It's easy to forget after the uproar of the last week, but the near-scandal about Mitt Romney's Bain Capital background started with an Obama campaign attack on outsourcing.
The president's team ran ads blasting Romney for being an outsourcing "pioneer," but instead of defending the tactic, Romney instead said the outsourcing in question doesn't count -- it happened after February 1999. Soon after, we entered the realm of "retroactive" retirements.
But some, including Matt Yglesias, have made the case that outsourcing need not, on its face, be considered problematic. After all, it makes sense for a business to be as efficient and profitable as possible, and if it can save money through outsourcing, it can, in theory, lower prices, sell more goods to customers, grow, and hire new workers. Instead of making a ridiculous case that the CEO of Bain Capital had no idea what Bain Capital was up to, maybe Romney could have just defended the underlying complaint.
So, why didn't he? Because the debate over outsourcing isn't that simple. As Jonathan Cohn explained, "The question isn't whether outsourcing can be a sound, legitimate business practice. The question is how we, as a society, react to it, given that outsourcing inevitably causes a lot of very real, very serious human pain."
One response is to minimize outsourcing, by, for example, creating financial incentives that discourage it. An example would be industrial policy that subsidizes domestic manufacturing. Another response it to let the economy operate as freely as possible, with minimal interference, but then intervene after-the-fact to help those who lose their jobs -- by redistributing income through the tax code or by creating universal programs that provide economic security and opportunities for new work. [...]
Liberals have argued amongst themselves over which combination of these strategies makes the most sense. But the conservative answer to outsourcing -- the answer Romney has long espoused -- is essentially to do nothing.
Exactly right. Romney could make the case that outsourcing is just a fact of modern business, but he supports generous benefits for those hurt by the practice, and ambitious job-training programs. But Romney strongly opposes these ideas -- he fully intends to shred the safety net.
Indeed, this is systemic in Republican politics. Last week, National Journal talked to Senate Minority Leader Mitch McConnell (R-Ky.) about his economic worldview, and he sketched out a vision of inaction -- government should do nothing, and eventually, the market will adjust.
With Romney and outsourcing, it's an identical dynamic. Part of the problem is the business practice itself, but the real problem is his disregard for those adversely affected by the practice.
It touches on the notion of transactional politics that we discussed a couple of months ago -- there's no trade to be made. The problem isn't just Republicans' awareness of the problems; it's also their indifference towards addressing the problems.
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It might be hyperbole to state that the goal of the GOP is no less than the extinction of the middle class, but what else should we call it?
It's like Medicare and Social Security: they don't want to eliminate the middle class any more than they want to end Medicare or Social Security. They just want to redefine them:
Wow, you actually think the GOP wants to eliminate the middle class? Did you ever stop to think that we might actually need a government that plays by the same rules as its citizens? By and large we live within our means, we may borrow money for a home, a car and even run up a tab on our credit cards, but we pay those bills and adjust our budgets to work within a framework of what we spend should be equal to or less than what we make. Asking our government to follow these same rules is not some draconian concept, it's common sense. The GOP is pressign to ensure we don't burden the next 100 generations with our stupid decisions. It's not about class warfare, it's about forcing our government to live within its means.
... which only applies when the Party is not in control. When it has the power, on the other hand, spending skyrockets while taxes are slashed.
However, I could be wrong. Remind us again what happened to the deficit between 1998 and 2004. Or better yet, between the end of CY2000 and the end of CY2008.
Eric, I'm in favor of that. Most of us think the economy needs to recover first, and spending in the form of stimulus is the best way to accomplish that.
I thought it was NAFTA that gave us outsourcing. In my simple mind, corporations should do whatever they need in order to profit. Government needs to step in to prevent companies from doing harm to employees, environment, etc.
The logical extension is that our wages will decrease. If I'm to compete against people in India, then we'll eventually meet in the middle. This will drive down salaries. I'm really not sure what can be done except to use the govt to give incentives for hiring at home.
So outsourcing is yet again another force working against the middle class. I won't mention income redistribution. Oops.
@Eric - that logic only makes sense in a world in which the GOP tells itself the truth. It's the GOP that turned a solid surplus into a massive deficit, refused to do anything to correct it, and who snipe from the sidelines while Pres. Obama both reduces spending and the deficit - and worse than sniping, Republicans lie about it as they play people for fools.
Mitt Romney, by embracing Paul Ryan's budget, is set to further explode the deficit by over $3 trillion - that's $3,000,000,000,000 taken out of the hide of the middle-class and lower income levels, in order to provide people like Sheldon Adelson hundreds of thousands more in tax cuts. The reasonable-sounding lecture you posted is a fairy-tale. The truth is, when Republicans are in power, "deficits don't matter." When Democrats attempt to clean up the GOP mess, suddenly, every Republican is giving lip-service to shrinking the deficit, while at the same time pushing for policies that would further explode it.
FauxPas, How do you explain Germany, then? High wages, lots of benefits, lots of good industry? Do you think we out-soursed all our jobs to Germany?
Steve, you wrote, "Exactly right. Romney could make the case that outsourcing is just a fact of modern business, but he
supportsopposes generous benefits for those hurt by the practice, and ambitious job-training programs. But Romney strongly opposes these ideas -- he fully intends to shred the safety net."I think you should have written it the way I changed it to read.
Change the corporate bankruptcy laws to have the first money paid go to pensions or the local community, and not golden parachutes or corporate raiders.
I think the Obama campaign should watch it with the outsourcing talk:
By Russ Choma
Investigative Reporting Workshop, American University
updated 12/9/2010 8:25:49 AM ET 2010-12-09T13:25:49:
The same reporter estimates that $2 Billion of the Stimlus money has/will go overseas, creating 6,000 jobs outside the U.S.
I don't know about the actual numbers, but I have heard/read this at various times and sites with various amounts and numbers of jobs, but I think it would be safe to say that some of the stimulus money was "outsourced". In my opinion I really think it is almost impossible for any project or industry to be completely in the U.S. anymore and to accuse either side of this is just pretty much stating a fact of life - business/industry wise. I cannot think of one major industry or service that is entirely homegrown.
@Skip Hoffman - the point is not that any industry is "entirely homegrown" -- Pres. Obama himself has said many times that there are industries and jobs that are just not coming back to the States. He also stated his vision for developing new industries here, and providing every incentive possible for companies to keep jobs here.
The problem with Romney is that he profited off shipping jobs overseas, and now presents himself as someone with expertise in creating American jobs. Bain Capital created profit, not jobs, and Romney's "expertise" apparently escaped him when he was governor of MA, where he brought the state in almost dead last in job creation. So, to offer up a two-year-old article as a cautionary tale for Obama doesn't quite make the cut. Especially when congressional Republicans have fought tooth-and-nail to prevent any kind of funding or subsidies for alternative energies.
June,
I get your points, but the purpose of the stimulus package was to generate jobs in OUR country - to get our economy going. So I guess you can cherry pick when you want to point out how a company like Bain created profit not jobs OR you could point out how the stimulus added debt (a loss as opposed to a profit) and also did not create jobs. I don't see much cifference.
@skip
The CBO, by law, publishes a quarterly analysis of the effect of the ARRA (stimulus). The reports themselves are mind-numbingly comprehensive - summaries more ordinary-human readable available. [go to cbo.gov and search on ARRA]
For example from 4th quarter 2011 {"They = ARRA policies}
Yes - there was money that ultimately went toward off-shore jobs. If the figures you stated are correct, this is a small percentage.
Did it help pull the country out of the economic nose-dive? Yes.
Was it enough? No.
Could it have been done better? Yes.
Is the bottom line in all of our discussions - that we might actually agree(maybe?) on - that we need to stop off-shoring jobs and bring back jobs and create new ones? YES!!
Skip, the actual facts provide a very different perspective on the Recovery Act than your source of information. The Congressional Budget Office cites millions of jobs created - whoever is claiming the stimulus had no effect has their information dead wrong. (I see someone above beat me to posting CBO's conclusions).
But also, check out this 4-Pinnochio report on "Over-The-Top Attacks on Obama's Green Energy Programs":
http://www.washingtonpost.com/blogs/fact-checker/post/over-the-top-attacks-on-obamas-green-energy-programs/2012/04/29/gIQAx9XeqT_blog.html
Also, one meme I've often noticed from those who lean right, or "lean away" from Obama, is a complaint about U.S. dollars going to overseas companies that make components which the US does not have the capacity to manufacture (such as wind turbines). But these same folks time and again vote in Republicans who make it impossible for those industries to flourish here - then they turn around and complain about the components still being made overseas! Something's got to give.
Lastly, creating/saving millions of US jobs is vastly different than making a pretty penny off investing in companies whose mission statement is to outsource jobs. There's simply no legitimate comparison.
June,
Useful info on you last post. But to be clear I did no state that the stimulus had no effect - of course it did. I was just pointing out that the ads about Bain Capital and outsourcing. Yes Bain capital outsourced jobs in some cases, but they also had companies flourish in the U.S. - the outsourcing is the only thing we hear about though. So just like the stimulus, which helped in some places also may have outsource some jobs/funding. Niether the stimulus or Bain capital were all about outsourcing - I was just pointing out the fact that in both cases some jobs were outsourced. I am sure that sooner or later the Republicans will counter with that if the Obama campaign keeps bringing that up.
Actually, Skip, you did say the stimulus had no effect, or is there another interpretation for, "OR you could point out how the stimulus added debt (a loss as opposed to a profit) and also did not create jobs." I suspect the Obama campaign will be more than ready to counter any attempts by the Romney campaign at a false equivalency with something along the lines of -- the intention of the Recovery Act was to save and create millions of American jobs, which it did, with measureable results. The intention of Romney's firms was to help companies ship jobs abroad, and they did -- and that's why Romney can't give a firm answer on how many jobs he "created" at Bain - because he wasn't in the business of creating jobs, only in the business of creating profit.
Actually June it is the same interpatation that you used when you said Bain capital created profits and not jobs - that was in some, but not all cases - just like my statement about the stimulus. In the case of the stimulus money going overseas - that was debt without jobs - and in the case of some Bain capital ventures, it was profit and no jobs. Not all Bain capital investments resulted in job losses in the U.S. - some of the companies they invested in have business here in the U.S. and are still operating. Just like most of the stimulus money that stayed here, helped create jobs. We are both talking about some, not all of Bain capital and/or not all of the stimulus - just the parts that went overseas. That's all. In both cases they (Democrats and Republicans) will highlight that piece of the entire picture and focus on it. The Democrats will only point to the Bain capital investments that shipped jobs overseas and not the jobs they saved (and maybe created) here and the Republicans will focus on the stimulus money that went to China or Spain and not on the money that stayed here. They will both hide the positive and show the negative. Politics as usual.
"OUTSOURCING" is only one subject of "Romney's LIES." Romney also has some of our tax dollars by his actions at Bain. "THAT is UNAMERICAN."
That’s a mighty effort at equivalency, Skip! We said two different things. I stated Romney cannot produce any measureable results from his self-proclaimed job creation expertise, and you literally said the Recovery Act didn’t create jobs, which isn't accurate, because it produced jobs in measureable results, state-by-state, territory-by-territory.
You know, now that I’ve really had a chance to look into this stimulus/jobs overseas item, I’m more convinced than ever Romney doesn’t have a leg to stand on should he go the route of trying to create a false equivalency between owning a firm that pioneered the practice of outsourcing jobs, and the Recovery Act creating millions of American jobs. As with most news that conservatives get excited over, I approached it with caution and took a thorough look at Choma’s assertions, which, to his credit, he has now corrected and set straight (after the original assertions did an enormous amount of damage by giving conservative candidates distorted “facts” to use as campaign fodder). If Romney wants to compare specializing in shutting down companies and shipping jobs overseas to what’s in the link below, I’m sure the Obama camp will say, bring it.
Here’s the factual coda to Choma’s original tale:
Power of Wind:
http://www.powerofwind.com/regional/post/fact-check-wind-born-in-usa-despite-outsourcing-flap
Ok June, if that's how you see it. See my post above (#3.7) - I was only talking about the $ that went to foreign firms, NOT the entire stimulus (which I agree DID create jobs). And your blanket statment any job creation measurments...well first my point was about the outsourcing that Bain did and the second point was that Bain has invested in firms that are in the U.S. and still operate. Whether they created any new jobs I can not prove at this point so I will give you that, BUT they did maintain jobs at the companies (and if you again look at my previous post at 3.7 I did say maybe on the new job creation. Again all I was trying to point out is that the Obama campaign is only showing one part of Bain capital - the outsourcing and not the sucessful continuation of companies in the U.S. that they did/do invest in. Obviously you will not see it that way and continue to think that Bain Capital buys companies and sends them overseas 100% of the time. I will not try to convince you further.
As for the debunking of the Choma article, your link didn't clearly state that is was untrue. It just alluded to the fact that it did creat some jobs in the U.S. by a Danish firm but I don't see anywhere in the article that says there were NOT jobs elsewhere in the world (like China or Spain as the original Choma article stated - and I'm sorry I am not good at linking so I cannot paste it here). So yes maybe some of those foreign firms hired folks overseas and here but as your link states:
As Media Matters found, the definition used is "so flexible, in fact, that it encompasses its opposite: foreign-owned firms coming to the U.S. to employ American workers." When $51 million in tax relief went to U.S. subsidiaries of the Danish company Vestas, for example, it supported wind manufacturing plants in Colorado. Now Vestas is contemplating 1,600 layoffs at its U.S. plants because future tax policy is uncertain.
Hopefully they will not lay them off but in the end I still stand by my original point that both sides will still be able to point to the negative part of Bain and the stimulus and again please show where I "literally" said the stimulus did not creat any jobs. I again was only talking about the stimulus money that went to foreign firms. Obviously we both think the each other said things out of context - I think you "literally" said that ALL Bain Capital EVER did was make a profit SOLEY from outsourcing and you think I "literally" said there was NO job creation from ANY of the stimulus - and niether of us said that. :)
No, Skip - what I do 100% believe about Bain is that they make a profit whether jobs are lost, or created. Even as I type this, there is a story being featured right now about Bain getting ready to ship jobs over to China from a company they bought in Illinois. That's in stark contrast to the Recovery Act, which the link I posted showed has been excellent in creating and keeping jobs here in the U.S., so much so that a new industry to build the components that were formally imported from China is going strong -- and as for the part you highlighted, who is causing the "tax uncertainty"? Republicans, who just last week voted against tax credits for small businesses, and who vote against every single benefit that new and small businesses could take advantage of. Romney's got a big job ahead of him to attempt to equate Bain's outsourcing with the Recovery Act.
RoMoney likes outsourcing so much, he outsourced his money!
Shred the safety net? Eeeeek. No more free food, free education, free medical care, free cell phones, transportation subsidies, housing subsidies, and best all our free money! Eeeeek!
No, nothing will be cut. (as in less money than the year before)
shooter242
June 11, 2012 at 6:54 am
I’d like to encourage more trollery on left wing sites. Specifically pushback on common memes such as identified by Jonah Goldberg as unchallenged cliches. It can actually work, and it can actually change the course of debate.
For instance, I always challenge “the rich take too much of the pie” meme. There is no pie, no one decides who gets what, and the “pie” is a measure of contributions to a total. Ergo the rich don’t take they contribute. It’s been gratifyingly effective.
Try it you’ll like it. Don’t curse and keep the personal insults to a bare minimum, don’t allow moving goal posts or distractions. Ignore trollish responders, and be four times more civil. They hate that.
http://moelane.com/2012/06/09/troll-hunting-101/
Outsourcing makes more products affordable and companies more profitable, until so many companies outsource that no one has a job to afford to buy those products.
Every company that outsources knows this. But none of them wants to be the first to stop, because, you know, then their product will be more expensive and they'll lose that competitive edge.
This is just my crazy speculating but I'd bet the first company of any particular product to a: move all production and jobs possible back to the USA and b: tout that in series of ads where they promise to minimize the additional cost to the consumer but tout that additional expense as an "investment in America" will be pleasantly surprised by how much more of their products they sell. Made In USA, Again and From Now On? Come on, what real 'Murkan wouldn't run over small animals to get to the mall of the local Tar-Mart to give that company their money?
You are being sarcastic right? Doubtful that folks will start paying 50 to 100 percent more for their shirts or irons or plastic do-dads. I think the genie is out of the bottle. There will have to be major shift in the mind-set of the Amercan consumer. They will have to limit their amount of "stuff" they have - which would not be much of an improvement since they may pay more for "stuff" but they would have half the amount of "stuff".
Per Apple, the cost differential is less than 15%.
OK DC, I stand corrected. I still don't think people will be rushing out to buy what was a $300 computer that would then be $345 (15% increase) - or a $750 flat screen TV that would then be $862.50 (15% increase).
Henry Ford, that notable communist, knew enough to pay his workers well so that they could buy his product. It's a pretty straightforward concept.
Outsourcing is visceral and that is why the Republicans are attacking the Obama ads. It makes no difference to a worker what the business justification is for outsourcing, just that the job is outsourced. That is why the ads work so well.
The current touting of offshoring that is just now coming out -- its being wonderful for the American economy requires us to stop and think just who it is wonderful for: ONLY for the 1%. But the apologists excuse/mask the harm it causes American workers by claiming that it is equally wonderful for them because, as David Brooks said it this morning, it reduced the price of consumer goods here by 20%.
So, since offshoring took down 20% of consumer goods' costs to Americans, but took away so many of their jobs (and much of their leverage for gaining higher salaries), Americans could only buy those goods on credit, thereby wiping out the 20% price reduction and landing them in debt, prey to vultures -- and to the financial companies the 1% also owns.
Dang, it's astonishing anything Obama actually says ever gets through. Just saw some genuinely ignorant commentator on a show I caught for the first time on MSNBC - the Cycle? Obama said that for anyone who has started a business, they use roads, railways, etc., to make that business successful. Entrepreneurs did not build them - someone else did. So now Romney, this MSNBC commentator *and* Fox news are saying that Obama said that the entrepreneurs did not build their businesses .. huh? The MSNBC person said that this means Obama is essentially a communist, a "collectivist" where no one owns anything, it's all owned by everyone. WTF? Where is Rachel when we need her to slap down this misquoting malevolent maven with facts, accuracy, stats and truth? Her cohorts responded with a mealy-mouthed version of: "Gosh, I don't see how you came up with that.."
For more on outsourcing, how many jobs we are losing, and our trade agreement with China, I recommend checking out Peter Navarro's documentary 'Death by China' - http://www.deathbychina.com