That was uncalled for. Just because you don't agree with half the people in the country (and I'm probably even further away from him than you), his opinions are rational and pertinent even though you and I disagree with them. I _do_ agree with his statement that financial corporations and their collusion with a corrupt government have a lot to do with the problem.
This is indeed a high level conversation. Will some one give specific examples of government regulation that stifles job growth? Also, VincePG, you make some good points but removing the insults will make more people listen...just a thought.
@ Michael Zito, I seriously doubt your "products" doesn't include some subsidized components(semiconductors, perhaps). Did you do any research using the Internet or did you use the Interstate Highway system, or the Air Traffic control system to get from point A to B. Then your business is government subsidized. No business in this country makes it without government help.
Good dialog here. It should also be mentioned that many government programs that are created to keep technology inside the USA aren't enforced well enough to keep corporations from outsourcing the manufacturing. Many GSA government products were meant to be made in the USA via the "Buy American Act". Loopholes exist however that allow a company to engineer a product in the USA, manufacture it outside the USA, but still get a GSA listing and government FAR by playing the exceptions to get past the bare minimum 50% domestic requirement. That means military hardware is being engineered here, manufactured in china, only to then be bought and deployed by our military. Scary in my opinion, but it is happening. If there was more enforcement, many gov and military products would be 100% USA made. More enforcement would mean not allowing any exceptions for DoD purchases and stepping up the 50% requirement to 100% domestic. Until a company is forced to pay fines for bending the rules, they're going to try for more profit every time.
To me the main reasons are regulations and taxes. Both of these drive up costs and it is a natural response to seek the lowest cost, like a circuit branch with the lowest resistance. Unfortunately, politicians are too stupid to realize this. I think many of them actually believe they can legislate the laws of nature. Then they are dumbfounded when that didn't work and have to find something to demagogue.
A problem is that most of these are lawyers which also brings up another problem related in an earlier post: frivolous lawsuits. There are so many worthless patents that I am almost to the point of thinking that there should be no such thing. This would make rapid innovation the road to protecting ones position in the market place and remove firms owned by patent lawyers that troll for potential lawsuits. In fact a book could be written about the problems actually caused by the legal system.
The Author made a very big mistake when he said "its easy to blame...." - Well, I would like to say Math is easy when 2+2=4...That doesn't mean its NOT Factual, does it? You can not pose such an article or question then scoff at the notion an EASY answer is not an answer....Because sometimes, the answer is as plain as your nose. The Answer is very Simple; Obama, Pelosi, Harry Reid. I'm an inventor, I have now 1 product waiting for patent and most of the money for the prototype has come from investors. When the question of manufacturing came up, I fought to keep it here, in the U.S.A. When you see the tax implications, I can safely say, No way...Oh, I'll be happy to take American money on the Sales, you bet I would...But, when I see what the Tax and Unions will be doing it for...Makes Mexico, India and Asia look a whole lot better..Sorry pal, but that IS your ANSWER and it is THAT easy
Those are not the two main reasons, sorry to be so blunt.
1. Common sense says that you locate your factory close to your demand to minimize logistics and inventory management (Supply Chain 101).
2. THe next contributing factor is then pairing costs with revenues in the currency where the sale is made. So, you put more mfg base in places where you have increasing revenues.
3. Volatility of currencies is then removed. Look at the slide of the US dollar over the past 4 years and you can see why #2 is so important.
In basic summary: it's a problem of flow of capital imposed by currency devaluation and corportate tax policy in the US.
It really is simple. There is a brick wall in the form of a 35% tax to companies to repatriate their International profits back into the US. To understand the finances of a Multi National Entity (MNE for short) you have to see where it's profits are created regionally because that is where they will pair their costs with their revenues for efficient budgeting and capital management. The problem is not the cost/revenue matching in some foreign country (that's just business common sense), it's where does the excess profit go if anywhere?
Rather than the populist argument of "sticking it to the man" why not do something constructive like getting the +$1.4 T (that's right Trillion) dollars of US MNE's back into the US and to work in the US. You want a perfectly market efficient stimulus program in the US, let the raw power of Investment capital flow back into the US and you will see very quickly what happens.
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