Tuesday, September 09, 2008
Why the US Exports Jobs
I was at an internal presentation at Microsoft. The presenter was David Chappell, well known author and speaker. I brought Alan Grenspan's The Age of Turbulence to read while I waited for Dave to begin. David said something about wanting to read the book. I said it was a very interesting book.
I asked David if he thought that outsourcing jobs was a necessary thing or not. My initial premise was that outsourcing equaled greater world wide prosperity and more customers for our goods. David's response was that we imported more than exported, so he didn't see how outsourcing helped. That got me to thinking. Why is outsourcing necessary?
The answer is so that the rest of the world can buy our goods. A natural response is that the rest of the world doesn't buy that much from us. Wrong answer John; tell them what they have won.
The rest of the world buys one product writ huge: U.S. debt. Our nation, our prosperity, like it or not is funded by about $5 trillion dollars in debt. And that debt includes all debt, like your credit card or car loan. If the US becomes an island of prosperity who will be able to debt-funded prosperity? No one. Eventually countries like Japan and China will have enough US debt in their portfolio and will spend elsewhere and our growth stalls.
So in eventuality, low and moderate paying jobs must be replaced with increasingly higher paying jobs like IT jobs, and eventually IT jobs for something else. For now the US gets rid of a lot of stinky manufacturing so we can export more debt and fuel the next level of prosperity.
Do individuals get hurt? Yes. Do the economic cycles from agrarian, to manufacturing, to informating, to whatever seem to be shortening? They do to me. But, this is inevitable. If we save 100,000 manufacturing jobs or IT jobs from export we sacrifice national economic growth and dominance. Capital seeks a better return. Manufacturing is just becoming a less desirable return on capital at this point.
The result it is that it is incumbent on every individual to have a service to sell, save and invest, and remember the government can't and shouldn't stop this trend.
I asked David if he thought that outsourcing jobs was a necessary thing or not. My initial premise was that outsourcing equaled greater world wide prosperity and more customers for our goods. David's response was that we imported more than exported, so he didn't see how outsourcing helped. That got me to thinking. Why is outsourcing necessary?
The answer is so that the rest of the world can buy our goods. A natural response is that the rest of the world doesn't buy that much from us. Wrong answer John; tell them what they have won.
The rest of the world buys one product writ huge: U.S. debt. Our nation, our prosperity, like it or not is funded by about $5 trillion dollars in debt. And that debt includes all debt, like your credit card or car loan. If the US becomes an island of prosperity who will be able to debt-funded prosperity? No one. Eventually countries like Japan and China will have enough US debt in their portfolio and will spend elsewhere and our growth stalls.
So in eventuality, low and moderate paying jobs must be replaced with increasingly higher paying jobs like IT jobs, and eventually IT jobs for something else. For now the US gets rid of a lot of stinky manufacturing so we can export more debt and fuel the next level of prosperity.
Do individuals get hurt? Yes. Do the economic cycles from agrarian, to manufacturing, to informating, to whatever seem to be shortening? They do to me. But, this is inevitable. If we save 100,000 manufacturing jobs or IT jobs from export we sacrifice national economic growth and dominance. Capital seeks a better return. Manufacturing is just becoming a less desirable return on capital at this point.
The result it is that it is incumbent on every individual to have a service to sell, save and invest, and remember the government can't and shouldn't stop this trend.
# posted by PaulKi : 12:05 PM
Subscribe to Posts [Atom]