The Sphinx in Winter

The American Conservative ^ | 03-01-04 | Eamonn Fingleton

[gcruse]

How threatening was it to have Japan own the Rockefeller Center? Was there a danger of them taking it to Tokyo? And did you feel better when they sold it at a loss?

How many jobs do you suppose are created by the Japanese manufacturers building cars in the US?

[P.O.E.]

It is fair to say that where economic matters are concerned, he enjoys far greater trust than any president.

Is that really a compliment?

[oceanview]

OK, how about China owning the semiconductor industry. IN CHINA. Is that the same as the Japanese owning a building in NYC? Should we send the whole semi industry to China, and then hope they build a few plants back in the USA years from now? Or would you rather we do something about it now, to stop it from being sucked out of the country? Because believe me, the US CEOs and corporate elites running these companies won't blink twice as they tear it down in the USA and send it to China.

[oceanview]

China is big on buying US brand names. So they can sell products made in China under brand names US consumers know.

[gcruse]

So you agree that Japan should not be part of this bashing?
Since I did not take up a cudgel for China, I feel no need to address your sino-scenario.

[Happy2BMe]

Do some research on how many billions of foreign investments were pulled out of this country within 90 days of 9/11.

Then narrow it down to middle eastern investments.

Then look at Saudi Arabia.

[Porterville]

This posting has poor cadence and is not a developed argument. Instead here is an article from the Economist; it flows much better and isn't written by a freshman member of the Pat Bucanhnan Club at Bakersfield State University.

The great hollowing-out myth

Outsourcing to other countries has become a hot political issue in America. Contrary to what John Edwards, John Kerry and George Bush seem to think, it actually sustains American jobs

[gcruse]

Jeez, guys, I'm typing as slow as I can, but it's still too fast, I guess. My comment referred to Japan. Japan does not deserve this bashing. Agreed?

[William Terrell]

Trade, moreover, is of pivotal importance for America’s continued leadership of the world community.

Always the assumption that Mr. Greenspan wants America to be a leader in the world community.

[XBob]

6 - thanks for the ping. Wow - Its worse than I thought.

[Don W]

The "Good News" report you linked to was well written and convincing, but fails to address the crux of the argument: When all the manufacturing and IT jobs leave, who can secure America?

The most blatant and final weakness I noticed in his argument was Some service sectors, such as construction and health care, are ripe for gains, because their efficient use of IT is low.

You cannot replace a nurse with a computer, and there yet remains to be built a robot that can perform one quadzillionth of the reasoning, logic and innovative thinking of a good construction worker.

[Porterville]

What you say maybe true, but it is a better written article that should be used as an example by the spectator. I may not write well but I read well.

[meadsjn]

...written by a freshman member of the Pat Bucanhnan Club at Bakersfield State University.

http://www.amconmag.com/3_1_04/article.html

Eamonn Fingleton is the author of Unsustainable: How Economic Dogma is Destroying American Prosperity..

[King Prout]

eeech. the title made me think this would be something interesting.
economics. *shudder*

[Brellium]

That's a great story, while I'd like to find the time to poke holes in it (logic is hard, atleast for the Economist), I'll just simply make one point.

The article that this tread is based on is regarding macro economic principles, the law of comparative advantage (which the Economist article is based on) is a micro economic principle.

[Porterville]

I understand this guys point on this post, it just seems like he could of summed his point up in 2, 3 sentence paragraphs instead of taking us on some long drawn out journey

[lelio]

From the article:

The best-known report, by Forrester Research, a consultancy, guesses that 3.3m American service-industry jobs will have gone overseas by 2015?barely noticeable when you think about the 7m-8m lost every quarter through job-churning.

What the author misses (on purpose I believe) is that the Forrester number are jobs that are permamently lost. The job churn he's talking about involves going from one job to another.

Ms Mann concludes that if IT software sees falls in prices, thanks to globalisation, similar to those that IT hardware has seen, then the second wave of productivity gains?notably in the service sector?could be greater than the first, which was based mainly on manufacturing.

That's probably true -- but its impact will be much greater in the rest of the world. For example I've heard a lot of talk about "Indians are going to start buying our products once they start earning more money" -- which totally misses out that we here in the US are buying their services in India and goods from China as they're what we can afford. Why should we suddenly expect them to start buying from the US?

Demand for database administrators is expected to rise by three-fifths

I suppose we'll see. I actually think it will go down as companies begin to realize that its probably cheaper to have an ASP host their backend software than try and hire an Oracle guy (and a replacement), a $100k Oracle license, and a $500k EMC hard disk array.

[Porterville]

I see it like this; The rest of the world is laying down their first real infrastructure of schools hospitals and other public services. Meanwhile, we are in a transition phase laying down the high tech infrastructure for tomorrows industries. Although we are buying from over seas we are buying basic products for cheap and putting these cheap products into the construction of this new high tech infrastructure. The time saved by having every product and every industry wired, will make industry and manufacturing streamlined to such a point where inventory will be sold at their immediate value.

I'm an optimist; although we do not have the best schools in the world we have the most educated people in the world; if we have to turn back to manufacturing Styrofoam cups and cheap products, I don't think it will be that difficult. The other nations like China and India are dogged by the fact that 80% of their population are treated like cattle.... there is a reckoning a comin' and I don't think it will be in America.

[DustyMoment]

I have not been a fan of Greenspan since about the mid-90s. He ran out of tricks then and holds onto his job more by perception of gretness than by skill, knowledge, ability and talent.

When you couple this article with the fact that the dollar has fallen below the Euro and remained below it for the past several months, we are clearly in serious trouble. Butying our heads in the sand and pretending that we are in a transitional phase is counter-productive. New manufacturing plants and opportunities are not looming on the horizon; the infrastructure and coporate mindset is simply not there to support it. With the value of the dollar based on GDP and US GDP falling, we are, most assuredly, in deep kim-chee.

There is another pattern, however that really makes the aims of our government all too clear. The more jobs and industries that the US exports, the more that the former employees of those industries seek job stability. What sector of our economy is noted for job stability? What sector of our economy is noted for not firing even the most incompetent employee? The pattern I see emerging is that as more people lose their jobs in the private sector, the more they seek jobs in the government; jobs that are stable; jobs where no one gets fired because of incompetence, or redundancy, or economic downturns.

I first noted this when Clinton began raising interest rates at the end of his second term to force the recession. There was no compelling reason for him to raise interest rates except one: with a hot economy and unemployment at all time lows, fewer people relied on the government for goods and services. If fewer people are relying on the government and more people are working, a lot of the government functions begin to be questioned. Clinton wanted to create a need for government . . . BIG government . . . so, he got Greenspan to raise interest rates. Later, when Bush was elected, Greenspan admitted that he raised interest rate because "Clinton asked him to". In essence, he admitted that there was no compelling economic reason to do so.

Look where we are today - big government. Bush has increased the size of government more than Clinton ever dreamed. He has pushed government spending through 2 or 3 roofs and he's still spending. With no one to tell him that we can't support the current spending levels and his inability to find the 'VETO' stamp, he will probably continue spending us into nonexistence.

Trade balances and dollar values are significant barometers of our economic health. Based on current levels, the patient is very, very sick and the prognosis isn't looking too good.

[bvw]

Pkease refer to Washington's Eighth Annual Message, December 7, 1796. See the Avalon Project: http://www.yale.edu/lawweb/avalon/presiden/washpap.htm