A simple economic question

As the US President seeks to close our borders and retrench from global markets, there is a simple question to ask. Let’s set aside what’s right or wrong from a humanity and safety standpoint. Let’s focus on a simple economic one.

Do we grow our economy more by letting people bring their ideas, work ethic and entrepreneurial spirit to our country and making it easier to do business with us, or do we accomplish more economic growth by closing our borders and forcing other countries and businesses therein to look to other markets for sales and supplies?

This thought struck me Sunday morning as I caught the Women’s Open Championship in the UK. What struck me is there were not any American golfers among the top two pages of the leader board. Thinking back to the World Cup in Russia last month, the American team was not present for this global event.

I recognize these are sporting events, but they are metaphors. If you don’t keep up, the world will move on. But, not keeping up does hit our economy, as well. In the US, unemployment is low, but we are having a hard time filling higher tech manufacturing jobs. US customer service jobs abound in Asia and the Philippines. And, many of our IT jobs are being done by people in India or who have moved here from such locations.

The first book which spoke to this is The World is Flat,” by Thomas Friedman. We live in a global economy with a global workforce. Employers need the best, cheapest talent they can find. The more commoditized the job, the pendulum swings to cheapest. The less commoditized, the pendulum swings to best. If we cannot fill the jobs here, they will be filled elsewhere. And, it should be noted that companies are leasing robots for $18 an hour, if they cannot fill the job.

We must be mindful of a key data point, immigration is accretive to our economy. Since Innovation is portable, new talent coming here brings more innovation. And, jobs are created around the Innovation. So, we need to be welcoming with better governance over immigration.

We also need to be easier to work with than we have become. When an entity makes it more difficult and less profitable to partner with, its trading partners look to other sources of sales and supplies. This has been happening for the last several months. And, as one farmer said, a subsidy won’t help if the customers go away.

Sadly, this issue has now been politicized, with fear and over-emphasis of causes. As I briefly noted above, the key reasons some areas are suffering are due to chasing cheaper labor and technology. The last issue is the larger concern as a CFO noted  in the book “The Rich and the Rest of Us,” by Cornel West and Tavis Smiley, “employers would do without employees if they could.”

So, look back at the simple economic question. What kind of country do we want to be? Then, add in the seasonings of doing the right thing and being safer. Global commerce actually makes the world safer, as you are less likely to go to war with your trading partners.

 

11 thoughts on “A simple economic question

  1. Well said, Keith. I do think Trump’s economic policies (?) are the reason the Koch brothers have bailed out on him and in the future more and more Republicans will join their ranks.

    • Hugh, agreed. The President has put his legislative supporters between a rock and a hard place, with the Kochs at odds with Trump. What puzzles me is Rand Paul’s siding with the obviously untruthful President on Russia cyber attacking. Like the Kochs, he is also a Libertarian. Keith

  2. Speaking logic to the rich & famous and the scared. It’s hard to reach them till it’s too late. And when they wake up from their dream, they’ll blame it all on the Dems and Obama. (No differently than now.)

    • Linda, one thing is for certain, Trump will not except responsibility on anything that does not go well. Larry Kudlow is already out there saying don’t blame Trump, as he inherited this. The tariffs are entirely an unforced error that even his own party begged him not to do. Keith

  3. Well said. Rather than making America “great” again, he is making America isolated and vulnerable in terms of both the economy and national security. I suspect that the economic fallout will begin fairly soon, given his tariffs, his treatment of our allies, lack of environmental stewardship and sanctions on Iran. I hope our national security is not tested any time soon, for I think we would be in trouble.

    • Jill, thanks. The negative impact has started, but it will be a bad gift that keeps on giving. The same will be true with the tightened immigrantion (and travel bans). Keith

  4. Dear Keith,

    You are so right on. What is disheartening, is that the president plans to take the anti-immigration message and use it to help the republicans win in this upcoming November 2018 elections.

    He plans to win by deliberately instilling and exacerbating the fear of others in order to win.
    There’s a reason the president wins with the rural vote. Their fear is more easily stoked because they don’t come in contact with the immigration community like folks do in the city.

    Hugs, Gronda

    • Gronda, when I hear back from Trump supporters when I say the immigration is issue is overblown and we are being cold hearted, I hear we need to be a nation of laws. My response is we cannot deport 800,000 DACA kids and many industries would suffer.

      But, as I thought more about the “nation of laws” comment, two thoughts struck me. Then, we should punish employers who knowingly hire illegal immigrants or we kept them on the job once they know. They are the ones using this low cost labor.

      The other comment is we have a President who shows little remorse in breaking laws or screwing people over so badly they have to sue him for back pay. Call me crazy, but defamation is a crime as is obstruction of justice.

      Keith

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