U.S. Offshore Outsourcing Leads to Structural Changes and Big Impact

cio.com ^ | August 13, 2003 | Diane Morello

[dfwgator]

For what it's worth, this is from the OPIC website http://www.opic.gov/ :

The Overseas Private Investment Corporation (OPIC) was established as a development agency of the U.S. government in 1971. OPIC helps U.S. businesses invest overseas, fosters economic development in new and emerging markets, complements the private sector in managing the risks associated with foreign direct investment, and supports U.S. foreign policy. By expanding economic development in host countries, OPIC-supported projects can encourage political stability, free market reforms and U.S. best practices. OPIC projects also support American jobs and exports—over 280,000 new U.S. jobs and $65 billion in exports since 1971. Because OPIC charges market-based fees for its products, it operates on a self-sustaining basis at no net cost to taxpayers.

[boycott]

Kucinich. That's him, I agree with him on trade. However, he's about as crazy as most the other Democrats.

[lelio]

If you value The Bill of Rights as anything other than a scrap of toilet paper, you don't want the US government to control who this company hires and fires.

But that can be taken to an extreme too. Is it okay to hire slave labor to make your widgets as they are in a foreign country? Who is to tell companies that can't be done but the government? Certainly the market isn't as they'll have the cheapest goods.

What I think is missing is the "promote the general welfare" clause of the Constitution. The government should be working towards increasing the standard of living for all Americans, not just the CEOs that offshore all their work to foreign countries.

[Edison]

5 years ago my company was 27k people worldwide with approximately 3k in the US. Today we are 27k people worldwide with 350 in the US. The rest of the jobs are in India.

When I get laid off I plan on learning a trade...electricans, plumbers and air conditioning jobs can't go to India and the plumber last week wanted 200+ per hour to fix a leak that was going to take 4-5 hours.

I'm feeling like organizing. Too bad we were all sold that bill of goods and are exempt employees in NJ.

Edison

[RinaseaofDs]

No, actually you deserve him. You are going to get him because this guy has a beef, and its real. The trend is bad for businesses, bad for national security, bad economically in ways you haven't even considered yet.

If you are the hater of liberals as you are, then you need this guys vote, and my vote too.

He's right, Bush is massively vulnerable on this topic. Anyone reasonable that comes out and says, "Why should my son or daughter go to school and get an engineering degree? This President thinks that ceding one of the only real advantages we still possess in the US, that of software engineering and development, to countries like China, India, Pakistan, and Indonesia is sound Homeland Security policy, and sound economic policy as well. This is the same party that wailed about the sale of sensitive satellite technology to China, but lifts nary a finger when a half a million, high paying, strategically critical jobs go to the ChiComs. By all means, Mr. President, let Bank of America outsource its back office operations to Beijing. Let Verizon outsource its billing to Israel. Let India handle all of our IO/IW software component development. When it comes to oil, you are all about domestic production, but when it comes to IT, its better that we rely on future generations of Chinese, Indians, Pakistanis, and Russians to develop new operating systems, switches, network technology, and application development - after all, we need more law school graduates here in the US, where during your administration, the only segment of the economy to grow was the litigation industry."

Now, I'm a republican, and that was pretty easy to write.

So, if you want Dean, then keep it up with the flip responses to people with Masters Degrees that have followed all the rules and got hammered with very little warning.

[meadsjn]

OPIC projects also support American jobs and exports—over 280,000 new U.S. jobs and $65 billion in exports since 1971. Because OPIC charges market-based fees for its products, it operates on a self-sustaining basis at no net cost to taxpayers.

Very informative.

In return for those 280,000 jobs over the last 34 years, OPIC has cost the US about five million jobs in the last three years.

And that $65 billion in exports over the last 34 years certainly helps offset the current half trillion per year trade deficit with China.

Minor details and such.

[Dane]

So, if you want Dean, then keep it up with the flip responses to people with Masters Degrees that have followed all the rules and got hammered with very little warning

What flip resopnses? It called economics. A grocery chain in my area has introduced self-serve checkout. The way it is set up, one checker now does the job four used to, thus effectively outsourcing 3 checker jobs.

Should this practice, according to you, be banned?

[thimios]

I'm still working in IT, but I have watched many of my code buddies tossed out on the street. Now I'm surrounded by people who don’t pay any taxes and could care less if this country become a third world country (in the end the joke will be on them. We won’t be able to buy the stuff they build)
I work with many people from India that have made America their home and they don’t like this movement because they don’t want to go back to India. They have tasted the good life. They know how bad it is to live in India.

[RockyMtnMan]

It's an interesting technology do you think it will catch on?

[LibertyAndJusticeForAll]

The sales pitch on the OPIC is not worth much. Here are some facts that are documented.

http://www.worldnetdaily.com/news/article.asp?ARTICLE_ID=26159

"POWER FOR SALE
Huge Enron loans
expose taxpayers
Ex-Im Bank, OPIC backed 18 of firm's overseas projects to tune of $1.7 billion

By Paul Sperry
© 2002 WorldNetDaily.com

WASHINGTON – Federal overseas economic-development agencies have financed or underwritten 18 Enron Corp. projects, exposing U.S. taxpayers to a total of more than $1.73 billion in potential liability, according to agency officials."

http://www.opensecrets.org/alerts/v3/ALRTV3N26.asp
"Taxpayer groups, such as Americans for Tax Reform and the National Taxpayers Union, are lobbying to end OPIC because they contend that taxpayer money should not be put at risk to benefit wealthy corporations. They also contest the agency's claims that it makes money for the government because much of OPIC's income is derived from interest on Treasury bonds. Opponents of OPIC argue that American job opportunities are lost when businesses locate plants abroad rather than in the United States.
Many of OPIC's more than 250 clients are also generous contributors, donating a total of $27.4 million in PAC and soft money contributions to federal candidates and parties in the 1996 election cycle."

http://www.newsmax.com/archives/articles/2002/1/28/155951.shtml
"Between 1993 and 1994, 26 companies received support from the Overseas Private Investment Corp. and the Export-Import Bank totaling about $5 billion. According to the center's study, five corporations – Enron, U.S. West, GTE, McDonnell Douglas and Fluor – donated $563,000 to the Democrats and received at least $2.6 billion in contracts.

Moreover, the U.S. government was aware that insuring the false contracts inside Indonesia could push the Overseas Private Investment Corporation into bankruptcy.

"OPIC's combined exposure in Indonesia is close to USD 1 billion, or 5 percent of OPIC's global exposure, all in the electric power sector. As such, resolution of potential insurance claims and/or actions could result in 'an adverse material impact' on OPIC finances," notes a cable from the U.S. ambassador to Indonesia.

Yet, despite being faced with total financial failure due to huge losses, OPIC continued to back more power deals inside Indonesia. The Commerce documents note that during the Clinton years, Indonesian dictator Suharto contracted for 26 U.S. taxpayer-sponsored power projects while his impoverished nation could afford only one such plant."

[Dane]

When it comes to oil, you are all about domestic production, but when it comes to IT, its better that we rely on future generations of Chinese, Indians, Pakistanis, and Russians to develop new operating systems, switches, network technology, and application development - after all, we need more law school graduates here in the US, where during your administration, the only segment of the economy to grow was the litigation industry."

Oh sheesh, you ooze demo talking points.

Oh BTW, if you owned a business and tried to cut costs of doing business, how would you feel if a government beureaucrat said you couldn't. Or are you going to give another demo talking point on how all business owners are evil.

BTW, how come you just bash Bush and not the demos, who try to block tax cuts(which benefit American businesses and consumers) at every juncture.

[lelio]

It called economics

So we have nothing to be worried about with everything being produced in communist China and a large majority of IT jobs in India? R&D moving to Tiawan and Singapore? Its all just economics that jobs are flying out of the country?

[Hop A Long Cassidy]

>>>"Because OPIC charges market-based fees for its products, it operates on a self-sustaining basis at no net cost to taxpayers."

If they are so self-sustaining, then why does the government need to perform this service at all? Why aren't there zillions of competitors vying for this lucrative insurance business?

This is clearly a subsidy to corporations to move their jobs overseas. If a company decides to move their work offshore then they should at least be charged market rate for this work and it should be done by an American private enterprise company... NOT by the U.S. government.

This is a clearly a governmental subsidy. Insurance for overseas investments by OPIC can't stand the light of the day. We want FREE TRADE, not our tax dollars subidizing the export of U.S. jobs. If U.S. companies can't invest overseas without this subsidy, then they should stay at home.

Hoppy

[Dane]

So we have nothing to be worried about with everything being produced in communist China and a large majority of IT jobs in India? R&D moving to Tiawan and Singapore? Its all just economics that jobs are flying out of the country?

Do you own a business. If you did, would you compare different companies offering the same product and which gives you the most bang for your buck.

In your personal life do you make purchases based on price? Why do you want to deny that to business owners?

[LibertyAndJusticeForAll]

You are correct, banks won't take the risks in insuring businesses in unstable 3rd world countries.. You might be interested in my response:
http://www.freerepublic.com/focus/f-news/963730/posts?page=50#50

[RockyMtnMan]

You do know the military uses high end, off the shelf, networking equipment manufactured by companies like Cisco and Juniper don't you. It's not a good idea to give China easy access to the latest and greatest hardware used to move logistical data. The Aegis system is built from COTS hardware and software and low-and-behold the ChiComs are announcing the development of a new Aegis class destroyer.

Let's not make their missles as accurate as ours. That was the advantage we held over the Soviets, we will have no such advantage over the Chinese.

[thimios]

As a business owner will these foreign governments give you access to their markets? You better hope they will because the American consumer is broke. I’m sure the Chinese and Indian consumer can’t wait to buy $50 Nikes.

[Mortimer Snavely]

"Globalization," as generally understood, does not consider the nation state of any importance, and presumes that political power holders have no influence upon economic activity. As a result the USA is exporting its manufacturing and research and development wholesale to national socialist and authoritarian states such as Red China. As I have posted elsewhere, I'm glad that no one had these bizarre ideas in the Thirties. Nazi Germany and Imperial Japan would have been nearly impossible to beat had today's ideas been implemented then.

[lelio]

Oh BTW, if you owned a business and tried to cut costs of doing business, how would you feel if a government beureaucrat said you couldn't.

If my way of cutting costs was dumping toxic waste into a river then I think the government has every right to step in. Government intervention in business is a matter of degrees. I think it should try and promote a healthy business climate and promote the general welfare of the US populace and weighing that against staying out of the market.

And be careful what you wish for: Hoover thought the same things about keeping the government out of the Depression and look what that got us.

[Dane]

You do know the military uses high end, off the shelf, networking equipment manufactured by companies like Cisco and Juniper don't you. It's not a good idea to give China easy access to the latest and greatest hardware used to move logistical data. The Aegis system is built from COTS hardware and software and low-and-behold the ChiComs are announcing the development of a new Aegis class destroyer

What stops the Chi-coms from buying or smuggling the same "off the shelf" stuff. The difference is with the Clintons is that they sold them for campaign contributions from the Chi-Coms.

I agree with you that military secrets should be protected as much as it is humanly possible and not sold for campaign contributions, but what about normal day to day business operations such as the cost of doing business. Shouldn't a business owner have the right to go to the place where his/her dollar gets the most bang for the buck.

BTW, earlier on this thread I noted that self-serve check out lines now lets one checker do the job of four, thus outsourcing three checker jobs.

Should this practice be banned?