"As the President recently told a group of CEOs, the choice “is not between Democrats and Republicans. It’s between America and our competitors around the world. We can win the competition.”
There’s only one problem. America’s big businesses are less and less American. They’re going abroad for sales and employees. That’s one reason they’ve showed record-breaking profits in 2010 while creating almost no American jobs.
Consider one of most popular Christmas products of all time – Apple’s iPhone. Researchers from the Asian Development Bank Institute have dissected an iPhone whose wholesale price is around $179.00 to determine where the money actually goes.
Some shows up in Apple’s profits, which are soaring.
About $61 of the $179 price goes to Japanese workers who make key iPhone components, $30 to German workers who supply other pieces, and $23 to South Korean workers who provide still others. Around $6 goes to the Chinese workers who assemble it. Most of the rest goes to workers elsewhere around the globe who make other bits.
Only about $11 of that iPhone goes to American workers, mostly researchers and designers."
"Meanwhile, back home in the U.S., GM has slashed its labor costs. New hires are brought in at roughly half the wages and benefits of former GM employees, under a two-tier wage structure accepted by the United Auto Workers. Almost all GM’s U.S. suppliers have also cut their payrolls."Which is what I've been saying for sometime myself, arguing that it's irrational on Rawlsian social-contract grounds for this nation to be shipping so many of its jobs overseas. But it's not clear what can be done if corporations are unwilling to support regulations that would encourage American companies to keep jobs here. Here's how I conclude the article linked above:
"Just after the midterm elections, the President’s chief economic advisor, Larry Summers, told a group of top U.S. CEOs that the election was partly a “rejection of elites…that were seen as more citizens of Davos than of their countries.” American CEOs, Summers warned, should “think very hard about their obligations as citizens of this country.”
Yes, they’re citizens. But first and foremost they’re CEOs. And CEOs have to show profits – wherever those profits come from. Under American-style capitalism, profits matter. Jobs don’t.
2010 was the year Washington became even more “business friendly.” The result has been more and better jobs – but not in America."
"Capitalism is a particularly demanding social contract that implies a high degree of trust. And so when that trust is broken on a grand scale, in the corporate accounting scandals or late or in the current offshoring race, it compromises the people’s faith in capitalism itself. Therefore, the continuing legitimacy of the U.S. economic system rests to a great extent on its business leaders taking business ethics seriously, indeed perhaps more seriously than their European counterparts. This means getting in the habit of reconsidering policies such as offshoring that tend to contrast, more than reconcile, private interest and public good. At this particular point in time, it means being prepared to challenge prevailing assumptions at the heart of a corporate culture."