Re: [NTLK] OT: outsourcing

From: Norman Palardy (
Date: Sun Jun 12 2005 - 20:47:29 PDT

On Jun 12, 2005, at 5:50 PM, wrote:

> In a message dated 6/10/2005 10:44:13 A.M. Eastern Daylight Time,
> writes:
> "The only fear to fear is fear itself" - Sir. Winston Churchill.
> also said by fdr right after dec7 1941
> Actually, Napoleon Hill wrote that. He is the author of "Think and
> Grow
> Rich." It is attributed to many others (mostly FDR) but now you know
> the truth.
> I have tried to remain out of this discussion, but as you will read, I
> cannot.
> First, I am not defending Matt, he can do a fine job of that himself,
> however, you should know that he is from the Detroit area which has
> been devastated
> by outsourcing and foreign "unfair" competition.
> Here is the issue as I see it. Let's take China as an example,
> certainly
> not the only one, but a reasonable example. Were you aware that
> foreign
> businesses need government approval before being able to set up shop
> in China? Not
> true here in the states. Anyone can buy land and start a business.
> Try
> that in China, or Japan. It is not possible without government
> approval. The
> South Americas have protectionism as do almost all other countries.

America has protectionism as well FYI.
As a Canadian we've seen the US slap duties of up to 30% on various
products in order to protect Americans shipping the identical product
(softwood products spring to mind) Various trade bodies, including
NAFTA and the WTO have ruled these are unfair and the US has not

The US has enormous subsidies to farmers as well.

Nearly every country in the world has some kind of protectionism trade
subsidy, etc.

The US has experienced a lot of of shoring of manufacturing jobs
because of the demand for inexpensive products.
And, the number of companies affected by this is huge.
Levis Strauss no longer has plants in the US making jeans. Husky bikes
are largely made overseas.
Name a company in the consumer products space and they make products

It's interesting how many have done this since they signed supply
contracts with Walmart.
"Lower prices everyday" has to come from somewhere. Walmart's impact on
the American economy and on manufacturing jobs moving overseas is
simply stunning.

Now, before anyone gets the idea I don't like Walmart let me say that
there are aspects of their business that they excel at. They have the
buying power to force suppliers to become more efficient all the way up
and down the supply chain. This is good in a lot of ways.

But, with that buying power they can demand things from suppliers that
force jobs to move to where products can be made cheaply. And that's
part of what you see going on.

And, other companies that are trying to drive product prices down, or
hold them steady, are under similar pressures and American labour is
just to expensive compared to China or other similar countries.

Funny that the company that in the 70's lead the "Buy American"
campaign's is now responsible for so much offshoring.

> You see, their own markets are not "free." The only economy that is
> is the US.

It's mostly free. There is no single economy in the world that is
purely a free trade economy.
America has as many trade subsidies, tarrifs, anti-dumping and other
trade protections as any other jurisdiction. Like I said, as a Canadian
we've born the brunt of several of these costing us billions despite
various court rulings in our favor.

Jobs move to where the cost of production is low - first it was Mexico,
and Taiwan, or Japan.
Now it's China. When things get to be too expensive to be made in China
they'll move to somewhere else. India ? Africa ?

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