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Originally Posted by MMM
I think you are mixing up periods. What hurt the economy was the sky-rocketing gas prices, not cheap Japanese cars.
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The period was early 70s to early 80s.
Yes, Japanese cars were better fuel efficient cars. Gas prices were the original reason people turned to imports(later, they just like the cars better). High fuel cost always hurts the economy, so does a lose of market shares in a huge industry like the domestic auto industry.
Quote:
Originally Posted by MMM
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.
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Agreed. But the U.S. trade imbalance was part of the deal with the U.S.-Japan relations. To grow Japan and keep Japan on U.S. side, America let this happen.
Quote:
Originally Posted by MMM
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?
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If it was "Ford when bankrupt because it lost to GM" then that's free market economy.
But we are talking about two different countries with different governments, different economies, and different regulations.
Two reasons why it is different between domestic and import competition:
1) Every country has a right to protect itself including it's industries. Otherwise, no third world country, say Mexico, can develop an auto industry of their own. Outside competition like Japan, Korea, U.S. and Europe will squash it before it even has a chance to grow. Ford shouldn't get protection from GM because they are in the same country. If one disappears, the U.S. still has an auto industry. Look at Japan, Outside of Tokyo city, isn't all the phone lines in all of Japan controlled and owned by U.S. companies? That's because the Japanese Government didn't protect it's phone line companies until they were all gone,swallowed up by U.S. companies, until only one was left- I think called "Tokyo Telephone Company". It's all cell phones now, but this did happen.
2) Some countries aid the development of certain industries: pay for R&D, lower taxes, or have lower environmental manufacturing standards. A company that doesn't have to pay for its own research and development can sell there stuff for much cheaper. A good example could be Korea. I'm not 100% sure but heard something that Korean companies like Hyundai and the Korean government work together. This is part of the reason for Korean product success in resent years. Japan had/(might still have) something like that going on too.