Outsourcing, Cheap Imports and Foreign Ownership of US industry
Delta Pilots may Strike, Delphi UAW negotiations have gone sour, GM struggles.
What is going on here and will these trends continue? My feeling...YES!
What can be done about it? Are there any solutions? I wish I knew—you tell me
As I’ve stated before, the problems in our economy are many, and the issues at hand are far more than just a housing bubble losing its steam. Although housing has played a major role in our economy during the last 5+ years (and when it falters the repercussions will be felt far and wide), it is just one of the many issues at play... We also have massive trade deficits, increasing cumulative debt, foreigners holding vast sums of dollars, waning confidence in those fiat dollars, soaring energy costs, skyrocketing health care costs, negative personal savings rates, major immigration concerns, nearly broken Social Security system, nearly bankrupt pension plan system, decaying moral foundation, inept leadership, out of control government spending, irrational market exuberance, completely oblivious consumers, etc… I could go on, but the main issue I’d like to concentrate on today is: Outsourcing of US jobs and foreign ownership of US industries
Open borders, NAFTA/CAFTA, and the like have made it extremely difficult for US industry (within our borders) to compete with the rest of the world, and these agreements have been (to a large extent) responsible for the loss of many well paying US jobs—jobs that were replaced through the outsourcing of foreign workers--to reduce costs and stay competitive. Many of the industries that didn’t want to (or weren’t allowed to) follow these new rules of business (outsourcing) eventually found (or will find soon) themselves unprofitable and had to either change their ways or close their doors… Which brings us to today.
Today, the US still has many home-bound corporations (examples: GM, Delta, Delphi, Dana, etc) who have tried to hold on to their past modus operandi, yet seem to be reeling from the high cost of US labor, health care, legacy pension plans, etc. Most are finding it increasingly difficult to complete in the world marketplace and realize that, without change, they are doomed. And changes are on the way… to the detriment of our country and the US worker.
NAFTA/CAFTA and other free-trade agreements have eliminated and/or reduced many previously existing import tariffs, making imported products much cheaper than home manufactured goods. This has caused many US manufacturing industries to lose large portions of market share, which has increased both the import of foreign goods and the export of US dollars. These free trade agreements have now been in place for so long, it has become of no concern to most that our huge (and ever increasing) trade deficits have now placed trillions of US Dollars into the hands of foreigners… foreigners who use these dollars to buy up the U.S.
This buyout situation is extremely scary, as foreign entities have used (and are still using) many of their dollars, earned through their exports and the never ending US consumption of foreign goods, to purchase many of our own US industries. The numbers here are absolutely staggering and seem to be growing every day.
If you haven't already done so, I highly urge you to take a look at ECONOMYINCRISIS (permanent hyperlink on right side of my Blog). This non-profit site is dedicated to spreading the word about outsourcing, foreign purchases of US industries and similar topics…
I borrowed a few statistics (Below) from their site that I found mind blowing. Hope you feel the same way and can provide a good idea or two on ways to solve this problem…
I’m afraid that if we continue to do nothing about these issues, one day we’ll finally wake up and realize that we are little more than sharecroppers.
FOREIGN OWNERSHIP OF SPECIFIC U.S. INDUSTRIES
PERCENTAGE FOREIGN OWNED
Sound recording industries
Commodity contracts dealing and brokerage
Motion picture and sound recording industries
Metal ore mining
Motion picture and video industries
Wineries and distilleries
Database, directory, and other publishers
Cement, concrete, lime, and gypsum product
Engine, turbine and power transmission equipment
Nonmetallic mineral product manufacturing
Plastics and rubber products manufacturing
Other insurance related activities
Boiler, tank, and shipping container
Glass and glass product
Sugar and confectionery product
Nonmetallic mineral mining and quarrying
Advertising and related services
Pharmaceutical and medicine
Clay, refractory, and other nonmetallic mineral products
Other general purpose machinery
Audio and video equipment mfg and reproducing magnetic and optical media
Support activities for mining
Soap, cleaning compound, and toilet preparation
Securities, commodity contracts, and other financial investments and related activities
Motor vehicles and parts
Other electrical equipment and component
Securities and commodity exchanges and other financial investment activities
Architectural, engineering, and related services
Credit card issuing and other consumer credit
Petroleum refineries (including integrated)
Navigational, measuring, electromedical, and control instruments
Petroleum and coal products manufacturing
Transportation equipment manufacturing
Commercial and service industry machinery
Investment banking and securities dealing
Semiconductor and other electronic component
Paint, coating, and adhesive.
Printing and related support activities
Chemical product and preparation
Iron, steel mills, and steel products
Agriculture, construction, and mining machinery
Medical equipment and supplies
FOREIGN OWNERSHIP OF MAJOR U.S. INDUSTRIES
PERCENTAGE FOREIGN OWNED
Professional, scientific, and technical services
Finance and insurance