Good question. I'll think about it. Off the top of my head. I think the US needs to go beyond the traditional laissez faire economics in which the top benefit so disproportionally . We need to spend a lot of money in retraining laid off workers. We need to develop local energy sources or probably more important conserve energy, locate people and jobs, production, and food growing close to each other because the coming energy/ environmental problems. One thing for sure you don't ask only the non-ceo types to make any necessarysacrifices. This is ture even if they have the power to manage perceptions to make this appear the only and natural way.
It works both ways. Just as Toyota builds factories on American soil to improve domestic market share, they'll need American managers to understand American consumers. Since the late 19th century, the US has been an immigrant haven for inventors and scientists who, for their own particular reasons, did not feel confident to express their ideas in their homeland. There's a strong entrepreneurial culture that America has been and must be maintained. There's some perverseness in this, but the American consumer power that's forcing companies towards strong competition will also spur corporate innovation found only on American soil. For one thing, it's the culture. Another, there's less regulation here than found in other industrialized countries. Quasi-libertarians love to use Hong Kong as an example of how high a deregulated economy can go. America is nowhere near that level, but much closer than its competitors. As American consumer dominance begins to fade towards other sources, such as a centralized EU or emerging China and India, the US will have to rely on its tech (nanotech, materials science, computing) and science (biotech, gentech) infrastructure to spur innovation. There's no guaranteed success as third world countries and our traditional competitors have realized it as well, but I'm still optimistic. Consider me conservative when it comes to education. Hate is a strong word. How about apathy? With cheap junior colleges and online study (whether home or public access), there's no economical bar of entry when it comes to retraining for higher paying jobs. I do realize that low wages perpetuate a never ending cycle of possibly having no free time for more education, and I'm not speaking for all poor people. What I'm saying is that there are oportunities for people who complain about their wages, and it's up to them to find the incentive to invest that extra time. Besides, what is wrong for encouraging education instead of making excuses for our know-nothing culture, Glynch?
The glynch's post quoted below is the beginning of the solution to the out-source problem. After legal jobs, financing jobs, manager jobs, doctors' jobs, even politician's jobs start to be out-sourced, those guys will feel the pain and start to cry out loud. They never give a damn to what a tech labor thinks.
Maybe people who start losing their jobs can move to other countries? It should be easy to find some 'outsourced' jobs there...lol. But seriously, the cost of living is much lower in other countries. People will move to where the jobs are. If the jobs move to another country, people will follow.
These plans doesn't really address the actual out-source problem. Question is how do you make US companys compete on a global scale when the labor cost is 1/10 the cost in China/India etc. The answer is they move to the country where labor is cheaper, otherwise the company will go down. In a market economy, capital flows to where the resources are the cheapest, that includes human resources.
Aren't they the ones who threatened nuclear retaliation if the US got involved in a defense of Taiwan? Is that peace-loving?
So China had one general making the statement. Didn't a congressman want to nuke Mecca? It is so easy to find Hawks in any nation, just check out this board and you will see some prime examples.
Deepblue, we need a more regulated market economy. That is the point. Allowing capital to flow to the cheapest, most environmentally degraded countries is part of the problem. The problem is that the markets are not free and violate many of the assumptions that are idealized. There are many restrictions of trade, and currency valuatiion for instance. More importantly corportions are free to rig the laws against free trade in order to increase their bottom line, which doesn't necessarily help others. Perhaps the biggest example is the labor market which is rigged by the elite for their beneifit. Do you think the workers in China and elsewhere would work for those pitiful wages for long if they were perfectly free to emigrate? Of course not When you have so many real world laws and constraints and violatiions of the basic assumptions behind market models, to accept them simplistically is to basically accept propaganda. So any discussion of what to do with the living standards of American workers should not start with the presumption that the status quo is a fact of nature so if the workers living standards cannot be accomodated, too bad. I would say that the best start would be to require all CEO's and MBA's to work at the prevailing wages of their counterparts in China till they can fix the problem for their workers. Giving them bonuses for replcaing the ir workers with Chinese workers will only worsen the problem. I assume you believe in incentives as a way to fix problems.
Glynch, in an effort to make your case for a more planned economy, you ignore one of the largest issues, and one which has been in the news recently. The artifically manipulated exchange rate for the renminbi has to be as important as any other factor when it comes to China-US trade. Here's a general article on the issue from the Financial Times. The recent 2.1% adjustment has many people crowing about how good things are now, but 2.1% is a drop in the bucket. People have been criticizing GW (rightly so) for trying to depreciate the dollar to revive the economy. With a fixed yuan, you don't have to try you just do. Artificial exchange rates have enabled China to increase jobs by making cheaper exports, and has also played a big role in the large amount of dollars in the hands of China. Outsourcing is a great way to frame your arguement, but the same rules apply to US sugar subsidies that have kept South Americans artifically poor for forever. I agree in principal with your idea about job retention, but would suggest incentive based controls and as light a touch as possible. Ultimately, however, regulating the economy is a short term solution. In Marxian terms, protectionism creates artificial infrastructural capital in the means of production. If non-essential production costs can be removed, they should be for the greatest levels of production. CEO salaries, on the otherhand are a clear case of the inmates in charge of the asylum. I know that something needs to be done, but I instinctively think that congressional legislation would be less effective than other methods.
You are exactly right about this. China would be ultimately screwed if the worker of China were to unionize. I wonder what it would take for that to happen. I personally think this woulld make a great project for CIA.
NYT had a wonderful editorial on monday about how toyota is building a new plant in ontario instead of the US. why? because a) they have a more educated work force and b) they have health care so toyota wont have to deal with it. these two benefits outweigh the fact that in the US states would give them sweetheart deals.
That is an over-simplified sound bite at best and in truth, just plain disengeneous. Unions can't control the fact that Chinese, Indian and Mexican laborers are paid so far below market that they destroy competition. Not to mention that some of those countries have state-supported healthcare that doesn't need to be funded by the US company in question, a HUGE expense that merely feeds the legal protection racket that is health insurance. Your cheap shot at Unions is a hollow accusation--enjoy your 40 hour work week, LTD/STD benefits, workman's comp and unemployment rights if you are fired. Now, you can be an "honest" gilded-age-supply-sider and say that if employee X in Bangladesh can make a widget at an average cost of $.50 and US worker Y can make it for $1.50 then Mr CEO needs to pick the option that offers the best return for his portfolio and that of his investors--that makes sense and I recognize the need. However, don't blame Unions and American workers who need a higher standard of living and generally prefer air-conditioning, public sanitation, and freedom from TB in their hovels thus requiring a better living wage. Ford was gonna make crappy F-150's in Mexico for the ink on their bottom line REGARDLESS of Unions and EE benefits--Don't give me the tired Union card and lazy worker routine, it's tired and unsupported.
First off, lets address what you think you know about "Outsourcing" and how it is thought of and used in business today--and I'm not lecturing you=Deepblue, but everyone posting in this thread. I am a dreaded Outsourcer...In fact, I work for a company here in the North Houston office that is the Largest Provider of complete HR outsourcing: we control roughly 35-40 percent of that global market. We started as a private actuarial, record-keeping, and consulting firm earlier this century and now provide complete HR operations for global fortune 100 and 500 companies. We can administer ALL of a particular company's HR practice: Benefits(401k, Pension, Health Insurance)--the main part of our business, compensation and market consulting, hiring/firing, compliance, payroll, and every other service in between. Now, we are DEFINITELY not cheap compared to other "outsourcing" outfits like Ernst & Young, Towers Perrin, etc... I am given world-class benefits, excellent pay, and a great work environment. I get these benefits because companies like USAA, McKesson Pharmaceuticals, Baker Hughes, Halliburton/KBR, Verizon, Starbucks and PepsiCO..the list goes on...pay me via contracts with my company. As I said, we aren't cheap, but our value is better than what they can provide in-house and most importantly, we allow and empower that company to focus on their Core Business. So, Starbucks doesn't need to worry about benefits and comp, we got it covered--they can worry about making more nonfat lattes at 5 bucks a pop. Our business does effect American WHITE-collar workers, an HR functionary that lost his job with Starbucks because of their contract with us isn't gonna think to highly of our business model. However, they didn't loose their Job because Starbucks found an HR sweat-shop in Honduras that would administer their benefits and workforce for a quater of of what we would charge.
I think you have just proved my point, out-sourcing doesn't have to be to another country, like I said captial flows to where the resources are the cheapest. In this case your company are able to provide the same quality product/service at a cheaper rate, hence Starbucks out-sourced some of its HR functions to you guys. Now these company didn't find "HR sweat-shop in Honduras" because there isn't a shop in Honduras that can provide the same level of quality/service/expertise/logistics they require. Of course, the same can't be said about the toy trucks made in China vs made in USA, when there isn't much difference in terms of quality, cost will be the driving factor. I am glad you and your company are doing well, but that just shows in order not to be out-sourced, you need something that distinguishes yourself from the rest, instead of making toy trucks, innovate and make toy robots that can't be easily be copied. (hypothetical)
Ottoman, actually I mentioned currencies valuations as being one of the ways in which the idealized pure market model is violated. I was thinking of China. I'm not sure your instinct is the way to go when trying to evaluate what type of regulation will be best for the greatest number. However, I expect it is better than the idealized "One Market Under God" crowd. I do think the greatest good for the greatest number with somes sort of floor is what it comes down to. Just accepting what the corporate media and the right wing think tanks, both of which are dominated by a small group of wealthy elitists tell everyone how it has to be, buttressed with a near relgious claim for no regulation is not the way to go. Unregulated captitalism seems to always wind up with nearly all the wealth concentrated at the top. It is frankly self serving for those on the top to advocate this approach. I think you need to look to history and different actual systems for advice, not just idealized market theory. Important examples to look at are industrializing Gr. Britain, existing Holland, the So. American econmies, the Asian Tigers. I think it is clear that that the command economies of Russia and their satellites are not the way to go.
I don't think he was taking a shot at unions. At the same time, it is a benefit for Chinese industry to be able to operate without unions. They don't have to worry about the work hours, benefits, pay rate and work safety for unskilled labor. Not to mention, companies pay big bucks so unions can mobilize and organize. Unionizing in China would be difficult. The unemployment rate is quite high, and any demand for better work environment would result in termination because there are millions of people just waiting to get a job. Only way this will happen is if CIA or someone else is able to round up a good percentage of workers and do work stoppage. I wonder how the Chinese government would react to that.
