The Undoing of the Great American Economy

Even though there are probably fewer people stocking up on bottled water and ammo today than there were six months ago, it's obvious that there are still grave problems with the U.S. economy.

On Friday, my fellow Fools Morgan Housel and Ilan Moscovitz shone a light on banking institutions like AIG (NYSE: AIG  ) and Bank of America (NYSE: BAC  ) that are considered "too big to fail." Morgan followed up with another article yesterday, highlighting exactly why "too big to fail" is a terrible thing for all of us.

But unfortunately, "too big to fail" is a mere symptom of the greater disease that's landed us in such hot water.

The hallowed halls
A closer look at some of the United States' most prized educational institutions says a heck of a lot about the unfortunate direction that our economy has taken in recent decades. Stats from MIT, traditionally a bastion for mathematics and engineering, show that 27% of the school's undergraduate students now end up in the world of finance -- far more than any other industry.

Data from the University of Pennsylvania and Harvard paints a similar picture, as 24% and 23% of their undergraduates, respectively, end up in finance. And it should be noted that these numbers don't include Penn's Wharton undergraduate business school -- they apply only to graduates of the university's "Arts and Sciences" school.

Cornell, meanwhile, proudly lists the 10 biggest employers of Cornell's 2008 grads. Half of them -- Citigroup (NYSE: C  ) , Goldman Sachs (NYSE: GS  ) , JPMorgan Chase (NYSE: JPM  ) , Lehman Brothers, and Merrill Lynch -- were in the field of finance.

For a more detailed look, here's a sample of the post-graduation paths that Stanford graduates walk.

Degree

Field of Study

Employer / Position

BA/BS

Biological Sciences / Economics

Goldman Sachs investment banking analyst

BA/BS

Biomedical Computation

Goldman Sachs infrastructure systems analyst

BA/BS

Civil Engineering

Moody's (NYSE: MCO  ) financial engineer

MA/MS

Communications / International Relations

Morgan Stanley (NYSE: MS  ) fixed income sales analyst

BA/BS

Electrical Engineering

Goldman Sachs equities analyst

BA/BS

Mathematics

Citigroup quantitative trading and research analyst

MA/MS

Physics / Computer Science

Jump Trading professional trader

MA/MS

Statistics

Bear Stearns associate

Source: Stanford.

It seems obvious that many of our best and brightest, who have studied in fields such as biomedical computation (the name alone makes my head spin), are being lured away from making truly productive contributions to society. Instead, they opt for the huge paychecks financial companies can provide.

But who can we blame? The school? We could argue that it just wants students to find the best and most lucrative opportunities after graduation. The students? It seems hard to blame them for wanting to score a big paycheck after paying through the nose for their education. Heck, I certainly can't be high and mighty, since my first stop after the University of Pennsylvania was investment banking.

But here's the problem
The problem isn't Goldman Sachs, "too big to fail," the Federal Reserve, or the government as a whole. These things are really only reflections of our society. Where the U.S. was once primarily an industrial nation, making and inventing things, we are now a country very focused on financial engineering and the trading of paper assets.

I'm hardly alone in this opinion. Among others, PIMCO's Bill Gross has been preaching on the subject for a while now. In Gross's most recent commentary, he wrote:

For the first several decades of this history, economic growth, not paper wealth, was king. We were getting richer by making things, not paper. Beginning in the 1980s, however, the cult of the markets, which included the development of financial derivatives and the increasing use of leverage, began to dominate. ... We, in effect, were hollowing out our productive future at the expense of worthless paper such as subprimes, dotcoms, or in part, blue chip stocks and investment grade/government bonds.

And wagging our fingers at the CEOs of big banks only allows us to ignore how pervasive the belief in paper wealth runs. Whether we witness Goldman Sachs's head honcho taking home tens of millions of dollars, or Joe Schmoe getting in over his head flipping houses, we can see the problem almost everywhere. In the end, looking for the next quick, easy way to get rich has become a national ethos.

No easy solution
Just like Mickey trying to chop up all the broomsticks in Fantasia, we can snuff out credit default swaps or break up the big banks, but as long as our underlying philosophy remains the same, new iterations of the same ugliness will keep sprouting up.

So what do we do? I want to hear from you. Head down to the comments section and share your ideas about how the U.S. can get back on a sustainable path of creating solid economic growth, and steer away from chasing the glimmer of paper riches. Or you can tell me that I'm completely crazy, and that none of this is a problem at all.

Is Jim Cramer an evangelist for the paper wealth society? Perhaps. But either way, Nick Kapur thinks you shouldn't be listening to Cramer.

Moody's is a Motley Fool Stock Advisor and a Motley Fool Inside Value recommendation. Motley Fool Options recommended writing puts on Moody's. Try any of our Foolish newsletter services free for 30 days.

Fool contributor Matt Koppenheffer owns shares of Bank of America, but does not own shares of any of the other companies mentioned. You can check out what Matt is keeping an eye on by visiting his CAPS portfolio, or you can follow Matt on Twitter @KoppTheFool. The Fool's disclosure policy is fine with a new national ethos, as long as Flip This House stays on the air.


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  • Report this Comment On November 18, 2009, at 10:59 AM, arvjos wrote:

    When the governments world over decided to flood the economies with money to unfreeze credit markets, they should have taken steps to ensure that the cheap money does not go back into speculation over real estate and assets. However, they seem to have let that happen with the goal that asset appreciation can bring back the feel good factor and along with it consumer spending. In the end it is going to make the situation worse because the stock markets have increased almost 80% while all the key indicators are still negative. When we have the 2nd dip, the world will not be left with any options but to finally correct the basic problems and then it will get ugly.

  • Report this Comment On November 18, 2009, at 11:00 AM, quantized wrote:

    The U.S. needs a robust industrial policy in order to address your valid concerns. A regulated financial system with limits (or disincentives) on size would help a bit too.

  • Report this Comment On November 18, 2009, at 11:02 AM, Turfscape wrote:

    Excellent insight into the underlying factors of our current economy. People can blame institutions and government administrations, but we, ourselves, buy into the magic seeds that they're selling.

    We rail against financial giants for their Credit Default Swaps now, but refused to ask questions of them when our statements were showing 18 - 26 percent annual growth.

    I offer no solution, but hope that people continue asking the questions. It's a BIG first step to true recovery.

  • Report this Comment On November 18, 2009, at 11:07 AM, CAPTAINWACK wrote:

    The paper economy can be traced back to the passage of NAFTA, which has lead to millions of manufacturing jobs leaving the US economy. High taxes is also a factor in forcing manufacturing jobs to other countries.

    Have you ever tried to start-up a manufacturing company in the US? Give it try, you'll see what I'm talking about. I'm sure your going to ban this comments just like the others you did...censorship is alive and kicking at fool.com

  • Report this Comment On November 18, 2009, at 11:15 AM, TMFDiogenes wrote:

    It's a problem of incentives. Our economy doesn't reward productive behavior, so rational agents engage in lucrative unproductive behavior. To fix it, you have to make unproductive banking less lucrative and productive occupations more lucrative.

  • Report this Comment On November 18, 2009, at 11:18 AM, jiyana wrote:

    The US needs to push Science & Technology and lead the way to find a way to reduce dependence on oil.

  • Report this Comment On November 18, 2009, at 11:26 AM, djkumquat wrote:

    i've been saying this since college (the early 1990s). the US has been a nation of bean counters, micro-managers, and petty tyrants for a while now. all we know how to do is shuffle paper for a quick buck.

  • Report this Comment On November 18, 2009, at 11:31 AM, Turfscape wrote:

    TMFDiogenes wrote:

    "To fix it, you have to make unproductive banking less lucrative and productive occupations more lucrative."

    Yes. And to make Ciudad Juarez safer you have to reduce the violent crime and murder rate...

  • Report this Comment On November 18, 2009, at 11:36 AM, seminole82 wrote:

    I have been thinking about this for a while now and have just accepted the fact that this is the path of all great societies throughout the ages. We are on the downward slope of history and should enjoy the ride much as the Romans did while the rest of the world was closing in on them. There is not much that can be done to revive a society that has taken the path towards laziness and complacency, history has taught us this. If you are looking for real transformation and an opportunity for growth I would look overseas. While I am not saying that the USA will completely deconstruct in the next 100 years I think a role more along the lines of Western Europe is on the horizon. Unless of course there is another great global struggle akin to WWI and WWII, both of which set the stage and provided the foundation for US growth in the 20th century due to the destruction of the economic capacity of the rest of the world. While these thoughts seem discouraging I find some comfort in them.

  • Report this Comment On November 18, 2009, at 11:36 AM, seminole82 wrote:

    I have been thinking about this for a while now and have just accepted the fact that this is the path of all great societies throughout the ages. We are on the downward slope of history and should enjoy the ride much as the Romans did while the rest of the world was closing in on them. There is not much that can be done to revive a society that has taken the path towards laziness and complacency, history has taught us this. If you are looking for real transformation and an opportunity for growth I would look overseas. While I am not saying that the USA will completely deconstruct in the next 100 years I think a role more along the lines of Western Europe is on the horizon. Unless of course there is another great global struggle akin to WWI and WWII, both of which set the stage and provided the foundation for US growth in the 20th century due to the destruction of the economic capacity of the rest of the world. While these thoughts seem discouraging I find some comfort in them.

  • Report this Comment On November 18, 2009, at 11:42 AM, benthalus wrote:

    I completely agree with this article, and can apply the same analysis to a subsection of our economy. I graduate from medical school in May, and am just now interviewing for residency positions. I will be joining a specialty that I enjoyed during my clerkships, and am excited to practice, even though it is about average in terms of work hours and pay. However, among my classmates and throughout the country, the most competitive specialties are those that pay the most and/or have the least amount of work involved. The brightest (I won't say best) medical students are competing for positions in plastic surgery, ophthalmology, dermatology, and radiology not because they are interested in the particulars of the field, but because they can make a lot of money easily. There are certainly very important problems to be addressed and solved in those fields, but there are much greater and more important health issues facing other fields like infectious diseases, oncology, and the drastic shortage of primary care physicians.

    A simple solution is to change the compensation structure so that those same people are more likely to choose the types of practice that this country needs, not just the ones that will make life easiest for them. Perhaps something similar could be done in other industries. It might not be the free-market, capitalistic action to take, but I think we have seen first-hand how unregulated markets are not always compatible with a stable society.

  • Report this Comment On November 18, 2009, at 12:34 PM, rj8118 wrote:

    re-elect no ne and force one term, term limits. eliminate lobby and re-election scam, no lame ducks

  • Report this Comment On November 18, 2009, at 12:43 PM, skippiks wrote:

    Biggest regret ever: switching my major from chemical engineering to finance. Now I'm surrounded by the dumbest, laziest, Youtube-watching, Netflix-queueing group of accountant-wannabes that can't even balance their own checkbooks let alone perform the duties of their jobs. Maybe I should brush-up on my o-chem and p-chem and go back to school.

  • Report this Comment On November 18, 2009, at 12:46 PM, Turfscape wrote:

    rj8118 wrote:

    "re-elect no ne and force one term, term limits. eliminate lobby and re-election scam, no lame ducks"

    Uh...with one term term-limits, all politicians would be lame ducks.

  • Report this Comment On November 18, 2009, at 12:48 PM, b1russ wrote:

    You make some great points. It should be noted that gambling, get rich quick, and over-appreciation of markets has happened before - in the 1920s. It was followed by a correct consequence - the great depression. After the great depression you had generations of people who knew the value of a day of work. They knew what it meant to save and strive. This created a wonderful industrial nation through the 40s, 50s, and 60s until we forgot the lessons that we learned and greed crept back into the national subconscious.

    We were on the brink of another great depression, but instead of letting the bad decisions run their course and allowing the greedy to take their fall, we scapegoated a select few, acquitted ourselves, and used the same methodologies of debt and painlessness that got us into the mess to "get us out". Unfortunately it just delays, and worsens, the inevitable. The only way out of the mess we've created is a painful depression that lasts a number of years and sobers us to the reality that wealth has to be earned over decades, not flipped over months.

    Final note to Congress: Let the markets run their course, and stop trying to meddle with the invisible hand.

  • Report this Comment On November 18, 2009, at 12:48 PM, TMFKris wrote:

    Random thoughts: Finance institutions are probably the ones coming to campuses, so that makes it easier to get a job with one; they come to the students. It was all about "underwriting" when I graduated.

    Colleges could require all undergrads to take a business or finance class, so liberal arts majors aren't going in totally ignorant and learning only from people already in the biz for years. Everyone could benefit from knowing how Wall Street works.

    Also, colleges could teach ethics courses to all these future financiers.

    Kris (Motley Fool copyeditor)

  • Report this Comment On November 18, 2009, at 12:53 PM, megabuc wrote:

    A very good start would be for the Fed to become TRANSPARENT and tell the taxpayers where the TWO TRILLION SECRET ACCOUNT FUNDS were gifted out. CITIBANK RECEIVED $5OO BILLION, what happen to the other $1,500,000,000,000.....CITIBANK HAS BEEN DOING FRAUD AND TELLING LIES SINCE 1998. MADOFF WENT TO THE CAN, Citibank has over $1,000,000,000,000 in off balance sheet loses and the CEO'S are lying to the shareholders that Citibank made a profit. THE CEO'S ARE WALKING FREE AND THE FRAUD IS GETTING BIGGER.

  • Report this Comment On November 18, 2009, at 1:48 PM, GenYfool wrote:

    It's the Global Economy, stupid (not literally calling anyone here stupid).

    It seems that until the Chinese are able to consume more, we'll continue to be a paper wealth economy. They're getting there, but it's slow and painful for us.

    They produce more than they consume. We consume more than we produce. They have cheap labor, we don't, and therefore we cannot compete and keep our people employed at the same time.

    It's quite unfortunate, and there's no easy answer.

  • Report this Comment On November 18, 2009, at 2:32 PM, miteycasey wrote:

    rj8118 wrote:

    "re-elect no ne and force one term, term limits. eliminate lobby and re-election scam, no lame ducks"

    Uh...with one term term-limits, all politicians would be lame ducks.

    But that's okay since they are all lame ducks. They are forced to work together because they do not have second terms or reelection to worry about.

    Lame Ducks happen because the people who stay behind have no reason to work with the person that is leaving. Since everyone is leaving they work together for the time that they have.

  • Report this Comment On November 18, 2009, at 2:32 PM, miteycasey wrote:

    rj8118 wrote:

    "re-elect no ne and force one term, term limits. eliminate lobby and re-election scam, no lame ducks"

    Uh...with one term term-limits, all politicians would be lame ducks.

    But that's okay since they are all lame ducks. They are forced to work together because they do not have second terms or reelection to worry about.

    Lame Ducks happen because the people who stay behind have no reason to work with the person that is leaving. Since everyone is leaving they work together for the time that they have.

  • Report this Comment On November 18, 2009, at 2:39 PM, ronb111 wrote:

    I haved lived this for the last 40+ years. The problems we have center on family, ethics, honor and hard work. We must be able to be proud of what we do everyday and not dinigrate the product of hard labor, not all of the knowledge of the world has come from the ivory halls, but from the lessons learned and passed on to generations following. Pay attention to history as we will repeat this folly.

  • Report this Comment On November 18, 2009, at 2:48 PM, Spacepower wrote:

    "re-elect no one and force one term, term limits. eliminate lobby and re-election scam, no lame ducks"

    Couldn't agree more. As long as politics and affluence are linked, people will misuse their positions of power for personal gain. It's inimical to having a justly-led society.

    America is still young, and I consider the very valid points in this article to be simple growing pains. In 100 years... in 200 years... we will have hopefully learned from our failings and will have matured as a society. Either that or we'll be consumed from the inside out by our own rot. Either way, the problem will clear itself up.

    Sadly, humans are like a flood of water -- once they're all moving or thinking the same way, it's extremely hard to change them. The "paper wealth" mindset will persist until its obviously no longer lucrative. Unfortunately it may take a prolonged period of national hardship to make that point apparent.

  • Report this Comment On November 18, 2009, at 3:13 PM, tdmlwh wrote:

    People are bound to follow the money. If we want fundamental change we need to change who makes the cash. Tons of money may not always bring happiness or be the sole reason for picking a career; however I am convinced a hefty paycheck will mitigate enough disatisfaction to make most chose one career path over another. A move away from the financial world will end when the money is better elsewhere or when money stops being an essential part of quality of life.

  • Report this Comment On November 18, 2009, at 3:22 PM, Turfscape wrote:

    miteycasey said:

    "But that's okay since they are all lame ducks. They are forced to work together because they do not have second terms or reelection to worry about."

    OR...nobody works together since there are no repercussions to complete gridlock. Can't upset your constituency because they can't vote for you again, anyway. Might as well just get in there, make a lot of noise to secure a book deal, and cash all the paychecks you can while the gettin' is good.

  • Report this Comment On November 18, 2009, at 5:09 PM, RatherBeSurfing wrote:

    Get kids interested in enginering, math, and science. For an excellent approach check out http://www.usfirst.org/.

  • Report this Comment On November 18, 2009, at 5:30 PM, pickerupper wrote:

    A friend of mine who's in the insurance business was telling me about a new "product" that his company was introducing. I said "what product? You don't produce anything. A product is something I can touch or maybe run on a computer. You're basically a bookie. You're betting I'm going to live and I'm betting I'm going to die" He sputtered a little and said something like "well, that's the term the industry uses". We're still friends, fortunately.

    Somehow I wonder if this is symptomatic. The people in finance are providing a service -- we actually need insurance - but they think they're producing something. To make something, really make something, can be tremendously fulfilling. I fail to see how selling some financial "product" or making bets with someone else's money could be fulfilling, even if you make a big salary.

    To "RatherBeSurfing": notice that there were several people on the list who apparently WERE interested in science and math but wound up in finance. It's because our society presently values these things more and that's really enticing. We sometimes decry how much money the big sports or movie stars pull in but that's only because our society values those things enough to pay those huge salaries.

    We can change. The current recession has taught people that they need to save more and consume less. I don't know exactly what it would take to cause us to reevaluate our priorities as to what our "best and brightest" should be doing. Sigh.

  • Report this Comment On November 18, 2009, at 5:42 PM, thisislabor wrote:

    What I don't understand is why we still have minimum wage labor laws...... especially when the unemployment rate right now is 10%. a low paying job, is better than no job.

    hell, when I figure in all the hours I spend studying for taxes and then the hours I spend doing taxes I am making below minimum wage as it is right now.

  • Report this Comment On November 18, 2009, at 5:46 PM, Unprotected wrote:

    Interesting that I noted only one mention of industrial policy, or lack thereof.

    While I have little confidence in good intentions coming to fruition under the guiding hands of the bureaucratic hordes, it seems that limiting imports of goods, services, and illegal aliens might be a good start; especially if we limited government largesse programs at both the corporate and personal levels.

    I fail to understand how greedy, immoral robber barons and oppressed, exploited laborers built the depth and breadth of a strong American nation and economy, and how that nation and economy have been so rapidly diminished (if not extinguished) by the beneficiaries and inheritors of those same builders.

    Simply put, we have forgotten how to fish and now depend upon some externality to deliver fish to our collective doors on a daily basis.

  • Report this Comment On November 18, 2009, at 5:48 PM, dialysisjoe wrote:

    Please, the problem with our economy began back in 1913 with the creation of the Federal Reserve, a non-governmental private banking institution pretending to be a "federal" institution. The very day that a private central bank took over the printing of our money, we were in trouble.

    Reagan put the final nail in the coffin of our economy when he suspended all the regulations that kept banks and financial institution in line. I can't say that I'm a fan of Michel Moore, but it was interesting seeing a Wall Street top dog telling the President of the USA to "hurry up" with his speech. Reagan was simply a mindless tool, propped up by Wall Street to de-regulate the financial and insurance industries.

    AIG and Goldman, as well as all the other central banks and large corporations, have raided our treasury and stolen the future of our childrens' children for many generations to come. This nation is about to fall, and fall hard and there's going to be no coming back, particularly if another stimulous package is carried out in 2010. According to many reliable sources, this is going to happen to the tune of 1.2 trillion dollars. "Too Big To Fail" will continue on until there is nothing left of this nation, but an empty shell.

    Don't blame the average American for this situation. It's not their fault for being lead down the yellow brick road to financial oblivion. The banking and insurance industry have carefully crafted our present misery to their own gain. Private foreign banks and heavy hitting American investors with no loyalty to the American people have been and will continue to be "The Undoing of The Great American Economy." Anyone who is honest with themselves knows the truth, even if they are afraid to admit it.

  • Report this Comment On November 18, 2009, at 6:18 PM, groenfeldt wrote:

    Before finance, it was lawyers. The Washington Monthly's (a great magazine that looks at how the U.S. government actually works) founder Charles Peters railed for years at the waste of talent with the country's best and brightest going into law. Now it is finance. Where are the incentives?

    I was at the Olin College of Engineering in Needham, MA a few weeks ago for an innovation lab, and listened to students and grads talking about new businesses -- they have free tuition. Perhaps offer engineers and scientists a break to encourage more to study, tax financial transactions and write worker protection into law to keep private equity firms from gutting good companies. But Gretchen Morgenson's Sunday Times piece on the $30 billion bailout for the nation's largest home builders suggests the first step is a modification of Shakespeare's advice -- First, hang all the lobbyists.

  • Report this Comment On November 18, 2009, at 6:42 PM, WyattJunker wrote:

    I prefer the Dutch system for banking that puts the people who run banks on the front lines for risk, making them behave more rationally.

    As to last year's market implosion, a better solution rather than TBTF would have been a sequestration process of the toxic assets with a simultaneous suspension of the mark to market acct. while the good assets were sold off to those more responsible with credit creation. No more AIG period. No more Citi. It wouldn't have frozen the markets because the transitions could have been aided by the Fed's liquidity while the sea changes transpired.

    The same for GM. As for the perversions of Fannie and Freddie, the govt should have been unwinding itself out of the housing markets years ago, requiring private equity markets to pick up the slack, and the risk, which would have also required traditional 20% down deposits and high credit scores for home ownership. Tamping the brakes incrementally instead of a sudden shift towards true market forces.

    The problem as always wasn't capitalism or greed. Again, it was government interfering with the natural equilibrium of risk/reward flow.

  • Report this Comment On November 18, 2009, at 6:48 PM, ralph702 wrote:

    Accountants do not understand manufacturing, only its financials. They have no clue what it takes to start from scratch and create a viable product while maintaining productivity. This process involves people. Skilled craftsmen that are, believe it or not still human, not just a number.

    Labor unions, the executive branches of corporations and government by greed have destroyed the manufacturing base in this country.

    If this trend is not reversed in 20 years we will indeed be a third world country.

  • Report this Comment On November 18, 2009, at 6:49 PM, WyattJunker wrote:

    All that to say, what is truly hurting our society and the economy that feeds it, is liberal meddling. EVERYONE needs losers to lose and winners to win. We have been attempting to pervert that for decades and risk has risen all the while. The government should not be in the home guaranteeing business. The government should not be in the auto business. The government should not be in the wage and price control process. The government does not create anything productive, it only takes from the productive(robs) and redistributes after having knifed out huge payrolls that feed its parasitical habit.

    Our country is dying. Political correctness and sensitivity training entered the housing markets, perverting them. The CDOs emerged from that perversion, squaring it. Of course you would trade default swaps knowing what kind of impending ponzi scheme was about to erupt from governmental intrusion. Why blame the insurers of risk when it was government the entire time creating the risk and forcing it into the system through Fannie and Freddie.

    Thanks Barney Frank. Thanks Christopher Dodd.

    Next time you look at the value of your home, thanks a liberal.

  • Report this Comment On November 18, 2009, at 7:35 PM, tramagli wrote:

    I have worked in manufacturing for 25 years. First we must provide disincentives to outsourcing. Second we must rein in the greedy unions that have priced US labor right out of the market. Oh yeah, I was a union machinist for 9 years and shop steward for 1 1/2.

  • Report this Comment On November 18, 2009, at 8:17 PM, dkiefner wrote:

    Several years ago I was pursuing my lifelong dream and attending one of the best aerospace engineering schools in the country. It was in the midst of the dot com bubble, its subsequent crash, and the growth of a new real estate bubble.

    How exciting! I was amazed that so much wealth could be created out of thin air! It was immediately apparent that a guy like me who was good with numbers could make a lot of money in this industry, and a hell of a lot quicker than in engineering. I secretly laughed at my engineering classmates as I transferred to finance. Poor schmucks; I pictured them tirelessly working away for a meager paycheck while us financiers rolled in the money.

    I had a great job as a management consultant for the finance industry. That profession is bust for now. I’ve now been out of work for one year. I regret my decision to change majors for I made it based on the allure of chasing quick and easy money. Now, I am hoping to finish my engineering degree and enter a productive profession, not one whose sole existence is based on shuffling money back and forth with the presumption that that action generates more wealth.

    A society whose livelihood depends on the unwavering belief of asset appreciation and relentless pursuit of increased consumption will not last. We need something sustainable. Now.

  • Report this Comment On November 18, 2009, at 8:26 PM, Dannysea wrote:

    Some of the BEST candor in all the article and responses! This is what we need to talk ideas and forget this censorship when our special ideologies are questioned!

  • Report this Comment On November 18, 2009, at 9:49 PM, oneM0718 wrote:

    As a starting refrence point, the issue here centers on the inequtable imbalance of reward(financial compensation) to those doing the "real" and actual work. Realistically, and with some deep down honest soul-searching and candor, very closely examine this actual scenario --- a brilliant, well-educated and hard-working engineer discovers a methodology to pack even more memory into single memory chip. His/her company(employer) pays this engineer a salary plus benfits, yet profits exponentially from this engineer's brilliancy and "industriousness". If and when the companies(employers) begin to realize the fact that their employees are beginning to become more business saavy - in addition to being already industrious, then it begs the point to be made that these companies should more equitably and proportionally share MORE of their bottom line with their employees who qualitatively and quantitatively prove themselves worthy of high productivity. The era where companies try to justify themselves, rather foolishly and insultingly, that profits need to be pumped back into research; competition; preparing for a potential economic[domestic and global] downturn; benefits; etc. is a continuous slap at the employees' intelligence. Employees for the most part realize and accept the fact that these profits have to be cycled back into to the company...but at their expense so the bean counters can reap the benefits of the "real" and truly industrious workers' creativity??? I can attest to this firsthand...I used to in fact work in the engineering field and transitioned over 20 years ago into - yep, the financial field. Thankfully, I have not lost that "industriousness", et al hard work ethic, and steered all my clients away from such sophisticated literal trash such as credit default swaps, subprime related securities, etc. Closing endpoint...it is appalling given the multitude and array of fees banks have so long been allowed to get away with, how they were so blind to their blatant arrogance of their cuurent plight. There is no substitute for hard work. In the Old Testament days of the Bible...if you don't WORK...you don't eat principle needs some closer reexamination and revisiting.

  • Report this Comment On November 18, 2009, at 9:50 PM, sigmundk wrote:

    A related question; Is there any correlation between pre-Reagan (59 1/2%) vs post- GW Bush (35%) tax rates that cause many corporate leaders to focus on short term profits today?

  • Report this Comment On November 18, 2009, at 9:53 PM, 214pw wrote:

    First you are right.

    This Country and its people need to see that writing, history, math and Science are the source of the future.

    We need to begin a new era of research and development. and out of the ideas rebuild a new era of manufacturing (it may not look like those of the past but it could create a new world of new money jobs as a opposed to government, take the dollar from your the guy sitting next to you and then give it back to him, jobs.

    Spend our time and money on sustainable type of industry ideas and not pie in the sky..

  • Report this Comment On November 18, 2009, at 9:56 PM, mansfieldanne wrote:

    WyarttJunker gets it, as does the fellow who brought up the heavy cost we all pay for trades unions and their entitlement mentality, particularly SEIU and other "public service" entities.

  • Report this Comment On November 18, 2009, at 11:32 PM, SissyTheClown wrote:

    Why didn't all those smart, well-educated people in our federal government realize what would happen to this country if we sent all our manufacturing overseas? Or did they?

    Excessive taxes proposed and implemented during the Clinton years, union demands for more and more money for blue-collar jobs, and companies' overhead were the downfall of our manufacturing economy. Government needs to make it attractive for American companies to do their manufacturing within this country. Or should I say more unattractive through taxes and tariffs for them to make products outside the USA then ship them back in to sell.

    As a consumer, I have found that cheap labor leads to shoddy workmanship and sub-standard products. Hasn't anyone but me noticed how clothing manufactured overseas in Africa and Asia lasts a lot less than it used to? You wash a shirt or blouse one time and its seams never are straight again? That comes from cutting corners to make more profit? Quality still counts...you can tell the difference.

    We cannot succeed in this country without some other source of good jobs than service industries.

    Make manufacturing in this country more attractive to companies, outlaw lobbying in government, set term limits for the federal legislative and judicial branches just as we have for the executive branch (I'm sure our "founding fathers" didn't expect legislators to make a career out of making laws for the country), set caps on interest rates a financial institution can charge (I don't care what anyone says, 20%+ interest on a charge card is usury), pass a law making the Federal Reserve accountable for losing all our money -- or abolish it. (It's just a front bank for the "one world government" that's coming soon to a town near you.) And, quit all this politically correct stuff. Let's call it as it is!

    That's a good start to the changes we as a country need to make. What say ye?

  • Report this Comment On November 18, 2009, at 11:42 PM, antonioexpo wrote:

    uptick rule, ban CDS and CDO's...

  • Report this Comment On November 19, 2009, at 12:53 AM, jomueller1 wrote:

    Though the eighties show the symptoms of the money oriented society the root is much deeper. The roots are from the British who were after the money already then. As the US was an economic virgin in the 17th century there were opportunities for ruthless people all over. First, the natives were forced into submission and then the country was open for rape.

    As an example, Florida was a major supplier of valuable timber but the people who cut the trees had never planted one.. The people who became rich on oil had never produced anything. So the idea of becoming rich without really working for it became the groundswell.

    When things looked bad another war was started (think of Panama, Cuba etc) to get the economy going. As the victor collects the spoils the US gained lots of benefits, especially being able to make the dollar the currency for commodities and other trades. Bretton Woods was a smart move in the international chess game.

    But all that money spoiled the population badly and decadence set in. In the two class society there is no repect for "lower" jobs like waiters or landscapers. You have to have a college degree to become a car mechanic. What a laugh! Now you need a college degree to be unemployed.

    So the dance around the golden calf (or Wall Street bull) keeps on going until it all blows up. Or people with money and people in influential positions wake up.

    Get prepared to start from scratch1

  • Report this Comment On November 19, 2009, at 1:05 AM, cruikshank wrote:

    I've always worked in small business mostly electronic or engineering. I've also started and ran 2 small businesses. As an electronic engineering tech I had a chance to move up into management. When I made my decision to turn it down I told a colleague that I did it because I much more enjoyed hands on working. I said in the end I didn't want my obituary to say "He moved a mean pile of papers" I grew up in the 60's' during the space race. When science was pushed in the schools and we as a country felt we could accomplish anything, and we could. We need to put that same energy, investment, and excitement into the quest for alternative energy & transportation. So much more good could have been started with the stimulus money than paying back those who put them in office. For 35 years we have heard about our crumbling infrastructure and a need to find an alternative to oil. How much of the stimulus will go towards that? Instead we get hi-speed rail to a deserted desert city from a bankrupt state.

  • Report this Comment On November 19, 2009, at 1:11 AM, ET69 wrote:

    What do you expect for gods sake? This is capitalism! People actually lionize (sic) Ayn Rand in this country. We live in an age of advanced financial imperialism. It can't be otherwise in this economic system.Read some Lenin for Christ's sake if you are still clueless!

  • Report this Comment On November 19, 2009, at 2:39 AM, TMFKopp wrote:

    Thanks everyone for all of the great comments. It's great to know that I'm far from the only one that thinks the problems we're facing run much deeper than what we hear about on the news all the time.

    Fool on!

    Matt

  • Report this Comment On November 19, 2009, at 4:45 AM, rmarks1 wrote:

    I'm MIT class of 62 in Computer Science. Was employed on "advanced development" projects for large companies. This is speculative stuff, if the project works you are decently employed, if the project is truly advanced then funding is speculative. I think that the best and brightest should have some security when working on speculative development. And if no security, then they should be very well rewarded for truly innovative work. I once completed work that lead to a fundamental patent, great I got a $5000 reward. This is a far cry from the tens, if not hundreds, of millions the company earned from this work. If I pulled off a 10 million deal for a finance company, what would be my bonus?

    Then to make things more interesting. Two years later the company was on hard times and my department was cut.

  • Report this Comment On November 19, 2009, at 8:01 AM, MrsCathyGF wrote:

    Well, societies need to look after family values, too.

    It cannot all be the same sort of societal contribution, namely goods and services. I could become anything I wanted to become in life, and chose to stay home and look after my dear husband and children. Did it make sense to step down in living standards ? Of course not. Anyone would rather be financially self-reliant than depend on others. So, paper wealth made it possible. My children have never been ignored, my husband always has my focus. Savings made all that possible. So, society receives one less divorce, and two well loved, very well educated, emotionally secure children in return. Seems like society gets a good deal. It also gets a steady stream of tax dollars, and a person who NEVER wants to rely on the gov't, any more than needed. Net positive for society.

  • Report this Comment On November 19, 2009, at 8:28 AM, LessGovernment wrote:

    In simple terms, the problem is "Income Taxes" and "Payroll Taxes".

    Think about it.

    Taxing income is a penalty for creating wealth.

    Taxing employment is a penalty for hiring workers.

    Withholding payroll taxes and charging the employee income taxes on the money he never got is just plain theft (thank you Al Gore - idiot)

    At this very basic level, America went off the road to prosperity .

    To put America back on the right path:

    Eliminate all federal Income taxes, eliminate the Tax Code, and eliminate the IRS

    Eliminate all payroll taxes, employer and employee

    Move government revenue collection to a sales tax and only a sales tax. If that means a 20% sales tax, then so be it. But that is still much better than a 15% combined payroll tax and a 20% or more Income tax and a 5-7% state income tax.

    Will this hurt the poor? No.

    This is the only way to give the poor an opportunity to get out of poverty, because this is the only way to get an economy humming in the right direction again. No central planners, no arbitrary rules that a business that has lost a lot of money is now valuable due to tax loss carry forwards, none of this nonsense helps, and it all hurts.

    All redistribution accomplishes, whether through the tax code or outright transfers of wealth through government assistance, tax incentives, clunkers, mortgage incentives, etc., all this does is raise the cost of doing business somewhere in the system and that removes opportunity in the process.

    I have reached the point that this country must have a revolution to get its self adjusted to the fact that Government is and has been the problem. The revolution can come in 2010. And here is how.

    Fire Them All

    OneTermAllowed.

    Never Vote for an incumbent.

    Then get people elected that will do the above.

    Do this, and America's best days are ahead. Fail, and we are on the slippery slope to the abyss of the other failed socialist states on the rock pile of history.

    It is just that simple.

  • Report this Comment On November 19, 2009, at 8:34 AM, LessGovernment wrote:

    8:33 am and no post.

    What is gpoing on Fool?

    Are we being censured?

  • Report this Comment On November 19, 2009, at 10:08 AM, tothetop1964 wrote:

    First of all it's time to take our Government back!!! We got change alright - "Pocket Change" that's al that is left!

    Here is the list of what we must do to thrive, not just survive.

    1. Rid ourselves of the unions, they have ruined every single industry they have touched. How can anyone profit in an industry that is "FORCED" to pay so much for their foolsh demands???

    2. If the White House wants to increase jobs, dramatically reduce income tax, business tax and payroll taxes. They are more concerned with controlling us not providing us with a free market society. We better wake up.

    3. It takes 2 parents to raise a child NOT a village. This will dramatically reduce drugs and crime and make this society more productive. The only thing villages raise are idiots!

    3. Open Bi-Partisan Health Care reform - not this government take over stuff that is going on now.

    4. GOD Bless America -

  • Report this Comment On November 19, 2009, at 10:28 AM, Turfscape wrote:

    truthisntstupid wrote:

    "If you ever want American-made products to sell in other countries again maybe we need a MAXIMUM-wage law for people that have no higher education and no right to expect to suck $40, $50 an hour and up from our economy."

    If someone has a marketable skill and can demand $40 to $50 per hour for that skill, what the hell does it matter how much education they've had? Only college grads are worth something? Uh...last I looked a lot of college grads and people with doctorates were running investment banks and creating credit default swaps...and getting paid a HELL of a lot more than $40 to $50 per hour! But, gee...that had all that education and truly deserved their pay!

    To sit around and point at Unions for trying to get better pay and benefits for their members ignores the problems we face.

    But, gee...all would be good if we could just go back to a ruling elite and a subservient, compliant workforce that would be grateful for a few pennies per day!

  • Report this Comment On November 19, 2009, at 11:26 AM, Samoyed2 wrote:

    You are right on with respect to paper wealth versus real wealth. Real jobs and thus individual income and higher standards of living depend upon the creation of tangible wealth. For centuries The Fords, Nobels, Carnegies Westinghouses, Franklins, Wrights, Listers, Remingtons, Colts, Whitneys, Fultons, and the like of the USA have conceived engines of progress and set up and managed the production processes to place their innovations in use. These processes produced the jobs that provided individual wealth which wealth when use to purchase personal items deemed desirable by the wage earners created new markets and commerce that provided jobs to others creating more wealth.

    The socialists focus clearly on using wealth avoiding the need to create wealth in order to have it to distribute. The two elements that resulted in 6% (Americans) of the worlds population producing 30% of the worlds wealth are: individual rights that allowed your right to pursue your own dreams at your own risk and the right to all rewards you gain from your own initiative, intellect and industry. In essence the right to excel and the right to the rewards of your own risk, sweat and excellence. The second was charging the Government with the task of protecting those rights. The heart of American prosperity is the focus on individual rights.

    The Government is working diligently to change that focus to a socialist view that makes the government the giver of rights and wealth.

    The socialists look at how much the entrepreneur earns versus how much the worker earns as a value comparison. The real value of entrepreneurs is the wealth they create. How many jobs did Ford create over the years? How much National Income did he add. What is the value of his contribution to the Republic's standard of living? Ask the same question for each of America's wealth creators. Then ask what our country would be like without them.

  • Report this Comment On November 19, 2009, at 3:19 PM, lordhep wrote:

    IMHO there are a couple of things that will make this country habitable to industry in the future.

    A decline in the standard of living via inflation and weakened currency drastic enough to make the wages seem competitive to third world countries and China.

    A loss of job security that will empower employers to enforce stricter quality standards. ISO/GMP are crap compared to being able to can a employee who doesn't care about what he's doing. It's sad that I know look to asia for quality and assume if it's made here I'm going to have a huge fallout when I test inventory.

    Reducing taxes and regulatory fees on companies would be a big help in making us more competitive. I type this as I'm getting ready to pay my annual $2000 check of protection money to the FDA or face government retribution. $2k is a huge bill for a company with 5 employees...... It will be bigger than any single material bill for the month of December.

    In the short term the only industry that's going to prosper here is niche manufacturers that fill smaller volume needs.

    In the long term I don't care, I'm learning to speak Thai and have family there. I plan on escaping before they tell me I can't take my money with me. I'll open shop there. They are FRIENDLY to people who want to work there and I won't be paying everyone else's bills.

    Labor prices will never be reasonable in this country so long as sitting at home and taking a check is more attractive than doing a low paying job you don't like. People who don't work should either get help from their community, start working, or STARVE.

    Sorry I'm fed up and can't wait to get out.

  • Report this Comment On November 19, 2009, at 3:33 PM, Turfscape wrote:

    truthisntstupid wrote:

    I should have said:...

    ...and NO UNIQUE MARKETABLE SKILLS from banding together and forcing our companies to pay them far more than they are worth."

    Companies have a choice to work with unions or not...but, just like they do now, too many companies were choosing the short term profits over long-term viability and shareholder value. Why worry about how the current union contract will affect us next decade? We're selling cars now, so just give them what they want!

    We need to quit blaming unions for management's mess-ups.

  • Report this Comment On November 19, 2009, at 3:53 PM, enginear wrote:

    I've heard a lot worry about people going into finance because the market (for wages) leads them there.

    The only realistic way to stop that is what someone referred to as a 'maximum wage law' (aka very progressive income taxes - say 80-90% at the top end).

    It would make a $40M bonus a waste of corporate income (which I hope shareholders would rise up against).

    Are we willing to go there? It would really only need to change after AGI of over (say) $300,000 or even higher, and it could scale up.

    Any takers?... I see the value, but worry about it.

  • Report this Comment On November 19, 2009, at 4:22 PM, MyDonkey wrote:

    Is The Motley Fool going soft?

    Is TMF now saying there is some kind of PROBLEM with looking for the next quick easy way to get rich? I thought this site's Reason For Being was to turn poor slobs into rich slobs ASAP; since when did TMF begin to care how that was accomplished? They've never had any qualms about promoting companies whose products cause cancer (Altria) or rot your teeth (Coca Cola) or clog your arteries and cause hypertension (McDonalds) or create dependency and bad side effects (Phizer) or send your job to China where employees work in environmental cesspools and have babies with deformed limbs so that you can buy a dress shirt here for $3.99 (Wal-Mart). Ethics? Phhhht! Who cares about that?

    No, TMF isn't going soft. This article isn't about morals; it's about sour grapes. It's whining that the "paper shufflers" are getting paid more than the "thing producers". If both groups were paid equally, there would be nothing to complain about. In any case, who gives a rat's a$$ about equality or fairness? If you're getting rich, there's nothing else to care about! If your 10-bagger turns into a 100-bagger, are you going to say "Gee, it doesn't seem fair that my hundred-thousand turned into a million. This massive wealth transfer makes me feel bad; woe is me!" Not a chance. To hell with "the other guy" -- and society in general; it's all about YOU, Fool, and don't you forget it!

    So, Fools, never mind that the proposed solution to the "problem" is to produce and consume more stuff in pursuing the myth of sustainable growth in a finite world of dwindling resources. Don't worry about TS hitting TF in 20 or 30 years. Just do as TMF suggests: play the buy-and-hold game for 5 to 10 years and hopefully make a few million in the process. Then you can party hearty until the day we all choke on our own vomit and die in our own sewage.

    Fool on!

  • Report this Comment On November 19, 2009, at 4:29 PM, gomdp wrote:

    Very relevant post.

    Problems created by:

    - Politicians, lobbyists and special interests

    - Moving away from Gold Standard

    - Creation of Federal Reserve and allowing it to work

    without any audit and oversight

    - Repeal of Glass-Steagall act that separated banks

    and investment houses

    - Credit card companies, which have a very high

    interest in consumers/borrowers not paying off

    their balances

    - Allowing "no skin in the game" NINJA loans to buy

    houses, leaving interest rates too low for too long;

    promoting house ownership as a right / entitlement

    rather than something obtained after very hard work

    and saving 10%-20% down payment

    - In general, become lazy and complacent and

    developing entitlement mentality; wanting everything

    now (instant gratification) and "free" from govt or at

    any cost by going into debt

    - Debt and deficit financed growth by creating money

    out of thin air by running the money printing presses

    - Unfettered greed and consumption in a society that

    values "things" and "possessions" more than

    anything else, leading to living beyond means at

    any cost, as individuals, as a community, as a

    society, as a nation; look at deficits and debts

    carried by our cities, states and national govt. Not

    understanding the difference between wants and

    needs.

    - Media for hyping up and promoting glitzy, get rich

    quick / overnight ethics and gambling mentality;

    putting movie stars, musicians, sports stars, etc

    on pedestals rather than engineers / scientists /

    researchers and noble prize winners

    - Stupid / Dumb / Gullible citizens falling for the above

    and not having a basic knowledge and

    understanding of how finance and economy work;

    losing the ability to do cost-benefit analysis and

    trade-offs of short term benefits vs long-term harm

    - Bloated bureaucracies / govt without any

    accountability; always interested in saving their

    jobs, lining their pockets and grabbing more power

    - Expecting govt to solve all our problems and baby

    sit us from birth to death

    - Unions: were good and necessary when they

    started out but became entrenched and a source of

    support / power for politicians; started asking for

    wages, salaries and benefits that were not in line

    with the skills required and without any co-relation

    to performance. But then can't blame them much

    because the Executives and Management were

    raking in millions regardless of whether companies

    were profitable or not

    - I, Me and Individualistic society that focuses on

    Win-Lose rather than Us (community, society,

    nation) society that thinks Win-Win

    - Over Regulation / Rules for businesses but at the

    same time lack of enough watchdogs to enforce

    the basic common sense rules / regulations

    - Demographics: Aging Population

    - Us Citizens/Society not questioning / policing the

    politicians, administration and executives /

    management

    - etc

    Solutions::

    -------------

    - Vote all the incumbents out the next election,

    regardless of the party

    - Have term limits (no more than 8 to 12 years); when

    president is limited to 2 terms, why shouldn't the

    congress be subject to the same

    - Ban all lobbyists, special interests and "soft

    money"; all elections should be publicly financed

    from tax dollars

    - Get rid of Federal Reserve or alter it's charter and

    how it's members are selected / elected

    - Mandate balanced budget at all levels of govt and

    create "rainy day funds" at all levels of govt

    - Credit cards to be issued only after taking into

    account debt / income ratios, etc., just like for

    any other loan (tighten standards for all kind of

    loans, especially home loans)

    - Stop bailing out Wall Street and other industries

    - Separate Banking from Investment/Insurance; any

    company wanting to do trading and investing has

    to rely on private money or use their own money.

    Banking should be very simple, easy business:

    take money from depositor and lend it out in the

    community; the bank has to hold at least 20% to

    40% of it's loan portfolio on the books

    - Have CFO's at all levels of govt; they have to verify

    and approve all the budgets and spendings

    - Make Energy Independence (Alternate / Reusable

    energy), Reducing Emissions (by building

    / promoting public transportation, clean coal,

    natural gas and other forms of energy),

    Infrastructure Rebuilding and solving real Health

    Issues / Problems (Obesity, Alzheimer's,

    Parkinson's, Cancer, etc.), the highest priority

    akin to Manhattan project (A-Bomb), Marshall Plan (

    Rebuilding Europe after WWII) and "Man on the

    Moon" (NASA); this will redirect money and

    resources away from "financial engineering" and

    create millions of jobs and payoff for a long term

    - Mandate / Incentivize Savings and accumalation

    of "rainy day" funds, funds for education, health care

    and retirement

    - Pound it into everyone's heads, Debt is evil / sin

    - Tie everyone's (individuals, CEO's / Executives,

    politicians, etc.) wagies, salaries, benefits and

    compensation to performance and long term (as in

    years, not just a quarter or a year) results;

    executive / management compensation should be

    some reasonable multiples of lowest paid workers

    and if it is not, tax it to the maximum extent

    possible

    - Have short term (less than 2 yrs), medium term ( 3

    to 5 yrs) and long term (5 or more years)

    capital gains tax rates to snuff out short term

    mentality and speculation

    - Have a use / consumption tax and balance that out

    by giving tax breaks/credits to those with lower

    incomes; increase sin and luxury taxes by a bunch

    - Globalization is real, it's not going away; countries

    like China and India will continue to grow and

    prosper; don't look down upon them or discourage

    them but become mutual partners and beneficiaries

    in their growth and prosperity

    - Most of all, each of us needs to understand / realize

    that there is no substitute for "real" hard work and

    we need to produce / manufacture "goods" not

    just push around paper

    - We are a community, society, nation not just a

    bunch of individuals living together; we sink or

    swim together; actually, we are one world, one big

    global family / community.

    - etc

  • Report this Comment On November 19, 2009, at 6:17 PM, gomdp wrote:

    The title of this Post should have been, "Undoing of the Great American Empire". It's all there in the history. Great Nations/Empires Fall (Roman, British, etc) due to their hubris, meddling in others' affairs while not taking care of it's own, complacency, debt binge, corruption, nepotism, etc. It's a given that our kids and grand kids will be burdened with mountains of debt and un-funded govt mandates / programs unless we resort to some painful solutions and/or invent-develop some groundbreaking technologies. Check out http://www.usdebtclock.org/

    Most of us still have our heads buried in the sand (not my problem or doesn't affect me or why should I care) and / or hoping that all the problems will go away or be solved by the wave of a magic wand. If we don't wake up (and not get our heads out of where sun doesn't shine) we will turn into also ran West European developed nation at best (if we are lucky) or barely above an emerging / developing nation at worst. Our politicians / govt needs to tell us like it is, the very painful truths and hopefully that will motivate / galvanize us to roll up our sleeves, put our heads down and give it our best; if we go down, at least we will go down fighting.

  • Report this Comment On November 19, 2009, at 6:59 PM, gmcgfool wrote:

    I hope everyone reads GOMPD's comments made 11/29 4:29pm. It is a long read but all the points are very valid. Well worth one's time.

  • Report this Comment On November 20, 2009, at 10:56 AM, alamothe34 wrote:

    It may be best to listen to our parents and our kids, who are less caught up in the financial frenzy. They'd say we need to make things to rebuild the economy. To do that, we need to intelligently rework the EPA laws and educate the young workforce on how to create an industrial economy that is friendly with the environment. We also need to lower the wages/benefits of government union workers to match their tax paying brethren. And we need to return decision making power to states and localities along with their tax dollars.

  • Report this Comment On November 20, 2009, at 10:58 AM, langzaam wrote:

    My stomach turns reading your article.

    I started my engineering business in 1972 realizing that innovation of products became a outsourced item by large corporations. Engineers within the corporation became complacent and felt secure without having to make a real contribution. These engineers became the managers to shop for solutions outside the corporate walls. My timing was correct and for almost 30 years we produced systems in automation. In 2000 the wheels fell off because those corporate engineering managers had their authority clipped by bean counters that insisted on competitive bids. Our business was requested to submit bids knowing that offered solutions could be compared and used against us. After a year of some disappointments we started to submit bids and holding back on revealing the solution until after an order was placed. In another two years everybody else had to do the same as there was no incentive to offer solutions for nothing. Thus, locally produced consumer items became stagnant and too expensive resulting in a major effort to have Mexico and China pick up the slack. Our plant closed two years ago.

  • Report this Comment On November 20, 2009, at 11:31 AM, CraigGilkison wrote:

    Always go with strength.

    Forget building widgets unless you lead the pack, say with airplanes or weapons, or machinery.

    Encourage innovation in science, engineering and technology.

    Drill holes, dig coal, build nukes, harvest the tides and the trees and the crops that feed the world.

    #1 Get the government out of the way!

  • Report this Comment On November 20, 2009, at 11:57 AM, JamesBKRlawyer wrote:

    The primary solutions are a far more aggressive anti-trust element in the government, more enforcement against white collar/computer fraud and crime, and a change to a more progressive tax structure that puts more money in the hands of lower and middle income working people because that is ultimately where capitalists get their money and what truly drives our economy. An aggressive tariff system that forces out companies not actually manufacturing products within U.S. borders will have dramatic longterm improvements to the economy after some shortterm pain. This will never happen with current election laws. I propose clean sweeping out congress and replacing them all with citizens drafted at random that are in for 2-3 terms each. 95% of all elections in the U.S. turn on crap issues and the other 5% turn on real issues that never end up actually being resolved by the people elected. In other words, since this makes too much sense to be implemented by present politicians, expect disaster until we have a revolution.

  • Report this Comment On November 20, 2009, at 1:08 PM, Chump11015 wrote:

    It's seems you have struck a nerve here. I am a chemical engineer working in the insurance industry. When I got out of school in the early 80's I went to work for a chem plant here in the US. It has since closed. Then I went to work at a big corporation and it went into chapter 13. I have worked in the food industry and that plant closed. These are big nationally known companies. I have a friend who is a post doc from MIT and he did cutting edge research on genetics in a lab there. He was making $30,000/year and couldn't feed his family. He changed to the computer industry(911 software) and now he makes a decent wage. I have also changed to the computer industry to get away from closing companies. It was fun working in engineering and I enjoyed it very much, but to it these days you have to travel outside the US. The EPA and other regulations have made it hard to compete in industry and Chem processing. So big companies move off shore where there is cheap labor and no government regulation. Now I am not saying the EPA is bad or that government regulation is bad. But the bottom line is it makes it hard for companies to compete globally. So fewer US manufacturing plants leads to fewer jobs here and less demand for graduates. So my kids don't want to be engineers or scientists. They know there aren't many jobs available and pay may not be that great or the pay may be great but your on an airplane most of your life. It is good to do something you love but you have to be able to feed your family too. We are experiencing a serious brain drain in our colleges today. I think the answer is put money back into research. Research stimulates innovation and scientists will be created to fill the need. Then engineers after the basic research is done and things have to be built. So that is my two bits on the subject.

  • Report this Comment On November 20, 2009, at 2:37 PM, VEROBOLT wrote:

    We need to start with cutting Fed. Gov't by at least 20%, and cut the wages of the rest at least 20%. We need to remove union representation from any gov't organization, including police, firemen and teachers. There is no place for unions in representative government. Arbitration is all that is needed for any government employee. By reducing union membership, we can eliminate the abuses afforded the leadership, and get the thugs from being hired to get unqualified elected officials.

  • Report this Comment On November 20, 2009, at 2:37 PM, harley1584 wrote:

    After the complete failure of our Government, the people who can actually grow food and weld metal will once again rule. The investment 'problems' of today will be long forgotten.

  • Report this Comment On November 20, 2009, at 4:46 PM, purequill wrote:

    Happy to weigh in on this as Iam also a fellow Wharton grad 1960. So look, Bill Gross is regarded as one of the PRIMO debt experts on the planet-great guy-however, not pouring steel, building engines, pouring concrete--you get my drift? Not a bad time to re-read Atlas Shrugged -why not? Iam also a free market guy-so let the money do the talking and let them do the walking as long as it is legal!!!! We all know the supply/demand thing quickly imbalances on the supply side--so all these guys running to wall street need to at the same time develop a plan B. Our world has a big challenge to get the next big deal going. Iam waiting so I can put some money that way too. Wall Street has always been a big deal-but I also just read somewhere where the NYC reagion lost about 35,000 of those jobs. So lets hope our culture gets it moving yet again. Tony Davis

  • Report this Comment On November 20, 2009, at 5:23 PM, winbuks wrote:

    So many words and so little meaning, or if there is meaning the meaning contradicts reality on the level of "our energy problems would be solved if someone would invent a car that runs on water"

    Here are some examples:

    Randomly chosen I might add --- that is I just went to a section that had a lot of words and grabbed the most meaningless. Here are the first three.

    "A simple solution is to change the compensation structure." No doubt this would be achieved by appointing an all wise incorruptible who knows what people should be paid.

    ----------

    "Unfettered greed and consumption in a society that

    values "things" and "possessions" more than

    anything else" I do not even know what that means.

    Well, I do really. What the speaker really means is that he things some people spend to much money on things he does not like, and he should have the right to completely determine how they spend their own money.

    --------------

    once they're all (People like water) moving or thinking the same way, it's extremely hard to change them.

    Given that 20% do not know that the earth revolves around the sun I am not sure exactly it is that "ALL" people are expected to believe. Also the author appears to be unaware that the degree to which it is difficult to change a persons mind has little if anything to do with how the rest of the country believes.

    What we need to do to change things is to actually understand the nature of humans. The other is to get rid of all regulations and replace them with the concepts of responsibility and openness.

    visit here for more info:

    factotum666 dot livejournal dot com.

    There is no need for lobbyists. Their stated goal is to educate congressmen. Well, any education can be done virtually and we can all see what the education is about. No representative of an industry shall meet with a congressman without being on the net.

    Corporations are creatures of the state. change their rules. If they fail, it is up to the managers and major share holders to demonstrate that they were open and honest. If not than their personal wealth can be used to pay off creditors and some stock holders. It will no longer be necessary to "pierce the veil" of the corporation or initiate a lawsuit to recover damages from poor corporate performance.

    With a few well defined and narrow exceptions, those responsible for the screw up will be responsible up to the entirety of their wealth, of which only $100,000 (or some similar nominal amount) may be shielded.

    What you respond --- Then people will not be willing to take risk. Well, if they are not risking their own money than they are not taking risk. They are gambling with other peoples money.

  • Report this Comment On November 20, 2009, at 5:29 PM, drborst wrote:

    Matt, I appreciate the aritcle, especially the fact that you point out the lovely irony that you your self don't make anything. It might have been even better if you had pointed out that the entire Motley Fool is about making money by moving paper.

    Of course I agree with you because I'm an engineer who makes things (semiconductors) and its obvious that I'm underpaid...

    I think tax policy is the best place to change the US to a more industrial ecomomy. Other posters suggested eliminating taxes on work and hiring people. I prefer a compromise with that poster. How about we increase the standard deduction to $50K. Then only higher earners pay taxes (and make them pay a lot).

    I could probably make more money in finance, but I wouldn't like the work as much. I think this would tip that tradeoff toward making things instead of making paper.

    Then we reinstate the estate tax for personal wealth. The children of the wealthy already have advantages, but if they think their family has enough money that may not see the need to work (we clearly need some loopholes like the family business or farm).

    Next we institute a national property tax on the unimproved land value. My company builds billion dollar factories and pays taxes on the billion dollar assesed value, while the farmer next door pays taxes pays a lot less on his land.

    Add a national sales tax. Taxing consumption instead of work is just better. And it ensures every one pays (I donn't want to let the large number of people I gave the big deduction to in my first proposal off the hook for share sacrifice).

    Finally, reduce the deficit. My biggest problem with Bush is that he turned a surplus into a deficit during good years. Taking out a loan isn't a bad thing, but not paying it back when you have the money is.

  • Report this Comment On November 20, 2009, at 6:57 PM, neutrinoman wrote:

    It's not a cult of markets, but of *financial* markets, that's the problem. Markets are basically about goods and services. When paper assets are king, we have nothing to eat. Add to that the more recent and astonishing cult of leverage and democratization of credit.

    Much of the problem is due to bad govt policies:

    1. They encourage too much household and corporate debt.

    2. The govt itself is too much in debt.

    3. They encourage people to buy houses when they don't need them. A house is not a productive asset, but a cost center. It's not an "investment," any more than a washing machine is an investment. A house is a consumer durable.

    4. The Fed has addicted the US and global economy to an apparently endless supply of make-believe cheap credit.

    Excessive debt creates a bloated market for bonds and credit instruments and financial types to buy and sell them.

    5. The Fed has undermined our banks by all but eliminating capital reserve requirements. Only this year did we see a small reversal of this policy. But by historical standards, the US financial system is still too overleveraged.

    6. The US govt tolerated Japan's and now China's (and tomorrow, the rest of Asia's) manipulated cheap currencies, a major factor in the undermining of US manufacturing. This is rooted in long-obsolete Cold War policies.

  • Report this Comment On November 20, 2009, at 6:57 PM, neutrinoman wrote:

    It's not a cult of markets, but of *financial* markets, that's the problem. Markets are basically about goods and services. When paper assets are king, we have nothing to eat. Add to that the more recent and astonishing cult of leverage and democratization of credit.

    Much of the problem is due to bad govt policies:

    1. They encourage too much household and corporate debt.

    2. The govt itself is too much in debt.

    3. They encourage people to buy houses when they don't need them. A house is not a productive asset, but a cost center. It's not an "investment," any more than a washing machine is an investment. A house is a consumer durable.

    4. The Fed has addicted the US and global economy to an apparently endless supply of make-believe cheap credit.

    Excessive debt creates a bloated market for bonds and credit instruments and financial types to buy and sell them.

    5. The Fed has undermined our banks by all but eliminating capital reserve requirements. Only this year did we see a small reversal of this policy. But by historical standards, the US financial system is still too overleveraged.

    6. The US govt tolerated Japan's and now China's (and tomorrow, the rest of Asia's) manipulated cheap currencies, a major factor in the undermining of US manufacturing. This is rooted in long-obsolete Cold War policies.

  • Report this Comment On November 20, 2009, at 8:40 PM, eeyore8282 wrote:

    Companies that grasp and implement the new model for industry of Cradle to Cradle Design will be in the forefront of the Sustainable Earth Movement. They will establish market share and set the bar.

    Take 20 minutes and watch "The Story Of Stuff" at http:/www.storyofstuff.com. It's rather simplistic for a wide audience but entertaining and is dead on target for business today.

    It's all in the design and we have 100% control of how we move forward. We can make markets of nothing until extinction or we can get busy investing in ideas that will move business and the world in a positive and productive direction indefinitely.

    "The stone age didn't end because we ran out of stone."

  • Report this Comment On November 20, 2009, at 9:12 PM, lmxxx wrote:

    I am not an economist or finincial guru. But I see that our country's demise is due to the fact that we don't make anything now. Everything I buy and I am sure with others, comes from somewhere other than the USA. US corporations have opted to send manufacturing overseas. As a country, we loose millions of jobs. these lost jobs result in less demand for a product that was once made here in the USA.

    We are the biggest comsumers in the wolrd. But since most are losing jobs. There is no money to buy.

    US corporations have shot everyone in the back with there actions. Why these CEO's didn't see this is beyond me. They are MORONS.

  • Report this Comment On November 20, 2009, at 11:27 PM, scepticalone wrote:

    Since modern civilization commenced only a small percentage of the global population have ever been employed in manufacturing goods, as processes have grown more and more sophisticated.Both Maoism and capitalism are predicated on a form of permanent revoloution,capitalism being the fairer gentler more successful model.As we all know education is the key to the economic world(even if it is self taught),but it is not the key to happiness.So, the straight A student in nuclear physics who takes a job at Goldman Sachs, wants to be seduced, but at the same time regrets that he will never be revered like Newton or Einstein.However consider this,if he makes money he can invest some of it in techno start ups, and perhaps create the next Google.It is no good looking at the past for a model of the future.The Japanese make very good cars in America,but GM made lousy ones for at least the past twenty five years,learn from your competitors.A few suggestions, engineering degrees should be free for second year students who achieve the top forty percentile in the first year. Investment in bio or IT startups should be tax deductions in year one and thereafter. I too am a Wharton postgraduate of the 1960s, although I have never worked in the USA,and I believe fervently that the USA is still the best incubator of change in the world,and that it will recover based on on small and medium business tech savvy. It has got to find those export niches based on technology,and reward those who exploit them like football stars,tax free,because these people will be creating jobs, revenue and common wealth. Good Luck

  • Report this Comment On November 20, 2009, at 11:59 PM, topsecret09 wrote:

    Companies like Levi Strauss,and Hershey are just two companies that go to the root of the decline In AMERICAN jobs. The outsourcing of AMERICA Has come home to roost,and If our policy makers In Congress continue with their apparent Indifference to their own AMERICAN citizens,nothing will ever change,and In fact will only get worse over time.....http://www.rttsweb.com/outsourcing/statistichttp://www.hrwor...

  • Report this Comment On November 21, 2009, at 12:03 AM, topsecret09 wrote:

    Outsourcing America........

    "...At companies with revenues of at least $5 billion, as many as one quarter of IT jobs will be moved offshore by 2010." ComputerWorld May 2009

    "Compass Management Consulting services director Nigel Hughes argued that companies could see productivity losses of up to 60 percent when the full cycle of application development is outsourced, leading to longer development times." VNUNet April 2009

    "An annual survey by accounting and consulting firm BDO Seidman LLP showed that 22 percent say the United States is the outsourcing destination they are most likely to consider in 2009, compared to 16 percent for China and 13 percent for India." Silicon Valley Business Journal March 2009

    "The number of H-1B visas that can be issued annually is capped by Congress at 65,000...but while the total of available visas remains constant, the number issued to the major offshoring vendors is rising. The four largest H-1B recipients last year are all based in India: Infosys Technologies Ltd., with 4,559 visas; Wipro Ltd., with 2,678; Satyam Computer Services Ltd., with 1,917; and Tata. The number of visas issued to Infosys was identical to what it received in fiscal 2007, but Wipro, Satyam and Tata all saw increases." Computerworld February 2009

    "Half of the IT pros...surveyed say they have new concerns about Indian IT providers..." InformationWeek January 2009

    "Sixty-eight percent of IT pros who've worked with Indian outsourcers say they wouldn't work with Satyam based on what they know of the financial scandal..." InformationWeek January 2009

    "When compared to their beliefs two years ago, 58% of companies said they were less of a believer in the idea that working with Indian IT outsourcers delivers value for their company and its shareholders." InformationWeek January 2009

    "The $50 billion-a-year offshore outsourcing business was growing at a 29 percent annual rate until the credit crisis hit last fall, said Rod Bourgeois, a technology services specialist at Sanford C. Bernstein & Company. But he now forecasts growth in 2009 to be about 10 percent." New York Times January 2009

    "The number of outsourcing contracts worth more than $25 million signed by global financial services firms declined by 19 percent last year compared to 2007 and their total value decreased by more than 25 percent." CFO January 2009

    "Numerous surveys indicate that anywhere from 17 percent to 53 percent of customers have not realized business value/return on investment from offshore outsourcing." CIO November 2008

    "Three surveys conducted across [India] between January 2007 and March 2008 have shown that three in every ten job seekers make false claims on their CVs while applying for jobs." Hindustan Times July 2008

    "...20% of InformationWeek 500 companies say they've taken back offshored work in the past year." InformationWeek November 2007

    "In a 2005 study, McKinsey & Co. estimated that just a quarter of India's computer engineers had the language proficiency, cultural fit and practical skills to work at multinational companies. The result is increasing competition for the most skilled Indian computer engineers and a narrowing U.S.-India gap in their compensation. India's software-and-service association puts wage inflation in its industry at 10% to 15% a year. Some tech executives say it's closer to 50%. In the U.S., wage inflation in the software sector is under 3%, according to Moody's Economy.com." The Wall Street Journal June 2007

    "Data from law outfit Addleshaw Goddard has found that 60 percent of companies had changed or renegotiated their IT outsourcing contract while a third had opted to return the running of their IT infrastructures to internal employees." iHotDesk March 2007

    "This research into the potential pitfalls of outsourcing comes just a week after Jean-Marc Lazzari, head of Unisys operations in continental Europe, told us that he knew of up to 10 deals worth between 700m euros ($890m) and 1.5bn euros ($1.9bn) that were already back on the market despite having been signed less than two years ago. "These deals were based on the your mess for less principle, said Lazzari, and they are in danger as the supplier often did not get the volume of work expected from the client, and the client didnt get the expected cost savings." Yahoo News - UK & Ireland September 2006

    "But the big whoosh of jobs to India never happened. Indeed, that gush slowed to a steady stream once American companies realized it's tough to set up shop in a country with bad roads and a patchy power grid. Lately, American consulting firms that once predicted runaway growth in outsourcing to India have been slashing their estimates by half or more. Now American companies are hanging on to the high-skilled work that requires face-to-face interaction, while everything that can be done "over the wire" gets shipped offshore." Newsweek March 2006

    "Global revenues on outsourced medical transcription services in 2005 is already estimated to be at 2.2 billion dollars, with the US market accounting for more than 85 percent of global demand..." XMG Study January 2006

    "The Indian software and services export is estimated at Rs 78,230 crore ($17.2 billion) in 2004-05, as compared to Rs 58,240 crore ($12.8 billion) in 2003-04, an increase of 34 percent." Nasscom-McKinsey November 2005

    "On average, applications for H-1B workers in computer occupations were for wages $13,000 less than Americans in the same occupation and state.” Programmers Guild Report

    "...offshore outsourcing will create more than 337,000 jobs by 2010..." InformationWeek November 2005

    "Demand for offshore IT services isn't slowing, and that trend is showing up in Indian companies' hiring. Between July and September, Tata Consultancy Services increased its staff by nearly 12% to more than 53,000, while Infosys Technologies' staff grew 15% to more than 46,000." InformationWeek October 2005

    "Outsourced IT services brought in $12 billion for India 2004, leading the world in IT exports." Santa Clara University's Leavey School of Business October 2005

    "Only 19% of US businesses have an offshore outsourcing strategy, a study by Ventoro found. However, the percentage skyrockets to 95% if only Fortune 1000 companies are considered." ZDNet Research October 2005

    "The US IT offshoring market will record a compounded annual growth rate of 14.4% and will nearly double to $14.7 billion by 2009..." IDC September 2005

    "U.S. financial service providers (FSPs) are expected to spend $65.7 million on IT services in 2005, however less than 30 percent of FSPs will outsource any strategic projects by the end of 2006." Gartner August 2005

    "Business Process Outsourcing will overshadow and incorporate IT outsourcing and mainstream BPO expenditure is likely to grow worldwide by 10 per cent a year from $140 billion in 2005 to over $220 billion by 2010." LogicaCMG August 2005

    "...the average size of contracts announced by IT and BPO services vendors in the second quarter of '05 fell to $56m compared to $106m in the year ago period. This means that average deal size has now declined for four consecutive quarters." Datamonitor July 2005

    "In 2003, Ireland and India were the main beneficiaries of offshoring and the largest exporters of IT services, reaching 14.4 billion dollars and 11.3 billion dollars respectively..." International Monetary Fund July 2005

    "Citing various studies, the WTO noted that the global turnover from offshore IT services reached 45 billion dollars in 2003, or less than 10 per cent of total world business service exports." News From Bangladesh July 2005

    "The research firm Gartner Inc. predicts that up to 15 percent of tech workers will drop out of the profession by 2010, not including those who retire or die." ABC News June 2005

    "...the number of buyers prematurely terminating an outsourcing relationship has doubled to 51 percent while the number of buyers satisfied with their offshoring providers has plummeted from 79 percent to 62 percent." DiamondCluster June 2005

    "...entry-level programmers and help-desk workers in Vietnam earn an average, annual salary of about $3,000 per year. By contrast, India's IT graduates are paid about $5,400 -- not a lot, but almost twice as much as the Vietnamese. neoIT June 2005

    "India controls 44 percent of the global offshore outsourcing market for software and back-office services, with revenues of US$17.2 billion (euro14.07 billion) in the year ended March 2005..." Associated Press June 2005

    "Nearly three-quarters of international outsourcing companies in 10 countries expect to grow revenues within the next 12 months by an average of 11%." ComputerWeekly May 2005

    "...financial services firms in the U.S. spent about $590 million on offshore services from third-party outsourcers last year, while their European counterparts spent about $480 million overseas." ComputerWorld May 2005

    "To get high-quality service levels from top-tier vendors, customers should expect to pay in the $24 to $30 per hour range for offshore labor..." Forrester Research May 2005

    "Twelve percent of outsourcing spending in 2005 will involve offshore resources, growing to 19 percent in 2009." Saugatuck Technology May 2005

    "The ranking of 12 most valuable companies published in April 2005 issue of Global Outsourcing has IBM at the top, quite predictably, with a valuation of more than $140 billion. ADP takes the number 2 slot with market capitalisation of $26 billion, ahead of Accenture ($23 billion), a company with almost double of ADP's revenue. The next two positions are taken by Infosys and Wipro with a market capitalisations of $19.9 billion and $14.6 billion, respectively," a release said here." Global Outsourcing May 2005

    "Transiting from a major business process outsourcing (BPO) hub, India is set to emerge as a $17 billion knowledge outsourcing destination by 2010, states a new industry study." Confederation of Indian Industry (CII) May 2005

    "The survey of 25 large organizations with a combined $50 billion in outsourcing contracts found that 70% have had negative experiences with outsourcing projects and are now taking a more cautious approach. One in four companies has brought outsourced functions back in-house and nearly half have failed to see the cost savings they anticipated as a result of outsourcing." Deloitte Consulting April 2005

    "Indian software exports exceeded $17bn last year, representing a $4bn jump over 2003." Sand Hill Group April 2005

    "By 2009 the information technology and enterprise solutions (ITES) market in India alone is likely to reach $142 billion. This estimate contrasts with the current price tag of $532 billion to provide these services in the United States." McKinsey Study March 2005

    "According to the National Association of Software and Service Companies (Nasscom), the total market size of knowledge process outsourcing business in India may rise to a staggering $15.5 billion, up from $1.2 billion now." Indo-Asian News Service March 2005

    "...60 per cent of organizations that outsource parts of the customer-facing process will encounter customer defections and hidden costs that outweigh any potential savings they derive from outsourcing..." Gartner March 2005

    "Gartner also predicted that through 2007, 80 per cent of organizations that outsource customer service and support contact centres with the primary goal of reducing cost will fail." Gartner March 2005

    "Three-quarters of U.S. companies outsourced some or all of their information technology activities in 2004, and that percentage is likely to increase this year..." Global Outsourcing Report 2005 March 2005

    "Industry experts predict that by 2015, offshoring by the US companies would represent $135 billion in wages and 3.3 million professional jobs. And new countries like Czech Republic, Poland, Hungary and Mexico are likely to become new offshoring destinations this year." Hewitt Study March 2005

    "...estimates that in 2005 as many as 40 percent of global sourcing projects may fail to achieve desired results." neoIT Study January 2005

    "Over 40 percent of offshore initiatives will not yield anticipated savings, scale or risk diversification...' NeoIT said in its predictions for 2005. The key reason for these disappointments will not be due to supplier capability but buyer preparation and management." CNET News.com January 2005

    "By 2005, Deloitte & Touche expects the top 100 global financial-services firms to offshore more than $200 billion of their operating costs and save more than $700 million. Shahrawat notes that the three largest Indian outsourcers will each surpass $1 billion in sales in 2004. " Wall Street and Technology December 2004

    "Spending on the top 100 outsourcing deals worldwide increased from $48.3 billion in 2002 to $66.1 billion in 2003 and, for the first time, Europe surpassed the Americas, capturing more than half of the top 100 deals and accounting for more than half the value of these deals." IDC December 2004

    "Offshore outsourcing is expected to grow nearly 20 percent annually through 2008, with the average enterprise sending 60 percent of its application work to low-wage countries by 2009, a market research firm said Tuesday." TechWeb November 2004

    "Almost half of business and IT professionals believe the 2004 U.S. Presidential election will impact the number of U.S. companies using offshore outsourcing, according to a recent survey conducted by META Group. The survey found that almost 50 percent of respondents believe that offshore outsourcing will increase if George W. Bush is elected, and that it will decrease if John Kerry is elected." META Group November 2004

    "Even though the term "outsourcing" has become synonymous with the practice of sending jobs overseas, the bulk of outsourcing activities—70.2 percent—occur on the domestic front..." 2004 Enterprise Systems Outsourcing Survey October 2004

    "...a University of California-Berkeley study that warns as many as 14 million Americans hold jobs at risk of being outsourced." Mercury News October 2004

    "...the worldwide market for offshore IT services will grow from nearly $7 billion in revenues in 2003 to $17 billion by 2008, achieving a five-year compound annual growth rate (CAGR) of nearly 20%." IDC October 2004

    "Several offshore outsourcing vendors now exceed $1 billion in annual revenue, and the total market is greater than $10 billion." META Group October 2004

    "...the average enterprise will ultimately outsource 60% of application work offshore (circa 2008/09)." META Group October 2004

    "The offshore outsourcing market will continue to grow nearly 20% annually through 2008..." META Group October 2004

    "AMR Research released a study today announcing that manufacturers plan to increase outsource spending 9.3 percent in 2005 in an effort to contain internal IT costs." AMR Research October 2004

    "Despite these limitations, the report showed that in 2002 the US imported 37.5 billion US dollars worth of business, professional and technical (BPT) services, which is a 76.8 percent increase since 1997." INQ7.net referencing GAO Study October 2004

    "Major IT services companies worldwide currently employ 14% of their combined workforce in India, as they tap into the country's low-cost IT and back-office skills base. Research from ComputerWire found that the top 50 IT services companies currently employ a total of 1.25 million employees worldwide, with 173,000 of this total based in India." Computer Business Review Online September 2004

    "The U.S. information technology sector lost 403,300 jobs between March 2001 and this past April..." Associated Press September 2004

    "American employers will hire 270,000 fewer IT workers this year than they did in 2003, according to a poll of 500 hiring managers by the Information Technology Association of America, providing fresh evidence that the IT-labor market continues to weaken." InformationWeek September 2004

    "General Electric's '70-70-70' plan signals the possible extent of these shifts: It plans to outsource 70 percent of its head count, push 70 percent of that outsourcing offshore and locate 70 percent of its workers in India." Newsweek August 2004

    "The number of Indian professionals in the IT sector is expected to triple to more than 2 million over the next five years, and Morgan Stanley's Mumbai research center predicts that multinationals will match new jobs in Indian subsidiaries with head-count reductions elsewhere." Newsweek August 2004

    In the first 32 months of a typical U.S. recovery, wages rose 10 percent; this time, wages have risen just 2 percent." Newsweek August 2004

    " In the U.S. recession that ended in June 2001, half the job cuts were 'structural,' meaning permanently eliminated, compared to an average of 25 percent in previous recessions, according to the U.S. Federal Reserve. In other words, laid-off workers are much less likely to be rehired by their old companies and have to find new jobs or turn to self-employment. Data from the U.S. Bureau of Labor Statistics show that more than half of the jobs created since the end of the recession are part time, that tenured workers are still losing their jobs at record rates and those that find new ones are taking 57 percent pay cuts on average. Newsweek August 2004

    “The topic of offshore outsourcing enlisted the strongest responses, said W. Ladd Bodem, Principal, ServiceXRG. 24% of customers indicated that they will stop doing business with a vendor if they outsource support offshore, regardless of the quality of support. It is not clear that they would actually stop doing business with a vendor, but it is clear that this is an emotional issue and one that must be factored into any outsourcing strategy.” Service Excellence Research Group, LLC August 2004

    "The brouhaha over the loss of service jobs, which currently account for over 80 percent of private-sector employment in the United States, is not merely an American phenomenon. Service jobs are at risk in all developed countries. In the U.K., where some claim that as many as 50,000 jobs moved offshore in 2003, the issue is just as prevalent and just as contentious. Countries like Germany and Sweden are feeling political tremors as well." Harvard Business School August 2004

    "About 21% of IT executives surveyed recently by management consulting firm DiamondCluster International said they had prematurely terminated offshore arrangements in the prior 12 months. The most common reasons cited: the provider had financial difficulties; the provider failed to deliver on commitments; or the buyer consolidated its outsourcing vendors." Network World July 2004

    "In India, they were pumping these guys out left and right. . . . Look at the deal here: We've got very highly paid SAP programmers that we could hire in the U.S. - and they're hard to find. Or we could go to India and find very talented SAP programmers immediately at 35% to 40% lower cost." Network World July 2004

    "The research showed that 80 percent of organizations have suffered problems ranging from time and cost overruns, to non-adherence to specifications and requirements, when outsourcing ADM projects." Meta Group July 2004

    "The number of software and IT service jobs in India will increase by 1.5 million to 2 million by 2008, according to a report. This represents a 40% compound annual growth rate." The Times of Inda July 2004

    "New research shows that 80 percent of businesses have spent more time and money on outsourced application development that was originally specified..." Meta Group June 2004

    "Responding to survey on a prominent election-year issue, 66 percent of U.S. workers believe that offshore outsourcing of jobs is harmful for the economy." Hudson Global Resources June 2004

    "58% of American workers believe that companies outsourcing work that could be done by Americans to offshore contractors should be penalized by the US government..." ELA Survey June 2004

    "6% of those surveyed said they have lost a job because their work was sent overseas -- 30% know of someone, including a family member, friend or co-worker who had lost a job due to offshoring. -- 8% said they personally feel their job security is at risk because their employer might send their work overseas ELA Survey June 2004

    "Forrester also increases its near-term estimate of lost jobs by 240,000 in its new report, projecting that a cumulative total of 830,000 positions will have moved offshore by 2005." Forrester Research May 2004

    "Forrester has increased its estimate of how many US services jobs will go offshore in the near term. Long term, we believe that our previous projection of 3.3 million by 2015 is still accurate." Forrester Research May 2004

    "...an employee could be paid as much as $50,000 to share a firm's data with a competitor." Wall Street & Technology May 2004

    "TowerGroup estimates that the top 15 global financial institutions will increase information technology spending on vendor-direct offshore outsourcing by 34% annually – representing an increase from $1.6 billion in 2004 to $3.89 billion in 2008." CRM Today April 2004

    "...40% of the Fortune 500 expected to have [outsourced offshore] by the end of this year, according to the research firm Gartner Inc.... Fast Company April 2004

    "American high-tech firms shed 560,000 jobs between 2001 and 2003, and expect to lose another 234,000 in 2004." IEEE-USA March 2004

    "Offshore business process outsourcing services - which, unlike application development, typically require the transfer of personal data - grew 38% last year to just under $2 billion..." Gartner March 2004

    "While the U.S. lost 234,000 IT jobs in 2003, for Indian techies 152,000 new jobs were created." The Economic Times March 2004

    "About 14 million jobs, or 11% of the US total, have been identified as at risk of being sent abroad." McKinsey & Co. February 2004

    "...the Department of Labor estimates (the North American Free Trade Agreement or NAFTA) was responsible for the loss of more than 500,000 U.S. jobs between 1994 and 2002." Time Magazine February 2004

    "In the past 3 years, offshore programming jobs have nearly tripled, from 27,000 to an estimated 80,000." Forrester Research February 2004

    "More than 2.2 million jobs have been lost since Bush took office and the unusually tepid recovery in the labor market has fueled public concern over offshore "outsourcing" to low-wage countries like China." Reuters February 2004

    "Some 200,000 to 300,000 jobs could end up being shipped offshore this year..." eCommerce Times February 2004

    "Nonmilitary government clients were the biggest outsourcing customers last year, with $18.5 billion in contracts. The defense sector finished a close second at $18.2 billion." IBD February 2004

    "While 93% of business technologists surveyed recently by Software Development magazine, a CMP publication, say the work that's going offshore is either important or critical to their companies' operations, 56% say what's coming back is worse than what could be achieved in-house and, in the worst cases, unusable." TechWeb January 2004

    "At least 13 bills that would ban offshore outsourcing are now wending their way through various state legislatures." CNNMoney January 2004

    "Global spending on major outsourcing projects - in which a customer hires an outside company to design, implement and run a computer network or other information technology endeavor - rose 44% from 2002 to $119 billion last year." Datamonitor PLC January 2004

    "...at least 3.3 million white-collar jobs and $136 billion in wages will shift from the United States to low-cost countries by 2015. " Forrester Research January 2004

    "...Gartner says the (offshore outsourcing) market will grow to $160 billion in 2005, up from $101 billion in 2000..." TechWeb January 2004

    "26% of companies already using offshore services expect to double their spending in the next year." Dataquest January 2004

    "...60% of Fortune 1000 companies have yet to do any offshore IT outsourcing, and that the overseas movement within these companies is slow." Forrester Research December 2003

    "The U.S. software industry lost 150,000 jobs last year..." ADTmag.com December 2003

    "According to another Gartner survey, nearly 30 percent of companies saw no cost reductions or actually saw increased expenses as a result of outsourcing their IT work." Earthweb December 2003

    "Analysts predict that as many as 2 million U.S. white-collar jobs such as programmers, software engineers and application designers will shift to low-cost centers by 2014." Reuters December 2003

    "...the offshore component in delivery of US IT services may rise as mush as 23% by 2007, up 5% from 2003." IDC November 2003

    "By the end of next year Gartner predicts that 1 out of every 20 IT jobs at user companies will have moved offshore." Computerworld October 2003

    "...analysts at Meta Group Inc. predict that in the next several years, as much as 40% of production support may be managed offshore." Computerworld October 2003

    "One of the most popular nations for outsourcing is India, which is recording double-digit growth in revenues from IT services, which are expected to reach $57 billion in 2008, according to a joint study by McKinsey & Co. and Nasscom, an Indian software association. Based on a U.S. model of spending 5% to 7% of the IT budget on security, and with the IT budget consuming 15% of a service company's revenue, India should be ramping up to spend $450 to $600 million on information security and assurance by 2008. " Computerworld September 2003

    "By next year, 80% of CIOs will have marching orders to take some IT offshore." Computerworld September 2003

    "Since 2001, according to the US Bureau of Vital Statistics, more than 500,000 people in IT professions in the United States have lost their jobs." CIO Magazine August 2003

    "In fact, at the Gartner Outsourcing Summit 2003, analysts predicted that shipping work offshore will be discussed in more than 8 of every 10 U.S. executive boardrooms by next year, and more than 40% of U.S. firms will be outsourcing IT services through a global delivery model within that same time frame." SearchCIO.com August 2003

    "... 20% of outsourcing deals do not produce cost savings...10% of those deals actually wind up increasing costs."

    "... this year alone 50% of all outsourcing projects will fall short of delivering expected value and will be deemed unsuccessful

  • Report this Comment On November 21, 2009, at 12:07 AM, topsecret09 wrote:

    Businesses move their headquarters overseas to escape federal Income taxes http://www.hrworld.com/features/10-overseas-companies-060408...

  • Report this Comment On November 21, 2009, at 12:19 AM, topsecret09 wrote:

    The quickest way to bring jobs back to Americans Is to completely suspend all non-essential Immigration. The Federal Government Imports 75,000 foreign workers per month,even though we are In the middle of the worst economic downturn since the great depression. Thats 900,000 foreign workers per year,and yet nobody In congress Is even addressing this travesty. Why does our own government continue to bring In foreign workers that compete directly with American citizens for the few jobs to be had In this most difficult of economic times ? TS

  • Report this Comment On November 21, 2009, at 2:22 PM, lynnchase wrote:

    THOSE FORECLOSURES ARE NOT REAL FOLKS, GET IT?

    Posted on November 20, 2009 by livinglies

    NOW AVAILABLE on KINDLE/AMAZON

    The Emperor\’s New Clothes: THOSE FORECLOSURES ARE NOT REAL FOLKS, GET IT?

    1-in-10-u-s-mortgage-delinquencies-reach-a-record-high-going-up

    The Emperor is still strutting around as though he was fully clothed in the best silk, color and design. Wall Street is still the darling of government and a whole lot of other people, even if it was a little bad these past few years. We’ve been through the part where the swindler’s came to town, where the government officials ashamed of their apparent blindness and ignorance raved about the new derivative innovations, and the parade of foreclosures based upon invisible clothes. But we have not arrived at the part in the story where the little child yells out that the old fool has no clothes on. And we still don’t hear everyone laughing at wall Street and sending them home to lick their own wounds instead of inflicting it on everyone else.

    The swindlers are still in town selling invisible clothes to everyone gullible enough to buy nothing and call it something. We are running on vapor since 1983 when derivatives were zero. Now we have credit derivatives with a "nominal value" of somewhere over $500 Trillion — that is ten times the total money in circulation from government origins. That’s “nominal value” because they don’t exist and they have no value. There is no substance to them to the extent that they are based on secured debt and possibly all other debt. There is no mortgage, there is no note, although there might be an obligation. But if there is an obligation it probably has been extinguished by either set off for predatory “lending” (actually illegal sale of unregistered securities fraudulently masquerading as loan products) or extinguished by payment directly or indirectly from Uncle Sam, more investors or others. In this fairy tale (national nightmare), the swindler’s take over the government instead of sneaking out of town with their hoard of ill-gotten gains.

    Think about it. If virtually ALL of the securitized residential mortgages that were originated for the last 10 years are in some sort of trouble, how much brain power does it take to conclude that there was something wrong with them to begin with?

    If virtually ALL of the mortgage backed securities that were created and sold in the last 10 years went into default, how much brain power does it take to conclude that there was something wrong with them to begin with?

    So if virtually all the transactions originating the source money and all the transactions that were funded from the source money went bad, how much brain power does it take to conclude that there was no substance to the transaction and that the whole thing was a fantasy from Wall Street, who are now strutting around with their pockets bulging with the all the money everyone else (investors and “borrowers”) lost?

    I’ve been as gentle as I could, giving everyone a chance to catch up but we are now on the precipice of a cliff far deeper than anything we have seen before including one year ago. And nobody on the side lines is really getting it. We continue our march toward the edge of the cliff, push the ones in front off, in the hope or belief that we won’t ever get there. So here it is, my opinion to be sure, but anyone who has been following my writings since April, 2007 knows that I called the stock market crash, the credit freeze and the collapse of the world economies and why. So it’s not like I don’t have a track record. I wasn’t the only one and people with far more credibility than me spotted the same things and continue to scream bloody murder, “the emperor has no clothes!” See comments by Roubini, Krugman, Volcker et al.

    Geithner and Summers have to go. They are the emperor’s closest confidants who don’t want to look stupid even if it destroys the entire country. The current emperor is still on a learning curve so we have to cut him some slack. The prior ones, well….read on.

    The recession is real but most of it could be reversed by simply admitting the obvious: those derivatives have no value, the mortgages are mostly invalid, the notes are mostly invalid, and the obligations are mostly extinguished by the swindlers’ own chicanery with Federal bailouts and Credit Default Swaps, which were the cloth of the Emperor’s invisible clothes.

    The need for the AIG bailout can be argued. But nobody can argue that the people who benefited from it are the same people who got us into this mess. They took a system that was working and turned it into a system that couldn’t work. They turned mortgage lending on its head: mortgages that were likely to perform were valuable only as cover for most of the illegal activities underneath. The real incentive was to create mortgage pools that would fail and where they could collect on credit default swaps worth as much as 30 times the original nominal value. Vapor on Vapor.

    That means they have every motivation to make certain you go into default and no motivation whatsoever to modify, settle, allow short-sale or do anything for the benefit of a homeowner who wants to settle the matter honorably. You can’t do that when you are dealing with dishonorable people with motives that amount to acts of domestic terrorism. There is no talking to them because if they can get you to default on that $300,000 loan they probably are going to get paid $9,000,000 just on your default. How do you like them apples? Check it out. It is true.

    Any obligation — whether it is a loan for refinancing a house, buying a house, student loan, auto loan etc. that have the attributes discussed in this blog — does NOT have any security or note that can be enforced and all of them can be extinguished in bankruptcy — probably even including the nondischargeable student loans. (More on that another time).

    Therefore, much of the recession, all of the foreclosures and much of the lost wealth that is “missing” is legally, morally and ethically and in actuality and reality, a fantasy. Some 60 million homeowners or more with these residential mortgages securitized through a money laundering scheme are sitting on wealth they have been convinced they don’t have. But they do. Those houses are free and clear — legally, morally and ethically.

    All the homes in the MERS database are probably free from any encumbrance legally, ethically and morally. Trillions of dollars of wealth that is claimed as “lost” is still possessed by people who don’t know they have it and the game is on to make sure that if they ever figure it out it will be too late.

    Imagine the purchasing power in our consumer economy if the mortgage obligations and other obligations simply vanished. What would happen to the recession? What would happen to unemployment? What would happen to tax revenues without ever raising the rate of taxation? It would all self correct. And speaking of taxes, how about all those trillions of dollars in “fees” and “profits” that were sequestered off shore, never reported and thus never taxed? what would happen to the national and state deficits?

    All this is happening because the wrong people are controlling the conversation and most people are listening because the “experts” because they are so smart “must know better.” Consider me the child who yelled “But the Emperor has no clothes.” A million experts with long resumes, PhD’s and persuasive catch words can’t change the fact that the money laundering scheme of the last 10 years was clothed in “Apparent” legality but in substance was simply fraud perpetrated by people who were not any smarter or better than the common swindler. They did, however, have one ace in the hole — the Emperors were in on it. Maybe we have a chance with the current administration, maybe not.

    Unless we do something about this, we will suffer the indignity of decline into third world status as the wealthy few squeeze the life out of the rest of the country. Is this too extreme for you? Go to the International Money Fund website or the World Bank website or any other website or book that addresses basic economics. You won’t find anything different there. Just words, like these, with a little more polish and a little more academic tone, with the same message.

  • Report this Comment On November 21, 2009, at 7:45 PM, Whitlatm wrote:

    It's time our leaders realized what the common man on the street has intuitively known for some time, and that is that our country can not sustain itself as a world leader without an industrial base onshore.

    We can debate endlessly about the service society and it's environmental benefits, but ultimately we must build, purchase, and sell THINGS.

    Not everyone in a country as diverse as ours has the ability to be a analyst or manager, but most of those could still find steady employment if it were available to them, employment that would enable them to go out and actually BUY things made in America, assuming the price and quality were competive to other items on the market. We need to take the steps necessary to allow that price pparity to be established, even if it were unpopular with those who sell to us now, and those who choose to take their jobs offshore.

    You may point to how many foreign automakers, etc., have facilities here in America, however there are 2 problems with that; 1) the profits still go offshore, and, 2), they can and will pack up and leave as quickly as they arrived. Most of them required huge financial incentives to come here in the first place. Why didnt we use incentives such as these to keep our own industries from leaving here for greener pastures?

    We cannot continue to send all of our capital overseas and ever expect things to get any better.

    My last point is more of a personal comment; doesn't it make anyone in Washington even a little bit nervous that almost everything we buy is produced in a factory in a communist country, who also has a large stake in our financial well-being? Call me paranoid, but I'm fearful my great grandchildren will live in a colony of communist China!

  • Report this Comment On November 21, 2009, at 10:41 PM, JimBnd wrote:

    America as it is now, and as it was intended to be are two completely opposite realities. There is no easy fix as all of us are at fault. To truly change America will require all us of to change. The Government of America in the beginning was run by tradesmen & farmers who farmed for the food & clothes they needed to live and went to do their Government work for almost no payment. No income tax was paid from any farmer, tradesman, or employee. Being an employee was only a temporary station in life until you could save enough to start your own enterprise. You were not revered for having a college degree, or advanced schooling of any kind. Our country really was an experiment of humankind, to see if humans really could exist as equal, free, noble, and self-reliant beings on the Earth who would provide for themselves and their families, let everyone believe as they wished to believe, and worship as they wished to worship, in whatever form they wished to worship, without being in violation of any manmade laws. Our Beloved Country was founded on Godly principles, or in accordance with the laws of Nature if you prefer. Nothing in either our Declaration of Independence or the Constitution is in Violation of any Godly principles, or laws of Nature. We can argue about the slavery issue, color, women's rights and whatever else today's wimpy so-called Americans try to bring up about the Beginnings of our Country. However, those were vastly different times. To survive took almost all your energy, diseases were rampant, there was no electricity, or any conveniences of any kind. To think that government officials in those days were truly committed to personal freedom for everyone without truly being paid is amazing. Slavery was permitted then, BUT, it was a vastly different time. Today, NONE of THE FOUNDING FATHERS WOULD EVEN CONSIDER ALLOWING SLAVERY as today we do not need slaves today, or do we? I CONTEND THAT WE HAVE MORE SLAVES TODAY IN AMERICA THEN THERE EVER HAVE BEEN. Let me repeat for Emphasis, I MEAN EVER HAVE BEEN, PERIOD, AND I CAN PROVE IT!!!!!!! Don't believe me, how long could you survive without going back to your job, if you are lucky enough to have one? Answer truthfully, I can guarantee you that less than 1% of Americans can truthfully say they are set for life. Even if you were able to farm & grow your own food, property taxes would kill you financially. We are a Generation of SELF-MADE SLAVES, believing that MORE GOVERNMENT will SOLVE OUR PROBLEMS. How niave are we, Government buearocrats do not solve problems, they push them forward. They are not tradesmen, or Farmers who make a living and do Government work on the side. They are paid by all of us to sound good, look good, and pretend they are looking out for us, when in reality, they have no clue what America truly stands for. And since all of us voted them in we are really responsible for everything that is happening to the Country. Don't blame Republicans, Democrats, or any of the other tiresome excuses we all love to create. WE ARE ALL RESPONSIBLE. START BEING REAL AMERICANS BEFORE WE LOSE THE ONLY REALLY IMPORTANT THING IN LIFE, FOREVER. FREEDOM!! And the secret to FREEDOM is COURAGE!! Let's all start being courageous and turn this country around before it's too late.

  • Report this Comment On November 21, 2009, at 11:39 PM, NoMoeMoney wrote:

    Americas downfall may be wrapped in paper now,

    but history has shown it will be soaked in blood too.

  • Report this Comment On November 22, 2009, at 1:28 PM, bearkitty67 wrote:

    Your question is a tough one. I myself completed an undergraduate degree in engineering. I graduated in 1982 near the top of my class from a good school. I was told that you need experience to land a position. My summer internships did not count. I retrained in the computer area. I found work. Later I found out that if I did straight software development versus 'Engineering software development' I could make 20% more. Its like my engineering degree was a black mark. I cannot blame young people for taking finance jobs. Our economy rewards that. And remember the last 10% you make is more likely to be disposable income/savings than the first 10%. So a tend or 20% increase in earnings makes it worthwhile to go with the flow. Plus then there is more job availability. These issues arise because of a US government that encourages offshoring. In developing economies they graduate lots of engineers, lots of people pursue engineering and they understand engineering. And they have vastly lower wages in US dollars because the 'exchange rate system' does not work. If 10K US makes you rich in China that means the exchange rate is fake and free trade does not work. You can buy a pair of glasses that cost $700 dollars in the USA for $20 US in India. If our exchange rate system worked properly that would not be possible. In an efficient free market existed the prices would be the same, since the product is the same.

  • Report this Comment On November 22, 2009, at 2:30 PM, marjamlou wrote:

    After reading all the articles I find extremely informative, I would just like to add one thing---no matter what we try to do to change our system, it will not work because the dye has been set on one goal..ONE WORLD GOVERNMENT, which has dictated that it has to destroy our present form of government & control every economic entity and personal wealth & freedom. According to the book of Revelations which i personally we are in---there is that attempt by an evil entity which has control over our financial system---THE ILLUMINATI--which is responsible for causing all of the modern day wars and destroying countries within, either militarily or financially...The modern world is now set up to be completely controlled by the Great Dictator, through all of this new technology that is about to be unleashed on all of us whether we like it or not. We are very close to a cashless society than ever before. No on can sell or buy without the MARK OF THE BEAST---666..Just a matter of time now before all of the paper money will be worthless---does it seem to be happening now with what is going on around the globe-especially to the Uniter States...I cannot believe that there is no other purpose than chaos & control that our goverment is now trying to impose their will in our health, banking,telecoms,media,postal,trucking,military,auto. What is and who is left to control? I guess we are being lulled into a type of hypnosis, if we believe that government is our friend. It is for us to open our eyes and see what is going on before us...Just tune in to listen to Jack Van Impe and he will tell you the truth of what is going on today in the light of Bible prophecy. Thank you for you time...

  • Report this Comment On November 23, 2009, at 12:28 AM, 1Demeter wrote:

    Our nation's manufacturing base has been eroding for at least 30 years, aided and abetted by an economic philosophy that trashed Keynes and all of the laws passed after the Great Depression.

    Some economists warned about the consequences of this philosophy but media like the Wall Street Journal and others just poo-pooed these warnings. Our lawmakers continued to encourage finance instead of real production as a source of "wealth." We had one bubble after another and all the while our manufacturing base went bye-bye. The Conservatives constantly complain about the power of the unions but they now represent less than 12% of the workforce -- so please, get real. It wasn't the unions alone that sent work overseas. A good part of it was our national insistence that private insurance through businesses was more efficient than government programs -- and cheaper. Meanwhile, our corporations got less and less competitive.

    Writers like Paul Krugman and Thomas Friedman have for years been explaining and warning about the illusory nature of our economy and the policies our Congress pursued. Republicans refused to see where their policies would lead and Democrats were, and continue to be, absurdly timid. Where were all the smart guys in the room all these years? Cleaning up at the trough and still are.

    Saving Wall Street will not save our nation and the intransigence of Republicans, who seem happy to pay for two wars but not for healthcare for our own citizens, says everything there is to know about how far up a dark tunnel they are and have been for at least 20 years and how perverse their "values" really are.

    Our government has become all but deadlocked because Republicans would rather fight than compromise. Our voters think Sarah Palin is a great candidate and that Glenn Beck is the new Thomas Paine! There is plenty of blame to go around for the demise of the American economic engine. I see no one out there willing to verbalize what we need to do nor the new industries that have to be developed. Europe and China will eat our lunch economically because they are and they do.

    The business interests that pay for the elections of legislators dominate the creation of policy and law. There is no hope for the American democratic enterprise under these conditions and everyone involved is too selfish to give up anything that might allow the group, the community to work.

    And because the nations of the world have now become as blindly selfish as we have been within our own nation, the entire planet is suffering. God forbid that anyone really cut back on the production of CO2 or use less gasoline or less coal. No one wants to be at a disadvantage and no one wants to go first. It's me, me, me, me -- all around the world. Frankly, humankind is showing itself too selfish and too stupid to survive as a species.

  • Report this Comment On November 23, 2009, at 1:00 AM, topsecret09 wrote:

    EXIBIT A ...... India may get 1 billion In OUTSOURCING CONTRACTS .... MUMBAI (Reuters) – Leading Indian outsourcers such as Tata Consultancy (TCS.BO), Infosys (INFY.BO) and Wipro (WIPR.BO) stand to gain contracts worth about $1 billion in the next one or two years as U.S. banks emerge from the troubled asset relief program, the Economic Times reported on Monday.

    The newspaper said JPMorgan (JPM.N), Goldman Sachs (GS.N) and Morgan Stanley (MS.N) that received approval to buy back government stake worth $68 billion earlier this year are among the firms seeking operational efficiencies by outsourcing non-core IT and back-office projects to India.

    American Express (AXP.N), Bank of New York Mellon (BK.N) and Capital One, which have started repaying government debt, were also considering outsourcing, it said.

  • Report this Comment On November 23, 2009, at 1:04 AM, topsecret09 wrote:

    I think that we should ousource our entire Federal Government to India. Then we could start all over..... TS

  • Report this Comment On November 23, 2009, at 10:32 AM, Counterparty wrote:

    In the end it's probably also a question of simple numbers and how much 'organic' growth a population can create, even if the economy has above-average productivity.

    Biggest economies:

    1 United States, 2 Japan, 3 China, 4 Germany, 5 France, 6 United Kingdom 2,680,000, 7 Italy, 8 Russia, 9 Spain, 10 Brazil

    And now looking at the population:

    1 China 1,334,280,000 19.63%, 2 India 1,172,930,000 17.25%, 3 United States 307,996,000 4.53%, 4 Indonesia 231,369,500 3.4%, 5 Brazil 192,079,000 2.83%, 6 Pakistan 168,024,500 2.47%, 7 Bangladesh 162,221,000 2.39%, 8 Nigeria 154,729,000 2.28%, 9 Russia 141,879,000 2.09%, 10 Japan 127,560,000 1.88%

  • Report this Comment On November 23, 2009, at 11:50 AM, eekthecat wrote:

    lynnchase and 1Demeter: spot on!

    truthisntstupid: you are a bad, malicious person.

    The offshoring of American jobs is not a result of greedy American workers demanding more for their labor than the market value. It is the result of greedy oligarchs demanding work at below market value.

    It came to be during the course of American history that we achieved a certain standard of living--not a luxurious standard of living, just a decent one--and the people are not now willing to revert back to the awful standard of living that their ancestors had, and which is still being lived in many countries today. Recognizing the disparity, and the desperation of people in third-world countries, American business leaders started hiring foreigners for far less than any human with dignity should be expected to work. But you think Americans should work for this pittance, too? You want to see regression in our standard of living?

    The unions are not to blame for demanding a decent standard of living, the corporations are to blame for extorting cheap labor from foreigners who had no other choice but to accept the pittance they were being offered. The people in these countries have been conned.

    Western corporations have gone to third-world countries, told those people that in order to live like Americans and Europeans, you need "money". And the money, of course, comes from the Western world. It's a largely imaginary thing that we invented. After dominating the world initially via brute force, we now use this "money" to maintain our dominance, telling the people that we "own" their resources, because we "bought" them. So the people there now need this money, which is something we make and are free to distribute at any rate we see fit. Since the oligarchs of the world don't care about the well-being of the people, they pay the people pittance, keep them at a low standard of living, and keep them enthralled by this monetary global economy.

    But you think that American workers deserve to be treated this way, too, right? Because, you know, American workers once upon a time were treated this way. Unions helped them get out of this exploitative trap, so the corporations moved to a new country where there were new people they could exploit.

    You are a bad person, truthisntstupid. You are advocating that people in one of the few countries that has finally, after so many centuries of human misery, achieved a decent way of life for its people, rather than striving to maintain this standard, should instead engage in a regressive race to the bottom.

  • Report this Comment On November 23, 2009, at 3:07 PM, iamari wrote:

    1. ban money from political process. the US is the only country in the world where bribing a politician is legal

    2. force any american company outsourcing jobs to deposit a matching amount for retraining displaced american workers

    3. force any american company outsourcing jobs to deposit an amount equal to bonuses paid, to be used for social services provided displaced american workers, like medical insurance

    4. understand the issue is not "capitalism" versus "socialism". the issue is sanity versus blind, irrational, all-destructive greed. if making money is the only purpose in life, then perhaps we're getting what we deserve: a dying planet, an atrophied spirit, a fading culture

  • Report this Comment On November 23, 2009, at 6:13 PM, NorseWarrior wrote:

    This issue drives at a huge number of areas. Please consider the national security implications of a declining industrial base. In the entire 20th century, we were a superpower precisely because we could out-produce every other nation on earth. Nazi Germany, Imperialist Japan and the Soviet Union all found out the hard way what happens when we can produce more of everything than they could. And, we could only do that because of a tremendous entrepeneurial spirit, thousands of small factories (not ones too big to fail!) and a conservative economic system which rewards efficiency and production, not wildly complex investment schemes.

    And, ask how many of these fine young people decided to delay cashing in on their educations and elected to serve their country? I'd bet the number is less than 1%. The implications are obvious--the financial elite become more distanced from the true cost of the defense of the nation. That is a scary proposition for the long term.

  • Report this Comment On November 23, 2009, at 7:48 PM, somethingnew wrote:

    I'm not sure there really is a realistic solution. I think the solution remains in the mindset of the U.S. people and I doubt that will change unless this country loses almost all of their savings or nest eggs. Everyone I know puts salary first above altruism and in particular loving their job. If you talk to someone about going to school simply for the enjoyment of learning and not job prospects afterwards, I find I get weird looks. I'm not going to say I'm taking classes merely for enjoyment. For me though I really value loving the work I do more than how much money I could make doing something else. That is conscious even as I work full time and take a class on the side.

  • Report this Comment On November 23, 2009, at 10:11 PM, eekthecat wrote:

    truthisntstupid:

    Well, inflation wouldn't run rampant if there were legislation preventing it...

    If you are making under $9 an hour in America, I hardly see why you would be in favor of the so-called "free market" when you are clearly getting shafted by it.

  • Report this Comment On November 24, 2009, at 1:42 AM, oSUNo wrote:

    Well, no problem comes without the seed of it's own solution.

  • Report this Comment On November 24, 2009, at 1:38 PM, topsecret09 wrote:

    EXAMPLE B..........

    Updated November 24, 2009

    Schumer Blasts Adidas for Plan to Move NBA Jersey Production Overseas

    by

    FOXNews.com

    Sen. Charles Schumer says he wants Adidas to reverse a decision to move production of its NBA player jerseys to Thailand, saying the shift would eliminate 100 jobs in upstate New York.

    print email share recommend (0)

    Sen. Charles Schumer is crying foul over a plan by Adidas to shift production of its NBA player jerseys to Thailand, a move the outspoken New York senator says will cost 100 workers their jobs at an upstate factory outside of Buffalo.

    A Schumer aide told Fox News the Democratic senator will meet with managers and workers Tuesday at the American Classic Outfitters factory in Perry, N.Y., which is under contract with Adidas to produce the uniforms. The aide said that if Adidas does not reverse its decision, Schumer will appeal to the NBA, which has a merchandising deal with Adidas.

    "It is flat wrong for Adidas to move the production of the jerseys worn by NBA players outside the United States when there are U.S. companies that have done this work so well for so long," Schumer said in a written statement. "And to do it in this economic climate adds insult to injury. ... The jerseys the NBA players wear should be made in the U.S.A, plain and simple."

    According to the statement, workers in Perry produced the jerseys worn by Michael Jordan and the 1992 Olympics Dream Team, as well as about half of all jerseys worn by NBA players during league games. They also produce jerseys for the WNBA.

    Schumer accused Adidas of leaving American Classic Outfitters in the middle of a seven-year contract and said the move could cost the United States a $7 million-per-year line of business.

    Schumer said ACO had invested more than $1 million in improvements and equipment in order to produce the jerseys.

    Calls to the NBA and Adidas seeking comment were not immediately returned Tuesday.

  • Report this Comment On November 24, 2009, at 1:48 PM, Turfscape wrote:

    truthisntstupid wrote:

    "You can't have it both ways. You can't have the workers in the plastics factories costing their emplyers upwards of $30 an hour, the folks driving the trucks doing the deliveries $30 an hour, the bakers baking the bread costing their employers"

    Well, no you can't...not when the CEO is being given compensation at 15 times annual earnings plus a guaranteed payout should he/she completely fail at his/her job.

    truthisntstupid wrote:

    "The socialist system that failed so miserably in the Soviet Union was in the beginning supposed to do the very thing you're proposing."

    Wasn't a socialist system anymore than Cuba is...It was a communist system with dictatorial government.

  • Report this Comment On November 24, 2009, at 4:12 PM, ARJTurgot wrote:

    I think y'all ought to buy a subscription to the Economist and actually read it.

    You want to define markets based on your childhood experiences; it doesn't work that way anymore.

    And NAFTA - the NORTH AMERICAN free trade agreement did not cause jobs to go to China or India. To the contrary, it was an effort to head off that problem by creating a near shore environment with cheap labor. It came too late because protectionist d***heads slowed implementation.

  • Report this Comment On November 24, 2009, at 4:15 PM, Turfscape wrote:

    truthisntstupid wrote:

    "After you take the costs of doing this into consideration just in the hypothetical baked goods company I used as an example, you have to do the cost accounting to see what it really cost to put each loaf of that bread on the shelves at you local store."

    And if you refuse to pay workers what they are worth then no one will have enough money to buy the product they're producing...wow, just a big ol' circle of impossibility. How will we ever survive. Wait! Turns out there are a LOT of companies that are surviving and thriving despite paying workers a responsible wage/salary, working with unions and still being good corporate citizens in their community!

    Huh, maybe civilization isn't lost after all...

  • Report this Comment On November 24, 2009, at 4:24 PM, topsecret09 wrote:

    On November 24, 2009, at 4:12 PM, ARJTurgot wrote: I think y'all ought to buy a subscription to the Economist and actually read it.

    NAFTA Is an absolute failure. It has become the blueprint on how to export jobs to countries all over the world. One of the single WORST PIECES of legislation ever to come out of Congress. I think that you should probably read this... http://www.amazon.com/Selling-Free-Trade-Washington-Subversi...

  • Report this Comment On November 24, 2009, at 4:52 PM, topsecret09 wrote:

    Where did my last post go ?

  • Report this Comment On November 24, 2009, at 4:53 PM, topsecret09 wrote:

    Delayed reaction........

  • Report this Comment On November 24, 2009, at 6:43 PM, Turfscape wrote:

    truthisntstupid wrote:

    "It killed/is killing GM because they CAN'T COMPETE!"

    Poor decisions by GM management led to the death of GM, not wages or unions. Same situation with HOG...but fortunately on a smaller scale, and now being cleaned up by new CEO.

    Notice that in the situation of HOG, the CEO is not saying to the unions that they must take pay cuts. He's ensuring that workers are compensated for work and for quality while instilling the need for efficiency.

    To say high pay is killing any business is to ignore the problem.

  • Report this Comment On November 24, 2009, at 7:53 PM, topsecret09 wrote:

    EXIBIT C......... Italian Welders Work On Dallas Bridge—Texans Remain Jobless

    By Rob Sanchez

    The Trinity River Corridor Project, a major Dallas, Texas construction project to build bridges over the Trinity River, is an example of what can go wrong for American workers when work is outsourced to foreign-owned companies.

    The Margaret Hunt Hill Bridge was designed by Spanish architect Santiago Calatrava, and most of the bridge’s structures were imported from Italian company Cimolai. Texas taxpayers will pay for it all, but the profits from building the bridge will be sent overseas—and Italians on temporary work visas are getting the good paying construction jobs.

    Watch this YouTube video to see raw video footage of the Italian steel arriving at Port Houston and how it was transported by truck [another video] to Dallas for the Margaret Hunt Hill Bridge.

    Most news reports call the shipment “steel” but that word is highly misleading. This is no shipload of steel ingots brought here to be melted and turned into finished products. You will see in that video that “steel” means girders, support columns, and many other high-value manufactured components. They are enormous (some look like giant water heaters) and need to hoisted by crane onto trucks to be shipped to the Trinity River Project. All that needs to be done in the U.S. is to set these enormous pieces of steel in place and weld them together like a giant erector set.

    WFAA-TV and KHOU-TV published news reports that describe the tense labor situation. Be sure to watch their excellent video reports because they have information not reported on their text versions, notably more union and worker reaction.

    WFAA’s report gives an early clue about who is doing some of the work:

    “On the construction site in the Trinity River bottoms, an American inspector told News 8: ‘If you don’t speak Italian, it’s going to be tough to communicate.’ ” [Italians, not Texans, building signature Dallas bridge, By Byron Harris, WFAA-TV, November 5, 2009]

    Italian construction workers came to Dallas with nonimmigrant B-1 business visas. That’s creating quite a controversy over who should get these jobs—and the fact that using B-1 visas for this purpose is probably illegal.

    Using the right visa is more than a matter of semantics. If the wrong visa is issued, then the immigrant loses status, and technically becomes an illegal alien.

    In order to understand why B-1 is not the proper visa to use for this purpose, refer to the U.S. Department of State Foreign Affairs Manual Volume 9 [PDF]. The manual explains what types of jobs can qualify for B-1 visas and states that, when petitioners are not eligible for B-1, they may be able to get H-2 visas (sort of like the H1-B visa, but for blue collar workers.)

    The B-1 visa is supposed to be used for people like managers and executives (and whoever else doesn’t actually do any real work, LOL!) This clause from the manual should automatically disqualify the Italian welders

    “Section 9 FAM 41.31 N10.4-2 Business or Other Professional or Vocational Activities

    “An alien who is coming to the United States merely and exclusively to observe the conduct of business or other professional or vocational activity U.S.”

    If that wasn’t enough, the manual specifically excludes construction work from B-1 visas:

    “9 FAM 41.31 N10.1 Commercial or Industrial Workers

    (CT:VISA-701; 02-15-2005)

    “a. An alien coming to the United States to install, service, or repair commercial or industrial equipment or machinery purchased from a company outside the United States or to train U.S. workers to perform such services.

    “b. These provisions do not apply to an alien seeking to perform building or construction work, whether on-site or in-plant. The exception is for an alien who is applying for a B-1 visa for supervising or training other workers engaged in building or construction work, but not actually performing any such building or construction work.” [Emphasis added]

    Like so many of our visa programs, B-1 contains loopholes that are subject to interpretation. Whenever laws are squishy, lawyers will find a way to get around them—in this case, Colombian-born Houston immigration attorney Beatriz Trillos Ballerini uses section “a” to argue that the Italian welders are installing foreign-made equipment, so they qualify for B-1 visas.

    Ballerini covers all bases, just in case somebody persists in asking her why Italian welders need to be used—she claims that the welders have specialized skills that are specific to that bridge. But bureaucrats at the U.S. consulate in Milan, Italy somehow approved the visas to “install” (tsk!tsk!) the bridge, which proves that they don’t read their own State Department manuals. Dubious claims from Ballerini don’t change the fact that the proper visa to use is the H-2B.

    So just how “specialized” are those Italian welders at Cimolai—and how well has outsourcing and offshoring worked out for Texas?

    Here is a report about “un errore stupido” by those Italiano workers:

    “TxDOT [Texas Department of Transport] officials admit that the Italian workers actually welded the wrong ends of two sections of the bridge together. ‘They turned one of the boxes [a massive piece of support steel on the bottom of the structure] around the wrong way,’ TxDOT inspector Stan Ybarra told News 8. ‘That happens. They’re only human.’”

    In fact, Cimolai’s B-1 workers are probably the least of the problems from the company’s point of view. In August, it announced that its steel shipments are to be delayed by ten months.

    TxDOT claims that the delays won’t raise the cost of the project. But that’s only if the fixed priced contract with Cimolai is considered while all the other expenses are ignored. Construction delays always end up costing somebody something.

    The much-acclaimed Spanish architect Santiago Calatrava hasn’t had a stellar Dallas performance either. Somehow, the Spaniard conned Dallas into building a “bridge to nowhere”, at least until recently-discovered problems with the river levee are resolved. After Calatrava first designed the bridge the lowest price bidder was $113 million, which was way over what Dallas was willing to pay. Calatrava had to redesign the bridge to be less costly by using cylindrical arches instead of heptagonal, and by substituting PVC for steel drain pipes. This begs the question—since he is such a genius of an architect why didn’t he design it right the first time?

    Outsourcing the bridge to save money was a bad idea. The other questionable action was using B-1 visas improperly. But it’s not clear that Cimolai or any other contractor will pay a penalty for gaming the immigration system.

    Why didn’t the Italian company save themselves some trouble by using H-2B visas?

    The simple answer: B-1 visas are easier and quicker to obtain than H-2Bs and there is no limit to the number of visas that can be issued.

    The other, less obvious reason: H-2B regulations contain similar verbiage to the H-1B program—they both require a “good faith” effort by employers to consider Americans first. Cimolai probably figured that H-2B could be a tough sell in a depressed Dallas construction industry where qualified American workers are plentiful. Nosy immigration investigators could be an additional fly-in-the-ointment if they asked Cimolai why American welders can’t be found. B-1 visas have no such requirements to consider American workers so the dangers of bad publicity are reduced—or so Cimolai thought!

    (In a way, Cimolai was right. The immigration enthusiast Dallas Morning News has reported problems on the project—but has somehow not mentioned the temporary worker scandal. See State report offers solutions for concerns with Trinity River levees - but Army Corps must approve them, by Michael A. Lindenberger, November 14, 2009)

    It goes without saying that American welders who were hoping to find jobs on that publicly funded $70 million project aren’t too happy about losing their jobs to foreign workers.

    Recently the AFL-CIO has actually started making some noise about the use of B-1 visas to hire foreign welders. It’s refreshing to hear patriotic talk coming from the unions—for a change:

    “But there are all kinds of ways to get around [visa safeguards] too, said Michael Cunningham with the AFL-CIO. ‘We have a lot of American workers who could be using this work right now, especially with the high unemployment in construction which is probably around 20 percent in this state,’ he said.”[Workers complain that immigrants use B-1 visas to steal American jobs, KHOU.Com, November 19, 2009]

    If Cunningham doesn’t watch what he says he might be branded a xenophobe, protectionist, or even worse things, like ANTI-IMMIGRANT! Or even…racist!

    Unfortunately for unemployed American welders in Dallas who are losing their houses or can’t feed their children, by the time anything can be done in the court system, the Italian welders will be long gone—with lots of Euros in their pockets, to bask on the beaches of the Mediterranean. Something should have been done to resist the outsourcing before 2005 when the contract was given to a foreign owned company—because offshoring and the importation of foreign workers are two sides of the same coin.

    Fortunately the unions have other opportunities to get American construction workers back to work. That’s because the Margaret Hunt Hill Bridge is the first one of three bridges over the Trinity River to be built.

    But actions needs to be taken immediately to prevent Cimolai from using foreign workers with impunity.

    Unions and unemployed welders can’t count on political support from the city to solve the problem—at least if the Mayor of Dallas, Tom Leppert [Send him mail], gets his way. During the WFAA interview, he told unemployed Dallas construction workers to eat cake:

    “Although the bridge is a signature project for Dallas, Mayor Tom Leppert said the lost jobs are not the city’s problem. ‘That one’s being run by TxDOT, so TxDOT’s going to have to be the one to do the fact check, the analysis, all of those sorts of things; they’re going to have to be approached.’”

    The one thing the union could do to solve the immediate problem of getting those jobs back is to demand that the fraudulent B-1 visas be revoked on the grounds that technically the Italian workers are illegal aliens.

    For inspiration the unions could look to a recent story from India. Chinese immigrants used fraudulent business visas to work and live there. The Chinese workers were booted out of India, but only after persuasive mobs of rioting local citizens demanded that their country’s immigration laws be enforced.

    If angry Indian nationalists carrying clubs and sticks can do it, then surely the AFL-CIO can figure out a way!

  • Report this Comment On November 25, 2009, at 9:22 AM, Turfscape wrote:

    topsecret99 wrote:

    "The Chinese workers were booted out of India, but only after persuasive mobs of rioting local citizens demanded that their country’s immigration laws be enforced."

    Yup...ain't no justice like MOB justice!

  • Report this Comment On November 25, 2009, at 11:46 AM, Natez wrote:

    Excellent article, I am glad I am not the only one that thinks these things. Our only real vote is how we spend our money, not being able to rely on the government to do what is in America's best interest, we need to organize together to re-establish American economic dominance for the 21st century.

    America's decline is not a foregone conclusion, but it will be if we (not me) decide to make a cheap profit by outsourcing industrial jobs to countries without the same level of labor, environmental, and human rights standards.

  • Report this Comment On November 25, 2009, at 12:02 PM, topsecret09 wrote:
  • Report this Comment On November 25, 2009, at 12:52 PM, topsecret09 wrote:

    Impatience with Obama trade policy grows

    By JIM ABRAMS (AP) – 9 hours ago

    WASHINGTON — The third anniversary of the signing of the U.S.-Colombia free trade pact came and went this month with the Obama administration still negotiating the fine print, Congress showing little interest and business groups frustrated by the lack of action on trade deals.

    "For most of 2009 we were willing to sit on our hands" as the new president struggled with the recession and health care, said Bill Lane, a government affairs official for Caterpillar Inc.

    "We can't maintain that anymore. It's time we started moving forward," said Lane, who is also corporate co-chairman of the Latin American Trade Coalition.

    Critics of President Barack Obama's trade policy point to the failure by Congress to act on the three bilateral free trade agreements — with Colombia, Panama and South Korea — signed during the George W. Bush administration.

    They say delays in implementing those pacts, under which those three countries would cut tariffs and remove barriers to U.S. goods and services, have cost the United States billions of dollars and hundreds of thousands of jobs.

    Lane said the United States has paid Colombia $2.3 billion in tariffs since the agreement was reached three years ago. A report prepared for the U.S. Chamber of Commerce estimated that 383,400 American jobs could be affected if the U.S. continues to do nothing while the European Union and Canada proceed with trade agreements with Colombia and South Korea.

    "The U.S. risks getting stuck on the outside looking in," said John Murphy, the chamber's vice president for international affairs

    The last free trade agreement approved by Congress was with Peru in 2007, the same year the Democratic-controlled Congress killed "fast track," a procedure that prevented lawmakers from tinkering with already-completed trade deals.

    Resistance to free trade deals runs deep among many Democrats, who contend they have contributed to a loss of jobs in this country while not doing enough to protect worker rights and the environment in the partner country.

    Specifically, there's opposition to Colombia because of violence against labor leaders there, Panama because of its status as a tax haven and South Korea because of its restrictions on U.S. beef and auto imports.

    "We are not standing still," U.S. Trade Representative Ron Kirk told the U.S.-Korea Business Council recently, saying his office was carrying out a "thorough review" of the Korea deal as well as the other two agreements.

    Kirk cited government estimates that U.S. exports to Korea could rise $10 billion to $11 billion annually with conclusion of the accord. But "it is absolutely crucial that we get it right," he said. "We are still dealing with the legacy of Korea's long-closed market, especially with respect to autos."

    Obama also linked jobs and trade during his recent trip to Asia, predicting that hundreds of thousands of jobs would be created if the U.S. can increase exports to the Asia-Pacific region by 5 percent.

    The trade representative's office said it has made progress in the first 10 months of Obama's presidency in pursuing cases before the World Trade Organization on protecting intellectual property and restraining Chinese raw materials exports. It also says it has resolved long-standing beef disputes with the European Union and Chile while advancing the organization's long-stalled Doha Round of multilateral trade talks.

    But even Obama allies complain the administration is not doing enough on trade.

    "For the past 10 months, the United States has lacked a comprehensive trade agenda. And that absence is palpable," Senate Finance Committee Chairman Max Baucus, D-Mont., said in a recent speech.

    Baucus said a new blueprint should emphasize labor rights and the environment, enforcing existing rules, focusing on Asian trade and retraining American workers dislocated by trade.

    While a majority of Republicans support free trade initiatives, Democrats are split.

    A bipartisan group of 88 House members, led by Reps. Adam Smith, D-Wash., and Dave Reichert, R-Wash., wrote Obama urging action on the South Korea agreement. On the other side, 127 House Democrats are sponsoring a bill by Rep. Michael Michaud, D-Maine, to review whether existing trade agreements — including WTO agreements and the North American Free Trade Agreement — meet labor, environment, product safety, human rights and currency manipulation standards.

    "The deck is stacked against our workers and has been for some time," complained Rep. Louise Slaughter, D-N.Y., joining Michaud at a news conference urging a shift in U.S. trade policy when new world trade talks open in Geneva next week.

    Thea Lee, deputy chief of staff at the AFL-CIO, said unions believe the administration should take a more proactive trade stance — not to advance what she said were "flawed" trade agreements but to steer the Doha Round to help American workers and to call out the Chinese on currency manipulation and unfair trade practices.

    On the Net:

    U.S. Trade Representative: http://www.ustr.gov

  • Report this Comment On November 25, 2009, at 5:40 PM, phillyarchitect wrote:

    Remember back when Bill Clinton was running for the first term and former Gov. Jerry Brown was in the primary. Jerry Brown plan was to pass a balanced budget amendment, and set term limits. That would have really changed things and set some rational limits on Washington. Oh no everyone said, we can't elect Jerry Brown, he's a weirdo, Gov. Moonbeam. There is no way that someone whose only experience is successfully governing California (7th largest economy in the world) could be ready for the presidency. So we get Bill Clinton who represents real change that vast wealth of experience in being a governor of Arkansas.

    So Clinton ended up changing nothing and I think it is decisions that we've made such as electing him that are to blame for the drift that we have experienced and the General malaise that we have fallen into.

    As to the Obama effect, the jury is still out on him, but I fear that his election is yet another example of bad decisions we've made. Is it really a good idea to elect someone who has absolutely no relevant experience, just because he gives nice speeches? I hope my pessimism is proven wrong but I'm not feeling so good about things. His efforts in the middle east are so far a disaster.

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