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1.The exchange rate value of the U.S. dollar increased recently. Is it good news or bad news? Why? Should we worry about it?

2.The U.S. has a whopping trade deficit. Why? Should we worry about it? Are we shipping all our jobs to China and Mexico? Could we save precious U.S. jobs by restricting imports from countries with cheap labor? Could we reduce our trade deficit by restricting imports?

3.The U.S. owes the rest of the world $2.9 trillion more than the rest of the world owes to the U.S., making the U.S. "the world's biggest debtor nation". Why is this? Should we worry about it?

I have to write essays about these 3 topics. Can you guys give me an idea of the right answers for each of them? Thank you in advance.

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Chika Ilonah
Chika IlonahLv10
28 Sep 2019

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Case Study 8
THE OUTSOURCING SYNDROME

In Case Study # 3, we discussed some of the economic and ethical problems related to Wal-Mart. However, is it fair to blame Wal-Mart for this downsizing of our standards? What about the other large U.S. corporations that have been sending manufacturing and other jobs overseas? Lou Dobbs, on CNN, in late 2003, started listing during each evening program those corporations which have sent jobs overseas. The list keeps growing and growing. It is a virtual Who’s Who of American business.

In late December, 2003, the Wall Street Journal reported that IBM told its managers that it will be moving as many as 4,700 high paying white-collar jobs overseas. This type of change represents the latest threat to employment in the U.S. It was bad enough to see the exodus of manufacturing jobs but, now, this move overseas is extending to the higher-paying technical and white-collar employees.

When U.S. corporations first started shipping factory jobs overseas, workers were advised that they should become better educated and acquire more skills, enabling them to achieve an even higher standard of living. There would be more and better jobs in technology and information processing. Now, it is these more educated and skilled workers at IBM and other corporations who are losing their jobs. To be fair to IBM, many other technical companies have also moved these higher paying jobs overseas. An executive at Microsoft, the ultimate American success story, told his department heads last year to “pick something to move offshore today”.

Globalization may be a fact of life but does that mean that its destructive impact on any
single country’s families can't be mitigated? Should the exportation of jobs and the effect on the standard of living be monitored by the government, the civic center sector and the media of the base country? Should trade agreements and tax policies be examined and updated to encourage the creation of employment that enhances the quality of life at home?

If we don’t do something about all of these issues, we may all end up working at Wal-Mart, by one name or another. If we don’t do something, then who will be able to afford the IBM and Microsoft products?

Almost 100 years ago, Henry Ford was astute enough to realize that he had to pay his workers a living wage so that they could afford to buy his automobiles. Evidently, American manufacturers have forgotten that strategy. Will the rest of the world follow suit?

HOW DO YOU FEEL ABOUT THIS SITUATION?
WHAT SUGGESTIONS DO YOU HAVE TO ADDRESS THIS ESCALATING PROBLEM?
WHAT WOULD YOU RECOMMEND IF YOU HAD AN IMPORTANT GOVERNMENT POSITION?

Background When you look at news reports of any kind, there can be a tendency to take them at face value, accepting what they tell us as the truth. This is usually a grave mistake. News typically moves quickly, with tight deadlines to get information and there is almost always a bias at play. Numbers are an easy way to manipulate the truth--and truth itself can be pretty flexible when it comes to human relationships. The value of the truth can also be flexible depending on your point of view. For example, in the second quarter of 2015, the U.S. dollar is strong--meaning it has a high value against foreign currency. Is this a good thing or a bad thing? If you're a consumer, it's generally a good thing in the short-term. It means items imported to the U.S. cost us less to buy. Go us! If you are a growing business that exports, it's a bad thing because your costs make it difficult to compete with locally produced goods in foreign markets. If you're traveling out of the country, it's good because the dollar goes farther. If you have a business that benefits from foreign tourism, it's bad because visitors have less money and may chose to go to other places where their money gives them more buying power.

find an article (you might try MSN Money or CNN Money or something similar) and then write at least 600 words. how strong the position the article takes is. Questions to consider include: What are the weaknesses to the article? How are numbers used effectively? What's missing? How are the numbers being used to disguise something?

ARTIcle

President Obama slapped a stiff 35% tariff on Chinese tires in 2009 after American companies complained about unfair competition. They said China was flooding America with tires at low prices making it tough for U.S. companies to compete. The tire tariff gradually waned, and finally ended in 2012. The tariff saved 1,200 U.S. tire jobs, which had been in sharp decline. And U.S. tire production rose after a major decline. "Over a thousand Americans are working today because we stopped a surge in Chinese tires," Obama said in his 2012 State of the Union address. But a study from the Peterson Institute of International Economics found that the tariffs cost Americans in many other ways. Americans paid more for tires. Some Chinese-made tires cost as much as 26% more -- rising on average to $39 per tire, from about $31. And U.S. tire makers, facing less competition from China, also raised prices on American-made tires 3.2%. According to Peterson's model, higher prices from the tire tariff cost Americans an extra $1.1 billion, which translated to an estimated 3,731 retail jobs lost. Plus, China fought back by imposing penalties on U.S. shipments of chicken parts. The Peterson study estimates that China's retaliation cost American chicken producers $1 billion in sales. "Tire safeguards did not change Chinese policies in a helpful way, nor did they boost U.S. employment," wrote Gary Hufbauer, a trade expert at Peterson, who authored the report. Indeed, the tariffs didn't bring the tire-making jobs back to previous levels -- a similar trend that's played out for the rest of U.S. manufacturing. But they did help to stem the job losses. In 2008, there were about 60,000 American workers making tires. Now, there are about 55,000. That's better than the low point reached in 2010 but not back to pre-tariff levels. Related: Trump's 35% tariff on companies: Easier said than done An Obama administration official, who requested anonymity, disputed some of the calculations and assumptions in the Peterson study. For instance, the official claimed tire prices did not go up by as much as the study claims. Hufbauer said no one until now had contested any of his analysis in the four years since it was published. He noted that the administration official didn't provide an alternative estimate for price changes. Republican presidential nominee Mitt Romney criticized Obama for the tariffs in his 2010 book "No Apology." "President Obama's action to defend American tire companies from foreign competition may make good politics by repaying unions for their support of his campaign, but it is decidedly bad for the nation and our workers," Romney said. U.S. tire makers still applaud Obama's tariffs. Morry Taylor, CEO of Titan International, a U.S.-based tire company, is one of them. "He did what he should have done and he should have done more of it," says Taylor, who voted for Trump. His company has plants in Ohio, Wisconsin and Illinois (they also have operations in Brazil and Russia). Related: 3 ways Trump can go after China and Mexico Taylor argues that if the tariffs weren't put in place he might not have any business today to speak of. By 2012, Taylor still had 1,800 tire-making workers, about the same amount as before the tariffs. Today, however, his firm only has a little more than 900 workers. His problem today is what he describes as unfair competition from India, where firms make cheap tires and sell in the U.S. at prices he can't afford to sell at. He hopes Trump considers higher tariffs on tires, saying it would save jobs. To be clear, Obama wasn't trying to "bring back jobs" so much as protect the ones already in America, which he accomplished. Trump wants to bring manufacturing jobs back from other countries. Some trade experts believe that would be difficult task, since many of jobs overseas are low-skill positions and many U.S. manufacturing firms now want highly skilled employees. In any case, U.S. tire production recovered but didn't surge. Instead, U.S. tire imports from all other countries excluding China rose dramatically, Hufbauer found. In other words, the Chinese tire jobs didn't come to the U.S. -- they went to the next cheapest countries. In the end, Hufbauer argues the tariffs didn't make a difference. "The best thing about the tire tariffs is that they expire," Hufbauer wrote in 2012. CNNMoney (New York) First published January 3, 2017: 3:41 PM ET

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