Sunday, October 2, 2016

What happens when a domestic innovation sector is surrounded by a contracting industrial sector

Nothing
So LNG as the contraction isn't de industrialization
In other words
So long as the contraction oin domestic industrial output
is purely the result of innovation
Automation reduced labor leading to reduced value share
By way of the Baumol process of service- ization of the domestic job  pattern
ie
Not  from
" out sourcing " combined with " off shoring "

That combo sucks the roots out from under the domestic innovation sector

Or so the conjecture goes

Upshot

We need an industrial policy
That returns us to balanced industrial trade
At least in source what we out source market value wise
IN INDUSTRIAL PRODUCTS