is no expectation that any production of goods will take place in the US rather it will take place in China (subsitute Mich. for US and Tenn. for China for the auto industry) all the supporting building and services that support those employees have to either move (possible in the US, not with regards to China) to the new production location, or they have to be retrained and hired by someone else who can meet some new, undefined demand (see Google)." OK and agreed. "The cost of losing production facilities and the switching costs are expensive and depend on finding some new demand (assuming everything else is in equilibrium) or some people have to accept lower purchasing power." Agreed. But the benefit exceeds the cost, as we get to consume the same number of cars that now come from China, plus whatever goods and services the Americans who used to be producing cars can now produce. The problem is we don't understand our monetary system that always allows us to keep everyone willing and able to work employed and producing real output. Martin Reply: December 7th, 2010 at 9:10 pm No, I understand and in principal I believe we agree. "But the benefit exceeds the cost, as we get to consume the same number of cars that now come from China, plus whatever goods and services the Americans who used to be producing cars can now produce." So the key driver are the goods and services the Americans who used