Overblown ogre of 'outsourcing'

The Washington Times ^ | 18 Aug 03 | By Bruce Bartlett

[.cnI redruM]

Everybody seems to be worried about manufacturing these days. All the Democratic presidential candidates condemn the practice of "outsourcing"

[Lazamataz]

"conservatives" in denial BUMP

C.I.D. bump.

[maui_hawaii]

Remember, what really matters for employers is not absolute wages, but unit labor costs — how much the labor costs to manufacture a given product.

In China thats all irrelevant. Figure up the end cost then give yourself a 30% discount...

Labor cost is only a small portion of the costs though. It depends highly on what one is making. In some cases labor is 5% of the cost of manufacturing, in other cases it is .5% the cost...

[harpseal]

First the program to fix the structural problems in teh economy that have resulted in the continues decline in employment during the "recovery."


In no particular order of importance.

1. Get rid of government subsidies for offshore investment of US companies. OPIC is the first such program which should go but support of World Bank programs that subsidize the outflow of Capital would be another.

2. Use tariffs on those nations which are engaged in unfair trade practices such as currency manipulation (China and India for example), those nations which refuse to open their markets to US products (China for example with its 50% tariffs on US consumer goods and non tariff barriers), those nations that subsidize competition to American Industry (airbus for example) and those nations which have slave conditions for their workers.

3. Use tariffs and other means to prevent the relocation of jobs offshore that are essential to the national defense. If necessary take control of the company seeking to export vital technology or industry by means of eminent domain (No I do not like this last option and I will only defend its use as an absolute last resort like say in the case of rare earth magnets essential to smart bomb technology).

4. An immediate end to guest worker programs. If people wish to come to the USA to work and make a life let them immigrate according to the rules.

5 Provide economic development zones where the corporate income tax is zero for operations within these zones. In order to operate in this zone a company must agree to only purchase American components if available and employ only American citizens or legal immigrants in these operations. These economic development zones shall be eventually be expanded to include every bit of every state once the benefits are shown I would like them to be totally implemented immediately but I realize4 that may be overreaching.

6. Scale back unnecessary regulation including the tort system. Institute a cap on punitive damages, limits on class action suits, and limits on liability to the actual percentage of liability with no plaintiff able to collect if said plaintiff was involved in the commission of a felony at the time of the alleged tort or was more than 49% negligent in the alleged tort. Note that the loser in a frivolous lawsuit shall pay the attorney fees of the winner. There are many other regulatory structures that also need to be included that need to be included such as repealing the Family leave mandate, getting rid of OSHA etc.

7. Increase the domestic content in purchases by the Department of defense and give absolute preference in non-domestic content to proven allies of the USA over say the French or Germans. The only reason any content for DOD purchase may come from non US allies is that content is not available elsewhere and is essential.

8. Do not allow expense involved in moving operations overseas to be included in business expenses under the IRS code.

9. Prosecute for perjury anyone who has made a false statement in order to employ an H1B or L1 visa worker. I will be lenient on the actual perjurer if he/she was ordered to make this false statement and he/she provides testimony to aid in the conviction of the person ordering the perjury. Just because a person is a CEO does not give them a pass on criminal behavior.

10. Prosecute anyone who orders the transfer of vital defense technology or funds a R&D project that could be of use to our military overseas except to strong allies of the USA. Make the necessary enhancements to our espionage laws so that continued support or funding of any R&D in a nation whose government has threatened the USA is guilty of espionage. The UK and Australia come to mind as meeting these criteria for being eligible for transfer of technology first. There will be other nations and a gradation of what can be transferred to which specific nation. Under no circumstances may technology be transferred to any nation whose government has threatened the USA within five years without a complete change of government or specific exemption from Congress and the administration.

11. Deport all illegal aliens immediately and take measures that prevent the entry of any more illegal aliens. Fine all companies knowingly employing illegal aliens Criminal sanctions should be imposed on anyone helping an illegal alien stay in the USA in violation of our laws.

12. Decrease the punishing levels of taxation on companies and eliminate the double taxation on corporate dividends. See effects of item 5 for how minimal this will be if item 5 covers the entire USA. Eliminate all IRS provisions that inhibit free use of independent contractors by businesses for example section 1706.

13. Eliminate the minimum wage so that the worker can be paid based on productivity. Overtime compensation will remain the same but instead of 150% of the "wage" the worker would receive 150% of the production pay. If one through 13 are enacted # 14 becomes an irrelevancy as no one will be working for that low a wage.

[harpseal]

Ping on or off let me know

[maui_hawaii]

Ever heard of leveraging technology? Work two times smarter and your easily five times more productive.

Yup. Thats the way it should be, but thats not the way it is.

If we make a product, then invest to get our productivity up 30%, the Chinese will just get more subsidies to offset the difference and negate everything we just did.

[harpseal]

No, it isn't in decline. BUt the gloom n doomers and the anti-Bush, anti-Americans here would like you to think so and they'd like their socialist agendas put up including protectionism and tariffs and high taxes.

Excuse me but this is a blatant misrepresentation of what tariffs and protectionism are about. Calling tariffs sociailist is like saying the USA in early 1800's was Socialist. Globalism and internationalism has been a central tenet of Marxist governments since Lenin.

Now if you would like to discuss things plainly and clearly without calling names thats fine we can deal with an issue based discussion but name calling has no real place on Free Republic particularly when it is contray to what facts are.

[eniapmot]

I doubt this article will make Gebhardt weep: he is probably saying "Is that the best they can do...?". Hillary is reading this and watching from the reeds, licking her lips.

[nightdriver]

Bruce Bartlett just hasn't been replaced in his job by a foreigner with a bright, shiny new H-1B visa yet.

[harpseal]

Highest percentage of GDP produced in factories during the 40's - 35%.

Highest percentage of US GDP produced in factories ever (2000) - 40%

Now just what do you interpret this statistic to mean? What do you say it shows about the economy or proves for that matter. One can argue that it is either a healthy statistic or an unhealthy statistsic or an irrelevant statistic that is cobbled together to obfuscate the issue. Now just what are the effects of the offshoring of IT. Does the fact that perhaps the prices of manufactured items have risen in relationship to non-manufactured items factor into this of course it does. Does the destruction of a lot of our mining industry have a realtinship to this statistic have anything to do with it of course it does. Does the fact that a far more significant percentage of our petroleum account for a portion of this difference have meaning of course it does.

Please let us forego the smoke and mirrors and honestly discuss issues with facts taht are clear and honest.

[txhurl]

'C'.I.D. bump

Also I'd like to be comforted regarding the job situation by somebody reassuring me that it takes fewer jobs and less money to support a household now than it did in the 50s. Anyone?

[lelio]

In the first quarter of 2003 ? the latest data available ? real goods production was 39.2 percent of real GDP.

How does GDP count for parts of the whole manufactured in foreign countries?
If 10% of the parts in 1950 were made in foreign countries how do you compare that to a car made of 80% foreign parts today?
I think this gets accounted for in the trade deficit numbers. Those numbers are oddly absent from this cheerleading article.

[Lazamataz]

Also I'd like to be comforted regarding the job situation by somebody reassuring me that it takes fewer jobs and less money to support a household now than it did in the 50s. Anyone?

It takes fewer jobs and less money to support a household now than it did in the 1950's.

[sauropod]

print out ping

[txhurl]

Well, thank you!

Back to my mint julep. I do wish the servants would muddle the sugar less. Perhaps it's time for another thrashing.

[Jeff Head]

Great points bro. We need to get back to sanity with respect to our economic dealings internationally...sanity that takes into account our soveriegnty, our defense and our ability to maintain them.

History is a harsh task master.

BTW, don't you mean there at the end if points 1-12 are inacted that 13 may become unnecessary?

[Lazamataz]

Well, thank you!

I live to serve.

[harpseal]

Yes but I chose the term irrelevant and that has been out for a while. Now the problemas I see it with uneccessary is that it gives away a politicla bargaining chip in getting points 1-12 enacted.

[Lazamataz]

In some cases labor is 5% of the cost of manufacturing, in other cases it is .5% the cost...

In pregnancy, labor is at least 60% of the cost.

[cdefreese]

This says it all:

[txhurl]

I think a lot of people misunderstand our grousing and carping about US job loss as directed AT the GOP, rather than TO the GOP. I swear I'll kill myself when the Rats manhandle this issue to their advantage.

And they will, too.