Re: Interesting

mg wrote:

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.

As I enjoy your comments. It's refreshing to have a discussion with someone who has knowledge of issues, as well as understands abstractions and their implications. A set of circumstances I find lacking among some regular participants here.

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.

For wont of a better thing, GDP is the best we've got at this point. And it really doesn't address what you mean by wealth, IMHO. Since we have national entities, GDP is useful, as it permits us some way to measure, albeit indirectly, wealth. And whether or not it's a zero sum game, depends on what you define as wealth. If you define it with a natural resource component, you may be right. If you define it as inclusive of resources, but also produced goods, then it probably isn't.

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.

We can no longer husband natural resources. Our economy has grown so large that we can no longer avoid having to deal with a global economy. Much as I would like to. We simply, as no nation does, have the self-contained natural resources to have its own, insulated self-contained economy.

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.

Further down the road would be the dissolving of national boundaries. Doing so would make permanent the measures, by eliminating all unnatural impediments. Radical, I realize, but if one looks far enough down the road, one realizes that such is the only logical solution.

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.

That does not solve the problem. The problem can only be solved by attacking it where it presents the problem. That's where labor is treated to far less than here.

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.

A possible scenario, not out of the question.

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.

If that is the case, you only exacerbate the problem, not solve it. Or at best, merely shift the problem from one worker to another. Solutions which are not global do not level the global advantage capital has over labor.

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.

Unfortunately such is not the case. Our economy is shifting rapidly from manufacturing to financialization. 28% of our GDP, and rising rapidly, is due to the FIRE sectors of our economy, as compared to a mere 6% a bit under 40 years ago. That is unsustainable as far as sharing of the fruits of our economy are concerned.

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.

Separation of research from manufacturing does not reduce the R & D costs. Someone has to pay for those, somewhere. If they're not included in the cost of product, then who does pay for those costs?
Increasing competition is unrealistic,due to FDA imposed procedures development and marketing, which, IMHO should not only not be reduced, but actually made more stringent. In fact, because of that competition, it is inefficient to have drug companies competing to bring drugs to the market for the same condition, a set of circumstances we now have.

A significant and greater loss of profit, IMHO, is patent infringement from other less, enforcement minded nations, such as China. If that were ended, and licensing fees were extracted and enforced, then perhaps profit would not be lost unfairly. Mind you, I'm no fan of the drug companies, and I agree that the American consumer should not bear the total cost of other nations' unfair infringement on patents, but that is an issue our Government must address. Unless that is addressed, tax breaks here still have to come out of the pocket of the American consumer.

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.

The appropriate medication from his country is frequently a generic copy of an American drug on which the patent has been infringed. I hardly see that as a solution.

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.

Adds to and exacerbates the problem rather than addressing it.

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.

Drug companies should be allowed to sell or otherwise license their product. I agree that if reimportation is prohibited, then there should be are requirements that drug companies set floor prices through some kind of 'fair trade' mechanism. That might have to be negotiated by treaty, and I would support such. In that way, a foreigner could not be able to obtain a drug for less than it would cost someone in the U.S.

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.

That's an excuse which is hardly the case. Using curriculum which was essentially the same, 50 years ago, we produced more scientists who were quite capable of thinking for themselves, and solving problems. The one thing the National Science Initiative did was to make it worth their while to become scientists or engineers, by creating jobs at good salaries. It has happened before, and can happen again, if the government decides to do it. And it isn't going to do it with such garbage as NCLB, whose real motivation was NOT to improve standards, but to destroy the public school system in favor of vouchers.

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.

Noble thought. How are we going to implement this in India and sundry Muslim and African countries? Or get China to more aggressively reduce its population?

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.

40 years ago, before the insurance companies got control of medicine, and we essentially had a fee for service system of medicine, the AMA certainly did its darndest to control admission to medical colleges. But now that the control of doctor's wages has shifted from AMA control to the insurance companies, the AMA will no longer oppose expansion of the number of physicians, as it will likely see taking over of the oversight of physician wages by the Government as increasing physician income. I see AMA endorsement in expansion of the number of physicians.

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.

The Chinese are learning to improve their quality control. Some of the machined parts coming out of China today are far superior to what we have here. In fact, one reason we're in this mess, is that the Mexicans, when handed those manufacturing jobs on a silver platter by NAFTA, were so incompetent, they promptly lost them all to China. The main problem coming out of China is not quality control, the current pet food and toy fiascoes not withstanding, but piracy, both overt and intellectual, and patent infringement.

And I agree that standards should be uniform. That is some of what needs to be done to level the playing field.

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.

I agree that a fairer share of the fruits of production need to be put in place.

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.

Those are pretty much my points. I believe I made them in my other thread.


.

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