Start with one company and one plant. A refrigerator plant employing two thousand people. On paper the math looks simple. It costs about five hundred eighty dollars to make a refrigerator in the United States. It costs about four hundred sixty dollars to make the same refrigerator overseas. The moment a consulting firm shows the board those numbers, the conclusion seems obvious. Moving production offshore produces one hundred twenty dollars of extra profit per unit. At a million units a year that is one hundred twenty million dollars of additional profit. The company gets bigger margins. Executives get bigger bonuses. Shareholders get higher dividends. From the perspective of the boardroom the decision is not only rational, it is almost irresistible.

But the country is dealing with a completely different equation. When the plant closes, two thousand workers fall from sixty-thousand-dollar manufacturing jobs to forty-thousand-dollar service jobs. Multiply the twenty-thousand-dollar gap by two thousand workers and forty million dollars evaporates from household income. Then apply a simple multiplier. A 1.3 multiplier means another six hundred jobs indirectly tied to the plant take the same hit. Multiply twenty thousand by six hundred and that is another twelve million dollars gone. The national income loss now stands at fifty-two million dollars every single year. And the consumer does not get much in return. That one hundred twenty dollars of corporate savings does not flow through as a one hundred twenty-dollar price cut. Maybe half eventually shows up in the price. Most families will save maybe sixty dollars the one time they buy the appliance, which for a refrigerator is once every decade. Spread across all households the yearly benefit is only a few dollars. That is the entire consumer gain. A handful of dollars per year. In exchange the country permanently loses fifty-two million dollars of wages every year. In this one micro example the boardroom makes a short-term gain while the nation absorbs a long-term loss.

Now scale this up, because what I just described is exactly what has actually happened in the United States for the past quarter century. The boardroom made the offshoring decision again and again. Not one plant. Not ten plants. Thousands of plants. Millions of jobs. Every time the pattern repeated. A manufacturing job became a service job. The wage dropped from something like sixty to something like forty. The multiplier kicked in and wiped out the surrounding jobs. Household incomes sagged. Entire regions fell. Real wages flattened. Purchasing power sank. The middle class stopped growing. Younger generations fell behind their parents. Affordability collapsed in autos, housing, appliances, college, and almost every major expense. The middle of the country was squeezed down to the point where it could not fuel the very consumer economy that American corporations depended on. This is not theory. It is the lived history of the United States from the late 1990s until today. This is the macro version of that refrigerator plant playing out over and over until it became the defining economic trend of the era.

And here is the part that rarely gets said out loud. The boardroom did not just act against the nation’s interest. It acted against its own long-term interest as well. By pushing millions of workers down the income ladder, corporate America shrank the very customer base it depends on. The bottom sixty to seventy percent of the population now struggles to buy a new car, struggles to buy a home, struggles to keep up with basic costs. New car demand collapses the moment you remove the top ten percent of earners. Appliance replacements are stretched out longer and longer. Housing demand is sagging as younger buyers cannot afford to enter the market. Corporate America optimized so aggressively for short-term margins that it slowly dismantled the source of long-term demand. They squeezed the consumer until the consumer could no longer buy. They won the quarter and lost the decade. They cut labor to save money and ended up starving their own market. The top ten percent still spends, so from the top the world looks fine. But beneath that thin layer the domestic market that once powered American growth has been hollowed out. That is not efficiency. That is not optimal allocation. That is a system undercutting the very engine that once made it strong.

And this brings us to the final point. People love to invoke the invisible hand. They say the market will allocate resources efficiently. But what exactly is efficient about a system where the incentives reward decisions that weaken national income, collapse long-term demand, and eventually reduce the firm’s own customer base. This is not the invisible hand. This is an incentive failure. The boardroom’s math diverged from the nation’s math, and without a corrective mechanism there was nothing to bring those interests back into alignment. A tariff at the beginning of this process would have done exactly that. A tariff would have erased the one hundred twenty-dollar savings and made domestic production cost-competitive. The plant would have stayed. The wages would have stayed. The middle class would have retained its earning power. The multiplier would have stayed intact. The demand base would have remained strong. A tariff does not create inefficiency. It corrects an incentive flaw that leads to national decline. It keeps the boardroom’s short-term decision from becoming the country’s long-term disaster.

So the lesson is simple. The boardroom’s choices were rational in the narrow sense, but in the broader sense they were destructive. They hurt the country. And eventually they hurt the corporations themselves. The invisible hand cannot function when the incentives push decision-makers to destroy the very demand their future profits depend on. That is not inevitability. It is a design flaw. And the consequences have already played out across an entire generation of Americans.