More Lizzie on outsourcing:
This is a complicated matter but the problem is, I don't think it matters much to me about what "leads to greater inefficiencies" at this point. If we weren't in the economic soup we are in then I might care but right now I want to get the economy, deficit and trade deficit back on track so the fact that E-loan gets greater efficiency from offshoring I consider to be secondary. In truth the most efficient use of capital is probably to have NO jobs here in the US except 3 executives anyway. Unfortunately hiring expensive US labor is just a cost of doing business here in my view. Remember what Larsen says, the 24 hour clock makes processing faster... well guess what he can hire a graveyard shift here too right?
As for what to do about outsourcing, I would get a good trade team and treat offshoring service jobs just like importing products. For example if the US doesn't have a valid trade agreement set up, don't allow offshoring there. Right now companies are offshoring to prisons in mongolia it seems like, its amazing, we need to put a stop to this. Then make jobs count in the trade deficit/surplus calculations, we need to track this. Buying labor in China with US dollars is the same as buying imported goods, if those goods are being produced for the US market. This way if a trade violation occurs, the companies that are offshoring are liable for tariffs on those salaries of the offshore workers. Some stuff like personal records needs to be outlawed from offshoring, and I support all those John Kerry disclosure laws. In the end if we still have huge service sector labor deficits with China we will have to put a stop to it just like when Reagan tariffed foreign cars from the US markets forcing them to manufacture here.
I really think the notion of offshore workers being subject to tariffs or fines based on trade policy, which is kindof a touchy area anyway, might make US companies leery about hiring key personnel offshore.
Message 19903235
A few comments:
1. If the U.S. economy is in bad shape, depriving companies of efficiencies strikes me as an odd way to attack the problem ("the fact that E-loan gets greater efficiency from offshoring I consider to be secondary"). If that's the objective, Senator Kerry should include the following line in his stump speech: "We need to get this economy moving again by making our businesses less efficient and more costly to operate!"
2. If hiring "expensive U.S. labor" is just a cost of doing business here, then why allow any imports? Why not force TV manufacturers to make their products here? Of course, at current wage and manufacturing cost levels, the average TV would cost around $800 instead of $400, and sales might go down (and thus the employment of the people who are involved in the sales and distribution of those TV sets), but hey, principles are principles. And those BMW's that our populace (including the author of that post) love to drive? Forget that. Slap a huge tariff on them, so that everyone can go back to buying American cars. Designer clothes? Not if they're from outside the U.S. And that Beatles' album in your collection? You should have paid a tariff on it, because the jobs that went into producing it landed in the UK, not here in the USA.
3. Many, many Americans work outside the U.S. Many others provide services to customers outside the U.S. If the U.S. starts tariffing labor movement, will countries just lie there and take it, or will they impose retaliatory tariffs, thus reducing such work for Americans? I don't think the answer to that is very difficult to figure out.
This economy is more like 1996 than 1932, as I pointed out yesterday. But impose a "solution" to outsourcing like the one above, and 1932 will be just around the corner. The words "Smoot Hawley" (the protectionist legislation passed in 1930 and widely thought to have exacerbated the Great Depression if not outright caused it) come to mind. |
