Central to everything is the American middle class. The American middle class is what generated the wealth that causes businesses to produce products for it. In the 1950s, America was self sufficient and its large middle class produced most, if not all, of the goods that other Americans bought. This was the key. The money American workers earned was spent within their local communities and thus supported other middle class American jobs and businesses. Basically a dollar would pass thru 4 or 5 hands before leaving a community. I can't put a table in this comment, but starting with $100, 20% taxes, 10% savings, and passing the money thru 4 or 5 hands, the actual taxes collected are over $50 and savings are over $25. That's why life was so good. Taxes allowed local governments to build and maintain services. Savings allowed banks to have money to loan for investments.
But the objective of business is to make as large a profit as they can. Having American goods made by cheaper overseas labor increased profits but what was not taken into account was that laying off each wage earner really affected 4-5 other wage earners resulting in a much greater loss of taxes and savings; i.e., closing a plant and laying off 1000 workers has the effect of actually laying off 5000 workers.
For a business, this is not their problem. There is a belief that the American middle class is large and can handle such an impact ... so they say. In addition, the business' offers these foreign built products at a reduced price in convenient large shopping malls. Also, they've paid workmen's comp and offered re-training courses. Not one of these things are an equivalent full time job to replace the one the worker was laid off from.
Also, thinking that the now wealthier business owners and shareholders will spend their increased income in the local communities is naive. Do they even live in the local communities? How many limos have you seen in Walmart and Target parking lots? How many nannies, cooks, and gardeners can these people hire to be equivalent in pay and skills to the skilled wage earners that are no longer working?
To fix this economic downturn, the American middle class must start working again to have the income to buy things and to pay off any loans. In order for the middle class to do this, they must have real jobs irrespective of the impact on foreign countries. If the foreign economies were in good shape, then they would be weathering the American financial screw up with minimal impact on their own economies. The foreign economies actually depend on the American middle class to buy the goods they produce.
What is needed is a form of "Environmental Protection" for the American middle class worker.