{Empty title} | The Nation

While there are many excellent suggestions in this article and the comments about handling the current crisis, they are, in fact, patches trying to hold together a failed economic theory. The basic reason for transferring industries and jobs out of developed countries is to reduce the wages of ordinary workers in those countries. Since their wages and disposable income support two-thirds of Western economies, driving down their wages and taking away their jobs means the market disappears for even the cheapest products from overseas. Producing goods in countries with cheap labor who cannot afford to buy the products they make and trying to sell these products in countries that have no jobs is insane. This economic theory destroys markets and benefits no one. Since reducing wages reduces markets, it follows that increasing wages grows markets. Also, when economic or political power is concentrated in the hands of the few, any failure effects everyone. Therefore, economic and political power needs to be dispersed, so that failure in one part of the globe or country does not effect the whole world or an individual country. Development of national economies reduces the possibility of global collapse and, within countries, a decentralized economy reduces the danger of a national collapse. While industries can expand overseas, they must produce goods within a country, employing local workers who support that country's economy. This is how to build markets and not destroy them.

Development, in any country, only occurs behind trade barriers. Alexander Hamilton, Henry Clay and, yes, even William McKinley fought for tariffs that made this nation an industrial giant that supplied jobs and prosperity.

Frankly, I shared the Bush administration's ignorance of McKinley's position on tariffs, and only recently came to appreciate his insights.