Quote:
Originally posted by Tables R Us
No, it's OK to allow US investors and businesses have foreign production in low wage countries as long as they are only used to sell offshore. You can use tarriffs, civil liability, and criminal liability to prevent goods from coming back to the home market. Toyota and Honda manufacture cars in the US for sale in the US, not for sale in Japan.
The Japanese have employed tactics like this for years, and they've preserved their standard of living at the cost of slower growth. A major reason that P/E ratios for Japanese companies are much lower than P/E ratios for US companies is that by law and by custom businesses are managed in part for the benefit of workers. Because of this, the Japanese companies are less profitable, so investors pay less for them. But partly because of these policies, Toyota is on its way to becoming the biggest car manufacturer in the world.
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You mess up the market with that sort of thing and you screw up many boomers' retirements. The fallout's enormous as we face down an entitlement crisis over the next 30 years.
This is not Japan. And Adder already addressed why Japan is no example for us to follow even if that were an option.
We can't afford slower growth.
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