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Politics : THE VAST RIGHT WING CONSPIRACY -- Ignore unavailable to you. Want to Upgrade?


To: calgal who wrote (5105)12/30/2003 7:58:23 PM
From: calgal  Read Replies (1) | Respond to of 6358
 
The silver lining of outsourcing overseas
Bruce Bartlett (archive)

December 30, 2003 | Print | Send

URL:http://www.townhall.com/columnists/brucebartlett/bb20031230.shtml

Just before Christmas, workers at IBM got an early lump of coal in their stockings. The company announced plans to ship some 5,000 software-programming jobs to India.

Although the trend toward outsourcing or offshoring has been going on for some time, the IBM announcement got people's attention. New York Times columnist Bob Herbert complained that globalization is now forcing white-collar service workers to follow "the well-trodden path of their factory brethren to lower-wage work, or the unemployment line."

Ironically, much of the move toward offshoring is the result of ill-considered efforts to keep software jobs in the United States. Previously, companies had brought Indian programmers to this country to do their work under a program established in 1990. It provided these foreign workers with H-1B visas that allowed them to work here temporarily. But under pressure to save such jobs for the native-born, the number of visas allowed under this program was reduced from 195,000 to 65,000 in October.

So now, instead of having Indian workers come here, where they spent much of their earnings, companies are contracting with them to work in India, which is where they now spend their earnings. Rather than admit that they were wrong in the first place, the same people who demanded restrictions on foreign workers are trying to get new limits placed on outsourcing, as well. A new report from the National Foundation for American Policy (nfap.net) details this effort and the likely costs. These include higher taxes when laws are passed preventing state and local governments from utilizing cheaper foreign sources for information technology (IT) services.

Pressure is being placed on private companies, as well. Dell Computer and Lehman Brothers both recently announced that they were closing some of their Indian operations and bringing back jobs that were previously outsourced. Reuters reports that many big companies now resist admitting that they are even looking into outsourcing for fear of a political backlash. As a result, these companies may now be depriving investors of important information on their cost-cutting efforts.

The truth is that outsourcing is far less of a threat to American workers than they imagine, and there are significant benefits for the U.S. economy. For starters, there is not a one-for-one relationship between jobs lost here and those gained elsewhere from outsourcing. Boston University researcher Nitin Joglekar has found that outsourcing of IT services typically leads to domestic job losses of less than 20 percent. In other words, for every 100 jobs outsourced to India, only 20 are lost here.

A study by the McKinsey Global Institute found that workers freed up from routine tasks that have been outsourced are often redeployed within the company in projects generating greater value-added and jobs paying higher wages. It also found that companies engaging in outsourcing often established foreign subsidiaries that generate sales and profits for the home company. Adding it all up, McKinsey concluded that every $1 outsourced led to a gain for the United States as a whole of $1.12 to $1.14. The country where the outsourcing takes place captures just 33 cents of the total gain from outsourcing.

Even this greatly underestimates the gain to the United States from outsourcing because it doesn't fully account for the ways in which businesses will be able to improve the quality of their products and take advantage of new opportunities presented by outsourcing. A new study by Catherine Mann of the Institute for International Economics (iie.com) looks at some of these dynamic effects. She notes that globalization of computer hardware manufacturing led to a 10 percent to 30 percent decline in prices. This made such equipment more affordable and led to a far greater increase in jobs in the long run than were lost initially when production went abroad.

Mann believes that lower costs resulting from outsourcing of services will lead to comparable dynamic gains in the United States. She says globalization of IT services "will yield even stronger job demand in the United States for workers with IT proficiency and skills." Indeed, she notes that overall employment in job classifications most impacted by IT service outsourcing is in fact rising, not falling.

Other studies also find domestic benefits from outsourcing. For example, companies are able to provide round-the-clock service for their customers globally. They have also found that small firms and new startups gain more from outsourcing than large corporations. The latter have managerial structures that make it hard for them to take full advantage of outsourcing's benefits. Smaller companies and those just established can organize themselves more easily to utilize outsourcing and thereby gain sales and better compete in today's global marketplace.

I don't expect the protectionists and nativists to stop complaining about outsourcing. Nevertheless, the benefits to U.S. workers and the U.S. economy greatly outweigh the costs.

Bruce Bartlett is a senior fellow at the National Center for Policy Analysis, a Townhall.com member group.

©2003 Creators Syndicate, Inc.



To: calgal who wrote (5105)12/30/2003 8:36:23 PM
From: Lazarus_Long  Read Replies (1) | Respond to of 6358
 
Dispute in Michael Jackson Camp Over Role of the Nation of Islam
By SHARON WAXMAN

Published: December 30, 2003

LOS ANGELES, Dec. 29 — Officials from the Nation of Islam, a separatist African-American Muslim group, have moved in with Michael Jackson and are asserting control over the singer's business affairs, friends, employees and business associates of Mr. Jackson said.

Initially invited to the Neverland Ranch several weeks ago to provide security for Mr. Jackson, members of the Nation of Islam are now restricting access to him and have begun making decisions for him related to the news media, his business affairs and even his legal strategy, some of Mr. Jackson's friends and associates said. Mr. Jackson faces charges of child molesting in Santa Barbara and recently moved into a rented house in Los Angeles, where Nation of Islam officials have accompanied him.
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Efforts to reach Mr. Jackson through his spokesman were not sucessful, but his lawyer, Mark Geragos, and The Final Call, the Nation of Islam's newspaper, denied the claim.

Leonard Muhammad, chief of staff and son-in-law of the Nation of Islam leader Louis Farrakhan, now works out of the Los Angeles office of Mr. Geragos, Mr. Jackson's lawyer, the Jackson associates said. Mr. Muhammad stood behind Mr. Geragos during a recent televised news conference and, according to two of Mr. Jackson's employees who spoke on condition of anonymity, he participates in phone calls involving media and legal strategy.

Mr. Jackson's official spokesman, Stuart Backerman, resigned on Monday to protest the Nation of Islam's presence, said a colleague of Mr. Backerman, who could not be reached for comment on Monday.

The employees said they spoke out because they are concerned about Mr. Jackson's welfare and because his multicultural message was at odds with the group's philosophy of black separatism. The Nation of Islam is a small group that advocates black self-empowerment and a separate African-American state, and some of its leaders have espoused anti-Semitic, anti-gay and racist rhetoric. Mr. Jackson is not Muslim nor a member of the Nation of Islam.

"The Nation of Islam and Louis Farrakhan's son-in-law have taken over completely and are in full and total charge," said one senior Jackson employee, speaking on condition of anonymity. "They have gone in and taken over control of the finances in terms of who's getting paid, how much," the employee added. "They're approving all funds and have decided they have control of the business manager and accountant, without signing authority or power of attorney. They are working out of Geragos's office; in essence they're telling him what to do."

A business associate of Mr. Jackson who was accustomed to speaking to the singer daily said there were about a half-dozen Nation of Islam members around the singer constantly, whether at Neverland or in Los Angeles. "These people are basically brainwashing him," said the associate, who is also a friend of Mr. Jackson's. "They tried to do the same thing to Whitney Houston. They offer a false sense that they can control everything. Everyone is scared of them. They pretty much keep Michael semi-captive."

Another Jackson employee said: "They're negotiating business deals with him. They're negotiating media deals, who can talk, how much. You've got a lawyer who's scared to throw them out. Michael doesn't know what to do with them."

The employees said Mr. Geragos and Mr. Muhammad together negotiated an interview of Mr. Jackson by the CBS program "60 Minutes," which was shown on Sunday, in exchange for an agreement by the network to broadcast a still-incomplete Michael Jackson special, for which Mr. Jackson would be paid $5 million.

The interview was negotiated last week by Les Moonves, chief executive of CBS, over the objections of Jackson advisers who said they thought it was a bad idea to put Mr. Jackson on television while he faced felony charges.

In response to inquiries on Monday a statement issued by The Final Call said that the Nation of Islam "has no official business or professional relationship with Mr. Michael Jackson." The statement added, "The Nation of Islam joins thousands of other people in wishing him well."

In a telephone interview on Monday Mr. Geragos denied that the Nation of Islam was running Mr. Jackson's affairs. "The idea that there is some takeover by the Nation of Islam — someone is spinning you," he said. "Nobody has told me what to do and what not to do. Leonard, I believe, is someone Michael consults with, just like in excess of 25 people."
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Mr. Geragos said that members of Mr. Jackson's security detail were Muslim but that that did not mean they belonged to the Nation of Islam. Mr. Geragos said that he felt these accusations of Nation of Islam control have originated with the Santa Barbara district attorney's office, which is "playing the race card," he said.

But a half-dozen people from Mr. Jackson's inner circle, some speaking on condition of anonymity, said they had not been able to talk to the star in weeks and laughed at the notion that the district attorney was the source of their own comments.

Mr. Jackson's main business partners, Dieter Wiesner and Ronald Konitzer, said that they had been unable to get to Mr. Jackson for the last two weeks. "These are difficult times," Mr. Konitzer said in a phone interview. "My concern is the business side. I would like to get back to business." Asked if he were being pushed out by the Nation of Islam, Mr. Konitzer said: "I don't want to comment on that one." Others who are said not to be able to contact Mr. Jackson include Mr. Backerman and Mark Schaffel, one of Mr. Jackson's business associates, who could not be reached for comment.

Despite the concern of Jackson employees about the CBS interview, Mr. Geragos said Mr. Jackson himself decided to give the interview, and that it was not unusual for high-profile figures awaiting trial to speak to the media. "Michael wanted to make a statement, his fans wanted him to," Mr. Geragos said. "People are extremely interested." Mr. Muhammad was present briefly during the interview, Mr. Geragos said.

In the interview Mr. Jackson again confirmed that he enjoyed sleeping with children, though not in a sexual way. "Of course — why not?" he said when asked about it. "If you're going to be a pedophile, if you're going to be Jack the Ripper, if you're going to be a murderer, it's not a good idea. That I am not." He also accused the police of brutality in handcuffing him and humiliated him by locking him in a bathroom smeared with feces during his arrest.

Eyewitnesses said that Mr. Jackson was guarded by Nation of Islam security at a party at Neverland on the Saturday before Christmas. He was not permitted to leave his main house because of alleged security risks that day, nor in the two days after the party, they said.

"Security told him the premises was not secure, they'd rather have him back in the house," said a friend of Mr. Jackson who was a guest at the party, speaking on condition of anonymity. "I felt like Michael was a prisoner in his own house. The bottom line is: what kind of security do you need in your own home?"

Meanwhile Mr. Jackson has rented a house in downtown Los Angeles, where he is also accompanied by Nation of Islam security. He told "60 Minutes" he considered Neverland tainted because of the police search.

The motives of Mr. Muhammad and the Nation of Islam are not clear. The group, which believes in black pride and racial separation, has not supported Mr. Jackson in the past; Mr. Jackson has undergone extensive cosmetic surgery and his children appear to be Caucasian.

But some would consider gaining Mr. Jackson as a follower or proponent of the tiny group, which numbers about 20,000, to be a huge coup. Mr. Jackson's now-shunned advisors say they fear the Nation of Islam intends to use Mr. Jackson's celebrity to increase its visibility and make money off the star and that Mr. Jackson is too naïve to suspect otherwise.

Mr. Jackson was introduced to the Nation of Islam through his nanny, Grace Rwarmba, who is a member of the group, and through Mr. Jackson's brother Jermaine, several people close to Mr. Jackson said. The pop star met Mr. Farrakhan in Las Vegas last month, and the Nation of Islam leader "talked like a father to him," said someone present at the meeting. "They prayed together." Around Thanksgiving Mr. Muhammad moved up to Neverland and is said to have begun asserting control.

Mr. Farrakhan has called Judaism a "gutter religion" and as recently as November gave a speech in which he called Jews the "masters of Hollywood" who feed "the minds of the American people and the people of the world filth and indecency."

nytimes.com