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The myth of 'insourcing'
U.S.News & World Report ^ | 5/3/04 | Lou Dobbs

Posted on 04/26/2004 12:11:06 PM PDT by Willie Green

The issue of whether U.S. multinationals will continue to export American jobs to cheap overseas labor markets is critical to the well-being of millions of working Americans and, I believe, the future health of our economy and society. Advocates of unbridled free trade first defended the practice of shipping American jobs offshore by saying the practice wasn't widespread and few jobs were lost to outsourcing abroad. Then the University of California-Berkeley last fall revealed that as many as 14 million American jobs are potentially at risk over the next decade. Then the advocates of exporting America claimed that outsourced jobs would be replaced by high-value jobs. Instead, the economy has lost millions of jobs.

The Bush administration, corporate America, business groups, and their surrogate think tanks contend America must be able to kill U.S. jobs and move them to cheap foreign labor markets in order to be more productive, more competitive, and even more innovative. How competitive are our great American multinationals in the global marketplace? We now have a half-trillion-dollar trade deficit, and our surplus in services is falling like an anvil (one most likely not manufactured in the United States). We're exporting jobs senselessly and importing debt held by foreigners that amounts to $3 trillion--and is rising fast.

Smoke and mirrors. Outsourcing advocates, including many in the Bush administration, are now trying to change the language of the debate, and they've introduced a new term: "insourcing." They claim that the jobs created here by foreign companies counterbalance those outsourced to cheap foreign labor markets by U.S. corporations.

(Excerpt) Read more at usnews.com ...


TOPICS: Business/Economy; Culture/Society; Editorial; Foreign Affairs; Government
KEYWORDS: globalism; insourcing; loudobbs; thebusheconomy; trade
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To: Extremely Extreme Extremist
I wish Mr. Dobbs would adrress himself to the tangible benefits of insourcing: the Nissan plants in Kentucky, the Hitachi and Samsung R&D facilities in California and Texas, the BMW plant in South Carolina, the Honda plants in Alabama.

By any accepted economic metric the US has benefited in terms of jobs from free trade agreements and insourcing more than we have host jobs through outsourcing or off-shoring. The ability of US firms to globally source supply and and production has been a source of competitive strength which has partially offset our lawsuit culture and completely ridiculous, anti-competitive corporate tax code.

If a protectionist regime in the US were imposed tomorrow it would do nothing to solve problems realted to out of control lawsuits and a coporate tax code that has twice the marginal rate of many of our economic competitors. Protectionism is economic snake oil and it will not increase employment as our economic rivals will build their plants in more hospitable climes.
281 posted on 04/27/2004 11:37:52 AM PDT by ggekko
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To: Enduring Freedom
"The job market, which has a major impact on confidence, appears to be gaining strength," she said. "The percentage of consumers claiming jobs are hard to get is now at its lowest level since November 2002, and more consumers expect this trend to continue."

Keep outsourcing jobs to the best value performer on Earth, and American corporations will have unprecedented growth and opportunities. Enough to employ even some of the cretins on this thread. Although I would have very few of you on my own staff - you are mostly losers with a capital L.

282 posted on 04/27/2004 11:39:15 AM PDT by Enduring Freedom (Liberalism is a form of insanity)
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To: All
Why Marx Would Have Approved Of the 3rd Way

Marx, viewing the USA of our 1860s ancestors, saw the biggest threat to his plans. Unlike the hellish industrializing areas of Europe, the USA was well on track to undermining the one situation where Marx' ideas might take root; the true Conservatives of that day were increasingly setting forth the conditions which would give rise to workers with wealth, and, an educated and empowered middle class. This bulwark, from the late 1800s until the late 1900s, made the USA into the world's impenetrable fortress of freedom and the font from which such ideas might flow freely across the globe.

The Communists had other plans. All the while, they put in place, incrementally, mechanisms by which the American fortress might be breached. Starting with the anarchists, evolving through the Red Diaper Babies, and reaching full force via the destruction of the resolve of the Baby Boomers, the Communists never stopped trying to undermine the USA's winning combination of Judeo-Christian values, a sturdy work ethic, and, our love of country. But the quiet war did not stop there.

At the international level, the Communists reached their point of maximal opportunity at the close of the Second World War. By tricking the USA, and its Western allies, into international structures, seemingly utopian in nature and ostensibly created to prevent great war, the Communists had set into motion a series of processes which would ultimately provide the route to achieving two key goals. The first goal, taken without modification from Marx, was to seize the means of production. The second goal, was to speed the implosion of the winning combination of spritual values, work ethic and patriotism mentioned earlier. From these structures would emerge GATT, WTO, NAFTA, and, the present infatuation with Communist Red China.

Now here we stand, and the clock reads 1 minute to midnight. The Communists have seized the means of production. The American psyche now places profit ahead of God, country and morals. We can barely defend ourselves against terrorists and rogue nations, and have given up on any meaningful defense against great powers who want to destroy us. The Right, not only in the US, but throughout the West, is fragmented and is not in any way robust; our single unifying principle is opposition to the Left - but look inside and you will see many unwittingly manipulated into doing the bidding of the Communists. The time is short. This may be the last generation to know an America we would recognize as a nurturing land. Our future is not assured. Conquest by those who hate us is possible if not probable. There is no strategy, only pale platitudes and sound bites. A rocky road lies ahead. Prepare for battle at our thresholds, and unthinkable sorrows across the land. And most of all, pray to God for mercy.

283 posted on 04/27/2004 11:41:23 AM PDT by GOP_1900AD (Un-PC even to "Conservatives!" - Right makes right)
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To: Enduring Freedom
"Outsource every menial job in sight, and don't stop until our economy and ingenuity is at peak performance sometime in the next century."

Sometime in the next century we won't have any jobs left to outsource-including high tech. jobs, you know the ones we're giving away.

284 posted on 04/27/2004 11:41:52 AM PDT by chronotrigger (good pick up line- "my, that's the whitest white part of the eye I've ever seen, do you floss?")
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To: Enduring Freedom
Eat this commie simpleton: millions of jobs lost, no sign of them coming back. According to people like you, we've been in a "recovery" for years now. Were the hell is it?
285 posted on 04/27/2004 11:45:46 AM PDT by chronotrigger (good pick up line- "my, that's the whitest white part of the eye I've ever seen, do you floss?")
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To: ggekko
Pardon my style (I like smashing things) but I believe you are quite correct.

It is painfully obvious to anyone that has ever done anything that delegating work has enormous advantages.

Rather than sitting on a computer revising floorplans or modifying databases for old tired businesses, the opportunity to outsource at a bargain price lets me do something entirely different.

It lets me instead concentrate on creating a brand new business, requiring even more personnel in my universe.

And since most startups don't even think about outsourcing, new businesses create enormous jobs.

And since most startups require flexibility and creativity, the quality of job I create is far more interesting and potentially rewarding than database manipulation.

When people are stupid, they are stupid to the bone.

(time to start smashing heads again)
286 posted on 04/27/2004 11:47:11 AM PDT by Enduring Freedom (Liberalism is a form of insanity)
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To: ninenot
jimwass said: Our mini-mills (e.g., Nucor - long-term earnings growth projected at 10 to 15 percent) are very efficient.

ninenot responded: But IIRC, the mini-mills don't make steel from ore--only from recycling scrap. We NEED the ore-to-steel mills, if only for national defense purposes.

and asked: You don't expect PRC to send steel to us for tanks, do you?

Agreed, the mini-mills work from scrap. I'm not equating the technology but rather the management practices. Running for protection puts off the inevitable unless the company also works to make itself and efficient and effective producer. I want to see measures that will improve the industry and not just protect it. The recent case of the shotgun wedding between French pharmaceuticals Sanofi-Synthelabo and Aventis to thwart Novartis's attempted acquisition is an example of protectionism that I believe may be the death of the French pharm industry.

287 posted on 04/27/2004 11:49:18 AM PDT by jimfree (Neither a browser nor a lurker be.)
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To: chronotrigger
You're lying. Again.

How can I tell? Because you're posting.

Now be a good girl, and start READING:

"The job market, which has a major impact on confidence, appears to be gaining strength," she said. "The percentage of consumers claiming jobs are hard to get is now at its lowest level since November 2002, and more consumers expect this trend to continue."

288 posted on 04/27/2004 11:53:53 AM PDT by Enduring Freedom (Liberalism is a form of insanity)
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To: Extremely Extreme Extremist
You cite protectionist fallacies as:

The four fallacies of protectionism: (1) Limiting imports saves jobs (2) Limiting imports keeps U.S. wages from falling (3) Limiting imports saves American companies and American industries (4) U.S. National security requires protection of industries needed to fight a war Protectionism is based on POLITICAL premises, POLITICAL logic, and it COMPLETELY ignores economics.

In fact, all of your assumed positions, rather than the propositions you attack, are fallacies. Let us just take the converse of your fallacies, and state your implied contentions. Your positions are by far the greater fallacies:

(1) Unlimited imports means unlimited U.S. jobs.
(2) Unlimited imports means wages will rise, not fall.
(3) Unlimited imports save "American" companies and "American" industries.
(4) U.S. National Security requires no industries to fight a war. The stuff just magically appears, or we can always buy it from China.

REPLY: As you can see, without even stretching for 'reductio ad absurdum' restatements, your free-trade thesis self-destructs. Particularly when you have the temerity to dispute, without aknowledgement, Adam Smith's own caveats on free trade. And we need to remind you, that but for the political freedom and other constitutional protections afforded by our Nation, there would be none of the economic freedoms which you apparently worship above all. Freedoms which can only be provided by a NATION. A nation you are profoundly unconcerned about protecting. Don't cry to me when the NEXT nation the U.S. becomes eliminates your property rights along with all the other rights.

Conclusion: You are Extremely Fallacious, or perhaps a Fallacious Extremist, or even an Extremely Fallacious Extremist.

289 posted on 04/27/2004 11:56:17 AM PDT by Paul Ross
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To: ggekko
Therefore, embrace an updated version of the Republican Party Platform of 1900, which would include both properly managed trade and the ending of stiffling regulations.
290 posted on 04/27/2004 11:56:19 AM PDT by GOP_1900AD (Un-PC even to "Conservatives!" - Right makes right)
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To: Enduring Freedom
RE: "I like smashing things". Marx was also fond of this idea. Those who want to smash tradition, erase borders, and move the wealth of the Western industrial nations to Communist Red China and its allies are in league with the Marxists.
291 posted on 04/27/2004 12:00:22 PM PDT by GOP_1900AD (Un-PC even to "Conservatives!" - Right makes right)
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To: WilliamofCarmichael
252 - "And I say this without sarcasm, seriously. The puzzle for me is that while John and Jane Q are civilians looking for a job the "free" trader is the first to say, "Get lost!" and, as expressed in "free" trader posts above, say to the Americans, "I can get mud hut dwellers and monkeys to do the work!" "

252 - "But I know it ain't anywhere near treason. I just don't get it."

LOL - you dont get it. Free-Traitors, like the ones we have here are the ones who sold the guns to the indians to massacre the settlers.

Free-Traitors are the gun runners of the world, except now, it's jobs they are running.

292 posted on 04/27/2004 12:04:31 PM PDT by XBob
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To: ggekko
RE: "I wish Mr. Dobbs would adrress himself to the tangible benefits of insourcing. . .By any accepted economic metric the US has benefited in terms of jobs from free trade agreements and insourcing more than we have host jobs through outsourcing or off-shoring."

I do not believe that Mr. Dobbs' article argued against "insourcing." I believe that one of his points in the posted article was that many jobs classified as being created by insourcing were existing jobs; i.e., the foreign entity bought an existing company with an existing payroll. You used the phrase "by any accepted economic metric." Does that mean that you reject the source of his information?

I am seriously interested in this debate over insourcing vis-a-vis losses due to offshoring. If you have sources that dispute the "existing jobs" argument please list them. Thanks.

293 posted on 04/27/2004 12:06:27 PM PDT by WilliamofCarmichael (Benedict Arnold was a hero for both sides in the same war, too!)
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To: belmont_mark
Yes!

I am a closet Marxist.

I was schooled by Saul Alinksy and Noam Chomsky.

I despise America!

But as much as I try, I cannot possibly hate it as much as you.
294 posted on 04/27/2004 12:06:27 PM PDT by Enduring Freedom (Liberalism is a form of insanity)
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To: Enduring Freedom
I love America. I hate the 3rd Way. I cannot write it more plainly.
295 posted on 04/27/2004 12:08:03 PM PDT by GOP_1900AD (Un-PC even to "Conservatives!" - Right makes right)
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To: jimfree
256 - "Nucor - long-term earnings growth projected at 10 to 15 percent) are very efficient."

And these are the mills being closed down and shipped to china, where they are rebuilt.
296 posted on 04/27/2004 12:09:09 PM PDT by XBob
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To: belmont_mark
If you love America, than love what made it lovable.

Love free enterprise and it will love you too.
297 posted on 04/27/2004 12:09:36 PM PDT by Enduring Freedom (Liberalism is a form of insanity)
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To: Enduring Freedom
Free enterprise, while an important factor in our success, was not a distinguishing one. Other nations some which were strong and others which failed had free enterprise. The distinguishing factors in the success of the USA were Judeo-Christian values, a strong work ethic and love of country. Judeo-Christian values and love of country are embodied in our Constitution and the work ethic was innately embodied in our (now fading) de facto Anglo Saxon rural culture. Do you refute these?
298 posted on 04/27/2004 12:16:39 PM PDT by GOP_1900AD (Un-PC even to "Conservatives!" - Right makes right)
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To: All
When you see not only the Left but also many who proclaim themselves to be "conservatives" actively undermining Western Civilization and selling out the USA to enemies foreign and domestic, including anti Western nation states, then the time for drastic measures may be nigh.
299 posted on 04/27/2004 12:22:05 PM PDT by GOP_1900AD (Un-PC even to "Conservatives!" - Right makes right)
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To: jimfree
Steel tariffs were the most recent and significant mistake. Our big mills are inefficient and should destroy and recreate themselves. Our mini-mills (e.g., Nucor - long-term earnings growth projected at 10 to 15 percent) are very efficient.

There is a synergy you are oblivious to. Without the big integrated mills, we can't make the steel from raw ore. The small mills mostly just use old iron stock and recycled steel, and can't make steel from raw ore. Hence they don't add to the overall supply without massive imports of feed stock from other nations.

300 posted on 04/27/2004 12:24:29 PM PDT by Paul Ross
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