Don't enter into trade agreements with nations that don't provide their citizens the social guarantees afforded our own citizens.

Which of course is exactly the argument opponents of Nafta, PNTR Cafta etc have been making all along.

We (the American people) do fool ourselves into believing we have more benefits, leisure time, income than we actually do.

Perhaps from nostalgia, denial of current circumstances or the fading memory of another era when middle class meant 1 salary supported the family, with a new car every two years, annual vacations, extra cash to buy a washing machine or fridge, and you could save for the kids' college.

I would say, however, that the number of jobs in design is small compared with the number in production.

But perhaps more to the point, Microsoft has set up research facilities in China, noting that the cost of engineers there is a fraction of US costs.

The Guardian reports that Microsoft plans to spend $1 billion in research - in China.
http://www.guardian.co.uk/media/pda/2008/nov/13/microsoft-research

In some cases, research does follow production.

Taiwanese companies tell the story of how they climbed the ladder from OEM (original equipment manufacturing), that is, contract manufacturing of equipment designed elsewhere, to ODM (original design manufacturing) - designing the equipment as well as manufacturing it.

As any college student who has done an internship (or anyone else who has held a job) knows, most learning comes from learning-by-doing, rather than from the classroom.

In a practical sense, those who actually make things are the ones to figure out how to make things better.

Or as Thomas Edison said, genius is 1% inspiration and 99% perspiration.

The notion that Americans are uniquely gifted to be the world's innovators, while 'others' will make the things we design, always struck me as not only misguided and naive, but condescending and even borderline racist.

In his prescient and highly readable 'In Praise of Hard Industries' (also available under the title 'Unsustainable' from Nation Books), Eamonn Fingleton details how service sector jobs are actually more easily outsourced than manufacturing jobs.

Basically, you only need a phone connection and microcomputers to get into the call center or software business, while advanced manufacturing is capital intensive and therefore has a higher barrier to entry.