THE WORLD gave Maryland's Eastern Shore an early, unwelcome Christmas gift last week: Towson toolmaker Black & Decker's announcement that it's closing its last major Maryland manufacturing plant -- laying off 1,300 Easton workers next year and sending their work to Mexico, Brazil and North Carolina.

Talbot County officials reacted bravely, insisting this isn't a disaster, but the impact of losing the county's largest employer -- and largest source of blue-collar jobs -- will be widely felt across much of the Shore.

For Black & Decker, moving production of its DeWalt tools offshore follows the firm's "vision statement": "Black & Decker's objective is to establish itself as the pre-eminent global manufacturer and marketer of power tools and accessories." Easton isn't unique; over the last three years, the company has cut an estimated 3,000 jobs from an English plant, moving its production to the Czech Republic.

Investors reward this quest for lower-wage workers. Black & Decker stock, still down from three years ago, is up almost 30 percent this year. And low-wage production pleases American consumers awash in cheap goods not even available a few years ago, such as tilting cordless screwdriver sets for $15.99, or less. After Christmas, as the saying goes, they'll be giving the stuff away.

The result: There's no price inflation for many consumer goods. Take cars -- their prices have been falling since 1996. Inflation is running so low that for the first time in a half-century deflation is at least a possibility. Imagine a world in which, with every passing month, most everything's worth less.

That happened during the Great Depression and for a while in the 1950s. But for consumers and companies -- now both much more deeply indebted than then -- this would be a financial Twilight Zone. Even Federal Reserve officials, who have reportedly been studying the possibilities, aren't certain what they would do.

There's an intense debate over the extent of globalization's link to deflation, but there's no question that manufacturing jobs have been fleeing Maryland and the United States for places like China, where textile workers in many plants still make less than a dollar an hour. This isn't just a U.S. problem; the entire Taiwanese shoe industry has relocated to southern China, where it's being joined by Japanese car and electronic plants. Nor is this limited to manufacturing: Microsoft has moved a lot of software work to Bangalore, India's Silicon Valley.

In Maryland, manufacturing jobs are down 20 percent over the last 20 years. The state offers incentives to companies to keep producing here, but it's clear that's a losing battle. Black & Decker was to receive $9.5 million to expand in Towson but never did that, never received the state cash and never included in the deal a promise to keep open the Easton plant.

More and more, particularly with the productive potential of China's almost endless labor force playing an ever larger role in the world economy, the competitive advantage of Easton and Maryland workers rests with high technology and information. Short-term payoffs to retain manufacturing may be politically necessary, but in the long run they aren't a solution. The Easton plant closing underscores that such money is best spent on educating the state's work force.