After our industries exit, then what?

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.

Acknowledgement RDB3 who helped hammer out this plan.

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). Provide a hardened, widely distributed infrastructure to supply all that is needed for our military units and civil defense that can be continued to be deployed in the event of any military attack.

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 realize that may be overreaching. It must be stated for clarification that simply being in the geographic area of the zones does will not subject any company to any new mandatory regulation. Everything is voluntary for getting the exclusion from corporate taxation. The profit attributable to direct imports is subject to the same rules that exist everywhere else in this nation for corporate taxation. Only free from such taxation is the profit attributable to American content and any American improvement. In short no new mandatory regulation will be a part of this. It is my opinion that there will not be a lack of companies seeking this tax relief. And no the regulation implied is absolutely minimal in order to get this through.

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.

Now since I started posting this plan another idea has come up that in my opinion is a very good policy that stands on its own. Now I give credit to Jim Gibson and Freeper Ed_in_NJ for coming up with the idea, separately to the best of my knowledge. However I can be corrected on that. The tariff phrasing is from Jim Gibson.

“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. If we assumed that a four-man team could fully inspect two containers a day or about 500 per year, it would require 48,000 inspectors. Allowing for at least 2,000 support personnel, we would need at least 50,000 workers. Because these workers would require high intelligence and skill levels they should earn at least $30 per hour. At 40-hour weeks plus benefits, I estimate the cost per worker to be over $75,000 per year, all paid by the foreign manufacturers. Even so, this would still leave over $2.25 billion to cover all other costs. Any revenue not used would be used to compensate American workers displaced by foreign imports. “

I urge and encourage everyone who agrees with this plan and or the terror tariff idea to communicate this to every politician you can think of.

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