Economics of Outsourcing

Interesting stats ... reprinted from a quiz on Yahoo Finance.

Each dollar that a US company spends on outsourcing a service job to India generates an estimated 1.13 USD in net value for the US, according to a recent study in the current edition of the Milken Institute Review (reg. req'd). The study also estimated that India gains 0.33 USD in net value from local wages, profits earned by local outsourcing companies and their suppliers, and taxes collected from all the local companies involved in the operation.

The net value generated by the outsourcing is returned to the US through several different channels. The outsourcing company can immediately recognize cost savings through lower wages, and many companies have seen additional cost savings from efficiency gains. US consumers benefit from the resulting lower prices. Outsourcing can also boost US exports to India, as the company builds the infrastructure to support the outsourced jobs. The Milken Institute points out, "A call center in Bangalore is likely to be filled with HP computers, Microsoft software and telephones from Lucent, and to be audited by PriceWaterHouseCoopers." The newly employed workers also have more money to spend on goods imported from the US. In 2003 the US exported 5b USD to India, an increase of 1.3b USD from the 2000 total.

While the outsourcing of jobs has become a hot-button issue for politicians and business leaders alike, a new study indicates that the actual impact on US workers is not as drastic as some may believe. A report by Lori Kletzer, an economist at the University of California Santa Cruz, studied the impact on American workers of non-manufacturing job loss due to free trade. Professor Kletzer found that between 1979 and 1999, 69% of US workers who lost a non-manufacturing job due to free trade found a new job within one year with an average salary equal to 96% of their prior job.

Jus' Say No to Martha!

So Martha Stewart's tipped to do a reality show for NBC. Great, another celebrity who is rewarded for infamy. This is the woman who committed FRAUD and got thrown in jail for it, made ridiculous comments to the effect that she was in the same league as Nelson Mandela (hang her for blasphemy!) and now she will make tons of money for it all. Oh yes, I do understand she was no Enron or Global Crossing, but her fraudulent ways cost tons of shareholders a lot of grief, not to mention life savings.

I think 5 months is justified punishment ... heck, I could even live with her not getting jail time. But to reward her is taking leniency a tad too far, don't you think? I say boycott the bitch!!

Damn the Dam!

This story reminds us again of our inadequacies in engineering natural systems. While human ego prods us to achieve the impossible (and this is personal - I'm myself a civil engineer), history tells us we should always be critical of our efforts, and prefer small-scale local solutions to gigantic works. And yet, at some level, engineers, policy makers and the other suspects favor the latter in a skewed desire to match up with a Wiser Power.

Wonderful book!

Folks, I finished this wonderful book called 'Nickel and Dimed' by Barbara Ehrenreich. This is an eye-opening book on the nature of low-wage work in the US. It really brings into focus the need to improve wage levels in this country. I give it two thumbs up, even if I disagree with the author on some aspects like drug testing, etc (sure, it may be a violation of your freedom, but I aint gonna here no dopey if I have a business!)

It's all about Reading and Riting!

Folks, I've gotten at least one reader (who I can identify!) who disagrees with my suggestion that Bush wins on education. Her credentials are far better than mine ... being an education major working with schools and the like. Nevertheless, I thought I'd present my view of why I prefer Bush's approach (the catch phrase is 'prefer' ... I don't think either candidate is a star, but I think we've given up on stars among our pols!)

FIrst, my 2 cents on the 2 candidates' approaches to problems. Bush is an action-minded man ... not super smart but action is what he thrives on. (Dennis Miller, appearing on the Jay Leno show, commented that what he likes about Bush's war on terror is that he doesn't overthink this issue ... 'I think he just wakes up every morning, lands on his 2 feet, scratches his balls and says, "Let's kill some f**king terrorists')

What that means is that Bush is gonna get a good share of his decisions wrong. Some would argue the war in Iraq is an example, as are many others. He has no patience for being caught in nitty-gritty ... he's gonna change the system, damnit! But that is precisely why he will also make some stupendous changes to our systems. He won't accept status quo, and he won't accept sitting by a flawed system.

Kerry, on the other hand, is a tweaker. He understands complexity ... is far smarter ... yadar yadar ya. I suspect he will make the 'right' decision more often ... or rather avoid wrong decisions. But he isn't the type to reform systems. He'll tweak here and there, but stand by failed systems because it's more convenient and because major reform is beyond his cautious mindset.

Then, the issue comes down to which style you think is right ... there is no right answer ... just like stock investing styles. This is part of why I have not yet supported either candidate ... because what we truly need is a blend of the two.

OK, back to education! The reality is that Bush has increased education funding dramatically, but overall funding has probably reduced due to the budget crunch in many states. This is unfortunate, but it is a recession. But the real reason why I think Bush scores over Kerry is the recognition that our education system is in need of major repair, not tweaking ... the decision to impose standards of teaching ... and the voucher program.

The voucher program? That raises your eyebrows, I'm sure. Well, the single biggest cause for bankruptcy in the US is people buying houses they can't afford to be in the "good" school district. The voucher program will eliminate that! Also, I believe when taxpayers are funding education, they should have the choice of the fabric of their school. So, for example, a family who wants to send their kid to a Catholic or a Hindu or a Muslim school should not have to spend exclusively out of pocket, while their tax dollars apparently pay for their education. Needless to say, we need to have standards of performance for these schools, but this is not an impossible task.

Debate III - Conclusion

Schieffer was the clear winner, asking good questions and keeping the candidates disciplined and not allowing them to stretch on and additional rebuttal time.

Between the candidates, I think it was close, with Kerry marginally ahead. Bush just doesn't do well in these situations - he doesn't have the command of numbers and facts that is required in these situations.

On a side note, I think Kerry's gonna sleep on the couch. GOD, couldn't he think of something to say about Theresa. He sounded like he would have wanted Laura except for Theresa's money!

Debate III - Minority Issues

OH Bush is supposed to meet with the clowns at NAACP who compared him to Hitler and Saddam?

TIE - Kerry scores for being for diversity but not quotas; Bush wins for minority home ownership

Debate III - Assault Weapons Ban

OK Kerry, you don't look like a hunter, so quit trying to show off as some machismo! Kerry still wins because of Bush's complete lack of leadership on this issue! SHAME SHAME!!

Debate III - Foreign Policy

Oh George, stop that damn "global test" nonsense! Kerry fails though because there is the lingering question why he voted against the '90 Gulf War.

Debate III - Labor

Kerry fails for talk of raising the minimum wage - just not pragmatic in a global world.

Bush wins on the issue of education, even if he didn't address the issue of underfunding NCLB convincingly.

Debate III - Immigration

Both lose. Didn't hear one ounce worth of useful stuff. Great that you talk of illegal immigrants, but what about those who are here BY THE RULES!!!

What makes you think illegal immigrants will go back when their newfound legal visas end?

Debate III - Social Security

Kerry loses because he jumped to jobs and wants to put the social security issue till later.

Bush doesn't really win because he failed to refute Kerry's contention that privatization would bankrupt SS.

Debate III - Healthcare

Healthcare: Kerry wins. One big concern for me personally was government-run healthcare, but Kerry used the Blue Cross Blue Shield example effectively. I'm still sketchy what the limits are, but certainly he's boosted my confidence.

Debate III - Early Views

OK, here's my early opinion ...

Kerry - Doing well. Dishing out facts and numbers.
Bush - Hey, enough fluff ... where's the beef?
Schieffer - Kicking butt. The best show so far from a moderator. Like the question on whether homosexuality is a choice. Staying away from the chliched questions. EARLY WINNER!!

Bashing Free on the Air

First, let me say it's wonderful to be back in action. I passed my PhD quals and am now allowed to spend many more good years in pursuit of scholarly achievement.

OK, there's been a lot of angst over these guys at Sinclair Broadcasting Corp wanting to air an anti-Kerry documentary on the airwaves. Listen, this is OUR space, and we let these bozos use them for our benefit, and any partisan nonsense like this should be illegal! If the name Sinclair rings a bell, it's cos these idiots are the ones who refused to air the pictures of our fallen soldiers. This is truckloads of CRAP! We have soldiers dying out there, and we need to respect their sacrifice, irrespective of the political consequences.

On the same note, we need to question the logic of allowing biased political opinion on the free airwaves. I mean, I like Bill Moyers, but there is no way in hell he is non-partisan. He is a liberal ... one who is articulate and clear, but a liberal nevertheless. Should it be sold as a news program?

I think we should have programs such as NOW with Bill Moyers, but we do need a disclosure clause. After the stock market scandals, every newspaper publishes a disclaimer on the vested interests the analyst has in that stock ... we need a similar clause for news reporting ... XYZ has contributed $1,500 to the RNC/DNC, and has funded causes such as yadar yadar ya. Then people can figure out for themselves if they trust the "reporting".

Also, none of this "NEWS" nonsense. When you read a newspaper, in theory, you know what is NEWS and what is OP-ED. Same should go for TV stations!

Unilateralism

OK, this has gotta be short, cos I have these big tests to work on. In recent times, I have been moving to the right, mostly on economic agenda. However, this powerful piece by one of my favorite journalists is moving me to reconsider my prior opposition to the war in Iraq. Read and contemplate ... I'd love to hear your views.

[The following article was published in the NY Times]

Another Triumph for the U.N.
By DAVID BROOKS

Published: September 25, 2004

And so we went the multilateral route.

Confronted with the murder of 50,000 in Sudan, we eschewed all that nasty old unilateralism, all that hegemonic, imperialist, go-it-alone, neocon, empire, coalition-of-the-coerced stuff. Our response to this crisis would be so exquisitely multilateral, meticulously consultative, collegially cooperative and ally-friendly that it would make John Kerry swoon and a million editorialists nod in sage approval.

And so we Americans mustered our outrage at the massacres in Darfur and went to the United Nations. And calls were issued and exhortations were made and platitudes spread like béarnaise. The great hum of diplomacy signaled that the global community was whirring into action.

Meanwhile helicopter gunships were strafing children in Darfur.

We did everything basically right. The president was involved, the secretary of state was bold and clearheaded, the U.N. ambassador was eloquent, and the Congress was united. And, following the strictures of international law, we had the debate that, of course, is going to be the top priority while planes are bombing villages.

We had a discussion over whether the extermination of human beings in this instance is sufficiently concentrated to meet the technical definition of genocide. For if it is, then the "competent organs of the United Nations" may be called in to take appropriate action, and you know how fearsome the competent organs may be when they may indeed be called.

The United States said the killing in Darfur was indeed genocide, the Europeans weren't so sure, and the Arab League said definitely not, and hairs were split and legalisms were parsed, and the debate over how many corpses you can fit on the head of a pin proceeded in stentorian tones while the mass extermination of human beings continued at a pace that may or may not rise to the level of genocide.

For people are still starving and perishing in Darfur.

But the multilateral process moved along in its dignified way. The U.N. general secretary was making preparations to set up a commission. Preliminary U.N. resolutions were passed, and the mass murderers were told they should stop - often in frosty tones. The world community - well skilled in the art of expressing disapproval, having expressed fusillades of disapproval over Rwanda, the Congo, the Balkans, Iraq, etc. - expressed its disapproval.

And, meanwhile, 1.2 million were driven from their homes in Darfur.

There was even some talk of sending U.S. troops to stop the violence, which, of course, would have been a brutal act of oil-greedy unilateralist empire-building, and would have been protested by a million lovers of peace in the streets. Instead, the U.S. proposed a resolution threatening sanctions on Sudan, which began another round of communiqué-issuing.

The Russians, who sell military planes to Sudan, decided sanctions would not be in the interests of humanity. The Chinese, whose oil companies have a significant presence in Sudan, threatened a veto. And so began the great watering-down. Finally, a week ago, the Security Council passed a resolution threatening to "consider" sanctions against Sudan at some point, though at no time soon.

The Security Council debate had all the decorous dullness you'd expect. The Algerian delegate had "profound concern." The Russian delegate pronounced the situation "complex." The Sudanese government was praised because the massacres are proceeding more slowly. The air was filled with nuanced obfuscations, technocratic jargon and the amoral blandness of multilateral deliberation.

The resolution passed, and it was a good day for alliance-nurturing and burden-sharing - for the burden of doing nothing was shared equally by all. And we are by now used to the pattern. Every time there is an ongoing atrocity, we watch the world community go through the same series of stages: (1) shock and concern (2) gathering resolve (3) fruitless negotiation (4) pathetic inaction (5) shame and humiliation (6) steadfast vows to never let this happen again.

The "never again" always comes. But still, we have all agreed, this sad cycle is better than having some impromptu coalition of nations actually go in "unilaterally" and do something. That would lack legitimacy! Strain alliances! Menace international law! Threaten the multilateral ideal!

It's a pity about the poor dead people in Darfur. Their numbers are still rising, at 6,000 to 10,000 a month.

What Stress?

I'm still on a break from blogging, with my PhD qualifiers up in 9 days. Can't wait to getting back to good ol' ranting self. Meanwhile, check out this article in the NY Times, comparing work stress today with those of previous generations.

A Heart Wrenching Story

This heart wrenching story reflects poorly on our humanity... that we would allow a poor sick Mexican man dying of congestive heart failure to die because of money. It's a very sad day because, although not a surprise, it is a reflection of our priorities in life. The very people who praise the great men of their religions, be it Jesus, Mohammed or the Buddha, don't seem to be burdened by the need to replicate their loving actions.

A Day in the Life of Joe Middle-Class Republican

[The following was reproduced from Michael Moore's website, michaelmoore.com]

August 29th, 2004 9:38 pm
A Day in the Life of Joe Middle-Class Republican

by Donna L. Lavins and Sheldon Cotler

Joe gets up at 6:00 AM to prepare his morning coffee. He fills his pot with good, clean drinking water because some liberal fought for minimum water quality standards. He takes his daily medication with his first swallow of coffee. His medications are safe to take because some liberal fought to insure their safety and that they work as advertised.

All but $10.00 of his medications are paid for by his employer's medical plan. Because some liberal union workers fought their employers for paid medical insurance, now Joe gets it too. He prepares his morning breakfast -- bacon and eggs this day. Joe's bacon is safe to eat because some liberal fought for laws to regulate the meat packing industry.

Joe takes his morning shower, reaching for his shampoo. His bottle is properly labeled with every ingredient and the amount that is contains because some liberal fought for his right to know what he was putting on his body and the breakdown of its contents. Joe dresses, walks outside and takes a deep breath. The air he breathes is clean because some tree-hugging liberal fought for laws to stop industries from polluting our air. He walks to the subway station for his government-subsidized ride to work; it saves him considerable money in parking and transportation fees. You see, some liberal fought for affordable public transportation, which gives everyone the opportunity to be a contributor.

Joe begins his work day; he has a good job with excellent pay, medicals benefits, retirement, paid holidays and vacation because some liberal union members fought and died for these working standards. Joe's employer meets these standards because Joe's employer doesn't want his employees to call the union. If Joe is hurt on the job or becomes unemployed he'll get worker's compensation or an unemployment check because some liberal didn't think he should loose his home to temporary misfortune.

It's noon time. Joe needs to make a bank deposit so he can pay some bills. Joe's deposit is federally insured by the FSLIC because some liberal wanted to protect Joe's money from unscrupulous bankers who ruined the banking system before the depression.

Joe has to pay his Fannie Mae underwritten mortgage and his below market federal student loan because some stupid liberal decided that Joe and the government would be better off if he was educated and earned more money over his lifetime.

Joe is home from work. He plans to visit his father this evening at his farm home in the country. He gets in his car for the drive to dads; his car is among the safest in the world because some liberal fought for car safety standards. He arrives at his boyhood home. He was the third generation to live in the house financed by Farmers Home Administration because bankers didn't want to make rural loans. The house didn't have electric until some big government liberal stuck his nose where it didn't belong and demanded rural electrification (those rural Republican's would still be sitting in the dark).

Joe is happy to see his dad, who is now retired. Joe's dad lives on Social Security and his union pension because some liberal made sure he could take care of himself so Joe wouldn't have to. After his visit with dad, Joe gets back in his car for the ride home. He turns on a radio talk show. The host keeps saying that liberals are bad and conservatives are good. He doesn't tell Joe that his beloved Republicans have fought against every protection and benefit Joe enjoys throughout his day. Joe agrees, "We don't need those big government liberals ruining our lives. After all, I'm a self-made man who believes everyone should take care of themselves, just like I have."

In the years to come, Joe's life will change dramatically. The U.S. dollar will be devalued as a result of our huge deficit, our living standards demolished, our standing with the world diminished and our social security gone...all because some conservative republican made sure he could take care of himself and his buddies.

Aghast, i remain...

Laura Brings Me Back

OK folks, I have these big exams in 28 days, so I've sorta sworn off my blog till then, but good ol' Laura Bush got me back with an interview to Time Magazine. She sees no problem with In Vitro Fertilization (IVF), which destroys tons of embryos, while she and other lunatic evangalists prevent embryonic stem cell research. If someone can help me figure it out, that'd be great!

She also says her big objection with stem cell research is that we may be promoting false hope. Sure, but that doesnt mean there's anything wrong with it! I mean, what about her hubby's money-sucking Mars program, that has been swindling money from education and environmental programs in the promise of ... what again? Or what of that silly missile defense system, which has failed to survive the basic pilot tests mapped for it!

I'm no fan of Kerry's, but looks like we get to decide between Mr. Flip Flop and Mr. Hypocrisy!