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2010-10-18 Home Front: Politix

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Posted by Fred 2010-10-18 00:00|| || Front Page|| [11126 views ] Top

#1 I know a local company that just hired over 20 people. All of them with college degrees in science and engineering ... in Estonia.

It was cheaper to create an office from scratch there than it was to hire 20 locals to do the same job.

Posted by crosspatch 2010-10-18 00:22|| 2010-10-18 00:22|| Front Page Top

#2 Its typical. Ericsson in Boulder a month ago dumped 150 Telecommunication engineering jobs when they close their R&D Center in Boulder and sent the jobs to Shanghai and Budapest. That screwed the entire area - you don't dump 14 million or so in salary in just 90 days and not have an impact. (Note: I know of this because I have a friend who got caught up in that, he will be unemployed come Thanksgiving, and a gaming acquaintance who will be unemployed Jan 1).

These are jobs that are gone and not coming back. It was sort of like they said "Thanks for inventing 4G, now get lost while we hire cheap Chinese to maintain what you invented".

Moving R&D to Shanghai? They're just asking to have their intellectual property stolen.

Posted by OldSpook 2010-10-18 08:15|| 2010-10-18 08:15|| Front Page Top

#3 In 1994, when GATT was passed, Sir James Goldsmith said the ratio of the cheapest labor to first world labor was 47:1.

So with the fall in the first world standard of living, we have made a great deal of progress in matching low overseas labor costs, by getting to 20:1. Our society has been gutted by globalization, and we are now really feeling the pain.
Obama's proposal is a band-aid compared to what really needs to be done. Knowing B.O., what he proposes is most likely (1) irrelevant and/or (2) counterproductive, as are most of the goals he pursues.

Posted by Anguper Hupomosing9418 2010-10-18 08:24|| 2010-10-18 08:24|| Front Page Top

#4 Agree with you, AH. Globalization of labor markets is inevitable. But you correctly nail the political class in this country which:

a. lacks the stones to be honest about what's coming (or is actually here!) and

b. has no ideas at hand to make the ongoing transition as smooth and painless as possible (knowing that there must be some pain).

We are extremely ill-served by our politicians on this subject, who have, as I've said on the 'burg many times before, known about the coming globalization of labor and its ultimate effects on the income and the psyche of the American public for decades, and have either kicked the can down the road or have tried to transition to globalization by doing incredibly stupid and ineffective things like looking the other way on illegal immigration.

The only thing that will actually work in terms of getting us through this is a back-to-the-future move - a redefinition of the material expectations of American (and, to be frank, all Westerners) that is in line with the actual value of their labor in a global market. It won't be easy under any circumstances but with the current troupe of clowns in charge it will be nigh on impossible.

While we're at it, a recapture of the ability to derive joy from life without always having that joy derive from material goods and their acquisition would do a lot of good, too. Again, our fearless leaders don't even have the brains or stones to have any kind of discussion about it.

Posted by no mo uro 2010-10-18 09:43|| 2010-10-18 09:43|| Front Page Top

#5 "Globalization of labor markets is inevitable."

Not so.

Stresses have and will build up and then wait for war to break out. I believe that was what happened in the last century also. Somehow things will be different this time around? China and Japan look interesting right now. Who's going to be the spark? .

Then watch how fast these corporations try to bring back their operations to the US and protection. It's going to be funny to watch them try and bring back their plants and technology from China and other such countries when China won't let them go.

Even a second American revolution is possible at some point. We don't have to let cargo ships and planes fly cheaply, they're very polluting after all, and we don't have to let corporations play hide and seek with their taxes in their overseas operations.

Stupid is as stupid does.

If somehow war doesn't break out...which is a very low probability...count the US as on the ash heap of history.

Posted by Black Charlie Chinemble5313 2010-10-18 11:04|| 2010-10-18 11:04|| Front Page Top

#6 I don't understand completely the dynamics of globalization in detail, but I know there is something wrong when everywhere I look I see Americans work for US companies, bouncing from job to job because they keep getting laid off and work being sent to India or China.

These US companies are basically getting resources for free (cost savings), they should pay a higher fee for what America is losing, at least in some industries where this abuse is higher.

I'd love to see quality products that said Made in America again.

Posted by Uleger Barnsmell4617 2010-10-18 11:24|| 2010-10-18 11:24|| Front Page Top

#7 Make no mistake, there are currently no rewards or tax loopholes for foreign subsidiaries of U.S. companies. Thats typical liberal-speak for wanting to add $92 million in new taxes. Longstanding tax policy grants U.S. companies deferment from paying tax on income earned by their foreign subsidiaries until that income is brought to the States. The logic is quite simple. The host government has already taxed that money. What Obama and the liberals are proposing is a double taxation money grab. Ironicly, there is absolutly no proof that such a scheme would create domestic jobs. But there is ample evidence to suggest that such a policy would unfairly hinder competitiveness and actually result in the loss of jobs.
Share the wealth baby.

Posted by DepotGuy 2010-10-18 11:39|| 2010-10-18 11:39|| Front Page Top

#8 If all a company cares for is sending jobs to improbable locations like Estonia, because it is cheaper then the decision makers in that only allegiance is to money. "I pledge allegiance to the money. One dollar less an hour per worker with no God, and for the immorality for which it stands."
If ones only allegiance is to money, than the allegiances can change. Bad juju and unamerican.

Posted by PrivateEye 2010-10-18 11:45|| 2010-10-18 11:45|| Front Page Top

#9 Obama to discourage ~~overseas~~ hiring.

FIFT

Posted by charger 2010-10-18 12:06|| 2010-10-18 12:06|| Front Page Top

#10 "Make no mistake, there are currently no rewards or tax loopholes for foreign subsidiaries of U.S. companies."

I don't agree with that. They'll just never bring the earnings back over here. Why should the foreign countries get all the tax receipts and we're just supposed to supply all the benefits such as security and a stable environment to these entities?

And how about the offshored financial industry. You think there's no tax dodging going on there? How very naive.

I say we start letting companies doing business overseas start getting their defense and security from the countries receiving the taxes. Ireland and the Cayman Islands can provide international military security to the world. They can pay their fair share, seeing as we can't afford it anymore. If you haven't noticed we're bankrupt.

The only people we're spreading the wealth to is a bunch of international bankers and corporate CEOs who are quite indifferent as to their allegiances and don't believe in spreading the wealth. They want the benefit of the United States without paying for it.

Posted by Black Charlie Chinemble5313 2010-10-18 12:07|| 2010-10-18 12:07|| Front Page Top

#11 If ones only allegiance is to money, than the allegiances can change. Bad juju and unamerican.

Baloney! Private enterprise has no obligations for the health of an economy. Their primary allegiance must be their bottom line. In fact, by law corporations must always first consider their shareholders when making core decisions. Its called Capitalism. It may not always be perfect but at least this system allows for innovation and consumer choice. And remember, self-interest doesnt always equate to greed.

Posted by DepotGuy 2010-10-18 12:34|| 2010-10-18 12:34|| Front Page Top

#12 by law corporations must always first consider their shareholders when making core decisions. It's called Capitalism By the way, who made the laws that created corporations?

Posted by Anguper Hupomosing9418 2010-10-18 12:37|| 2010-10-18 12:37|| Front Page Top

#13 People who are stockholders in the companies moving jobs overseas to save money might think a little differently from most of the opinions expressed here.

Particularly if they're depending on decent dividends from those companies to fund their retirements.

Just sayin'.

Posted by Barbara Skolaut 2010-10-18 12:42|| 2010-10-18 12:42|| Front Page Top

#14 Pulling out stick and dead horse.

You know that if instead of the Big Bailout, we'd just recharter Hamilton's First Bank of the United States, and instead absorbed the financial institutions rather than take the loses and sold the holdings, corporations looking for credit lines would have to get those new host country governments to compete dollar for dollar for those jobs and business instead of such a bank. The bank was originally intended to help American industry and business. A recharter bank today would be sitting not only on the losses passed on to the taxpayer, but also the assets which would in shear volume dwarf what most other countries could even dream of enticing industry. However, several major institution would have already been folded in to such a entity [without the bonuses for the upper management], so they found it cheaper to used their well bought and paid for congresscritter to look out for their bottomline rather than the bottomline of the American people. And so a big leverage to discourage such behaviors of moving jobs and industry overseas has been surrendered.

Posted by Procopius2k 2010-10-18 12:42|| 2010-10-18 12:42|| Front Page Top

#15 People who are stockholders in the companies moving jobs overseas to save money might think a little differently from most of the opinions expressed here.

Particularly if they're depending on decent dividends from those companies to fund their retirements.

Back in the good old days of 2007 I used to be a stockholder. Sold out when I figured out that whatever dividends any company's CEO's were going to pay wouldn't cover either my shareholder risk nor my retirement. Corporate profits by and large go to corporate insiders. Shareholders will become bagholders (if they aren't already).

Posted by Anguper Hupomosing9418 2010-10-18 12:48|| 2010-10-18 12:48|| Front Page Top

#16 Higher Government Taxes.

Higher Government Mandeted Healthcare Costs.

Over-reaching City, State and Federal Regulations on Businesses.

All the Above will cause Inflation and zero profits.

Get a grip voters!

And Then the Top Government Tyrant In Charge Demands US Businesses Don't Go For Cheaper Labor Environments Overseas...

Posted by Angock Untervehr3829 2010-10-18 12:49|| 2010-10-18 12:49|| Front Page Top

#17 I still see H1-B indentured servitude so... Obama is not discouraging it.

Posted by Water Modem 2010-10-18 13:41|| 2010-10-18 13:41|| Front Page Top

#18 Oh, and Depot Man.... should a French Revolution come to the US... I have to say that Madam Defarge's job looks like it has at least a 10 year job security. Her position will be a popular one.

Posted by Water Modem 2010-10-18 13:43|| 2010-10-18 13:43|| Front Page Top

#19 As a nation, we're going to work this out. Because if we don't we'll have a whole nation of happy shareholders, more unemployed than employed, and an idiocracy rife for a dictatorial regime to take over. Wait, nevermind. Remember CEO and business folks, you still work for us, if you don't move house and leave the U.S. USA love it or leave it, but don't pretend...

Posted by Private Eye 2010-10-18 14:00|| 2010-10-18 14:00|| Front Page Top

#20 #19 PE

"Remember CEO and business folks, you still work for us"

Who is "us", exactly? Are you saying that the people in charge of businesses work for the employees, or the apparatus of state?

THAT only happens in a dictatorial regime.

CEO's work for their businesses, as do owners of small businesses like myself. I do NOT work for my employees or the public at large or for the apparatus of state. I am not some host which you can parasitize. And you do not dictate to me how to run my business in order that it maximally benefits you instead of me.

Directing politicians to change the law to force your businessman neighbor (through whatever means - tariffs, increased taxes, or direct mandate) to provide you a job and pay you a lot more than he would have to pay someone else is thuggish tyranny. It would be no different than if he and his peers passed a law to force you to take a huge pay cut so that he could keep more of his business' profits.

Your contention is an evil and un-American one. I don't work for you, pal. And with that attitude, you can be damn sure you'll never work for me.

Posted by no mo uro 2010-10-18 14:30|| 2010-10-18 14:30|| Front Page Top

#21 So you honestly believe that businesses owe nothing to the country that they operate in? Is that correct? Sounds a bit like a little dictatoship micro country to me. If you're a CEO, and you run a company, your business is your creation. So your creation doesn't owe it's success to the country and resources around it? It boggles the mind. And btw, I wouldn't want to work for you either, let alone apply.

Posted by Private Eye 2010-10-18 14:44|| 2010-10-18 14:44|| Front Page Top

#22 Ah, and now the tune changes......

Owing something to the country in which I operate (a concept I happen to agree upon, within reason) is very, very different than saying that I work for you, PE.

You've now backpedalled considerably. Which is your true notion, then, your first comment, or the next? I've found that the first words spoken in haste and emotion represent the true thoughts of the speaker. I'm guessing that's the case here.

Why do you think my first obligation as a businessman is to provide you with work, income stream security, and a lifestyle that YOU think you deserve?

For the record, my employees tend to stay around a long, long time, and I'm known for being very good and fair to them. And you know what? They're very good and fair to me. They don't show up with an attitude that I owe them something beyond what's fair for their skill level and performance. Or that my life's work is to guarantee their income stream instead of fulfill the mission of my business. Or that I exist to "work for them", as you seem to believe.

You'd be lucky to work for a business like mine. But with the chip you have on your shoulder, you wouldn't be all that productive.

Posted by no mo uro 2010-10-18 14:55|| 2010-10-18 14:55|| Front Page Top

#23 "I am not some host which you can parasitize. And you do not dictate to me how to run my business in order that it maximally benefits you instead of me. "

Well, job creation is dependent on businesses hiring. Wherever did you get the notion that employees are parasites? You clearly have managerial issues that are beyond the scope of this argument if you view employee as mere parasites. Hmm, if you were a dairy cow milk producer, would you view your cows and milkers as parasites? If so, feel free to go milk each cow yourself and claim yourself parasite free.

As for jobs, I have one. Here is the rub. We have a national identity, too. If you have no desire or interest in keeping America great, and your larger goal is sheerly fiscal, feel free to move anywhere on the globe you want and get your cheapest labor possible. If you merely want to predate off cheap labor, and thinly maintain a presence here in the US, well, I urge you to come out from behind the curtain and looking glass world of fantasy and admit that your allegiance is elsewhere, business or no business. P.S. I have had two businesses of my own, sole proprietorships, so you can drop the CEO to idiot serf schtick you seem to be leaning on.

Posted by Private Eye 2010-10-18 15:07|| 2010-10-18 15:07|| Front Page Top

#24 That was 'benefit from' not predate. Apologies.

Posted by Private Eye 2010-10-18 15:25|| 2010-10-18 15:25|| Front Page Top

#25 P.S.

It is precisely because of the chip on my shoulder that I am very productive and also able to run my show and boss others around to achieve results. I guess us non-docile folks can't please everyone. Well, toodles.

Posted by Private Eye 2010-10-18 15:37|| 2010-10-18 15:37|| Front Page Top

#26 In related news...

October 16, 2010

Machinist Union rejects Hawker/Beechcraft governor backed proposal. HBC likely to leave Wichita, KS.

http://www.ksn.com/news/local/story/Machinists-reject-Hawker-Beechcraft-contract/g4MrWtSaMUuoSBMVHSolRA.cspx

Posted by swksvolFF 2010-10-18 16:00|| 2010-10-18 16:00|| Front Page Top

#27 Afraid his job will be outsourced to India?

Posted by g(r)omgoru 2010-10-18 16:04|| 2010-10-18 16:04|| Front Page Top

#28 What part of "owing something to the country is something I agree with" did you not get? Take a deep breath and clear your emotions and listen and think. Please!

PE, seeing as all my business and employees are here in the U.S., with no plans to move, I guess a few of your premises about me are incorrect.

If you perceive me as "talking down to you" from the polite and logical stream I've pursued, that tells me a great deal more about your personal issues and personality than it does about anything else.

Is "non-docile" the same as "violent"?

I did not say my employees were parasites, or that employees in general are. Nice bit of casuistry and projection on your part. (Law degree, perhaps?) In any business, there is give and take. I am acutely aware of that. It's not give and give, as you seem to think.

And these:

"It is precisely because of the chip on my shoulder that I am very productive"

"boss others around to achieve results"

well, I must admit you finally gave me a chuckle. I'm sure the Easter Bunny and Kris Kringle are real in your world, as well. If you had any understanding of business at all, you'd know that the notion of "bossing others around" as a description of management is a construct in the mind of the perpetually disgruntled worker, and bears no resemblance to the way real management occurs.

But let's for the sake of argument say your premise regarding keeping jobs here is correct - that a business which has the option of moving some labor overseas to effect huge savings on cost must be forced by government to forego that and sacrifice whatever it must in order to keep the jobs here or they are some terrible, un-American thing.

OK, tough guy, what are YOU, as an employee, going to sacrifice, in terms of pay, hours, benefits, security, etc? And what is the moral basis for putting ALL the sacrifice onto the employer?

Does historical context for income and standard of living have any bearing on where we are now and where we are headed (I don't mean just going back to the post-war era, but going back throughout the country's history)?

Posted by no mo uro 2010-10-18 16:11|| 2010-10-18 16:11|| Front Page Top

#29 I had a Sole proprietorship, so was a company of one. The first one failed the second venture lasted 3 years. After that I managed young twenties people, and served a diverse population. In the management position was very much about bossing. I'm not sure what the way forward is, but most people who have jobs or want jobs value achievement, even at entry levels. I think workers should be offered a chance to take a pay cut by management before their jobs are uprooted and outsourced abroad. I do not know if that option is offtered enough. Also, hiring illegals to supplant citizens is clearly a no no.

Posted by PrivateEye 2010-10-18 16:37|| 2010-10-18 16:37|| Front Page Top

#30 There's a huge problem overlooked by the idea of Chartering "Hamilton's Bank".
Having only ONE bank amounts to Tyranny, they tell YOU what to do, if they don't like your idea, You DON'T get a loan, no loan, no business.
Plus they can rais rates at whim (Yes I know banks are already doing that) but think.
What do you do when ther's NO other source?

Posted by Redneck Jim 2010-10-18 16:55|| 2010-10-18 16:55|| Front Page Top

#31 PE, post #29 is exactly the kind of constructive thing I was looking for.

Some excellent ideas...I pretty much agree with everything in it. Especially the part about not hiring illegals.

I am truly sorry that your first ventures didn't work out, and that you were exposed to management in a way that it was presented as "bossing around" in your second venture. I've had my business for nearly 25 years and worked for successful outfits prior to that, and although there was always a hierarchy, "bossing around" was not their management style (or mine).

As far as offering people a pay cut to save jobs, it has been my experience that management does in fact offer this often, but that employees (particularly senior ones and especially in union shops) are almost never receptive. It's too bad, because this could save a lot of jobs and keep them here.

Good post.

Posted by no mo uro 2010-10-18 16:59|| 2010-10-18 16:59|| Front Page Top

#32 Having your own business is its own kind of crazy. Whether that ends up being good crazy or bad, just varies according to outcomes. They didn't call the store "Crazy Eddies" for nothing before it went out of business. The Donald wouldn't be the Donald without the help of a team of bankruptcy lawyers and a comeback. That is what we need here in the U.S. We need a comeback, a win, because we've been on a losing streak money-wise for awhile, too long, it seems. The crazy eddies of the world who want to keep their business lucrative and keep jobs here (those are the good kind) need to make some adjustments and offers the rest of us can't understand. And sometimes telling a worker, ya know, its a two dollar (etc) hour paycut or Arto and Achmed are having your job might cut it. Labor and seniors positions who aren't receptive, not much to be done but replace. Its the up and comers Im worried about who will bust tail to keep a job, they may be getting shortchanged. It would be interesting to know exactly, what is done before sending non union or lower echelon jobs overseas. The data would tell the real story.

Posted by Private Eye 2010-10-18 17:59|| 2010-10-18 17:59|| Front Page Top

#33 What do you do when ther's NO other source?

The Hamiltonian bank wouldn't be the only bank. Even in Hamilton's time it was not a monopoly but competed with state chartered banks and private ventures. Read again, it would be composed of those financial institutions that had failed and rather be liquidated for the benefit of other institutions, its losses and assets would have been retained. Banks and institutions who's house was in order would still be able to provide lending and commercial products at their own risk. If they were efficient and effective, the market will reward them. However, they couldn't play the middle man by borrowing from the central bank to then allow those monies to be utilized by business that was directly in competition with American interests.

Posted by Procopius2k 2010-10-18 18:29|| 2010-10-18 18:29|| Front Page Top

#34 Obama to discourage overseas hiring

So he's eliminating the H-1B and L1 visa programs? No? Then it's more meaningless posturing.

Posted by DMFD 2010-10-18 18:32|| 2010-10-18 18:32|| Front Page Top

#35 I seem to recall W lowered overseas taxes to around 5% and the money flooded in, more than they thought.

Posted by anonymous2u 2010-10-18 19:31|| 2010-10-18 19:31|| Front Page Top

#36 Take a pay cut or lose your jobs? At the largest American companies, like Mr. Wife's, it's been "take a pay cut and downsize". In his last assignment, he accepted the pay cut and then downsized himself to keep one more of his people on the payroll. Thank goodness another division in the company decided to pick him up, but he didn't know that when he submitted the plan.

Yes, he's one of my heroes. And his company is one of those that actually makes things here. Also elsewhere in the world -- once they establish a solid market in a region, they stop importing product and open factories locally to reduce their overhead.

There was the other division which moved to Puerto Rico, but the American employees were offered the opportunity to be moved to PR and go local instead of losing their jobs. Some chose that opportunity, others chose to try their luck finding a new job here.

Mr. Wife's brother-in-law is another of of my heroes. A former navy radar guy (I'm not sure what the title for that is, sorry), he owns a heating and air conditioning company, which he's significantly grown since he bought it over two decades ago. In these difficult times he's had to downsize his payroll, but he's not taking much for himself until business picks up again. His wife has worked for the VA for years to provide the family with health insurance, because his company can't afford health insurance for the employees... or for his own family.

Contrary to the reportage of nasty, horrid American companies, most managers and owners work hard to keep as many of their people employed in bad times as is consonant with the company not going bankrupt.

Posted by trailing wife 2010-10-18 21:39|| 2010-10-18 21:39|| Front Page Top

#37 The US has allowed financial firms to asset strip and plunder this country since I was in high school in the seventies. I never understood why our politicians allowed it, why should someone be able to strip all the assets out of a company for themselves just because they had access to leveraged loans? These firms didn't even do the hard work to develop the firm with sound, non-leveraged financial statements, they just got a gang together with enough borrowed money to steal it from the original owners, management and employees. They stole other people's hard work, assets, and livelihoods.

And we, stupid people and venal politicians, allow them to do it. With no penalty. In fact, we give them trillions for the pleasure of gambling away our country so they can be richer than their wildest imaginings.

Posted by Black Charlie Chinemble5313 2010-10-18 22:39|| 2010-10-18 22:39|| Front Page Top

#38 I never understood why our politicians allowed it,

Just call me a cynic, but a little checking of campaign contributions not just to the individual pol, but to the parties also should explain why they allow it. That applies both sides of the aisle. I believe the banks that made out best in the bailout were those who had the highest contributions, thus the best investment they made in the last 10 years.

Posted by Procopius2k 2010-10-18 23:36|| 2010-10-18 23:36|| Front Page Top

#39 I like this thread...

1. Tax companies for the profits they earn by outsourcing jobs. This pays for the unemployment compensation as entire service sectors are lost.
2. Raise the import taxes on cheap labor trinkets and license the dealers of same to assure safe merchandise.
3. Reinstitute the build American buy American propaganda machine.
4. Expand the Drug Use as Terrorism motif. Reintroduce capital punishment to providers. Tax the consumers.
5. Reduce academic scholarships that favor foreign interests over American interests. This is a generational war.
6. Incentivize industry to support "Return-to-Work" study programs for the unemployed. This can reduce the taxes from #1.
7. Reduce/eliminate money for weapons as foreign aid.
8. Audit and publish the practices of the IMF. Why support building foreign infrastructure when our own bridges are failing?
9. Reduce greenhouse gasses and dependency on foreign oil by establishing a real telecommunications program which supports 'work-at-home' initiatives to reduce commuting.
10. Vote out the long term career incumbants that allowed this to happen.

Did I hit them all...?

Posted by Skidmark 2010-10-18 23:46|| 2010-10-18 23:46|| Front Page Top

23:59 newc
23:46 Skidmark
23:43 anymouse
23:38 Procopius2k
23:36 Procopius2k
23:19 anon1
23:14 Pappy
23:13 OldSpook
22:39 Black Charlie Chinemble5313
22:13 Nero
22:13 DarthVader
21:54 trailing wife
21:47 trailing wife
21:39 Throns Ebbeque9685
21:39 trailing wife
21:14 Swamp Blondie
21:10 JosephMendiola
21:06 JosephMendiola
21:02 borgboy
20:59 JosephMendiola
20:55 JosephMendiola
20:45 Old Patriot
20:44 JosephMendiola
20:37 JosephMendiola