In a different realm, Citibank has been a leader in off-shoring, pushing more and more of its financial services support base overseas.
Now taxpayers are being asked to bail out these large firms which showed little interest in the economic health of the nation and which engaged in "winner-takes-all capitalism" where those at the top, like Robert Rubin, became mega-wealthy with little regard to the eroding conditions of America's middle class.
American interests and the economic interests of firms were said by many economists -- including Lawrence Summers, Robert Rubin and others -- not to be tied to each other.
Telecom and media CEO Leo Hindery, who served as senior economic policy advisor to the John Edwards for President campaign and then served on the economic advisory team to President-elect Obama, has been talking for a long time about getting the economic interests of major firms back in line with the interests of the American middle class and of America itself.
Then, why isn't anyone asking the question of the CEOs of these firms about what their new social contract with America and working Americans should be after having their companies literally "saved" during this economic crisis? What if we see the funds from the bailouts go to increasing the rapidity of off-shoring to India, China, and elsewhere in Southeast Asia?
Will that be the payoff taxpayers are expecting? I don't think so -- but few are talking about it.
And then he suggests...
Any big loans or bail-out equity acquisitions should come with a fundamental new condition: U.S. job creation and penalties for off-shored positions.
That should be the price of dipping into the public coffers -- for all firms, whether financial or manufacturing.
Personally, in theory at least, I don't think we should be bailing these bastards out at all. They took risks, let them suffer the consequences of those risks. Their business model failed. Let them fail.
In the real world I have no interest in seeing the economy that is so closely tied in with these companies fall any further then it already is. But I don't think we should be bailing these companies out. We should be buying them, kicking the people that ran them into the ground to curb, and then figuring out where we go from here for the betterment of all the people in this country and not just to save a few elite butts.
But... in counter-point to Steve....
I’m going to have to take the other side of this issue. Democracy, capitalism, and nationalism have all three only been around a few hundred years (roughly 1600-1700’s) though the seeds of each go back further. Of the three I would say that Democracy has been a smashing success though it is still in the experimental stage and could use some tweaking (particularly here in the USA).
Capitalism has shown some real strengths (promoting innovation and real economic growth) but it has also shown a great deal of instability, a tendency towards promoting one of the worst of human vices… greed… and an inability to promote the welfare of all.
Nationalism has shown no discernable positive effects whatsoever and frankly has been an absolute disaster. Not that the feudalism which preceded it was any better.
We are once again in a time of change. Democracy is here to stay and is spreading. It will continue to spread as long as the USA does not impede it by propping up dictators and undermining democratic movements as we too often did during the Cold War and still do, in the name of stability, to a smaller degree today.
Capitalism needs some serious work. Perhaps finding a nice synthesis with socialism so that each offset the others weaknesses while allowing the strengths of each system to do their thang.
Nationalism is morphing into internationalism and this is a good thing. Nationalism is nothing more then an “us and them” mentality. It promotes nothing but an us and them mentality and is therefore incredibly harmful to all. Us… and them. Internally and externally. Arbitrary borderlines drawn through ethnic/linguistic groups are harmful. Arbitrary borderlines that tell a starving people that they have to stay on their hopeless side of the line rather than cross over into a more hopeful situation is not only harmful but it is just plain silly. It doesn’t work (see current immigration issue and the long history of human migration throughout the centuries).
I have no problem with off-shoring per se. And I say this as someone whose job is highly threatened by this latest economic downturn and as someone that works for a major name brand corporation that has been concentrating its efforts on international growth while engaging in lots of off-shore contracting.
The problem is in how globalization is being run. The problem is in not taking actions to level the playing field to promote the spread not only of good American jobs off-shore but also of the hard-earned (see history of labor in America) worker protections, benefits, and environmental protections as well. The problem is having the corporate masters being the only ones at the table when discussing and setting the rules of globalization and therefore having only their bottom line interests being promoted which produces an environment that is separating their class from the nations that produced them and, more importantly, the history of human development that produced them.
This corporate master class is beginning to resemble the feudal lord class that preceded nations. Lords held fiefs in different places under different Kings and played a “great game” amongst themselves of power and wealth accumulation.
Eventually a merchant, craft, and learned class developed along with a landed gentry that established a middle class with distinctly local rather than international interests. Thus began the shift of power from lord and sword to merchant and economy. In the process tying down the lords, establishing of citizen rights and the need for boundaries within which those rights were guaranteed (along with the establishment of stable economic rules of interest to this economic class). Power shifted from the sword to the coin and as time passed formerly feudal lords found their interests best served by merging with this economic class.
In globalization we see that process reversing as the winners of the inherently unequal capitalist game, exacerbated by abuses built into the system by the Bush administration in particular but not solely. The last few decades have seen this top economic class "game" the political system through the spread of money in order to see the rules of the economic game changed in order to accelerate their further enrichment.
Through the development of internationalism following World War II and the eventual breakdown of national barriers through globalization this top economic class has once begun to resemble a feudal class of lords of commerce with interests in many different nations and therefore no ties to any particular nation, individual King, Prime Minister, or President... or the middle and lower classes (now known as “consumers” rather than the antiquated term “serfs” or now almost equally antiquated term “citizens”) that they feed off of.
One possible solution would be to try and pin these feudal lords and their corporate fiefs back to the nations and peoples from which they sprang. I think this is a doomed strategy under the truism that “you can never go back again.” Human history, individually and collectively, always moves forward for good or ill. I also think this is the wrong approach because it is a form of protectionism which has been proven again and again to cause more problems then it solves. Protectionism like nationalism is an us and them mentality.
Us and them leads to greed. An “I got mine to hell with you” approach to life. A lack of compassion and in its worst forms de-humanization of whoever is unlucky enough to be “them” this time around (see "niggers, nips, krauts, gooks, sand-niggers, towel-heads, and wet-backs). This is one of the things those of us on the left despise most in the right-wing fringe (which is a fine example of us and them thinking all in itself).
Us is ok. Them is not. Us needs preserving. Them needs killing if they get in our way. And it doesn’t matter if “our way” is towards what we need or towards more than we need. It doesn’t matter if “our way” is taking away from their abundance or from their essential needs. Us and them overwhelms all other considerations and drowns out even the possibility of conversation about mutual needs, mutual wants, mutual assistance, and mutual cooperation towards common, potentially shared goals. In an us and them environment there are no common goals. There are my goals and my goals only. Such a mind set leads to war and much unnecessary death, dying, and suffering.
The spread of corporate interests across national borders can be a very good thing. The sharing of economic interests across national borders can be a very good thing. Economic interests like stability. Economic interests like security and prefer not to be disrupted in pursuit of their goals. I have no problem with off-shoring. But I have a big problem with the separation of corporate interests from any ties to the citizens of the lands in which they operate. International law, international rules, regulations, and standards need to cross national borders along with corporate economic interests. Corporations, like governments, need checks and balances. Corporations, like governments, need oversight. Neither governments or corporations are inherently evil things but they also cannot be left to their own devices without power and money leading the fallible humans that run them astray.
Likewise, natural resources need management that crosses national borders as well. Resources like water and air know no national boundaries. Other resources are found in abundance in one place but not in another but can be used and are plentiful enough to be used for the benefit of all.
Finally, humans everywhere are created equal, have certain inalienable rights, have basic subsistence needs that can be met given the still abundant resources of this world. There is no excuse and no defense for not meeting at bare minimum the basic subsistence needs of all humans for food, shelter, heat, health care, education and economic opportunity.
I would very happily see democracy spread, human respect, dignity, and rights spread, the best aspects of capitalism synthesize with the best aspects of socialism across the world, and nationalism go the way of feudalism.
Like Steve, I do not trust the people that ran this economy and these corporations into the ground to anything else with the bail-out money then what they have done with the billions and trillions that have already flowed through their hands. We the People should not be bailing out entities that have no ties to us and therefore no incentive to repay our generosity. We the People should buy those entities that wish to be saved through our generosity. We the People should then take action to find real solutions to an economic system that clearly is not working as structured. We can try to take the system back again to a time in which it worked well for Americans or we can try and take it forward to a time in which it works well for all.