Dagger wrote:

> The elites who are engineering the transformation of the USA
> into another Brazil, or worse, need to be HANGED.
> ------------------------
>
> Outsourcing Innovation...And Everything Else
>
> America's Has-Been Economy
>
>  By PAUL CRAIG ROBERTS
>
> http://www.counterpunch.org/
>
> A country cannot be a superpower without a high tech economy, and
> America's high tech economy is eroding as I write.
>
> The erosion began when US corporations outsourced manufacturing. Today
> many US companies are little more than a brand name selling goods made
> in Asia.
>
> Corporate outsourcers and their apologists presented the loss of
> manufacturing capability as a positive development. Manufacturing,
> they said, was the "old economy," whose loss to Asia ensured Americans
> lower consumer prices and greater shareholder returns. The American
> future was in the "new economy" of high tech knowledge jobs.
>
> This assertion became an article of faith. Few considered how a
> country could maintain a technological lead when it did not
> manufacture.
>
> So far in the 21st century there is scant sign of the American "new
> economy." The promised knowledge-based jobs have not appeared. To the
> contrary, the Bureau of Labor Statistics reports a net loss of 221,000
> jobs in six major engineering job classifications.
>
> Today many computer, electrical and electronics engineers, who were
> well paid at the end of the 20th century, are unemployed and cannot
> find work. A country that doesn't manufacture doesn't need as many
> engineers, and much of the work that remains is being outsourced or
> filled with cheaper foreigners brought into the country on H-lb and
> L-1 work visas.
>
> Confronted with inconvenient facts, outsourcing's apologists moved to
> the next level of fantasy. Many technical and engineering jobs, they
> said, have become "commodity jobs," routine work that can be performed
> cheaper offshore. America will stay in the lead, they promised,
> because it will keep the research and development work and be
> responsible for design and innovation.
>
> Alas, now it is design and innovation that are being outsourced.
> Business Week reports ("Outsourcing Innovation," March 21) that the
> pledge of First World corporations to keep research and development
> in-house "is now passe."
>
> Corporations such as Dell, Motorola, and Philips, which are regarded
> as manufacturers based in proprietary design and core intellectual
> property originating in R&D departments, now put their brand names on
> complete products that are designed, engineered, and manufactured in
> Asia by "original-design manufacturers" (ODM).
>
> Business Week reports that practically overnight large percentages of
> cell phones, notebook PCs, digital cameras, MP3 players, and personal
> digital assistants are produced by original-design manufacturers.
> Business Week quotes an executive of a Taiwanese ODM: "Customers used
> to participate in design two or three years back. But starting last
> year, many just take our product."
>
> Another offshore ODM executive says: "What has changed is that more
> customers need us to design the whole product. It's now difficult to
> get good ideas from our customers. We have to innovate ourselves."
> Another says: "We know this kind of product category a lot better than
> our customers do. We have the capability to integrate all the latest
> technologies." The customers are America's premier high tech names.
>
> The design and engineering teams of Asian ODMs are expanding rapidly,
> while those of major US corporations are shrinking. Business Week
> reports that R&D budgets at such technology companies as Hewlett
> Packard, Cisco, Motorola, Lucent Technologies, Ericsson, and Nokia are
> being scaled back.
>
> Outsourcing is rapidly converting US corporations into a brand name
> with a sales force selling foreign designed, engineered, and
> manufactured goods. Whether or not they realize it, US corporations
> have written off the US consumer market. People who do not participate
> in the innovation, design, engineering and manufacture of the products
> that they consume lack the incomes to support the sales infrastructure
> of the job diverse "old economy."

But why is it that so few people understand
something which stares us all in the face and
has done for a quarter of a century?

D.

> "Free market" economists and US politicians are blind to the rapid
> transformation of America into a third world economy, but college
> bound American students and heads of engineering schools are acutely
> aware of declining career opportunities and enrollments. While "free
> trade" economists and corporate publicists prattle on about America's
> glorious future, heads of prestigious engineering schools ponder the
> future of engineering education in America.
>
> Once US firms complete their loss of proprietary architecture, how
> much intrinsic value resides in a brand name? What is to keep the all-
> powerful ODMs from undercutting the American brand names?

Of course, they will. I've seen similar
sequences occur several times in the last forty
years. It is the next natural step for them.

D.

> The outsourcing of manufacturing, design and innovation has dire
> consequences for US higher education. The advantages of a college
> degree are erased when the only source of employment is domestic
> nontradable services.
>
> According to the Los Angeles Times (March 11), the percentage of
> college graduates among the long-term chronically unemployed has risen
> sharply in the 21st century.
>
> Misled by propagandistic "free trade" claims, Americans will be at a
> loss to understand the increasing career frustrations of the college
> educated. Falling pay and rising prices of foreign made goods will
> squeeze US living standards as the declining dollar heralds America's
> descent into a has-been economy.
>
> Meanwhile the Grand Old Party has passed a bankruptcy "reform" that is
> certain to turn unemployed Americans living on debt and beset with
> unpayable medical bills into the indentured servants of credit card
> companies. The steely-faced Bush administration is making certain that
> Americans will experience to the full their counry's fall.
>
> -----------------
>
> Paul Craig Roberts was Assistant Secretary of the Treasury in the
> Reagan administration. He was Associate Editor of the Wall Street
> Journal editorial page and Contributing Editor of National Review.
>
>
>
> ..............
>
> -=-
> This message was sent via two or more anonymous remailing services.
>
>
>
>

Nice piece.

D.



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