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Originally Posted by chiuchimu
Yes, consumer benefited. The discussion was about the economy which didn't.
U.S. car companies survived by closing shop and going to Mexico. Jobs were lost. Suppliers lost big contracts. Japan got rich.
I agree about the spin to an extent. But plants in America did close down and operations moved to Mexico. Japanese cars were not made in America at that time( Honda started in mid 80 I think).
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I think you are mixing up periods. What hurt the economy was the sky-rocketing gas prices, not cheap Japanese cars.
The move to Mexico was after NAFTA, which is the largest mistake of the Clinton-era, which essentially opened the borders between Mexico and Canada with the US, and made it possible for American corporation to shut down "expensive" factories in the US and open them in Mexico paying workers at cheaper wages. Then India and China said "We are even cheaper," but that is a story for another day...
Quote:
Originally Posted by chiuchimu
Competition IS good for the consumer and if trade agreements are well planned, even good for both economies. But any single import item takes money out of circulation and sends it to a different country. If the trade is totally unbalanced then it hurts the economy. For varies reasons, the simple Idea that Capitalism is good across international borders is false. That's like saying, "If American car companies went bankrupt because they were inferior to Japanese cars then they deserve to go bankrupt." In some countries, companies get help from the Government. The U.S. funds a lot of R&D by way of military contracts. Some countries don't have strict codes to follow etc... The playing field is not always fair - why force the rules of a fair game? A country and an individual is different.
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If money moves both ways, then it is good for both economies. Japan has been at the advantage with the trade imbalance with the US for decades, but now China is king of trade imbalances, taking advantage of 10s of billions of dollars from the US every year.
That's like saying, "If American car companies went bankrupt because they were inferior to Japanese cars then they deserve to go bankrupt."
How is that a false statement?