North Dakota’s Senator Byron Dorgan released a book this year concerning the problem of outsourcing. The title of the book is “Take This Job And Ship It: How Corporate Greed and Brain-Dead Politics Are Selling Out America.”
A new study has just come out that disproves Dorgan’s contention that it is corporate greed or conservative politics that is driving manufacturing and other jobs offshore. What is driving them out is Byron Dorgan’s policies of high taxes, easy lawsuits and wacky environmentalism.
We have now climbed to a nearly 32% cost disadvantage with the rest of the world. This means that in three short years our cost gap with our international competitors has risen 43%. Not only is there a cost disadvantage with all of the competitors studied, but there’s a cost disadvantage with each of the competitors used in the study. Every one.
The major culprits in terms of costs?
-- We have the second highest corporate tax rate in the world. Fully a third of the cost disadvantage is owing to our corporate tax rates. Six out of 9 of our competitors have lowered their tax rates since our last study. Said NAM President John Engler, “By standing still, we are falling behind.”
-- Our tort costs are the highest in the world. Our tort costs exceeds the GDP of each of these countries.
-- Our pollution abatement costs are the highest in the world;
-- Natural gas prices rose. This is ironic since we sit on 420 trillion cubic feet of it, but 85% of that supply is subject to a federal moratorium. In other words, what was an asset for us in the 90’s is now a liability in terms of costs. No other country would sit on a reserve like this and not tap it;
--- Health and pension benefits added a little over 1% to the increase in the cost gap.
I think it’s a great thing that the market has seen to it that American workers get a high wage. I fully believe that all things being equal the American worker can produce enough to compete in the world market (or at the very least the domestic market) even at those high wages.
What the businesses can’t control is the socialistic impulses of politicians like Byron Dorgan. Senator Dorgan has worked to keep corporate tax rates as high as they are. Senator Dorgan has worked to block tort reform, (likely because of the huge money they donate to his campaigns). Senator Dorgan has done everything he could to keep us from developing domestic energy sources while mouthing platitudes about energy independence.
Everyone one of these problems is caused by politicians like Byron Dorgan. How can US companies compete when their costs are artificially boosted 32%? Byron Dorgan could be part of the solutiion but he’d rather play his class warfare games and accuse businesses of “greed.”