Gomory is referring to the United States response to the mercantile trade practices of China. In the piece, The Innovation Delusion, Gomory exposes the absurdity the United States can create intellectual property, advanced R&D and innovate it's way out of the trade deficit. Gomory also calls out Thomas Flat Brain Friedman, one of my favorite things to see. (I have yet to figure out how such nonsense even gets published never mind on the best sellers' list!)
Ralph Gomory explains comparative advantage once again and also calls cash on the latest nonsense in trade policy suggestions from the Financial Times claiming Japan should abandon manufacturing and is the cause of Japan's financial malaise.
Ignored in all these discussions is the obvious fact that when you don't make for yourself the things you need, you will have to trade for them. If you have to import cars and all sorts of manufactured goods, you will be importing on a large scale; to trade for them you will need to create additional goods or services that you can export on an equally large scale.
Ralph Gomory wants to change a fundamental problem in the United States. What is this fundamental problem? Corporate interests and the national interests are divergent. In Country and Company: Part I - Divergent Goals, Gomory calls these much needed changes the Ketchum Goals:
We want companies that are productive, each contributing as much as possible to the total of goods and services produced in the United States. It is the sum of these efforts that make America a prosperous nation.
We want these companies to provide productive and well-paying jobs so that the value the companies create is widely shared by Americans. It is this widely shared wealth that gives the nation and its people economic security and stability.
This is great. Gomory has created a fictional universe to explain our same never ending question of why the financial sector was thrown gobs of money and the auto industry is getting the shaft.
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