On Wed, Jul 23, 2003 at 06:15:48AM -0400, John Pedersen wrote:
> Paul M Foster wrote:
> >I'm seeing entirely too much of this "offshore job movement" posting on
> >the main list, and I suppose I just needed someone to flame me. ;-}
> >
> >I'm tired of hearing the whining about this phenomenon. Companies don't
> >do this because they're bored or evil or anything of the sort. It's a
> >business decision. It's a matter of cost. It costs less to host many
> >jobs overseas. Plain and simple.
> >
<snip>
> Much of what you say is true. I totally agree that many people seem to
> think that profit is bad, and companies "owe" employees. Profit is the
> world's greatest motivator, and companies "settle up" with employees
> every time they issue that pay check.
>
> But I don't agree with you entirely. First, you're ignoring the "big
> picture". And secondly, as nice as it would be to simply accept
> "laissez faire" as the driving force in our economy, there is in fact
> enormous evil and greed that is driving history right now.
>
> You speak about agrarian economy and manufacturing ecomony and service
> economy....
>
> I cringe when I hear the term "service economy". You know what a
> "service economy" is? That's what politicians tell you you're going to
> have, while they and their banking brethern sell you down the drain.
>
> The truth is that no country can maintain their standard of living in
> the long run unless they "create" things of value.
>
> They can do this by manufacturing (ie taking some raw materials and
> making a chair, or a car or a shoe (well, hopefully two of them). Or
> they can do this by harvesting natural resources (oil, timber, wheat,
> whatever).
>
> However, "service" is NOT a "wealth creating" industry. As necessary as
> it may be to sell insurance, or write programs, or make hamburgers, or
> give haircuts or paint fingernails, it DOES NOT create anything of
> value, in the "big picture".
>
I'm not sure where you come up with this evaluation of what constitutes
"things of value". Anything is of value if people are willing to pay for
it. Even if it's something like kisses at the kissing booth at the state
fair. Things that you can hold in your hand or drive around aren't the
only things "of value". Even piece of mind can be "of value" if people
are willing to pay for it. Doctoring is a service which creates wealth
for doctors.
> For many decades there was a slow drain of jobs (ie manufacturing) from
> this country, but it was tolerable. There were a few people back then
> who noticed, "Hey, there's not one single television set made in the
> USA". But if all the cameras, televisions, and motorcycles are made in
> Japan, that's ok because the Japanese will buy SO MUCH stuff from us, in
> exchange--remember those days? Yeah, right....
>
> Bear with me--I'm getting to the evil/greed part. We entered a period
> of history where the stock market, with help from the Washington
> printing presses, created a huge "consumerism bubble". There was an
> enormous demand for goods. The investment bankers (Goldman Sachs, JP
> Morgan, et al) were not content to make huge amounts of money by simply
> funding the manufacturing of millions of pc boards, chassis, etc. They
> realized that they could increase their profits even more (no, profits
> are still not evil!.....wait for it!) by manufacturing offshore. Not to
> mention the potential for ducking lots of taxes, etc.
>
> Here comes the evil/greed part: in my opinion, the very top elites in
> the investment banking circles HAD TO KNOW that every time they got a
> few million dollars for putting together a billion-dollar deal to
> manufacture widgets in China, they were destroying forever one more
> element of the ability of this country to "create wealth". Once a
> factory gets moved to Mexico, or China, does it EVER come back? In a
> pig's eye.
>
So investment bankers (not companies?) have a moral obligation not to
fund projects which ship jobs overseas? Even though they'll make scads
of money on them?
I'm sorry, I really don't see this. Investment bankers, like everyone
else in business, are driven by profit. Unless you're talking about
heroin manufacturing or kiddie porn, I'm not sure what morality has to
do with it. I'm not sure how it's "selling out the country". Selling the
Chinese satellite and missile guidance technology is selling out the
country.
And actually, those factories did come back. It used to be that
Japanese/Korean cars were made overseas. Now it's become economically
more feasible to locate their factories an the American south. Of
course, that's not true of all oriental commodities. Just an example of
where it _can_ happen.
> So, yes, I do think that there are evil, greedy people who are selling
> the country out, and don't give a damn about consequences--after all,
> when you have $300 million and homes in four different countries, you
> can pretty much adapt to anything.
>
Are all rich people evil, or just investment bankers?
> So why are we, relatively speaking, doing so well, even now? Well,
> whenever you see the newspaper saying "the economy is strong", read the
> part that comes next: because retail sales are strong. We have
> re-defined the word "economy" to mean "people buying stuff". Well, that
> ISN'T a measure of strength of economy. It suits the spin-masters to
> have you think so, but it's just not true.
>
Actually, the one and only workable way to drive an economy is with
production (including the production of services). You can tinker with
the money supply and interest rates, but you can't interest-rate your
way to a prosperous nation. Only production and thence exchange (for
money) will really drive an economy. A productivity increase will have
far reaching effects all over an economy, including more disposable
income. Without this, nothing you do will save a failing economy.
> You say, "But you still haven't answered the question: why are we doing
> so well?"
>
> This is all about the US dollar. In traditional economics, when you
> printed a gazillion greenbacks (or any other currency), you debased it
> until it was worthless. But Greenspan et al have been injecting money
> like crazy for years, but no inflation--how come? Part of the answer is
> that, as a currency, until recently, the US dollar had no competitors.
> I mean, if you're not going to buy oil, and a 10-million unit deal for
> VCRs in US bucks, then what are you going to use?! But then along came
> the Euro....
>
> Another part of the answer is that foreign investors were happy to pour
> their money back into the US stock market, and US financial paper.
> Another factor: It's kind of like the old saying, "When you owe the
> bank $50,000, the bank owns you. When you owe the bank $50,000,000, you
> own the bank." In other words, to some degree, it's not in the
> interests of foreigners to pull the plug on the US. At least, not all
> at once.
>
Ever see a movie with Jane Fonda and Kris Kristofferson called
"Rollover"? One of the most frightening movies I've ever seen. It's a
story about what happens when the Arabs, who keep a lot of money in
American markets which they "rollover", suddenly one day don't roll the
money over. Worth a rent, if you can find it.
> Can this go on forever? Answer: does anything go forever?
>
> Nations rise and fall, and the US has entered the last phase of their
> decline--empire building.
I agree about the decline of American civilization, but it isn't because
of money or markets. It's a result of the destruction of morality. And
every dead civilization in history died on exactly this same point-- the
death of morals. The Romans were probably the best example.
This is a corollary to this. Having said all I've said, I'll now
stipulate that one of the major problems with American business is
their fixation on profit. Crazy, huh?
You're seeing an incredible amount of short term planning going on in
companies in order to meet quarterly profit projections. This kind of
thinking is suicidal. There is little thought for the long term.
Unfortunately, it tends to rip up companies.
The problem is that companies have fixated on the profits and forgotten
the purpose of the company: to _produce_ something at a profit, for a
long time. A company makes and delivers widgets. That's its point, its
raison d'etre. It must do so profitably in order to remain in business,
but the real point is the widgets. If companies began to reason
backwards from the widgets, they would begin to see that minor market
fluctuations and quarterly profit targets aren't that important. It's
the long term ability to create and sell widgets. It affects a lot of
things, including product quality and employee happiness.
You're seeing the same type of thinking in the American public-- this
demand for instant gratification. Short attention spans. Narcissism,
self-absorption. And morality is going along with it. Morality is
something one can ill afford when one is racing headlong to the next
sensation.
> Some people think that the Iraq war was about
> WMD. It wasn't. Some people think it was to steal the oil. Wrong
> again (well, mostly wrong). It's about CONTROLLING oil, and who gets
> enough oil at what price, and who doesn't. Before the war, there was a
> steady push for world payments for oil to be made in Euros.... A
> disaster for the US dollar.
>
This is old and tired. The Iraq war was only marginally about oil.
> I guess that ain't going to happen now! See how nice it is to have a
> huge troop base in the middle east?
>
> Big picture, we are becoming the soviet union that we (well, except the
> young whelps like you) grew up with, complete with propaganda, conrol of
> the press, sucking assets from satellites (not the flying kind), the
> whole ball of wax.
>
Umm, I don't think you're that much older than me, buddy boy.
In a sense, you're right. The government is becoming more and more
big-brother-ish all the time.
> That is the outcome when you have a society to sustain, and you have
> little or no means of wealth-creation (ie manufacturing).
>
Repeat after me: Manufacturing is not the only source of value.
> Like it or not, America has an ENORMOUSLY high standard of living,
> compared to the majority of the population of the world. And most
> people will not be happy to "even things out" by giving away, for
> example, 90 percent of everything they own.
>
> Bottom line, some of the people who are complaining about their jobs
> going offshore might not be exactly right about where to lay the blame,
> but their complaints are justified; the net job movement is one way
> only; and the jobs ain't coming back! Good reason to whine, IMHO!
That was my beef in the first place-- the wrong targetting of American
business/profit.
Paul
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