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It's official: Globalization and job outsourcing has destroyed the US economy

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  • It's official: Globalization and job outsourcing has destroyed the US economy

    The Council on Foreign Relations has published - and I assume sanctioned - a 52-page report from Nobel prize-winning economist Michael Spence and Sandile Hlatshwayo.

    The Evolving Structure of the American Economy and the Employment Challenge

    The basic synopsis:

    They note that the American economy has seen the lower and middle components of the value-added chain moving to the rapidly growing markets abroad and warn that soon higher-paying jobs may follow low-paying jobs in leaving the United States. The actions of the free market have made goods less expensive for Americans, but the free flow of labor and capital has also diminished the employment opportunities available in the United States and will, the authors warn, continue to do so at all levels of society. Spence and Hlatshwayo suggest that policymakers acknowledge the trade-off between the cost of goods and the availability of jobs, and they explore policies that may improve it. While the authors acknowledge that there is no simple policy fix to improve the trade-off between inexpensive goods and diminished domestic job opportunities, they argue that given the political salience of the issues at stake, policymakers must work to tackle this enormous question of inequality and economic distribution.
    In other words, the outsourcing of labor has not only destroyed lower and middle class American jobs, but will soon continue into higher paying management jobs and keep snowballing from there. And, the US will never have a real "job recovery" as long we keep going with this current system.

    Or as Steven Pearlstein from the Washington Post puts it:

    In short, what ails the U.S. economy is primarily a structural problem, not a cyclical one that can be effectively dealt with through the magic of short-term Keynesian stimulus. Unless we find a way to dramatically increase the size and scope of the tradable sector, Spence says, we’re in for an extended period of slow job growth and rising inequality. And make no mistake: at the heart of this problem is globalization..........

    What’s pretty clear, however, is that continuing to do what we’ve been doing — pushing down wages and taxes in the hope that free markets will somehow solve this problem — is folly. As Michael Spence and Sandile Hlatshwayo have demonstrated, the future does not lie in further expanding employment in health care, government, restaurants and real estate. Our urgent challenge is to reorient the tradable sector of the economy, services as well as manufacturing, so that it creates not just wealth for investors and jobs for PhDs and MBAs, but jobs for middle-class Americans as well.
    Economist Paul Craig Roberts notes in his blog at CounterPunch:

    These are discouraging times, but once in a blue moon a bit of hope appears. I am pleased to report on the bit of hope delivered in March of 2011 by Michael Spence, a Nobel prize-winning economist, assisted by Sandile Hlatshwayo, a researcher at New York University. The two economists have taken a careful empirical look at jobs offshoring and concluded that it has ruined the income and employment prospects for most Americans.......

    For a decade I have warned that US corporations, pressed by Wall Street and large retailers such as Wal-Mart, to move offshore their production for US consumer markets, were simultaneously moving offshore US GDP, US tax base, US consumer income, and irreplaceable career opportunities for American citizens.

    Among the serious consequences of offshoring are the dismantling of the ladders of upward mobility that made the US an “opportunity society,” an extraordinary worsening of the income distribution, and large trade and federal budget deficits that cannot be closed by normal means. These deficits now threaten the US dollar’s role as world reserve currency.........

    To find a Nobel prize-winner documenting the high cost of globalism to developed economies is extraordinary. For the Council on Foreign Relations to publish it suggests that the Establishment, or some part of it, suspects that its hubris has run away with its fortunes, and that different thinking is needed to restore the US economy.
    I agree with Roberts that it's highly irregular for a powerful think tank like The Council on foreign Relations - who usually support the "common wisdom" - to enlist a Nobel Laureate economist to tell the truth about the destructiveness of American job outsourcing.

    But, it's great news. It shows that they've finally embraced the inconvenient truth that this current economic system - global economy, job outsourcing, etc - will ultimately be the death of this once great country. God knows it's done enough damage as it is, and we need to change this, and change it fast.
    |TG-X| mp40x

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  • #2
    Re: It's official: Globalization and job outsourcing has destroyed the US economy

    Well honestly, with the way the government devotes its spending on defense, why would you expect the country to be any better than a glorified police force for these outsourcing companies? "It's too expensive to pay American salaries! But we damn well expect you to protect our interests abroad!"


    • #3
      Re: It's official: Globalization and job outsourcing has destroyed the US economy

      Multinational corporations are playing nations off against each other and guess who looses? Everyone but the global ruling elite.


      • #4
        Re: It's official: Globalization and job outsourcing has destroyed the US economy

        Well, I know I lost. My technical support jobs got shipped to India and Pakistan. To make me feel even better about it, India is giving my tech support jobs to their prisoners. How's that for globalization?



        • #5
          Re: It's official: Globalization and job outsourcing has destroyed the US economy

          Wow, that article of yours read exactly as I expected it to: India glorifying sweat shop/slave labor practices.

          From the comments:
          I could quite easily read the line,

          "The scheme is in its early stages, with prisoners being trained in basic data entry skills."

          Yet still we are getting comments about personal details being stolen, jobs being taken and all the rest of the usual reactionary bollocks I would associate with other publications.

          Data. Entry. So what data are they getting to enter? I'm pretty confident that if they're going to be performing any useful function, I doubt it'll be entering just nonsensitive data...




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