Letters to the Editor
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Pet Food and Cough Medicine
China, in particular, seems to be an opaque maze of pencil-whippers who do or say anything to please American (and other) 'masters'. With lead-filled baby bibs, poisonous cough syrup, and tainted pet food appearing on the market, I am increasingly concerned that the zeal for outsourcing ultimately compromises safety and security.
Lou Dobbs is rightfully agitated about the current 'tidal wave'.. When an American company outsources 'everything', it loses its stakeholders. I look at the airlines as a prime example of this trend. United Airlines is becoming a 'virtual airline' maintaining a fragile core of 'mainline' service with a hodge-podge of United Express and Star Alliance partners. Buying a ticket does not mean you get a United Airlines maintained aircraft and United Airlines highly trained and experienced crew. You may end up with Mesa Airlines trained crew and aircraft. Quality: unknown. It is a rip-off.
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Dobbs
At least Lou is right about the disaster of importing massive third world poverty. Los Angeles now has massive stretches that are no longer the US, but whole sections of the impoverished parts of Latin America. And Americans can no longer get a job in the sections of the economy where these immigrants and their employers have driven down the wages.
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Lest we forget that Thomas Friedman is not an economist and gets it wrong
The world is not flat. It's nubby. Capital does not move frictionless equally everywhere instantly. It moves to cities. If anything, the notion of Globalization will seem silly in a few years as jobs, technology, people and education all cluster into a few hundred large cities world wide. And those cities will be indistinguishable from one another just like most places in the west already are. Dublin could be in France, London and NYC are similar, Cleveland, Phoenix and Vancouver are all pretty much the samething.
Well add in Lagos, Nairobi, Kinshasha, Cairo, Sao Paolo, Buenos Aires, Mexico City, Tokyo, Seoul, Singapore, Bangalore, Mumbai, Hong Kong, Karachi, Delhi, Beijing, Hanoi, Jakarta, Kuala Lampur, Shangai and the MORE THAN other 80 cities in China that have >1million people each. And so on.
See the world is nubby. The world is cities, not countries. So when we talk about job movement we're really talking about moving from one city, one middle or lower middle class, to another in another city. On a small scale you see this right here in the US. A bank moves a credit card processing center from Arlington VA to Las Vegas. The places are the same, the people are too. The only difference is marginal labor cost. Now when we incent companies to move to Las Vegas we offer them tax breaks, that you or I pay for. Or, we offer them tax incentives to keep them where they are. That you or I also pay for. Seems like a devil's bargain either way though. Anyway in a nubby world you have the same thing writ large. Companies don't move in a vacuum and fill up the space there. They move and low and behold find themselves in a competitive environment with everyone else who thought of the same idea. This tends to make all the nubby places alike. In ZA, J'Burg is alot like any other large modern city in the world. So is Dubai, Riyadh, Islamabad and so on. It's not really a race to the bottom so much as a race to duplicate the same thing a hundred different ways. All the nubby places eventually are all the same.
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Nice article, but there's more to it
I agree with alot that's said in the article, and especially appreciate the realistic message that the way to deal with the challenges of globalization is not just to whine about it. We have a disproportionate fraction of the world's wealth and resources, so it's hard to believe that we're not going to experience some net loss over time.
But I think the article stops short of a few key points. First, as many have pointed out, the "free trade" we're talking about is not free - there is a Byzantine world of complex bilateral trade agreements that make the very concept of "free flow" of capital ridiculous, even if we were to agree that's a laudable goal (which of course, we could debate for days). It's not just about lower labor costs and a lack of environmental controls, it's about protectionist subsidies and tariffs that other countries use to protect their markets. I heard a great quote on NPR awhile back - if the agreements labeled "free trade" agreements were really about free trade, they'd be one page long - "we drop all tariffs and subsidies, and you do too."
Secondly, the fact we don't take seriously the need to compete in sciences and technology anymore is destroying our future. In the global economy, you have to compete, and one of the areas we used to have the edge in because of our university system and available capital was in tech driven fields. We're significantly losing that edge because we've dramatically cut back spending on reasearch, we're allowing our education system to go fallow and we don't take seriously the challenge of finding ways to make our workforce better and stronger. We have to focus on what our strengths can be and invest in them over the long term.
So yes, we have to compete, and no, we shouldn't just whine about it - but the article seems to say that we just have to sit back and do nothing about it, which I don't think is quite right.
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No need to outsource . . . .
Any time you want to take a trip overseas, just visit my company's IT department. Most of the people there are from India. The company doesn't need to outsource to India, because they have already imported Indian labor.
I recently talked to a very bright young fellow, a college graduate with a degree in computer science, currently unemployed. He tells me that most of his fellow graduates are either unemployed or working at jobs unrelated to computer science. When you have four year degree in computer science and can't get a job, in what field are you supposed to be "retrained?" Hotel management? Mortuary science? Landscaping?
Not many years hence computer science will be a dead field in the U.S. because there won't be any jobs for the graduates.