TCS Daily


Workers of the World

By George A. Pieler & Jens F. Laurson - March 16, 2009 12:00 AM

Change is here, and people are responding. Bank of America just responded to the decision by Congress to limit hiring of foreign skilled workers under the H-1B program, and did so by canceling contracts to hire a batch of foreign-born business students. Does it mean jobs for Americans? Probably not: Bank of America can either cancel the positions, or outsource the work abroad.

Senator Chuck Grassley, who co-sponsored the H-1B clampdown, says "There is no need for companies to hire foreign guest workers -- when there are plenty of qualified Americans." Apart from the fact that it isn't for Grassley to divine what kind of American workers are or are not currently present, even if there were such qualified Americans around, they might not always be in the right place at the right time to close the employment deal. Many qualified Americans also want the opportunity to work abroad or for a foreign-based company. How are they helped by limiting the flow of workers into the U.S.?

There are legitimate concerns about H-1B. It is, after all, a poor substitute for genuinely open labor markets across national boundaries: it is burdened with red tape and riddled with exceptions, some of which are easily exploited by labor-market middle persons (I.E.: we'll do your H-1B paperwork for you, if you'll wink at the overstated salary we report). And if abuse of the H-1B system really did take place in one out of five cases, that's four out of five cases where legitimately-needed, highly-skilled talent made a contribution to the U.S. companies and the economy. While imperfect for many reasons, the H-1B regime is still better than nothing when U.S. businesses grow faster than the domestic supply of highly trained (tech-savvy, and other specialized) workers doesn't keep up. No one really complains about the availability of foreign super models, sports stars, or actors under work visas.

The fact is, American workers benefit most from the free flow of highly-skilled labor across national boundaries. As Columbia's Glenn Hubbard puts it, the TARP limit on H-1B hires "gives an advantage to international institutions over American institutions." Why? Because foreign companies (and universities, which was the context for Mr. Hubbard's remark) that can hire the best talent wherever they find it will create a stronger workforce than companies that have to jump endless regulatory hurdles just to make a single hire. Where merit dominates the hiring decision, progress is the inevitable result.

As in all forms of economic activity, maximum competition yields maximum gains. Artificial restrictions on the labor pool also restrain productivity and economic growth; two things we desperately need more of right now. This is neither harmful to -- nor in disrespect of -- highly-qualified American workers. What those workers need most are more opportunities to market their skills, which requires more new companies that need highly-skilled professionals. Writing in Business Week, Vivek Wadhwa points out that "foreign nationals residing in the U.S. were named as inventors in 25.6% of international patent applications filed from the U.S. in 2006." (based on WIPO records) This fount of intellectual property creation is what drives future industries; precisely the industries that will hire (and train) U.S.-based tech workers.

So far, these hiring constraints are linked to their receipt of TARP funds. However, as TARP recipients are increasingly becoming a template for regulating corporate America, the concern about short-sighted labor protectionism is very real. Bad ideas begotten under the TARP authority will have an impact far beyond its recipients.

It's not unusual for a recession -- and a global one, at that -- to bring on beggar-thy-neighbor policies, but that's no excuse for actually implementing such policies. We lamented the betrayals of core American values of liberty, and the consequent overreactions when faced with an increased security threat. Similarly, we should now lament the curtailing of economic liberties that are equally vital to this nation's success.

In the 21st century, we truly are all in this boat together. The best workers, whether from Lahore or Durban, Fresno or Poughkeepsie, will be sought after by the best employers. We should let both sides make the best deals they can, because it makes all of us better off: not least the American workforce.


George A. Pieler is Senior Fellow with the Institute for Policy Innovation. Jens F. Laurson is Editor-in-Chief of the International Affairs Forum.

140 Comments

Communism...
"TARP recipients are increasingly becoming a template for regulating corporate America..."

We will either lead the global economy's financial capitalism...or someone else will. Such dominance has been the competitive advantage we enjoyed during these past 60 years following World War II and since the end of the Cold War in 1991. We effectively marginalized the challenge to our economic hegemony coming from Japan with the Plaza Accord in 1985 as we forced them to float their currency...leading to their own 20 year black-hole of deflationary recession from which there is no escape...and that we now risk dropping down into ourselves.

The only way that our mature economy can continue to expand faster than our birth rate is for more people to actually immigrate here and for proportionately more of those people to be profoundly motivated...than average people born everywhere...including the US...are. That means America needs to continue to be the "go to" destination for such talent. This flow can reverse in a single generation as another nation opens up more opportunites for such immigrants or if they simply decide to stay home because the opportunities in America are not really so special anymore.

If that happens then there will not be a compelling reason for an "America"...so to speak...to even exist. We would become just another European economy...although we would probably not petition to join the EU. The fact that I can even say something like that shocks me.

But what is even more astounding is how rapidly the end of right leaning Supply Side economic expansion has given itself over to left leaning socialist policies. We might soon be more Communist than the Communists.

We need a Thomas Jefferson. We need a Republican.

Republicans would kick Jefferson out of their party today.
Just as they are trying to do with Paul and Rush. Polling shows conservatives and libertarians are negatives so the party is trying to ditch them. All that are left are blue dog dems and country club Republicans, the milque toast of the party.
The Republicans need to return to principles and stick to them. Letting Snow call herself a Republican is a sham when she is less conservative than Reid.

The Institute for Policy Innovation
I kept reading this article, waiting to come to the part where Mr Pieler showed us how outsourcing all our good paying manufacturing jobs to low-cost places like Vietnam was actually a GOOD thing for US workers.. until I got to the end. And that information was nowhere to be seen.. unless you count that the American Worker, having been replaced by a work unit out in Asia, now has a chance to work on his marketing skills ("What those workers need most are more opportunities to market their skills").. having been made redundant in all the skills he's developed over a lifetime.

So then I looked down the page to see just who this guy was, and found that "George A. Pieler is Senior Fellow with the Institute for Policy Innovation".

What?

A look at their web site gives us this: "Advocating lower taxes, fewer regulations and a smaller, less obtrusive government". It's something **** Armey thought up after he left government.

http://www.ipi.org/

Here's a list of the people who pay for the IPI's opinions. The list includes the Scaifes, the Armstrongs, the Olins, the Bradleys and the other usual suspects.

http://www.mediatransparency.org/recipientgrants.php?recipientID=171

Which is not to say that the American worker might not benefit in some way by having his job taken away. Only that this was illustrated nowhere in the article.

Anyone here want to explain to me how we're all better off trading in our good paying manufacturing jobs for seven dollar positions in the service industry?

We're tapped out
Hi Forest.. you say "We will either lead the global economy's financial capitalism...or someone else will."

I think we're tapped out. It's been quite a few years now that our trade imbalance has left us buying the goods other nations produce, with dollars we can only obtain by re-borrowing the funds we spent last year. That's not a sustainable model.

In fact the only way it's continued this long is because the creditor nations haven't yet tried to invent a currency to take the place of the dollar. So they have to keep putting their earnings into the only bank that can sustain the dollar.. the US Treasury.

Eventually you'd think they'd get tired of this. No one wants to bite the bullet, because then they'd lose all the money they'd made up to this point. But in time, what with the world banking system teetering well past the point of collapse, this brand of thinking could change.

Have you read that book yet? Bill Bonner, Empire of Debt.

ignorance, they name be roy.
Balance of trade has nothing to do with it. Though if the only thing you read are trade union propaganda, you would never know that.

1) Growing economies always run trade deficits.
2) The trade deficit is no where near as big as the propagandists would have you believe, since the most commonly used number, merchandise trade is only a tiny sliver of total trade.

typical roy, attack the messenger, ignore the message.
Roy forgets, as usual, that the US is made up of both workers and consumers, and low and behold, they are usually one in the same.

How does it benefit US consumers to be forced to buy over priced, poorly built products?

Pleanty of taps left
We have nearly unlimited resources, physical and human, yet to be developed because of NIMBYs.

Trading away our energy production industry to the middle east Europe
USA oil and gas workers work abroad because the government won't allow development.

USA has few nuclear energy workers since the government won't allow development.

Let's call this Mark's Law
1) "Growing economies always run trade deficits."

Mark, this is just one other thing you're pulling out of your.. er.. hat. There's no such rule.

Great Britain, for instance. When this empire was expanding it always ran a trade surplus. In fact they destroyed India's textile industry just to provide such a surplus. Because there's an old rule of commerce: always sell more than you buy. Otherwise there comes a day when you run out of cash.

Even when the Brits began to wane, and started running an overall deficit, they still had a positive trade balance in some important sectors.. like shipping and trade with their colonies.

http://www.americaneconomicalert.org/view_art.asp?Prod_ID=494

Now let's take a quick look at today's young economy on the move: China. Running a trade deficit? If they were, would they be expanding to the precise degree that we're shrinking?

If I were to say that the sky was blue, I'd count on you to tell us all it was yellow mauve.

Adjusting the trade balance
"Roy forgets, as usual, that the US is made up of both workers and consumers, and low and behold, they are usually one in the same."

Actually there's a second category. There's the worker-consumers.. and then there's the under- and unemployed, who can't afford to consume.

In fact it's this lack of consumer power that is currently crippling our economy.

"How does it benefit US consumers to be forced to buy over priced, poorly built products?"

They don't have to be poorly built. US products have always had a good reputation. But they're priced higher than those produced in third world economies with no labor or environmental laws.

I'd level up the playing field by working toward international labor and environmental laws.. and slapping big tariffs on products from countries that wouldn't sign on. So even if we did buy from them, they'd have to pay into the Treasury for the privilege of exporting to us.

"no labor or environmental laws." Hint?
Make OUR laws more cost effective?

policy innovation
I thought lower taxes, few regulations small government are what the founding fathers said the US was supposed to be about? Oh, I forgot, you're the guy who always advocates for big government.
But regarding this problem you have with American companies making things overseas instead of in the US, why do you want your children and grandchildren to make the underwear and socks for us? Wouldn't they rather work for Google?

Mark's Law is real
"Great Britain, for instance. When this empire was expanding it always ran a trade surplus"

Because British capital was funding America's industrial expansion. They provided the surplus, we took it and thus had deficits.

It was also going to Africa, India, Australia, Canada and elsewhere. Britain was the first nation to industrialize, so the law of diminishing returns set in. They had to invest abroad.

Also, it isn't just that one grows and the other doesn't. It is the relative delta between their growth rates. Britain's growth was still going good, just not as strong as ours was after the Civil War. China's and India's outpace us too.

Resolving our trade issues
There's one thing WalMart has taught us. That's that when quality and service are comparable, price wins out every time.

So if present trends continue (which they probably must) we will begin selling products to the Chinese and the Indians when our labor rates compare with theirs.

That will probably be when we come down to, and they come up to, maybe two bucks an hour. That's $4,160 a year.

The H-1B Visa Is A Corrupt Scam
You two propagandists should be ashamed of yourselves for repeatedly pushing the mantra that there are not enough skilled workers in America. There are 200,000 in the I.T. industry that have been displaced at the hands of low-skill (yes, they are lacking in fundamental technical competencies) and low-wage workers, primarily from India.

I have witnessed the abuse of the H-1B system first-hand and have reported it to the DOL.

15 years in the biz, with top skills, and I have seen my wages decline every year -- it is occupational apartheid at the hands of mostly upper-caste Hindus. Call me politically incorrect, just don't call me a coward. It is the truth, and for over ten years 200,000 American programmers have suffered the humiliation of being displaced by low-skill, low-wage H[indu]-1B imports.

The monopoly of the IT profession by the mostly Indian H-1B lobby must stop. So few of those imports can communicate in English, much less code. We got the best and the brightest a decade ago; what we have now is the greedy and desperate.

- TR (http://www.itgrunt.com)


Channeling the Founders
In actual fact, the Founding Fathers said nothing I can recall about taxes, whether they should be lower, higher or just right, about regulations, whether we should have fewer or more, OR about whether government should be large, small or medium sized. I suspect they were all thinking government should be just about the right size.. no more, no less.

Taxes were kind of an afterthought. Once they had their new government up and running they realized they didn't have any way to fund it. So followed their first BAD idea.. to tax liquor production at the still. It wasn't so much a sin tax as it was a tax on what was nearly the young nation's only salable product.

Regulations? Anyone but a fool would say we need rules that get the job done. How many? As many as we need.. no more, no less.

If the FFs held and offered actual opinions on these issues, I will count on you to give me actual quotations.

roy, get thee to an econ class
When Great Britain's empire was expanding, it was forcing it's colonies to buy it's goods.

Now if you really want to use this method for increasing the US's exports, maybe you should petition congress.

roy doesn't bother reading what he responds to.
If you had actually read and comprehended what I wrote you would have seen that I point out that workers and consumers are for the most, the same people.

As to the un-employed, even in "the worst economy in since the great depression" that number is only 8% of those who are looking for work. As a percentage of the population it's less than half that amount.

There is no lack of consuming power. That's part of your Keynsian fallacies.

Products don't have to be poorly built, but that seems to be the product that unions prefer to build.

As to your labor and environmental concerns, I have no doubt that you would take great pleasure at beggaring the rest of the world just so that you don't have to worry anymore.

Poor TunnelRat!
I am likewise in the industry. I had to train my Indian replacements on the application I supported for full month the first time I was outsourced.

But I don't cry about it. Next thing you know your new job at the buggy whip factory will become obsolete. Then what are you going to do? Cry some more? WHAAAAAAAH! (Mommy!)

Also, you are behind the times. The main outsourcing happens over in India now, not over here. H-1Bs are no longer the threat they once were. And, when programs start writing programs, they are all out of a job as well.

You need to be nimble and prepared to shift careers. All of us must be. Those are the raw economic facts.

Oh, and your blatant racism doesn't win you any points, either.

Obviously you never read the Federalist papers or even the Constitution
"Article I, Section 8, Clause 1 of the United States Constitution assigns Congress the power to impose "Taxes, Duties, Imposts and Excises," but Article I, Section 8 requires that, "Duties, Imposts and Excises shall be uniform throughout the United States."[10]

In addition, the Constitution specifically limited Congress' ability to impose direct taxes, by requiring it to distribute direct taxes in proportion to each state's census population. It was thought that head taxes and property taxes (slaves could be taxed as either or both) were likely to be abused, and that they bore no relation to the activities in which the federal government had a legitimate interest. The fourth clause of section 9 therefore specifies that, "No Capitation, or other direct, Tax shall be laid, unless in Proportion to the Census or enumeration herein before directed to be taken."

Taxation was also the subject of Federalist No. 33 penned secretly by the Federalist Alexander Hamilton under the pseudonym Publius. In it, he explains that the wording of the "Necessary and Proper" clause should serve as guidelines for the legislation of laws regarding taxation. The legislative branch is to be the judge, but any abuse of those powers of judging can be overturned by the people, whether as states or as a larger group.

The courts have generally held that direct taxes are limited to taxes on people (variously called "capitation", "poll tax" or "head tax") and property[11]. All other taxes are commonly referred to as "indirect taxes," because they tax an event, rather than a person or property per se.[12] What seemed to be a straightforward limitation on the power of the legislature based on the subject of the tax proved inexact and unclear when applied to an income tax, which can be arguably viewed either as a direct or an indirect tax.

In 1895, the United States Supreme Court ruled, in Pollock v. Farmers' Loan & Trust Co., that taxes on rents from real estate, on interest income from personal property and other income from personal property (which includes dividend income) were direct taxes on property and therefore had to be apportioned. Since apportionment of income taxes is impractical, the Pollock rulings had the effect of prohibiting a federal tax on income from property. Due to the political difficulties of taxing individual wages without taxing income from property, a federal income tax was impractical from the time of the Pollock decision until the time of ratification of the Sixteenth Amendment."

from: http://en.wikipedia.org/wiki/Taxation_history_of_the_United_States#Income_tax

Buy American
Okay, let's take soda pop. The stuff only has two ingredients: water and corn syrup. Both are obtained in the US at a very nominal cost. The minute quantities of artificial flavorings required are obtained from a factory in New Jersey.

Hard to keep a nation afloat on that kind of primary production. We used to make lots of Chevies, Fords and Dodge Rams. Too early to say whether we'll be making any of them any more, after the Disaster finishes shaking out.

If you want to see differential pay scales in various countries, check this out:

http://www.paywizard.org/main/Paycheck/salariesoverseas

Going from memory, software programmers and comparable techs making $60-80K here in the US are being fired, so their peers in India can make $6-14K doing the same thing. Wages in China are MUCH MUCH less.

Once the playing field finishes getting levelled out, I suppose those jobs will be coming back here. Oh joyous day.

Worthless arguments
Mark, you're starting to drool again. We are in total agreement that workers and consumers are two words for the same person. My point was that when they're no longer working they don't get to consume any more.

So when you say "There is no lack of consuming power" you are purposely ignoring the five million workers who've recently lost their jobs. They have no money with which to consume. Neither do they have credit. How then do they consume?

You also contend that union products are poorly built. Name a few. Are you going to trot out the famous old coke bottle in a car door? Have we heard of such a thing in the past forty years? Those things don't happen.

Manufacturing jobs didn't leave because Americans were incompetent workers. They left because plant owners could get cheaper labor elsewhere, and because it was time anyway to replace the old plants with new.

My point exactly
When the British Empire was on the way up, they sold their goods to others. Whether they used force (which they did) is beside the point. They made money on the deal.

We don't. We can't sell anything to anybody. All we can do is buy their stuff. Now please convince me that this is a sustainable model.. and that we're doing this the right way.

It's like the retailer who lost money on every sale, but made it up in volume.

Too bad we don't oil drillers working at ANWR or offshore CA and FL or...
dozens of nuclear power plants under construction or an oil refinery being built in AZ.

Can't have any of that can we?

Who is "we," Kemosabe?
>In the 21st century, we truly are all in this boat together.

The problem is with the pronouns. There are two economies and two boats which is why the the government can tell us that the economy is recovering and the unemployment rate will increase to 8%, maybe 10%.
This is why a company's stock can jump on the same day that a big lay-off is announced. Our owner's economy improves as expensive American employees are laid off and cheaper foreign employees are being hired.

But when is the last time anyone has heard of Red China or India referred to as a "third world nation?" From the end of WW2 to maybe 1995 the "third world nations were what? They were countries that sold us cheap raw materials because their working class lived in poverty and to whom the US sold heavy equipment and high tech stuff. These days, who is selling heavy equipment and high tech stuff to whom? As the Rev. Wright famously said, "The chickens are coming home to roost."

Most of you have never unintentionally missed a meal and don't want to know that prior to WW2, the working class in every country in the world in the history of the world lived in poverty. Do to freak economic conditions, after WW2 the US and some other western nations developed a large middle class while the rest of the world's workers lived in poverty.

We had our chance to partner with the rest of the world but we always knew that real WASP Americans were better than the rest world and not fit partners. Sorry to announce that we blew it and the world is reverting to the mean. Our owners will do just fine but the large working middle class will be a blip in world history.

India's middle class is larger than the USA population
A rising tide lifts all boats.

Today's poor in the USA are better off than the 'middle class' fifty years ago.

The world may be reverting to a mean, but the mean is increasing. I suggest the best fit is a Poisson distribution, not Gaussian.

Unintended consequences
H1B importation of workers, if skilled, has the unintended consequence of the US not having to provide (highly) skilled labor. This masks the need for higher education to provide people trained in the technical arts, causing us to fall behind compared to the education systems in other countries.

If unskilled, the consequence is that the average wage is driven downwards for everyone at the low end of the scale.

Totally bogus argument, and way oversold as well
Education is not the answer or even an answer. There is no lack of educated workers, it is skills that are missing in this country, those many companies are all-to willing to provide. Unfortunately, too many over-educated Americans are not willing to take entry level (or just above) pay while they learn those skills.
A desire to work the job as they are told is another problem. Call it the "Union Mentality" where too many younger workers want to do what they want to do and are unwilling to do the job they are hired for.

As a Manager, and later a business owner, I got to the point where I wouldn't even consider a recent college graduate if a less educated by more experienced person was available.

And no, I did not pay the less educated person less, the pay was the same take it or leave it.

we need to go back to strong vocational training
...the linkage is in the need for stronger vocational training in this country. We use colleges for overpriced and glorified vocational schooling and we don't get much out of it. The exception is the two-year community colleges that do well for the money, if you ask me.

Most nursing, programmers, biotechnicians, etc should be going to vocational schools. Most are starting to.

But no...our society's elites puts on airs that to succeed a youngster needs a 4 year B.S. 'bs' degree and that is simply preposterous.

We can't continue to do so...either having our universities and colleges become more like de facto (and not very good) vocational schools or spending the time and money on them. Not when graduates will see more chaotic churn in their careers going forward. No more 20-30s year careers in the same occupation for most of us. Get used to it.

Would you invest in buying a house what will fall apart/lose value in 10 years? You might if the price you paid factors that half-life into it. College educations don't do that except in a few (and getting fewer) cases.

People are starting to figure that out and making long-range career decisions accordingly. That is why Anthony's point is valid -- but it is not 'unintended' as anyone with half a brain could have seen it coming.

...which means that all those dolts who write 'younger people need not only a BS but also an MS in order to compete in many career paths today' don't even have half a brain, if you ask me.


The dropout option
It's heartening to see here how much we agree on.

I find it easier to analyze the blue collar-white collar thing using Aldous Huxley's famous old scale, where the alphas are the movers and shakers at the pinnacle and they are supported by the managerial and technical talents of the betas.

That would be the 28% of Americans who have their BS or beyond.

Examining the prospects of the rest of society (for building a decent life for themselves as well as contributing to a strong and dynamic society in which each worker should, ideally, have a stake) I can't praise our community colleges and trade schools too highly. They service the very real needs of students who are neither temperamentally nor financially equipped to take out a number of years to enter higher learning.

And this kind of schooling for our gammas is an extremely dynamic force in current society.

That leaves the deltas. One third of all students in NC who enter the eighth grade never emerge successfully from the twelfth. And it is these 16 year olds, allowed and often encouraged to drop out (to keep the school's NCLB numbers high), whose needs are not being served. That is, not until they enter prison, where a GED is offered.

The courses they need should be offered by grade six at the latest. And the course title has to be called "Life Skills".. the education that they'll be hanging around this earth for a long time, and that without marketable skills they'll go down the familiar path of drugs, crime and general shiftlessness.

Such a course would save them from having to learn some expensive lessons. And teaching it at middle school level would save our state budgets from some expensive incarceration. We don't have it yet because our own state government is unbelievably incompetent and amateurish.. and looks to always be that way.

If we accept your view that this is in their nature, WHAT then would you propose as a way to teach the children of our dropout class to become productively engaged in some career pursuit?

Preparation for life
"As a Manager, and later a business owner, I got to the point where I wouldn't even consider a recent college graduate if a less educated by more experienced person was available."

It looks as though you and I share some points in common on our resumes. With me, I got tired of hiring young guys with no work ethic, and no understanding of the employer-employee relationship. It was a pretty basic problem.

So I started hiring ex-offenders. Those guys know the score, know the reasons for discipline and know the value of a dollar. They were serious people I could strike a deal with and see it be honored.

So in a way I agree with this too: "Education is not the answer or even an answer. There is no lack of educated workers, it is skills that are missing in this country.."

Kids don't graduate from high school with anything in the way of life skills. The way K-12 is handled, all it is is college prep. Such a curriculum doesn't serve the needs of the majority of young people, who want to see thenselves ready to step into living actual lives.

I'd change the schools to fit the needs. Prepare them for real life. Revolutionary, eh?

I say as much below, in "The dropout option".

Roy's Energy Plan
Marjon, Don't you think it would be a better strategy to draw down the reserves of other countries, while they still have so much oil it's below $40 a barrel? That figure might very well be cheaper than what we can drill our undersea reserves for now.

I would suggest keeping what remains of oil under US territory as a strategic reserve.. to be used by your own grandchildren in their time of need.

Dozens of nuclear plants under construction? I'd be happy to replace coal with fissionable, just as soon as they figure out what to do with their slags.

This is dumb. I have no confidence in anyone proposing such a dumb scheme as to create wastes without the slightest plan for what to do with them.

That refinery in Arizona? I'm strongly in favor of it. The case built against it was bogus.

No Subject
Bill,

You said "There are two economies...which is why the the government can tell us that the economy is recovering and the unemployment rate will increase..."

There is the "trickle-down" Supply Side economy dominated by the multinational industrial corporations and the 20 largest banks...all enabled by the most powerful sovereign government that has ever pushed its own citizens...and the rest of the world around...at will. Then there is the underclass economy of "we the people" who constitute the "human resources" for that dominant economy. And when the human resources of another nation are "better, faster and cheaper" than we are then the Supply Side economy simply goes over there and puts them to work.

That is the way American Managerial Capitalism has evolved in the Post Industrial Society...and it has indeed brought us all to this point.

We are now strong enough, smart enough and wealthy enough, however, to launch our own capitalism...a third economic reality here in the US...so that we might no longer remain trapped as part of the Supply Side economy's "labor pool" if we don't chose to be.

K-12 is college prep? Ya gotta be kidding
"Kids don't graduate from high school with anything in the way of life skills. The way K-12 is handled, all it is is college prep..."

Not even close. 10 years ago when I was in grad school and on 1/2 assistantship, I had the singular honor of teaching those "prepped for college/prepped for life" semi-literates 20 hours per week. They were totally unprepared for a scientific or engineering education.

K-12 is simply a factory churning out substandard products (our most precious resource per the enlightened), which is staffed by union employees (picket-line ready thugs), overseen by incompetent "educators" (even phys-ed majors called them morons) and allowed to operate because parents really believe the public (aka government controlled & funded) education their precious darlings receive is "high quality and world class."

Of course the parents were a generation older model from the same factories. And so, they are conditioned to believe all the official garbage.

Keep the jobs here.
You keep complaining about jobs going abroad but support a party and administration that prevents great supply side jobs from being created in the USA.

Those great supply side jobs
"You keep complaining about jobs going abroad but support a party and administration that prevents great supply side jobs from being created in the USA."

Actually I don't. But I'm so far from being a supply side Republican the only box you can think to put me in is marked "liberal Democrat".

All those new jobs created since the 2002 crash? They were inferior in every way to the jobs that had been lost. They were mostly McJobs.. low paying, no benefits, minimal skills and no chance for advancement. They were created in the services industries to provide warm bodies for the purpose of pushing brooms. And the desperate people who took them often had to take two of them.. because they were only offering half the pay.

This is not to disparage the creation of a lot of high tech jobs as well. In the wake of the tech meltdown there were still opportunities for many thousands of high paying technical jobs. Just not enough to satisfy demand.

Rather than create a small number of jobs draining the gas out from beneath our national monuments in Utah, I'd tell those gas and oilfield drillers it's a big world out there. And extractive industries are hiring around the planet. So it may be boom times this year in Wyoming (which has never seen as much money as it's spedning today) but they should also keep an eye on the wreck that gets left behind when the fields are tapped out.

They need to use that "blessing" money to create something solid and permanent. Because the thing about the boom years, they're a short time with us and a long time gone. No sense pissing away all your windfall money like some oilfield roustabout when you can use it to build a world that's both solid and sustainable.

It's seed money. We should be investing it wisely, not just seeing who can be the first to get to the bottom of the hole.

Good comment
Your correction is well put. Those teenagers I know are not being prepared for a life adapted to succeeding in nonacademic fields.. but neither are they being prepared for a life of higher learning. Generations of college profs have lamented the failure of the public schools to prepare kids for college.

Let's say instead that the public schools fail somewhere in the middle. They teach "pseudo-academic" subjects from inertia. Classes are in areas that are hangovers from a century ago. Kids struggle with trig until they finally give it up, when instead they could be learning household finance.. the handling of (or avoidance of) debt.

So whether they aspire to be home heating engineers or real engineers, they learn most of what they have to know about their work right there on the job. Meanwhile, at home, they have no teachers to advise them as to how they might manage their own households. And life trajectories.

You'd have to take these issues up with the state school boards. Which, sadly, are mostly staffed by people who decided on education as being a safe, no-horizon niche to exist in.

Or (Plan B) you could just take the libertarian approach, that the public schools should be eliminated and that kids should learn life where they have to learn sex now.. in the street.

Only in whatever world roy inhabits, would that be a valid point.
But you have to forgive roy, he's an expert at performing back flips to justify his positions.

don't bother posting either, roy will just ignore them, and demand that you post them again.
...

roy likes to make fun of himself by demonstrating his ignorance.
roy claims that the 5 million people who lost their jobs are no longer able to consume.

So roy actually believes that each and everyone of those people is now starving and living on the streets?

When roy can figure out why they aren't, then roy might, finally be on his way to knowing what he is talking about.

Roy, Champion of the...???
Roy, isn’t it you who is so often complaining about the disparity of wealth here in the US? You know - the rich get richer, the poor get poorer, and all that? The wealthy make too much wealth, and sit on it, while the poor struggle to survive…Government intervention and wealth redistribution are necessary to keep the excesses of capitalism in check…etc., etc.
Why is a disparity of wealth within a nation an evil thing, but disparity of wealth between nations a good thing? With regard to local economics, you argue for less disparity, even if that wealth disparity is created by (and justified by) real differences in wealth productivity. With regard to global economics, you fight to protect the disparity, even if it justified by nothing more than power, and even if it means perpetual poverty for the disadvantaged.
By applying tariffs you penalize both the producers in the poor country and the consumers in the rich country. The only people who benefit are the rich producers in the rich country (who can sell their products at artificially high prices) and the government of the rich country (which collects higher taxes, and tariffs on imports).
If a man in India can make a product AND pay to have it shipped across the globe AND push it through customs, AND advertise it in a foreign language, AND distribute it through a foreign distribution system, all for less than the local businessman, who knows the local language, customer desires, market conditions, etc, should he not be allowed to sell his product without further hindrance? Is not the home field advantage enough? If not, the home team needs to take a loss. What they need is not more protection, but less, so they can learn how to compete, and perhaps, win on another day.
Whatever happened to Roy the Warm Hearted, Champion of the Poor, Defender of the Downtrodden and the Oppressed? Don’t tell me he has become Roy the Cold Hearted, Champion of the Captains of Industry, Defender of the Competitively Challenged and Financially Protected.
If I argued to maintain a system where one group of people were paid ten times as much as another group of people, based on their gender, or the color of their skin, you would be all over me (and rightly so) for being a bigot (a sexist, or a racist). But when the discriminating factor is not what gender you were born with, or what skin color you were born with, but rather, what side of an imaginary line you were born on, you see nothing wrong with that. If a man born in China makes chairs (or writes software) for $2/hour, while a man born in New Jersey makes similar chairs (or software) for $20/hr, you see no problem in that. In fact, you eagerly seek to institutionalize this disparity. You would slap tariffs on the poor group, to prevent them from selling their products to the wealthy group. Your goal is to maintain and perpetuate this disparity. No justification is given, or, apparently, needed. Is not your bigotry (nationalism) as bad as the bigotry of the sexist or the racist? Please explain.
It is amusing to see how people can apply two different standards to the same problem, depending on which side of the fence they are on at any moment. When looking at those richer than yourself (those rich Americans who make “too much” money) you decry the horrors of wealth disparity. But when looking at disadvantaged laborers in foreign countries (who could easily claim that you make “too much” money) wealth disparity is something to be celebrated and protected. Please explain.

High marginal rates cut jobs
He showed that a labor supply elasticity of three would predict that Western Europeans would work about one-third less than North Americans and Japanese. The evidence confirmed his prediction. Moreover, his posited labor supply elasticity is consistent with the fact that hours worked per person were much higher in France and Germany in the early 1970s when marginal tax rates were substantially lower. "

"In his Nobel lecture, Prescott noted some important conclusions that follow from his and Kydland’s research on business cycles:

We learned that business cycle fluctuations are the optimal response to real shocks. The cost of a bad shock cannot be avoided, and policies that attempt to do so will be counterproductive, particularly if they reduce production efficiency. During the 1981 and current oil crises, I was pleased that policies were not instituted that adversely affected the economy by reducing production efficiency. This is in sharp contrast to the oil crisis in 1974 when, rather than letting the economy respond optimally to a bad shock so as to minimize its cost, policies were instituted that adversely affected production efficiency and depressed the economy much more than it would otherwise have been.

Prescott concluded that the gains in well-being from eliminating business cycles are small or negative, while the gains from eliminating depressions such as the Great Depression and from creating growth “miracles” are large. He noted work by Harold Cole and Lee Ohanian that is also consistent with this encyclopedia’s article on the great depression, suggesting that Franklin Roosevelt’s cartelization of U.S. industries in the early 1930s could have been the reason for the stunning reduction in hours worked per adult over that time.2
"

http://www.econlib.org/library/Enc/bios/Prescott.html

Hard currency...
Roy,

You said "creditor nations haven't yet tried to invent a currency to take the place of the dollar."

Hard currency is hard currency. They have theirs and we have ours. Dollars and the rest of them are traded at an immense daily scale on the FOREX...dwarfing any underlying commercial or investment transactions so that the banks can freely exchange any such currency at the existing rates so that the value itself is retained and only the denomination changes. In this manner, when the Chinese want to purchase US Treasuries they might convert a euro remittance into dollars. The seller might immediately turn the dollars into a peso balance because he gets a higher rate of interest on his peso account. The original euros no longer exist and neither do the dollars. Indeed, the Treasury bonds themselves were already in someone else's portfolio...not sold by the US government directly and indeed represent funds borrowed 24 years ago with a 30 year debt instrument...and are scheduled to be simply rolled over 6 years from now. We are not borrowing anything from the Chinese to spend today. They might not have even purchased our outstanding debt with money they earned from doing business with us at all.

The fact that the Chinese are holding those bonds instead of some rich guy in England has virtually nothing to do with us.

The dollar is the standard of value in the global economic arena. It's the big dog and our government is the least likely of any nation to ever default on its paper. But even if another sovereign state actually did someday have a currency that was employed out there in the underground economy, for example, more than the US dollar is and even if the Treasury debt of that other nation became more respected than ours...what is that to us really? Do the Germans, therefore, have some sort of second-rate wealth because they are using euros instead of dollars to buy their beers?

It simply doesn't matter very much.

Socialism lite...
Roy,

You said "...our own state government is unbelievably incompetent and amateurish."

We imagine that the government should take on our own responsibility to promote the education and welfare of our "subordinate" family members...but that is a fully socialistic attitude in a nation where the government itself is doing a lousy job of being a proper socialist state. No good Communists!

Communism does not work. Even the Soviets who were far more rigorous than we are...about their totalitarian approach to government...found that much out. Half-ass socialism is worse than no socialism at all. Because we think the government is going to take care of these things, so we politely step aside and then our less-motivated kids simply fall through the cracks. Better the government should stop pretending that they can do this stuff, let us keep that part of our tax dollar and leave it up to us.

Each of those young people belongs to one of our families and each of our extended families has its share. Statistically, no more and no less. If we are indeed overrun with morons, of course, then our family should probably do poorly and...in a sense...die out as God and Darwin intended.

Otherwise, let me keep my money and let me work this education business out by hiring my own cousin the teacher...about whom I already know whether or not he will molest my children...to teach the kids to read at least and to get them ready for college if they are really college material. If they end up staying home instead and taking care of our old people...that the government is also doing a pretty terrible job with, by the way...then that's also my own damn business.

Intuitive but naive...
Antony,

Nothing wrong with being young.

You said "This masks the need for higher education..."

You are implying that our society is actually able to measure the need for technical talent...more or less fulfilled by our own workers or those who imigrate here...and that the government that has taken upon itself the responsibility to educate more of the people we need to operate our economy...can actually say to themselves "we have enough of such workers...therefore we do not need to push our schools regarding Calculus", for example...

It does not work that way. How it does work is that we have an almost unquenchable demand for world-class technical talent and people in other parts of the world who are able to develop themselves to do such work have nothing else going for them so they dig in and they do learn.

Here in America our talented kids can play Soccer and Nintendo instead...and many of them do exactly that. Human nature.

Prejudicial...
I agree. At some point we simply get tired of useless American-born workers who have no work ethic. We focus on our best guys and we ask them to bring their cousins in. Invariably, all of those workers were born in the Philippines or Yugoslavia.

You can call me prujudicial in this regard...and you are right. But so am I.

It's a whole new ball game
"Please explain."

Be glad to.

JT.. everything you say is true. In terms of global equity, it's only just that we in the West pay back the brown guys for all the centuries of wealth we've gained from their unpaid labor, and resources we've consumed from their lands without compensation. It's not just payback, it's justice.

No problema there. What I'm pointing to is that, as Americans, where do we go from here? We are the debtor nation. China is our creditor now (plus many other foreign providers). So unless we're able to continue pulling rabbits out of our hat, we're no longer dealing from a position of strength.

One might reasonably expect the bank to call the loan. Or, to use another charming analogy (I've got a million of em), now that we've hit our credit limit, the card issuer might well be expected to up the rate on us.

The point is, for everyone's sake, the old machine's now broken. The American consumer can't consume any more, so long as he's unable to sell his labor on the world market. Therefore those profitable entities who enable us will only keep our line of credit open until the moment they can develop fresh markets.

So what, then, do WE do? That was my point. We need to be thinking ahead, and figuring out a way (now that we're sort of a fifth wheel on the world market) to provide American goods for American consumers, at American wage and price scales.

It's a whole new ball game.

No man is an island
Forest, I've been with you 100% on a lot of this stuff. But here your argument completely falls apart. Guiding the careers of kids with no forseeable futures is communism? I think your arrow mises the mark.

We don't just guide those kids to do them a favor. We do it to make them socially useful, that is, useful to us as a people. And most directly to the point, we do it to save money.

How much money do you think we spend now on the court system, the world of incarceration, the war on drugs, the police structure and the monetary losses the indirect costs of the underclass make on us? THIS is a truly horrendous figure.

Far cheaper would be to get to them early, before they begin to go off the tracks. Intervention, to be successful, needs to be initiated by grade four.

"Each of those young people belongs to one of our families and each of our extended families has its share. Statistically, no more and no less. If we are indeed overrun with morons, of course, then our family should probably do poorly and...in a sense...die out as God and Darwin intended."

It just don't work that way. Most of the "young people" we're describing do NOT belong to families in any meaningful sense. They are creatures of the streets. As were their mothers. As were their sperm donors.

They aren't conveniently dying out, either. They're outpacing every more successful segment of society.

And before you caution me on maligning some brave group of disadvantaged lads and lasses, I might remind you that I spent a thirty year career working those same streets. I know them well.. and by name.

"Otherwise, let me keep my money and let me work this education business out by hiring my own cousin the teacher...about whom I already know whether or not he will molest my children...to teach the kids to read at least and to get them ready for college if they are really college material."

That's a fine approach for the 28 percent.. for "our" children. We can afford to prepare them well for the privileged positions they will enjoy. But if we want to save ourselves a lot of money we will also contribute a bit toward the proper alignment of our socially useless types.

Remember this: they procreate a lot faster than does the leadership class. Five and six kids is the norm for many female inmates (one of our fastest growing demographics). And nearly every one of them is being raised by someone who doesn't like them or care for them.. or is not in a financial position to do them right. If they're not our responsibility they'll end up being our downfall.

One of our biggest blunders...
...was to scare off our foreign students here on visa, in the wake of 9/11. Talk about shooting youself in the foot!

For generations, the brightest and finest young people of the entire globe came to America to get their schooling finished. Half of them stayed here, lending their talents to the task of making us that nation with the unbeatable competitive edge.

The other half went back home, ensuring that the leadership class in their nation had mostly all spent a few of their formative years in the US. They shared our values and our aspirations, and worked toward making their own countries over.. in the image of the very best they saw in us.

Well, that ended in a flash. 900 of them incarcerated without the right of habeas corpus, typically for an average eleven months, or until John Ashcroft could see his way clear to undetain them.

We taught them a lesson, all right. An unfortunate lesson.

DC voucher progam killed.
One program that worked for DC kids is being killed by the government.


"Creation of the fund in 2004 put the District at the forefront of the school-choice movement. At that time, the Republican-led federal government was taking steps to use the nation's capital -- with its ailing public school system -- as a showcase for educational reforms, which also included the country's most sweeping charter school law.

Parents of scholarship recipients offer high praise for the program, crediting it with changing the direction of their children's lives. Patricia William, whose son Fransoir, 11, is a sixth-grader at Sacred Heart, a Catholic school in Northwest, said his growth has been striking.
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"He's been developed in many ways, intellectually, emotionally and in his values," she said. "I couldn't ask for anything better."

Wendy Cunningham said her daughter Jordan, who will be a senior, has thrived since entering Georgetown Day School two years ago and has had access to opportunities that likely would not be available otherwise. This summer, Cunningham said, Jordan will enter summer programs at Catholic University and San Francisco State. "
http://www.washingtonpost.com/wp-dyn/content/article/2008/06/08/AR2008060802041_2.html

Teacher union money is more important than effective schools.

You support vouchers?

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