Friday, June 10, 2011

Incentive to outsource

If you needed any more proof that tax incentives to big business don't and will never solve the unemployment crisis, today the NYT shows us how current tax policy is a disincentive for hiring. In fact, it doesn't even encourage domestic spending on capital goods.
Two years into the recovery, hiring is still painfully slow. The economy is producing as much as it was before the downturn, but with seven million fewer jobs. Since the recovery began, businesses’ spending on employees has grown 2 percent as equipment and software spending has swelled 26 percent, according to the Commerce Department. A capital rebound that sharp and a labor rebound that slow have been recorded only once before — after the 1982 recession.[...]

To add insult to injury, much of the equipment used to replace American workers is made by workers abroad, meaning that capital spending is going overseas. Of the four pieces of equipment Vista bought last year, one was made domestically. The others came from Israel, Switzerland and Germany. ...
It's not that finding ways to automate routine functions is necessarily a bad thing. Or it wouldn't be if the corporations actually passed on the savings to the consumer instead of pocketing the additional profits. But what's good for big business, isn't good for America right now. The millions of "on the verge of retirement" Americans need immediate jobs to recoup their losses from the Bush era. Private sector isn't going to step up to provide them.

If the Bush era taught us anything, it's that an economy that only booms for the owners and investors is neither humane, nor sustainable. Wondering when the White House is going to learn that lesson?

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Blogger Ruth said...

The trickle down theory again fails to delineate what it actually is trickling down on workers. Sadly, corporate boards no longer contain wiser heads, and are usually picked by CEO's to work with them on short term gains that go in their pockets in the form of bonuses, instead of developing any firm toward longterm prosperity

1:22:00 PM  
Blogger Libby Spencer said...

As I often say Ruth, I can't believe I lived to see the day when greed was considered a virtue instead of one the seven deadly sins.

9:49:00 PM  
Blogger Unknown said...

Nobody gives a damn about the American worker. Obama is no exception. He stood on a stage with Samuel J. Palmisano when he first took office and told us how companies like IBM were going to help grow the economy. Meanwhile, IBM is outsourcing to India, Brazil and China at a frantic pace. They are firing older workers and importing H1B visa holders for entry level jobs when H1B visas are supposed to be reserved for people with skills unavailable in the United States. And for the remaining workers, there are 1% annual pay raises and elimination of night shift differential and alternate shift pay because "our competitors in the market don't pay it."

I have written both Democrat and Republican Representatives and Senators about the issue and to no avail. I get canned responses regarding how these people are necessary to keep America competitive.

First hand knowledge. A high school classmate of my son's graduated with a degree in Engineering with high honors. He applied for a position with a company in Chicago and was offered a starting salary of $33,000. When he questioned that starting salary, he was told that they could hire engineers from India for $25,000. The H1B visa program has destroyed the engineering and computer sciences fields for young people. And Obama was at NOVA Community College yesterday telling the students how technical skills were the key to good paying jobs. I wanted to fly up their and tell him he is full of it. Until the influence of corporations is negated, nothing will change. That applies to Democrats and Republicans. This country is being squeezed by the wackos on both the extreme Left and Right. There is no center ground.

And don't forget, envy is also one of the seven deadly sins. The Leftists simply substitute "fairness" and empower themselves to reach into peoples wallets and take what they want, telling us to feel lucky we are left with what we have.

11:35:00 PM  
Blogger Capt. Fogg said...

"The Leftists simply substitute "fairness" and empower themselves to reach into peoples wallets and take what they want,"

Is that so? I don't recall reaching into anyone's wallet but my own, nor do I need to, nor does the virtue of justice suffer from you making a flimsy straw man out of it. The idea that Democrats are all poor and looking for handouts doesn't hold water and most of the working class people I know are Republicans - extreme Republicans.

Today's 'extreme' left seems pretty centrist compared with other civilized and wealthy nations and even with our own past while the right has completely lost touch with sanity, supporting candidates who contradict themselves from minute to minute and who couldn't graduate 5th grade in any other country.

Saying Obama doesn't give a damn because he has to live with reality and contend with the powerful forces that run things is another bit of self-serving hyperbole. If he had the power to do what you seem to want him to do, he'd be a dictator and perhaps that's why the Reprobate Right wants to call him one - because they're terrified of any government that could actually institute justice.

8:55:00 AM  

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