Professor Elam

Pat Buchanan like Ross Perot vigorously opposed NAFTA saying it would lead to a loss of jobs here. Now he notes that countries around the world are growing more protectionist.   And that incldes the 11th hour save of GM and GMAC.  THe Smoot Hawley tariffs passed in the 1930s slowed round the world trade.  Actually the real problem now is more the distrust of the intl banking system that has commodities on ships in harbors around the world Buyers and sellers are wary of letters of credit from various banks, will they  get paid?  This hesitancy in itself has brought on a trade slow down and a commodity price collapse.

No less an observer than Ann Richards said that we would not get rich flipping one another hamburgers and washing one another's hair.  Indeed, consider the difference between say a computer game and an automobile.

Automobiles require design, huge plants to manufacture, spawn lots of sub contractors to supply parts, foster an after market of sales and service, and finally a giant re cycling market in the form of salvage and metal yards. Just this week I purchased a $185 a/c hose for my 2003 escape. My point being, no one buys a $185 hose for their computer game or five year old cell phone, the original product keeps producing economic wealth for all involved. Computer games by contrast provide or have their whole product life cycle exhausted in about a year. not much re cycling there. This is precisely why countries that move from agriculture where the product is quickly consumed to manufacturing grow wealthy. This is what lifted America our of the depression.Since America emerged from the war without invasion, it stood as a manufacturing giant in the world. That started to change in  1970. The Jpanese came to dominate electronics, motorcycles, and later autos. And that is why we study managerial accounting.