How is outsourcing good for the economy?

[even_sven]

One thing we are forgetting is that outsourcing is making a huge market for American products in India. Indian products suck. India has traditionally had a very protected economy, and the result is that the consumer goods are on par with Soviet Russia- they are there, but they don’t work so great. India has been so hostile to American multinationals that they kicked Coca-Cola out entirely for a few years. Once all the Kentucky Fried Chickens closed basically overnight. But the new administration (in part because of outsourcing) is much friendlier to American multinationals and more American goods are hitting the new middle class market. It’s pretty amazing to see the shiny chrome and glass malls full of Tommy Hilfigar shops in the middle of a dusty fields full of cows and slums. We’re talking about a market of one billion people that are starting to buy American home appliences, Western name brand clothing, American pop culture products, and other goods. It’s kind of like the fifties over there- a new middle class just dieing to consume. And you can bet we’re just waiting for them to give us back some of those newfound rupees. It’s globalization in it’s purest form.

In other words, we can’t debate outsourcing without being willing to look at globalization as a whole. There is a lot more at stake than just America.

Despite popular belief, outsourced tech jobs are not sweatshop style. They provide very comfortable working conditions (the offices I saw were better than any government or local business offices I saw) and very livable wages. $300 a month doesn’t seem like a lot, but when rent is a hundred bucks and a meal out is a dollar or two, it goes a long way. The only complaints I had about tech outsourcing working conditions is that discrimination of all kinds is okay there and age, gender, etc. were big factors in getting hired. Anyway, I saw some real sweatshops there and the tech places were not comperable.

It’s not all peaches there though. Their economy is getting unbalanced. Nobody studies anything but subjects that will get them outsourced jobs, but everyone is pretty sure all those jobs will go to China pretty soon. Kind of seems like our economy right now, eh? But there there isn’t much of a service industry to fall back on. When you have a bad job in India, it isn’t a matter of moving in to a smaller apartment and cutting back on meals out. It’s a matter of life and death. And the tech economy there could fall with the blink of a multinational’s eye. I’d imagine our companies would wait until the country can support a middle class before pulling out to China, and repeat there, thus getting them two billion new potential customers. But who can count on that?

And yeah, it sucks for all of you losing your jobs and being forced to work jobs you don’t like. Welcome to the same boat the rest of us are in. Few people in the world in history get the luxery of working jobs that don’t hurt, arn’t demaning and allow them to afford much more than a basic standard of living. We all took a gamble in what we studied/trained in and sometimes we lose. And a lot of Americans have been losing big time for a long time. It isn’t so special that it’s suddenly people that put their eggs in a basket that we once considered economically viable now have to do these things. What we need to do is to create a labor sitation where even the “last resort jobs” provide a reasonable standard of living. We need to aknowledge that the entire American economy is in the dumps and things like our current healthcare situation, retirement options, etc. need fixing right now.

[rjung]

@even sven

One thing we are forgetting is that outsourcing is making a huge market for American products in India. … And you can bet we’re just waiting for them to give us back some of those newfound rupees.

So, American companies get rich(er) from selling to new global markets.
American citizens, on the other hand, get bugf*cked because the only jobs left for them are $6/hour minimum wage burger-flipping tasks.

Must be more of those “traditional values” again.

@even sven

$300 a month doesn’t seem like a lot, but when rent is a hundred bucks and a meal out is a dollar or two, it goes a long way.

Which would be great, if we’re all living in India. Since we don’t, it’s a meainingless statistic.

(Hey, sven, have you ever lived on $300 a month? If so, where?)

[John_Mace]

even sven: I can agree with almost all of your post, but I’m puzzled why you would ruin it with a statement like:

We need to aknowledge that the **entire **American economy is in the dumps…

My bolding. Can you elaborate?

@laigle

…It is only by slowing the rate of “progress” to the level where workers can transition that we are able to sustain the human beings for whom the economy exists…

Can you tell us how you think this should work, wrt outsourcing? The government doesn’t allow certain jobs to be eliminated if they are replaced by someone in another country? What if a new company starts up based on outsourced labor? Does the “ministry of progress” shut them down unless they hire American workers to do the jobs?

I wonder if contributors to this thread understand how highly successful companies, like Intel operate. Intel has thousands of employees (yes, thousands) overseas who participate in the manufacturing process. Pretty much all the front end manufacturing (wafer fab) is done in the US, Europe and Israel. Pretty much all of the back end manufacturing (assembly and test) is done in Asia. This has been the trend since the early 80s. And Intel isn’t unique. All the large semiconductor manufacturers have the same model. The smaller companies, who can’t afford their own manufacturing plants, often subcontract out ALL of the manufacturing process. This sector is probably one of the most innovative and vibrant sectors of our economy. And, btw, companies catering to this need, like TSMC in Taiwan and Anam/Amkor in Korea, have become powerhouses in their own right. It’s experiences like what we have seen in the IC industry that makes me thinkg those claiming “outsourcing is ruining our economy” simply have no idea what they are talking about. Do we want to “slow the progress” of companies like Intel, Motorola, and Texas Instruments?

[XT]

@rjung

Yeah, job loss from outsourcing is all the fault of those damn greedy Americans! Why can’t they just accept working for third-world sweatshop wages like everyone else?

sigh You are right…we should just pay our workers whatever they want as far as a wage goes. Who needs a free market at all. I mean, look how wonderfully it worked for the old Soviet Union. Paradise on earth…

@rjung

Sure, but what good is a nation whose only jobs left are for folks waiting tables and working drive-thru windows?

Do you EVER have anything vaguely interesting to say or is it all hand waving BS, hysterical anti-Bush screeds or digs whenever you can get away with it, and an ignorance so deep about how the economy works that its breath taking?? Show me that our economy is going to all the workers in the US waiting tables or working drive-thru windows and you might have a point. Of course, you CAN’T because once again all that spews out of you is endless hysterical BS. Its not even GOOD hysterical BS either.

-XT

[Johnny_L.A]

I’m going to bow out of the thread, at least for the time being. It’s not because I don’t want to debate it, but because I’m very depressed at the moment about other matters.

Please carry on.

[Evil_Captor]

@Debaser

You’ve got it backwards. It’s the opponents of outsourcing who want the government to tamper with the free market to stop outsourcing. Since you are the one who wants to interfere, it’s up to you to prove that you have thought it through and provide evidence that it will have benefits that make it worth it.

Your argument posits that the free market is enshrined in the Constitution somewhere – it is not. We are all equal here, and it is my opinion that the nebulous benefits of allowing outsourcing to proceed unhindered calls for much more evidence than stopping the obvious harm that outsourcing produces – lost jobs, lost income, etc. for average folks.

The folks who benefit from outsourcing are wealthy CEOs and stockholders who find themselves slightly richer as a result – important to them, but compare their situation with Aruqvan’s and I think you will see it’s a very unequal situation.

Taxes and civil penalties for companies that outsource would be a starting point. Companies would not outsourced, those jobs would be retained in America – friend Aruqvan would not be hounded from job to job. A good thing for all except the wealthy few, who will not be all that discommoded by not being able to buy that third luxury yacht this year.

[Evil_Captor]

@msmith537

I hate to bring in this same old tired cliche to this argument, but why are we not a nation of unemployed farmers and buggy-whip makers if you were right?

The reason you should hate to bring these cliches to the argument is that they don’t work well for you. Specifically, you are not comparing apples and oranges. Buggy whip manufacture died out because its market died, not because people found it cheaper to hire people to build buggy whips for less in other countries. There is a demand for programming and customer support in American business, but the megacorps don’t wanna pay living wages to Americans. You posit that this is an OK thing, that after a period of adjustment new work will be found by the workers. But if there is one thing we have seen of late, it is that most new jobs are cheap service sector jobs. Unless you can propose some concrete mechanism where good-paying programming and tech support jobs will be replaced with equally lucrative work, you’re just blowing smoke.

“Want an order of fries with that?” is the future you so eagerly seek to drive us toward.

INCORRECT - Outsourcing results in freed up resources and capital that can be put to work elsewhere in the economy. The benefit comes to the consumers who can enjoy a higher standard of living by buying more affordable products.

See low-paying service sector jobs referenced above.

“Supposedly, there were going to be huge new numbers of jobs from the (putative) burst of economic growth.”

INCORECT - New economic growth comes from innovation. Outsourcing simply uses existing resources more efficiently. The growth will come as companies use the profits to grow and develop new products or markets.

More typically, they’ll just offer stockholders a higher dividend or inflate the CEOs salary even more ridiculously than it is already inflated.

INCORRECT - Most rich people have significant investments in real estate, stocks, bonds and other instruments ties to the economic health of the country. Even if what you say is true, why would they want to own 99% of a shrinking pie?

Because it is better than owning 98 percent of a shrinking pie?

“If large american companies can increase their profits by outsourcing, then those improved profits strengthen the country. They allow America to be more competitive on the world stage, and mean that in the end, America will prevail.”

CORRECT - Profits mean companies can grow, hire more workers develop new products.

I’m pretty sure I know whose end America will prevail in. It WON’T be the wealthy elite’s.

"Doesn’t Occam’s Razor suggest that the explanation that outsourcing is a bad thing in and of itself is the preferred one: it is the simpler explanation, it does not rely on what amounts to faith as the “efficiency” explanation does. "

INCORRECT - What is “intuitive” or “common sense” to the layperson is not always the correct one in economics. For example, common sense tells you it’s fair to force minimum wages or rent control so that people can maintain a high standard of living. Well, to an economist familiar with basic market theory knows that price cielings or floors basically create a condition where there are more (or not enough) people willing to pay for a product at a given price than there is product available. The results are shortages or gluts.

Occam’s razor has nothing to do with intuition or common sense, it is a logical principle that simply states that when two competing explanations are offered for a phenomenon, the simpler of the two is the most likely to be correct. You are proposing that some distant and unknown effect of the marketplace will Solve All. Well, well, well. You’ll pardon me if I view your proposal with some reserve.

and let me dispel some additional notions before they even get started:
“There is a finite amount of work to be done”

INCORRECT - Well, maybe there isn’t infinite work, but until we live in some kind of Utopia there is always something more that can be done.

Sure, there’s always work to be done, but just try getting someone to pay you a living wage to do it. There are hungry people who need to be fed, there are sick people who need to be clothed, there are people living on the street who need housing … but we don’t seem to be able to do much about them, somehow.

“Small companies are better than large companies”
INCORRECT - The best size company is the one that is most efficiently able to meet the needs of it’s customers.

Small compnaies are not better than large ones, large ones are just the ones most likely to outsource because they are most likely to have international contacts.

[RaftPeople]

Some miscellaneous points that may or may not have been made already:

1. For an individual, outsourcing can be very difficult because years of experience and skills are no longer valuable and the time it takes to acquire skills that are valuable in this economy can be significant. While economists are probably accurate at the macro level, the benefits are not nearly as evident to specific individuals.

2. If you want to really worry about something, start worrying about the trade deficit.

[msmith537]

@Evil Captor

The reason you should hate to bring these cliches to the argument is that they don’t work well for you.

Look I don’t want accepted economic theory or actual facts to get in the way of you opinion. You so obviously have no idea about what you are talking about that it is difficult to formulate a response.

@Evil Captor

Small compnaies are not better than large ones, large ones are just the ones most likely to outsource because they are most likely to have international contacts.

Noooo…large companies have more employees and more services so they are more likely to outsource them. There is no secret society of “international contacts”.
Look, you see outsourcing as rich people sending jobs overseas to screw Americans out of spite. I see it as an opportunity for innovators to get a product manufactured that otherwise could not be made.

@Evil Captor

But if there is one thing we have seen of late, it is that most new jobs are cheap service sector jobs. Unless you can propose some concrete mechanism where good-paying programming and tech support jobs will be replaced with equally lucrative work, you’re just blowing smoke.

I don’t believe they should be. Tech support and IT staff should not be pulling down six figure salaries. There is no reason the IT guy should make as much as the director of marketing. It’s a supporting function that is supposed to support the core business. I’ve been laid off several times over the past few years. I know a lot of people in finance and consulting that have also been laid off. All of us have found jobs that pay at least as much as we made before. They may be slightly different jobs, but they are the same level. I don’t know anyone working at McDonalds. Maybe the problem is you.

[rjung]

@xtisme

Do you EVER have anything vaguely interesting to say or is it all hand waving BS, hysterical anti-Bush screeds or digs whenever you can get away with it, and an ignorance so deep about how the economy works that its breath taking?

Way to go with that rebuttal there, xtisme. :rolleyes:

[Bill_H]

On a personal level, being laid off sucks. But outsourcing happens because people are being paid at a rate that is too high. Should you pay $800 for a TV when you can buy one for $200? Of course not. Why should a company be forced to buy a Tech Support Engineer for $80k/year, when they can get a comparable one for $25k/year? It’s the natural state of things for them to pay the $25k. For someone to force them to pay higher, or to try to claim it’s unethical for them to pay a reasonable price is, well unethical.

Everyone deserves to buy what they need at the lowest price they can, and sell what they’ve got at the highest price they can. When prices are held artificially high or artificially low, less money flows, and that hurts everyone.

[even_sven]

John Mace,

It isn’t so bad for established people, but for younger folks it is a pretty bad scene. Jobs are scarce and many of them are low wage. Beyond that, even good jobs are part time and don’t offer anything in the way of benefits. Younger worker are expected to fend for themselves entirely when it comes to health care and retirement, whereas it used to be uncommon to be without at least some sort of pension plan. Somewhere along the line (in my opinion it started in the tech bubble when we started thinking it was cool to pay people in things like stock options and there was enough money floating around to keep things from getting bad) everything got shifted to an “independent contractor” type situation, except without the higher fees that independent contractors used to pull in.

Added to that is the sliding dollar, an imminent explosion in interest rates (which also screws over young folks that graduated with massive student loans) and a general sense of “oh my god whats gonna happen?” regarding the stock market and we have a very shaky situation. It’s not pretty, and I predict it will get worse before it gets better.

rjung, the idea is that these American companies not only make more profits, but they make new markets to lead to even more profits. In theory this stimulates the American economy through more tax dollars and more money to invest etc. etc. It’s exactly like the old colonial ideal of snatching up a country’s resources and then selling them profits. I’m not so sure that I buy this myself, but you can’t seperate a critique of outsourceing from a critque of globalization in general.

I guess I feel like it’s kind of America’s fault for letting the divide between “tech support guy” and “guy flipping burgers” grow so wide, and now we ought to work on fixing it, not instituting protectionist schemes. America is a prosperous country, and it’s a shame for any Americans to be suffering, not just displaced tech workers.

And yeah, I did live in India on $1000 for three months, so, uh, there.

[Evil_Captor]

[QUOTE=msmith537]
Look I don’t want accepted economic theory or actual facts to get in the way of you opinion. You so obviously have no idea about what you are talking about that it is difficult to formulate a response.

[quote]

In other words, you disagree with my ideas, so much so you can’t begin to formulate a response. Works for me. Silence is golden and all that. But if you do have a response, I’ll listen, cause I’m a nice guy.

Noooo…large companies have more employees and more services so they are more likely to outsource them. There is no secret society of “international contacts”.

Stop putting words in my mouth. I never said there was any such secret society. Large companties are more likely to do international biz, thus more likely to have contacts, and as you point out, are more likely to want to outsource. You really need to read carefully and argue with a person’s actual arguments, rather than your imagined version of their arguments.

Look, you see outsourcing as rich people sending jobs overseas to screw Americans out of spite. I see it as an opportunity for innovators to get a product manufactured that otherwise could not be made.

Once again, you are attributing notions to me which I do not happen to have expressed. Rich people send jobs overseas to lower their production cost. There is no spite involved. They are indifferent to the fortunes, or lack of them, of their employees. If you think that every penny that is saved on outsourcing is spent on new products, why, you’re a very BELIEVING person, aren’t you?

I don’t believe they should be. Tech support and IT staff should not be pulling down six figure salaries. There is no reason the IT guy should make as much as the director of marketing. It’s a supporting function that is supposed to support the core business.

So, basically, you think everybody should be making burger doodle wages except a few corporate honchos in any organization. Oh, THAT’S a formula for econnomic success in America … if your idea of “economic success” is becoming a Third World nation with a huge underclass barely getting by supporting the extravagant wealth of a small upperclass. Banana republicans, here we come!

I’ve been laid off several times over the past few years. I know a lot of people in finance and consulting that have also been laid off. All of us have found jobs that pay at least as much as we made before. They may be slightly different jobs, but they are the same level. I don’t know anyone working at McDonalds. Maybe the problem is you.

Argumentum ad hominem, hence invalid on its face. My personal fortunes have very little to do with what’s happening in the economy and it wouldn’t matter if they did. I am not arguing what is best for me, personally, but what is best for the economy as a whole. OTOH, maybe the reason you have difficulty communicating with people who don’t buy your notions of economic righteousness is … you.

[Debaser]

@Evil Captor

Your argument posits that the free market is enshrined in the Constitution somewhere – it is not. We are all equal here, and it is my opinion that the nebulous benefits of allowing outsourcing to proceed unhindered calls for much more evidence than stopping the obvious harm that outsourcing produces – lost jobs, lost income, etc. for average folks.

It is not enshrined in the constitution that we are all to be financial equals either, Comrade.

It’s great that you have an opinion on the subject. However, everybody has an opinion. I’m glad that all these opinions aren’t official government policy, however. If you want to tamper with the free market that serves us all so well, then you better have a damn good reason to.

The reason that we have the strongest and best economy of any country in the world is that the government doesn’t mess with it to make things “equal” for everyone.

The folks who benefit from outsourcing are wealthy CEOs and stockholders who find themselves slightly richer as a result – important to them, but compare their situation with Aruqvan’s and I think you will see it’s a very unequal situation.

You make it sound like only rich fatcats are stockholders. Anybody can buy stock and benefit from the rise of value of a company. Aruqvan included. Most American’s own stocks.

Taxes and civil penalties for companies that outsource would be a starting point. Companies would not outsourced, those jobs would be retained in America – friend Aruqvan would not be hounded from job to job. A good thing for all except the wealthy few, who will not be all that discommoded by not being able to buy that third luxury yacht this year.

It’s ultimately a good thing for everyone to allow outsourcing. If we force American companies to not leave our borders then they won’t be able to compete. Instead of IBM laying off 5% of it’s workers to hire indian programers and save a buck, they will go out of business entirely and some new Indian company will own that market.

Being against outsourcing is like wanting the government to just print money for everyone to have. It’s a nice idea, but hopelessly niave and betrays a complete misunderstanding of economics.

[Beware_of_Doug]

@Debaser

If you want to tamper with the free market that serves us all so well, then you better have a damn good reason to.

The reason that we have the strongest and best economy of any country in the world is that the government doesn’t mess with it to make things “equal” for everyone.

Yes, won’t somebody think of all those starving Western Europeans? :dubious: Their life under generalized social welfare states doesn’t seem too bad. (Maybe the Scandinavians go too far, but that’s another debate entirely.)

Is the ultimate goal to have a great economy? Because ultimately, an economy is only a bunch of numbers and indices. Or is the real goal to increase our standard of living?

And if so, is it better to make real gains for all sectors (which seems to mean extensive social welfare infrastructure), or merely maximize gains for some sectors (which seems to mean trusting the haves to think about the have-nots and taking no action if/when they don’t)?

The common American business model these days is winner-take-all: that a company must either be #1, or a very nervous #2, or go out of business. My last question is: Might it not be fallacious to apply this model to economies? Do nations compete like companies? Must they? (I’m asking; not rhetorically, because I honestly don’t know.)

[Evil_Captor]

@Debaser

It is not enshrined in the constitution that we are all to be financial equals either, Comrade.

So equality is now proof of Commie tendencies, is it? Didn’t realize the Founding Fathers were such a bunch of Commies. Your grasp of history is … interesting.

It’s great that you have an opinion on the subject. However, everybody has an opinion. I’m glad that all these opinions aren’t official government policy, however. If you want to tamper with the free market that serves us all so well, then you better have a damn good reason to.

It serves the wealthy very well, the middle class not well at all, and the poor, well, let’s just say they experience the Invisible Hand as a fist most of the time. So changing the free market is a good thing … for most of us.

The reason that we have the strongest and best economy of any country in the world is that the government doesn’t mess with it to make things “equal” for everyone.

I don’t recall saying that, in fact, I’ve said just the opposite. Gotta get those conservative filters out of your cranial inputs, Debaser.

You make it sound like only rich fatcats are stockholders. Anybody can buy stock and benefit from the rise of value of a company. Aruqvan included. Most American’s own stocks.

Very few people derive significant income from stocks. Most people who own stocks own stocks in the company they work for, as a benefit. Many never see much in the way of benefit from this “benefit.” Especially if they get summarily laid off so other stockholders can benefit from their suffering.

It’s ultimately a good thing for everyone to allow outsourcing.

It must be all the pie in the sky we will get when we die.

If we force American companies to not leave our borders then they won’t be able to compete. Instead of IBM laying off 5% of it’s workers to hire indian programers and save a buck, they will go out of business entirely and some new Indian company will own that market.

Being against outsourcing is like wanting the government to just print money for everyone to have. It’s a nice idea, but hopelessly niave and betrays a complete misunderstanding of economics.

y’know, Debaser, other countries have done well by protecting their economies at times … notably, Japan. It doesn’t work in all circumstances, but I think priotecting the American middle class from further erosion just might be worth making big Blue a little less competitive in the marketplace. Maybe they could make it up in other ways … better service, products, etc. Been known to happen. The race to the bottom is not inevitable. It SURE as hell isn’t desirable.

[erislover]

I’ve always been under the impression that outsourcing is what is happening to a lot of job creation, and not so much to downsizing. Some restructuring will always happen, of course, but it is hard for me to see the difference between companies outsourcing and consumers buying cheap imported goods. This is from the manufacturing angle.

But the outsourcing discussed today usually refers to service and support outsourcing, not moving manufacturing. This is a different kind of efficiency argument than relocating industries to more favorable conditions. And it can only last so long before the salaries and costs rise in, for example, India, at which point what happens… move to another country rinse and repeat until the whole world has caught up to America? Or until the dollar is so crappy that we might as well employ Americans again?

Some people make everything market-related smell like roses. I do have a nose, though. I can smell for myself. They key phrase is always, “…in order to stay competitive…” In other words, there is no expectation of lowing prices, really, but maintaining current profits (or beating them).

Then we hear the lovely idea that the monies saved by these companies will simply be reinvested. Ok, where? In what industries? Manufacturing in America is expensive, so we moved to Mexico. Technical support was too expensive, so we “shipped” that to India. Exactly whose infrastructure will we be investing in, with these profits, if lazy American workers are so overpaid?

Just wondering which way the wind is blowing so I know where the distinctly non-rosey odor is coming from.

[LonesomePolecat]

@Cheesesteak

I don’t have to prove that the industrial revolution was real, do I?

To an extent, it *wasn’t * real, Cheese. Anyone who thinks that it was the Miracle of the Free Market that raised millions of factory and mine workers out of crushing poverty instead of a bitter political struggle, is living in Cloud Cuckoo Land (as the Germans say).

[John_Mace]

@even sven

It isn’t so bad for established people, but for younger folks it is a pretty bad scene. Jobs are scarce and many of them are low wage. Beyond that, even good jobs are part time and don’t offer anything in the way of benefits. Younger worker are expected to fend for themselves entirely when it comes to health care and retirement, whereas it used to be uncommon to be without at least some sort of pension plan…

Although I disagree with that assesment, at least it’s something more debatable than what I highlightled from your first post. At any rate, I don’t really want to hijack this thread into that direction, so let’s just agree to disagree on that point.

@Beware of Doug

Is the ultimate goal to have a great economy? Because ultimately, an economy is only a bunch of numbers and indices. Or is the real goal to increase our standard of living?

And if so, is it better to make real gains for all sectors (which seems to mean extensive social welfare infrastructure), or merely maximize gains for some sectors (which seems to mean trusting the haves to think about the have-nots and taking no action if/when they don’t)?

No, it’s not better to make real gains for all sectors. If that were true, we’d still have a thriving buggy whip sector alongside our thriving IC industry. Some sectors SHOULD go out of business. Inherent in your argument, I believe, is the assumption that is there is some objectively knowable “right” balance among the various sectors of the economy, and that the government can manage that balance to the benefit of all. That simply isn’t true.

The common American business model these days is winner-take-all: that a company must either be #1, or a very nervous #2, or go out of business.

It might be the goal of every company to be #1, but I’d like a cite to demonstrate that most #3 ranked businesses go out of business.

My last question is: Might it not be fallacious to apply this model to economies? Do nations compete like companies? Must they? (I’m asking; not rhetorically, because I honestly don’t know.)

Countries do not compete like companies. That is correct. Ford competes with GM in the same way they compete with VW. But companies have to be play by the rules in their country. If we tax “outsrourcing” in the US, but it’s not taxed in other countries, we put US based companies at a competitive disadvantage.

@erislover

Some people make everything market-related smell like roses. I do have a nose, though. I can smell for myself. They key phrase is always, “…in order to stay competitive…” In other words, there is no expectation of lowing prices, really, but maintaining current profits (or beating them).

The consumer electronics business is probably the poster child for globalization, wth so much “outsourcing” it would make your head spin. When was the last time you paid MORE fo the same consumer electronics gadget (ie, same features) than you did 2 years ago?

Actually, it seems that you are the one saying always:

Then we hear the lovely idea that the monies saved by these companies will simply be reinvested. Ok, where? In what industries? Manufacturing in America is expensive, so we moved to Mexico. Technical support was too expensive, so we “shipped” that to India. Exactly whose infrastructure will we be investing in, with these profits, if lazy American workers are so overpaid?

A tiny, tiny fraction of tech support has been outsourded to India. You make it sound like there are no tech support jobs left in the US. And some companies that tried the India solution found it didn’t work, and brought those functions back to the US.

As for reinvestment, go back to my Intel example. It cost $2-3B (that’s billion, with a “b”) to build a new wafer fab facility. Where does Intel build these fabs? Almost all of them are in the US. Again, Intel (and companies like it) might be seen as another poster child for outsourcing.

[erislover]

John, I’m not saying anything one way or another. But it doesn’t add up. If no one is “really” outsourcing, then it isn’t so great, is it? But if so many people are, then where is our economy coming from? I’m trying to grasp the issue, because nothing anyone is saying makes any real sense. On either side.

Cheaper goods… for who to buy with decreased salaries? Oh, but not that many people have decreased salaries? Then how are we getting cheaper goods (and services)? Etc.