I post this article not to take a shot at China. Sadly they appear to be a more peace loving natiion than Bush's America. I think that this shows the danger that has developed from those whose world view is largely limited by simplistic micor economic theory preached in biz schools and by the GOP.. Of course, the whole defense industry shoud be analyzed from the perspective of what happens when you have a monopoly that has extreme poliitical pull at the Federal level. Note the increasing percentage of "defense" that is sole source. The author, a conservative from the Reagan era is well versed in fundie economics, but is still able to comprehend reality unencumbered by the simplistic model so popular in the GOP and the media. July 25, 2005 The US Navy...Made in China China-Mart Takes Over By PAUL CRAIG ROBERTS My poor beloved country, trapped in a Middle Eastern quagmire and tricked by Osama bin Laden into subsidizing to the tune of $300 billion (spent or appropriated) a training ground for Muslim terrorists and insurgents while our once fabulous economy disintegrates. If the US were still rich and just wanted to throw several hundred billion dollars at bin Laden as a good will gesture, that would be one thing. But we are borrowing the money that we are using to train Muslim terrorists to kill and maim our troops in Iraq and Londoners in England. The money is being lent to us mainly by Asians, especially the Chinese. China has so many dollars to lend to us because we send so many dollars to China to pay for the goods and services that patriotic American corporations have decided to supply to us from China instead of from America. US corporations decided that the way to get rich was to destroy their American consumer base by closing their American factories, throwing their US employees out of work and hiring Chinese instead. The Chinese work for less, you see, and free trade economists say lowering costs makes us better off. What US corporations and the free trade economists overlook is that giving Americans' jobs to foreigners raises foreign incomes and lowers American incomes. When credit cards and home equity lines are maxed out, there will be nothing to support the US consumer market. The American corporations who moved their capital and technology to China will have to find new customers. Maybe the Chinese government will let the relocated US firms sell to Chinese customers, or maybe the Chinese government will let the US firms go bankrupt. The latter favors China's strategic interest. Chinese businessmen will purchase the bankrupt firms, and Chinese businesses will sell to Chinese customers. Americans are pouring so much money into China that China can finance our wars while it buys up our companies. Everyone was shocked that a Chinese company could outbid Chevron for Unocal. China has already purchased IBM's personal computer business, and is now after US appliance maker Maytag (whose appliances are made in Mexico). The outsourcing mania has hit the Pentagon, and China will soon be supplying the ships for the US Navy. The Pentagon, seeking lowest cost, is pushing defense contractors to outsource offshore for more materials, components and systems. This means the end of US shipbuilding capability. Component suppliers to American shipbuilding are already skeletal thin, with most components only having sole suppliers. For example, Manufacturing & Technology News (July 8) reports that 80% of the components for the Virginia Class submarine come from sole sources. With not enough US Navy ships being built to support even an industry of sole suppliers, Asia is fast becoming the only source for US Navy ships. While President Bush spends $300 billion recruiting and training terrorists for bin Laden in Iraq, US Navy ship procurement has fallen 33% since 2001. Meanwhile China is on a rip. China is now the third largest shipbuilder after South Korea and Japan. In five years China's submarine fleet will be twice the size of America's. In 10 years China's navy will be larger than the American fleet. This is amazing performance for a country that as recently as 1989 had essentially no shipbuilding industry. This year the US is producing 6 ships, one-tenth of South Korea's output. In 2006 the US is scheduled to produce only 4 ships, because China has outbid us for the steel. The US "superpower" can no longer afford to compete against China for essential materials. Cynthia Brown, president of the American Shipbuilding Association says that "the manufacture of entire components and systems will migrate to China in the next several years under current Department of Defense policy with respect to outsourcing." But, hey, we will get ships cheaper, and it is making us rich! Paul Craig Roberts has held a number of academic appointments and has contributed to numerous scholarly publications. He served as Assistant Secretary of the Treasury in the Reagan administration. His graduate economics education was at the University of Virginia, the University of California at Berkeley, and Oxford University. He is coauthor of The Tyranny of Good Intentions. He can be reached at: paulcraigroberts@yahoo.com http://counterpunch.org/
Eventually the globalization affect will bring down us living standard and raise the living standard in other countries. When living standard are relatively even between developed nations and developing nations is when the whole outsourcing thing will stablize. Corprate big shots think they are so smart by outsourcing everything, but when the companies from other countries grows strong enough to replace these US companies they wouldn't feel so smart then. Unicol and Maytag are just the first ones to feel these effects.
I don't think globalization lowered the living standard, on the contrary, it raises the American living standard, just at the same time, it raises living standard in those developing countries as well, and in a more rapid way. For instance, two kids at school, one used to score 95 out of 100, another scores 20 out of 100 usually. It's must easier for the latter one to improve to 40, than the first one to get to 99. The first one is still far ahead of the second one, though not by such a margin than it used to be. I don't think it's a bad thing for either side.
This is the prevailing wisdom. You should extend it to its full version. Corporate big shot's job is to make money for the share holders not to save anyone's job, or defend our way of life, or protect the environment or follow the law if it is more profitable, or raise the general level of culture or level of personal responsibility, enhance democracy etc. This is a sadly immoral philososphy that needs to be rejected for many raasons. I know the genral spin defending their amoral conduct.
Except look around...its a lot of US companies setting up shop overseas. So in essence, they are looking for self preserverance....and btw, its not just CEOs....next time a consumer decides to buy a microwave, they go for the one thats 25% less, even if its made in China. The transition of production is a concern, but its not the end of the US like some believe, primarily b/c US shareholders own the factories overseas, so we still control a lot of capital...
If the unions you love so much had not inflated the labor market in America, then we wouldn't need to outsource jobs to China. As soon as American workers start to work for fair market value (on the global labor market) then we won't need to look elsewhere. No one wants to pay more to get the same or less.
I have not heard too many COEs say they will not take the huge buyouts after they run the company into the ground.
I'm still optimistic about outsourcing and free trade policies. While blue collar jobs are vastly declining, white collar management positions have been outsourced to America. As long as America stays at the forefront of innovation on all spectrums, then our workforce will manage. This speculative fear about China outcompeting us also happened during the 80s with Japan and the Asian Tigers. Does anyone remember the "Made in America" hysteria? Eventually the displaced workers from the Rust Belt found new training. The internet boom also helped create a ridiculously low unemployment level envied by other countries. Plus, companies like Toyota are building factories on North America replacing some jobs GM outsourced. America needs to keep on keep it on... minimalize regulation and subsidies, encourage immigration, and reprioritize education.
Just point out that COEs wants theirs just like the shop floor workers. Stupidmoniker was saying that workers were pricing themselves out of jobs, which I partially agree with.
You honestly believe that US will be a nation of mangement? There are very few jobs that could not be outsourced today with the level of technology we have. You can outsource engineering jobs, accounting, software developing, etc...
The distribution of stocks in the US is roughly like the distribution of income in many third world countries. It is true perhaps close to 50% of workers own a few thousand bucks or more in stocks. This is no way makes up for losing their job.
I doubt based on percentges alone that stupid moniker is a big time rich guy. He has therefore incorported a spin that is against his own economic interest or at least against a majority of US workers. Most likely if he had his own job outsourced he would change his tune and he had to try to live on the "fair market value of his services in China, for an indefinite period, perhaps the rest of his earning years, he would start to examinethe corporate spin he has absorbed. He might even do so if Dubya and friends still espoused it.
Reminds me of going out to lunch at one of the many crap jobs I had prior to completing my education. In the elevator on the way to lunch the low wage workers at the job were saying what a bummer it was that Paul McCartny had to pay over 50% of the roughly 50 million he earned that year in British taxes. I guess they couldn't see past the fact that if they only took home half of their $150 gross per week it would be tough. (Note 20 + yrs ago).
I've seen estimates that a couple of hundred thousand legal jobs will be outsourced in the next few years. Indian attorney are already writing summaries of cases for West Law the near moopoly on legal books. Radiology can be easily outsourced. There goes another hundred thousand or so very high paid doctor jobs.
I wonder if your low wage co-workers ever completed their education and if they'd still be paid the same level if they did.
