Categorized | Economy

Vote for Reshoring in Economist Poll

Share on FacebookTweet about this on TwitterShare on Google+Share on LinkedInShare on RedditDigg thisShare on StumbleUponBuffer this pagePin on PinterestShare on TumblrEmail this to someone
Make sure to vote for reshoring in this online debate at The Economist website.  CPA supporter Harry Moser is arguing that multinationals should maintain a strong presence in their home countries.  Harvard Professor Jagdish Bhagwati opposes that position.

13 Responses to “Vote for Reshoring in Economist Poll”

  1. Hugh Campbell says:

    Do U.S. Multinationals Have a Duty to Balance America’s Competitiveness with Their Own?

    Moser’s opponent argues that: competitiveness is hardly likely to be undermined by multinational corporations investing abroad.

    Since 1997, with multinational corporations able to defer paying U.S. income tax on overseas earnings, multinational corporations investing abroad has undermined America’s competitiveness, perhaps more than any other single factor. Al-Qaeda’s central aim in its war on the United States is to bleed America to the point of bankruptcy. If you view offshoring and outsourcing as weapons of economic destruction aimed at America, please vote yes in the debate that U.S. multinationals still have a duty to America.

    • W. Raymond Mills says:

      Mr. Campbell. Please imagine our world if U.S. corporations had not invested abroad. I know the answer to that depends upon whether the U.S. government would have continued support for free trade. If our government had not changed its trade policy, and U.S. firms had kept production at home, America’s competitiveness would have been worse than it is today.

      In my opinion U.S. corporations in 1983-1986 had a choice – do I move production overseas or do I join with other domestic corporations and try to persuade the U.S. to make a 180 degree turn and support balanced trade rather than free trade. Our traditions of every man for himself and distrust of government led the CIO’s to support free trade and find their own way to profit in that environment.

      There are many more domestic firms alive today and providing some jobs in the U.S. than their would have been had they refused to move production overseas.

      The public and the officials we elect control public policy. If our rules do not properly circumscribe the limits of legal action by corporations, we need to write some new laws.

      • Hugh Campbell says:

        Mr Mills, It appears that the Economist practiced a push-poll technique by selected the word “duty”, as an investor, I would rephrase the question, as follows” Are multinational corporations practicing enlighten self-interest by maintain too weak a presence in their home countries?” If the Buffet balanced trade model was adopted in the United States, U.S. multinationals would be faced with significant impairment write-downs on their oversea investments.

        The fat lady hasn’t song yet on offshoring. U.S. multinational CEO’s blind-trust in offshoring and the governments of some of our trading partners is analogous with U.S. leaders trusting Osama bin Laden to defeat the Soviet Union in Afghanistan.

        • W. Raymond Mills says:

          Mr. Campbell keeps coming back to his point that corporations are not making good decisions when they locate factories overseas. They are not using “enlightened self interest”.

          Magazines such as The Atlantic, Bloomberg News and The Economists have recent articles discussing the return of SOME factory activities to the U.S. They all hope that the trickle will become a flood. I hope so too. The articles all agree that enlightened self interest is the reason for the return. (Vindicating Mr. Campbell, in one sense).

          My view is that this trickle will go on and reach one level if U.S. policy remains unchanged and will reach a flood only if the Congress and the President reverse course and change U.S. trade policy to seek balanced trade for ourselves and for all other trade deficit nations that see their enlightened self interest as requiring balanced trade (or as close as we can get to it).

      • Joe Brooks says:

        “In my opinion U.S. corporations in 1983-1986 had a choice”

        Actually Ray, most did not have a choice. Many fought tooth and nail, to survive. As usual, the reason they did not survive here, was and is, our own government.

        Since I was already engaged in exposing Federal idiocy, I watched the leveraged buyouts and literal destruction of thousands of viable American companies, by hostile takeover.

        Many were foreign investors.

        When T. Boone Pickens arrived in Japan around 1995? after looting so many US companies, the Japanese government met him at the airport, told him politely to get out, and he left.

        http://modernhistoryproject.org/mhp?Article=BushBook&C=19.0#Vampires

    • Tom T. says:

      Hugh, this problem could easily be solved by a tax on timed earnings. If a stock is listed on the U.S. stock exchanges or domiciled in the U.S., for example, and earnings are not being repatriated, an additional fee of 2 percent per year of earnings of the tax owed could solve this problem in a jiffy. I just made up the 2 percent and there is probably a better number based on studying the issue but you get the drift. This is a policy change by our government to take care of the problem of not repatriating profits. There could be a 2 percent duty on any products coming from overseas by companies that do not repatriate profits in a timely fashion.

      The issue of American Competitiveness based on our wacky system of not having any kind of tax on imports when running trade deficits is a government policy problem and should be solved by the government.

      I was in a similar discussion on another issue with a tea party activist. I talked to him about Warren Buffet’s opinion that we needed to tax “the rich” more to pay for the government we have. He stated that if Warren Buffet wanted to pay more taxes to help the nation’s balance sheet get in order then Warren Buffet could do that. I asked him if he thought that meant that taxes should be voluntary for everyone.

      If multinationals are doing ANYTHING that is not in our nation’s interests, like scabbing labor around the world, polluting other parts of the world, or taking advantage of a country manipulating their currency to get the lowest production costs, then OUR GOVERNMENT should do their job in protecting OUR economy.

      Having China threaten the U.S. dollar because they are being called on their methods is a direct threat to our world order. They have the ability to threaten us because we allowed our trade deficits get out of control and have allowed dollars to be captured by their government.

      Private companies should not have the power the question implies. I say that competent trade policy is the solution to the incompetent policy our nation has had in the last decade. Asking companies for loyalty oaths because government can’t or won’t do its job means that the people who have been governing the country have been utter failures. It is about like, as someone above implied, asking consumers to buy American because our policy makers have failed the nation.

      Tom T

      • Hugh Campbell says:

        Tom, See my reply to Mr. Mills. There is a huge gap between duty and enlighten self-interest. What the U.S. multinational have engaged in, i.e., buying the policies that have failed our nation is not sustainable. In the book I.O.U.S.A. Warren Buffett warns that persistent trade deficits may create real political instability down the line, and increase the possibility that demagogues come along, with very superficial arguments and do some very foolish things.

        Hugh

        • Tom T. says:

          Hugh, I see your point. I guess I believe that if our government actually governed for the public interest instead of the corporate interests, the question would be moot. There would be write downs of the out sourcer’s assets as policy changed to protect the national interests and veered away from corporate interests. This move would once again align the interests of shareholders with the interests of the nation they live in. It would, of course, mean that the investment bet into other countries in the Koom Ba Ya ideology was a bad investment if it relied mainly on the manufacturing in other countries and the markets remaining in the U.S.

          It is a function of actual governance to decide the policy that is best for the nation irregardless of how it affects the 1% and their interests.

          I wholeheartedly support China moving to a market economy but I detest the fact that China is still dependent on U.S. markets and has not developed their own demand. Instead, they rely on U.S. demand. This is one of the problems with manipulating the currency so much and not having a floating currency with economic benefits spreading evenly throughout the economy and instead being concentrated. With a floating currency, the relative currencies adjust to fix the trade deficit. As China gets too many dollars, they become less valuable to the Chinese who own those dollars. This would be the result of a floating currency and free market conditions. We have neither in our trade with China. The benefits of the economy are concentrated in their 1% who are all members of the Communist Party. I wish all the success in the world to the Chinese people. I want them to succeed as much as any American but this can not happen under the current conditions. We are basically playing a game of chicken with the U.S. government being directed by their 1% and the Chinese their 1%. Both need to stop this no win game before, as Buffet claims, there is a more ominous ending. I don’t think we need to let this decision rest with the 1%.

          I think we have to look at the situation and decide that corporate and public interests have diverged and we have to make the appropriate policy changes irregardless of the hurt on foreign suppliers. I agree with Warren Buffet that persistent trade deficits will increase the possibility of war in future years and one that no one will win (except maybe the war profiteers).

          Enlightened self interests should be forced on an unsustainable system through government policy, not simply asking investors to “do the right thing”. They won’t as long as the incentives are there to do the wrong thing. Those incentives need to change.

          I think you and I are on the same page, so to speak, on this issue, so thanks for engaging in the discussion so that we can voice the underlying points. The question by “The “Economist” is very useful in that regard.

          Tom T.

  2. Hugh Campbell says:

    Mr. Moser mentioned Ricardian comparative advantage, but most Ricardian have failed to check the context which David Ricardo used the phrase comparative advantage, which follows:

    In Chapter 19 of the 1817 classic On the Principles of Political Economy, and Taxation, David Ricardo identified, in addition to war, removal of capital and a new tax as destroyers of the comparative advantage which a country before possessed in manufacturing. Since offshoring encompasses the removal of capital, is there little wonder that the free trade has failed to benefit all parties?

  3. Hugh Campbell says:

    Is Poor Corporate Citizenship Becoming a Reputation-Risk Time Bomb?

    Number 8 one Compliance Weeks Top 10 Global Compliance Trends to Watch in 2013, follows:

    8. Shareholder Spring 2.0. Stung by criticism that they sat on the sidelines before the financial crisis, European shareholders started to throw their weight around in 2012. The so-called “Shareholder Spring” left several companies embarrassed as their executive pay plans were voted down. Focus this year could turn to how much tax companies pay. The U.K. Parliament accused Amazon, Google, and Starbucks of an “immoral” use of secretive jurisdictions, royalties, and complex company structures to avoid paying tax on British profits. Shareholders don’t have a vote on tax policy, but 2013 could be the year that clever tax planning becomes a reputation-risk time bomb.

    http://www.complianceweek.com/top-10-global-compliance-trends-to-watch-in-2013/article/272941/

  4. Hugh Campbell says:

    Does anyone else read the winner announcement, which follows, as the Economist having a hard time with the debate result, given their apparent bias of “free trader to the end!”:

    This has been a closely fought debate, and for most of the time it looked as if Jagdish Bhagwati would prevail, with voting in his favour at around 54%. He robustly defended globalisation as practised by multinational corporations, and conclusively answered each point made by his opponent, Harry Moser of the Reshoring Initiative. Nonetheless, in the end the voting suddenly swung narrowly in Mr Moser’s favour. This is a surprising result, given that a large slice of Economist readers can be assumed to be strong believers in the benefits of a global economy, and the idea that companies owe a duty to somewhere called “home” counters that.

    But Mr Moser’s side prevailed in the end. This doubtless reflects not only his arguments in favour of reshoring to America but a broad angst about the country’s economic future. I would like to thank both of our debaters for their contributions, and thanks especially to Mr Bhagwati for bringing trade theory to life with wit and good humour. It has been particularly striking to note the quality of comments from the floor of our debate. We heard from several people who have direct experience of how companies manage their global footprints. For multinationals the message is clear; choices about where to locate deserve careful consideration.

    • maggie says:

      Yes I read the winner announcement, and it says it all, that the Economist magazine is all about propaganda and not about investigative journalism or the facts.

      • W. Raymond Mills says:

        Lots of people on this blog agreed with Harry Moser that multinational corporations domiciled in this country should maintain a strong presence in this country.

        Nobody has answered my question: Why make it harder to sell products in the U.S. manufactured overseas by a subsidiary of a domestic company when products made overseas by a subsidiary of a corporation domiciled in Japan, Germany or China does not have to meet that restriction? (The restriction in question is “strong presence” in the U. S.. If you want to require a “strong presence” in the U.S. for any company to sell in the U.S., I COULD SUPPORT THAT).

        We live in a competitive world. Don’t ignore that. A proper response to our trade deficit is to add tariffs to all goods manufactured in Japan, China and Japan. NOW THAT WOULD HELP DOMESTIC CORPORTIONS.

        As a second point, I recoil against lack of specific determination as to whether that “should” is to be backed by penalties enforced on evaders or if it is just a recommendation that makes us feel good to be ignored if corporations so choose.

Trackbacks/Pingbacks


Friends Don’t Let Friends Buy Imports

Sign up to receive periodic updates

Frequency