An Open letter to President Bush (End run vs. Outsourcing)

"And given that outsourcing is shifting technology and R&D to India and China is it not more likely that this supposed "new technology" will appear there than here ?"

What has been invented in the last 20 years in either China or India? What do you think that they will ever invent first before the U.S.?

Who made the DVD player you are using now ? Where did the computer you are using now come from ? China needed a few years to catch up technologically to the United States, but to insist as you do that the people who gave the world paper, the printing press, gunpowder, rocketry, spectacles, etc are somehow so dumb that they will never surpass American technology, especially when we are giving it to them at such a rate that American college students are leaving engineering and IT programs because they see no career stability in them, is complacent racist idiocy. Russia has yet to produce manufactured goods competitive in world markets. China has succeeded in doing so in barely a generation.

It could easily have gone the other way at several points in history. Around 1100 China stood on the brink of an industrial revolution before the mandarin elite, threatened by the merchant class, smashed it. Around 1450 as Portuguese ships were making their way into the Indian Ocean from the west, Chinese naval expeditions were doing so from the east. The junk was every bit as seaworthy as Columbus's caravels. The mandarin elite decided that these voyages of discovery were a waste of money and discontinued them. Two bad calls and they have paid for them since the Opium War. Well, they won't make the same mistake a third time.

You see, if you are right that real R&D is moving away from the U.S. over to China and India, then China and India should be coming out with revolutionary new products at a feverish clip.

Obviously they are patiently laying the groundwork for doing precisely that over the next ten years. Already we have lost our technological edge. Intel just recently pulled out of China. They realized that the Chinese intend to pick Intel's brains about chip design, then produce tons of cheaper chips. Enough to corner the market in chip technology and put Intel out of business down the road. Even now, we purchase from them advanced industrial goods and export to them soybeans and wheat. Hardly cutting edge technological innovation on our part, is it ?

The core of your idiocy is your determination that "free trade at all costs" will work out well for America because it just darn hasta. Says who ? What earthly reason is there to believe that you can transfer all you R&D to another country (and a very smart and ambitious one that comprises one fifth of humanity at that) and still remain a technological superpower ten or 20 years from now unless you have a stupidly complacent faith in your innate superiority ? In one generation China has pulled technologically abreast of the United States. One generation. As things stand now, the great advances in nanotechnology will be in China.

Americans, en masse, think of the 1990's as a boom time. NAFTA was ratified by an all Democratic majority House, Senate, and President in 1993, and so by default NAFTA gets lumped into the American mindset as something either neutral or positive.

Why do you insist upon lying ? Oh you're a free traitor. The vote on NAFTA speaks for itself. Most Democrats opposed it and the majority that passed it was all but 43 Republicans and 102 out of 258 Democrats.

Now that has got to chap your hide.

Then why has "giant sucking sound" entered the language ? Do you remember anything Gore said in that debate ? Obviously because Perot said something that stuck in the minds of the American people as a dire warning. And because time has proven that he was right.

Clinton made a maximum effort. All the business community, every voice of orthodox economic theory, all living ex presidents, all the pundits, all the talking heads, all the experts, all editorial pages of all news publications praised NAFTA. And it passed by only 34 votes in the House with most of the president's party in opposition. With that kind of firepower behind it, it should have been a slam dunk.

What you obviously refuse to comprehend is that support and opposition to NAFTA fell along class lines. College educated people supported it by a wide majority. Blue collar workers, rightly concerned about that "giant sucking sound" opposed it. They knew that the good factory jobs that their fathers had had, the jobs that enabled someone with only a high school diploma or less to buy a house, a car every three years, have health insurance, go away on vacation and retire on a pension were disappearing because of globalization. Indeed, the prosperity of the 90's was confined almost entirely to the college educated, who consoled themselves that all blue collar people had to do was to take Visual Basic courses at the local community college.

Now, what was a trickle of jobs overseas under Clinton has become a steady stream in the first Bush term and will become a raging flood in the next. White collar people who thought they would benefit in the form of cheap imports realized that they could be casually ruined precisely as blue collar people had been. Now they are hearing from you precisely the same crap that blue collar workers have been hearing for the past 25 years. You know what ? They aren't buying it because they know it is crap. Are you dimly aware that support for free trade was at 57% in 2000 for people making over six figures ? Today it is at 28%. You think someone making that kind of money wants to hear about "retraining" so he can start over again at the bottom at age 45+ ? You think he's willing to put "market efficiency" and the wellbeing of the "global economy" ahead of his future and that of his family ? You think he is stupid enough to buy your "I just know that by golly something will turn up and it will be just great" ?

Blue collar workers never supported free trade out of basic socioeconomic self interest. Now those white collar workers who had supported it 10 years ago see that they are in the same boat alongside blue collar workers.

The fundamental purpose of economic activity is, and always has been security. Are we such a wealthy nation that we have forgotten that we live in a world of scarcity?

The notion that free trade, under all circumstances, will produce better jobs and more wealth, sounds curiously marxist to me.

And the willingness to sacrifice the lives of others to your vanguard elite vision of a pure world is very marxists, too. The certainty that we have the scientific theory that justifies our actions and is guaranteed to produce utopia.

It is also a kind of sentimentality. Sentimentality is putting your personal preferences ahead of the truth. Free traitors insist that we can transfer our manufacturing base, our R&D overseas and it will have no adverse economic or geopolitical consequences for the US because, darn it, it just plain has to come out all right for us. You see, we're the good guys and we always win.

I was listening a month ago to some Cato Institute fool prattling about how he "believed in America" and that America will always somehow come out on top. Reminded me of a book I once found in a college library. It was written by a British author in 1942 about the future of the British Empire. In it he accurately listed all the problems faced by England (geopolitical overextension, de-industrialization, loss of technological competitiveness, loss of export markets because of free trade, capital drain, etc.). His final chapter, where he felt the need to come up with a solution, was a gushy ode to the moral superiority of the British public school ethos and the insistence that England would always find a way. The author did not have the guts to face the truth and fell back on sentimentality rather than see the truth of what was in front of him. Free traitors are like that. They either haven't the guts to face the fact that they are willing to destroy this country to line this pockets or the honesty to admit it.

Where to start...

1. I never asserted that President Bush has personally told any business that they have to outsource. So to begin with, you are misrepresenting my position. However, the policies of the Bush administration, including tax incentives for overseas investments, high US corporate taxes, failure to contract H1B visa totals in line with unemployment rates and failure to enforce L1 visa duration restrictions have all encouraged businesses to outsource, either overseas or to domestic businesses who employ foreign "temporary" contractors. In light of this, I find it difficult to see how you could assert that promoting the outsourcing of American jobs is anything but administration policy.

2. The Bush administration's acceptance of the precept that labor is just another commodity to be traded is a marked change from the stated positions of previous administrations. If you believe otherwise, please site an instance where any previous administration has stated that outsourcing American jobs is "good for the economy" (a direct quote from the head of the President's Council of Economic Advisers).

3. I hope you are right. I hope things get so good between now and the next election that all of this is irrelevant and guys like us all have jobs. The fact is, where I live in California the Bureau of Labor Statistics says that one in six jobs in the state are candidates for outsourcing. The secure jobs are those in government, education and low paid retail and business services. Most of the people who hold those jobs vote Democratic. The private sector jobs that provide a middle class income, the ones typically held by Republicans, are the ones that are most at risk. Sorry but this kind of insecurity, literally Russian Roulette odds, doesn't bring people out to the polls to vote for the President's reelection.

4. The historical analogy and national security concerns from my previous post remain unaddressed in your reply. Does this mean that we are in general agreement as far as the benefits of sustaining a strong, diverse domestic economy is concerned?

"What earthly reason is there to believe that you can transfer all you R&D to another country (and a very smart and ambitious one that comprises one fifth of humanity at that) and still remain a technological superpower ten or 20 years from now unless you have a stupidly complacent faith in your innate superiority ?"

You're already dodging my test, rather than to admit that you have no evidence to support your wild-eyed claims.

The test is simple, and I'll repeat it simply because it needs to be hammered home into your brain again and again:
Show me where China has invented *anything* in recent history ahead of the U.S. due to your so-called transfer of R&D.

Because here's the reality that you refuse to let slip into your mind: the so-called "R&D" that has moved to China and India amounts to mere grunt work. China and India aren't inventing anything of note ahead of the U.S., and because they aren't inventing anything ahead of us, you'll never be able to pass my above test.

That leaves you to name call, toss out straw men, feign boredom, and otherwise dodge my challenge to you. It's all that you've got.

You see, you can't show where any of this so-called "R&D" is paying off for China and India (not that such a major, fundamental failing will slow down your uninformed ranting, however).

"In one generation China has pulled technologically abreast of the United States. One generation. As things stand now, the great advances in nanotechnology will be in China."

So China is walking on the Moon, building national ICBM defenses, exploring Mars with multiple robots, and flying stealth fighters today?!

No, the advances in nanotechnology will not come from China. Nor will the advances in chips and software. Nor will the advances in rocketry.

In fact, within the next year American *civilians*, led by Burt Rutan and his SpaceShipOne, will be going on sub-orbital flights in launch vehicles that cost less than $10 million to build...and that are reuseable.

So yet again the next advance in rocket science will come from America, not China, and not India.

But your brand of hyper-feministic fear isn't new. In the 1940's the Germans were going to rule us. In the 1950's the Soviets were going to bury us. In the 1960's the "British Invasion" was going to show Americans how business was really done. In the 1970's and 1980's the Japanese were going manage the world. In the 1990's China was going to "make everything" and in the current decade we've heard that India will take over all American high tech jobs.

Pick a decade and there has always been a Chicken Little or two screaming that the mighty U.S. would finally be humbled.

Well, I've got news for you: the Chicken Littles of the world are always wrong.

You're already dodging my test, rather than to admit that you have no evidence to support your wild-eyed claims.

The test is simple, and I'll repeat it simply because it needs to be hammered home into your brain again and again: Show me where China has invented *anything* in recent history ahead of the U.S. due to your so-called transfer of R&D

So called transfer of R&D ? So called transfer of R&D ? Tell that to Microsoft, Intel, Hewlett Packard, GM, Boeing, etc, all of whom accept transfers of technology to China as the price of doing business there. Tell that to the Mikoyan-Gurevich design bureau which is teaching China to build the Su-30, a state of the art air superiority fighter that can go one on one with an F-15. You can't see the foundation being laid for a technological take off by a China that is absorbing state of the art technology from all over the world at a break neck pace ? You know how many scientists and engineers are produced by China each year (and considering the fact that it takes a generation to produce human technological capital your babble about "the past 20 years" is singularly imbecilic) ? Once you have a trained technological cadre in place, which they do, and in their case an enormous one, the sky is the limit. You don't see where this is leading ? Funny, you are the one who is always raving about the benefits of "change" yet you never face the possibility of "decline". Do you think practically the most brilliant civilization in human history somehow lacks the "creativity" gene and that is something Americans will always be better at ? Are you dimly aware that thanks to your stupid, destructive policies American college students are leaving degreed programs in high tech because they see that outsourcing means they can expect no job security ? You don't see Germany 1900 multiplied by a factor of 100 ?

Your certainty that there is nothing an Asian could think of that a round-eye didn't think of first is nothing but racist, arrogant idiocy.

"Blue collar workers never supported free trade out of basic socioeconomic self interest."

Nonsense. You don't even understand "free trade."

Here's Economics 101 for you: "free trade" is when two humans negotiate and *agree* to exchange something.

Free trade, at its most basic level, is precisely what the masses understand and embrace, contrary to the Marxist claptrap that gets tossed around with whatever buzzwords are in vogue today.

You have something of value. I have something of value. I want what you have. You want what I have. We negotiate. We haggle. We wheel. We deal. Finally we *agree* to exchange what we have for what we want. You end up getting what you want, and I end up getting what I want.

That's free trade, and Blue Collar workers have *always* supported it with their actions even during those times when they've been fooled into denouncing the very words "free trade."

Free trade gets people what they want. Go to areas that don't have free trade, such as Cuba and North Korea, and you'll find masses of people who *don't* get what they want.

Free trade gives out an incentive for you to obtain or produce something or some service that is valuable enough to let you trade it for those things and services that you want for yourself.

Take away free trade and you take away both the incentive to produce as well as the means to exchange and get what you want.

In short, free trade is the solution...not the problem...though it makes for a catchy-enough sound-bite that it is easily scapegoated as the problem even when it isn't.

In this case, i.e. offshore outsourcing, the problem isn't with free trade (e.g. we certainly have no NAFTA-style agreement with China or India), but rather with international currency manipulations. Both China and India are hoarding U.S. Dollars in order to prop up the foreign exchange value of the Dollar. That makes U.S. exports more expensive and less competitive, and it makes imports into the U.S. from China and India unnaturally cheaper than would happen in a free market.

"So called transfer of R&D ? Tell that to Microsoft, Intel, Hewlett Packard, GM, Boeing, etc, all of whom accept transfers of technology to China as the price of doing business there. Tell that to the Mikoyan-Gurevich design bureau which is teaching China to build the Su-30, a state of the art air superiority fighter that can go one on one with an F-15. You can't see the foundation being laid for a technological take off by a China that is absorbing state of the art technology from all over the world at a break neck pace ?"

Correct, I do not see it...because transfers of old American technology TO China are not even in the same league as China inventing something on its own.

And that's my challenge to you. You keep claiming that China is equal technologically with the U.S., that the U.S. has "lost" its technical edge, that all R&D is now being done in China and India instead of the U.S....

...Yet you can't name a single Chinese invention from that R&D. You can't name even a single thing that the Chinese have invented ahead of the U.S. in recent history. Not even one.

As I stated the first time on this thread when I posted this challenge to you: you'll fail this test with a whimper...never managing to show even a single Chinese invention ahead of the U.S. R&D departments...and never admitting that you were without such evidence all along.

You've got hot air, not evidence.

Show me where China is inventing things today ahead of the U.S.

That's your challenge.

So Perot is leading in the polls today because everyone in America finally believes that he was right all along?!

Gee, I wasn't aware that Perot was seeking public office.

What is fascinating is the political collapse of free trade. The only Democratic pro-free trade candidate was Lieberman and his candidacy went nowhere fast. And we see in the GOP grass roots the same factor. Non college educated workers saw what globalization did to the good factory jobs their fathers had had and now white collar workers are in the same boat. Perot and Buchanan were prophets before their time. On NAFTA they lost the battle but the very fact that Bush is so much on the defensive on this issue shows that they won the opinion war. As that poll I cited shows, the most pro-free trade sector of American opinion, high end college educated white collar professionals no longer believes your assurances because they see in their lives and the lives of the people they know that under the impact of outsourcing and offshoring their career prospects are dwindling. You've lost. All the MNC shills in the world can't convince people that what they see happenning in their lives isn't happenning.

When even Kissinger concedes that at present rates America will become a third world nation in a generation it is obvious that the complete failure of free trade to provide all those good jobs and new industries you keep promising has sunk into the American people.

Bush is trailing badly in the Midwest, the core battleground states because people there can't pay the bills with your blue sky promises. If he loses, and if he keeps this up he will, a new, reborn GOP will have to reject free trade if it is to regain the White House and the ideological initiative.

In this case, i.e. offshore outsourcing, the problem isn't with free trade (e.g. we certainly have no NAFTA-style agreement with China or India), but rather with international currency manipulations.

Yes, you've been babbling about "Reduce the value of the dollar by nearly half and outsourcing will go away." Is that a way of saying "reduce the American standard of living by half and outsourcing will go away" ? Because that is the truth. But the American people are not going to support reducing their standard of living to third world levels to "compete". Not now. Never. Given a choice between protectionism and impoverishment, the American people will choose protectionism.

Reduce the value of the dollar by nearly half. Are you recommending hyperinflation ? You think you can sell that to the American people ? You think that is responsible and intelligent ?

"Reduce the value of the dollar by nearly half. Are you recommending hyperinflation ? You think you can sell that to the American people ? You think that is responsible and intelligent ?"

It's a crying shame that I have to repeat myself, as you obviously didn't comprehend what I said the first time...but dropping the value of the U.S. Dollar only impacts 4% of our GDP.

We've already dropped the value of the Dollar by 20% versus the Euro. We've got another 20% to go.

Do we have hyper-inflation with that 20% drop? No.

Why not?

Because it only impacts 4% of our GDP, and 20% of 4% is so trivial as to be lost in the wash. Ditto for the next 20% fall.

Drop the Dollar that final 20% and offshore outsourcing will rein itself in. Problem solved.

Well, solved for everyone except those who want Marxist controls placed onto our economy to "protect" certain jobs like telephone switchboard operators and buggy whip makers from certain technological extinction.

"Non college educated workers saw what globalization did to the good factory jobs their fathers had had and now white collar workers are in the same boat. Perot and Buchanan were prophets before their time."

Nonsense. Factory jobs, regardless of globalization, are simply following the same path as Agricultural jobs.

At one point in time agricultural jobs employed 98% of all working Americans. Today, such jobs employ less than 2%, yet we grow more food today than at any point in our past.

What has happened is that *technology* has improved the productivity of our farmers. We need fewer farmers to produce our food.

Ditto for what is happening in manufacturing. Ten years ago GM made almost 5 million cars per year with over 500,000 employees. Today, GM makes more than 5 million cars per year with some 188,000 employees...and their quality is better, too. Again, what is happening is that technology (e.g. robots) is making fewer workers more productive than the larger groups of earlier employees.

This same technological trend can be seen in software with teams of programmers being replaced by simple HTML design packages, and teams of system administrators being replaced by network management software. Fewer people are now able to do even more IT work with even higher levels of quality.

And these things would have happened with or without NAFTA. Enact all the trade protections that you want, the newspaperboy on the street corner is still going to be replaced by the newspaper vending machine...only he won't have words like "free trade" to blame for his loss of his job under such a scenario.

It's a crying shame that I have to repeat myself, as you obviously didn't comprehend what I said the first time...but dropping the value of the U.S. Dollar only impacts 4% of our GDP.

Why that is the best news that I have heard thus far. Lets just crank open those printing presses and give every American citizen a $1,000,000,000.00 to invest. Our GDP will drop by 4%; but, who cares, we are all going to sit on our tails and make brilliant investment decisions like our true blue blooded capitalist.

Economics 101 would argue that a drop in the dollar means inflation and increased funding costs; but heck if our globalist are willing to send me a check, then I am just going to have to cash it. ...Oh BTW, if our imports are SOoooo insignificant then why don't we just seal the borders and make everyone happy? It is just 4% right?!?!

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