Using Patriotism to Kill Jobs

Shout Bits Blog ^ | 7-4-09 | Shout Bits

[Shout Bits]

V.P. Biden famously declared paying higher taxes is a patriotic duty. Lou Dobbs bombasts that relocating a company outside the US is treason. Pres. Obama wants a special tax on US companies with foreign operations. These three, along with many others, reflect an ugly conceit that the US government is somehow an institution greater than the people who originally authorized it. Also, they make the policy error of assuming that businesses and the wealthy can be forced to remain in the US, that the taxman can squeeze them mercilessly without consequence. Of course none of that is true, and using "patriotism" as a foil only reveals their moral bankruptcy.

An underlying error to the Biden / Dobbs / Obama worldview is that a job is a thing that can be kept and exploited. In fact a job is an agreement between two individuals to exchange services for money. The agreement evaporates as soon as either party becomes dissatisfied. A job cannot be contained, it moves where it creates the most benefit. What Lou Dobbs sees as treason is Adam Smith's invisible hand at work.

Indeed, companies that move jobs out of the US are a rarity compared to jobs that evaporate in the US and are reconstituted overseas. It is far more common for an inefficient company to downsize while a more efficient competitor grows than for a company to explicitly relocate operations. For example, GM did not move from Detroit to Tuscaloosa, but as GM failed, manufacturing jobs moved just as if GM had relocated. Jobs react to the marketplace much faster than inefficient corporations.

A job knows no boundary, owes no allegiance to any government, and cannot be contained. Despite calls of patriotic duty, goods will be manufactured where cheapest. Jobs will migrate to where Obama and Biden cannot tax them and Dobbs cannot shame them. One only needs to consider Socialist Europe, where unemployment is at recession levels permanently, to see that government efforts to "save" jobs can never work.

Politicians of all stripes react to these market realities in the same way: protectionism. Obama wants to tax goods from low cost countries to protect his high cost energy tax regime. Pres. Bush, like many before him, taxed steel imports to protect inefficient domestic producers. Such moves are a tax on the consumer and reduce overall production by forcing up prices. What these protectionists forget is that the world is perfectly willing to prosper and leave the US out of the party. If the US effectively outlaws the import of Chinese steel, the rest of the world only benefits more and grows faster. The endgame of protectionism is economic stagnation while free trade countries flourish.

So, while Biden claims that driving up costs is patriotic, the opposite is true. When Dobbs calls companies that react to the US's unfriendly business environment traitors, his ire is misplaced. People who want to kill US jobs through regulation, taxation, and protectionism are in fact unpatriotic and traitorous themselves. They want to turn the US into a kind of prison where the outside freedoms of trade and investment are banned. Prosperity and liberty cannot be separated, so the true patriot will reject the perverted brand of patriotism slung about by Biden, Obama and Dobbs.

[EagleUSA]

These three, along with many others, reflect an ugly conceit that the US government is somehow an institution greater than the people who originally authorized it. Also, they make the policy error of assuming that businesses and the wealthy can be forced to remain in the US, that the taxman can squeeze them mercilessly without consequence. Of course none of that is true, and using “patriotism” as a foil only reveals their moral bankruptcy.
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This is a good demonstration of the arrogance, and perverted, twisted totalitarian thinking that is now dominating our government and it simply needs to be fixed. Government is existing for government and they think the American people exist for goverment as well. Ain’t gonna happen and it is long overdue.

[ANGGAPO]

In my book if you move your company to some 3rd world location just to increase your profit and beat the tax man, our government has the right to tax your products if they are sent here. And if your personal income is inflated by your offshore operation, you should be taxed accordingly.
The though of putting Americans out of work by taking an operation offshore just to make big bucks is contrary to most folks thinking. But if you are convinced that moving out for money is right, then just move along with your operation.

[Viking2002]

'V.P. Biden famously declared paying higher taxes is a patriotic duty.'

That's what King George III thought before we dumped his tea in the harbor and handed Cornwallis his ass.

[BwanaNdege]

In the early 20th Century, textile companies in New England moved operations to the lower wage South. We benefited from the company owners looking for a lower cost of labor. Their customers benefited from lower priced goods. Later those operations were moved to even lower wage areas overseas.

In the last 20 years or so, Japanese auto manufacturing plants were moved from high wage Japan to lower wage Southeast USA. BMW, Mercedes and Hyundai have followed.

We here in the South have benefited from manufacturers looking for lower wage costs. The “rust belt” areas of the North have been hurt by labor unions trying to ignore the basic facts of commerce.

Does price affect your buying decisions? If so, then you are no different from manufacturers who let price affect their decisions about where the “buy” their labor.