Outsourcing labor is a serious danger to America's economy and needs to be dealt with.

On Japan: you mention the gold-silver-ratio's. note that these were fixed by government. If free market was allowed to work there, the ratio would move to one representing the real demand and offer. Indeed, i can imagine there were problems at first, the country barely knew external competition for 2 centuries. No wonder they got a shock at first. But the pressing external competition made them adapt quickly, the industrial revolution you mention. You mention problems at first, indeed, no wonder, totally new. But after the intial adaption, they grow like mad. (and i take note of this quote from you: "things got worse before they got better" so you acknowledge yourself things did go well in the end) If they hadn't opened for the rest of the world, they wouldn't have had that incentive. So it is thanks to the opening to the west. There was no incentive the past 2 centuries for them, and there is not a single reason to asume there would have been one if they didn't change their course. The effects: long term employment increase. Well, it indeed seems to be something coming along with it. People from the sector getting moved who don't have other qualifications with a need for in the local economy. But it seems to have at the same time a positive effect on the other parts of unemployment. Trade rates. I'd like to give this a fair deal of attention, since this is exactly the balancing system. + it can provide us with a thoughtexperiment to see what total internal production would be worth. Indeed, because the US buys other currencies (and hence, sells its own), the currency drops. Indeed, this reduces overall purchasing power. But look at it a little bit closer: the only things that get more expensive are foreign. Anything produced in the nation itself will be just as expensive/cheap. So that means that more American products get a competitive price. (and less foreign products) So, let us now do the thoughtexperiment. Say that the USA moves to stopping off-shoring (so no more import from foreign nations) through free market mechanisms. How would that go: by an extreme drop of the currency exchange rate: the dollar going to a new low. Of course, that won't happen. Since the United States is competitive on many levels. But as you and i agree that overal purchasing power is hurt by worse trade rates. Seeing that no offshoring would demand far lower than now. So a far lower purchasing power. (less wealth) On companies short term or not: Say they indeed don't look further than next quarter results. But after that quarter, the stockholders from that moment will want a good next for that quarter and so on. Not that it is totally the same as long term view, but it certainly also flattens out the effects of short term views (whatever you define as short term) Mattel example: indeed, they had to know the risc of it to a certain extent. It is a part of the reason why they are cheap: lower quality. But they cerainly didn't want to have such products. There were checks, otherwise we wouldn't have known that the high lead dosis in there products. (if they didn't do it, a consumer organisation did, both cases free market worked here. but that is a different debate. ;)) About still going: sure they did, but the stockholders did lose 10%. (the drop is a direct consequence of it. the raise you report afterwards isn't, so if it hadn't happened, we can assume stocks would be around 10% higher today) Also, only, you can of course debate about this, but i believe 10% is quite something. (if you incorporate opportunity costs, it is 15%, you can get 5% on virtually riskless investments) I'm sorry to say, but your claim of a 300% mark-up doesn't make sense. There are a lot more costs in bringing a product to the market than pure the labor + resource costs. Capital costs, fixed costs, transport costs, marketting costs... In the end, benefit on capital for a company won't reach anywhere need that. Banks here make 25% on capital and that is Huge. Capital goods: you focus on factories, but: First, i repeat, it is far broader than that. Second, there won't be a stop of demand for capital goods. There is a reason why buildings, machines, computers... (everything but art and ground) get written-off in bookkeeping: they need replacments over time. Also, why are we able to sell it at companies and not citizens in general? Because those have different priorities. I do admit i'm partially wrong by fading the difference that much. They are same products, but aimed at different demands for the product. Wealth: you did define it before as money and resources. I see you now accepted that it is a broader thing. Japan, these days: what makes you think the US technology is more in the open than Japanese technology due to offshoring? And suppose it were (but i don't see grounds upon which to do that), there does that patent system kick in. (ofc, not 100% proof, similar, yet different products come into the market sooner than the patent period indeed, fueling competition) Service jobs: now i don't know the US situation, but here in Belgian, service jobs get decent pays. better than uneducated manufacturing labor. Of course, the educated handwork (electricians, plumbers...) do have better wages than some service jobs. (and you can't outsource most of those, even if you wanted to ;)) Service jobs do contribute to wealth. Banks, clearest example of them all. They convert short term passiva in long term activa (assets). This supports the economy in such a massive way. They are so important that everything is done to keep them as safe as possible. Second examples: assurances. They reduce riscs. This stimulates people to go invest, to take risks from which the economy benefits. Also, the internet made international services much easier. (the previous two are also clearly globalized) And with a little thinking, i'm sure anyone can find many more that can work at international level. (ofc, some local part will need to be established in many cases, but most can be handled foreign) Comparative advantage: sure, they get more, but why is that? Because they also produced more. It wouldn't be fair if you got as much while they did more. Exporting less then importing: Indeed, you'll have less money (not less wealth). But the less money there is (talking in real value ofc), the less there will be imported. So you get to a balance eventually. And that isn't a worse one. US is currently more spending than it can sustain, banning offshoring won't change that, people are currently living above their standards. Arab-owned-ports (example): of course they aren't busier just because of the nationality of the owner. But, the original owners sold it to the arabs. This means that the arabs value it more than the original owners. So those arabs expect that it will improve futher (probably by taking care of that themselves) meanwhile, the original owners have their money back, which they can go invest in a different project. Which might be an American one, resulting in more investment (hence production, hence jobs/welfare) for the US. Of course, he can take it abroad, in which case he'll get benefits from his foreign investment, which than come into US hands for the part of his investment. Yes, the arabs currently get part of the benefits (but companies don't pay out huge parts of their benefits as far as i'm aware), but that is normal, investing money expects compensation. And i agree that some government regulation is needed. but there is no need for a government to play consumer-union. I'd like to finish with the ethical part: "We have no obligation to employ the world's poor." I'd like to add: nor is there an obligation to employ Americans. Best man or women for the job gets it. and that counts on a global scale and is not less fair than on US level, but fairer. We're all human after all.