The Creative-Destruction Deficit

Any capitalist nation must embrace the process of "creative destruction". Progress is made by allowing the new to replace the old. If people lose their jobs at MySpace, then it's not a problem because people are being hired at Facebook. People who use social-networking sites now have an (apparently) better service and nobody is calling for the government to save MySpace.

If an auto plant moves from Michigan to North Carolina, the new workers might be paid less, but Americans are still being employed. A laid-off worker in Detroit could move south and get re-hired.

Now, what if the auto plant moves to Guadalajara? Is it the same thing? Clearly not. Even if an American worker were allowed to take a job in a Mexico, he would have to declare bankruptcy. What American could pay his bills on a $2 per hour wage? He wouldn't be able to pay his mortgage, credit cards, or car loan. On a large-enough scale, that could cause a banking crisis. He would also be paying his taxes to the government in Mexico City, rather than Washington.

Since the era of wide-open, free-trade with low-wage nations kicked into high gear a decade ago, the USA has seen an explosion of people on food stamps, a banking crisis, and a government budget crisis.

All of these crises are caused, to a large extent, by the "Creative-Destruction Deficit", to coin a phrase. If all of the destruction-part of capitalism is taking place within the USA, and the creation-part is taking place in Mexico, China, and India, then we shouldn't be surprised when the USA starts to look more-and-more destroyed.



"creative destruction"

Ah, I remember that song and dance. It's absurd, and fails to note those "localized regionalized economies" that are "hurt" during the process will "recover", ignores a few things, number one being TIME, as in recover when? 50 years, when we have the next Roman empire after the global collapse and 1000 years of the dark ages, uh?

The other thing is how those "localized economies" which are destroyed, kind of add up after awhile to be relabeled now as middle town USA or small factory town Ohio, but they all start blending into each other to be called "The United States of America".

Creative destruction is a

Creative destruction is a real phenomenon.

The problem is this process is not being allowed to occur.

Much as Japan did, the US has placed its full faith and power behind the banksters.

The US however doesn't have nationalized health care nor does it have a trade surplus, nor even a large domestic pool of savings.