Has outsourcing of jobs to other countries made us vulnerable?
Colorado Springs, CO
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Matt Stoller's article, How America Could Collapse in AlterNet (August 11, 2011) raises some concerns about how the massive outsourcing of jobs to overseas countries has made segments of our economy vulnerable to natural disasters and poltical events. Stoller uses the simple example of how the recent Japanese tsunami knocked out much of Sony's manufacturing capacity including certain types of tape used by the television industry in recording events such as NBA games. It appears Sony was the single supplier of this kind of tape worldwide.
Stoller provides additional examples, none of which appear to be devastating in themselves, but it certainly highlights a potentially much bigger problem on the horizon if, for example, critical electronic components for our communications industry or our military are suddenly in scarce supply or simply removed from the supply chain. Or needed drugs that help fight off diseases...or many many other things that our society needs but are not made or grown in America.
Republicans have continually championed the "drill baby drill" slogan to ensure America is not vulnerable to OPEC oil supply interruptions. So why doesn't the same logic apply to our manufacturing base including many, many electronic components that drive our every day lives and are manufactured exclusively in China?
The multinational companies will go where the labor is the cheapest...they don't care one iota about the vulnerability it creates at home. Is that something that the government should care about? Or should we just let the free market take care of everything?
Matt Stoller concludes, "And while this may not be hitting the elite segments of the economy right now, there will be no escape from a flu pandemic or significant food shortage. The re-engineering of our global supply chain needs to happen—and it will happen, either through good leadership or through collapse. This means that our government and our society needs to reorient our economy toward manufacturing and rededicate our corporations to productive uses. This will require a new conception of antitrust laws to ensure that monopolistic or oligopolistic practices in pivotal industries aren’t placing our culture at risk. It means understanding the networks of suppliers and sub-suppliers. And it means ending the race to the bottom that pushes deflationary pressures on labor and the social safety net."
Natural disasters can affect anyone and any product...agricultural or manufactured. Some might argue that the complex interrelationship of a global economy ensures more economic and political stability. For example, would the USA necessarily engage in a war with China now that we are so absolutely dependent on their manufacturing base? Another example is our dependency on the Russians to get astronauts to the space station. Is this an impediment to the war hawks that see a military solution to every international disagreement?
I agree with Stoller. We do need to revamp our manufacturing base, both for the jobs they'll create but also to lessen our dependency on other countries to supply us with critical components. We can never be 100 percent insulated from international disruptions in the supply chain, but we can lessen the impact and at the same time provide a much needed boost to our economy and jobs.
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Schmidt, refer to:
the topic “Reduce the trade deficit; increase GDP & median wage”
or Google: “wikipedia, import certificates “.
Excerpted from the message “Manufacturing's economic significance”
Within http://www.usa-imports.blogspot.com :
The production of foreign goods contributes little or nothing to the USA’s economy. Domestic and imported goods do not economically differ after arriving at a USA port of entry or a USA producer’s shipping platform.
Manufacturing is of greater importance because the goods and services supporting factories are generally great as or greater than what's required for most other industries.
Manufacturing has a great (multiplier) effect on our GDP. Individual businesses are more or less unique, but a domestic factory's contribution to GDP is generally much greater than that due to a service site such as an administrative office or a retail outlet.
Excluding the value of unrefined petroleum, manufactured products account for almost our entire global trade deficit.
I believe there’s a symbiotic relationship between manufacturing and technological knowledge. USA’s deindustrialization has begun to cost us our technological edge. Our colleges and universities are not producing the creators of the globe’s technical future. Due to USA's deindustrialization, we invest less and others more for research and development. Those who sow less, harvest less. As we manipulate materials, and create products, we learn more of the materials, tools and the products. If we do not manufacture today, will we be able to resume manufacturing in the future?
Many are concerned about our military’s dependence upon foreign manufacturers. There’s of course some concern regarding security of information and prevention of sabotage. If national governments of our suppliers disagree with our policies, will it affect the production and delivery of our strategic needs?