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Corporations will do anything they can to produce profits
Tuesday, August 21 at 12:00 AM

This Speakout has not been edited.

By Conny Jensen

If only people, such as letter writer Dennis Hammond (Math, science are key in education,” July 24) and especially those in business, including students majoring in business, would read books like “Turbo-Capitalism: Winners and Losers in the Global Economy” by Edward Luttwak, they would realize that only a small number of all the envisioned “proficient” students” will ultimately find a slot away from the base of the pyramid that is capitalism!

Well-paying high-tech jobs requiring advanced math and science will be few. Yet, Gates and others believe it necessary that kids are pushed in that direction whether it is their area of strength, or love, or not!

Why do we even believe this hype, when according to BBC World News corporate America is already investing money in research and development labs in China, therewith supporting the graduates over there instead of here? (See http://news.bbc.co.uk/2/hi/asia-pacific/6912056.stm) It’s not because there are no smart graduates here as we are supposed to believe. It’s because investing in Chinese graduates and labs is cheaper! Having more science and math majors here is not going to change that.

Luttwak writes “Corporations are not moral entities. They exist to earn profits.” Indeed! They are opportunists, lacking allegiance to their own country, fellow citizens and even their own employees which they easily lay off under the guise of “restructuring.” At a later time they rehire, but at lower wages and offering fewer benefits!

Clearly corporations will employ any strategy that promises profit, including outsourcing which has nothing to do with the talent pool stateside, but with savings. Writes Luttwak: ... even at the height of the boom in 1997, there was still an oversupply of software engineers in general, so much so that employers could pick and choose among job applicants, specifically picking the young who cost less, while rejecting mid-career applicants - not something they could afford to do if there were a shortage.

As an example, since 1997 Microsoft has only hired 2% of all software writing applicants! The other dozen or so smaller software companies hire even fewer which leaves more than 70% of qualified people without a job of their choice! That’s what “business” hopes No Child Left Behind will “produce” — an oversupply of qualified human resources for any field in which large profits can be made to drive down wages and generate more profit. And profit for whom? The CEOs and the stockholders!

Conny Jensen is a resident of Greeley.


READER COMMENTS

Kat wrote "Let me quess here Conny. You don't like capitalism. hmmmmm....methinks you must be a communist/socialist or in today's world, a Democrat.
Pathetic."

No, I'm merely trying to be ethical :) Can you say the same?

Posted by Conny jensen on August 29, 2007 06:10 PM

Connie,

Your faith in Mr Luttwak's analysis is quite misplaced. Since Mr. Luttwak wrote that book in the 90s, the U.S. has faced down the forces of globalization and has thrived. With 4.6% unemployment, rising wages, a resurgence in exports and some of the strongest GDP growth in the developed world even despite boasting the world's largest economy, as a citizen of the United States you are already near the top of the economic pyramid, not the bottom as you would imply. And 'Turbo Capitalsim' is not the evil Mr Luttwak makes it out to be. It has allowed us to thrive in an age where the two nations he lauds in his book, Japan and France, have struggled.

Japan can't pull itself out of its domestic economic malaisse and still suffers from dreadful deflation while France can't shake loose from decades of low growth and high unemployment. Both situations are eroding the societal advantages Mr Luttwak applauds. Meanwhile millions upon millions of the world's citizens are pulling themselves up from poverty every year on the backs of turbo capatalism.

Another very real problem with Luttwak and many liberal economists is they would have you believe that the U.S. middle class is among the 'have nots' of the world. This simply is not the case. While the super-rich in this country have become a disgusting and appallingly embarrassing lot, the middle class in the U.S. is still thriving as never before.

I can't argue with Luttwak's notion that we suffer increasingly from the brutal side of this increased competition. Fear of competition and the destructive shifts in our economy breed insecurities about our future. However, these destructive waves of competition can't really be stopped and the alternative. At least the United States has embraced the need for a dynamic market oriented economy, because apparrantly the alternative is economic stagnation.

Luttwak builds much of his economics upon the works of Joseph Schumpeter who is an essential economist in understanding the cycle of creative destruction. However, like Schumpeter, his arguments about the natural progression of society under such a system are deeply flawed. Economists like Luttwak, Schumpeter, Keynes and Galbraith who argue the benefits of a benign governmental role in allocating resources within our economy are losing relevence in today's world. If only YOU would read some Tom Friedman, followed by Hernando de Soto, some Milton Friedman, and a heavy dose of Friedrich Hayek, you might understand this. Heck, read some Sachs, Keynes and Galbraith too! I may not always agree with them, but they are essential to understanding the development of political economic thought in the 21st century. And in the end, perhaps YOU will better understand the forces working upon our society today instead of relying upon the single flawed view of Mr Luttwak and complaining about being at the 'bottom of the pyramid.'

Posted by FreeToChoose on August 21, 2007 02:38 PM

Conny must be thinking of liberal Democrat candidate John Edwards whose Fortress Capital, a hedge fund, just forclosed on 34 Katrina victims in New Orleans.

Edwards invested $16 million into Fortress and actually joined them so he "could learn more about poverty. " Well, I guess Edwards learned enough to know that he doesn't want anything to do with it.

Posted by Hank on August 21, 2007 01:24 PM

"Clearly corporations will employ any strategy that promises profit, including outsourcing which has nothing to do with the talent pool stateside, but with savings."

Thank God for American free-market capitalism. If companies wouldn't go to the mat to turn a profit, then who the hell would ever want to own their shares. Profits are the life-blood of our economy and everyone acting in their own best interest is the fastest way to get there.

Wealth, prosperity abundance, American household net worth stands at an all-time record high of about $60 trillion. And I will employ any strategy to ensure that I always get my share.

$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$

Posted by Hank on August 21, 2007 01:13 PM

If you can't understand the help desk person, ask for someone who speaks English better. If they don't transfer you, hang up and call back. Don't yell, just TELL people when you can't understand the person on the phone. Apologizing helps.

If the help desk people don't know what they are doing, email or phone the public relations department at the home office. You can also try the stockholder relations office. I have occasionally gotten help through the advertising department. Don't try the legal department. I have never gotten a corporate legal department to respond.

I had trouble with my new dishwasher and I couldn't get help through the approved channels so I called stockholder relations. They sent me to a Vice-President who solved the problem promptly and fairly.

If you never tell management that they have a problem, they won't know. If you don't complain, you can't complain.

Ms. Jensen and Mary, if you don't like corporations that make money, go invest your 401k with a company that loses money. That will show them!!

Posted by Yaakov Watkins on August 21, 2007 07:51 AM

Let me quess here Conny. You don't like capitalism. hmmmmm....methinks you must be a communist/socialist or in today's world, a Democrat.
Pathetic.

Posted by Kat on August 21, 2007 06:03 AM

Absolutely correct.

Microsoft is going to open a development branch in Canada, which has less restrictions on what the US would consider H1B workers (highly skilled green card holders) who cost 2/3 to 3/4 of what US workers cost & who most frequently are hired as contractors, so companies can employ them without benefits. Interestingly enough when the push to offshore to India began, those people cost 1/4 to 1/3 what the US employee cost - today, that number is closer to 75% - and they are less well trained as schools proliferated overseas without even computers to train on. As anyone in ANY industry knows, theory is fine, but the reality is that hands-on experience is the best education method. In addition, many if not most innovations come from those who have worked in their industry & come up with the proverbial "better way" - figure out how to implement it & often how to market it.

Quality support is often being sacrificed for cheaper wages. I work at a site where the vast majority of programmers are in India or Pakistan, and have watched projects take over 3 years (which historically US staff would have completed in 2 years or less). Data entry of medical billing information has now gone offshore - with an error rate of 50% or more (and the patient must then find the errors & report them to get them resolved - so check your bills closely). When an severity 1 problems occurs requiring someone from the OS support team (US based - they aren't going to fly someone from India in to power cycle a machine) and well as the application programmers, the US based person is expected to be on the resolutuion calls for 18 or more hours before that person does a warm hand-off (members of the IT industry are having to live with laws put in place decades ago which allow them to defined as managers, despite the fact that each only manages him/herself) while the application programmer frequently simply hangs up at the end of his/her shift.

Complaints abound from folks who are dealing with helpdesk people who know precisely enough to read from a support script, even when the person calling for help tries to explain that all the 'basic' fixes have been tried. Don't try to derail that support person - they will simply start over at the beginning of the script - and if your problem isn't there, no resolution will be found.

Ralph Gomory (a retired IBM VP) & William Baumol (a Nobel nominated economist) co-authored "Global Trade and Conflicting National Interests" 7 years ago - and until recently, it was ignored. I highly recommend everyone read the article "The Establishment Rethinks Globalisation" at http://www.celsias.com/2007/06/13/the-establishment-rethinks-globalisation/ which talks about the book & its finding, then contract their representative to push forward with Patriot Corporation of America Act which rewards the companies that don't screw their employees and weaken the country by moving the jobs to China and elsewhere. (Read the article "Now That's a Patriot Act" at http://www.thenation.com/blogs/notion?pid=219923).

Posted by Mary on August 21, 2007 03:32 AM

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