Wednesday, March 11, 2009


The data for offshoring production and outsourcing jobs is not straight forward. Which is silly because companies do get tax breaks for outsourcing jobs, which means the jobs need to be tallied for the tax benefits.

The legislators are owned by big business to enforce legislation and in return they provide the most watered down excuse for a defense that never built a bridge of logic with rational discourse (or just your basic numerical mathematical capabilities). I beg anyone that might read this too see the resource for itself or challenge what doesn't make sense to you, even if you "don't know economics". Economics is merely the science of money movement, a lot is based on psychology and common sense.

As a Republican myself, I often found the Neocon vague excuse of a defense for Keynesian or free market capitalism very illogical, irratic...many republicans often parrot these ideas blindly without understanding the very context of their meanings or impact. But then again, many do not value coursework at a university level, they also get preference for government jobs, benefits and pensions of some sort thus the true state of the economy is not something they care to worry about. Unless their real wages are affected by inflation or taxation. I disagree that the government needs to meddle or impose excessive taxation which is the only reason why I'm a Republican. But I can't chime in with the fluff because it really insults even the most remedial intellegence.

To understand why outsourcing production and offshoring jobs is a disaster to our economy, it is important to at something called the "Factor Market" in economic terms. This is the consumer base and we depend on their income and their wages for purchasing power. Purchasing power enables the "70% of service sector jobs" to exist. However quite a few service sector jobs including real estate (built on a false economy) exists to replace and underemploy former factory workers.

Service sector jobs are often retail. Real estate is a retail sector, because of the multiplier effect it's growth is only as good as the economy (plus derivative backed credit).

Many jobs have been offshored because the factors that make American workers competative for these jobs are literally impossible for them to do as Americans.

THE OFFICIAL TAX EXCUSE!! ("Americans charge Companies too much in taxes" is a big fat lie)

Republican/Neocon "probusiness" apologists use the ignorant excuse "but we're taxing the companies too much to stay here!"


1. The government has given tax breaks to companies that outsource labor, as long as the money doenst' make it back into the U.S. Seriously! That money is gone from the U.S. permanently as the companies have incentive to keep that money overseas while production stays at the same level at the same cost.

2. The citizens paid $1.34 trillion dollars in income taxes last year. Corporate America paid ONLY $300 BILLION in INCOME TAXES last year!!! Who deserves a tax break? The citizen who got cheated on the cost of living index? Or the corporation that pocket's billions? Or how about the CEO's who get million dollar bonuses as stock options which are not taxed? They make more money here than they would anywhere else in the world.

And here's a reference to the vaguely stated 2 irrelevant excuses goes to former President G.W. Bush's Chariman of Council of Economic affairs Greg Mankiw-

Mind you, because the U.S. experienced inflation since the creation of the Federal Reserve, the cost of living and doing business here is much greater than China, Korea, India, Vietnam, Mexico or even South America before taxes. So in response, Bernanke lowers the base interest rates to inflate the housing bubble, making the cost of living in America (need for employee wages) that much more expensive. This is counterproductive and just plain STUPID!

Most economists speak in self interest and are not to be trusted.

I'll play my little fiddle for the poor bureaucrats.

With that being said, except for a few cases (such as Halliburton) taxes are not a big enough factor to cause so many companies to leave the country altogether. However, to put Americans on a level playing field in the global market, the best solutions are to either End the Federal Reserve (to end inflation) or to impose protectionist policies on trade & labor.

And about Onshoring
Republicans and Neocons defend Offshoring with the official Onshoring excuse. This is a misnomer. This is like comparing Apples to daisies, not oranges.

Offshoring is sending jobs overseas to cut down on production costs.
Onshoring is sending jobs to rural areas in America to cut down on production costs. Republicans and neocons believe that other countries onshore jobs to America. They don't understand the term "Onshoring".

Toyota outsourced production to the U.S. to cut the cost of production down since it saves them money on shipping cars here. But Toyota is a rare case of another foriegn companies offshoring thier labor to america.

NOW. If over 3.3 million jobs have been sent overseas, then sending another million jobs to the sticks in Idaho will not bring the wages for more than 3.3 million outsourced jobs back to America. So either way, the "onshoring" excuse is irrelevant blather. They are not a replacement.

Now where are the comparative advantages, a defense proposed by David Recardo? They're divided as such so that the bureaucrats, aka. Corporate America are solely entitled to it at the expense of both America's economy and the labor force.

And here is excuse #3.
"America is not creating enough jobs to replace the outsourced jobs".
They're also producing fewer jobs that underemploy those whose jobs were outsourced. The only jobs created to replace factory workers and white collar jobs sent overseas are either real estate, or lower paying retail or hospitality sector. But you lose your market when consumers' jobs were outsourced.

Lastly, "Loss of jobs reduces the tax base, creates high unemployment benefit costs, and raises the cost of government retraining programs"

Our states are broke and requesting bailouts. The state of California lost jobs due to outsourcing and granted, there are less incomes to tax.

The top level of the wealth and income brackets have yet to practice the trickle down excersize that Keynes introduced to reduce savings and put more money into the economy. Again, these Keynesian supporters only know half of the arguements they use to defend their useless logic. Keynes himself believed that trade deficits were an ailment to the economy. It's important to understand these theories as they were written by the author than to pass them off as an apology for bureacratic theft.
America is the land of opportunities. The University system is the only bureacracy that may be competative on a world scale, except for a very few other sectors. America is making this "dream" of "opportunities" exclusively for Corporate America at everyone's expense. Without being worthwhile to society, without innovating, without creating wealth or managing it well. America has the system to enable global competativeness. Instead America cheats itself before we even make it to the global level. The lax government standards allow bureaucrats to interfere with global competativeness all in the name of short term profits.

And the moral of this diatribe is that one must always factcheck a neo-con/republican PARROTING or any parroting a "free-market" or "Keynesian" excuse. It's always about the bottom line. Who blindly assumes that anyone volunteers to be cheated?
The bottom line is the most important matter to capitalism.

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