Paul Craig Roberts: America’s Has-Been Economy — Long essay. Preaching to the choir, but fun anyway.
The American future was in the “new economy” of high tech knowledge jobs.
This assertion became an article of faith. Few considered how a country could maintain a technological lead when it did not manufacture.
So far in the 21st century there is scant sign of the American “new economy.” The promised knowledge-based jobs have not appeared. To the contrary, the Bureau of Labor Statistics reports a net loss of 221,000 jobs in six major engineering job classifications.
Today many computer, electrical and electronics engineers, who were well paid at the end of the 20th century, are unemployed and cannot find work.
May be the GOP will revoke the outsourcing tax breaks and at least give us an even playing field.
We have no choice but to carry on. You can’t tell people what to make or not to make or where they can make it any more than you can tell them what they can or can’t write. You can try, but you don’t have to buy. I have American cars. It’s not like we are being forced to buy junk imported stuff. I have more stuff than I need now. I know, they are making filling for the pie in the sky which is falling. John is pitching imported stuff from Best Buy here to the right. You never need to go to Best Buy again. Maybe you sell cars here.
“Junk imported stuff” is almost as ignorant as Harley riders dissing “rice-burners”.
Let me take all the imported parts off your American car, Jim — and let’s see how far you can drive?
Outsourcing is insidious. It started with migrant farm labor coming into the USA to help out during harvest crunch. When farm owners recognized that these people would work for very cheap wages and they could often forget about paying taxes on undocumented workers, they decided to expand the process to year-round migrant labor. Slowly but surely, Americans no longer could afford to compete with people who, coming from abject poverty and no work, were willing to live with 10-15 people in a 2 bedroom apartment or stand on a corner for hours at a time hoping to be chosen for available work.
Then we started exporting manufacturing by making a few parts in a cheaper location elsewhere. Most everyone is happy that they can then buy a product at a lower cost than before. But few realized or were willing to acknowledge that jobs were lost in the USA to foreign economies in the quest for lower costs. Oh, they answered, the relatively few people who have lost their jobs will be retrained to work in other jobs. After all, there are plenty of jobs available.
As time moved on, more and more low level manufacturing jobs were exported offshore. Yes, we got cheaper prices for goods, but at the cost of more and more job losses, a rising trade deficit and a loss of manufacturing how-to knowledge.
Next to go were the call centers. All that was needed was a good worldwide telecommunications infrastructure and a country with much of the population in poverty, earning low wages and able to speak passable English.
No worries though mon, the people in the USA who lost their jobs in call centers would be retrained for something else.
But then the owner companies started to export mid-level white collar jobs, like basic engineering design, computer programming and R&D work. Still no worries they said, we will train those smart people who lost their jobs to be “innovators”. We will sell our “innovations” to the rest of the world and let them build these products for us.
Unfortunately, you can’t take college courses in “becoming an innovator”. Innovation is not something that you learn, but instead is something that develops (in relatively few) after years of experience with real-life problems in the area of one’s speciality. It doesn’t come from working at McDonalds, Wal-Mart or 7-11, where many today are stuck because so much lower level work has been farmed out to other countries.
If you remove the base from anything, it tends to fall over. That is what is happening to the USA as we destroy the base of our country’s economy in the never ending quest for cheaper products and more profits for the owner companies. We are watching a country consume and destroy itself in real time. Welcome to this new reality show. You have a front row seat!
I don’t want to take the imported parts off my car. I want the congress voted – dubya signed tax breaks off outsourcing. If outsourcing works, why does it need tax breaks?
BTW – read the recent Gartner Group report on the dismal success of outsourced IT projects to India. Particularly the part that states that with out US tax breaks outsourced IT would cost 30% to 70% more then insourced projects.
Gentlemen, you seem to be whining about the consequences of global economics. The real concept that Americans must really wake up to is that people are competing for jobs both locally and globally. If a product, any product, can be made equally well overseas and imported back to the US, someone will do it. If a job is offered to two people, all things being equal, the employer will chose the person asking for less. That means the other person loses out. That’s stark reality of economics. Americans could easily take those jobs taken by immigrant workers if they lowered the amount of money they ask to a competitive level. US wages are artificially high through minimum wage, but most poor countries do not have this type of floor. So, people are shocked when immigrants from these countries will work for less than minimum wage or when production is moved overseas where people will work for less.
Competing means you either have to lower your asking price or offer a set of skills and services whose benefits offset the additional money you ask. Employment is not a right. It is an economic exchange of services for money. If someone else offers the same set of skills and services for less, the odds are that they will take your job.
Our K thru 12 schools need fixed. Furthermore, somehow our employment system sucks to high heaven. I don’t have the answers.
When the country figures out the answers to these 2 problems, things will kick some ass. I don’t expect answers anytime soon, America for the longest time has had an easy time of things, we don’t know how to “compete” and it will be several years before corrective action is taken.
Our government has torpedoed the IT industry as well as others. I guess they don’t value american labor. The price of computer programmers keeps going down, so I’m swinging a hammer for more money now.
You can’t outsource carpenters…or can you?
> Our government has torpedoed the IT industry
Ha ha ha. You are so funny George. Dumbass nerds making 60K a year dinking around in the office surfing the net and other bozos being paper millionaires with web sites to sell pet food or other malarky.
The problem is —> The IT industry got PROFESSIONAL. Professional = you are worth your RETURN on INVESTMENT.
The only programmers left are the ones that can pull off the survival of the fitest routine. No more free lunches or confusing the non-IT people with gobbleygook when you are really just looking at porn sites.
Ignorant comments like this really irk me. On the surface, they sound sensible, but they really are a simplistic cover that misrepresent reality.
First off, given the fact that engineers and computer programmers work for 10X less (or more) in India/China, there is no feasible way an American programmer/engineer can compete. At least regarding price. Forget “minimum wage” or other debatable economic infastructure comparisons — bottom line, is an American could not afford a place to live and food to eat on a $5K salary. To suggest that the problem lies solely with American workers not being competitive is ludicrous, when they have no role to play in setting global currency transaction rates or the infinite myriad of other factors in so called “free trade” of globalization that really isn’t so free.
Second, the importing of illegal immigrants is a boon for corporate entities because much of the cost can be externalized to other groups, including primarily taxpayers. Also, the labor is not “free”, as the condition of being here “illegally” grants the employer a super negoitaiting chip that is not in existence when dealing with the Ameircan labor pool. Additionally, costs of police, schooling, other social services are passed on to taxpayers, most of which don’t break the law to pad their profits.
I see the wholesale movement of work to offshore locales (and the importing of illegal immigrants) as a crime similar to slavery — it’s just that when it happens out of sight in Asia or domestic work sites (meatpacking, construction as long as they don’t come into your neighborhood, fruit/vegetable picking…), most are oblivious.
I was watching a documentary on China the other day and it blew my mind. They are a technological society. I always assumed that they were the red card carrying soldiers in green colored garments of old Chairman MaoTse-tung.
They have entered the new age of Silicon Valley. They have pretty well mastered the Silicon Valley and Japanese computer and robotic technologies. Business and housing is created by the minute. It is moving as fast or faster than Las Vegas. The United States is being left behind.
Thomas – Spoken like a true Libertarian.
Business is not a government and Government is not a business. Business is about supplying products or services to whomever will pay for them. Government is about doing what is best for the people. Business must fit within the government, not ignore it.
Because business is parasitical (feeding off of the resources of society), it is incumbent that business return profits to society. As with any parasite, if you kill the host, the parasite dies.
Business does not own the air we breathe, water we drink, or coal buried in the earth. All the resources are owned by America and should be used for Americans. Therefore the Government (remember We the People) has a vested interest in protecting, promoting, regulating, standardizing, helping, and even owing business (the economy). (Note: I am not proposing any type of communistic government)
The same when you want to do business in The United States. The Government, again representing ALL OF US does have an interest in controlling how that business is conducted. If you disagree with this argument, then go ahead and try opening a store next to a school selling methamphetamine or marijuana. If business is allowed to conduct itself however it chooses, then expect stores to pop up near schools.
Our wages are not artificially high. They are, if anything, low. The concept of a minimum wage is to allow the wage earner at least some degree of reasonable income. And if you think they are high, then YOU TRY TO LIVE AT THAT LEVEL! If your business can’t afford to pay those wages, then you shouldn’t be in business.
And my final quick rant; Regulation is a very important part of our society. Without it, we would all degenerate to the lowest forms until some sort of regulation was returned. In economics, in order to sell something you need a buyer. If all the buyers have been done away with because of unemployment and underemployment, then the sellers have no customers and hence they themselves will go under.
We need regulation to provide a level field for everyone. That is something that is not happening today. The WTO is trying to level the field, but with uneven input from only business driven governments. The people affected by WTO decisions are not being consulted and apparently not considered.
What I don’t get are all the people who feel that in/outsourcing is inevitable. There is something quite simple we could do: Impose tariffs.
First, it would make US consumers buy less foreign goods which would lower our trade deficit.
Second, it would give incentive to actually build stuff in the US. What a crazy idea that’d be!
The problem is that we’ve been told for so many decades that tariffs are bad that no one can seriously raise the issue without being laughed at.
But of course things have changed. For the greater part of the 1900s tariffs WERE a bad idea for the US. We were the world’s exporter thus it was to our advantage to get the rest of the world not to tax our goods.
But now that we’re the world’s biggest importer, it only makes sense to stop the bleeding before it’s too late.
Wow, after taking deep breaths and counting to 60, this is actually a really good thread! jojo gives a good account of what Outsourcing is doing to our economy without clouding the analysis by assigning blame: The hollowing out of our economy into “knowledge workers and innovators” or low-level service jobs.
I would just ask, “how fast is this actually happening?”. Unemployment has not skyrocketed. We are still recovering from an over-demand and over-supply of tech workers from the dot-com boom. Outsourcing of jobs overseas is still a trickle in the stream of tech jobs that are created and destroyed every month. As a programmer myself, I share jojo’s concern, and Anonymous’ no-punches-pulled assessment of what it means to earn one’s salary. However, I was heartened by The Economist’s recent survey on outsourcing which basically said that it will happen like jojo says, just much more slowly than today’s panic would indicate. There will be time to adjust.
I feel another dissertation coming on, but I have to earn my salary for the next couple weeks. So a little less porn and Dvorak Uncensored surfing.
I would just like to question this quote:
Because business is parasitical (feeding off of the resources of society), it is incumbent that business return profits to society. As with any parasite, if you kill the host, the parasite dies.
Business does not own the air we breathe, water we drink, or coal buried in the earth.
This seems totally backward to me.
In poor towns all across this earth, as far back in time as civilization has existed (by definition), farmers have specialized and grown crops, then taken them into the local market to barter or sell their product for the product of some other specialized worker. Value is added in both cases, because specialized skills, knowledge, and processes produce better products than if we each tried to do everything alone.
Whether it’s a farmer growing crops, or an agribusiness, whether it’s a woman carrying water on her head from the local river back to her home, or a multinational utility company that builds dams and pipes the water to her house, these are the activities that create wealth and determine our standard of living. Business generates the wealth to afford — and frees up our time to create and/or enjoy — the luxuries of society that we call culture.
What value does the water we drink or the coal we burn have to society if it is hundreds of miles away or stuck under ground?
Trees and most other aspects of the environment have many uses, so valuing these things is complex. Perhaps man is a parasite for turning nature into stuff that we “need” to live. But the fault lies not with business. It is not a parasite.
The “invisible hand” of Adam Smith has existed since time immorial. Through force or mutual consent, we form governments that tax and regulate the activities of business to provide a more fair and just society. If anything, government is the parasite we tolerant in order to tame the natural laws of economics.
Civilization came about because some leaders in Sumeria, the Indus valley, etc, said “Cooperate! You farm the crops, while you make pots to hold them in, and you, with the glasses, can write it all down on papyrus so we can audit it and count the beans. And I’ll just take my usual fee.” Whether those leaders were entreprenuers, or government, is debatable. But government and business have coexisted and depended on one another forever, and will continue to do so.
http://en.wikipedia.org/wiki/Purchasing_power_parity
http://en.wikipedia.org/wiki/Standard_of_living
Some interesting links. I’ll let Wikipedia lay the groundwork, and just state my thesis:
People give their labor in exchange not for a particular salary (which may be 1/10 of US when measured in dollars), but for a certain relative lifestyle/standard of living in their local economy.
1/5 to 1/10 a US programmer’s salary is a middle to upper-middle class wage in India, when compared in PPP terms and taking into account the local standard of living.
Outsourcing and hiring illegal labor are not slavery, because they are earning the same lifestyle as if they lived in the US (give or take, see below). In the case of migrant workers, they give up creatures comforts to earn good money, relatively, and send money home to their family. They make the decision based on the standard of living and opportunities at home.
PPP is not a perfect measure of the differences between nations because:
– Preferences and choices can vary from country to country. Goods then differ in their contribution to welfare.
– Differences in quality of goods are not sufficiently reflected in PPP.
If you look around your neighborhood, and compare our products and infrastructure to those in other countries, not only are they better on the surface, but behind them are lots of laws, taxes, and regulation to keep the environment clean, provide for the poor and unemployed, and regulate the markets in which they are produced and sold. All that extra stuff costs money, which we pay for indirectly. Compare the size of our welfare state, the level of taxation, and the dynamism and flexibility of our economy to those in Europe. “Great” health care and unemployment benefits, not so great unemployment rate.
For the countries that don’t have that “baggage”: their economies are in a different stage of development, and their standard of living isn’t as high, but it is also a competitive advantage. Do the politicians who choose not to impose all those rules, regulations, and social welfare understand that competitive advantage, or that their country cannot afford them yet, or are they just in the pocket of big business, selling their countrymen into slavery?
> First off, given the fact that engineers and computer
> programmers work for 10X less (or more) in India/China,
> there is no feasible way an American programmer/engineer
> can compete
Wrong. They can compete on skills, quality of results, time to market, proximity to the client, business acumen, communication skills and others. They compete by bringing to the table skills and assets that their Indian competitors do not have. If an Indian client can provide the same set of benefits for less, they’ll get the job barring governmental barriers like tariffs. Welcome to economics.
>bottom line, is an American could not afford
>a place to live and food to eat on a $5K salary.
They could if the cost of living was low enough that $5K provided the life style they wished. In *global* economics you are competing against both wealthy and poor counties. You have to provide a set of benefits that compensates for higher prices you want to charge. As I said above, that could be as simple as being in the same time zone.
>Second, the importing of illegal immigrants …
I would completely agree that *illegal* immigration must be addressed. That, however, is a totally different discussion. What you are talking about is competing globally against companies based in countries with significantly lower costs of living. Again, welcome to economics. Why do you think Austin, TX has become a Midwest version of Silicon Valley? The cost of living and doing business in that city is cheaper than the Bay Area. Companies can operate cheaper in Texas than they can in CA, so they move. Companies that feel they get a competitive advantage by being in CA stay. When CA raises business taxes, many business decide to move based on whether the cost is greater than the benefit they gain by doing business in CA.
>Government is about doing what is best
>for the people. Business must fit within the government, not ignore it.
What is best for *everyone* in the long run is the real debate. I would argue that forcing Americans to compete in a global market place is better in the long run.
> Because business is parasitical (feeding off of the
> resources of society), it is incumbent that business return
> profits to society. As with any parasite, if you kill the
> host, the parasite dies.
It is amazing how idiotic people can be. This indicates ill placed, deep seeded hatred for business and serious lack of understanding about economics.
Companies are going to move operations to other counties if they feel that they can make a comparable quality product for sufficiently less. American companies can either compete on other features beyond cost like quality, timeliness, service etc. or they can try to compete on cost.
I just had a disturbing conversation at lunch.
Specialized staffing firms are cropping up that import foreigners to teach math and science in local school districts. They get $8-10,000 per teacher in order to recruit, fly and set them up in the US, and sponsor the visa process.
S o do we blame Gov. Arnold for breaking his promise to spend $1.3 billion we don’t have, or do we blame the director of the NEA who said “Pay for performance and [in-demand skills] is anathema to the labor union movement.”
Did anyone address this from the first comment?
revoke the outsourcing tax breaks and at least give us an even playing field
What are you referring to? The playing field is leveling because tariffs and protections on goods and services are being systematically lowered through the WTO system. If you are referring to the “tax break” of not taxing jobs created overseas, how do you tax a job created in a company that exists outside Congress’s jurisdiction? Taxing the jobs of an American company’s subsidiaries overseas would not work, besides being outrageous. If a company has the means, their jobs will seek out the location that offers the lowest cost for the best work product, whether it’s California vs. Texas, or USA vs. India.
http://en.wikipedia.org/wiki/Unemployment_rate
jojo, your Roach link says that the BLS is producing the same statistics on unemployment they always have. The government isn’t “massaging” them. Unemployment is hard to measure. It’s the White House spinning the results. Anyway, using the unemployment rate alone was not a good defense for a discussion about whether our economy is “hollowing out”, so I’ll give you that. We need much finer grained statistics about the kinds of jobs created. Your links are a good resource.
http://en.wikipedia.org/wiki/Tariffs
The bottom line is tariffs have unintended consequences and do not work in the long run. Tariffs are a blunt instrument that cannot resurrect dying industries or change the writing on the wall: manufacturing and other labor with the same skill level as Americans is cheaper overseas. Also, when tariffs are imposed, it’s clear they are an artificial barrier subject to political risk, so instead of using the opportunity to become more competitive, protected industries just jack up prices and keep the status quo with regard to jobs. Look at the effect of the steel tariffs.
Also, we are increasingly talking about services and digital work being moved overseas. Taxing stereos is one thing, but how do you tax documents and software, and advice given over the phone?
The hope to counter a “hollowing out” economy is another round of innovation. We had a manufacturing boom after WWII, and since then IT, finance, and other services have been taking the place of a declining manufacturing sector. Not everyone needs to go to college to be an “innovator”, just another Wozniak, Jobs, Gates, etc in a new industry to create new “normal” jobs. It seems like wishful thinking, but that’s how it has turned out in the past.
Perhaps tariffs would slow the decline. But at what cost to consumers? And will industry really adapt, or will it just postpone the inevitable and make the transition worse, slowing economic growth and starving new industries of workers along the way.
No, I’d estimate, that for 80-90% of the jobs in question, price alone is the sole determinant. Skills, quantity, etc. are not important to the major employers which are the multinational corporation who have adopted a pure “race to the bottom” mentality. Sure, there are niches to be filled. But from my extensive experience working critical applications systems development/support, price alone is the primary factor, now, except for the middleware vendors like Oracle who’ve heavily invested in India (& now China).
::First off, given the fact that engineers and computer
programmers work for 10X less (or more) in India/China,
there is no feasible way an American programmer/engineer
can compete
::Wrong. They can compete on skills, quality of results, time to market, proximity to the client, business acumen, communication skills and others. They compete by bringing to the table skills and assets that their Indian competitors do not have. If an Indian client can provide the same set of benefits for less, they’ll get the job barring governmental barriers like tariffs. Welcome to economics.
If wishes were fishes and all other such hooey… …again, bottom line is that cost of living is not “low enough” and worse, we’re witnessing a trend over the past decade or two that threatens to take our society (and the world too) back to a neo-feudalistic order, where a small set of individuals own and control most all the assets and resources, while the middle class is stripped bare. The numbers from BLS and more all bear this out, and unless addressed, will likely grow in severity, given that automation (though cheap and exploitable labor puts the breaks on that type of innovation) will supplant lower level work.
:bottom line, is an American could not afford
a place to live and food to eat on a $5K salary.
::They could if the cost of living was low enough that $5K provided the life style they wished. In *global* economics you are competing against both wealthy and poor counties. You have to provide a set of benefits that compensates for higher prices you want to charge. As I said above, that could be as simple as being in the same time zone.
I find your comment about not understanding “economics” insulting. What’s myopic is your simplistic short-sighted vision that totally disregards a host of variables and elements of causation. Things arn’t as simple as X means Y, there’s a an inexaustable myriad of factors involved, and it’s easy to be trapped in bromides and cliches.
Paul,
You doom and gloomers always fail to see the light until the good times smack you upside the head. In the early 1990’s, the economy got gutted out of white collar middle management and everyone said the economy will never recover. It did.
The US has resources: people, land, education, infrastructure, customers.
Resources ALWAYS get used. Period. Any situation where resources are NOT used is the aberation.
When everything changes, everyone will think the upturn was SOOOO obvious because of this and this and this.
> I find your comment about not understanding “economics”
> insulting. What’s myopic is your simplistic short-sighted
> vision that totally disregards a host of variables and
> elements of causation. Things arn’t as simple as X means Y,
> there’s a an inexaustable myriad of factors involved, and
> it’s easy to be trapped in bromides and cliches.
Your comment is flowery but wholly unconstructive. To which variables are you referring? People that dislike economics generally think that supply and demand does not apply to them or to the labor market. Nothing could be further from the truth.
> the ability to defer and often never pay taxes on
> foreign-earned profits. The result: foreign profits of U.S.
> companies end up taxed at a lower rate than their U.S.
> income, creating an incentive to invest overseas in
> factories. The jobs are where the factories are.
This is another area where people have somehow got it into their head that supply and demand does not apply. *Governments* are also competing for businesses globally. Counties, states and cities through their taxation, zoning, and amenities compete for businesses to setup shop in their area. In the example I gave above, it is why high-tech companies are moving to Texas from CA. CA is less attractive as a location for business than Texas.
Another huge catch in this equation is the definition of a “US company.” If a company has offices all over the world, is it a “US” company? If a UK company sets up a shop in the US, is it now the case that all of the money made on foreign orders are taxable by the US? Somehow people think the reverse should be true (a US company sets up shop in the UK and should be taxed on money made in the UK).
> But here’s how it works with the loophole: The U.S.
> subsidiary simply keeps the money offshore and certifies to
> its accountants that the money is invested overseas. It
> never remits the money to the parent and so never pays the
> $15 million extra to Uncle Sam.
Yep and there is really no way to stop this as I see it. You should also note that by keeping the money made in say a European county, they also get a huge gain if the exchange rate is favorable to Europe over the US (as it is now).
What you are suggesting is essentially double taxation. The company would be taxed by both the foreign government and the US government. You can make it even uglier if taxation is based on gross revenue, ignoring the foreign government’s taxation. Guess what, multi-billion dollar companies will find a way around this. In the Film industry, they will launder money through multiple shell firms and multiple countries just to save a single percentage point of tax.
Multi-billion dollar companies will find a way around this type of taxation including moving more manufacturing offshore where it is taxed less.
> This argument seems falacious to me. There are lots of
> reasons that companies decide to stay in the US. Better
> workers, tradidition, infrastructure, rule of law, you name
> it, we’ve got it. “
Yep. That’s part of competition. The US, states and cities either have to justify their higher taxation through things like better amenities (like quality of life, safer legal system), higher quality workforce, better legal system and/or on price or taxation and cost of doing business. The US is starting to wake up to the fact that some locations like India provide are offering a competitive set of benefits. However, note that if all other things are comparable (workforce quality and quantity, legal protection, etc), then it makes sense to locate wherever the cost of doing business is lowest. That includes the cost of delivering goods to the majority of customers which may be in the US.
It doesn’t seem like a loophole so much as “the way it’s always been.”
It also isn’t a loophole in that you cannot avoid the tax completely. It’s a tradeoff between leaving the money out-of-reach and not paying US tax, and repatriating it to recognize it as real revenue and profit, paying taxes, and being able to use the money elsewhere. Technically, the profit doesn’t count until it’s repatriated, though investors don’t seem to mind.
This tradeoff exists in many parts of the tax code, such as with capital gains taxes. You don’t pay taxes on the rising value of your home until you sell it and take the cash out. Of course you can take out a home equity loan against the rising equity, without paying tax. You can also get a reverse mortgage, completely deplete the equity in your house, and walk away without paying any taxes when you die.
As someone who has worked for an accounting firm, you know that the complexities of rationalizing real accounting, tax accounting, and GAAP have always been a problem. I don’t see how an accounting situation that has existed for centuries can be described as a loophole.
The real travesty would be if they offered a one-time tax amnesty, as some in Congress have suggested, and gave these corporations a break in repatriating those funds at a lower rate. Even though it would bring in some revenue, it would relieve the pressure on these companies to decide what to do with all the money accumulating overseas. They can’t leave it there forever.
Maybe if the doomsday scenario of our hollowed out economy comes true, we will have no choice but to close this “loophole”, since all corporate profits will be earned overseas. But I don’t think it’s going to happen soon. I don’t have access to the figures, but I am sure overseas earnings are still a small percentage of US corporate profits.
I wasn’t part of the accounting firm, but the consulting firm in IT.
My understanding of how this works with regards to outsourcing is that the parent US firm starts a foreign sub and then turns around and sends that work, sold through the channels of the parent firm, to the sub crediting the sub for the “sale”. The tax sheltered profit is then distributed to the firm at large. This was how it was expained to me by an accounting friend medium high in the firm.
The new part of the loop hole is before a foreign sub that earned money in the US would have to pay us tax because the parent was based in the US. Now the parent firm can avoid it. It 2001 this was changed as part of Bush’s tax give away.
The reason I believe itsan important issue is that money earned in the US is not getting rightfully taxed. This is not so in the EU and Japan.
I agree with you that if the republican congress applies the one time amnesty they have been talking about, it would be a true injustice.
Lot of hooey going back and forth here. You guys should run for Congress!
The bottom line is – if you offshore all the low-to-mid level jobs where do the non-geniuses in our society find work (you know, the majority of the people who pay most of the taxes to support our society)? Does everyone come out of college (2 year colleges these days, with grade inflation, is roughly equivalent to what people were learning in high school 30 years ago) and move into an “innovator”position? Where do they start their careers?
And what happens to the over-40 crowd who lose their careers that they have specialized in for the last 20 years or so? Do we pay for them to study for a new career for 2-6 years so that they can MAYBE innovate in something and earn their keep in this new world?
I always thought I should have been a doctor or a lawyer. Now if someone would kindly pay for my education and living expenses while I study for the next x years, then I’m not adverse to having to start a new career. Unfortunately, this ain’t going to happen. With 30 years of work experience in various positions in the high-tech world, I was out of work for 1 1/2 years until 3 months ago. It isn’t easy finding work, even when you are much more qualified than the average person, if you are over 40.
We are removing the base of our economy under the guise of free trade, corporate greed and political corruption (both moral and real).