Obama's IT Protectionism: Just What Are 'Our Jobs,' Anyway?
"We will restore a sense of fairness and balance to our tax code by finally ending the tax breaks for corporations that ship our jobs overseas," President Obama said last night. That begs the central question: In our massively interdependent business world where more and more products are designed, sourced, built, sold and serviced everywhere, how exactly do we define "our jobs"?
"We will restore a sense of fairness and balance to our tax code by finally ending the tax breaks for corporations that ship our jobs overseas," President Obama said last night. That begs the central question: In our massively interdependent business world where more and more products are designed, sourced, built, sold and serviced everywhere, how exactly do we define "our jobs"?Let's start with a very tangible example we've all grown up with: what about the hundreds of thousands of cars that are made each year by the United Auto Workers union in Canada -- are those "our jobs"? Or cars made by U.S. automakers in Mexico -- are those "our jobs"? And flipping that a bit, what about the booming automobile businesses run in this country by "foreign companies" like Honda and Toyota and Mercedes-Benz: are those "our jobs"?
Let's look at the IT industry: I would bet that at least 90% of the people reading this article work for companies that outsource some of their software development and IT services to India, China, the Philippines, Malaysia, Israel, Ireland, Poland, Russia, and scores of other countries. Are those "our jobs"? How about notebook computers made in the Pacific Rim -- are we ready to relocate those factories back to the U.S. and raise the price of those computers by at least 50% and more likely 150%? After all, these are "our jobs," according to the president.
And about all those IT services and software-development jobs that have been relocated to other countries: why were they moved out of this country in the first place? Was it a national conspiracy among greedy CEOs to move "our jobs" out of the U.S. and weaken the competitive stature of this country? Or was it an attempt by companies to deploy their resources most effectively to be able to deliver the greatest value and innovation to customers and thereby deliver the greatest possible value to shareholders?
"Our jobs"? What does that mean? What about textile manufacturing -- those used to be "our jobs," too -- should we penalize U.S. companies that import textiles? How about the steel industry, which until very recently provided hundreds of thousands of "our jobs" to Americans until other countries created new and better ways of producing better steel and related services at better prices?
Just yesterday, I wrote about how the managing director of Microsoft's oil and gas business said this: "Our industry is facing unprecedented challenges that demand a truly borderless response." Wait a minute -- "borderless"? How can we define what are "our jobs" are in a world that is "borderless"? What are we supposed to tell brilliant technology companies like Microsoft and IBM and Google and Oracle and Hewlett-Packard that employ hundreds of thousands of people around the world: stick your wildly successful business models where the sun doesn't shine because we're going to make you pay dearly until you bring "our jobs" home.
This phony, artificial, and wildly dangerous concept of "our jobs" lies somewhere between fantasy and delusion and betrays a stunning lack of awareness of how the private sector's global economy works here in the 21st century and how it has raised the standards of living for many hundreds of millions of people around the world. If our government persists in this misguided attempt to vilify and penalize private enterprises for deploying their people and their capital and their intellectual property as they see fit, and if it continues to pursue this terribly outdated definition of "our jobs" as the driver of protectionist tax policy, then we are in for an economic disaster.
Mr. President, the American economy has plenty of challenges in front of it already. Don't compound an already brutal situation by rolling out misguided protectionist schemes that will do massive harm to the the global IT community, which has been the engine of so much growth, innovation, and shared prosperity. And rest assured that massive harm will be "borderless" indeed as it will batter not only the United States but also its trusted, worthy, and interdependent partners around the world.
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