Re: Does Outsourcing Piss you off?

norak wrote:

Unless the funding on research yields no results. Putting money into
research is fine because technological improvements can be beneficial
in the long run, but most may be offended by the idea of coercing
people to put their hard earned money into research.

There are 2 options for the US into the global economy:

1. ride the top of the wave, and this means investing in research even if
some primitives are offended
2. sink and drown with the same wages as India and China, while the
primitives move their headquarters into another victim country trying to do
the same


I prefer 1. even if this mean higher taxes. In the end they have to pay
back.

Suppose more money is put into research. Suppose this research creates
a machine that produces cars everything at almost zero cost. Workers
who work at car factories would all lose their jobs because their
services are no longer in demand.

Nope !!! A lot of low end jobs was also lost in 70's and 80s. The difference
was that the new high tech jobs took their place. You were able to provide
college education to unemployed workers and give them better paid jobs in
high tech. How long you have investment in research and development you
will always be able to do that.

The big problem with today's globalization is the fact that both low end and
high end jobs are lost. If you get today an unemployed worker, put him in
college, you are going to get an unemployed with diploma and huge debt in
student loans (no scholarship help anymore, thanks Bush). Then the bank
will take his home (no bankruptcy protection anymore, thanks Bush) and the
guy is going to be left homeless, no job, no health care, no food, no
pension. An highly educated person way worst like a slave (thanks Bush).

You say money put into research is
"smart." Research that leads to productivity-increasing technology has
the same effect as outsourcing.

Well, exactly the same you can tell about slavery. If you get 98% of the US
population in slavery and just pay them a bowl of rice a day you actually
can get huge productivity. Is this similar new technology ?

Therefore, wouldn't outsourcing be smart by the same reasoning?

For top 2% of the population yes. For the rest of 98% NO !!!!
Last time when I checked, the democracy was ruling by the will of people not
by the will of oligarchy. The last one is called monopolistic plutocracy.

The empirical research does suggest that although there are job losses
following outsourcing there is more job creation according to the
stats. Although we have to watch out for post hoc propter hoc fallacy
here.

I said countless times on these groups, but you guys just does not want to
listen. Globalization do change everything we know about how the economy
works. Old rules we knew are obsolete. We need fresh out of the box
thinking, new theories and reforms.

Yes, we need to reform our society in order to cope with globalization,
exactly how we reformed it after Great Depression in answer to the
irreversible changes created by huge productivity increase brought by mass
production, assembly lines and automation.

Creation of SS, Medicare/Medicaid and a stronger gov. oversight over
businesses was what helped US to cope with the challenges of XX century.
Globalization it is our new challenge. We need more reforms to be able to
cope with this one too.

The only question is: Are we smart enough to do them without getting again
by a new Great Depression or are we idiots enough to believe in obsolete
mythologies until GD 2.0 strike ?

Someone also mentioned that what works in micro issues does not apply
to macro issues. I was under the impression that macro issues were just
aggregated micro issues. How is it not?

I mentioned that. And the reason is the system theory.

A system can behave different than the simple sum of all the independent
components. If you sit in front of speakers you hear the voice,
if you speak in microphone your voice gets amplified. If you put the
microphone in front of the speakers your windows will blow up and if the
amplifier is not protected you can see smoke.

A system DO behave different than just sum of the parts.

An US unionized worker making 45k/yr can afford to buy an 35k
SUV. If his job was offshored to China and the Chinese make 2k/yr the GM
is not going to sell that SUV anymore.

The CEO's increase in profits as well as the Indian worker's increase
in profits would together compensate for the decreased demand the U.S.
worker's loss of income created. Increased overall demand is what gives
the U.S. worker opportunity to get a job in the long run.

NO, it will NOT !!!!!!! This is just Bush corporate propaganda.

Assume you offshore 10000 75k engineering jobs and all the proffit goes to
business owner. This 10000 engineers did eat each a pizza/day from Pizza
Hut, as unemployed they did not. Pizza Hut is going to lose 10000
customers/day. Unless the owner is going to eat 10000 pizza/day he is NOT
going to compensate for business and Pizza Hut get bankrupt.

Those 10000 engineers changed their car 35k car at every 5 years. That means
car manufacturers did sell 2000 new cars/year to them. Being unemployed
they do not. Unless the owner is going to change his car at every 4 hours
and a half (2000 cars/yr) he is NOT going to compensate for business. The
car manufacturer go bankrupt.

Those 10000 engineers used to buy every year 2 new business suits. Unless
the owner is going to change his suit at every 27 minutes, the suit
manufacturer goes bankrupt.

In meantime 10000 Indians get an extra $1000/yr increase in wages due to
offshoring. To eat a $5 pizza/day they need to spend 5*365=1825/yr, so they
will rather eat their traditional food leaving not much business for pizza
Hut. Maybe one or 2 pizza/yr, unable to compensate for lost business here.
To buy a car in 5 years they will look to a 5k Chinese car and not for a 35k
US SUV. And there will not be money to buy suits from Belk so they will look
again to China.

Guys, get the hint: Polarization in society distroy the economy.

You want globalization ? PERFECT: Do it in such a way to increase OR AT
LEAST MAINTAIN current population spending power. Do it such a way to
decrease OR AT LEAST MAINTAIN the current polarization level betwen rich
and poor.

If you do otherwise you distroy our economy. IN PURPOSE !!!
Osama bin Laden will be proud of Bush & Greedy Corporations.
They do as we speak what he tried and failed.

This is a very short-term, partial equilibrium perspective. GM isn't
going to lose 100 customers because a likely non-zero proportion of
workers will get jobs once there is increased demand for their services
due to the increase in CEO's salary and the increase in the Indian's
salary.

See above. For the Indian salary to increase enough to be a replacement for
lost jobs here it will take 25 years. In meantime, GM fail, Delphi & Dana
(suppliers for GM) get in trouble too.

BTW: just today Dana corp. announced bankruptcy:
http://news.yahoo.com/s/ap/20060304/ap_on_bi_ge/dana_bankruptcy;_ylt=AnyHYxzS5JsdWIkBjwj6tbSs0NUE;_ylu=X3oDMTA3bGI2aDNqBHNlYwM3NDk-

In meantime, consumer spending patterns for the CEO and rich shareholders
does not compensate for business since they can not eat 10000 pizza/day.
Do you actually believe that Bill Gates does eat 100,000 pizza/day just
because he can afford to do so ? Do you have any insider information that
Bill Gates does change his shirt at every 4 seconds since he have enough
money do to that ?

Kid, use your judgements. Please !!! The extra wealth accumulated by CEOs
and rich shareholders will be:

- invested offshore, since from there they get the biggest return of
investment
- parked in bonds, providing money for Bush to give them back as tax cuts
- invested in land or gold (limited resources which does not create jobs)
- put on stock market from where the companies will eventually invest them
offshore looking for the bigger ROI


Outsourcing is just a specific case of a general case in trade.

1. A and B trade.
2. C offers a better deal to A.
3. A choses C instead.

B it is out of trade and eventually will starve to death. I agree.
But, it is in US interest to have US population starving to death, just
because a gang of greedy individuals want to own more gold and land ?

This happens very often in trade, in international trade as well as
trade within countries as well as trade among family member. To prevent
outsourcing is to force the following:

1. A and B trade.
2. C offers a better deal to A.
3. Entity with monopoly on power coerces A to trade with B.

This is the essence of communism. Can anyone say with honesty that the
second case is preferable to the first?

Nope. This is the ONLY way to AVOID a communist revolution in US :-)

There is a certain limit people can handle before they are willing to take
disperate actions. When enough people are willing to take disperate actions
you got a revolution. It happen in November 1917 in Russia. It was on the
way to happen in US too in GD, but the genius of FDR kicked in and saved
the capitalism from capitalists.

And BTW, nobody said to force A to deal with B and leave C out.
The solution is to prevent A to kick B out of trade. I.E. to have all 3: A &
B & C prosper not having A looting all the wealth accumulated by B.

Keep in mind that all this happen because we have a fundamentally broken
system. The wealth is created by work. Due to the way our system is
implemented, the business owners assume the wealth created by others and
what is worst it can use his accumulated wealth to PREVENT others to use
their skills to create wealth.
That is, skilled people are prevented by less skilled people
to create and accumulate wealth due to uneven access to resources.

An 100% even access to resources may never be achieved, this is an utopia
that may be linked to socialism (NB: not to be confused to communism which
is an monopolistic plutocracy).

However, societies where a significant number of population is prevented to
have access to resources are going to degenerate in disfunctional economies
and eventually collapse. Therefore, it is a gov. duty to protect a somehow
fair access to resources / production logistics.
Since increasing polarization in society imply an accumulation of resources
into the hands of an oligarchy, a mentally sane government must not allow
big polarizations.
How much polarization is too much, is however an open subject to debate.

Food for the thought !!!
========================
The Gini coefficient is a measure of inequality in society:
http://en.wikipedia.org/wiki/Gini_index

One can see from the map that countries with a very big Gini are
disfunctional economies from Africa and South America.


The Level Playing Field Act
http://capmag.com/article.asp?ID=3098

Yeah, it is a good piece of humorous :-)
Nothing else, however. Absolutely, nothing else.


.

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