Responding To Reader Email: Outsourcing And Term Limits

I received a rather heated email from a reader of my political writing on my blog that expressed a couple of things I thought I would answer publicly. I should note that “local” for the email writer is not North Dakota.

“If you cut a tree down you have to replace it”…….. I was appalled to find out that 60% of our local unemployment is due to “Outsourcing”…Charbroil makes BB grills for half the world under private labels etc … they shut down and pushed 700 people into the streets ..no they did not quit making grills they outsourced to China. If you out source and take jobs away from Americans then you should pay an import tax strong enough to discourage outsourcing.
Term Limits……No more than 2 terms ..8 years….Fresh blood brings in new ideas, something we are missing! The day of the career politician should be eliminated, because they lose sight of what they are in DC for.

The reason jobs get outsourced is because the cost of doing business becomes cheaper elsewhere (outside the U.S.). It’s not simply that Chinese workers get paid less. It’s that the taxes, building costs, permit costs, regulatory hoops, and union requirements are all more onerous here than there (China in your example).
All that would be accomplished by raising import tariffs is that tariffs on American products exported to China (again, in your example) would increase and the cost of those grills would rise to offset the cost of the tarriff.


Corporations don’t pay tarriffs — the consumer does, in increased prices.

I agree that we should discourage outsourcing. The way to do that is to remove federal barriers to building a business. That certainly doesn’t mean 100% deregulation or the elimination of corporate taxes. But it does mean not tiliting the game away from business and towards state and federal tax coffers, unions, and trial lawyers to such an extent that outsourcing becomes the sanest business decision.

As for term limits, I’m on the fence, though I generally lean to the same side as you. Generally I think they would eliminate a lot of the complacency and bed-sharing that goes on as long-time incumbents get comfortable partnering with special interests. My qualms with it are twofold:

First, I don’t know if there are Constitutional questions about limiting terms that would need to be dealt with. I’m not a Consitutional lawyer.

Second, part of me feels that citizens can vote for whomever they want; term limits would remove that ability. If the citizens of Massachussetts want to send Scott Brown to the Senate for the next thirty years, they should be able to. If he becomes entrenched in the same nest-feathering as most of his counterparts, at some point the onus falls on the electorate to “vote the bum out” as it were. In some sense I see term limits as a copout for a disinterested electorate.

That said, I still lean towards agreement with you on this topic if only because there are so few examples of public servants above the local level that are in the job for the right reasons. They get elected to represent their constituents. At some point, they all seem to become more enamored of keeping the job and securing as much compensation as possible, from whomever will provide it.

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  • http://Array robert108

    While it is inaccurate to say that China’s currency is “attached directly to ours”, it’s not free to float in the world market, and so China can manipulate prices to be lower than they would actually be for export, thus giving them an unfair advantage. Unfortunately for Chinese workers, that policy makes them virtual slaves and erodes the fiscal strength of their citizenry, which is what has made our free enterprise system so successful: the fiscal strength of ordinary Americans.
    China’s currency game is their own version of protectionism, not for ordinary Chinese, but for the favored groups withing their country.

  • jimmypop

    “Second, part of me feels that citizens can vote for whomever they want; term limits would remove that ability.”

    if that was the case, ron could very well still be our president.

  • sayanything-4625

    Bat its a whopping helping of both!

  • sayanything-203

    In this day and age, when even a high school sophomore should be aware that the Smoot-Hawley tariff turned a moderate recession into the world-wide Great Depression, even now we have dolts like this pleading for protectionist legislation, in the midst of yet another deflationary recession?

    We are either spending way too little on basic education… or way too much on voter registration.

  • Myron Floren

    Repeal the 17th Amendment and term limits are a moot point.

  • robert108

    WalMart would still give us the best deal available. You also forget that cutting way back on govt overhead(taxation/regulation) would give us all better prices on US made goods. Better for everybody but the greedy unions.

  • jimmypop

    “The goal should be to quit giving places like China a competitive advantage by heaping huge amounts of tax/regulatory/compliance burden on our businesses here.”

    the problem we have is their currency is attached directly to ours. the yaun needs to trade on its own… if it did, wed quickly find we could no longer afford to buy much of what walmart sells.

  • sayanything-5633

    Rob, in regards to protectionsim, you’re right on. On the question of term limits, I used to be firmly opposed, with the philosophy that we already have term limits in place. Every four years, or however long their term is, they must face a reelection. That’s a term limit.

    But I now realize that the founder’s oringinal plan is fundamentally corrupt now that progressives have had over fifty years to dumb down Americans and turn them into hopelessly disengaged dupes who will mindlessly reelect the familiar face, giving no thought to the actual performance or agenda of the candidate.

    I fear that term limits is our only hope since it will be almost impossible to educate the millions of people whose philosophy is; “I’m here fo some Obama money! He goin’gimme some Obama money!”.

  • sayanything-203

    Haiti?

  • Jim

    I recommend the writer read this book – Economics in One Lesson by Henry Hazlitt or he/she can get the notes here – http://jim.com/econ

    Rob, your point are right on. People in China make lower wages but the cost of living is much lower too. The cost of doing business is a fraction of the cost in the US. Regulatory compliance cost/employee in the US is $7,000. Amortize that to your barbecue!

    I support free trade, if a product I buy can be made and costs me less in another country, that leaves me with extra cash that I can use for other investment or consumption.

  • studakota

    Some time ago, during the Bush era, a proposal was floated which would allow some part, or all, of one’s Social security contribution to be invested directly into the stock market. During the present economic troubles I’ve heard the argument, usually from a Nanny Stater, as to how fortunate we were not to have done that, or our losses would have been even greater. But wait, had we been invested in Fannie Mae, or AIG, or any number of vastly over- leveraged enterprises, wouldn’t we, the stock holders, have put the brakes on the risky investments we’d read of right there on our yearly reports. I rather think we would have, and in so doing, perhaps prevented some, maybe all, of the very practices which caused the economic catyclysms. Another, broken, law of unseen consequences ,perhaps.

  • sayanything-39096

    Oh noh another earchquake hits Haiti.. Not only Haiti country ar suffering but only the world world. Other countries try to help the victims of Haiti. Hope they will recover. Sikat ang Pinoy

  • robert108

    If doing business were only about the price of labor, there would be few businesses in the US, or in any other developed country, for that matter. As Rob said, it’s largely about overhead costs imposed by greedy govt taxes and restrictive regulations, not about the relative price of labor.
    As far as term limits is concerned, that’s up to the voters, IMO. I think we should not re-elect any politicians for at least a ten year period, which would change the type of person who runs for elective office, IMO. It’s foolish to expect the legislators to voluntarily restrict their own power, through enforcement of any sort of term limits.

  • sayanything-13

    My only fear with term limits is that it could replace politicians who seek to be entrenched for life, stuffing their pockets with filthy lucre, with politicians who spend their terms trying to “make it big” before they have to give up their office.

    If we elected people of character, that’d be a moot point.

    Cf

  • http://sayanythingblog.com robport

    I support free trade, if a product I buy can be made and costs me less in another country, that leaves me with extra cash that I can use for other investment or consumption.

    Exactly.

    Personally, I think the fact that I can stroll down the aisle of the smallest store in the most rural part of the country and choose from among products made all over the world is a testament to what made this country great.

    Namely, freedom. And free trade.

  • sayanything-32073

    The beginning of the collapse was Fannie and Freddie. Between politicians raiding them for campaign money and them having to pony up on bad loans that congress forced banks to make, they drug the whole financial world down. Now they have a blank check from the idiots in charge to continue to do the same. Also the community reinvestment act is still forcing banks to make bad housing loans setting up the whole thing to repeat itself.

  • http://sayanythingblog.com robport

    I think the one thing protectionists tend to forget is that when markets seek the lowest prices, that’s a win no matter how you try to slice it.

    So when a company finds that it can offer its goods more cheaply in the market by having them made in China, that’s a win for consumers who get to enjoy those lower prices and see their purchasing power go further. If we cut off trade with some place like China, we’re hurt because prices go up and our purchasing power goes down.

    The goal should be to quit giving places like China a competitive advantage by heaping huge amounts of tax/regulatory/compliance burden on our businesses here.

  • sayanything-32073

    The protectionist, buy American, people are wrong. It is a world market already and we only hurt ourselves by restricting markets with tarriffs, etc. I agree that we should remove most govt burdens on businesses here so that they can compete in the market. Unions need to realize that they are hurting their own members when they kill businesses!

  • http://sayanythingblog.com robport

    the problem we have is their currency is attached directly to ours. the yaun needs to trade on its own… if it did, wed quickly find we could no longer afford to buy much of what walmart sells.

    That…doesn’t make much sense. What China does with its currency is irrelevant. And while our monetary policy certainly has an impact on our purchasing power, within the confines of this topic protectionism has an inflationary value of its own.

    In that it inflates prices by prohibiting the sort of competition that keeps prices low.

    Regardless, I think we all agree: Less government involvement in all levels here leads to healthier trade and a healthier economy.

  • spartacus

    Any bets one where SEIU (or any other unions) hats & tee shirts are made?

  • mionavmanspirits500thf

    Rob, your point are right on. People in China make lower wages but the cost of living is much lower too. The cost of doing business is a fraction of the cost in the US. Regulatory compliance cost/employee in the US is $7,000. Amortize that to your barbecue!

    Mio Navman Spirit S500THF

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