Hack on Business/Outsourcing

From Paul Hackett's campaign website:

Outsourcing of jobs is corporate welfare. The government is granting subsidies to corporations to take our jobs away.

Outsourcing is good for America. It keeps prices low. Multinational companies build facilities in other countries for several reasons: lower wages, proximity to other markets, and the tax incentive. Of the three, the tax incentive is the least likely factor in why a business would "ship a job" overseas.

The funny thing about this idea that outsourcing is a great evil, is that the companies that do it, usually are doing so to sell products to the market in which they are made. The end result: profit is made for the company which then has the more capital to re-invest in the company providing more jobs for everybody.

The other thing guys like Paul forgets is insourcing, but more on that in a bit.

I am a lawyer and small business owner with five employees—when Hackett Law Offices has a bad month, we don’t fire half the staff and then go crying to the government for a handout.

Hackett is a personal injury lawyer. An ambulance chaser, if you will. Do you think he has a bad month? Three of the five employees (and I assume he counts himself as an employee) are also lawyers. I would imagine the other two are a paralegal and a receptionist. Does anybody think this is a bad gig?

America gives us the opportunity to be successful and small businesses are the life-blood of motivation and American ingenuity.

He gets one right...

When small businesses and individuals across the nation get a boost to grab the next rung on the ladder it’s called "big government." When a megacorporation receives a taxpayer subsidy it’s called "growing the economy’" or "good government."

Paul, when "small businesses and individuals across the nation get a boost to grab the next rung on the ladder" it's called a "tax cut", ever hear of it? Subsidies are generally not good government. That's why when a subsidy is granted, it is usually in the best interests of the public to do so. Take transportation for instance. You want an example of a "bad" subsidy, check out the ethenol subsidy...

That’s Un-American. That’s wrong.

If you're talking ethnol, my brother, I say "Amen" but somehow I suspect you aren't...

Those are our tax dollars, and should benefit us, the American taxpayer. Our tax dollars should not be funneled to some megacorporation with an American name, an offshore bank account shielded from taxation, all the while relocating thousands of good jobs to some third world nation a hemisphere away.

Is he really ticked that there isn't an Ambulance Chaser Subsidy? Could that really be what this is about? Paul, nobody is going to shift your job overseas...

Democratic economist Charles Schultze: "there is nothing in the data to suggest that large increases in. . . offshoring could have played a major role in explaining America's job performance in recent years." (FactCheck.org)

American megacorporations in conjunction with the government are outsourcing our country’s intellectual and technological wealth.

Okay, here is where we talk about "insourcing."

U.S. subsidiaries employ 5.4 million Americans.

U.S. subsidiaries support an annual payroll of $307 billion and pay, on average, 31% more than all U.S. companies.

U.S. subsidiaries heavily invest in the American manufacturing sector. 34% of the jobs at U.S. subsidiaries are in manufacturing -- more than double the proportion of manufacturing at all U.S. companies.

U.S. subsidiaries manufacture in America to export goods around the world -- accounting for over 20% of all U.S. exports.

New foreign direct investment (FDI) in the U.S. totaled $39.9 billion in 2003.

In 2003, U.S. subsidiaries reinvested $38.6 billion in their U.S. operations.

U.S. Subsidiaries have spent $27.5 billion on U.S. research and development activities.

Source: Organization for International Investment

These are jobs we're talking about. If we start pulling back the tiny number of jobs we are "offshoring" or "outsourcing" we run the risk of losing these jobs.

"Intellectual and technoligical wealth", eh? Here is a list of the companies that have insourced jobs to OHIO:

ABB Inc.

Ahold USA

BASF Corporation

Boehringer Ingelheim

Bridgestone Corporation

DaimlerChrysler

Honda

ICI Americas, Inc.

L'Oreal USA, Inc.

Nestlé USA, Inc.

Reed Elsevier

Rodenstock North America

Saint-Gobain Corporation

Siemens Corporation

Signet Group

Sodexho Inc.

SUMCO USA

Tomkins Industries

Source: OFII

Over 200,000 jobs in Ohio alone, Paul.

This not only puts at risk our economy, but also our national security.

Our economy is just fine, Mr. Hackett. let's talk about national security, shall we...

An example of this dangerous practice is the partnership the United States has with Egypt, a Middle Eastern country, to build M1A1 battle tanks. I’m here to tell you that’s bad for jobs, that’s bad for national security, that’s bad for the economy, that’s bad government and it’s bad leadership.

Paul frames this like it just happened yesterday. It didn't. The proposal was approved in 1984. Bill Clinton didn't appear to have a problem with this arrangement because in 1999 not only did Egypt build some M1A1s, they bought them too. (Source: Center for Global Security - locals can queue up the Patton music for Frank Gaffney)

How much does it cost to build an M1A1? How much would it cost to build one here? Think about the implications to the tax payer for a minute... National security concerns? As if the military and our government would just turn over the facility to just anybody. There have got to be stringent security protocols in place... This is a strawman argument, Paul...

Conclusion: John Kerry's rhetoric didn't work for John Kerry as it failed to reonsate with the voter. The premise that outsourcing is the root of all evil is just silly.

Other Installments of "Hack On..."

Hack on Social Security