American jobs must not be lost, says Kissinger

TIMES NEWS NETWORK ^ | JULY 16, 2003 | KALPANA SHAH

[IonInsights]

LAS VEGAS: When a former US secretary of state of the stature of Dr Henry Kissinger walks into a technology conference, 10,000 techies filling up the Ballroom at Mandarin Bay stand and applaud, even before he says anything. When he answers a question about outsourcing of economic activity, his reply draws a bigger applause from the largely American audience.

“If outsourcing would continue to the point of stripping the United States of its industrial base, and of the act of getting out its own technology, then it requires really careful thought of national policy and probably create incentives to prevent it from happening.”

It was Mr Sanjay Kumar, chairman and CEO of Computer Associates (CA) who put the question to him. Mr Kumar mentioned the increased outsourcing of technology related work, from insurance claims, airline reservations, computer programming to countries like India and China and asked Dr Kissinger whether this would erode middle class power bases in Europe and the US.

Dr Kissinger’s answer: “I don’t look at this from an economic point of view but the political and social points of view. The question really is whether America can remain a great power or a dominant power if it becomes a primarily service economy, and I doubt that. A country has to have an industrial base in order to play a significant role in the world. And I am concerned from that point of view.” The mood was unambiguous — American jobs must not be lost.

Mr Kumar also reminded him about his acceptance speech after winning the Nobel Peace prize where he had voiced concerns about the rise of technology, and asked whether he had changed his mind about technology since then. Dr Kissinger said, “My concerns have mounted since then. I am of a generation that grew up on books. It helps you develop concepts. With computers, you don’t have to remember things because the information is all there.” He worries that despite the fact that there is an explosion of information, the problem is how to transform information into knowledge and knowledge into wisdom.

“I worked with leaders who had an intuitive sense of the future although they didn’t have so much information. Statesmen have progressively more information but they have progressively more insecurity because they have no sense of the evolution of the system,” he said. The role of technology should be to bridge the gap between availability of information and the ability to use it, Dr Kissinger said. An idea that the IT industry will have to mull over.

[IonInsights]

Kissinger at least has common sense when it comes to this issue. I wish our elected officials would demonstrate a little.

[Rodney King]

“If outsourcing would continue to the point of stripping the United States of its industrial base, and of the act of getting out its own technology, then it requires really careful thought of national policy and probably create incentives to prevent it from happening.”

bump

[LibertyAndJusticeForAll]

Dr Kissinger’s answer: “I don’t look at this from an economic point of view but the political and social points of view. The question really is whether America can remain a great power or a dominant power if it becomes a primarily service economy, and I doubt that. A country has to have an industrial base in order to play a significant role in the world. And I am concerned from that point of view.” The mood was unambiguous — American jobs must not be lost.

[pabianice]

Outsourcing can be stopped only by protective legislation. Protective legislation is 100% guaranteed to end in bankruptcy for the protected industries. This is a solution? Has no one studied the histories of the US auto, steel, and ship-building industries?

[lelio]

I think this is the first time I've ever agreed with Kissinger. Is that a snowball in Iraq I see?

[Jim Cane]

Protective legislation is 100% guaranteed to end in bankruptcy for the protected industries.

Amen! Just look at what Ronald Reagan's tariff on 700cc and over Jap bikes did to Harley Davidson.



*uffda

[oceanview]

we have a 25% tariff in place on foreign light trucks in the US, and foreign companies are building light truck plants in the US and employing Americans.

[DonaldC]

I don't think that a tariff is a solution. I would look at tax adjustments for companies that send work overseas. I don't want to punish a foreign company but there is no way that American labor can compete with Indian labor. Just a thought.

[Ed_in_NJ]

If outsourcing would continue to the point

It WOULD -- does this mean we have to wait until it DOES?

[joesnuffy]

Which face was he speaking out of

[StolarStorm]

We can't compete as long as we allow our "trade partners" to manipulate their currency exchange rates in their favor.

[A. Pole]

Dr Kissinger’s answer: “I don’t look at this from an economic point of view but the political and social points of view. The question really is whether America can remain a great power or a dominant power if it becomes a primarily service economy, and I doubt that. A country has to have an industrial base in order to play a significant role in the world. And I am concerned from that point of view.”

Bump

[oceanview]

we need a sliding scale for corporate taxes based on the ratio of profits earned in the US to US workers employed. Earn $100 profit in the US with no US workers, tax rate is 90%. Earn $100 in the US with only US workers, tax rate is 0%.

[Jason_b]

"Outsourcing can be stopped only by protective legislation"

Not only. There is another way---without protectionist barriers that is. Getting anyone to go along with it is another matter.

If you care to, please read post 182 of this page.

[riri]

Which face was he speaking out of

True, but at least somebody, somewhere of some significance is saying this.

Question is, is anybody listening?

[DonaldC]

True, that is a large part of it. But just on employee costs, American workers are at a disadvantage (Social Security et al). Something is needed to give some balance to the equation. Hire an American at $60 (wages and benifits included) or go to India at $20. Business will naturally gravitate to the cheaper cost, unless there is an incentive to do otherwise....:)

[oceanview]

Hillary is listening. Come 2008, she will know what to pitch to these displaced workers. They are the swing vote she needs to put her over the top.

[Jim Cane]

I don't think that a tariff is a solution. I would look at tax adjustments for companies that send work overseas.

Tariffs are a Constitutionally sanctioned means of protecting domestic production. Social engineering via different tax breaks/penalties on individuals and corporations based on state sanctioned behaviours are abominations. That's why the Founders chose tariffs. Jefferson considered his successful funding the Federal government completely via tariffs alone as his great accomplishment as president.

[LibertyAndJusticeForAll]

That's right. Imagine how unhappy just all those "soccer moms" will be by 2008.

[liberallarry]

Bump. It's impossible to stop globalization. We can only try to dominate it, turn it to our advantage. I'm surprised that Kissinger isn't saying this.