Help Answer a Nagging Question About Jobs and Economics


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sundance43.5
March 16, 2004, 12:42 AM
I, for the life of me, cannot grasp how the exportation of jobs from America could in the long run benefit the U.S. and the middle class. President Bush has come out in support of outsourcing, so how can he say he understands and supports the middle class?

Can someone please explain how America can survive when jobs are being lost by the hundreds of thousands and aren't being replaced?

This may sound like a flame, but it's not. I would just like an explanation or some information.

Thanks

Chris

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atek3
March 16, 2004, 12:47 AM
totally not gun related.

http://www.mises.org/fullstory.asp?control=1443

http://www.mises.org/fullstory.asp?control=1429

those two should get you started.

atek3

Mulliga
March 16, 2004, 12:51 AM
I assume we're talking about tech sector stuff, since unskilled labor has been outsourced by almost every business in America. :)

Here's an explanation I recently read:

Other countries, like India (most infamous), have large supplies of technically minded people who like programming and other jobs that require skilled labor. These people are trained engineers, and good at it. Nothing wrong with that.

Notice, however, that American companies, currently, reap all the benefits. Eventually, Indian companies formed by savvy Indian engineers/scientists, will rise up to compete for this skilled labor pool. With demand for skilled labor rising, Indian workers can then ask for higher wages, until eventually supply and demand meet.

This current "job imbalance" is temporary. Indian people aren't freakish aliens that hate money - they want the best for their families as much as Americans do. Eventually the wages worldwide will stabilize, and I have full confidence that American workers can compete in a global marketplace...don't you?

BowStreetRunner
March 16, 2004, 01:21 AM
yeah i doubt bush came out to support outsourcing (political suicide defined???)........one of his economic advisrs said it wouldnt be all bad in the long run and the dems jumped all over it...."Bush wants to send jobs overseas!"
no one WANTS that, but its capitalism and thats how it works
BSR

Pendragon
March 16, 2004, 01:21 AM
I am curious as to where the president has come out in favor of outsourcing.

Perhaps he came out in favor of NAFTA or free trade?

The fact is, if you are a large company and employ 1000 Engineers at $50,000 per year, that is a $50 Million payroll.

If you move 50% of the jobs to India, you pay them $5,000 per year - a net savings of $45,000 x 500 (no calc handy).

Its simple economics.

7.62FullMetalJacket
March 16, 2004, 01:21 AM
What Mulliga said ;) , and

These are not "our" jobs. They are not sKerry's jobs. They are not Bush's jobs. Business has a fiduciary duty to run a company to maximize the benefit for the stockholders. If a job can be done in another location just as well for less money, then that is where the job is created. If a job done here costs too much, then the job is not created. Outsourcing merely creates jobs in the larger pool of jobs.

The turn the US gets is that those techies in India will start to desire better goods of the American variety and we sell them to the new workers. Industries that create jobs here expand to meet that demand. True, some of this stuff can be manufactured anywhere, but the US is still the engine that pulls the world.

Over 2 million jobs have been created since Bush took office despite 9/11 and the tanking of the stock market. Unemployment is about 5.6%, right around the low average for the Klinton "boom" years.

Presidents can make policy to encourage growth and economic freedom which will in turn create jobs. Congress can make laws to support the endeavor as well :barf: Neither ever really does. Entrepeneurs keep pulling the wagon despite the governments best efforts to load down the wagon.

Neither of them creates any jobs (except in the dead hand of government).

Jim March
March 16, 2004, 01:27 AM
Well, I think this IS gun related.

I really think that there's an element among US business and gov't leaders who think that US labor costs are too high to allow long-term profitability and economic survival. The "solution" is to slowly ratchet down US income levels - but it must be done slowly enough to prevent social chaos.

Some large segment of that group in turn thinks that gun control will help prevent that chaos as this major social shift happens.

THAT in turn is what's really behind US gun control, in a financial/PR sense.

-----------------------

History lesson: starting around 1870ish, a bunch of well-meaning but incredibly stupid ladies started the "Women's Christian Temperance Union". They were ignored as utter twits until shortly after WW1, when they suddenly started making political and PR progress towards prohibition.

Why the change?

They convinced major industrial figures such as Henry Ford, Kaiser (Kaiser Steel) and the like that banning booze would cause a worker productivity increase of about 10%. That in turn would help with global competitiveness. So the ladies got a boatload of money all of a sudden, and eventually caused more crime and chaos than any other political movement in US history.

Gun control is following the same pattern, folks!

We have useful idiots fronting for big corporate money used for dim-witted amateur-hour social engineering. It's happened before and it's happening now.

Oleg Volk
March 16, 2004, 02:12 AM
More on this topic: http://www.gmu.edu/departments/economics/wew/articles/03/jobs.html

atek3
March 16, 2004, 04:43 AM
Walter williams is definatly my favorite black econ professor. How many others are libertarian besides He and sowell?

atek3

atek3
March 16, 2004, 04:45 AM
come on...where are the protectionists...I know they are lurking, ready to spew garbage about "sucking sounds" and 'darn Furiners takin' our jobs that pay fair wages' :)

atek3

cracked butt
March 16, 2004, 05:07 AM
really think that there's an element among US business and gov't leaders who think that US labor costs are too high to allow long-term profitability and economic survival. The "solution" is to slowly ratchet down US income levels - but it must be done slowly enough to prevent social chaos.

In the long run, inflation will make the adjustments naturally.





Most of what we hear is propaganda.
When I graduated from college in the mid '90's it was difficult to find a job, I did not blame this on Bill Clinton. The buzzword of the day was that big corporations were "downsizing" which makes the big corporations look like the ogres ruining people financially. Since GW has been in office, the word "downsizing" has left our vernacular and has been replaced by the words "jobs moving overseas" in an attempt to pin the blame on the government, specifically the POTUS.

You tell a lie loud enough and enough times, it becomes the truth.

sundance43.5
March 16, 2004, 09:00 AM
You can say what you want about corporations trying to turn a profit, but corporate profits are at an all time high, and corporate taxes are at a low.

Chris

Waitone
March 16, 2004, 09:41 AM
When companies move production to lower cost centers they do so for one and only one reason. The cost of production ("production", not "labor) is too high to compete in selected markets which this day and time is global. This thread falls right in line with public thinking as to the reason for offshoring and this is labor costs in the US are too high.

Riddle me this bat persons. How can you economically justify relocating you production centers to a lower labor cost center when your cost of labor is a fraction of your total cost structure. Run the numbers and you can.t. You can if you are attempting to escape additional costs far beyond labor costs.

Real reality is American business are bailing out of the US because the cost of production in the US is far too high to compete in a world economy. When a US company outsources it reduces its labor costs (minor component) , it avoids health costs (both workplace health and healthcare), environmental costs, safety costs, and litigation costs (threats and judgments. US companies have to fund their own healthcare and retirement plans which generally is pawned off on the government of other countries.

In case you think I make this up, the National Association of Manufacturers commissioned an economic study to determine the true costs of production in the US due to government mandated "benefits" imposed by our glorious government. The NAM study determined the government places a mininmum 22% tax on US labor.

Lowering of barriers to exit from the US permits US companies to remain profitable FOR A SHORT PERIOD OF TIME. It allows them to recover some degree of profitability until the market re-establishes itself. Offshoring does nothing to fix the underlying problem which is the cost structure of producing in the US is too high for a global market. In a commodities market low cost winner will win every single solitary time.

Conclusion to which no one in government wants to come to: in a global market the US worker and US companies can no longer afford the socialist leviathan which is firmly attached to our back.

Chris Rhines
March 16, 2004, 10:06 AM
Waitone put it through the ten-ring. I know only a few business owners who have outsorced jobs, but they have all said the same thing - 'It's not the lower labor cost that makes overseas investment attractive, it's the suffocating government regulations that businesses operate under in the U.S.'

- Chris

Art Eatman
March 16, 2004, 12:06 PM
sundance43.5, you're confusing "profits" in terms of gross dollars above the cost of production with "profitability" in terms of percentage return on investment. This latter has been falling for over twenty years.

If you have a million-dollar ranch, and at the end of the year after production costs, taxes and cost of living you wind up with $10,000, you have a one-percent return on your investment. That sucks. But, if the year before had only gotten you $5,000, you've doubled your profits! Ain't that neat? But your local paper will tell the world that your profits doubled, not that your profitability isn't worth crossing the street for...

Art

Jim March
March 16, 2004, 12:15 PM
Waitone and others are correct. It's not just "US versus other countries" - socialistic STATES like California :barf: have massively higher production costs due to over-regulation than, say, next-door Nevada. Calif's shift of high-dollar workers out of the state is the real cause of our financial crisis.

So what do we do?

Either turn the state's .gov in a Libertarian direction, or watch it go completely down the toilet.

A *really* serious LP candidate with the kind of media access (probably via "star power") that Ahnuld has could maybe get this point across.

Sigh.

Kurt Russell in '06? :rolleyes:

atek3
March 16, 2004, 12:36 PM
I can seem them now, "Waaahhh, race to the bottom, don't repeal the 'Rights' of working peoples." Really, what is it with socialists.
California won't reform, it is doomed. Actually, it will do what europe did in the late nineties. Elect Neo-liberal leadership that understands you can't afford govn't programs without businesses to tax, and so the state will reform some of the most onerous things about california's business climate. Electricity costs, workers comp, the state's overtime law (if you work two twenty hour days in the rest of the country you earn 40 hours of pay, in california you are owed 16 hrs at normal and 24 hours of overtime :what:, not to mention CalOSHA, the biggest jerks around.

atek3

316SS
March 16, 2004, 12:44 PM
waitone wrote:
National Association of Manufacturers commissioned an economic study to determine the true costs of production in the US due to government mandated "benefits" imposed by our glorious government. The NAM study determined the government places a mininmum 22% tax on US labor

So, assuming things like workers' comp insurance and health insurance weren't mandated to be paid by employers, would this essentially be a pay decrease? I'm not saying that's bad or inappropriate, just clarifying.

What leads to the disconnect between the impressions of the public, that corporations are motivated by blind greed, and the point of view of waitone, that companies are simply looking for a way to maintain economic viability?

Lastly, what is the pure theoretical libertarian view of collective bargaining, both with employers, and , e.g. labor forces buying group health insurance without the intervention of the employer?

Jim March-

Your views of how this relates to gun control seem awfully sinister! Coming from you, though, they deserve further contemplation.

316SS

Gordon Fink
March 16, 2004, 05:24 PM
After all the manufacturing and technical jobs have been outsourced overseas, Americans will still be able to work in the post-industrial service economy. You know … selling imported goods to each other, clerking for retailers, cooking hamburgers, etc. :rolleyes:

~G. Fink

Waitone
March 16, 2004, 05:39 PM
Americans will still be able to work in the post-industrial service economy. You know … selling imported goods to each other, clerking for retailers, cooking hamburgers, etc. And that, Sir, is the crux of the matter. Wealth is created by farming, mining, and manufacturing. Services merely realocated wealth previously generated.

Try a little mind experiment. Take a services, any service, ranging from Mickey D's to Wall Street. Follow the services from destination to its source and at some point you will bump into something mined, grown, or manufactured. Services do not generate wealth. Services reallocate wealth.

Outsourcing is not trade. Ouytsourcing is direct substitution of low cost production. The end result is the US is transferring wealth out of the US to other areas of the world. Is that what we want? Are we prepared as a society to pay the social price? Don't know simply because there has been no public debate.

bountyhunter
March 16, 2004, 05:48 PM
I, for the life of me, cannot grasp how the exportation of jobs from America could in the long run benefit the U.S. and the middle class. President Bush has come out in support of outsourcing, so how can he say he understands and supports the middle class?

Here's the technical explanation: you're RIGHT, he's WRONG.

He supports outsourcing because it makes businesses more profitable, at least in the short term. In the long term it destroys the middle class and reduces their buying power, increases unemployment and generally lowers the standard of living. But short term profit is all business cares about, and business is all King George cares about.

Bush claims in the long run it will force US workers to train into other jobs: that's true, and they will be at much lower wages. because any job that pays a decent wage will (say it with me) get OUTSOURCED so the company doesn't have to pay a decent wage.... and the cycle continues until you have only two classes of people, similar to Europe in the 1800's.

JohnBT
March 16, 2004, 06:13 PM
"the cost of production in the US is far too high to compete in a world economy"

So how do all these 'foreign' companies get away with running factories in the U.S. of A.? If it's so bad here why have FN, Honda, Subaru, Toyota, H&K, Beretta and aw heck, there's a French condom factory here outside of town. Why do they have factories here?

They've outsourced here, why don't they out-outsource to someplace else if it's so advantageous? What do they know that 'our' corporations don't?

Maybe they know how to manage and run a business. It's not enough to make products cheaply, you have to develop and keep a customer base.

John

Jeff White
March 16, 2004, 08:00 PM
There are several states that still have business friendly state govenments. They can compete globally in many cases. The rust belt and the old industrialized North, plus the peoples workers paradises in California and places like Washington state are unable to compete because it simply costs too much to do business there. The for the most part democratic statehouses (although Illinois is in deep trouble after 30 years of republican rule) have sealed the economic doom of their states.

I'm afraid that until the average American understands that business owners don't sit on vast piles of cash ion their homes that this trend will continue. Take government out of the equation with it's minium wage, OSHA, EPA and other regulations and you'd see the country boom again.

Jeff - resident of New Appalachia (Southern Illinois)

7.62FullMetalJacket
March 16, 2004, 08:24 PM
Bravo, Mr. White. :D

bountyhunter
March 16, 2004, 08:51 PM
Take government out of the equation with it's minium wage, OSHA, EPA and other regulations and you'd see the country boom again.

Sure. Bring back "piece work" and child labor and it will be productivity at it's most efficient. You will excuse me if I don't stand and applaud your Reaganomic expositions about how the EPA has ruined America. When that moron was governor here, he gutted cal OSHA and did his best to pull their enforcement teeth.... and we inherited his legacy.

Guess what happens when it becomes cheaper to pay the fines than dispose of toxic waste properly? We and our children get to drink it. IBM and fairchild Semiconductor dumped thousands of gallons of toxins into the groundwater here. I have seen the cancer patients who worked in the "clean rooms" with the chemicals. cancers so rare that they occur one in a million, and yet five of eight people in a single production shift died from them. Women whose rates of miscarriage went up 1000% due to exposure to toxins.

You'll excuse me if I don't subscribe to the good old days of "leave business alone", because we saw it close up from 1964 to 1972 while that policy was in force. Our cemetaries are full of the victims of that policy when reagan was governor and the massive poisonings of the water tables have yet to be cleaned up (if they ever could be).

fallingblock
March 17, 2004, 12:22 AM
"....and business is all King George cares about."

... and the cycle continues until you have only two classes of people, similar to Europe in the 1800's."
************************************************************

A swat at "Dubya" (or was it really 'king' George:confused: )

A reference to class warfare.....


************************************************************
"Our cemetaries are full of the victims of that policy when reagan was governor and the massive poisonings of the water tables have yet to be cleaned up (if they ever could be)."
************************************************************


And, yes, a swat at evil Ronnie Raygun for poisoning all those children's water!
:rolleyes:


Uh, sorry, where were we....?

7.62FullMetalJacket
March 17, 2004, 12:48 AM
I deal with EPA and OSHA (and numerous other useless agencies) all of the time.

When is clean enough clean enough?
When is the workplace safe enough? (I have a saying that the only safe workplace is one where no work occurs)
Have you seen the Federal Register entries (and state laws as well) for environmental and safety regulations? If you think the IRS and the tax code are bad, try to digest all of these "feel good" regulations and compounding layers of feces while some are contradictory. :fire:

The left always claims that only the left can clean the air, land and water and protect workers. Note to the left: nobody wants to poison the pond and kill the workers. Is some regulation necessary? Yes. Set standards that must be met for releases to the "public" domain. Allow the evil business to determine the best way to get there.

Environmental regulations are too burdensome for the return. We passed the point of diminishing returns in the mid-90s. Somehow the left feels that we are not yet there. What no one knows is where is there? How much will it cost? Business can deal with risk but can not deal with uncertainty.

CalOSHA is one of the most rabid socialist worker's paradise militant organizations on the planet. They do things that would make the Earth Liberation Front blush. There was a time and place for safety regulation. The workplace and equipment used in the workplace today are safer than ever, and insurance companies are penalizing companies with high injury rates.

CalOSHA shows up to "investigate" and literally takes over these small manufacturing facilities, raise cane for 2 or 3 days, and then leave. Six (yeah, that is 6) months later (law requires no more than 6 months) the company recieves the "citation and notification of penalty." What kind of "safety" regulators would wait 6 months to inform a company of serious violations that could cause injury? No sane one. It is another penalty, or tax, on the workplace, nothing more.

Just to keep this on topic:

Gun ranges are being terrorized by the "lead (Pb) police." It is for the children. :rolleyes: I have seen and submitted proposals for numerous gun ranges closing in the PRK. Reason? Inadequate ventilation/lack of control for the "lead hazard." The problem is not the installation of the proper equipment, it is the open-ended litigation made possible by scare tactics.

Stealth101
March 17, 2004, 12:51 AM
Jim March...
I think you hit the nail on the head!(quite a few times!) The real reason that they want to take away the guns is that when the American people figure out the screwin they're getting at the hands of the rich ie the government, there might be revolt........got to keep the peasants in line you know. I have felt for some time that the rich no longer want to share with us.....they cant lower their standards...for heavens sake. I know my standard of living has fallen dramatically in the last five years and it worries me, and for my kids future.

w4rma
March 17, 2004, 01:04 AM
yeah i doubt bush came out to support outsourcing (political suicide defined???)........Doubt no longer. Bush did.

Treasury secretary defends outsourcing
...
Treasury Secretary John Snow on Tuesday defended U.S. corporations' right to send U.S. jobs offshore to cheaper-labor countries, and said a more productive source for jobs might be found by breaking down global trade barriers.

Snow was asked on CNBC television whether he would advise U.S. corporations to reduce the rate at which they are "outsourcing" U.S. jobs by having them performed in countries like China and India.

"I think American companies need to do what they need to do to be competitive, and as they're competitive, it's good for their shareholders, it's good for their consumers and it's good for their employees," Snow said.
...
Job losses and outsourcing, often using computers to ship work -- ranging from x-ray analysis to preparing data information -- to countries where people earn far less and have fewer legal protections in the workplace have become hot-button issues in the runup to November's presidential vote.
...
http://www.msnbc.msn.com/id/4365553/

...
President George W. Bush hit back at Democratic critics of his administration's job-creation efforts on Tuesday, branding them as "economic isolationists" who would raise new trade barriers and damage the US economy.

The comments came as part of what appeared to be a co-ordinated administration effort to respond to growing political pressures over the anaemic pace of US job growth, which has helped push Mr Bush's likely Democratic opponent, John Kerry, ahead of the president in several recent polls.

In a speech in Virginia, Mr Bush said: "There are economic isolationists in our country who believe we should separate ourselves from the rest of the world by raising up barriers and closing off markets. They're wrong. If we are to continue growing this economy and creating new jobs, America must remain confident and strong about our ability to trade in the world."

Robert Zoellick, the US trade representative, similarly warned Congress on Tuesday that "given the fact we're now in a stage of an economic recovery, the absolutely worst thing we could do would be to turn to economic isolationism".
...
http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1078381644895

Powell Reassures India on Technology Jobs
NEW DELHI, March 16 — Secretary of State Colin L. Powell, encountering the other side of a tempestuous debate in the United States, sought to assure Indians on Tuesday that the Bush administration would not try to halt the outsourcing of high-technology jobs to their country
...
In Washington, the White House endorsed Mr. Powell's comments.
...
http://www.nytimes.com/2004/03/17/international/asia/17POWE.html

schromf
March 17, 2004, 01:29 AM
What has this got to do with guns? If I want to read economics I will read Milton Friedman.

fallingblock
March 17, 2004, 02:23 AM
w4rma likes to get all fired-up about those media reports blaming "Dubya" for whatever.

The solvent w4rma had to use to get all those Dean stickers off the car may be exacerbating the problem.....:)

w4rma hasn't actually said much about guns....I don't think there's much interest there. :(

ksnecktieman
March 17, 2004, 03:21 AM
IMHO,,,,, Our economy is in bad shape because we are the big brother to the world.

We have soldiers all over the globe protecting and defending other countries. Our taxes pay these soldiers, and they take their families with them and spend their income in foreign lands.

We give foreign aid money in numbers my mind can not comprehend. We create factories and jobs, and raise the standard of living for any country that will ask.

We are taxed fifty percent of our income here, so everyone with a job has to earn double what he needs.

The first step to economic recovery is to stop the federal government from giving away our money.

fallingblock
March 17, 2004, 08:35 PM
"The first step to economic recovery is to stop the federal government from giving away our money."
************************************************************


Maybe even stop the Feds from taking it from us in the first place?:D

TamThompson
March 17, 2004, 08:49 PM
What all this has to do with guns is two things:

1. If you have no job because yours got outsourced, you can't buy guns and ammo.

2. What Jim March and WaitOne said, in spades! The standard of living for most Americans is falling, and when it falls too far too soon, the illuminati (wealthy elite) are very concerned about armed revolution/civil war. I think they're miscalculating, though. I believe there are enough of us out there who refuse to be disarmed that they won't be able to pull off their 'make America into a serfdom' scheme, and I do think we're headed for another American revolution or civil war.

To that, I say, MOLON LABE!

Glock Glockler
March 17, 2004, 10:03 PM
The outsourcing that is occuring might actually be a very good thing long-term, hopefully it'll give us the kick in the teeth that we need in order to realize we can't afford socialism.

If you want businesses to remain in this country you have to make it a hospitable environment in which to do business. You cannot have your cake and eat it too, trying your best to strangle a business yet existing as a parasite off of it is not an effective long-term strategy.

Here's a quick plan to make the USA more business friendly

- eliminate affirmative action. That would be a nice little boost if companies could hire whomever is best suited for the job instead of govt quotas.

- eliminate healthcare and workmen's comp. requirements on businesses. Companies used to give bennies like healthcare to attract and keep talent, they did so because it was beneficial to them, but requireing it from them on all employees is financially crushing, especially when he costs of those things are radicaly inflated due to govt intervention. More of Hegel's work here

- eliminate the matching Social Security requirement for employers. This would provide an immediate 7.65% boost to companies that employ people in the USA.

- lower corporate taxes. The USA, land of the free, has one of the highest corporate tax rates in any industrialized country, lower these rates and companies will be more likely to stay here.

- streamline and ease up on govt regulation. I'm not saying that companies should have free reign to pollute, but only that most regulations are not only harmful but they also dont do a damn thing to make anyone safer, and sometimes make people less safe.

Case in point, the EPA has severe clamps on BioDiesel fuels cause the level of oxide emmissions is higher per unit of fuel consumed than standard fuels but the total amount of oxide emmissions are lower with BioDiesel because it's more efficient. For all the talk given to helping the environment the EPA regulations harm the efforts of cleaner and renewable fuels as well as make us more dependant on Jihadist supplied oil. Bravo!!!

I wonder how many of you that are all about govt regulation of business have actually dealt with these various regulatory agencies, as every person I know that does, including my parents and brother, can all attest to financial waste caused by them while doing nothing to enhance saftey, except for the job safety of the fat bureaucrats employed at said agencies.

- eliminate the minimum wage. Suppose someone in the US was allowed to do a certain job at below the govt mandated wage, if that was the case a company could take advantage of lower wages by moving to Appalacia, which would save them money and bring jobs to an economically depressed area, but I suppose the ignorant socialist position is to mandate higher wages yet not want companies to move elsewhere.

- lessen govt involvement in education. Federal involvement can immediately be eliminated and I'll hold off what what I'd ideally like to happen to state education, but I think we can agree that watching different states try different approaches will be more helpful than the Federal/Soviet one size fits all approach.

One of the main reasons why the engineering and science depts of major universities are filled with foreigners is because Americans are unprepared and cannot compete. The mathematical and scientific abilities of American students have declined tremendously in the past 5 decades, while unsurprisingly the amount of govt involvement has risen sharply. You cannot maintain a top economy if you're routinely graduating kids that cannot read or think but are in touch with their feeling and know why evil white capitalist men are the source of the world's problems. A more free market to education is what is needed.

I could probably go into more detail as well as give other examples but what I listed would give an immediate high-octane boost to the economy, I challenge anyone to prove me wrong.

If you want jobs to remain here and want a robust economy, do what I recommended and it'll happen, but are you willing to give up your favorite welfare bennie for it?

7.62FullMetalJacket
March 17, 2004, 11:47 PM
Mr. Glockler,

Well Said :)

atek3
March 18, 2004, 02:17 AM
I can see them now, "Waaahhh, race to the bottom, don't repeal the 'Rights' of working peoples." Really, what is it with socialists.
to see this line of thought in action, re-read bountyhunter's posts :D

What mr. glockler said...


atek3

Dex Sinister
March 18, 2004, 03:15 AM
I, for the life of me, cannot grasp how the exportation of jobs from America could in the long run benefit the U.S. and the middle class. President Bush has come out in support of outsourcing, so how can he say he understands and supports the middle class?

Can someone please explain how America can survive when jobs are being lost by the hundreds of thousands and aren't being replaced?

The general economic answer is that economies do not run for the benefit of producers: They run for the benefit of buyers, and buyers always benefit from lower prices. Said another way, one never benefits by buying one of something instead of two for the same price, just because the seller of the one lives in your neighborhood, county, state, or country. The middle class buys the vast majority of the “stuff” – lower prices for stuff benefit them.

There are just as many jobs “lost” through paying higher prices to domestic laborers – you simply don’t see them because they aren’t created because the existing higher-paid jobs soak up the money. With lower prices, people buy other things with the leftover money, and support other businesses.

As for the money paid to foreign workers, either it stays out of the country, in which case the total money supply drops and each dollar is worth more, or it comes back and buys things, in which case it is obviously paying someone’s wages. Given that we don’t adjust trade imbalances in gold between countries anymore, the bits of paper have to eventually come back.

Dex }:>=-

Nightcrawler
March 18, 2004, 03:35 AM
One of the main reasons why the engineering and science depts of major universities are filled with foreigners is because Americans are unprepared and cannot compete. The mathematical and scientific abilities of American students have declined tremendously in the past 5 decades, while unsurprisingly the amount of govt involvement has risen sharply. You cannot maintain a top economy if you're routinely graduating kids that cannot read or think but are in touch with their feeling and know why evil white capitalist men are the source of the world's problems. A more free market to education is what is needed.

There's a world-class engineering college here, Michigan Tech. Many of its students are from China, a country that I think you'll agree probably is more socialist than Michigan.

To say that Americans are uneducated because of state-schools, and to say that all of these foreigners are smarter is a poor argument, since I believe every industrialized country in the world provides some form of state-sponsored education. It would seem that the quality of primary and secondary education is higher in places like, say, Japan. Japan, of course, has public schools and universities.

And, the fact that people from all around the world come to American universities for education certainly says something about the quality of our post-secondary educational institutions, if nothing else. Many posters here, for example, certainly seem well educated. I'm sure many of them went to good schools and worked hard to get there, too.

This is not to say that more money towards education is needed, only that the money there be utilized in an efficent manner. The Clinton Administration threw something like a hundred billion dollars at education during its 8-year tenure, and national test score averages went down. So it remains true that you simply can't fix a problem by merely throwing taxpayer dollars at it.

A minor point. However, I would caution against going around blaming the government for every problem in life. If Johnny does poorly in school, it's entirely possible it's because he's just not interested in studying hard. This is not to say that schools don't need reform in many places, but saying that schools, wholesale, are bad because students aren't doing well is oversimplifying the problem.

In order to compete in the US job market, you need an education or a technical skill. Now, nearly all of the low-skill manufacturing jobs have moved overseas, and our economy as a whole seems no worse for wear (the business environment in places in Asia is much like it was in the US in 1910; the sweat shops and child labor are still there, because it's monetarily efficient, but they're just overseas and you don't hear about them, much.) So quality education is exceedingly imporant if we Americans want young people to grow up to a higher station in life than being a janitor or fry-cook.

For example, I'm not spending thousands of dollars and going further thousands of dollars in debt to attend this university simply for my health; going to college, while enjoyable, is goal-oriented. Bachelor's degree so I can get into graduate school. Master's degree so I can get a decent career, maybe a doctorate eventually. It's going to cost a lot of money and require a lot of effort on my part, but the alternative of working for chump change for the rest of my life is highly motivating. I mean, a good career means good pay. Good pay means disposable income, and disposable income means more guns for Nightcrawler.

However, the highest quality education won't help if the person involved is unmotivated to work towards his goals, so personal responsibility is no less a factor now than it has ever been. If my grades are poor and I don't get accepted into grad school, you won't hear me going around saying that there needs to be more funding for schools, that I was discriminated against, or any of that. It'll be my fault and my fault alone.

However, you never accomplish anything if you don't risk failure, so what the hell. :D

Waitone
March 18, 2004, 10:07 AM
I just love contrarian economic positions. The following op-ed piece is written by Paul Craig Roberts. He is not one of the marquis economists, but he does have a heavy weight history. Mr. Roberts is the economist, who as a staffer, wrote the legislation in the Reagan administration which resulted in 19 consecutive years of economic expansion.

His view of "free trade" is somewhat different than the herd. His columns are syndicated and can be found at www.creators.com ..

http://www.newsmax.com/archives/articles/2004/3/17/91158.shtml

The Missing Case for Free Trade
Paul Craig Roberts
Wednesday, Mar. 17, 2004

Belatedly, pundits are beginning to notice that economic growth without job growth is not politically viable. But they still haven't a clue about what has become of job growth.
Pundits no longer confidently assert that the massive U.S. trade deficit is good for the economy, because it puts money in foreign hands to buy U.S. exports and create jobs for Americans.

Some pundits are even beginning to realize that "lower-priced foreign goods" are not all that cheap when the price is the loss of high-paying U.S. jobs.

But pundits still believe that free trade is somehow going to bail America out and create new industries and high-value-added jobs to replace the ones lost to offshore production and outsourcing (and, I should add, to competition from Japanese industrial policy).


Sooner or later, pundits will have to face the fact that the conditions upon which the case for free trade is based simply no longer exist.

Free trade is based on the principle of comparative advantage. For comparative advantage to operate, two conditions are required: a country's factors of production must seek comparative advantage within the country and not move to absolute advantage abroad, and countries must have different relative costs of producing different goods.

When free trade theory originated two centuries ago, climate and natural resources were important components of GDP. Climate and natural resources could not migrate, and countries' different climates and resource endowments meant that relative costs varied among countries.

In today's modern economies, production is based primarily on acquired knowledge. Modern production functions operate the same regardless of their location. There is no necessary reason for the relative costs of producing manufactured goods to vary from one country to another. Only the absolute costs vary, with the advantage going to countries with large excess supplies of labor.

Economists and pundits mistake offshore production and outsourcing for trade, whereas in fact they are merely the substitution of cheap foreign labor for expensive first world labor.

It is nonsense for economists and pundits to claim that the United States benefits from the loss of jobs, capital and technology when economic theory tells us that all three are needed for economic development.

Economists need to catch up with their discipline. The latest work in trade theory is "Global Trade and Conflicting National Interests," by Ralph E. Gomory and William J. Baumol, published by MIT Press in 2000.

Gomory and Baumol show that conflict is inherent in international trade. In some cases, free trade can be mutually beneficial. In other cases, one country gains at the expense of another. In some cases trade is worse than no trade. The authors demonstrate that in no case can all trading countries achieve their individually best outcomes.

Many modern industries are characterized by increasing returns, which means that countries with industrial policies can target industries, wrest them away from free trading countries, achieve a monopoly and retain the industry indefinitely.

Gomory and Baumol remind us that the issue is not whether companies or individual consumers benefit from free trade, but whether the country overall benefits. Specific corporations and consumers can benefit from offshore production and outsourcing, while the country as a whole loses occupations, industries, production capability and GDP.

A country that produces a large share of the world's goods "has much to consume and much to trade. It becomes a high-wage, high-consumption country. This beneficial effect of being the producer of a large proportion of the world's tradable industries can be very substantial." The greater the share of world income a country can achieve, the higher the wages of its workers.

A country whose policymakers are under the illusion that free trade is uniformly beneficial is likely to find itself blindsided in the competition for important industries and occupations.

In today's world, the interest of multinational corporations can easily diverge from the interests of their home countries. When, in pursuit of lowest cost, multinationals move production for their home markets abroad, they move GDP abroad by turning domestic production into imports. A country that produces abroad for its home consumption will never close its trade deficit.

Perhaps Gomory and Baumol will wake up policymakers before the United States becomes a mere low-wage assembler of foreign-made inputs.

Waitone
March 18, 2004, 10:27 AM
My big beef against "free trade" is it ain't free trade.

What we call "free trade" is in reality government managed preferrential access to American markets in support of US foreign policy goals. That is why it is possible to have "free trade" and import barriers at the same time. It is not unusual for US companies to face import restrictions on its products in say, India or China, yet those countries have no import restrictions on their products coming into the US. Note: bold factoids are inconsist with principals of "free trade" yet that is the terminology used.


Weeelllll, Colin Powell provides a textbook case.

http://seattletimes.nwsource.com/html/businesstechnology/2001880943_powell17.html

Powell wades into debate over outsourcing in India

By Seattle Times news services

NEW DELHI — Secretary of State Colin Powell yesterday urged India to open its economy to more American goods and services to offset the loss of U.S. jobs to Indians.
But Powell told a news conference "there's no quid pro quo here" and that "outsourcing is a reality of the 21st century global economy."

"Outsourcing" refers to the practice in which U.S. firms hire workers overseas, many of them here, to do jobs such as telephone customer support, accounting and transcription previously done by U.S. workers.

The number of U.S. jobs moving to India is still relatively small — fewer than 200,000 — but has become controversial in a U.S. presidential election year that has seen anemic job growth despite an expanding economy.

American job losses might be offset after "we can get the benefit of open trade," Powell said during one of two public appearances here in which sharp questions were raised about the growing U.S. political debate and India's anxious reaction.

Powell faced tough questions from Indian college students on a lively television program over what one student called U.S. hypocrisy.

One student gibed that the United States should outsource the counting of election results in the coming presidential election "because you've got backward stuff." India, the world's largest democracy, votes electronically over a period of days.

John Kerry, the Democratic presidential candidate, is promising to crack down on outsourcing if he is elected. Members of Congress and state legislators also are threatening new restrictions in the face of criticism from trade unions and others.

Powell and other U.S. diplomats are using the debate and India's anxiety to press for more and speedier liberalization of this nation's markets — and the extraordinary potential offered by 1 billion consumers.

Although it has taken dramatic steps toward reform since 1991, India still has a ban on direct foreign investment in its retail sector, and imported agricultural goods face a 38 percent tariff. Those barriers, U.S. officials say, are impeding efforts to pare a trade deficit with India that topped $8 billion in 2003.

TaurusCIA
March 18, 2004, 10:52 AM
Doubt no longer. Bush did.

Treasury secretary defends outsourcing

"Outsourcing HAS devesated our workforce" is all a bunch of hooey. Could it in the future? Don't know...I'll get my crystal ball.

This from Kerry's own man.


ALAN BLINDER

Q: Why is jobs growth so slow?
A: This is the flip side of productivity. Productivity has been soaring, so you're not getting any jobs. But that only changes the question to: What in the world is going on with productivity?

Q: Well?
A: We're pretty confident that a chunk of this ebullient productivity performance comes from the use of information technology. A little bit of it probably comes from the normal cyclical bounce in the economy. As GDP grows fast, productivity grows fast.
But it also does appear that American businesses are working their work forces harder. That could mean working people faster in the same number of hours or working them more hours. Remember, these days, many more people are salaried workers rather than hourly employees. So BusinessWeek doesn't even think of registering the number of hours you work, and neither does Princeton for me. The government can only make an estimate of that.

Q: And it assumes we're working 35 hours per week.
A: Right. If the gap between 35 hours and what salaried workers are really working is widening that would affect productivity [as measured by the government].

Q: But why are companies working their employees so much harder, rather than taking on new workers?
A: One explanation that has been given is soaring health-care costs. If they can get 60 hours of work out of Rich Miller instead of two people at 30, they only have to buy one health-insurance policy. That's expensive these days.
Another may be that businesses are uncertain about the solidity of economic growth and, therefore, hesitant to invest in new workers. I thought that was a really cogent argument nine months ago. But now it's wearing thin. I'm not sure how much more evidence businesses need. We're now looking probably at the third consecutive quarter of rapid economic growth.

Q: How big of a role is offshore outsourcing playing in the weak jobs market?
A: Jobs have been lost to outsourcing. It's a hardship for the people who lose their jobs. That said, when people have tried to make some estimates of how many jobs may have already been involved, they tend to come up in the hundreds of thousands. I think this outsourcing is going to be a much, much bigger phenomenon as we go through time. But up to now, as far as anybody knows, it's not that large.

http://www.newsletters.newsweek.msnbc.com/id/4540501/

TaurusCIA
March 18, 2004, 10:56 AM
So how do all these 'foreign' companies get away with running factories in the U.S. of A.?


It's called public relations. The US car makers played up to our patriotism by saying buy American. So they said Ok we will build them in America. They opened plants in pro-business cities/states. Smart move.

TaurusCIA
March 18, 2004, 11:14 AM
I wonder what the net gain/loss in jobs would be if we made all our companies only produce in America and threw out all the foreign owned companies that have US plants.

I forgot. They want to have it both ways. Keep the foreign company plants and the jobs they provide AND make all the US companies hire only Americans. :uhoh:

Waitone
March 18, 2004, 12:12 PM
Productivity is another one of those red herrings flopped out on the table to distract from the reality of the situation.

Go to the Bureau of Labor Statistics site and look up "productivity." You eventually find the definition used to measure productivity. Common sense tells you a company can not have month over month multiple percentage increases in productivity. New computer systems will give a company a one shot improvement. Resructuring will give a one shot change. An infustion in busineess operating systems will again give a one shot improvement.

However if you look at the definiton used by the BLS of productivity you will see a category lablelled as " purchased business services." In other words outsourcing. Outsourcing is the only way a company can provide month over month improvements in productivity.

It is me or is it dishonest gamesmanship.

braindead0
March 18, 2004, 12:29 PM
Other countries, like India (most infamous), have large supplies of technically minded people who like programming and other jobs that require skilled labor. These people are trained engineers, and good at it. Nothing wrong with that.
The "programmers" India is putting out have a degree from a government school that I suspect passes everybody. My company tried to outsource some programming, and they got what they paid for.. very poorly architected, inefficient code that was filled with bugs galore. We spent more time fixing all the problems that it would to just do it right in the first place.

Highly skilled programming jobs are not being outsourced at the rate some may suspect, what are being outsourced are the low-skill programming jobs nearly data entry type work. From what I've seen (10 Indian "programmers" from 3 separate firms) these folks are in no way prepared for serious programming.

I have no fear that my job will be out-sourced. On the other hand, this could cause problems for entry level programmers.

w4rma
March 18, 2004, 12:50 PM
The folks in India and China will learn and if the outsourcing to India and China continues, they will surpass. America will no longer be a leader in more and more industries. And it isn't just programmers, it's accountants/stock-brokers, engineers, tele-marketing, anything where the work done can be communicated to the U.S. (until the U.S. middle class's back is broken) with a phone/computer and/or fax machine. It's only a matter of time before the buisness owners pop up in India/China and American executives and the buisnesses themselves are outsourced, also.

JohnBT
March 18, 2004, 12:55 PM
"If Johnny does poorly in school, it's entirely possible it's because he's just not interested in studying hard."

I've done career counseling and the related interest and aptitude testing since '86 and started working as a rehabilitation counselor in 1974 and all I have to say is "A lot of 'em aren't interested in studying AT ALL." By a lot I mean a quarter, a half or who the heck knows how many. How the heck can so many have just simply given up?

John

TaurusCIA
March 18, 2004, 12:57 PM
I wasn't saying that productivity, as defined, is good, bad or ugly. I was just pointing out that both sides say that outsourcing is not that big of an issue regarding the jobs market as a whole.

I work for a medium sized software company and we have grown like crazy over the last three years. Grown in clients, revenue and salary but have not added any employees.

Why? Glad you asked. We are working smarter, more efficiently and yes, even longer hours when needed. But, by staying lean we have not had to lay off employees like most of our competitors. Companies got cocky during the dot com years and got burned. Most have learned their lesson and will grow smarter not necessarily by throwing more bodies at it.

Diggler
March 18, 2004, 01:11 PM
You want American programmers to compete with the world? Stop all this higher-education crap where we make courses mandatory so some of the ivory tower women's studies and English Lit prof's always have a job. It's nice to learn, sure, but c'mon.

By the time you go through a 4 year course of study, the stuff you learned in the first 2 years is already starting to become obsolete. Plus, you take all the other watered down stuff along with your field of study courses. They need to get rid of the other unrelated requirements and have programmers here immerse themselves in 2 solid years of math, logic and coding. Not coding where you write a function here and there, but actually write a system that can grow and evolve with your education.

I learned coding syntax at school. 90% of the other stuff I picked up by DOING, at work or at home. Never had the occassion to work Greek Mythology into my code though, even though I spent a semester learning it and studying it.

:rolleyes:

Diggler
March 18, 2004, 01:14 PM
A lot of those jobs from the 90's should never have been there in the first place. Everyone thought that they could put "E-" in front of their names (eFurniture.com, eGroceries.com, etc.) and venture capitalists would fall all over themselves to give them money... and for a little while they were right. Didn't even need a business plan, just a catchy name and a dot-com address. But like everything else, there has to be a foundation, or the whole thing will crumble.

Selfdfenz
March 18, 2004, 01:25 PM
Excellent thread IMO

Haven't made up my mind about outsorcing but I "feel" its short term + for the country will end up as a long term - for the US.

If textiles can be used as an example, we outsourced and that got the US cheaper ????s and underware. No argument. Those blue collar jobs are gone and at the labor rate 3rd world workers are paid we will never have those jobs returned or want them in all likelyhood.

So US citizens may be employed but in something besides a large part of textile manufactureing.

Now...if other traditionally US high,medium or nearly no-tech jobs follow this pattern will we see the same trend.....jobs that are permanently downloaded to other places.

If so, then US citizens may be employed but in something besides a large part of the __fill in the blank___. I wonder what they will be paid and for what?

Where does the US economy equilibrate and will it be more or less stable?

Next to oil, toys, textiles and software do we continue to add an unending number of items to the list of things we "are dependent on" from other nations?

How will political ups and downs on a global scale impact the US when many things and services are supplied in shipping containers or via sat uplink? Will we always have a few PITA things "you just can't get now" because of the elections or revolutions in country X?

If the typical US citizen has decreased buying power long term (more competitive jobs market and fewer high paying opportunities) is the US market for ALL goods and services going to be deminished as US citizens have less buying power?

How does that effect the US economy and US businesses? If I could be convinced we were only downloading some jobs and not (long term) a lot more than that, I would be on board.

And on what I hope all will consider a funny note: Will amnesty for illegals end up forcing many to wish 25 years from now they had kept they good
day jobs in Mexico City due to outsourcing?

I am trying to be a free trader but I just have a lot of questions?


S-

w4rma
March 18, 2004, 01:29 PM
The only way that Americans can compete directly with India and China in these positions is by raising their salaries to U.S. standards or lowering our salaries to their standards.

Engineers, accountants, health analysts, and other skilled offshorable jobs are available for about 10K/year in India and it is my understanding that one can live *extremely* well, in India, for that salary.

Also, China is now beginning to undercut India's prices as they educate more citizens in the sciences and trade skills. And China cares even less about worker and environmental regulations than India does.

Waitone
March 18, 2004, 01:51 PM
I am trying to be a free trader but I just have a lot of question.Yea me too. I want to believe in the concept of free trade but I simply can not ignore reality to shoehorn my belief template onto the facts. In my case my belief in free trade was shattered when I got an inside look at what is in reality happening. Once that occured I could continue to mouth the lie, or I could break. I chose to break and then develop my own definition of what we are facing. I guess I'm much more comfortable controlling definitions than being manipulated by the unthinking herd. I can rehearse all the wonders and benefits of free trade. I actually believe it in an ideal world. We do not live in an ideal world. We live in a world where people are manipulated like poker chips and used like kleenex.

I do reserve the right to believe in free trade. . . . just as soon as someone shows an example to me I'll begin to change my views, but until then I remain an opponent and I will use my vote to remove people from office that continue to believe in what I think is a lie.

mercedesrules
March 18, 2004, 02:51 PM
Free trade is good.

The USA doesn't have it. If it did, I could buy marijuana at the grocery, Vicodin at the pharmacy and pop over to Canada and Mexico to shop medicine prices.

Never judge what is best for the "economy", the "middle class" or the "country". If a policy is good, it will be good for the individual, not necessarily one of the previously-mentioned constructs.

MR

Selfdfenz
March 18, 2004, 03:44 PM
"If a policy is good..."

IF, both letters, upper case....but then I'm not one to garb away the broad brush from the painting hand of another.

S-

Selfdfenz
March 18, 2004, 03:47 PM
Oh and...

Never judge what is best for the "economy", the "middle class" or the "country"...

Those seem like pretty good places to put the calipers to me....

Perhaps I'm missing something.

NFI

S-

mercedesrules
March 18, 2004, 04:23 PM
(MR) Never judge what is best for the "economy", the "middle class" or the "country"...

(Selfdfenz) Those seem like pretty good places to put the calipers to me....

Perhaps I'm missing something.

I'm an individualist, Selfdfenz. IMO, (coercive) policies aimed at helping groups are collectivist. They help that group...at the expense of some other individuals. That's why they are called "special interests". Added to the above special interests would be "big business", "the elderly", "veterans", "the poor", "the handicapped", "women", "minorities", "the little guy", etc.

It's the old seen/unseen. The benefits to the favored group are seen while the harms to all the rest are unseen and thus ignored. Though ignored, they are nonetheless immoral. For instance, a policy that puts a duty on imported motorcycles to help Harley-Davidson helps them but hurts all those that can't afford, or don't want, a 1400 cc. motorcycle.

MR

Pendragon
March 18, 2004, 04:24 PM
I worked with several engineers from Idnia when I was at HP.

Very bright, educated young men who are excited about their future.

They made around $6k per year and had dirt floor homes and no running water.

My friend at work took them up to his land and let them shoot guns and make smores and sleep under the stars - they were amazed - it seems you can own firearms in India, but the costs are astronomical for any but the very rich. Also, hunting is the sport of the elite, not something regular folks can do.

The way to even the field is to export OSHA and other regs to the other countries :evil:. Make them setup unemployment insurance and all the other stuff that makes it so expensive to employ people here.

Despite the cost savings, some projects have proven to be a failure and some jobs have moved back over here.

In the 1990s, tech jobs were sold as the way to be wealthy in the future. I read a prediction in about 1999 that in 5 years, tech jobs would be considered "blue collar" and would pay those kind of wages. Those days are here = nothing wrong with blue collar though, its just different than it was a few years ago.

moa
March 18, 2004, 05:14 PM
My company has been outsourcing in my particular location since 1997. Some work was sent to India like programming, and a handful of Indians brought to the States to do the same.

However, lately I have been seeing a large influx of Indians pouring into our location. Apparently many are put to work on our back office operations and external commercial accounts, with most eventually being moved to commercial accounts. According to the H-1B visa status on the bulletin board, these jobs run from $45k-$60k a year.

But no American has been or will be considered for these jobs because my management team has been told to use our "global resources" from India.

My personal manager tells me he has not had a state-side new hire allocation for an American in four and half years.

I think one reason for the large influx is that it is ineffecient to have Americans working normal business hours when the Indians have to work in the middle of the night unless we wait to communicate with each other on a delayed basis. Also, it is easier to keep an eye on them.

And, the same time we have this large influx of Indians at my company location, other company locations are laying off hundreds of Americans, some probably with the same or better skills.

Gordon Fink
March 18, 2004, 07:11 PM
Warning! Big-picture economic comments ahead.

Probably the biggest problem with unfettered capitalism is that it encourages the consolidation (i.e., hoarding) of wealth. While the creation of new wealth remains high, this isn’t too big of a problem, but as the economy slows, consolidation becomes the prodominant means of acquiring wealth. In turn, this leads to a negative reinforcement of the underlying economic problem. As wealth is hoarded, less new wealth is created, so even more wealth is hoarded, and even less new wealth is created, and so on.

The end result is that, yes, the rich get a little richer, and the poor get a lot poorer—mostly at the expense of the middle class. Eventually, the economy corrects itself, but the process is usually painful.

The trick, therefore, is to discourage the extremes of wealth consolidation in some non-coercive way. In other words, we need to share the wealth without turning to socialism to do it. However, very few seem to have figured out how to do this yet, but there are some methods we could use.

We must also realize, of course, that not everyone will be rich and that some structural poverty is necessary to fuel growth. Then all we have to worry about is the larger problem of total exploitation of finite resources. :D

~G. Fink

fix
March 18, 2004, 07:39 PM
Waitone don't give up on free trade entirely. What we are seeing is more a result of big government than free trade. The two are mutually exclusive, much like communism and gun rights.

Gordon Fink
March 18, 2004, 08:01 PM
No, no, no, fix! Under communism, you still have the RKBA, but you don’t own the guns yourself. The community owns them. :D

~G. Fink

Waitone
March 18, 2004, 08:29 PM
Waitone don't give up on free trade entirely. What we are seeing is more a result of big government than free trade. I haven't! I am absolutely convinced that capitalism is the best way of improving the lot of everyone, everywhere.

Where I have to draw the line is when unthinking advocates of an ideology evaluate a socio-political issue through a pair of glasses which filter out the real reality of what is happening. They then make decisions which do nothing to correct the underlying problem. The situation is made all the more severe when those making decisions are in government and have the power of the gun to enforce their distorted reality.

Outsourcing is merely a market adaptation to a government imposed distortion of the marketplace. The unfortunate consequences of that adaptation unless changed will result in the loss of weath in our // my country, abandonment of a manufacturing base, and loss of technology which can be used to recover that base.

Lemme give you one simpleminded example. Advocates of "free trade" have no problem with abandonment of the manufacturing base and will cite lots of free market principals to buttress their claims. Its ok to give up (pick your favorite industry) because capital will be better used to identify and generate the next big technology. (Most insulting example here 'bouts is NC and SC textile workers need to get retrained in nano-technolgy,etc. something our idiot governor advocates). Point in fact is the industrial sector in the US accounts for 90% of all patents file. So here we have learned academics seeing nothing wrong with giving away the very engine that will create the next technology. I am not stupid, but I have a hard time following that logic.

I see market adaptations to governmental diistortions but I do not see a free market and hence free trade at work. I see at best a poor counterfeit at work. What scares me is market distortions are eventually corrected by market forces and it usually dangerous, unpleasant, and expensive. You don't fool with mother nature and you don't fool with a market economy.

wingman
March 18, 2004, 08:54 PM
He supports outsourcing because it makes businesses more profitable, at least in the short term. In the long term it destroys the middle class and reduces their buying power, increases unemployment and generally lowers the standard of living. But short term profit is all business cares about, and business is all King George cares about.

Bingo, pick up your prize at the door and prepare for your minimum wage
job of the future as we enter into the wonderful new global world.

We export jobs to the third world and import people in great numbers from
the same place, recipe for disaster..:(

Glock Glockler
March 18, 2004, 09:56 PM
Probably the biggest problem with unfettered capitalismp...

From where are you getting this information? I sure dont see anything near unfettered capitalism around, the closest would be Hong Kong during the days when the Brits were in charge, and they had one of the highest standards of living the world.

As wealth is hoarded, less new wealth is created, so even more wealth is hoarded, and even less new wealth is created, and so on.

Wealth is nothing more than goods and services. If the economy is bad businesses have an incentive to ramp up production when possible to make up in volume what they cannot get in price. Example: I finance equipment for a living, and when the economy is bad less people are buying stuff, so I'll work more hours to find deals cause I find less of them and the ones I do find dont have as much money in them. People in every industry are doing things like this in order to make money, so the net result is that those goods and services are that much more pleantiful and/or less expensive. Now consumers get to benefit from those lower cost items which helps them out, but consumers are also producers of other goods and services, which makes them more competative.

This is the complete opposite of what you're speaking of, and if you think the US is an example of that I puzzled by why we've has a continually growing middle class in this country and shrinking poverty rates. Sometimes it is necessary to tighten the belt through hard times, and we will have to do that in the next few decades in order to remain globally competative.

We are the global Big Dawg which means we have the biggest target on our back, every little guy out there is going to take pot shots at us and get their piece of the pie, so we can either blame others whom we cannot control or we can get our own act in gear.

I noticed that no one challenged me on my plan to improve the US economy, so I would like to know what you all think the correct approach is. If we dont outsource to places to take advantage of lower costs the Europeans, Japanese, and everyone else will, and we will be left in the dust. Now is the time to cut the fat from our economy and tighten our belts. We simply cannot afford the socialism we have built up, not when the global market is going to be more competative than ever.

bobdobalina
March 18, 2004, 10:57 PM
Something nobody has mentioned yet that is somewhat related to the issue of job losses, though not necessarily related to outsourcing and free trade is the upcoming retirement, in large numbers, of the baby boom generations. In the near future, large numbers of baby boomers will be retiring. When I say large numbers I mean in the millions. What will happen to their jobs? Do all of you think that they will just disappear? That the work these baby boomer accountants, lawyers, stock brokers, factory workers, etc.. will all cease to be necessary after they retire? No.
I think that when the baby boomer generation starts to retire there will be millions of old (not new) jobs available for younger workers. What do ya'll think?

Glock Glockler
March 18, 2004, 11:12 PM
bobdobalina,

When those millions of seniors begin retiring will they be collecting Social Security, Medicare and Medicaid, etc?

Who will be paying for all those bennies?

bobdobalina
March 18, 2004, 11:28 PM
Glock Glockler,

Our broken Social Security system is another matter entirely.

I was merely stating my belief that in the not too distant future there will be a large amount of available positions for younger workers to fill. That is an interesting thing for the chicken-little 'all our jobs are disappearing' types to ponder.

Whether there will be enough skilled workers available to take those jobs and whether those positions will be enough to support the welfare state leviathan are separate questions, although important ones.

fix
March 19, 2004, 11:52 AM
Most insulting example here 'bouts is NC and SC textile workers need to get retrained in nano-technolgy,etc. something our idiot governor advocates

When things happen rapidly, as we're currently seeing to some extent, it can be painful. When the transition spans a generation, it's not so bad. North Georgia was hit by the textile worker drain a few years ahead of the Carolinas. I come from an entire family of textile workers. My grandparents and all their siblings worked in the mills. My father and his brother, cousins, etc. felt the pain of job losses, but used their GI benefits to go to college and pursue other careers. My sister, cousins, and I are all in tech jobs or jobs that require skills of that type. So in our family at least, we made the transition from textiles to tech in one generation. Unfortunately, too many folks don't see which way the wind is blowing. Those are the folks hit the hardest. It's never safe to assume that the job market will take a generation to transform. For example, the flood of entry level tech jobs overseas will continue and the higher level IT jobs will begin leaving as well. You have to find an area of the field that isn't likely to be outsourced soon, and allows you to begin the transition to another field that can't be outsourced. I work for a company that provides security consulting services of all flavors to certain industries. Everything from computer and communications security to physical security to counterfeit prevention and all points in between. We leverage our individual experiences that encompass IT, law enforcement, business, holography, nanotech, military, legal, and several combinations of these. Just as we are an evolving company, our workers are evolving to meet current demands. Our economy is progressing at such a rapid pace that the days of picking a specialty and sticking with it for 40 years are all but gone. Cross training is the name of the game. The man with one hat will eventually see it blown away by the winds of change. He's got a problem on his hands. The man with two or more hats will just put on one of the others.

7.62FullMetalJacket
March 19, 2004, 12:25 PM
fix,

So you are saying that people are responsible for their own destiny? Come on, you know the gubbiment is responsible for the general welfare. I thought people had a right, no an ENTITLEMENT, to do the same thing for 40 years, retire with full benefits, and a gold watch, and move to Florida. With no effort on their part, of course. Security all the way. :rolleyes:

Gordon Fink
March 19, 2004, 12:48 PM
I sure dont see anything near unfettered capitalism around.…

Glockler, I never said there was. We have a variety of regulations and controls that currently ameliorate the weakness I described. The global economy is also still expanding, which masks wealth consolidation to a degree, because while new wealth is still being created, some of it does indeed “trickle down” to everyone.

I also indicated that I was disastisfied with coercive measures being used to control capitalism’s excesses. I would prefer to see conditions that encouraged voluntary profit sharing. There are some social-capitalistic approaches that could work in this situation, but command-economy socialism is not the answer.


Wealth is nothing more than goods and services. If the economy is bad businesses have an incentive to ramp up production.…

But how are more goods and services (i.e., new wealth) created? In a shrinking economy, there is not always incentive to increase production. Dismissing employees is often a more attractive option. The unemployed have less money to spend, however, so demand continues to drop. In turn, companies further decrease production and lay off even more employees.

This is basic economics.

The goal of any public economic policy should be to moderate the boom/bust cycle of capitalism. Instead, we usually see policies that favor one end of the economic spectrum or the other. These policies may have short-term benefits for the affected group, but in the long term, they often weaken the economy as a whole.

However, unfettered capitalism is no more of a solution than command socialism. Most members of the High Road recognize the weaknesses of socialism, dogmatically at least. I am merely illustrating an inherent weakness of capitalism that often seems to go unnoticed.

~G. Fink

moa
March 19, 2004, 01:09 PM
Do not be too sure that the Baby Boomers will retire as early, or in the numbers, that have been expected.

Some financial experts like Jonathan Pond think that many Boomers will have to work longer in order to accumulate enough resources for their retirement years. Reason is because of some many advances in health and medicine, many people will live well into the 80s and 90s.

Interestingly, 75% of the people currently applying for Social Security benefits are starting as early as possible, at age 62. They will get a permanently reduced benefit.

Also, the age progression eligibility standard for the Boomers is now age 66 or later, not age 65 to qualifiy for 100% of SSI benefit. And the older you wait to collect SSI, the more the benefits rise, and quite sharply, until age 70.

According to Pond, anybody age 50 or younger can expect to get only about 70% of the benefits they would have expected because SSI will not have enough incoming revenues when they are eligible to retire.

Pond says retiree strategy should be to retire wealth and die a pauper.

mercedesrules
March 19, 2004, 02:04 PM
(G. Fink) The goal of any public economic policy should be to moderate the boom/bust cycle of capitalism.
The so-called boom/bust cycle is caused by government meddling - not cured by it.

The idea that capitalism causes these cycles is commie propaganda. They are caused by federal reserve counterfeiting and interest rate manipulation.

MR

Oleg Volk
March 19, 2004, 02:48 PM
I used a graphics portfolio by a Russian designer as an example during a lecture to my Photoshop class yesterday. I explained that in many fields, a person can be anywere and work for anyone in the world. Unless I am outright prohibited from dealing with people in other countries, I may wish to hire a person from Ghana or Germany for their unique style or for their lower rates or for some other reason. Thus, to be competitive, local workers need to compete on something other than price against lower-wage people (Ghana) and on something other than quality against high-wage people (German). On the plus side, all goods and services bought by Americans become cheaper and better because they have a choice of what they buy and where. The only way to stop foreign trade is by restricting individual freedom, and it would produce a depression at once.

bountyhunter
March 19, 2004, 03:10 PM
Something nobody has mentioned yet that is somewhat related to the issue of job losses, though not necessarily related to outsourcing and free trade is the upcoming retirement, in large numbers, of the baby boom generations. No offense, but your math is in error. There is a steady flow of retiring workers, but the new workers entering the market always outruns it. I believe the current number is that about 100,000 new jobs must be created each year to keep the unemployment rate FROM RISING, in other words: break even. That situation gets worse as the governement allows companies to abuse the Visa system and flood the market with aliens. It also gets worse as illegal immigrants are encouraged to enter either by lax enforcement of existing laws or absurd new ones that allow anybody a green card if they have worked here "X" number of years.

I think that when the baby boomer generation starts to retire there will be millions of old (not new) jobs available for younger workers. What do ya'll think? Those jobs will be slurped up like a thirsty sponge sucking water.

Gordon Fink
March 19, 2004, 04:45 PM
The so-called boom/bust cycle is caused by government meddling—not cured by it.

The idea that capitalism causes these cycles is commie propaganda. They are caused by federal reserve counterfeiting and interest rate manipulation.

I’m sorry, mercedes, but history tells us something else. Government meddling can and does ameliorate the boom/bust cycle, but too much or the wrong kinds can and will restrain economic growth. Finding the right kinds of “meddling” or, better yet, non-coercive means to encourage a healthy (not equal) distribution of wealth is what I’m talking about.

You will also find the problem of capitalism’s boom/bust cycle discussed in conservative economic texts. “Commie” propaganda tracts usually focus on class warfare and the “evils” of the bourgeois.

~G. Fink

Talk about dogma!

mercedesrules
March 19, 2004, 05:03 PM
...conservative economic texts....
I suscribe to Austrian Economic Theory. (http://www.mises.org/fullstory.asp?control=1131)

"Furthermore, boom-bust cycles are not part and parcel of a free market economy, but on the contrary are the outcome of the existence of the central monetary authority."

MR

Gordon Fink
March 19, 2004, 05:35 PM
Here’s a quick plan to make the USA more business friendly

- eliminate affirmative action. That would be a nice little boost if companies could hire whomever is best suited for the job instead of govt quotas.

Agreed. Whatever benefits derived from the original affirmative-action programs have surely run their course. On the other hand, I think affirmative action has very little economic effect.


- eliminate healthcare and workmen’s comp. requirements on businesses. Companies used to give bennies like healthcare to attract and keep talent, they did so because it was beneficial to them, but requireing it from them on all employees is financially crushing.…

Agreed. Non-coercive public alternatives can be established. These would use market forces to make the best services available at the best prices for employers and employees without mandating participation or restricting competition. In fact, fair competition is the key to making insurance affordable and widely available.


- eliminate the matching Social Security requirement for employers. This would provide an immediate 7.65% boost to companies that employ people in the USA.

Social Security must be phased out but gradually. We have raised too many generations to depend on it, so we must wean our workers carefully. Proper financial education should probably be a part of this process.


- lower corporate taxes. The USA, land of the free, has one of the highest corporate tax rates in any industrialized country, lower these rates and companies will be more likely to stay here.

Taxes should be assessed only once. Eliminating corporate income taxes is one possible way to avoid double taxation. See also my proposal for voluntary taxation.


- streamline and ease up on govt regulation. I’m not saying that companies should have free reign to pollute, but only that most regulations are not only harmful but they also dont do a damn thing to make anyone safer.…

Agreed. In the cases where regulations have been adopted for safety purposes, criminal liability should be assessed in the event of damages. For example, if a company knowingly pollutes thd ground water, leading to illness and death in the surrounding community, the company’s owners, managers, and/or workers should be prosecuted for murder and other applicable crimes. Prior restraint is wrong.

~G. Fink

bountyhunter
March 19, 2004, 05:41 PM
.I suscribe to Austrian Economic Theory.

From the article:

"This increase in the purchasing power of the early recipients of money however, is at the expense of the late receivers or non-receivers."


This guy took about 40 paragraphs of text to describe a simple "pyramid" scheme..... must have been writing his master's thesis. Amazing how complicated some people can make things sound if they work at it.

Jeff White
March 19, 2004, 05:56 PM
The collapse of social security will be the defining political event of our time. I don't have to depend on social security, but the confiscatory taxes I have paid all of my life for it had better pay the full benefit or heads will roll in Washington.

It's going to be a very divisive debate. I have people tell me that since I have a military retirement I have no need for my social security and I should just accept a program that opts people who made other arrangements for their retirement out. I even heard that from my mother.

Well my family would have lived much better if I hadn't had to pay into social security and I would have a more comfortable retirement if I would have had that money to invest.

They've only got a couple years to fix things and the issue is too sensitive to touch...the next decade is going to be very interesting and may end up changing a lot in our society.

Jeff

moa
March 19, 2004, 06:06 PM
I think about 2014 it is projected that SSI will take in less revenue then it distributes.

bountyhunter
March 19, 2004, 07:04 PM
The collapse of social security will be the defining political event of our time. I don't have to depend on social security, but the confiscatory taxes I have paid all of my life for it had better pay the full benefit or heads will roll in Washington. It's not a "pay into investment program", it's a tax. Plain and simple. The government takes money from you to pay the people collecting. Period. There is no box with your name on it containing the money you paid in.

BTW: it's a pyramid scheme founded on the totally false assumption that the RATIO of people collecting to those paying would remain constant. It has not. Declining birth rates and longer lives mean all of the people collecting now receive far more money than they paid in. They also impose a far greater burden onto the backs of the workers funding them than was in place when they were working.

We would all be happier if we just admitted: SS is a broken wheel. It's a pyramid scheme that can NEVER work long term and that is why it is going broke. The way it will be balanced will be by raising the age of eligibility higher and higher and reducing the benefits paid out until the payouts are in line with the amount collected. When that day comes, you will probably have to be 85 to collect, and you'll probably get about $250/month. The truth is ugly sometimes, but that's about the size of it.

The collapse of social security will be the defining political event of our time. IMO, the defining political even will happen when the government admits the budget can never again be balanced and stops even suggesting that they will ever try again. One repub economic expert recently said that the Reagan years proved that "deficits don't matter" (seriously). When they admit that, we will be in a very different world.

Well my family would have lived much better if I hadn't had to pay into social security and I would have a more comfortable retirement if I would have had that money to invest. Yeah, but that's true of everybody. BTW, if you think you are getting screwed: my wife works for the county in kali, and they are forced to pay into the state retirement fund called CALPERS as well as Social Security even though the SS will be deducted from the CALPERS retirement (so it is lost). She is also a veteren of the Navy with 30 years and that retirement has an offset against both SS and CALPERS. She got reamed three different ways.

Jeff White
March 19, 2004, 07:25 PM
Bountyhunter,
I'm well aware that social security is a ponzi scheme. That doesn't matter, they taxed me with the promise of paying future benefits. There are millions of people who will look at it like I do. That's why it's going to be a defining momemnt in politics.

BTW if Navy finance is still figuring in social security offset they are wrong. There is no longer a social security offset to military retirement, just the survivor benefit program.

Jeff

bountyhunter
March 19, 2004, 08:54 PM
BTW if Navy finance is still figuring in social security offset they are wrong. There is no longer a social security offset to military retirement, just the survivor benefit program. I hope you're right about that. I know that the CALPERS offset is dollar for dollar, so she loses all of the SS benefit if she collects the CALPERS she paid into (which is a higher amount).

Glock Glockler
March 19, 2004, 09:13 PM
But how are more goods and services (i.e., new wealth) created? In a shrinking economy, there is not always incentive to increase production. Dismissing employees is often a more attractive option.

Yes, a company will often tighten their belt and cut the fat from their organizaton. They will try to do more with less.

When they lay off excess employees they've just freed up resources that can then be applied in the economy in another manner. I wonder how it is that an economy can ever improve given your economic theory.

mountainclmbr
March 19, 2004, 09:38 PM
When lawsuits, taxes and labor unions drive down the efficiency, and drive up the cost here...where else does a CEO go? The government does not create any productive jobs, only regulates, restricts and impedes them.

If the government here becomes socialist, it may create jobs after it has stolen all business and property from its citizens. But, it is a system that has historically proven to be both inefficient and bloody.

People who think that the government should "create jobs" raise your right hand and say Heil!

mercedesrules
March 19, 2004, 11:56 PM
(bountyhunter) It's not a "pay into investment program", it's a tax. Plain and simple. The government takes money from you to pay the people collecting. Period. There is no box with your name on it containing the money you paid in.
Right! And, the payout part is welfare, plain and simple. Either one can be changed by a simple act of congress. Powder dry, everyone?

MR

Gordon Fink
March 20, 2004, 04:34 AM
… given your economic theory.

It’s called “capitalism,” Glockler.

~G. Fink

Glock Glockler
March 20, 2004, 11:44 AM
Gordon,

You basically projected a downward spiral in which the rich get richer at the expense of the poor and that does not correspond with reality. Many of our "poor" today lived better than many elites in centuries past. I'm wondering how things can ever get better when the economy contracts, as companies will lay people off, followed by more people who cannot spend money, ect.

Forgive me but I think your missing an element of the equation, especially as it applies to the govt helping things improve when things are bad. Govt does much to cause the extreme boom/bust cycle that exists, having them help out is like someone giving you a great deal on some tires after they slash yours which work fine.

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