Creating Wealth 4/19/09
When someone takes raw materials, works on them and creates a useful product, they have created wealth. When that object is sold, money changes hands but no wealth is created. When oil is extracted from the ground, or trees are logged, wealth is created. When that oil or wood is sold, no wealth is created, though a certificate of wealth (money) changes hands. While this seems simplistic, it apparently is too complicated to be understood by our political leaders (both state and federal).
But, that’s not all. When Acme Widget Co. decides to have their widgets made in Zamboanga, they must send information - and it most cases, instructors to Z to teach people how to make them. That is a transfer of technology. If, in the future, they decide to bring the manufacturing of their product back to the USA, will that technology return also? Nope! They will no doubt find themselves competing with an identical widget manufactured elsewhere - and maybe one that has some improvements to it. Not all good ideas are created in the US and patents are largely ignored in the rest of the world.
Our country has been systematically committing financial suicide by transferring our manufacturing and resource development to others for 35+years - making other countries wealthy. If you think the world hates us for ruining their profitable deals with Sadam, wait till you see the angst when we change course - get back into manufacturing (which we must to survive)