>[no overcapacity problems here]
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>"Help Wanted" highlights skills drain in U.S.
>Mon Jan 21, 2008 8:09am EST
>By Joanne Morrison
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Interesting...You can read this as what poli-sci people call a commitment problem. No matter how well skilled manufacturing jobs pay, no young worker would want to invest the irreplacable time and money necessary to acquire the appropriate skills as long as the job might pick up and move to China. For the manufacturers themselves no such problem exists since most of their capital is already sunk. It might be that once the perceived likelihood of job losses crosses a certain threshhold, some form of job guarantee would be necessary to induce a sufficient flow of investment in skills to make a manufacturing line viable.
This is serious, since once households reach the limit of their borrowing capacity and consumer spending craters, exports taking advantage of the cheap dollar are the only thing available to prevent a deep recession (barring a more massive stimulus than is on the table now). But no matter how cheap the dollar, you can't generate exports without the capacity (which includes skills - not just machines).
Seth