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Globalization Creates Unemployment, American Job Losses Are Permanent
The Market Oracle ^ | 10-28-2010 | Paul Craig Roberts

Posted on 10/28/2010 6:37:50 PM PDT by blam

Globalization Creates Unemployment, American Job Losses Are Permanent

Politics / Employment
Oct 28, 2010 - 04:59 AM
By: Paul Craig Roberts

Now that a few Democrats and the remnants of the AFL-CIO are waking up to the destructive impact of jobs offshoring on the US economy and millions of American lives, globalism’s advocates have resurrected Dartmouth economist Matthew Slaughter’s discredited finding of several years ago that jobs offshoring by US corporations increases employment and wages in the US.

At the time I exposed Slaughter’s mistakes, but economists dependent on corporate largess understood that it was more profitable to drink Slaughter’s kool-aid than to tell the truth. Recently the US Chamber of Commerce rolled out Slaughter’s false argument as a weapon against House Democrats Sandy Levin and Tim Ryan, and the Wall Street Journal had Bill Clinton’s Defense Secretary, William S. Cohen, regurgitate Slaughter’s claim on its op-ed page on October 12.

I sent a letter to the Wall Street Journal, but the editors were not interested in what a former associate editor and columnist for the paper and President Reagan’s Assistant Secretary of the Treasury for Economic Policy had to say. The facade of lies has to be maintained at all costs. There can be no questioning that globalism is good for us.

Cohen told the Journal’s readers that “the fact is that for every job outsourced to Bangalore, nearly two jobs are created in Buffalo and other American cities.” I bet Buffalo “and other American cities” would like to know where these jobs are. Maybe Slaughter, Cohen, and the Chamber of Commerce can tell them.

Last May I was in St. Louis and was struck by block after block of deserted and boarded up homes, deserted factories and office buildings, even vacant downtown storefronts. Detroit is trying to shrink itself by 40 square miles. On October 25, 60 Minutes had a program on unemployment in Silicon Valley, where formerly high-earning professionals have been out of work for two years and today cannot even find part-time $9 an hour jobs at Target.

The claim that jobs offshoring by US corporations increases domestic employment in the US is one of the greatest hoaxes ever perpetrated. As I demonstrated in my syndicated column at the time and again in my book, How The Economy Was Lost (2010), Slaughter reached his erroneous conclusion by counting the growth in multinational jobs in the U.S. without adjusting the data to reflect the acquisition of existing firms by multinationals and for existing firms turning themselves into multinationals by establishing foreign operations for the first time. There was no new multinational employment in the U.S. Existing employment simply moved into the multinational category from a change in the status of firms to multinational.

If Slaughter (or Cohen) had consulted the Bureau of Labor Statistics nonfarm payroll jobs data, he would have been unable to locate the 5.5 million jobs that were allegedly created. In my columns I have reported for about a decade the details of new jobs creation in the U.S. as revealed by the BLS data, as has Washington economist Charles McMillion. Over the last decade, the net new jobs created in the U.S. have nothing to do with multinational corporations. The jobs consist of waitresses and bartenders, health care and social services (largely ambulatory health care), retail clerks, and while the bubble lasted, construction.

These are not the high-tech, high-paying jobs that the “New Economy” promised, and they are not jobs that can be associated with global corporations. Moreover, these domestic service jobs are themselves scarce.

But facts have nothing to do with it. Did Slaughter, Cohen, the Chamber, and the Wall Street Journal ever wonder how it was possible to have simultaneously millions of new good-paying middle class jobs and virtually the worst income inequality in the developed world with all income gains accruing to the mega-rich?

In mid-October Treasury Secretary and Goldman Sachs puppet Tim Geithner gave a speech in California in the backyard, or former backyard, of 60 Minutes’ Silicon Valley dispossessed upper middle class interviewees in which Geithner said that the solution is to “educate more engineers.”

We already have more engineers than we have jobs for them. In a recent poll a Philadelphia marketing and research firm, Twentysomething, found that 85% of recent college graduates planned to move back home with parents. Even if members of the “boomeranger generation” find jobs, the jobs don’t pay enough to support an independent existence.

The financial media is useless. Reporters repeat the lie that the unemployment rate is 9.6%. This is a specially concocted unemployment rate that does not count most of the unemployed. The government’s own more inclusive rate stands at 17%. Statistician John Williams, who counts unemployment the way it is supposed to be counted, finds the unemployment rate to be 22%.

The financial press turns bad news into good news. Recently a monthly gain of 64,000 new private sector jobs was hyped, jobs that were more than offset by the loss in government jobs. Moreover, it takes around 150,000 new jobs each month to keep pace with labor force growth. In other words, 100,000 new jobs each month would be a 50,000 jobs deficit.

The idiocy of the financial press is demonstrated by the following two headlines which appeared on October 19 on the same Bloomberg page:

“Dollar Index Appreciates as Geithner Supports Currency Strength”

“Geithner Weak Dollar Seen as U.S. Recovery Route”

To keep eyes off of the loss of jobs to offshoring, policymakers and their minions in the financial press blame US unemployment on alleged currency manipulation by China and on the financial crisis. The financial crisis itself is blamed by Republicans on low income Americans who took out mortgages that they could not afford.

In other words, the problem is China and the greedy American poor who tried to live above their means. With this being the American mindset, you can see why nothing can be done to save the economy.

No government will admit its mistakes, especially when it can blame foreigners. China is being made the scapegoat for American failure. An entire industry has grown up that points its finger at China and away from 20 years of corporate offshoring of US jobs and 9 years of expensive and pointless US wars.

“Currency manipulation” is the charge. However, the purpose of the Chinese peg to the US dollar is not currency manipulation. When the Chinese government decided to take its broken communist economy into a market economy, the government understood that it needed foreign confidence in its currency. It achieved that by pegging its currency to the dollar, signaling that China’s money was as sound as the US dollar. At that time, China, of course, could not credibly give its currency a higher dollar value.

As time has passed, the irresponsible and foolish policies of the US have eroded the dollar’s value, and as the Chinese currency is pegged to the dollar, its value has moved down with the dollar. The Chinese have not manipulated the peg in order to make their currency less valuable.

To the contrary, when I was in China in 2006, the exchange rate was a little more than 8 yuan to the dollar. Today it is 6.6 yuan to the dollar--a 17.5% revaluation of the yuan.

The US government blames the US trade deficit with China on an undervalued Chinese currency. However, the Chinese currency has risen 17.5% against the dollar since 2006, but the US trade deficit with China has not declined.

The major cause of the US trade deficit with China is “globalism” or the practice, enforced by Wall Street and Wal-Mart, of US corporations offshoring their production for US markets to China in order to improve the bottom line by lowering labor costs. Most of the tariffs that the congressional idiots want to put on “Chinese” imports would, therefore, fall on the offshored production of US corporations. When these American brand goods, such as Apple computers, are brought to US markets, they enter the US as imports. Thus, the tariffs will be applied to US corporate offshored output as well as to the exports of Chinese companies to the US.

The correct conclusion is that the US trade deficit with China is the result of “globalism” or jobs offshoring, not Chinese currency manipulation.

An important point always overlooked is that the US is dependent on China for many manufactured products including high technology products that are no longer produced in the US. Revaluation of the Chinese currency would raise the dollar price of these products in the US. The greater the revaluation, the greater the price rise. The impact on already declining US living standards would be dramatic.

When US policymakers argue that the solution to America’s problems is a stronger Chinese currency, they are yet again putting the burden of adjustment on the out-of-work, indebted, and foreclosed American population.


TOPICS: News/Current Events
KEYWORDS: employment; globalization; jobs; politics
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About three decades ago I remember reading about how great was the wealth of Americans versus most of the rest of the world. That thought evolved into not just the US but the developed Western nations and how unfair it was.
I thought then that before I died that I'd see a UN tax that would redistribute the wealth of the West to the poor nations...global welfare.

Hasn't the 'off-shoring' of jobs accomplished the same thing?

Who is orchestrating this crap? Is it all the 'linked' groups that Glenn Beck talks about?

1 posted on 10/28/2010 6:37:53 PM PDT by blam
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To: blam

India spends a LOT of money on lobbyists in Washington. Perhaps us Americans should start doing the same.


2 posted on 10/28/2010 6:42:53 PM PDT by driftdiver (I could eat it raw, but why do that when I have a fire.)
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To: blam

What we have allowed to happen to this country with our manufacturing base has been an absolute disaster. Only a koolaid drinker of some kind could look around at what has happened during the past 15-20 years and tell you otherwise.


3 posted on 10/28/2010 6:43:12 PM PDT by KoRn (Department of Homeland Security, Certified - "Right Wing Extremist")
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To: blam
Well, whatever, the robots are taking over already with mechanization, automation, computerization and robotics.

That's where the jobs are going. It's even happening in China!

4 posted on 10/28/2010 6:45:29 PM PDT by muawiyah ("GIT OUT THE WAY" The Republicans are coming)
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To: blam
Horse manure, off-shoring is caused by taxes, over regulation, anti productivity union rules, closed shop, and crony capitalism, period.

Creators and manufacturers would much rather stay where the legal system protects property rights, including intellectual property, but they are guaranteed to be stripped of their wealth if they remain here, so they gamble and leave.

5 posted on 10/28/2010 6:46:46 PM PDT by Navy Patriot (Sarah and the Conservatives will rock your world.)
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To: blam
Capital flows to where it is treated well. The jobs simply follow.

No one in their right mind would manufacture anything other than a high end skill based product in the US.

We are lucky that the auto and aero mfg. operations are still here (logistics).

The epa, osha, ins, irs, and a whole buttload of others prove this sad fact daily.

6 posted on 10/28/2010 6:49:56 PM PDT by mmercier ( somebody to shove...?)
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To: blam

Ross Perot tried to warn us.

The giant sucking sound is getting louder every day.


7 posted on 10/28/2010 6:50:09 PM PDT by TexasFreeper2009 (Obama = Epic Fail)
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To: blam

PCR off his meds again. American jobs leave because of American Unions, American tort lawyers, American EPA regulations, etc. Free trade is the only thing that can save us as it is the only thing capable of imposing discipline on our government. PCR wants to erect trade barriers to protect inefficient jobs. His prescription would condemn us to permanent decline.


8 posted on 10/28/2010 6:50:55 PM PDT by SeeSharp
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To: blam

According to what is available he is a Senior Fellow at the CFR. Seems pretty well acceptable to the usual suspects.

He is the type Zero loves, NO REAL WORLD EXPERIENCE and no common sense.


9 posted on 10/28/2010 6:53:36 PM PDT by Marty62 (marty60)
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To: blam

It is technology that is the primary culprit.

In a few years, about 50 million workers will be able to make all the goods the world requires, including food.

Then what will everyone else do?


10 posted on 10/28/2010 6:57:02 PM PDT by proxy_user
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To: Marty62
You might want to read up on him before making the statement that he has now real world experience.
11 posted on 10/28/2010 6:57:12 PM PDT by Errant
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To: Navy Patriot
Horse manure, off-shoring is caused by taxes, over regulation, anti productivity union rules, closed shop, and crony capitalism, period.

BS, off-shoring is caused by unskilled labor which cost around 5% of what it costs in the US, and by higher skilled and degreed workers available for 20% and less of US pay scales.

12 posted on 10/28/2010 6:59:15 PM PDT by Will88
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To: proxy_user
Then what will everyone else do?

Jobshift: How To Prosper In A Workplace Without Jobs - by William Bridges

13 posted on 10/28/2010 7:00:33 PM PDT by Errant
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To: blam

When the US achieved sole super power after WW2 she should have studied the Story of Silk vs leaving the US economic strategy to private corporations/banks. American business men practice short term profit and concentrate solely on corporate/self interest at exclusion to all other long term issues. Everything and anything will be off shored if possible based just on cost. I remember during the energy crisis of the 1970’s Americans were waiting in gas lines, oil companies were exporting US oil because on the oil exchanges, overseas markets were willing to pay more for the oil. China is pushing a different business model that a number of emerging nations are looking at. China practices capitalism tempered by strategic needs. This is in line with China’s historical past with silk and how they managed this unique technology bringing centuries of wealth (and with it social stability and means to support a powerful military). China intends to guard her technical and resource advantages, while the US elites would sell it to the highest bidder to benefit the few at the top of society leaving the rest in society endangered if a crisis should happen. There are freepers who would pooh pooh this notion, but let us compare. After twenty short years of narrowly focused US capitalism in the hands of corporations/bankers versus Chinese capitalism tempered by strategic needs, which nation has the cash surplus, which nation is fully employed and which nation has secured resources for their industries? Let me throw another issue on the table, how long will US democracy last if their people are impoverished and how long can the Chinese authoritarian state last as the Chinese middle class grows with the economic expansion? It would be ironic the US becomes less free due to declining wealth and China is under pressure to be more free as her population is well fed, fully employed and growing richer each year.


14 posted on 10/28/2010 7:01:02 PM PDT by Fee
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To: blam
"At the time I exposed Slaughter’s mistakes, but economists dependent on corporate largess understood that it was more profitable to drink Slaughter’s kool-aid than to tell the truth. "

Yeh, another one of those who thinks it intellectually honest to impugn the integrity of others without a shred of evidence. All those other economists, you see, did not just make mistakes or misunderstood something --- they are on the take of spooky corporations! Trust me, however, I am brilliant and honest. Pathetic.

15 posted on 10/28/2010 7:01:33 PM PDT by TopQuark
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To: blam

“American Job Losses Are Permanent...”

IMHO..that depends entirely upon when We the People decide we are going to bring jobs back to America.


16 posted on 10/28/2010 7:01:45 PM PDT by mo
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To: muawiyah; blam
Well, whatever, the robots are taking over already with mechanization, automation, computerization and robotics.

EXACTLY! Only those who simply don't think about it still demand "no outsourcing!" It's not jobs shipped overseas, it's jobs replaced with machines and automation. More jobs are lost to robotics and automation than to overseas competitors.

Protectionism will ONLY hurt the US, we need to let businesses compete on better footing and jobs will continue to move upscale in capability and income. Those at the bottom will get left at the bottom, in predominantly service positions. Not because some guy in India or China is running a press, but because a Tomasa or Jenkins auto-press is doing the work of 20 men.

Automation is taking over all the world's manufacturing. I see it a huge amount here in China. Ten years ago, factories had thousands of men each working their own lathe or press or mill or drill. Now you have dozens of men feeding and servicing a floor full of multi-tool CNC machines, and the products are higher quality, more consistent, and lower cost.

It's machines, not people, that are eliminating the need for US manufacturing jobs.

17 posted on 10/28/2010 7:03:26 PM PDT by PugetSoundSoldier (Indignation over the Sting of Truth is the defense of the indefensible)
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To: Errant

How many actual jobs has he created?


18 posted on 10/28/2010 7:06:54 PM PDT by Marty62 (marty60)
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To: blam
"The correct conclusion is that the US trade deficit with China is the result of “globalism” or jobs offshoring, not Chinese currency manipulation. "

Suppose that is true. This brilliant "economist" appears unaware that offshoring is not new, and "outsourcing" is just a new word for the old phenomenon: great many American companies had foreign subsidiaries. Globalization too is nothing new: there was a similar increase in the interconnectedness of nations at the turn of the XX century. And, when we exported so much of our output, was it not globalization?

Why is it now that globalization is hurting America whereas before it did not? This alone shows that globalization cannot be the cause.

Finally, if he had any intellectual honesty, he would ask the real question: what is that makes our companies move abroad? But he is too leftist to do that: the Wall Street is at fault. Having fallen in love with ideas, he manipulates facts to prove them.

19 posted on 10/28/2010 7:08:58 PM PDT by TopQuark
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To: PugetSoundSoldier
It's machines, not people, that are eliminating the need for US manufacturing jobs.

If that were true, it would not be economically feasible to employ the tiny number of workers in China or India to run the machines to produce products for sale in the US, and then incur all the handling and shipping cost to the US.

20 posted on 10/28/2010 7:12:12 PM PDT by Will88
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To: Marty62
I would guess a few if you believe Ronald Reagan:

"President Ronald Reagan and Treasury Secretary Donald Regan credited him with a major role in the Economic Recovery Tax Act of 1981, and he was awarded the Treasury Department's Meritorious Service Award for "outstanding contributions to the formulation of United States economic policy"

21 posted on 10/28/2010 7:15:10 PM PDT by Errant
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To: blam

A lot of what is being said here about outsourcing is pure nonsense. Many of the jobs now being outsourced are highly skilled jobs, including all sorts of skilled jobs in the computer and software industries, engineering jobs, accounting and tax preparation, radiologists, draftsmen, and any other sort of skilled work that can be performed and transmitted back and forth via modern communications systems. And, of course, all sorts of help centers and order centers were among the first jobs to be outsourced to cheap labor nations.

The only jobs not being outsourced to some degree are jobs that simply cannot be performed offshore.


22 posted on 10/28/2010 7:17:00 PM PDT by Will88
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To: Will88

On a side, today a busload of workers working for an AMERICAN company in Mexico were targets of the Drug cartel. I wonder if the American companies that went to MX after NAFTA was passed will be coming back to the U.S. or send production on to another third world country.


23 posted on 10/28/2010 7:18:31 PM PDT by Marty62 (marty60)
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To: blam

BTT


24 posted on 10/28/2010 7:19:19 PM PDT by Cacique (quos Deus vult perdere, prius dementat ( Islamia Delenda Est ))
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To: blam

BTT


25 posted on 10/28/2010 7:19:24 PM PDT by Cacique (quos Deus vult perdere, prius dementat ( Islamia Delenda Est ))
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To: Marty62
I wonder if the American companies that went to MX after NAFTA was passed will be coming back to the U.S. or send production on to another third world country.

They might move to places like Vietnam and Laos and other very poor nations. Wages in China are getting to around $1.50 per hour and that's just more than some trans-nationals think they should have to pay.

26 posted on 10/28/2010 7:23:57 PM PDT by Will88
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To: Errant

Are we talking about the same person?

From 2005 to 2007 he was on leave from Dartmouth while he served on the Council of Economic Advisers. Dr. Slaughter joined the Faculty of Arts & Sciences at Dartmouth in 1994 and a member of the Tuck School faculty in 2002. He is a recipient of the university’s John M. Manley Huntington Teaching Award, and a member of Phi Beta Kappa. Dr. Slaughter received his bachelor’s degree summa cum laude from University of Notre Dame in 1990, and his doctorate from the Massachusetts Institute of Technology in 1994.


27 posted on 10/28/2010 7:25:45 PM PDT by Marty62 (marty60)
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To: blam
It was evident to anyone paying attention thirty years ago. Conservatives and liberals drank the koolaid in the seventies and eighties. Five years ago if you posted a comment that free trade was looting our nation and destroying our industry you were flamed and ridiculed right off the thread. Too late our citizens are beginning to realize what predatory socialism and globalization are going to mean to them. So...all should understand that in the not too distant future an American laborer will have the same average wage (buying power) as the average laborer around the world. The same goes for Doctors, Engineers etc. Don't believe your degrees will save you. You cannot make a widiget with labor at 20/hr and compete with people making widigets for 1/hr using machines that are as good as or better than yours. Oh one more thing, most foreign governments don't penalize successful businesses in their countries. Like our government does. Where does this end? I would say a feudal system of world government. Nice to contemplate huh.
28 posted on 10/28/2010 7:25:56 PM PDT by Nuc 1.1 (Liberals aren't Patriots. Remember 1789!)
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To: Will88

Ditto. Recently a book came out describing the profile of Wall Street bankers in New York city. Democrats will have you believe it is dominated by white Anglo Saxon Protestants Republicans, who believe in the conservative notion of small government and no regulation. That is far from the truth. Wall Street bankers want no regulations for finance except when it impacts small and medium size financial companies who can represent future competitors if they get a chance to grow. Big government is considered a useful tool when needed to eliminate competitors and barriers to their selfish goals. Wall Street already learned how to influence government via donations, lobbyists and infiltrating the Treasury and Federal Reserves with allies and seducing them with prospect of lucrative jobs on Wall Street for federal officials/reps upon retirement. More then half of the bankers are of Jewish descent. This is a critical social dimension to the Wall Street psyche. Jews always supported a strong central government because it represents a safety net against possible prosecution by the majority. The Holocaust adds legitimacy to this viewpoint of the world. When you have many CEO’s who come from a ethnic group that feels naked and unprotected without a large powerful government, a leadership tone is set on how the Wall Street elites view big central government and social issues. That is why Wall Street CEO’s will lean Democrat/RINO, liberal on social issues and support big government except if it affects their ability to make money.


29 posted on 10/28/2010 7:26:55 PM PDT by Fee
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To: blam
An important point always overlooked is that the US is dependent on China for many manufactured products including high technology products that are no longer produced in the US. Revaluation of the Chinese currency would raise the dollar price of these products in the US. The greater the revaluation, the greater the price rise. The impact on already declining US living standards would be dramatic.

Very true. I believe the Chinese will stick with what serves their interests regardless of US governing class wishes. We'll counter by depreciating the dollar and either way, the US living standards will fall.

30 posted on 10/28/2010 7:27:44 PM PDT by Errant
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To: Marty62
Must not be, I thought you were referring to the author: Paul Craig Roberts
31 posted on 10/28/2010 7:31:17 PM PDT by Errant
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To: Errant

no no, Sorry I should have been clear in my posting.


32 posted on 10/28/2010 7:32:40 PM PDT by Marty62 (marty60)
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To: PugetSoundSoldier
In 1966 when I went to work at Post Office Department headquarters we were working 30 billion pieces of mail per year with about 700,000 employees. 38 years later when I retired from USPS we were working over 200 billion pieces of mail per year without 750,000 employees.

That's about 600% productivity improvement. Most of it was done with NEW MACHINERY, COMPUTERS, OCR, IMPROVED SYSTEMS, a device I invented that saved one full man year every time we bought one ~ and we bought tens of thousands of them every year.

If we had not done all of that we'd needed another 3,600,000 employees!

BTW, not a single job was outsourced!

33 posted on 10/28/2010 7:36:01 PM PDT by muawiyah ("GIT OUT THE WAY" The Republicans are coming)
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To: blam
"Hasn't the 'off-shoring' of jobs accomplished the same thing?

No, these are two different things. A global tax would distribute a part of the product created by Americans to someone else. WHen a company outsources, only the capital is moved abroad, and the honor of creating the product lies with the foreigners working for those companies. A redistribution of exhisting wealth vs. creation of new wealth -- think about that.

"Who is orchestrating this crap? Is it all the 'linked' groups that Glenn Beck talks about? "

No, it is orchestrated by the American public. We have become spoiled and acquired a feeling of entitlement that none of our predecessors had. We are 28th among the industrialized nations in graduating scientists and engineers. The vocabulary of the present-day teenager is about one half as big as in 1950s. We have not been saving for a rainy day since the early 1990s. And yet, we expert salaries higher than in the rest of the world, and expect someone else to bail us out in downturns of luck (Katrina) and economy (Detroit).

The truth is simple but painful: we are less and less productive and competitive. We are less productive because we dumbed down our system of education. We don't even partake of what it offers, spending thousands on LCD TVs every couple of years rather than $250 for a course at community college. Many Americans arriving in New Mexico are surprised that a visa is not required. After 9-11 vacation-tour operators were overwhelmed by people that were apprehensive to fly, insisting that they would prefer to go to Hawaii by bus rather than by plane. And yet those same people think they are entitled to a $20-50/hour salary. Nope. You can be ignorant or highly paid, but not both.

As nation we also have decided to become less competitive by roping ourselves with chains of regulation and taxation. The latter has just increased by the health-care reform, which prices so many more of American workers out of the market.

So what should you do with your retirement money? When spend money on goods, you want the best return --- least price for the same good. Investment is the same purchase: you buy future money (profit, which you need for later years of retirement) with the money you have today. The thinking is also the same: you invest in the most productive workers (actually, to do so you hire senior management of companies in which you invest, and they make decisions on your behalf). Those workers are now abroad: you don't have to pay for the onerous regulation there, for their health-care and pensions, or for the frivolous courts that go after deep (your) pockets rather than fairness.

The above elements are the only things that are new, not globalization of offshoring. It is they (we ourselves) that are responsible for the worsening condition of our middle class.

Glenn Beck is right only in one sense: the various elites heu unmasks are the doers here, the pushers of the above-mentioned changes. But it is we ourselves that allow that minority to rule over us. People rail against poor education, but how many of them get actually involved with the PTAs (which de Tocqueville praised as the essence of our democracy, as a field on which we practice self-government). People are upset about the leftism in our academia, but the donations to Harvard do not decrease. Nazis too were first a minority, but the majority chose to listen to them. Glenn Beck points to the doers, but it is the American public at large that agrees with them or remains indifferent; it is the American public at large who hgives Obama 47% approval rating after observing his deed. In sum, the American public gets what it wants and does but, disliking the results, looks now for the guilty parties --- the Wall Street, the Fed, the "rich," the corporations (as if it were not Main Street that owned Wall Street). The same as in Nazi Germany, where the same parties were vilified as the perpetrators of 1929, loss in the WW I, etc. (The only difference, so far, that in Germany they especially disliked "Jewish bankers" and claimed, of course, that all Jews are bankers. We may reach that point, too).

34 posted on 10/28/2010 7:36:41 PM PDT by TopQuark
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To: Marty62

NP


35 posted on 10/28/2010 7:37:39 PM PDT by Errant
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To: Nuc 1.1

The Chinese are trying to break this lower wage trap. Unlike the US, employment is a critical factor in regime stability. Unemployed Chinese workers is a threat to the authoritarian Chinese government. China pursues capitalism tempered by strategic needs. China will protect its emerging technologies, they will protect their technological advantages once they achieve it, they will secure their natural resources for their industries and most important they pursue a balanced policy of profits and employment. I always challenge freepers who pooh pooh the Chinese model. After twenty years of Chinese approach to capitalism and the American capitalist model, which nation has the trade surplus, government surplus, full employment and secured natural resources?


36 posted on 10/28/2010 7:43:31 PM PDT by Fee
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To: Fee
Nothing is more important to big business these days than the ability to move all manner of jobs to the world's cheapest labor, then bring their output back to the US tariff free. And that means always having big government in their corner, and on the maximum contribution list.

Here is an article from 2007 to support some of the things I mentioned in #22. There are many such articles if anyone wants to Google: "outsourcing skilled jobs", or something similar.

High-skilled jobs in finance and medical research going to India, study shows

Only a nitwit or someone profiting off these practices would seriously contend that this is good for the US economy. The only job security in the US at present is performing a function that absolutely cannot be performed offshore.

37 posted on 10/28/2010 7:44:23 PM PDT by Will88
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To: Will88
Transpacific/Transatlantic shipping costs are quite reasonable. Per ton mile they are less than rail anywhere.

Makes it just like those Korean auto plants are about 100 miles offshore California or North Carolina, and China is really not as far, in terms of shipping costs, as Kansas City KS is from Louisville KY.

NOTE: The United States has only two great rivers to provide shipping to the interior ~ but that's all China has either. Europe has several. Africa has one. South America has two.

The navigable distance of the local waterways combined with modern international container shipping systems make many countries next door neighbors. Combine that with fiber optic communications capability, and the great manufacturing centers of China are a local phone call from the great manufacturing centers of America and Europe.

One disturbing trend is the US, and China, are losing port city frontage on the major rivers or the world ocean. We are backed up by the otherwise little used Gulf of California so we can expand into Mexico (See I35/I69 routing into Mexico). China can't do that readily without moving into areas now owned by Russia.

38 posted on 10/28/2010 7:46:05 PM PDT by muawiyah ("GIT OUT THE WAY" The Republicans are coming)
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To: TexasFreeper2009
"The giant sucking sound is getting louder every day."

Yep. And the sound is emitted by the progressively more empty, dumbed down American brain, the owner of which demands a salary it does not deserve.

39 posted on 10/28/2010 7:46:53 PM PDT by TopQuark
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To: Navy Patriot

I’ll give you the crony capitalism, but offshoring is caused by the government subsidizing corporate investment overseas and guaranteeing their investments should they lose it because they did business with communist dictators in an unstable political environment.

The government used offshoring as bribes to get other things the globalists and neocons in our government were interested in. For example, they could get their hands on foreign aid money and distribute it to their corporate cronies without having ask congress for the money. Look at Condoleeza Rice and her board status of a ‘government’ corporation, the Millenium Challenge Corp.

The government used offshoring as a tool to implement directives from globalist cabals like the WTO, the World Bank, and the G20.

Much of our federal policy is negotiated outside this country, outside of the federal record and laws that require records of meetings and ‘sunshine’ on what our politicians do when they travel abroad. This has for all intents and purposes obsoleted congress from their duties as lawmakers, as laws are now written and implemented as written by global corporations seeking to institutionalize tax money infusions into their businesses.

India negotiates the H1B visa levels at the Doha, and other WTO ‘rounds’. They tell Congress what they want and they get it because globalists have insinuated themselves into every part of our government.

The government, and I mean Bush 1, Clinton,and Bush 2 used offshoring of manufacturing to slave labor countries, to reduce the costs of some goods so the economic indexes would not show inflation. In return, slave labor using nations like China, purchased Treasury bonds under newly implemented globalists rules for foreign investment , to keep a cash flow going into the government so it could expand astronomically in size.

That is really why offshoring was begun and why it is still being subsidized by wage earning American’s taxes. It is designed to destroy free enterprise in the American economy, lower American standard of living and redistribute our wealth to the corrupt antiAmerican transnational corporations and foreign governments similar to Mexico’s mordita.


40 posted on 10/28/2010 7:50:31 PM PDT by hedgetrimmer
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To: Will88

But there’s a reason why it costs so little for labor. Skilled laborers in China and India aren’t living in crowded huts with no electricity or running water. The cost of living is simply lower there. Why? Because if you don’t have to deal with so much government, then you can build a house cheaper, and live in it cheaper, and eat cheaper, etc. etc.

The cost is that they don’t have government protecting them from bad working conditions, shoddy construction, pollutants down to single digit ppm, emergency room care, payoffs at old age, unemployment, etc.


41 posted on 10/28/2010 7:50:58 PM PDT by dan1123 (Free condoms for teens to have safe sex is like giving them bullet-proof vests for safe gun play)
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To: proxy_user
"In a few years, about 50 million workers will be able to make all the goods the world requires, including food. Then what will everyone else do?"

This has happened so many time in history that we actually know a definitive answer: the rest will also be workers but producing the kinds of things that do not even exist today. What happened to the huge steno pools and then pools of typists that every corporation had just a few decades ago? Some became computer programmers, some others became administrative assistants.

Similar predictions are periodically made about the shortages of food on Earth and the inability of mankind to sustain itself, but those predictions are based on the inability to envision that new methods and sources of production will become available. That is what happened in history time and time again.

42 posted on 10/28/2010 7:52:47 PM PDT by TopQuark
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To: KoRn
What we have allowed to happen done to this country with our manufacturing base has been an absolute disaster

Federal, State, and Local Tax policy is what is primarily responsible for jobs leaving (Union scum have done their part as well). DON'T BLAME MANUFACTURERS FOR LEAVING BECAUSE GOVERNMENTS HAVE MADE IT TOO EXPENSIVE MANUFACTURE HERE!


43 posted on 10/28/2010 7:56:46 PM PDT by rottndog (Be Prepared for what's coming AFTER America....)
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To: PugetSoundSoldier

Robots are creating jobs for Americans, just like automobiles have. Someone needs to build them, you know, and someone needs to fix them when they break. Someone needs to design them, program them and test them. Someone needs to design the factory floors where they operate and someone needs to build the factories to house them. Someone needs to pave the parking lots for the workers who still come to the factories, and tend the landscape for the building. Someone needs to supply the workers with their needs, office equipment, foodstuffs. Someone needs to train people how to run the robots and that means someone needs to provide classrooms and materials or supply internet courses and videos, which means someone will have to program the courses and shoot the videos.

Robots are good for a lot of someones.


44 posted on 10/28/2010 7:57:11 PM PDT by hedgetrimmer
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To: muawiyah

All good comments, but still, if the mechanization was replacing as many workers as some here think, it would soon become more feasible to move some of this highly mechanized work to the areas where most of it would be sold.


45 posted on 10/28/2010 7:58:10 PM PDT by Will88
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To: TopQuark

Interconnectedness = Gaia -speak.


46 posted on 10/28/2010 7:59:42 PM PDT by hedgetrimmer
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To: Will88

That’s what happened with automobile parts. There are a number of other industries where it has been commonsense to relocate the greater part of the operation to the point of sale ~ abroad!


47 posted on 10/28/2010 8:01:08 PM PDT by muawiyah ("GIT OUT THE WAY" The Republicans are coming)
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To: PugetSoundSoldier

If you are a soldier, indeed, thank you for your service to our country. But I must add that robot mules are a great advance for American soldiers deployed in rugged terrains, and the flying robotic humvees under development will help protect troops from IEDs.


48 posted on 10/28/2010 8:02:45 PM PDT by hedgetrimmer
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To: Fee
"When the US achieved sole super power after WW2"

It has not been a sole superpower after WW2; it has become such 50 years later, after the demise of the Soviet Union.

"leaving the US economic strategy to private corporations/banks."

No company on earth is responsible for economic strategy.

"American business men practice short term profit and concentrate solely on corporate/self interest at exclusion to all other long term issues."

That is a common misconception. You assume that (i) long-term issues are known and (ii) corporations simply ignore them. The truth is, people cannot predict the future beyond a couple-of-years horizon. The fist assumption is therefore false. It true that socialist regimes, such as those in Europe, pretend that a committee comprised of a few Ph.D.s can come up with a long-term plan. How come, then, they are so much behind the U.S.? How come their unemployment is consistently, for decades, is much higher than ours? If our banks are at fault, how come the socialists in Europe did not avoid the same crisis? Spain suffers now from 20% unemployment vs. 9.5% ours, and their housing crisis is as deep or deeper --- what happened to their long-term knowledge of "issues?"

The only difference between capitalist and socialist managers is that the former, unlike the latter, do not pretend to know far into the future. American businesses focus on short-term result because nobody knows that long-term results are. And they have been achieving better results for centuries in part because they do so.

49 posted on 10/28/2010 8:03:13 PM PDT by TopQuark
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To: Will88
NOTE: We almost moved to Sao Paolo back in the mid 1950s since the company my father worked for was starting up an engine factory there.

They expected a vast number of sales throughout South America.

Subsequently the international shipping container with it's intermodal capabilities (truck/rail/sea) has pretty much wiped out that advantage but more recent threats to make casting more expensive has the same engine manufacturing interests looking at EXPANDING operations in South America in the exact same places.

BTW, truck engines are are not exactly designed and built by an interlocking zaibatsu, but they are !!!!! The subcontracting in that line of business is truly incredible.

50 posted on 10/28/2010 8:06:23 PM PDT by muawiyah ("GIT OUT THE WAY" The Republicans are coming)
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