13. End Outsourcing and Currency Manipulation

End Outsourcing and Currency Manipulation. Subject to the elimination of corporate tax loopholes and exploited exemptions and deductions as stated in grievance five, tax incentives will be permitted to entice businesses to hire our citizens rather than outsource jobs. Conversely, an “outsourcing tax” should be introduced to discourage businesses from sending jobs overseas and companies that continue to outsource will be barred from earning income in U.S. markets.

Tax incentives should also be offered to U.S. companies that invest in reconstructing the manufacturing capacity of the United States and hiring our citizens to produce and innovate. This country must again competitively manufacture everyday products in the United States rather than importing them from countries like China and India. 

To do business in the United States and gain access to the world’s largest and most lucrative market, corporations must make slightly less profit by hiring American workers and paying them a living wage rather than maximizing every penny of profit to the detriment of our society. 

Congress must implement legislation (see e.g. H.R. 639) to encourage China (which undervalues its currency, the Renminbi, by an estimated 40%) and our other trading partners to end currency manipulation and reduce the massive trade deficit. China’s access to U.S. markets should be replaced with U.S. companies until they are in compliance with trade and currency agreements.

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Showing 18 reactions

chuck gregory commented 2012-03-13 17:40:16 -0700 · Flag
Quite right, Megan.

At the beginning of the Industrial Age, when America was just starting, there was a contention between the agriculturalists and the manufacturers. Farmers wanted low tariffs on imported goods because they needed them; the nascent manufacturers wanted high tariffs to force the farmers to buy domestically manufactured goods, thereby encouraging the development of American manufacture. The latter won out, leading eventually to America being the armametorium of World War II and a manufacturing innovator par excellence for at least a decade beyond.

Manufacture is still the foundation of the wealth of a nation; Adam Smith will not go out of date yet!

But what is needed is to dump all the “free trade” agreements or at least modify them after determining just what sort of manufacture is appropriate to our future. Then we inaugurate trade, monetary and fiscal policies to pursue those goals. Clearly, the manufacture of items that reduce pollution, improve the general welfare and respect the ecosystem would be more desirable than some others.
Megan Frazier commented 2012-03-13 17:31:38 -0700 · Flag
These manufacturing jobs are not coming back-and for a good reason! Most of these jobs require more than a high school education but less than a bachelors, meaning that the US really isn’t producing the kind of workers companies like Apple, HP ect. need to make their products. Let’s not eat yesterday’s stale leftovers and focus on job creation that maximizes our current skills!
Tashia Berman commented 2012-03-11 15:10:34 -0700 · Flag
There already is an incentive for companies to invest in new equipment, perhaps this could be expanded. I don’t think you’ll have to give much incentive to end outsourcing to China however.

You see capitalism has its own effects that the Chinese thought they were immune to, but have now learned differently. No more are Chinese workers content to sit in the dirt outside with no heat or air conditioning, working long hours for pennies per day. Oh, no, now they want state of the art facilities with heat and air and bathrooms — all the modern conveniences. No longer are they content to ride their little bicycles around and take public transportation on long trips home over Chinese New Year. Oh, no, now they want to own cars and homes and they really don’t even want to go back after Chinese New Year.

Companies who moved to China for cheap labor, willing to take a little poor workmanship for the high labor savings; willing to build factories that belong to the Chinese government in exchange for little or no environmental regulation; willing to put Americans out of work to exploit their Chinese counterparts and willing to pay huge sums to re-import goods made there to sell here are dealing with a new reality. Their workers want better conditions. more benefits and more pay, along with bonuses just to come back after Chinese New Year.

Suddenly, it begins to look better, more patriotic and more economical to make a better product, on American soil, providing jobs to American workers and not having to ship the items in from China. Manufacturing will be coming back to our shores, but with new technology, retooling with robotics and computerized quality control systems and inventory tracking systems. We will definitely need more trained workers, but probably not much in tax incentives. The incentive is already there!
Ramsay Grove commented 2012-02-29 00:06:04 -0800 · Flag
“companies that continue to outsource will be barred from earning income in U.S. markets.”

I am slightly concerned about this stipulation, I think there should be incentives for companies not to outsource but to outright barre them from earning income seems a bit tyrannical. We should be trying to build a nation that is fair and competitive, not one that hands out punishments for running their business intelligently. If a business is given the right incentives this kind of punishment should not be required, if it still makes business sense to send a job overseas then we need to look at why that is not just hand out blind punishment. Not all companies that send jobs overseas are swimming in profit, some do it so that the business can survive.
Timothy Price commented 2012-02-25 07:31:28 -0800 · Flag
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Nathan Duncanson commented 2012-02-23 20:04:48 -0800 · Flag
If we end the international trade in currency, then individuals and businesses that wish to do business in other countries (or foreign businesses doing business in our country) they would have to exchange real goods and services – not money – between each other. Do this would automatically force balanced trade.

As it is, the U.S. actually benefits from the trade imbalance. We send money oversees and receive back real goods and services. Of course, the flip side is that the money disappears into foreign hands, who then invest it in commodities, stocks, bonds, U.S. Treasury notes, etc…
David Abplanalp commented 2012-02-23 11:15:18 -0800 · Flag
I would propose a " Staggered Pegged Tariff" to compensate for China’s, and any other countries curency manipulations. The concept of the pegged tariff is to brigde the difference between the US Dollar and the Chinese Yuan, that the market cannot account for. Also, staggering it, so it resets to new rates upon a random day every month would frustrate any efforts to artificially re-ajust their currency to compensate for the pegged tariff.

This has the added benifit of turning the difference in currency pricing into income, while raise cost of manufacturing in in nations that participate in currency manipulation. This should draw back some manufacturing.
Gary Wiseman commented 2012-02-22 18:18:52 -0800 · Flag
I agree with the amendment. Manufacturing is what made the middle class and outsourcing is killing it. All efforts must be made to bring manufacturing back to America, including penalizing companies that benefit from U.S. tax laws or markets that don’t employ American workers.
Terry Irwin commented 2012-02-22 15:30:22 -0800 · Flag
In Art 13, Paragraph 3, I would prefer:“corporations must hire American workers and pay them a living wage…” and drop “must make slightly less profit by” Let them figure it out. People who make ample salaries are often more productive.
Jeffrey McCollim commented 2012-02-20 17:06:52 -0800 · Flag
In regards to our trade imbalance with China, increase our tariffs to 25% on their goods, which is their tariff on our goods.
As for multinat’ls HQ’d in the U.S., apply tariffs or increase tariffs on their goods exported to the U.S.
John Lockette commented 2012-02-19 18:31:50 -0800 · Flag
@ chuck gregory – I disagree that the signers of the Declaration of Independence were merely stating what was unacceptable and they did not propose or state any solutions. In fact, they advanced two major solutions – elevating the colonies to the level of free and independent states and dissolving all ties to the British monarchy. At the same time, however, I agree with your sentiment that getting too specific in advancing too many solutions could create roadblocks in terms of gaining support for the cause.

Therefore, I suggest that we should stick to two or three paramount issues. I would argue that eliminating the influence of money in politics, instituting terms limits, and reforming some of our election practices are the bare minimum. All the other areas can be fixed if we the 99% can regain control of our democracy and our government through the enactment of new rules in those three areas. Essentially, that means going with #’s 2, 4, and 17.
Sam K commented 2012-02-19 14:46:19 -0800 · Flag
Response to Hikaru, Part 2:

The idea of spreading opportunity fairly is an ideal that undergirds the OWS/99% movement, and it applies not only here in the US, but it is in fact a universal ideal that applies to the entire global human society. All human beings are children of the same mother nature.

What we in the US need to ask for is that our trade in goods and services (“outsourcing”, as is usually connoted, comes under trade in services) be balanced. Doing balanced trade with other countries helps our economy, as well as gives an opportunity for developing countries to emerge out of poverty. Our trade with India is small and relatively balanced in both goods and services, and is mutually beneficial to both countries.

To be continued with some data..
Sam K commented 2012-02-19 14:44:07 -0800 · Flag
@Hikaru Maxwell (2012-02-19 03:28): ‘I still think we seriously need to stop outsourcing to India, though.’

Response, Part 1:

Why Hikaru? Isn’t such an attitude against the very SPIRIT of the OWS/99% movement? What about the “99.99% of the world?”

Don’t the poor and less fortunate of other countries have a right to participate in the global economy and thus have a chance to rise out of poverty? Thanks to colonization, India was reduced from a GDP co-leader (which it was from 0-1700 AD), and a place where the decimal number system, arithmetic and bunch of other important discoveries were made (not to mention that Ancient India is one of the possible original sources of Indo-European languages, which include English and Spanish), down to one of the poorest and illiterate countries in the world.

India has struggled over the past 65 years to lift its literacy rates from 10% up to about 70% now. Still about half of Indian people are dirt poor, earning less than $1 a day, and about a third of the Indian population has no access to electricity. It may surprise people that in 2010, India’s per-capita nominal GDP, about $1000 (compared to about $48,000 for the US, and about $9K for the workd average), was less than that of the African aggregate (mainly because Africa has more natural resources than India does after colonial occupation). Being able to participate in the global economy will enable India and other poor countries to eventually lift its hundreds of millions of masses out of poverty.
chuck gregory commented 2012-02-19 03:36:58 -0800 · Flag
When the revolutionaries drafted the Declaration of Independence, they did not propose specific solutions; using a radical philosophical framework, they stated what was unacceptable . If they had demanded a federal system of government, the United States would never have happened; they would have been abandoned by the public as they sank into a quagmire of quibbling over details. While the goal is admirable, to propose solutions instead of defining the problem (as the Declaration of Independence did) is to undercut the purpose of the movement. They

If you want people to rally to your side, do as was done in the Declaration of Independence and clearly state the problem rather than offer the solution. Solutions are much better after people deal first with defining the problem.
chuck gregory followed this page 2012-02-19 03:36:54 -0800
Hikaru Maxwell commented 2012-02-19 00:28:41 -0800 · Flag
I still think we seriously need to stop outsourcing to India, though. Especially with customer service or incoming sales. (If I had a penny for the number of times I’ve called my cellphone/internet/etc company for a customer service, billing, or even sales call, and heard someone from India I could barely understand, I’d be able to buy a small farm by now.)
Sam K commented 2012-02-17 18:42:13 -0800 · Flag
‘rather than importing them from countries like China and India.’

We actually don’t import much from India.

While our trade deficit with China in 2011 was $295.5 billion (an all time record for a single country), 40.7% of our total trade deficit of $726.3 billion, that with India was only $14.5 billion (2% of the total).

Census trade data for 2011: is.gd/gtd2011a
China trade data (1985-present): is.gd/gtdchn
Maria Cadwallader commented 2012-02-17 16:41:13 -0800 · Flag
I think I agree. However, I think we need a whole lot of trust busting to make this work. Corporations are just too big.
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