Richard Carlisle wrote in message
You're kidding again right? Have you bought gas, steel, lumber, etc.
lately? Cost of "things we buy" are most certainly not going down. The
price of steel has doubled as of 6 months ago and they are predicting
another increase. Aluminum prices are doing the same and gas prices are
expected to top 2.50 this summer. While all of this is happening, people
are still losing jobs to outsourcing and H1B imports.

Items that have a high raw material content (like raw materials)
aren't reduced in cost by cheaper labor. As the value of the dollar
reduces, the price we pay in the world market (in dollars) goes up
(except oil which, for now, is still priced in dollars). Now look at
manufactured goods, you'd have to admit, the Walmart effect is very
strong. You can go to Walmart and buy a Chinese toaster for $7.99,
its a throw away item. In the old days, a toaster was considered an
electrical appliance, and cost a lot more (adjusted for inflation).
Or look at machine tools, you can get these things for nothing these
days. This stuff used to be harder to make and we added the value to
the raw materials here in the USA and sold them to the world and added
wealth to our middle class. Now every country can make that low tech
stuff, we sold them the technology and first gen tools, and its way
cheaper to the consumer.

Now look at the price of the things you spend most of your income on-
real estate. Where I live, the price of the land is several times the
price of the structure. The price of that land is set completely by
what other people in my village are willing to pay for that plot. If
everybody takes a 20% pay cut (which seems like everybody I know has),
the high prices cannot be sustained. As a transient effect, the feds
can juice the economy by flooding it with cheap money (low interest
rates). But eventually, when people have borrowed all the equity in
there inflated house value and gave it to foreign manufacturers, the
spigot stops.

When was the last time you saw the cost of a product or service go down just
because the initial cost for the producing company went down. It doesn't
happen very often. Generally, as the cost to produce goes down the price
either stays the same or goes up and the quality of the product or service
goes down. I can see this pattern in just about everything I buy. The
reason they outsource is to increase the bottom line. Reducing prices
defeats that.

In addition to the stuff mentioned ealier, look at the price of
communications. I pay 4 cents a minute anywhere in the US (Pioneer)
with no miniumum or monthly charge. Someone calling "Long Distance"
used to mean something special because it was so expensive.

I doubt you'll find many executives sitting around the boardroom trying to
figure out how they can sell their products cheaper.

Nope. But you will get a lot of those types saying "Our competitors
are beating us on price, what can we do to reduce our selling price
but still maintain our margin?" You see companies that used to be
manufacturers that now just market their old brand name on an imported
product. Its a short term benefit because eventually people will just
buy the manufacturers brand directly when they realize all they bought
with the American brand was a label.

Ross

Regards

p.s. And the guy that said we're normalizing with the rest of the
world would seem to be correct. Your average Joe in the US is doing
down. The average Joe in China is coming up. And, in the short term,
corporations in the US are making lots of $.