Once again another hot topic in the economy came up today. It had to do with an article on cnet regarding Intel keeping jobs and manufacturing in the US instead of sending our skills abroad. At least I read both sides of the argument before I posted in their forum. And I can say i don't have any absolute answers to the problem. This outsourcing phenomenon has intrigued me for a while now. Actually, when i was in college a couple of years ago I traveled over to bangalore. And let me tell you that there are huge buildings there from american companies like google, yahoo, apple, M$, IBM, oracle. Pretty much all of them are over there. The thing is not only a cost advantage (which is withering by the day if you didn't know) but also a huge pool of talent there. They have very smart programmers and engineers in that area. In fact, the Dravidians of southern india have long been famous for their science and mathematical skills.
Which brings us back over to the "good old" United States. Not everyone has the right set of skills to fill the demand for jobs from these companies. Also, they are not willing to work for the 1/3 of american standard pay for a programmer that exists in India (give or take a little). It still concerns me though because when someone says that we are moving our knowledge and manufacturing skills to another country they are absolutely correct.
However, I think the solution is creating new industries that cannot be easily outsourced to another country. We have to be clever. Furthermore, education cannot be second class anymore. Without education we are doomed. Education should be the #1 priority of any nation (government). I do not think that massive government policy will fix the problem. Though i do think that we should raise tarrifs on imports and keep it that way until the chinese stop devaluing their currency to create an artificial advantage. And you should sleep well at night knowing that the chinese cannot do this forever. Artificially devaluing your currency and government ownership of industry is not sustainable. Now there are some who complain about GM but they will not be government owned for long. I am still angry at the banks though. However, it should be noted that many of the banks have already paid back the TARP money because they wanted the government off their backs to begin with.
Education combined with moderate, sensible trade policy while creating new LOCAL (mostly non outsourcable) industries is the answer. If another country wants free access to the US then they will have to learn to play fair. Then I'll consider the idea of dropping the tariffs when they stop devaluing their currency on purpose and when their government sells off their banks and companies back to private ownership. Until then, the chinese or others wouldn't have a darn thing to complain about.
Companies, by the way, should not have individual rights as a person. This is nonsense and that ruling needs to investigated and reversed including visiting the supreme court on the issue if necessary.
What we need to do is have public outcry and push from the President which, essentially amounts to little more than xenophobia (which Indians engage in everyday of every year, for thousands of years) due to survival costs.
ReplyDeleteThe President needs to stand up and say: " We are going to make it here, regardless- And here is the tax-break, college-tuition break to make it happen. Oh yea, and if they Unionize and you try to move out of the country, we'll increase the import taxes such that your products are no longer competitive... Is that fascism? Sort-of.. But at this point, it's what we need to boost the credibility of American workers.
I agree with the import taxes and tariffs anyway. I have mixed feelings about unions. Sometimes they are very good and help people and other times they cause legitimate problems. It depends on the industry and how much power the unions have. In some cases it does offset some greed and mistreatment within an industry.
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