After our industries exit, then what?

seattle post intelligencer ^ | 10.21.03 | Bill Virgin

[riri]

So what's going on these days in the world of offshoring and foreign outsourcing?

* The latest to sound warnings about the dangers of sending technology-based jobs offshore is Intel Corp. Chairman Andrew Grove. Speaking to a conference last week, Grove said the software and information-technology industries are going the way of the steel and semiconductor industries.

But at least one reader responded with "gee Andy, now you tell us," noting that Intel has been among the more aggressive American companies in shifting work abroad.

* But why wander so far afield for an explanation of whether this stuff matters? For a more on-point discussion we turn to the remarks given at the University of Washington chemistry commencement in June by Alvin Kwiram, vice provost for research emeritus and professor of chemistry.

Kwiram, who kindly forwarded a copy of his remarks, is concerned that many American companies have abandoned basic research, often in the pursuit of short-term gain.

"It is not clear where the major innovations will come from for the next product cycle in the major U.S. corporations whose names are so familiar to us," Kwiram said. "In many cases they don't even have the expertise any longer to recognize an important breakthrough for their business even when it jumps up and bites them on the nose."

Even more worrisome, he added, is that what research and production is being done elsewhere. While attention has been focused on the software industry, "maybe less well known is the work in chemical synthesis that is increasingly being farmed out to Eastern Europe, Russia and other nations. I have had representatives from major U.S. corporations tell me that they have decided it is too hard to work with U.S. universities and they are simply going to go offshore to get research done because they can pay minimum wage and control the intellectual property.

"Whether you want to think of this as a white-collar version of sweatshops, or good business strategy, or another sign of our complacency, I leave for you to decide."

Kwiram also said he is "unconvinced that you can be globally competitive by focusing on the service industry. We need to retain manufacturing jobs and we need to retain them in the U.S. One of the concerns I have about the globalization of the economy and corporate culture is that no one, as far as I can tell, is worrying about what the implications of this are for the U.S."

Amen to that. No, we cannot expect to keep every steel or auto or software or chemical job. If those industries are going to survive they can be expected to shed jobs and become more efficient. But losing industries entirely means losing the opportunities to create new industries -- and more jobs -- tomorrow.

* So now the Chinese have launched a man into space, had him orbit the planet and returned him safely to Earth. If anyone is tempted to make any jokes about it, remember that last element -- the returning safely to Earth part -- is more than this country managed to accomplish the last time we sent humans into space.

The news had one reader thinking about the historic parallels to the once-ludicrous notions that Japan would be a major economic power or a European company would pose a legitimate challenge to American hegemony in commercial aviation: "This time however, just maybe we'll take this competition seriously. Maybe, just maybe, this time we'll get to keep our jobs and just maybe this time we'll even earn those jobs."

Indeed. No doubt the apologists will conjure up an argument that this is no big deal. So the Chinese have finally mastered something we did 40 years ago -- so what? Well here's what -- do you think they plan to stop there? They won't. And the learning curve for them to get to the next stage will be a lot shorter than it was for us.

But, oh well, space exploration, satellite technology, research into what advantages there might be to manufacturing in a low-gravity environment -- these are more low-value industries we are evolving out of, to be joined by other industries we don't need. You know, like nanotechnology, biotechnology, photonics, advanced materials and composites, telecommunications ...

Meanwhile, we'll focus on ... we'll turn to ... well I'm sure there's something around here we'll still be able to do.

[freeeee]

Want to know what the US will be like? Just look at an island.

Nobody makes things on islands, it's too expensive compared to the mainland.

The rich vacation there and have large expensive homes. Real estate is big, so is tourism. Some service industries exist, simply because you can't get take your house to the mainland to be painted, for example.

There's lots of entertainment for those with money. Nightclubs, yacht clubs, restarants, movie production, etc..

There's usually a very small middle class on islands. They work in the service industries that cater to the rich. They live in very meager accomidations because of high real estate prices in decent areas, and are often seasonal guest workers from the mainland who live in dorms and save money to bring home.

Most of the upper class on an island makes their money on the mainland. A few of them own local businesses. They live in heavily guarded communities.

The lower classes of islands are some of the poorest and most destitute people on Earth. They lack every basic necessity and scratch out a marginal subsistance life in slums. Lower class areas are rife with crime and violence, and many of them prey on the rich, who carry more in their wallets than some of them will make in 20 years.

So that's it. The US is the island and the 3rd World is the mainland. Sounds like fun!

[RightWhale]

The plus is that we will easily meet the 2012 Kyoto limits.

[JohnSmithee]

"anti-Free Trade article."

This isn't about "free trade" but more about labor issues. They are quite distinct.

[JohnSmithee]

"Acknowledgement RDB3 who helped hammer out this plan."

Oye vey, now I am confused. I thought RDB3 was totally opposed to these ideas. We need a scorecard to keep track of everyone.

[JohnSmithee]

"The personification of Doom and Gloom. One is Doom, the other is Gloom."

So Andy Grove is doom and gloom also? He's the one with the business knowledge and he is being quoted in the article.

[harpseal]

Well if you read the plan it is very reasonable and totally conforms to teh principles of Free Trade ennunciated by Adam smith and David Riccardo.

[harpseal]

The ones who seem most opposed to teh plan I put forth are the hard core proponents of the WTO and a very small contingent of extremly libertarian conservatives. Neither group is willing to discuss issues rationally. Nor is either group willing to provide sound peer reviewed mathematical evidence of tariffs any tariffs being harmful. I note over the weekend I found an examination of one tariff that was mathematically shown to be harmful to the USA. This was after much internet and library searching I womnder if a Free Traitor can find it or another. It is not available on teh internet that I know of. There is at least one internet available study showing tariffs to be good for the USA.

[Muleteam1]

>>I suggest that the US Customs Department charge a $1,000-per-container inspection fee on every container entering the United States. This fee would be used to completely fund the cost of inspections.<<

Unless things have changed since I worked in port inspections, much of the U.S. Custom container inspection work is already paid by the importer. This comes in the way of inspectors' salaries, overtime wages, and inspector travel fees. I can not even begin to imagine that four inspectors would be needed to inspect a single container, especially at a rate of only two containers per day. Typically only one inspector at a pay grade of GS-9 or GS-11 has been used to inspect many containers in a given day. I also seriously doubt that the skills or expertise needed to inspect a container has increased so much that it would be necessary for inspectors to be paid at a payrate of $30.00/hour. This salary would be in line with the salary of a upper-level GS-12. To increase the cost of container inspection to the extent you suggest, either to the taxpayer or the importer, without justification is simply protectionism at its worst.

Muleteam1

[FITZ]

What is next is that we become a third world nation like Mexico. Free trade at its finest.

But Mexico has us ---- we don't have anyone. Desperate Americans can't cross into Canada and work for less than Canada minimum wage and obtain matricula cards and drivers licenses for being there illegally. What country would let millions of us unto their welfare system, give us free health care and education so we can send some money back to our compatriots?

[harpseal]

Please understand what I am proposing is getting enough inspectors to inspect every container in detail and to have importers pay the cost of it. If it is less than 1K per container fine lower the cost accordingly if it more raise the cost accordingly.

[Gritty]

They can't take all our jobs. We'll always need people to do each other's laundry!

[Muleteam1]

Unless you are simply concerned about the quality of the inspection processes, wouldn't it be much more simple to just institute an import tax rather than have a generalized high fee for container inspections? This would certainly serve the purpose of raising the cost of the imported goods and would dissuade future importation but it would not allow the discrimination of imports that compete with American production from those that do not. Also, Custom Inspectors do a lot more than import container inspection. Salary increases would have to be paid by American taxpayers as well as add to the costs of US Customs services used by American businesses. This would hurt the very jobs you seek to protect.

Muleteam1

[harpseal]

Personally I am endorsing this plan for the quality of inspections and I really just want those who are importing to pay the cost of detailed inspection of every container. My tariff proposals are in my 13 point plan I am endorsing this proposal as a user fee for security of our shores and as a means of funding vital Coast Guard operations that are currently funded out of the general fund. In short I am suggesting going to a user fee based sytem for a more complete check of all inbound cargoes to the USA whether overland, by sea or by air. Sea and air I want inspected on teh high seas or before depature.

[Muleteam1]

>>Personally I am endorsing this plan for the quality of inspections and I really just want those who are importing to pay the cost of detailed inspection of every container.<<

Any American who savors their freedom supports adequate inspection of imported cargoes that could pose a danger to American life and society. However, your plan for cargo inspection is simply too extravagant from my own perspective. Government works best in a free society when it seeks to be a "speed bump", and not a traffic cop. As a former Federal regulator, and as a proponent of nonintrusive government, I have always said, "the action that works best in government is the least action that works."

Muleteam1

[harpseal]

We will disagree on this as there is no right to free access into America from abroad. The specific danger from smuggled weapons madates a complete inspection fo all cargoes coming into the USA. Due to the nature of current weapons of mass destruction including most especially biological and chemical weapons along with componeents that could be assembled into nuclear devices the inspection is merely an expansion of programs currently in place to cover every port. Cargo Ships inbound to the Port of NY already are routinely boarded by the USCG for inspection. The importers should pay a fee for such inspection.

Already customs inspectors nspect and seal some containers in some foreign ports.

I find I must question your motives in not wanting such inspections. You seem to be objecting to their impact on teh cost of imports. I have merely stated that importers should bear that cost. The estimates on the costs of this were clearly not mine and I have stated repeatedly that the importers fees should reflect the actual cost of such inspections. Not performing complete detailewd inspections places too many Americans at risk.

Not having those whose actions cause the Coast Guard to expend time and money inspecting or the Customs service spending time and money inspecting is merely subsidizing these peopel at the expense of many who are harmed by imports.

[chimera]

The sad thing is, there are some who would celebrate the scenario you just penned, if it indeed came to pass, as the triumph of free trade (which really isn't) and the wonders of unfettered capitalism at its finest. You got rich people? Great! Good for them! They deserve it. They worked hard destroying companies and pocketing the savings and cancelling pension plans to put the cost savings on the bottom lines and earn $50 million bonuses for doing so. You got middle class in service work? Right on! The "free market" determines where they "fit in" best! So what if they spent their lives educating themselves and trying to build a better life for their children. Let them be cooks and housecleaners for the upper classes if that's where the marketplace tells them to go. You got millions of poor people living in squalor in slums, with no hope of lifting themselves out? Well, heck, screw 'em, it's their own fault for choosing the wrong career, like IT when everyone could see how the CEOs were sending that work to India. But, never, ever advocate anything like tariffs or measures to encourage preservation of basic industries or infrastructure, because that isn't classically "conservative". "Free trade" at all costs (even if it destroys you).

(/sarcasm)

[Cronos]

ping Muleteam:

Unless things have changed since I worked in port inspections, much of the U.S. Custom container inspection work is already paid by the importer. This comes in the way of inspectors' salaries, overtime wages, and inspector travel fees. I can not even begin to imagine that four inspectors would be needed to inspect a single container, especially at a rate of only two containers per day. Typically only one inspector at a pay grade of GS-9 or GS-11 has been used to inspect many containers in a given day. I also seriously doubt that the skills or expertise needed to inspect a container has increased so much that it would be necessary for inspectors to be paid at a payrate of $30.00/hour. This salary would be in line with the salary of a upper-level GS-12. To increase the cost of container inspection to the extent you suggest, either to the taxpayer or the importer, without justification is simply protectionism at its worst. Muleteam1

[Muleteam1]

Sorry for my late response, but as a retired person, I have had many other pressing obligations.

>>We will disagree on this as there is no right to free access into America from abroad.<<

I have no disagreement here because they don't have free access. As I have previously mentioned importers pay salaries, overtime, and travel fees for Custom inspectors. They also pay the same for agricultural and immigration inspectors whenever they are required on foreign-arriving passengers, ships and aircraft. I suspect that importers also pay large port, docking, and/or anchorage fees whenever they arrive in the U.S.

>>Already customs inspectors nspect and seal some containers in some foreign ports.<<

As well I know, as I have done pre-clearance inspections in South America and in Morocco. You should also know that my expenses during those assignments were paid by the importers.

>>Not having those whose actions cause the Coast Guard to expend time and money inspecting or the Customs service spending time and money inspecting is merely subsidizing these peopel at the expense of many who are harmed by imports.<<

I am not familiar with the inspection activities of the USCG, but I am sure their responsibilities have expanded after 9-11 as well they should.

Most imports are not harmful to Americans and those that are indentified as such are now being dealt with by Federal agencies with import regulatory and/or law enforcement responsibilities. Your contention of course is that the effectiveness of the current process is not satifactory. I contend that there is no evidence to suggest that such a radical political solution as you suggest is needed. Present agency structures allow for inspection activities to be ramped up whenever the need arises and I am quite sure they been have since 9-11. Federal agencies work closely with exporting nations to decide what can and cannot be imported into the U.S. Also, U.S import regulations pertaining of the U.S. Treasury, U.S. Justice and U.S. Agriculture are constantly under review at the various port offices as well as within these Departments' Beltway headquarter offices.

We can steel-shutter our doors and pull up the draw-bridge to protect ourselves from imports. However, the world is too small for the U.S. to become an island. Not only would that be detrimental to the jobs you wish to protect, it would be impossible at any expense.

Muleteam1