I was only 11 but I liked Ross Perot, maybe because of his fiery attitude. But he had some excellent points about NAFTA that were revisited in this election when Hillary was asked: Was Perot right about NAFTA. Turns out that he was partially right and US-Mexico economies have somewhat been on a race to the bottom rather than a race to the top. This may be partially what's to blame for current economic woes. How do we fix it?
I found this article really interesting on NAFTA. It discusses results of NAFTA and trading with less developed countries. Improvements are suggested by comparing NAFTA with trade agreements between other countries.
http://www.miller-mccune.com/...
It discusses how unless active structural aid and social components
are included in trade agreements with less developed countries the result is a race to the bottom for workers instead of to the top. The US is able to ship
their businesses cheaply to Mexico and out-compete the weaker Mexican
infrastructure. Once there's less Mexican business competition, US
businesses can set the wage, which despite inflation has led to the
lowering of wages for Mexicans. This has then resulted in a drive to
lower wages for Americans. But the US has some protection for it's
workers so instead of a decrease in the GDP between the two countries
there's been a stronger effect on Mexican wages and an increased gap in GDP between the two countries. This has promoted a flood of immigration as their situation worsens. But this then has driven down US wages
further. The US responded with substantial border protection.
What's interesting, is that the EU spent less in building up Spain's
infrastructure than the US did on border control and they saw less
immigration out of Spain though initially it was predicted that it
would be a tremendous problem. A wage gap was still present between
the countries but not enough that their standard of living was so low
or that the increased wage in other countries was so much higher to
really motivate immigration. Infrastructure helped create Spanish
jobs and compete. Labor agreements assured their would not be
exploitation that would occur if the EU outcompeted Spanish plants and
then could drive down wages.
People want to work but they want their work to support their
families. With mass production out competing local markets
corporations need to figure out how they are going to pay fair wages, especially when with the international market.
We're seeing the consequences now of when people's wages do not meet
inflation and they accumulate more debt then they can ever make in a
lifetime. The economy depends on people making good wages for a full
day's work. If people start living within their means with what wages
are now the economy will slow down tremendously. That's what's
happening now as credit is becoming less available and people cannot
afford their debts. Corporations are throwing a fit screaming save us
from ourselves, who's going to support us? Maybe that should have
been thought of earlier. Once the distribution of wealth increases
too much and drives up inflation, who's going to pay for all that's
produced?