Originally Posted by Cylon Baby
Re: Offshoring: I think the problem is more subtle and thus hard to address. I think it derives from two sources:
1) the Economic dogma that the sole responsibility of the CEO of any corporation is to maximize shareholder value. It's what's led to the short term thinking that pushes company's to close plants in the US and ship the work to India, China etc. All to get a pop in the stock price. It really is a shell game.
To take one example. Cisco recently "laid off" 5,000 workers in a plant in Mexico. What they really did was in effect sell that plant and the workers to a foreign company, which then behaved as before. On paper Cisco "saved" X dollars, and Wall Street analysts applaud. The workers get their pay from a different entity, (maybe poorer benefits: don't know)m but to my knowledge they are still doing the exact same thing. That is a benign example: we're all familiar with uglier cases. Point is, these are not rational economic decisions. They are the result of ideology.
2) Globalization. As much as people vilify it, it has raised the living standards in a lot of countries: South Korea, China, Taiwan etc. Compare life in those counties (on average) to life in a country that's rejected Globalization, like, say, North Korea.
Trouble is, whenever a job can be done for orders of magnitude in Country X vs the US, it will go to Country X. That IS a rational economic decision. And in the 90's 2000's many US companies took advantage of that disparity. But, a funny thing is happening now. The wage gap is decreasing between the US and these countries. And, questions about quality of product/service, concerns about foreign county's lack of respect for intellectual property rights (and Human Rights), etc has led many company's to return to the US.
One example: Dell tried moving all Customer Service to India. The complaints were such that they have moved at least some Tech Support back to Texas (for the high paying Elite customers of course ).
Offshoring - this economic dogma is the problem. In the beginning there were no corporations. Then there were corporations but they only lived as long as their owner and the first item on their charter, by law, had to be "to serve the public good." They chipped away at these restrictions, eventually attaining personhood through a hat-trick delivered by a clerk of the court who had a vested interest. Then they could do whatever they wanted and further chip away at restrictions, including getting rid of that burdensome "public good" thing. There was also the matter of paying their executives in shares, which they attained. And then after a few boom & busts cycles and FDR enacted the high top marginal tax rate, they managed to get rid of that through Reagan. With low marginal tax rates, the goal becomes not what's good for the country, not even the company--it's what's good for the CEO and shareholders, and that's it. We live in a democracy, which means we make the laws. It should follow that we make laws that benefit the millions of people that live in the country, not the handful of people that use the opportunity, the infrastructure, the freedom our great country affords to make themselves rich at the country's expense. And that's not even going into what disgusting vulture capitalists are doing with the dept of poor nations vis a vis their corrupt officials.
So, when Cisco turns a plant over to a contractor to push up its bottom line and remove itself from the horrors that contractor wreaks, that should be illegal. Everything they're doing would be illegal if we had a sane trade policy.
Globalization - I no longer buy the buoying of the wealth of the people as a good argument. Half these countries we have free trade agreements and favored nation status with are dictatorships. We're helping the elite of those countries, and selling out the underclass. Multinationals are stateless. They don't give two $%#!s about the country that happens to be hosting them at the moment. If workers in, say, Singapore did what workers in this country did to try to claim any fair labor practices at all, these f***ers would pack up and ship their operation to Sri Lanka, or wherever. It's like getting a decent living in the mob--one wrong move and you're done. And further, they're looking at consumer bases in these growing economies and what they see in the US is the future of cheap labor.
On your last point, I don't think it is a rational economic decision to go to Country X in almost every case. For one thing, the US will start to look more like Country X, and that's not a good thing for any of us. For another, computer chips for our defense systems are made in China. And for a third, as you said, the wage disparity will even out -- undoing what people fought and died for in this country because CEO A has to buy that second island. In the immortal words of Spock, the needs of the many outweigh the needs of the few, or the one. If the people of a democracy are weighing their options, they would be wise to err on the side of the many, not the few or the one.
Lastly, the view from here does not allow for what other countries are doing to protect themselves from the very thing that's happening to us. Germany, which has no shortage of millionaires, has tariffs and broad unionization, with half of boards of directors comprised of workers. China has strict ownership rules that prevents western companies from fully owning operations in their country, and India only recently said it would start allowing more than one operation of a western company in its country.
We had it right for fifty years--the fastest growth period this country has ever seen. What we're seeing now are the results of the dismantling of the American way that began with Reagan and has not let up. Monopoly capitalism eats its host, and since some people still have a few dollars to rub together, they're not finished with us.