One of the highlights of my misspent life is reading the Columbia Journalism Review. Submitted for your consideration are two articles that remind the reader that good journalism exists (not in Boston, alas, least not at the Globe).
First, we have the case of a blogger who violated every rule of modern journalism and (gasp) actually read all 144 pages of the Wisconsin Budget-Repair Bill:
16.896 Sale or contractual operation of state−owned heating, cooling, and power plants. (1) Notwithstanding ss. 13.48 (14) (am) and 16.705 (1), the department may sell any state−owned heating, cooling, and power plant or may contract with a private entity for the operation of any such plant, with or without solicitation of bids, for any amount that the department determines to be in the best interest of the state. Notwithstanding ss. 196.49 and 196.80, no approval or certification of the public service commission is necessary for a public utility to purchase, or contract for the operation of, such a plant, and any such purchase is considered to be in the public interest and to comply with the criteria for certification of a project under s. 196.49 (3) (b). (emphasis added)
Our blogger being rational, he concludes:
If this isn’t the best summary of the goals of modern conservatism, I don’t know what is. It’s like a highlight reel of all of the high-flying slam dunks of neo-Gilded Age corporatism: privatization, no-bid contracts, deregulation, and naked cronyism. Extra bonus points for the explicit effort to legally redefine the term "public interest" as "whatever the energy industry lobbyists we appoint to these unelected bureaucratic positions say it is."
In fairness, Wisconsin’s Governor Scott Walker is a right-Corporatist parasite, not a conservative, but it’s up to the Republicans to clean their own septic tanks.
On the Global Economy front, the CJR cites a Los Angeles Times article on outsourcing:
The biggest mistake people make when talking about the outsourcing of U.S. jobs by U.S. companies is to treat it as a moral issue. Sure, it’s immoral to abandon your loyal American workers in search of cheap labor overseas. But the real problem with outsourcing, if you don’t think it through, is that it can wreck your business and cost you a bundle. Case in point: Boeing Co. and its 787 Dreamliner.
Ain’t life wonderful?
The Indiana Deputy Attorney General was just fired for advocating deadly force against protesters in Wisconsin on his Twitter account.
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p>A confidential report by Goldman Sachs (hardly a hotbed of liberalism) states that proposed spending cuts would hurt the economy. (Duh)
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p>Mike Huckabee – an example of the Christian Conservative wing of the Religious Right – defended Michelle Obama from ad hominem attacks, based upon her anti-obesity program.
Outsourcing is accelerating. In some industries it’s not if, but when and how much. It’s probably not reversible.
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p>But on the larger point — agreed. And I’m glad to see somebody reads CJR.
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Outsourcing accelerating? Can you cite FACTS and STATISTICS on this? And why is outsourcing, per se, evil? And why do you think this hurts American industry, especially manufacturing?
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p>Certainly there are fewer manufacturing jobs today than there were 40 years ago. But manufacturing output, in real terms, has doubled since 1970, according to a UN report.
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p>Do you want us to return to the days of manual lathe operators, covering airplane wings in fabric, or assembling cars by hand?
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p>100 years ago, farming involved 40% of the US labor force. Today, output per capita is higher but only 2.6% of the nation’s workforce is involved in farming. Should we return to oxen-powered plows to create jobs?
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p>You don’t have any rational argument why clothes shouldn’t be made in Vietnam, or why Windex pump spray nozzles need to be hand assembled in the US. What is the problem with outsourcing the manufacture of pancake spatulas to Bangladesh? Or call centers to Bangalore?
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p>If Wisconsin wants to sell off all its power generation to private industry, why is this necessarily bad?
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p>> And why is outsourcing, per se, evil?
Per se, it isn’t. But we have high unemployment at the moment. I think that’s a problem.
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p>> And why do you think this hurts American industry,
> especially manufacturing?
Hmmm … why does lack of jobs hurt industry … let me think …
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p>> Do you want us to return to the days of manual lathe
> operators, covering airplane wings in fabric, or
> assembling cars by hand?
Yes.
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p>> Should we return to oxen-powered plows to create jobs?
That would create cruel, labor-intensive jobs that we don’t want. I’m not sure the oxen would be supportive either.
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p>> You don’t have any rational argument why clothes
> shouldn’t be made in Vietnam, or why Windex pump spray
> nozzles need to be hand assembled in the US.
So you say, Mr. Poopy Pants!
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p>> What is the problem with outsourcing the manufacture of
> pancake spatulas to Bangladesh? Or call centers to
> Bangalore?
Three words — Tata Consultancy Services. Google it. I don’t think spatulas are their primary product. And there are lots of are other firms like it. There’s nothing wrong with TCS either, but globalization spans ALL industries. Don’t kid yourself.
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p>>If Wisconsin wants to sell off all its power generation to private industry, why is this necessarily bad?
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p>”Wisconsin” wants to do this? Th public wants its public utilities to be private? Can you cite FACTS and STATISTICS on this?
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It sounds really sexy to decry the elimination of “manual lathe operators, covering airplane wings in fabric, or assembling cars by hand”, doesn’t it? “Hey, we are better than that kind of work”, as the argument goes.
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p>Problem is, not everyone is qualified to go to college to be a lawyer, a surgeon, a biotech technician, or even a master carpenter. We need jobs for everyone, and covering airplane wings in fabric or and other manual manufacturing labor was a job at which an individual with relatively few skills could earn a decent living.
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p>I read a post on a board about some guy who makes doors. He said that his doors take 60 hours of labor, and that his cost in Mexico would be $300 compared to $2,400 here, because they don’t have things like unemployment insurance, workman’s comp, social security, and their workers make a couple of dollars per hour whereas he has to pay $20 here.
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p>From a very short-range point of view, it makes perfect sense for him to move to Mexico. That decision becomes more and more rational as more and more companies move their production overseas, leaving fewer and fewer customers for $2,400 doors.
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p>But from a long-range point of view, we will all lose, because the jobs here will be gone, and the companies moving to these low-cost locations are dependent on US-based customers — the workers in the countries where the goods are not able to purchase those very goods and services.
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p>It will eventually collapse — as there are fewer and fewer US workers, sales will continue to decline and more will be moved overseas. With it, the skills and knowledge will wind up in developing countries, and eventually those countries will have it all, at a wage structure that will support everything in their country — including a more reasonably priced CEO.
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p>That is why the US government needs to step in here. This is a classic case of a “tragedy of the commons”. A country that produces more than it consumes from abroad cannot survive.
Not minor to me, but maybe overall – Lathe operation is not a low-skill job. If you think it is, you’ve never had to make anything even mildly complex on a lathe. Machinists were once in demand because of their skills. That was a large part of the impetus for developing CNC (computer numerical control) machining – instead of investing in a bunch of relatively cheap manual machine tools and a bunch of expensive machinists, a company could invest in a few expensive machines and a few less-expensive technicians to program them. Once that was well-established, it was a relatively trivial task to send all the production machining work overseas. It ended my career as a machinist, and took me out of the dwindling class of people who make things with their hands.
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p>I was fortunate to be able to develop other skills. Many were not. I am also fortunate that my new career is doing work that is not easily outsourced to other countries (although some companies have tried, with unfortunate results).
Context is everything. My concerns about outsourcing are, among other things, in the context of the collapse of middle-income America since 1973. Interestingly enough, the best (IHMO) analysis of this was done by a conservative, back in 1989.
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p>The macroeconomic dynamic hasn’t changed much since then. For all you progressives out there, I must stress that this is a structural problem; Massachusetts has the third-fastest growth in inequality – and the second largest gap between rich and poor – of all the States.
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p>Insofar as outsourcing in isolation is concerned:
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p>I’ve discussed in other posts and comments that Germany is a good example of high-wage, value added manufacturing.
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p>In my somewhat less than humble opinion, the major problem here is the tendency of American elites to avoid reality when it conflicts with their models. If either liberalism or conservatism existed as operative philosophies, this problem would be amenable to solution.
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p>Neither does exist, alas.
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Is that it could risk lives. The airlines, who used to do maintenance in-house now outsource large percentages of their maintenance. They will fly a plane to Turkey because the maintenance labor is cheaper there.
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p>These outsourced mechanics sometimes can not read English–you might want them to understand safety specifications from a book, you know.
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p>Miles O’Brien uncovered the use of illegal parts by these outsourcers.
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p>This really troubles me as I used work in a lab that tested airplane parts for quality. In that job I learned that every part is numbered and tracked, and if a part is discovered to be flawed, it is visibly scored (like with a chisel) so that it can’t be re-sold by unscrupulous vendors. But these outsourcers are not followed that procedure.
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p>This is akin to driving on bald tires. You may not need the tires’ tread for most driving. But God help you if find yourself on a stretch of road with a half-inch of water on it.
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p>This is another example where vigorous government regulation is necessary.
Does anyone honestly believe that the Chinese (to cite but one example) don’t reverse-engineer dual-use technology manufactured by or for American corporations in the PRC?
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p>For what it’s worth, all technology is dual-use.
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p>Economically, people tend to forget that it wasn’t the quality of our equipment that won World War II (Sherman Tanks were called “Zippos” by the Germans because they burned so easily), but the quantity churned out by the greatest manufacturing base in world history.
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p>Not being a warmonger, I merely add that, after the war, that same manufacturing base created the greatest case of upward social mobility in world history.
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p>Simply put, an equitable economy of scale based upon a service economy is impossible in a country the size of the US: manufacturing creates the wealth necessary to buy the services.