@Dietrich T. Schmitz * Your Linux Advocate
This isn't about Apple. It's about the prevailing environment set up by legislation passed over the years, NAFTA, CAFTA, Korean, WTO Treaties and so-called 'Free' trade.
Our country has seen a mass-exodus of jobs to third-world countries in the name of 'short-term' profit taking by Corporate America.
It goes further than that, but currently no one is breaking the law off-shoring jobs because of how laws are defined.
The matter of 'tax shelters' is a separate issue.
The matter of 'unfair labor practices' specifically related to sweat shops and child labor in third-world countries for products manufactured by U.S. Corporations is a separate issue.
Our country is facing a protracted deep recession, which will go even further if measures are not taken to enliven it.
The fact that we have seen long-standing 'outsourcing' is a current topic that may be a plank for Presidential hopefuls.
Newest points of view include applying a carrot and stick approach to inducing Corporations to 'insource' job creation on domestic U.S. soil.
The carrot: Graduated Tax breaks
The stick: Graduated Tax Penalties
I use 'graduated' because any such legislation would have to consider a phased-in approach over several years. You cannot simply undo offshoring of jobs and bludgeon Corporations with punitive taxation. That would be counter-productive and by itself hurt the economy as Corporations offset such costs and pass on to the consumer who ultimately pays for everything.
My point: You can't get from there (outsourcing) to here (insourcing) without changing the prevailing trade practices encouraged by incentivizing movement of jobs back to America.
The other flip-side of the coin is that we, America, are participating in WTO-sponsored 'Free Trade', aka the 'Global Economy'.
The problem with 'Free Trade' is that it isn't particularly free if the Country with which you plan to trade doesn't have a reciprocal arrangement. Example:
China's looming trade deficit. This deficit is because China will not provide access to their markets on a dollar for dollar basis.
Every dollar an American spends in WalMart that pays for goods made in China, goes to pay a WalMart invoice from a Chinese manufacturer who in turn, on the current exchange rate converts U.S. dollars to Yuan and defrays their own operating expenses, including paying their employees, who in turn possess the marginal propensity to consume (spend) in 'their' economy, stimulating it, not ours.
Add to that the fact that China intentionally manipulates their currency to not follow the prevailing market trading exchange rates and the fact that China buys heavily U.S. Treasury Bonds all of which has an effect of keeping their products' pricing to U.S. markets intentionally low, undercutting competition from U.S. manufacturing to match pricing.
We are not benefiting from the Global Economy. Quite the opposite, our financial strength has been diminished and the story above shows where the cash flows are going--straight out of our country and not trickling back down.
The worst is yet to come, regardless of 'success stories' about Apple and similar technology stars. Core manufacturing in America is gone and won't come back unless:
o We incent insourcing with Tax breaks
o Apply the 'great equalizer' on Trade-Deficit Countries who don't play fair on Free Trade by applying 'Tariffs'
The latter above is the 'equalizer' which will cooerce Free-Trade compliance with China.
Separately, off-shoring tax shelters, intentionally hiding income from the U.S. Internal Revenue service is simply breaking the law and will with time come to an end separately as Corporations are held accountable in a court of law.
While you are thinking about the above, it would be worthwhile for you to read what Andy Grove, self-made Intel cofounder, recommends:
h-t-t-p://www.businessweek.com/magazine/content/10_28/b4186048358596.htm
Thanks Adrian.
Discussion on:
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