Jon has identified the problem in spades. I live in Pennsylvania which is gifted with unnamed tons of iron oxide. --Not the iron oxide ore that you mine to create steel, but the iron oxide that was once steel and has now been reclaimed by the environment. Billy Joel laments Allentown, my wife recalls the teaming mills of Pittsburgh, and my family and I now enjoy bike rides as a benefit of our Rails to Trails program which permits us to pedal past scores of abandoned manufacturing campuses around Valley Forge -- the same railroad beds that previously transported the products of enterprising american workers.
Let us academics argue over how to get all of the toothpaste back in the tube. Manufacturing is gone. Corporate taxes, Environmental Regulations, Arbitration, Pension Obligations, Healthcare, Political Contributions, Multilingual Signage...these are the only structures that remain after manufacturing has departed. Pouring more money into STEM to produce more scientists and engineers would only serve to feed the structures I listed above. I'm all for raising domesticated livestock for food, but as an educator, I'm not for educating humans so they can be consumed by the Federal Behemoth.
Something very magic happened in 1776 after legions of free thinkers escaped the onerous regulations of old Europe for the New World. The Founders were mortally afraid of handing too much power over to an all-knowing Federal Government. And now, some 235 years later, we spend our energy arguing over where to focus the powers of the Federal Government to best solve the problem. In the present crisis, government is not the solution to our problem; government is the problem.
There's an idea that reducing corporate taxes will increase corporate profits, and that increased profits will result in job creation. The problem with this is that -- as the article points out -- companies are under no obligation to create jobs in the U.S. They can invest their profits anywhere they want. And their allegiance is to their shareholders, not to the U.S. public. Reducing taxes may result in job creation, but there is no guarantee that the jobs will be here.
In fact, as long as China has a massive population of internal migrants from the countryside who are willing to work under poor conditions for little money, there's a good chance that the jobs won't be here. Why should the U.S. forgo tax revenue -- which could be used to finance research and development, education, and infrastructure projects in our own country, not to mention to pay down our massive debt -- simply so that companies can create additional low-paying jobs in other countries? This may be in the interest of these companies' shareholders, but it is clearly not in the long-term interest of the U.S.
As to the idea that regulation is what's keeping companies from creating jobs in the U.S., there ought to be some congnitive dissonance here. If companies are supposedly staying out of the U.S. because of excessive regulation, what on earth are they doing in China -- which is, after all, a socialist country?
China has all kinds of laws and regulations affecting foreign investments. On the World Bank's list of 183 countries for ease of doing business, China ranks 91st. For comparison, the United States is number four (behind Singapore, Hong Kong, and New Zealand). Foreign companies don't go to China because of the business environment, but in spite of it. They are willing to put up with the many restrictions which the Chinese government places on them in exchange for access to cheap labor and a rapidly developing economy.
Companies are in business to make money, not to promote the general welfare. If you recall your U.S. history, that's what we formed a government for. Unquestionably, private enterprise excels at creating economic growth. Government has an important role to play in making sure that growth translates into prosperity.
While it is disturbing to see Asian manufacturing take what used to be American jobs, manufacturing is still strong in North America. It's only been a couple years since China pulled ahead of the United States in manufacturing volume, and China's manufacturing is primarily high-volume consumer products. North America is still the leader in complex, high-cost manufacturing -- medical, military, etc.
I would agree with Jon that there are serious domestic regulatory impediments, which put U.S. companies at a disadvantage. However, I find it illogical (in a Spock-like way, I guess) that a desired to dismantle onerous regulations has become joined at the hip (or, in our world, soldered) with the view that government can never invest in, nor support, any research, technology, or company. (Support for education is often, though not always, included in this bundle.) That linkage, I submit, is illogical. Firstly, the two issues are discrete and so one should have nothing to do with the other. Secondly, a cogent argument can be made the government financial support for, say, tech R&D in batteries, would help LEVEL the playing field with the likes of China.
Regarding STEM, there's been a lot of executive support for improvements in both funding and process for K-through-12 science and math education. However, it doesn't seem to have had much effect, as of yet. I did an interview two years ago with former Intel chairman Craig Barrett, who is a major STEM advocate. You can read it here. I would add that the slow progress is partly the result of the fact that it's a multi-tentacled effort comprising government, academia, and titans of the tech industry. At the same time, the slow forward movement is, at this point, also indicative of a lack of collective well to break the logjam and just get it done.
Unfortunately, we can't expect the engine of prosperity and growth to move along its track when it must stop every few miles to get bureaucrats and regulations out of the way. If I were to start a business today, I'd set it up in Australia, Hong Kong, Singapore or New Zealand; not here (USA). US businesses get burdened with ill-conceived regulations that help drive them overseas. I doubt many manufacturing jobs will return to the US, but by getting government out of the way we have a better chance to ensure R&D activities stay here and that corporations don't move off shore. Eliminating the tax on overseas profits would let companies bring profits back to the US and invest them. And repealing the stupid Sarbanes-Oxley Act would eliminate another noxious burden for companies. OK, you get the idea...
I completely with you, Chuck, and applaud your definite and passionate response to the idea of outsourcing R&D overseas. I think both Washington policy and corporate agendas have to do whatever it takes to foster R&D jobs and a culture of innovation right here on our own shores. Educational institutions have to step up promoting STEM curriculum and we have to make it a priority to introduce our next generation to the skills and training they will need to lead American innovation.
I'm afraid I agree with Jobs. Many manufacturing jobs -- especially the low-level ones -- aren't coming back. We can't compete with FoxConn City. But outsourcing of R&D? No way. With our university system, we should be leading the world in product innovation and in the creation of technical talent. And we should do whatever we have to in order to keep those jobs here. Our R&D, our engineering, and our ability to innovate should stay right here.
I also "enjoyed" the SOTU speach. It made me feel even worth from how I felt before the speach. Clearly the weather in Washington is too cloudy. The culture of "spend-spend and spend" on wrong things will not stop unless there is a cultural change. The division between parties is huge and i do not see a way for easy and fast fix.
I completely agree with you. I would go a step further. In many cases the action of our elected officials could be looked as anti American. We also kill our manufacturing with unreal regulations.
We must be careful of price level, but that should not be the only criteria.
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