All those factories in china have networks of distributers – like we used to have but don’t anymore. They have first-line supervisors, and marketing, and mid-level managers, and salesmen – we used to have all those other jobs based on moving products from factory to retail store.

We can’t compete with such low labor cost in China. Our government agencies will make sure any potential U.S. manufacturer protects the employee and environment – but they ignore the fact that we get our products today from a country that has no environment or employee protection.

In June 1980 the NBC documentary If Japan Can…Why Can’t We?; asserted that America’s declining competitiveness and rate of productivity would make the United States’ “guns and butter” policies of the past unsustainable and our children will be the first generation of American to have a lower standard of living than their parents. For more information about If Japan can…Why Can’t We? – click the link that follows:

http://en.wikipedia.org/wiki/If_Japan_Can…_Why_Can't_We%3F

In spite of America’s declining competitiveness and rate of productivity, the 40 years through 2006 has resulted in:
The percentage of the annual income accruing to the top 20% of the population (the special interest) reaching an all-time high
The percentage of the federal budget funded by corporate taxes reaching an all time low
The level of employee post-retirement benefits funded by employers reaching an all time low

The aforementioned, have resulted in the bottom 80% (the common interest) bearing the brunt of America’s declining competitiveness and rate of productivity.

The predominate reason corporate taxes were lowered and businesses justified freezing/terminating the funding of employee post-retirement benefits was to make America companies more competitive. Yet in spite of the lack of increased competitiveness, the percentage of the annual income accruing to the top 20% of the population reached an all-time high. Self-serving partisans have over-promised and have set the stage for to gross under-deliver to the American people, who above all deserve balanced and sustainable and clearly have benefited from neither.

Four deficits gave birth to the book and movie I.O.U.S.A, namely, the leadership, trade, savings and the fiscal deficits. Following the releases of the I.O.U.S.A. book/movie, the better financed special interest groups caused the fiscal commission to become a reality, leaving the remaining three deficits, most relevant to the middle-class, to fall by the wayside. These 3 middle-class-relevant deficits, namely the leadership, trade and savings deficits are most causal to our current economic plight, while the fiscal deficit is primarily the result (effect) of the first three. I.O.U.S.A. treatment of the trade deficit was framed in the context of Warren Buffett’s parable Squanderville versus Thriftville. The portion of my post, titled, An America Lost in Squanderville deals with the trade deficit:

The United States’ trade gap is the proverbial “leak-in the-dike” with its de-simulative effect on our recovery. In November 2003, Warren Buffett in his Fortune, Squanderville versus Thriftville article recommended that America adopt a balanced trade model. The fact that advice advocating balance and sustainability, from a sage the caliber of Warren Buffett, could be virtually ignored for over seven years is unfathomable. Media coverage that China has kept it currency undervalued is a gross understatement, it has actually been keeping the U.S. dollar over-valued; which adversely affects all U.S. trade with ALL U.S. trading partners, not just trade with China. Until action is taken on Buffett’s or a similar balanced trade model, America will continue to squander time, treasure and talent in pursuit of an illusionary recovery.

The Leadership deficit can be best addressed with campaign financing reform that really works. The savings deficit can be best addressed with increased productivity, similar to Japan post-WWII economic miracle pioneered by W. Edwards Deming, an American statistician and replacing federal employment and most federal income taxes with a federal consumption tax, like those used by most industrialized countries, except the United States.