The House Committee on Science and Technology, very much interested in the United States not losing US economic competitiveness and jobs, held hearings on The Globalization of R&D and Innovation on June 12, 2007.
Recently, Dr. Blinder, Princeton Economist, concluded
nearly all (35 of 39) STEM occupations are offshorable.
Ralph Gomory, President of the Sloan Foundation, testified:
In this new era of globalization the interests of companies and countries have diverged. In contrast with the past, what is good for America’s global corporations is no longer necessarily good for the American people.
Well, shift my paradigm....
Ralph Gomory just amplified and clarified a fundamental truth in international trade theory. In the theory of free trade, the goods of production are not mobile. Globalization on the other hand, allows productivities of scale to be offshore outsourced and thus globalization is not the same as free trade theory! Since productivity shifts are outside the realm of traditional free trade theory, the variables of production mobilities are precisely what needs to be analyzed for strategic policy initiatives to induce positive outcomes for the American people.
For the 1st time in history, primarily due to technological advances, we have corporations and nation-states being at odds with what is in the economic national interest, the things that increase GDP, our national economy and what is in a multinational corporations interests.
Accordingly to Gomory, globalization is fundamentally revising the relation of companies to the countries from which they have originated.
The Institute for Policy Studies wrote in 2000, Top 200: The Rise of Corporate Global Power, based on corporate sales and nation-states GDP:
Of the 100 largest economies in the world, 51 are corporations; only 49 are countries.
(Even in the minimal valued added analysis, (p. 6) which tries to minimize the true economic power of multinational corporations, still concludes Wal-Mart ranks as 44th and Exxon as 48th in overall world economic domination)
Just this week, The Real Cost of Offshore Outsourcing reported that:
Evidence suggests that shifting production overseas has inflicted worse damage on the U.S. economy than the numbers show. BusinessWeek has learned of a gaping flaw in the way statistics treat offshoring, with serious economic and political implications. Top government statisticians now acknowledge that the problem exists, and say it could prove to be significant
.
In other words, we have phony economic growth, in the calculations of GDP, that is actually productivity and output of other nation-states. That's NOT GOOD folks!
Finding the phantom GDP is yet more evidence that Ralph Gomory is speaking a fundamental truth.
What's the solution? Well, frankly I've heard so much about retraining I personally want to puke.
ok, so first we heard that Science, Technology, Engineering & Mathmematics careers are offshorable and then in the same breath we hear Americans need more education and training. I mean, come on, people with PhDs, IQs above 140, patents, Masters degrees, over 20 years worth of science and technology skills, are supposed to be retrained? It's a ridiculous insult without a major government sponsored incentive to create a new industry, agency or at least some sort of strategic economic innovation roadmap to claim people of this caliber need to be retrained. Can we get a strategy please that is not based specifically on what multinational corporations want but on what the American people want and need. How about policy that is in the United States National Economic Interest?
Blinder claimed: "No Child Left Behind is pushing us in the wrong direction" and we need to move away from 19th century educational system to more creativity, less route learning.
But is that statement really thinking outside the box?
Here's what Gomory says on the infamous "we need more education" to combat the trade deficit claim:
More R&D can only help but it should be clear from the discussion above that R&D, even if it remains in the U.S., can have only a limited impact. Proposals of this sort about education and R&D can only be helpful. They can only be harmful if they create the mistaken belief that these measures can deal with the problem
Ok, is anyone bothering to discuss real solutions?
Ralph Gomory implied the United States needs to create counter incentives to induce businesses to say in the United States. He proposed an inverse corporate tax rebate, revenue neutral that rewards for each full time employee job kept in the United States.
Amazingly enough we still heard from committee members claims the US needs more education, when one just had testimony that US professionals are the highest educated and best in the world. Mrs. Judy Biggert(R-IL-13th) asked questions like she did not comprehend a word the participants were saying, thinking it's all about K12 and also put in a plug for more foreigners workers as the solution (See my diary There is no worker shortage).
So maybe first up is to get Congress to even recognize there is little data and analysis per the United States national economic interests? Maybe, just maybe we should support Peter DeFazio's bill, H.R.548 : To establish a Congressional Trade Office. Maybe an analysis that is not written by multinational corporations, lobbyists or vested special interests on precisely how other nations are crafting their trade and economic policy strategies and incentives is in order?
Could it be we need to refocus the policy analysis and agenda on what is in America, yes America and Americans best interests?
Nope, instead we get plenty of Congress representatives basically saying in so many words that Americans are fat, lazy and stupid. Charming isn't it? And these are supposedly the representatives of the American people. Yet the truth is the only American fat and most assuredly not lazy and stupid is that lady singing on the increasingly glaring evidence of where we really are economically as a nation and as a people.
Update: While I'm digging at GOP representatives on retraining I should point out that "retraining" is a major Corporate lobbyist talking point where I should probably be more redirecting my wrath.