Re: Interesting


"mg" <mgkelson@xxxxxxxxx> wrote in message
news:1187542081.907628.29380@xxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
On Aug 19, 7:45 am, Alan Lichtenstein <a...@xxxxxxxxxx> wrote:
mg wrote:
On Aug 18, 8:02 am, "Jerry Okamura" <okamuraj...@xxxxxxxxxxxxx> wrote:

I posted a mesaage with a very simple question concerning outsourcing.
I
asked, what kinds of jobs can be outsourced. I received zero replies.
Now
it just seems to me those who think that the boogie man is outsourcing,
should know or want to know the answer to that question....

My economic philosophy about wealthy nations is that wealth is like
water or gravity, for instance. Given enough time wealth will equalize
to every single nook and cranny of the earth. Or, put another way,
what goes up must come down and eventually the wealth of the other
nations in the world will go up and the U.S. wealth will come down.

I enjoyed all your comments, Alan. It's good to see someone else
taking a comprehensive view.

Actually, we are not becoming poorer if aggregate growth and economies
are taken into consideration. Actually what you mean to say is the
average AMERICAN( usually one who works for a living instead of
investing for a living) is becoming poorer. A very different thing.

True. In taking a second look at this issue, I can see some
complicated issues. How do you define the wealth of a nation? I don't
think you can simply use GDP or GDP per capita. It's more complicated
than that. Does a rising tide raise all boats? Historically, I think
it has, but intuitively I believe we will reach a point where it's a
zero sum game. Does the distribution of the wealth on this planet
matter? If one person owned 99% of the wealth and the remaining 6.6
billion people owned 1%, obviously it would matter to the 6.6 billion.
What is the ultimate source of wealth? My guess is that it's natural
resources and they are all finite.

A couple of thoughts:

The "gravity" analogy is apropos. I think of it in terms of "osmosis." The
US is the bucket where money is concentrated in the highest osmotic
pressure, and over time, it inevitably passes through those semipermeable
membranes (borders) to areas of lower concentration. This is inevitable,
IMO.

The question is not *if* the US standard of living will come down in
relative terms -- it will -- but if it actually does decline, or simply
remains stable in the face of rising standards of living elsewhere.
Personally (and somewhat contradictorily) I believe that globalization
increase the chances that it remains stable as opposed to shrinking.

Measurement of standard of living is generally in terms of "basket of
goods". What does every person in America purchase every day, week, month,
and how much does it cost relative to the *median* income. Statistics like
this are hard to calculate, and thus are hard to find. Obviously, the
"basket" contains food, clothing, taxes, medical care, shelter, utilities,
transportation, and the like -- doesn't matter if you're working minimum
wage or you're Warren Buffet, you pay these things. By my way of thinking,
the lower the % of your income that you spend on your basket of necessities,
the higher is your disposable, and thus the standard of living.

It's a foregone conclusion that the world cannot support 6.6B consuming like
Americans consume. Stay tuned for contention for resources.....

The only issue that it makes sense to argue about is how we handle the
transition the U.S. is going to go through on its painful journey to
becoming a poorer nation. Opinions on how we handle the transition
will vary depending on one's ideology and one's sense of fairness and
morality, etc., and ones ability to face the facts and reality.

We are not handling it. The so-called 'free market' is supporting our
standard of living, which has moved from productivity to credit, simply
because we still have the markets to support THEIR growth. Once their
markets are sufficiently large and prosperous enough, the United States
will no longer be necessary, and that will have serious effects on our
standard of living. Based on current circumstances, I estimate we have
between 15-30 years left.

It's true. We are not handling it. By the time we do decide to handle
it, middle-class prosperity will be just a memory that our children
read about in the history books. I suspect that addressing the problem
long term would involve population reduction and husbanding our
natural resources.

That's still productivity. We can't maintain our infrastructure and
businesses with less people than we have. If we reduce population (and most
Western nations and China are) we reduce businesses ability to provide the
standard of living, so SOL (heh) and population decline in tandem, UNLESS
productivity increases.

Make no mistake about it, however. There are still tremendous productivity
gains to be had from streamlining business operations. More to come.

The simple fact is that we have a world economy as far as capital is
concerned, but we still lack a world economy as far as labor is
concerned. The way in which we need to handle it, is to level the
playing field for labor, NOW while we still can use our markets as
leverage. That can be done by removing restrictions on labor to
organize, as well as any governmental regulations which restrict labor
in one place as compared to another. Unfortunately, that might mean we
may have to allow wetbacks to immigrate here, but to remove
right-to-work laws, which are blatantly anti-labor.

I agree with all that as temporary measures to ease the transition,
but I don't think those measure alone will solve the problem in the
long term.

I personally believe that a legitimate function of our government is
to ease the transition for it's citizens and to do so in a fair and
equitable manner. On the other hand, I don't believe a legitimate
function of our government is to maintain a policy of denial in order
to pander to its citizens by running up massive deficits and
continuing to maintain the illusion of well being and, therefore,
making the situation worse for our children.

Exactly how do you propose to do that?

I would support the measures you mentioned previously along with a tax
system that recognized that labor is the injured party with
globalization. In addition, some of my recommendations listed below
address this issue.

I believe that during the inevitable transition, citizens need to be
wise and they need to be vigilant in recognizing propaganda to insure
that dishonest politicians don't take advantage of the situation by
either morphing America into a socialistic system or a fascist system.

But that's what's going to happen. It is irrational for citizens to
accept the fact that their standard of living is actually declining.
Who in his/her right mind would take that lying down?

As the pain increases the motivation to find a scapegoat will also
increase. The left will blame the right and right will blame the left
and we will attack other countries for their natural resources. Wealth
will become even more concentrated and ultimately some sort of radical
government will emerge.

That's gloomy. I believe a new phase of productivity and technological
improvements will be the solution (remember, this isn't the first time since
the Industrial Revolution that people were predicting the decline of
standards of living. The pain of decline stimulates another generation to
search for solutions, which they inevitably find.

I believe we should insist on some common sense fairness during the
transition. Here are just a few examples that come to mind:

1. People working in free-enterprise, private-industry jobs should
make more money than those with government jobs to reflect the extra
degree of job-security risk private industry workers face.

That would put what few manufacturing industries we have right out of
business, unless they can level the playing field for labor across
national boundaries. Do you believe that is likely to happen?

I was thinking of a decrease in government wages relative to private
industry wages rather than vice-versa. I believe we should attempt to
level the playing field to assist workers with the transition, but
it's only a temporary solution.

I'd agree. To do that, you'd have to bust the goverment workers unions. How?

2. Displaced workers should be given generous assistance in retraining
and not just for jobs that require a quickie, associate degree, but
for jobs that require university degrees also.

In what industries? If we had jobs for these workers, our economy would
be expanding, not shrinking, as the circumstances you suggest would
indicate.

I remember when I worked at a steel plant that was closing a couple of
lifetimes ago, displaced workers were attending the local trade
school. The standard joke was about a pipefitter and a welder who ran
into each other between classes. Each one was extolling the great
benefits of their new, future occupation, while, in fact, they were
merely switching occupations with the welder becoming a pipefitter and
the pipefitter becoming a welder :>

As a temporary measure, workers need to continue to chase the jobs
that haven't been affected by globalization yet.

Agree again. Educational support always pays back in new taxes paid by
better-paid workers.

3. U.S. workers should not pay more for drugs than the rest of the
world.

Patents which are infringed on need to be addressed internationally, as
this is indeed a problem. However, I agree with you that American
citizens should not bear the total burden for patent infringement, in
particular, by China.

So, how do you propose to achieve this?

I think what I might try if I were king of the U.S. is to separate the
research function of the pharmaceutical companies from the
manufacturing and marketing function. Let's break them apart like we
did Ma Bell. I think that might shine some daylight on the situation
and increase competition. In addition, we could consider giving
companies involved in pure drug research generous tax breaks or even
subsidies.

We might also, for instance, establish remote diagnostic centers where
a patient is examined by a foreign doctor with the aid of a U.S.
technician and the appropriate video/audio equipment and then
prescribes and sends the appropriate medication from his country. In
addition, any patient who has received surgery or treatment from a
doctor outside the U.S. should be able to have medications shipped
from that country.

In addition, we need to take a look at whether we want to allow drug
companies to sell to foreign countries using a contract that forbids
resale back into this country.

I think you'll find that reform of the IC laws regarding pharmas is all you
need. Pharmas load up the cost of new drugs because their patents run from
the first date of filing, which is often a decade prior to FDA approval.
Obviously, they load up the costs in the front end, and even more so because
the rest of the world isn't paying their fair share for the research (if you
have goverment-controlled pharma costs, you're forcing even more cost to be
levied on countries that *don't* control pharma costs -- meaning us.)

In the meantime, they keep extending IC protection for Mickey Mouse and Bugs
Bunny well past the 75 year limit. Go figure.

JG



4. U.S. tax rates should be adjusted to reflect the reality that the
U.S. worker is the one most adversely affected by global competition,
while those with capital are actually benefiting. Currently we are
going in the opposite direction with investors paying less taxes than
workers in some cases.

Noble. And it has a chance of working.

5. U.S. workers should pay less for medical care. Our system needs to
modified so that health insurance and Medicare is changed to
accommodate American citizens who want to travel outside the U.S. to
receive health care.

A better system would be for universal coverage at uniform rates for all.

I'm not against universal coverage, but I am against a system that
protects some workers from foreign competition and not others and it
occurs to me that universal coverage, if not done properly, could have
the effect of protecting the American medical industry and it's
workers

6. Bill Gates says we need more foreign scientists and engineers. I
say we need more foreign CEOs and medical doctors and specialists. I
also say CEOs are exorbitantly overpaid and that stockholders need to
maintain more control over the corporations that they own.

Many corporations are receiving stockholder pressure regarding Executive
Compensation, and shareholder proposals are likely to pass in many; some
have already passed. But you're right about what we need. We need
another National Science Initiative such as the one Presidents
Eisenhower and Kennedy pushed after Sputnik. IMpediments to this will
be the present Educational establishment which still buys into their
bankrupt Social/Emotional school of educational philosophy. We also
will need to undo the related damage this caused with the passing of
PL94-152( IDEA and related regulations and legislation ), by repealing
these ridiculous wastes of money. They only serve to defeat those aims.

Taking the broader view, education and the efficient and objective
administration thereof, is the best long-term solution to U.S. and
world problems involving politics, economics, health, ecology, etc.
It's also the path to better government if we teach about
hypernationalism, jingoism, propaganda and logic, etc. The problem is
that it's just not going to happen, at least not in the United States.
In the U.S. we believe in educating technicians, but we don't believe
in teaching people to think for themselves.

I believe, as I said before, we could solve some of the problems by
controlling or eliminating population growth. We could also pay people
not to have children instead of vice versa.

We don't need foreign CEO's and medical specialists. All we need to do
is prohibit entry into our medical colleges by those foreigners and
substitute Americans. And perhaps, build a few more medical colleges as
part of some new science initiative. While we still have the brain
power to do so.

My bet is that the medical industry controls the number of doctors it
produces, but I suppose it's worth a try. In a way, I suppose, you
could look at this as simply a form of unionism.

7. With the exception of jobs that involve national security, any and
all jobs should be outsourced whenever possible. What's good for the
goose is good for the gander, as the saying goes.

No jobs should be outsourced, unless you're going to address a leveling
of the playing field regarding labor.

8. Government should reduce spending by avoiding any future, ill-fated
international adventures involving nation building or efforts to
spread democracy around the world, etc. The U.S. worker has enough
problems with making ends meet and dealing with factory closings,
etc., without having to pay for the pipe dreams of misguided
ideologues.

No problem with this one.

9. Americans need to beware of politicians who mouth platitudes about
the glories of free enterprise while destroying competition behind
closed doors by allowing mergers, acquisitions and other activities
that make profits for the rich while increasing prices for the worker
who also has the problem of his job being outsourced.

Capitalism works that way. We have sufficient anti-trust and
anti-monopoly laws on the books right now to preclude excessive
restriction of competition. We only need better enforcement. That
means not electing Republican Administrations. American capitalism
worked because up until recently, workers had a greater share of the
fruits of production than they have now. One major reason is because
our GDP has shifted dramatically from production to asset appreciation.
We need to return some increased share of productivity to labor. But
given the reality of the global economy, and it is a reality, what we do
locally have only a small, temporary effect. We really need to level
the playing field globally. That, we can do while we still have the
influence to do it. In a few short years( 15-30 ) we won't.

Years ago wife and I received a set of lamps as a Christmas present.
shortly after that they started flickering on and off. When I took
them apart, it turned out all the screws were loose. They were made in
China and I suspect they might have been made by children who didn't
have the strength to tighten the screws. We do need to insure that
competitors have decent labor and appropriate environmental standards.

We also need to insure that workers get a fair slice of the pie.
Abraham Lincoln, for instance, once said:

Labor is prior to, and independent of, capital. Capital is only
the
fruit of labor, and could never have existed if labor had not
first existed.
Labor is the superior of capital, and deserves much the higher
consideration.

If we insist on a level playing field and insure that labor gets it's
fair share of profits, we will have a better world and a more
prosperous working class. In the long run, though, I believe the
quality of life in the U.S. will go down with global competition and
the quality of life in other countries will go up and eventually they
will meet in the middle.




.

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