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It's A Gray Area: Fundamentals are the answer to the recession

July 01, 2011|James P. Gray

The fledgling program TAP America is trying to strengthen the U.S. economy by encouraging people to buy more American products as a matter of patriotism; however, like so many other political proposals, it sounds like a nice idea, but it won't work.

Just like Communism's mantra of "From each according to his ability, to each according to his needs" sounded good to many people, it simply will not work. A more apt slogan is, "You can't fool Mother Nature."

Why? Because the "invisible hand" of economics is always present. Practical reality regarding Communism means that if people have no incentive to work by receiving the benefit of their labors, they won't work. Similarly, if people are able to choose between a good quality shirt selling for $12 that is made in another country, or a similar good quality shirt that is selling for $20 that is made in the United States, some may be patriotic for a while and pay more for the domestic shirt, but not enough to matter, and not for long.

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That is the reason all of the talk about preventing the "outsourcing" of jobs is nothing but talk. If a company overall can make a much better return, or just stay in business, by having its manufacturing or other services performed elsewhere, it is economically inescapable that this will occur, as long as the quality of the work is acceptable. And putting artificial barriers in their way will not only be unsuccessful, they will mostly be counterproductive.

So how do we put America back on the road to prosperity? Not by the government activity of passing laws or installing more programs. But instead by going back to our roots, which means we must out-work and out-compete everyone else.

How can this be done? We must focus upon our strengths by emphasizing the areas in which we compete best, and also go on to develop more of them.

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