Even the jobs we outsourced are suffering. Look at the hit the Chinese economy has taken in recent months. We outsourced those jobs because we have been pretending our money is worth more than it is, while China has been pretending theirs is worth less than it is. You can try to blame it on corporate greed, but they would have taken those jobs sooner or later, whether we gave them to them or they just took our customers.

When I say lack of demand, I’m speaking more of a glut of supply caused by a massive increase in global manufacturing. The government strategy of trying to increase the workforce is counterproductive. We would be better served by going on furlough to prevent job loss and give people more of their lives back, or increasing quality rather than quantity to rise above Chinese goods. The problem will not be solved by sealing up the borders and going isolationist, or trying to out labor a billion Chinese.

What time frame are we talking about here?

And oh, yeah, of course there is “lack of demand,” our jobs have been outsourced.

I tend to think of money as being the thermal energy of economics; as being neither created or destroyed, but merely transferred, I realize this isn’t strictly true. If your boat sinks, it is pretty hard to argue that wealth was not lost, but that is microeconomic function which, while important, seems less than relevant to our current crash. It should be offset by productivity. The productivity of the world is up. How can we have lost wealth? What we are seeing is a lack of demand, not a hole in the boat.

What you never had a friend who owned a boat? As they say, “It’s a hole in the water that you pour money into.: :)