A way to stop outsourcing
I very much liked the article, which is incisive and revealing. However, I would like to bring to the attention of the author that in an individualistic and capitalistic culture such as our own, one should not ignore the role of the individual. I mean, the CEOs of the big multinational corporations, with their obsene total compensations. In my opinion, one has to divise ways of not rewarding them with extra personal cash for sending jobs abroad, but within the framework of a free market capitalistic system. My proposed solution to this is the simple following idea:
The total compensation of the CEO and his senior executive elite would be a multiple of the mean salary of his employees in the company—but the whole company, including subsidiaries and/or subcontractors in all countries of the world. The actual multiple can be defined by the stockholders (a reasonable one could be 30x to 40x for the CEO and half of it for the senior execs), and may be different from company to comapny, but once is determined, it would remain in force for at least five years. I believe that this would do miracles to change the direction of the strategic thinking of the leaders of the US multinationals and will reduce the flow of manufacturing jobs abroad without causing a global trade war.
Nov 10 2010 - 12:56pm
I am a retired economic consultant. William Greider does an excellent job analyzing the problem, and the political shifts we are seeing, but I don't think that tax policies or "enforceable contracts" are a good answer because they are slow-acting, imprecise and complicated. He comes closer to the mark with what he describes as "a border tax on social costs," which at least would target something citizens of other countries could respect and would be reasonably flexible in implementation. But what is a "border tax" except Newspeak for a tariff? Mr. Greider would do us all a favor if he forgoes the Newspeak and gets down to the reality that no expedient—neither currency manipulations, quotas, subsidies, tax policies, enforceable contracts nor any sort of non-tariff barrier or incentive —is nearly as efficient, flexibl and crystal -clear as a tariff.
If we don't want the end of free trade globalization, what we need is an makeover of the WTO, making it a W(save free)TO. How to do this? Mr. Greider has given us half the puzzle with his very sensible suggestion about recognizing social costs. The other half of the equation is a long-overdue answer to half a century of destructive efforts to use currency policy as a tool to control trade surpluses or deficits. The simple, straighforward way is via tariffs. But if each nation sets its own tariffs, free trade goes down the drain. We need a WTO mechanism that will set tariffs for its members based on their handling of social costs, and their actual (prior year?) trade surplus or deficit. If a critical mass of nations can agree to do this, free trade will flourish.
Nov 7 2010 - 9:55pm
The world is still evolving post-WWII. Once-destroyed economies are agian fully mature, and once nonexistent economies are now post-adolescent. America no longer is the only game in town, and eventually we must become competitive on the world's terms... although we are still the biggist player and will do much to shape those terms. In the short term, protectionism is probably inevitable in America and should be. We've supported the globe for almost all of the last sixty years, and it is time for others to step up responsibly. Mr. Grove is almost certainly right and for the right reasons. That said, we must understand that fighting to win may well become a very hot war. We must "Be Prepared," as the Boy Scouts say.
It seems our best way forward is hard work to create wealth, materially and spiritually, while practicing frugality... in the hope we can shape the world before the conflict becomes hot globally.
Most of the rest of this century is probably going to be one hell of a ride... especially in Asia.
Nov 7 2010 - 7:41pm
It's time for the Dems to help the unemployed!
I wrote this ("End WTO Job Loss") about two weeks ago.
Peter G. Cohen
Santa Barbara, CA
Nov 6 2010 - 8:24pm
Social uses for dispersion and mass
As always, Mr. Greider has produced a thought-provoking article.
The above title reflects military concepts that may lend some clarity to the comments that follow. In the Dictionary of Military Terms put out by the Joint Chiefs of Staff, one aspect of dispersion is "the spreading or separating of troops, material, establishments, or activities which are usually concentrated together to reduce vulnerability." Although the military uses of these concepts are relatively modern, the political and economic uses of dispersion in the United States predates military usage.
In a political context, the separation of equal powers between the executive, legislative and judicial branches of government is designed to prevent the concentration of power in one branch of government.
In economics, the Sherman Antitrust Act was designed to prevent one company from controlling a particular type of industry or a segment of the market.
Tariffs, as conceived by Alexander Hamilton, were designed to prevent the control of the control of the infant American economy by foreign governments or business interests, and to grow American industries supported by American farmers. Tariffs are a form of dispersion that encourages national economies controlled by their own people. With an interdependent global economy, failure in one economy may effect all economies. Dispersed national economies limit failure to one nation.
Mass is defined as "the concentration of combat power." For civilian purposes, we will adapt this concept to mean the concentration of material and people to solve a problem or achieve a goal.
In summary, this aspect of dispersion is used for protection. Massing means concentrating people and and materials to solve a problem or to attain a goal. These concepts are not restricted to any level of government. Government will be considered a tool, and which level of government is used depends on the size of the problem. Usually, more than one level of government is required with a massive problem. Local government will often be on point, because they know the ground and the people. In some cases, the use of government may not be required.
Pervis James Casey
Nov 4 2010 - 5:00pm