Letter from an angry reader

From Stormy, who has written on global trade for over a decade, sends an e-mail on the discovery that we are losing competitive advantage:

I find it absolutely stunning that the Yves post and MIT study below is considered big news. Four or five years ago, I saw the writing on the wall. Off-shoring, outsourcing…name of the game. All the blather about new technology was just that: blather—otherwise, how do we explain China? It uses cheap labor …as does Vietnam, Mexico…on and on. Apple and IBM are the poster children of the modus operandi. They are American companies in name only.

Eventually, I just gave up singing the song. All the big economic voices have their selling  of corporate profit…. Globalization—poorly designed for all us schmucks. It was designed for the rich….end of story.

WTO rules? Ok: Last time. China played that WTO game by stiffing its own companies to lure the multi-corporations to set up house on Chinese soil. Chinese firms were taxed at twice the rate of foreign firms. Non-existent environmental standards in China, which lowered the cost of doing business. Unions? None. Lowered the cost of doing business. Cheap, slave labor. I could continue…but what is the use? And of course: monetary manipulation. Make cheap in China—sell high in the West. Where were the big economic voices?

And what did the U.S. do? Worry about the consumer stepping up to the plate!—banks charged uxorious rates for credit cards and loans. Extending risky credit was the name of the game. Get every last penny from the American consumer.

Sorry to get so annoyed. I saw all the stupid arguments…they were dodges. Clinton gave Phil Gramm a big wet kiss –and signed the Financial Modernization Act of 1999. Then he told us NAFTA was a win-win…. create jobs at home. Yup Yup. Then Clinton joined the lobbyist crowd and made his millions. Now we have Obama his loves the big CEO`s—

Obama’s efforts to stem outsourcing/offshoring have been silly. Obama’s solution? Cut taxes on corporations to keep them here. China gave tax free ten-year holidays to many corporations. O think he is going to match that? His strategy is classic economic stupidity…a knee jerk solution. And will O match the cheap labor costs? Will he match the low environmental standards? Will he call a halt to monetary manipulation? I suggest, play Name the Corporation who hates American. Name the corporations and the CEO who have shipped jobs overseas—only to send the goods back home.

Shame them. Make it difficult for them. Put a tariff on all goods made abroad by American companies—and exported here. Revisit the idea of what a corporate charter means. Take it away from corporations who consistently stiff us.

Close down tax havens. Get serious about them. Christ, if we think Iraq and Iran are problems….what about Bermuda? Close it down. I am serious. Send in the marines. If we cannot think of ways of really hurting Bermuda and similar uglies….we do not have a country interested in defending itself.
And change the rules of the WTO: Countries must have environment and labor standards. Countries cannot have a two-tiered taxation system—one for indigenous and one for foreign firms. All must be equal. No advantages to foreign firms in order to lure them. Otherwise, ditch the WTO.

It will take a major revolution or an outright collapse to stop all this nonsense. And with Global warming, pollution, resource lost, etc. Etc…. we do not have much time.

We have to start thinking outside the box. And listen to the squeals from the very rich.

doug

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