Tuesday, March 16, 2010

A Simple Question

I'm like most people who went to college, I suppose. I didn't major in economics.

Neither — I would guess — did most of the people who are unemployed today. That's another group to which I belong, although I would be happy to give up my membership in that particular club.

Since I have no academic training in economics — beyond those basic courses I was required to take — I hope someone can enlighten me.

Let me explain.

Obviously, economies are complex things, and the one that dominates our lives today may be more complex than any in my lifetime. There is no one factor that could be corrected that would turn things around. I assume that, if someone could pinpoint such a factor, a Nobel Prize would be waiting with his or her name on it.

Nevertheless, it is fashionable — and, perhaps, justifiable — to blame George W. Bush and the Republicans for policies that made conditions favorable for companies to outsource jobs to foreign countries where labor was cheaper. That isn't the only reason why millions of Americans have lost their jobs in the last couple of years, but it certainly is one of them.

When Barack Obama became president, he and the Democrats embarked on a radical — there are those who would use the word "extreme" to describe it — course of action to deal with the economy.

Perhaps what I am about to suggest is a case of closing the barn door after the horses already have escaped, but this is a question I simply can't answer on my own. Maybe someone with a greater knowledge of economics can answer it.

Why didn't the Democrats enact legislation that would make it more difficult for companies to outsource jobs to foreign countries?

On the campaign trail — and, then again, recently, when his attention was briefly diverted to the crisis of joblessness in the days after the special election in Massachusetts — Obama proposed tax breaks for companies that hired Americans.

When the stimulus package was being worked out, that proposal was dropped because the amount of the proposed tax break ($3,000) wasn't thought to be a sufficient incentive. When Obama revived the proposal earlier this year, he raised the amount (to $5,000), but it still isn't considered sufficient.

If the incentive is not adequate to achieve the desired effect, what possible good is the policy?

Which brings me back to my original question ...

Maybe I've missed something, but why hasn't a disincentive been discussed?

I've heard it said that the jobs that were shipped overseas are never coming back. Well, maybe some of them would if the government insisted that it would penalize companies for maintaining overseas workers on their payrolls when Americans could be doing those jobs — and I'm not talking about a slap on the wrist, either. I'm talking about fines that would be high enough to get employers' attention — and could be used to help offset the costs of getting the economy back on track.

Well, that's a rough idea. Perhaps there are legal issues that would have to be addressed. Certainly, a grace period would be necessary for existing companies to make the transition from foreign to domestic employees. Exceptions would need to be made for some jobs and some industries.

But doesn't it make sense to do whatever can be done — beyond the politician's best friend, lip service — to help unemployed Americans? Maybe filling jobs with Americans instead of Indians or Chinese would raise production costs, which would, in turn, raise the costs of goods and services.

But it seems to me that, if the choice is between paying more for a cell phone or a video game and leveling the playing field for unemployed Americans, the choice is obvious.

Flesh–and–blood Americans are more important than inanimate objects.

Aren't they?

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