Monday :: Apr 26, 2004

Chief Dull Razor's Revenge

by pessimist

One of the lame excuses conservatives offer, as when their 'bright boy' George Warmonger Bush is accused by us Eevull godliss commie pinko lib'ruls of taking actions which negatively affect the economy, is that presidential policies have little to no effect on an economy. My specific reason for bringing this point up is that as the unemployment picture eases (at least for now, this situation IS easing), the conservatives will be bragging that Bush's tax cuts had everything to do with this increase in employment. However, my own unscientific research into the specific problem of lack of jobs indicates that as help wanted signs are appearing more often now, the critique that these jobs are mostly low-wage service jobs still holds up. These jobs are mostly part-time sales clerk jobs, and we all know these rarely pay well.

Now, my dear friends of the conservative stripe - you can't have it both ways. Either a president's policies have no effect, good or bad, or they do have an effect, good and bad.

I stumbled across the following article while researching another topic. The source is a generally conservative, US-business-friendly Asian publication, and is asking the questions that American publications should be asking: What could George W. Bush do to help real high-wage employment in America and why isn't he doing it?

As US loses its edge to India and China

I was just out in Silicon Valley, checking in with high-tech entrepreneurs about the state of their business. I wouldn't say they were universally gloomy, but I did detect something I hadn't detected before: a real undertow of concern that America is losing its competitive edge vis--vis China, India, Japan, and other Asian tigers, and that the Bush team is deaf, dumb and blind to this situation.

Several executives explained to me that they were opening new plants in Asia - not because of cheaper labour. Labour is a small component now in an automated high-tech manufacturing plant. It is because governments in these countries are so eager for employment and the transfer of technology to their young populations that they are offering huge tax holidays for US manufacturers who will set up shop. Because most of these countries also offer some form of national health insurance, US companies shed that huge open liability as well.

Allow me a quick recap. US businesses are leaving the US for other nations, not because labor is cheaper (RRIIIGGGGHHHHHT!), but because these countries are offering huge tax breaks and have a national health insurance program.

Now I'm sure someone out there will want to correct me if they think I'm wrong, but hasn't the (mis)Administration of George Warmonger Bush already offered three years' worth of HUGE tax cuts to the American business community? There has not been a corresponding increase in employment in this country from this investment, which tends to dispel the belief that tax cuts create jobs. So this can't be as accurate a reason for American companies leaving the US as it might originally appear.

Ergo, the other two reasons - lower-wage employees and national health care programs - do tend to fit the motivations of executives who choose to relocate offshore. Both would offer millions in built-in incentives to encourage relocation. These reasons alone would be sufficient for most companies to at least consider offshoring. But, for some, there are other reasons.

Other executives complained bitterly that the department of homeland security is making it so hard for legitimate foreigners to get visas to study or work in America that many have given up the age-old dream of coming here. Instead, they are studying in England and other Western European nations, and even China. This is leading to a twofold disaster.

First, one of America's greatest assets - its ability to skim the cream off the first-round intellectual draft choices from around the world and bring them to our shores to innovate - will be diminished, and that in turn will shrink our talent pool. And second, we could lose a whole generation of foreigners who would normally come here to study, and then would take American ideas and American relationships back home. In a decade we will feel that loss in America's standing around the world.

I tend to agree with these two points. Of the first example, our history is full of examples of foreigners arriving in the US and becoming very creative. Nikola Tesla, for instance. Certainly the majority of the physicists who created the atomic bomb can be counted here as well.

The second example also has numerous supporting tales of foreigners who lived in America while completing studies and who then went back to their homelands and influenced their countrymen to emulate, and be more friendly toward, American interests. This has, more often, been the case since the end of World War II, but it is no less valid because of this fact. India, the Arab world, Africa, Southeast Asia - all of these regions have had people study in the US and return to their homelands, taking back with them the parts of the American culture they found complimentary to their native culture.

Had the US lived up to the principles we espouse so readily, we would be finding a much more friendly world out there today. [See the movie Ugly American for a dated, if still valid, protrayal of this sort of governmental behavior.]

But as is too often the case, we are our own worst enemies:

Still others pointed out that the percentage of Americans graduating with bachelor's degrees in science and engineering is less than half of the comparable percentage in China and Japan, and that US government investments are flagging in basic research in physics, chemistry and engineering.

Anyone who thinks that all the Indian and Chinese techies are doing is answering call-centre phones, or solving tech problems for Dell customers, is sadly mistaken. US firms are moving serious research and development to India and China.

The bottom line

We are actually in the middle of two struggles right now. One is against the Islamist terrorists in Iraq and elsewhere, and the other is a competitiveness-and-innovation struggle against India, China, Japan, and their neighbours. And while we are all fixated on the former (I've been no exception), we are completely ignoring the latter. We have got to get our focus back in balance, not to mention our budget. We can't wage war on income taxes and terrorism and a war for innovation at the same time.

Think about this for amoment, then ask yourself just how much George Warmonger Bush really cares about the future of America.

Craig Barrett, the CEO of Intel, noted that Intel sponsors an international science competition every year. This year it attracted some 50,000 American high school kids. "I was in China 10 days ago," Mr Barrett said, "and I asked them how many kids in China participated in the local science fairs that feed into the national fair (and ultimately the Intel finals). They told me six million kids."

This is nothing new. Nor is it a surprise. For about one hundred years, the image Americans have of higher education has been one of ridicule and disdain. How long ago did you last read a Tom Swift book? When was the last time you saw an intelligent person NOT portrayed like the eccentric Dr. Emmett L. Brown of Back to the Future?

At least since the days of Our Gang, education has been an object of ridicule. Most commonly, the plot involves ditching school to go have 'fun'. The biggest laughs were often elicited by the smart kid getting shown up in some manner, often physical. Smart kids were often portrayed as puny weaklings, and thus fair game for abuse. What kid is going to want to study hard if this is what happens to those who do? The image being presented is a powerful one, and isn't easily countered. We in America are now reaping the whirlwind of such ignorant attitudes from so long ago.

Just to make a point, this is how some future pundit will someday portray our current ignorant attitude toward global warming, but I digress. So what evidence is there to support my contention?

For now, the US still excels at teaching science and engineering at the graduate level, and also in university research.

Let's look at this in greater detail. The US excels at TEACHING science and engineering and in university research. But, to borrow the apt quote from Owwer Leedur, Is our children learning? The short answer is no. The vast majority of students in these curricula are not American kids. They have long before decided that science and engineering are too hard or too boring. They have learned that anything that takes as much time and effort as learning a science or technology requires giving up Nintendo and skateboarding, not to mention television. Is there intelligent life after The Apprentice? Apparently not for too many American kids!

The last period I can recall during which American kids looked up to scientists and engineers was during the '60s, when the Mercury, Gemini, and Apollo programs captured the imaginations and ambitions of the young American population. Some of these kids were inspired to choose the science and technology career path, only to be abandoned by the American people soon after Armstrong and Aldrin stepped upon the surface of the moon ("Mission Accomplished" ?) and they no longer cared about a technologically advanced future. We beat the Russians to the moon - case closed.

Now, we Americans have no interest in taking up the cause of technological and scientific education, for there has always been someone else ready to take on the task of providing us with the latest technological toys. This isn't going to be the case much longer. Why?

As the Chinese get more feeder stock coming up through their high schools and colleges, "they will get to the same level as us after a decade," Mr. Barrett said. "We are not graduating the volume, we do not have a lock on the infrastructure, we do not have a lock on the new ideas, and we are either flat-lining, or in real dollars cutting back, our investments in physical science."

Nations which are developing the sort of advanced industrial base once enjoyed by the United States will offer scientists and technologists far greater rewards than are currently available to them in the US. MBAs, who only seem to make a major mess of the companies they 'manage', are paid far more than the engineers who create the products which keep these companies in business. So how are these MBAs 'earning' their keep? They send the work away to lower-wage countries like India, whose respect for education far outstrips anything the US currently displays:

And what is the Bush strategy? Let's go to Mars. Hello? Right now we should have a Manhattan Project to develop a hydrogen-based energy economy - it's within reach and would serve our economy, our environment and our foreign policy by diminishing our dependence on foreign oil. Instead, the Bush team says let's go to Mars.

Where is Congress? Out to lunch - or, worse, obsessed with trying to keep Susie Smith's job at the local pillow factory that is moving to the Caribbean - without thinking about a national competitiveness strategy.

And where is Wall Street? So many of the plutocrats there know that the Bush fiscal policy is a long-term disaster. They know it - but they won't say a word because they are too greedy or too gutless.

The only crisis the US thinks it's in today is the war on terrorism, Mr Barrett said. "It's not."

Even here, in this assessment, a lack of knowledge is evident. Hydrogen, while an important future energy source, is hardly the only option available. Many things currently operated with fossil fuel can be converted to electricity generated on a scale-appropriate basis by solar, wind, or biomass conversion, which will free up other fuel resources for things not so easily converted.

Certainly, the call for a Manhattan Project for Energy is valid, but let's not be stupid and limit ourselves to a single technology. As anyone with technological education can attest, there are lots of possibilities - we just need to know how to utilize them. But if we don't get started soon, those Americans who have the knowledge will become unavailable to teach us, and the price other countries will want for that knowledge will demonstrate to us that the business lessons we once taught to others were well-learned, and are now being applied - very profitably - to us.

We need real and insightful leadership, and Owwer Leedur isn't the answer to that question. We aren't seeing it from Congress or Wall Street, either. But then, we rarely have in our history. This sort of leadership tended to come from those whom society looked down upon as beneath contempt for being 'too smart for their own good', like today's foreign students who take advantage of educational opportunities shunned by the citizens of the country - the one which created much of this knowledge in the first place.

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pessimist :: 3:52 PM :: Comments (8) :: Digg It!