Tuesday, March 23, 2010

Subsidizing jobs in Mexico, China, India ...

Idatech, the fuel-cell maker in Bend, knows how to work the system.

Since its founding in 1996, it has tapped into federal, state and local tax coffers for millions of dollars to stay afloat.

Idatech makes backup power generators for cell phone towers.

A couple of years ago when it threatened to move its 72 employees elsewhere because Bend had become too expensive, the city ponied up money to keep the high-tech company in Bend.

Of course, Idatech then turned around and opened a manufacturing facility in Tijuana, Mexico, because, well, it's cheaper to do so than in Bend.

Idatech isn't the only American company to export jobs to other countries and won't be the last. And companies, like Idatech, will continue to take taxpayers' money, thereby increasing the federal deficit, and then set up shop in China, India, Mexico, Honduras, Bangladesh and a host of other countries where workers make pennies compared to American workers' dollars.

One extreme example is Dick Cheney's Halliburton. After winning no-bid contracts worth billions for work in Iraq, the conglomerate then set up headquarters off-shore to avoid paying taxes to the very country -- and taxpayers -- that gave it billions.

This is how capitalism works. Oh, sorry, the Texas Board of Education voted to replace "capitalism" with "free enterprise" and "free market economy" in textbooks because the word "capitalism" carries negative connotations, they say. I guess they would know.

And who can argue against anything that is free. It sounds so good. In fact, it sounds too good to be true.

And it is.

What we have learned from the "free market economy" is that jobs flow to where workers make the least. In America, that means all clothing manufacturing is now done in foreign countries. Ford makes it hybrid Fusion in Mexico. General Motors makes vehicles there, too. The iPhone is made in China with technology bought from India.

The global economy means less work for Americans and more work for the poorest countries in the world. That is how capital flows. It's all so beautiful, the free marketeers claim.

Except that America is now experiencing it's third "jobless recovery" in the last 2o years. The number of the longtime unemployed is larger now than ever in this nation's history.

What all the brilliant business minds have failed to consider is that if Americans aren't working, how are they going to buy goods made overseas? Well, they're going to borrow money to do so.

The Great Depression occurred because Americans could not afford to buy the products they were producing without going into massive debt to do so. Now, the Great Recession persists because Americans cannot even afford the cheap goods they're not producing without going into debt.

Yes, joblessness today is much less than it was during the Great Depression because government was far more aggressive in averting total economic collapse, wading through "moral hazard" to do so. Because of the absolute failure of major American businesses, the government became not the problem, but the only solution.

And for that, we get Tea Party kooks claiming too much government interference in the free marketplace. They've got it wrong. By giving taxpayer money to companies, like Idatech, to export jobs outside this country, the government has abetted the economic meltdown.

Another thing we've learned from the "free market economy" is that there is no loyalty whatsoever -- not to the worker, to the consumer or to the nation itself.

One can hear executives at American companies, who've set up shop overseas, yell, "Screw unions! Screw the American worker! And screw the United States of America!"

That is the ultimate lesson learned from the "free enterprise" system.

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