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The Reality of Outsourcing
Townhall.com ^ | Bruce Bartlett

Posted on 02/17/2004 5:35:48 PM PST by phil_will1

Last week, Council of Economic Advisers Chairman N. Gregory Mankiw ran into a buzz saw. He committed a major gaffe, which in Washington means he spoke the truth, by defending the concept of outsourcing -- contracting with foreigners for information technology services. With a lack of job growth being the central economic issue in the country today, Mankiw's comments were assailed across the political spectrum. President Bush quickly distanced himself from his aide's remarks, House Speaker Dennis Hastert, R-Ill., repudiated them, and many Democrats called for Mankiw's dismissal.

There is at least one person in Washington who knows precisely how Mankiw feels: Federal Reserve Chairman Alan Greenspan. Back in 1974, Greenspan held the same position Mankiw now holds. Shortly after his confirmation in September of that year, Greenspan participated in an economic summit. At the time, the United States was in the middle of the deepest recession of the postwar period and inflation was rising rapidly. That year, the Consumer Price Index would rise 12.3 percent.

Greenspan was asked whether the Ford administration's policies were benefiting the rich over the poor. He replied: "If you really wanted to examine who, percentage-wise, is hurt the most in their incomes, it is Wall Street brokers. I mean their incomes have gone down the most."

Needless to say, Democrats had a field day attacking Greenspan for seeming to worry more about the problems of rich Wall Street brokers than those of common people. Although he quickly apologized, many observers believe that Greenspan was permanently scarred by the incident and forever afterward became far more circumspect in his public and even private comments.

Of course, when one gets caught in one of these Washington firestorms, there really isn't much one can do except apologize, hunker down and wait for the storm to pass. That is what Mankiw is doing. Unfortunately, the result is that debate on serious issues is often short-circuited and the political establishment draws erroneous conclusions. In this case, it may conclude that the issue of outsourcing is radioactive and everyone may rush to support ill-conceived legislative fixes with harmful economic consequences.

Here is the offending statement in the Economic Report of the President that has led to calls for Mankiw's head: "One facet of increased services trade is the increased use of offshore outsourcing in which a company relocates labor-intensive service industry functions to another country. ... Whereas imported goods might arrive by ship, outsourced services are often delivered using telephone lines or the Internet. The basic economic forces behind the transactions are the same, however. When a good or service is produced more cheaply abroad, it makes more sense to import it than to make or provide it domestically."

One would have a hard time finding a reputable economist anywhere who disagrees with this analysis. No nation has ever gotten rich by forcing its citizens to pay more for domestic goods and services that could have been procured more cheaply abroad. Nations get rich by concentrating on doing the things they do best and letting others produce those things they can produce better and more cheaply. It is called the specialization of labor, and it is the foundation for economic growth. That is why even Democratic economists like Janet Yellen, Laura Tyson, Brad DeLong and Robert Reich have come to Mankiw's defense.

What is different about outsourcing and why it has aroused so much protest is that it is affecting workers who thought they were immune from international competition. Blue-collar workers in manufacturing have been suffering from outsourcing for 100 years. It is worth remembering that textile jobs in South Carolina today were originally outsourced from Massachusetts. While in the short run, the transition was painful for Massachusetts textile workers, they soon found better jobs in new industries. That is why per capita income there is and always has been far higher than that in South Carolina.

It would be grossly unfair to say that it is OK to move manufacturing wherever production is cheaper, but wrong to subject information technology services to the same competition. It is mostly because of the Internet and the fact that IT people know how to use it that they are getting attention disproportionate to their numbers. Moreover, if we hadn't just gone through a painful economic recession, most of these people probably would have already found new jobs and the problem of outsourcing would not be worth writing nasty emails about to politicians and people like me.

In any case, even if the federal government tried to stop outsourcing, it cannot. We can put quotas and tariffs on goods that cross our borders, but it is impossible to stop people from importing software and data over the Internet. The only response that is possible is to adapt, innovate and stay ahead of the curve.


TOPICS: Business/Economy
KEYWORDS: brucebartlett; outsourcing
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"In any case, even if the federal government tried to stop outsourcing, it cannot. We can put quotas and tariffs on goods that cross our borders, but it is impossible to stop people from importing software and data over the Internet."

This is the section of Bartlett's piece that struck a chord with me, primarily because I have been thinking the same thing. NAFTA and the recent trade agreements have been getting blamed, but it isn't clear to me that they have anything at all to do with the outsourcing trend.

1 posted on 02/17/2004 5:35:49 PM PST by phil_will1
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To: phil_will1
Outsourced this comment on post yours is.
2 posted on 02/17/2004 5:38:17 PM PST by Blue Screen of Death (,/i)
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To: phil_will1
Someone please tell me if I'm wrong, but it seems to me that income tax rates in this country play a major role in the outsourcing of services and production. The income and payroll taxes not only mean that employers have to spend more to put a certain number of dollars in their employees' pockets, but they also increase the cost of anything the employee would want to buy. If it weren't for the availability of tax shelters and outsourcing, money would be almost worthless since a very large portion of anything that got spent would get vacuumed up by the government.

Is there anything wrong in my thinking?

3 posted on 02/17/2004 5:42:06 PM PST by supercat (Why is it that the more "gun safety" laws are passed, the less safe my guns seem?)
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To: phil_will1
No nation has ever gotten rich by forcing its citizens to pay more for domestic goods and services that could have been procured more cheaply abroad.

Incorrect, USA, 1776-1930's.

4 posted on 02/17/2004 5:43:05 PM PST by jpsb (Nominated 1994 "Worst writer on the net")
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To: Blue Screen of Death
Outsourced this comment on post yours is.

Yoda is that you? :)
5 posted on 02/17/2004 5:43:29 PM PST by lelio
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To: phil_will1
A politician in New Jersey is trying to pass a law that all companies that outsource IT jobs cannot get State contracts. So something can be done to discourage outsourcing. I am not saying this is a good idea; I happen to agree that from an economic standpoint outsourcing is probably a good thing.

Before everyone jumps on me, I am involved in IT myself and my business has taken a huge (hugh) hit the past 3 years. I am trying to learn new skills (can anyone say health care industry?) rather than bashing foreigners, however.

BTW, this month's Wired has a pretty good article on the subject.

6 posted on 02/17/2004 5:47:48 PM PST by Martin Tell (I will not be terrified or Kerrified.)
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To: phil_will1
Interesting. Thanks for posting this reasonable tome.

Many of my peers are huffy about IT outsourcing, as if they are too important to be replaced.

In the 80s and 90s, it was the Revenge of the Nerds, the guys who could navigate around a computer took over the workplace. They made us pay for not choosing them for basketball.

But did they think that only white college educated Americans could work a PC? They looked down their noses at blue collar "NFL" Americans all these years. Now it's their skill that has been cheapened.


How'z it feel... geeks?
7 posted on 02/17/2004 5:57:42 PM PST by moodyskeptic (weekend warrior in the culture war)
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To: phil_will1
While in the short run, the transition was painful for Massachusetts textile workers, they soon found better jobs in new industries.

Writers on this topic keep spewing this comment. They fail to observe that the outsourced jobs are in the new industries. None of them has managed to point to what "new" industries are prepared to employ the 4,000 to 6,000 people who get dumped on the street each day. They were not making buggy whips. They were employed at the forefront of technology. Most have 4 year degrees and many years of experience.

8 posted on 02/17/2004 6:00:21 PM PST by Myrddin
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To: phil_will1
Good point. If IBM moves their call centers overseas, is the U.S. going to assess a tariff on every toll-free call to a call center in India? If an insurance company moves their back office work overseas, is the U.S. going to assess a tariff on every internet data transfer?
9 posted on 02/17/2004 6:10:52 PM PST by Alberta's Child (Alberta -- the TRUE North strong and free.)
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To: moodyskeptic
But did they think that only white college educated Americans could work a PC?

Not only that, but I never understood how someone in the IT field whose job description didn't even exist 15 years ago could expect to find any long-term stability in his job.

10 posted on 02/17/2004 6:21:14 PM PST by Alberta's Child (Alberta -- the TRUE North strong and free.)
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To: moodyskeptic
How'z it feel... geeks?

Just fine. When my software or hardware has a problem, I know how to fix it. It is just a tool over which I have total control. No need for outside assistance.

But did they think that only white college educated Americans could work a PC?

Many people can operate an appliance...as long as it doesn't break down.

Can you explain the consequence of priority inversion in a real time operating system? How about a quick exposition on the merits of FSK, PSK or QAM? Would you choose CSMA/CD or token passing for best deterministic response? How did Shannon improve upon Nyquist's sampling theory?

If any of that wasn't familiar then we aren't having a discussion between peers.

11 posted on 02/17/2004 6:24:12 PM PST by Myrddin
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To: jpsb
Incorrect, USA, 1776-1930's.

That's actually a very misunderstood notion. The USA did not "get rich" in that period by assessing tariffs on imports -- it got rich by taking advantage of an "accident of history" (the settlement of the frontier) that allowed us to secure land and resources at costs far below what First World nations would have had to pay.

It's no accident that the last part of the period you mentioned (the 1930s) also happened to be the first time in history that the average American had a standard of living that exceeded the standard of living of someone living in advanced European countries like Britain and Germany.

This is exactly why one of the most important facts about this issue is often the one that is most often overlooked . . . In order to maintain an export-based economy, the nation doing the exporting must always have a lower standard of living than its trading partners.

12 posted on 02/17/2004 6:26:31 PM PST by Alberta's Child (Alberta -- the TRUE North strong and free.)
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To: Alberta's Child
If IBM moves their call centers overseas, is the U.S. going to assess a tariff on every toll-free call to a call center in India?

A tariff of 10 cents per minute on satellite serviced voice calls would immediately level the playing field. It would probably also offset any current subsidy of telecommunications that is coming from the U.S. taxpayer. Few of the rockets that put the satellites into orbit were privately financed by the companies that now exploit them.

13 posted on 02/17/2004 6:37:34 PM PST by Myrddin
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To: Myrddin
A tariff of 10 cents per minute on satellite serviced voice calls would immediately level the playing field.

Do you really believe that any government would be capable of actually collecting such a tariff?

It would probably also offset any current subsidy of telecommunications that is coming from the U.S. taxpayer.

As if the U.S. is the only country in the world that has launched telecommunications satellites into orbit . . .

14 posted on 02/17/2004 6:46:45 PM PST by Alberta's Child (Alberta -- the TRUE North strong and free.)
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To: Alberta's Child
1. you're right that we didn't "get rich " from tariffs -- as always, we moved money around with tariffs, a lot of it from the South to the North.

2. But, it wasn't just "an accident of history." Those resources were worthless until we applied ingenuity, sweat and freedom. The Indians had the same resources, and didn't do much with them.

3. I think most economists would say that we had caught up with the "advanced european economies" by the 1880s, if not the 1850s.

4. You can have an export based economy, even if you are very rich, if you have a great comparative advantage,either in making something, or having some resource that is peculiar to your location (oil in the middle east, hydro power in Norway, etc).

15 posted on 02/17/2004 6:50:52 PM PST by BohDaThone
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To: Alberta's Child
The U.S. Federal Communications Commission is the agency that regulates wireline, wireless and satellite communications. They certainly have the ability to regulate any and all telcom traffic that enters or leaves the United States.

I'm sure other countries have launched satellites. It doesn't really matter. The key technology that permits outsourcing of American jobs to foreign countries is cheap telecom. The U.S. government can regulate and tariff those communications paths as it sees fit. A tariff on the cheap telecom path takes all the cost advantage out of the cheap foreign labor.

16 posted on 02/17/2004 7:04:37 PM PST by Myrddin
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To: BohDaThone
Good post. I'm going to respond to a few of those points . . .

2. I describe the settlement of this nation as an "accident of history" because it was so unusual at the time. Because the U.S. was able to clear the land of its existing occupants at a relatively low cost (in essence, we simply took the land away from people who didn't understand our Western notion of "ownership"), we were effectively able to "start from scratch" in a manner that no other country in the developed world could possibly have done (particularly with regard to land titles).

3. I guess that is largely a function of how you define "catching up." I think it is safe to say that the U.S. caught up to Europe in terms of technological and industrial development by the period you described, but the average American had a lower standard of living than the average resident of the countries I identified well into the 20th century. In fact, the U.S. was still looked upon as an agrarian nation almost until the time of World War II.

4. How often does this kind of thing occur in the world today? I would even make the case that "peculiar" resource wealth may not be such a good thing, because the focus of a nation's economy is turned to the possession and protection of that resource (hence the constant civil wars in resource-rich countries in sub-Saharan Africa). Ironically, some of the countries in this world with the highest standards of living are those with no resource wealth at all (Japan and Singapore are good examples of this). This is because they are effectively forced into a position of high efficiency -- because the only real source of revenue their governments have is the taxation of their labor.

17 posted on 02/17/2004 7:06:42 PM PST by Alberta's Child (Alberta -- the TRUE North strong and free.)
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To: Myrddin
I think we're on two different planets here. You look at the U.S. government and see an institution that can assess tariffs on wireless phone calls from anywhere on the globe. I look at the U.S. government and see an institution that can't even keep a million Mexicans from pouring over our southern border every year, and couldn't even keep al-Qaeda from stealing four passenger aircraft and flying them into the World Trade Center and the Pentagon.

While we're at it, why don't we take away the "cheap transportation" component that allows countries like China and Malaysia to manufacture things so much cheaper than us -- by draining the Pacific Ocean.

18 posted on 02/17/2004 7:13:00 PM PST by Alberta's Child (Alberta -- the TRUE North strong and free.)
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To: phil_will1
Don't buy an HP printer or call HP for help if at all possible. My friend bought an HP deskjet printer and the CD was defective. So I went to the HP website and it even stated if "if you received an defective cd, call HP for assistance".

Called them a few times reluctant to give too information to the Indian voice at the other end. Each time I called, different voice, same Indian dialect. Finally, after giving up the information, the person asked to insert the CD in the drive and read the serial number. Almost joyfully, he responded "oh yes, that is a bad one, we'll have a new one sent in 24 hrs". Four days later, the disk arrived but still would not run properly but I was able to get the drivers off the disk. Funny thing, in big letters on the disk it said "Made in U.S.A."(...for now...).

19 posted on 02/17/2004 7:43:13 PM PST by dirtydanusa (100% American, no Jap cars, no Chinese shoes.)
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To: Alberta's Child
Same planet. You've just changed the subject. The U.S. government isn't even trying to stop the Mexican invasion. If they were serious, we would have troops on the border. The "border patrol" is a grossly underfunded and understaffed "feel good" enterprise.

I lay much of the blame for the WTC disaster on the gutting of the CIA by Bill Clinton. You can't detect and stop an attack if you haven't put the resources in place to do the job.

The cheap transportation component shares something in common with the cheap telecom component. A ship is worthless if you don't allow it to dock and unload. Most of the goods produced in Asian markets arrive on the west coast of the U.S. and are transported via rail and truck. Items destined for the European market are moved by ship to the U.S. west coast, then by rail to the east coast, then by ship to Europe. Again, the U.S. controls the transport path...if they desire to do so.

20 posted on 02/17/2004 7:55:45 PM PST by Myrddin
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To: Myrddin
Can you explain the consequence of priority inversion in a real time operating system?

A low-priority task holds a resource needed by a high-priority task, and so the high-priority task can't execute until all intermediate-priority tasks have been serviced.

How about a quick exposition on the merits of FSK, PSK or QAM?

The latter allow more data to be exchanged in a given bandwidth, but are more complex and more sensitive to frequency-dependent timing distortions.

Would you choose CSMA/CD or token passing for best deterministic response?

Token passing.

How did Shannon improve upon Nyquist's sampling theory?

Did he clarify the exact way in which frequencies above f/2 fold back, or had Nyquist already done that?

21 posted on 02/17/2004 8:04:53 PM PST by supercat (Why is it that the more "gun safety" laws are passed, the less safe my guns seem?)
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To: phil_will1
This should be an obvious question but I have not seen anyone ask this yet.

When they outsource all the jobs they can and bring in guest workers for all the jobs they cannot, who the hell is going to be paying the taxes to support this government?

I asked this question of a political science professor today and his answer was that nobody has the answer to that.

That being the case, what the hell are they doing this for if they don't know the consequences of their actions?

22 posted on 02/17/2004 8:15:30 PM PST by navyblue
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To: supercat
I see someone reading the thread has done more than figure out how to "work a PC". The element I was seeking on Shannon's behalf was the impact of signal to noise ratio on the carrying capacity of a channel.
23 posted on 02/17/2004 9:12:05 PM PST by Myrddin
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To: harpseal; A. Pole
It is mostly because of the Internet and the fact that IT people know how to use it that they are getting attention disproportionate to their numbers.

Bruce Bartlett on the unfair advantage that unemployed IT types have over other unemployed Americans. The nerve. ;)

24 posted on 02/17/2004 9:18:17 PM PST by LibertyAndJusticeForAll
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To: Myrddin
RE: "Writers on this topic keep spewing this comment. They fail to observe that the outsourced jobs are in the new industries. None of them has managed to point to what "new" industries are prepared to employ the 4,000 to 6,000 people who get dumped on the street each day. They were not making buggy whips. They were employed at the forefront of technology. Most have 4 year degrees and many years of experience."

That's an excellent point.

Many losing their jobs, I might add, are refugees from factory offshoring who retrained for the promise of better jobs. Now combine the quote from above with a post from another thread. To wit,

"The offshoring model in fact is the opposite of free trade. It is not trade at all but labor arbitrage. Unlike real arbitrage, the act of exploiting the wage differences is not ending the arbitrage opportunity. US companies create captive offshore centers in which the local employees are used to fulfill demand in the US while their wages are kept isolated from that same world demand."

See also the writings of Stephen Roach.

This ain't your great-grandfather's Ricardo. This is about a glut of readily available cheap labor worldwide and IMO is more akin to 19th century capitalism instead of comparative advantages among free trading countries. Fine.

There's also the those pesky "capitalists" depending upon tax supported Ex-IM Bank, OPIC, special programs, etc. Not so fine, IMO. But it's a riot hearing free traders complain about government "interfering" with capitalism when their pocketbooks are threatened. "Capitalism" has come to mean always having government money there if and when a capitalist needs it? Hands off! everybody else?

RE: "Few of the rockets that put the satellites into orbit were privately financed by the companies that now exploit them."

That's another taxpayer service, all the risks and R&D that built the rockets and facilities. BTW, I thought most of what makes cross-border IT-enabled services possible was the cheap underseas bandwidth.

25 posted on 02/17/2004 10:07:31 PM PST by WilliamofCarmichael (Benedict Arnold was a hero for both sides in the same war, too!)
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To: WilliamofCarmichael
I just heard on the local news, out of Seattle, that if you have your income tax prepared by an accountant, ask the accountant if they send your income tax return to a company over seas, such as India to be prepared? India was the only country mentioned, but that does not mean they are sent to an other country, another plus for out sourcing. Your identity could be stolen, is what the news reporter said.
This seams to be the normal way any more for your taxes to be done.
26 posted on 02/17/2004 10:33:30 PM PST by calawah98
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To: WilliamofCarmichael
BTW, I thought most of what makes cross-border IT-enabled services possible was the cheap underseas bandwidth.

Yes. The undersea cables were placed before we figured out the world of satellites. Network routing rules prohibit a voice path from traversing both forward and reverse paths via satellite because of the huge delay introduced.

I'm a former Bell System employee and very familiar with the helps and hindrances that government introduced into the telecom industry from the earliest days. Anyone who doubts the ability of government to lay taxes and tariffs on telecom need look no further than the monthly bill. I get my wireless activity in excruciating detail...along with some general taxes. The excruciating detail that you see in the billing records is evidence of the fine granularity of modern billing systems. It would be simple to impose targeted tariffs. Custom programming of the operational support systems was my specialty before I left PacBell.

27 posted on 02/17/2004 10:35:26 PM PST by Myrddin
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To: supercat
"it seems to me that income tax rates in this country play a major role in the outsourcing of services and production."

My sense is that our tax system is a major problem with respect to the flow of goods and is therefore significant in our lack of competitiveness internationally in the manufacturing and agricultural areas. Although that system also tends to inflate the cost of labor here, and may therefore also contribute to the outsourcing trend, I would think it isn't as significant a factor there. The biggest factor, it would seem, is that there are huge pools of educated workers who will gladly work for a fraction of what their US counterparts would require.
28 posted on 02/18/2004 3:21:20 AM PST by phil_will1
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To: Martin Tell
"A politician in New Jersey is trying to pass a law that all companies that outsource IT jobs cannot get State contracts."

I read somewhere that something like a dozen states are trying that. The problem, however, is that only about 2% of the outsourcing that is going on is governmental.
29 posted on 02/18/2004 3:24:06 AM PST by phil_will1
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To: moodyskeptic
How'z it feel... geeks?

Pretty good, now that I just trashed your credit rating. ;^)

30 posted on 02/18/2004 3:32:31 AM PST by Lazamataz (I know exactly what opinion I am permitted to have, and I am zealous -- nay, vociferous -- in it!!!)
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To: Myrddin
Ahhhh... the "company computer guy."
31 posted on 02/18/2004 3:37:29 AM PST by Per-Ling
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To: phil_will1
Last week, Council of Economic Advisers Chairman N. Gregory Mankiw ran into a buzz saw.

Probably made in China too.

32 posted on 02/18/2004 3:45:16 AM PST by The Red Zone
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To: navyblue
"When they outsource all the jobs they can and bring in guest workers for all the jobs they cannot, who the hell is going to be paying the taxes to support this government?"

You are right, that is the big question - or one of them.

Lou Dobbs of CNN, as many of you know, has been all over this story. He had Carla Hills on the other night; I believe that she is a former labor secretary. She cited some study that said that 20 MM new jobs would be created in the US over the next decade. My question to her would be what kind of jobs? We all know that not all jobs are created equal.

I would hope this becomes THE issue of this campaign. We should be asking tough questions of every single candidate for elective office - either party. I personally don't think protectionism works in the long run - as evidenced by the President's recent steel tariffs. They solved one problem and created others. However, I am sincerely concerned about how the US will be able to maintain a standard of living for the next generation that is at least comparable to what we have known. I certainly don't have all the answers and it sure doesn't look like our elected leaders do either.

BTW, I know that Fundamental Tax Reform (FTR) is a big part of the solution with respect to the flow of goods, but thats another post, if not another thread.

33 posted on 02/18/2004 3:51:54 AM PST by phil_will1
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To: supercat
I don't think you're wrong at all. We have a canadian democrat governor in Michigan who can't get it thru her thick head that the way to economic prosperity is not to tax, regulate, and litigate the hell out of manufacturing and business.

I think it goes further. I just retired from the domestic auto industry. Even in spite of Jacque Nasser's divide and conquer diversity initiatives, we could not find enough talented American engineers when we hired. We had to turn to engineers who came here from India and the Middleeast. Meanwhile in the USA, we have high schools that produce kids ready to become environmentalists, diversity consultants, and democratic party campaign operatives. Additionally, just from the domestic auto industry perspective, we could not, and they still cannot get those "quality" union people who are hired to come to work full time, and who receive expensive full time health care benefits to come to work everyday prepared to work. The benefits still get paid at the full time rate, and part time or sick/lame/lazy employees get put on the job in the absence of the qualified qualilty union employee. Companies owe an obligation to stock holders, and they will look for a way to make good on those obligations.

34 posted on 02/18/2004 3:56:00 AM PST by RushLake (Permission from the UN...we don't need no stinking permission slip from the UN.)
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To: Myrddin
"Anyone who doubts the ability of government to lay taxes and tariffs on telecom need look no further than the monthly bill....It would be simple to impose targeted tariffs."

As I said in my post above, I'm no protectionist, but I must say that this idea has some appeal to me. I think that we should demand that our elected representatives study it. My biggest questions are
(1) How high would the tariff have to be to offset the huge labor cost differential? My sense is that it would have to be enormous - much larger than the base it is being levied on. Is that really practical?
(2) What are the unintended consequences? They are always there when you start taking protectionist measures. It may be that the unintended consequences are justifiable, but I would rather know what they are, rather than getting blindsided.

I have to say that this is the first time I have heard a proposal about actually doing something about the outsourcing trend. It may be that we could set a rate that would not be so high as to completely reverse the trend, but would change the equation enough to slow the hemorraging and bring in much needed revenue.
35 posted on 02/18/2004 4:07:01 AM PST by phil_will1
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To: WilliamofCarmichael
>>BTW, I thought most of what makes cross-border IT-enabled services possible was the cheap underseas bandwidth.

Exactly correct. Undersea cables are where the big bandwidth happens.

A great (and very lengthy) Wired magazine article on the history of undersea cables is here:
http://www.wired.com/wired/archive/4.12/ffglass.html?pg=1


36 posted on 02/18/2004 4:17:22 AM PST by FreedomPoster (This space intentionally blank)
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To: calawah98
I can assure you it is far from normal. Most taxes are still done in the U.S., though some offshoring of tax preparation is occurring.

Identity theft due to confidential personal financial information being available to offshore employees is a real issue. I expect we'll see some big stories on this in 2004.
37 posted on 02/18/2004 4:20:07 AM PST by FreedomPoster (This space intentionally blank)
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To: FreedomPoster
"Most taxes are still done in the U.S., though some offshoring of tax preparation is occurring."

I seem to recall that one of the Big 5 was doing some of that a year or so ago. It also seems to me that they decided to terminate the practice when they received some bad publicity about it.

As an aside, our tax system is so complicated that even Americans who have grown up with it don't understand it - even if they are CPAs or work for the IRS. OTH, if you are going to have your taxes done by someone who doesn't understand the system, what difference does it make if they are foreign?
38 posted on 02/18/2004 4:35:54 AM PST by phil_will1
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To: phil_will1
FYI, we're down to the Final Four, with the demise of Andersen. It's hard to keep up.
39 posted on 02/18/2004 4:47:01 AM PST by FreedomPoster (This space intentionally blank)
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To: FreedomPoster
"FYI, we're down to the Final Four, with the demise of Andersen. It's hard to keep up."

Yes, it is. I worked for Price Waterhouse when it was still the Big 8. God, I feel old! LOL
40 posted on 02/18/2004 6:00:42 AM PST by phil_will1
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To: phil_will1
"In any case, even if the federal government tried to stop outsourcing, it cannot. We can put quotas and tariffs on goods that cross our borders, but it is impossible to stop people from importing software and data over the Internet."

In addition to the suggestion posted above that we levy a tariff on overseas LD charges, I heard another idea that would seem to be worthy of consideration. That would be to require written permission from the client/customer before sending any confidential information, such as medical or financial records outside the US. With the legitimate concerns over privacy and identity theft, that would seem to be a reasonable measure.

Comments, anyone?
41 posted on 02/18/2004 6:06:16 AM PST by phil_will1
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To: RushLake; Willie Green; Wolfie; ex-snook; Jhoffa_; FITZ; arete; FreedomPoster; Red Jones; ...
We had to turn to engineers who came here from India and the Middleeast. Meanwhile in the USA, we have high schools that produce kids ready to become environmentalists, diversity consultants, and democratic party campaign operatives.

Which is the cause and which is the result?

42 posted on 02/18/2004 6:07:17 AM PST by A. Pole (The genocide of Albanians was stopped in its tracks before it began.)
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To: phil_will1
The outsourcing is sending cheaper services to be done for less money. The better stuff: R&D and design remains here in the States. The biggest whiners are those expecting handouts or jobs for life.
43 posted on 02/18/2004 6:09:15 AM PST by Outsourcing=Competition
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To: A. Pole
You have heard of the "Dumbing Down" of America, right?
44 posted on 02/18/2004 6:09:59 AM PST by Happy2BMe (U.S.A. - - United We Stand - - Divided We Fall - - Support Our Troops - - Vote BUSH)
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To: jpsb
Incorrect, USA, 1776-1930's.

What's that supposed to mean? That's the time when we expanded significantly from the narrow strip of land on the east coast to coast-to-coast and beyond. You want to compare a technologically primitive time to today?? Putting a ban on overseas trading today is almost as silly as Mass putting a ban on trading with the other states in 1776.
45 posted on 02/18/2004 6:11:29 AM PST by Outsourcing=Competition
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To: supercat
Regulations and taxes certainly don't help, BUT I doubt outsourcing would be reduced if we eliminated all regulation and taxes. Case in point: Factories are moving from Mexico to China. Why pay $10.00/hr if you can get someone do it for $100/mo?
46 posted on 02/18/2004 6:11:38 AM PST by Nataku X (<a href="http://www.michaelmoore.com">Miserable Failure</a>)
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To: supercat
Regulations and taxes certainly don't help, BUT I doubt outsourcing would be reduced if we eliminated all regulation and taxes. Case in point: Factories are moving from Mexico to China. Why pay $10.00/hr if you can get someone do it for $100/mo?
47 posted on 02/18/2004 6:11:57 AM PST by Nataku X (<a href="http://www.michaelmoore.com">Miserable Failure</a>)
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To: Martin Tell
A politician in New Jersey is trying to pass a law that all companies that outsource IT jobs cannot get State contracts.

Just like the politician who got a law passed that a foreign owned cruise liner couldn't go from one American port to another without a stop elsewhere. This was in an attempt to build up the shipbuilding industry -- it didn't work and American citizens can't get cruise liners that go from one island in Hawaii to the other, reducing tourism there. politicians...
48 posted on 02/18/2004 6:14:36 AM PST by Outsourcing=Competition
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To: moodyskeptic
But did they think that only white college educated Americans could work a PC? They looked down their noses at blue collar "NFL" Americans all these years. Now it's their skill that has been cheapened.

Amen brother. There are more folks who can program nowadays so the price is falling and these guys ain't the prima-donnas anymore. So they're cribbing.
49 posted on 02/18/2004 6:15:49 AM PST by Outsourcing=Competition
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To: Myrddin
None of them has managed to point to what "new" industries are prepared to employ the 4,000 to 6,000 people who get dumped on the street each day.

Well we made the same point when factories were going bust. And those folks got jobs didn't they? Well time moves on..
50 posted on 02/18/2004 6:16:42 AM PST by Outsourcing=Competition
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