Wednesday, January 25, 2012

Chinese Spoken Here

If President Obama is to be believed- a leap of faith with any president- we won't have to join Jon Huntsman in an immersion course of Mandarin Chinese.

In the inspiring and progressive first portion of the President's State of the Union message last night, Obama declared

Meanwhile, America is more productive.  A few weeks ago, the CEO of Master Lock told me that it now makes business sense for him to bring jobs back home.  (Applause.)  Today, for the first time in 15 years, Master Lock’s unionized plant in Milwaukee is running at full capacity.  (Applause.)

So we have a huge opportunity, at this moment, to bring manufacturing back.  But we have to seize it.  Tonight, my message to business leaders is simple:  Ask yourselves what you can do to bring jobs back to your country, and your country will do everything we can to help you succeed.  (Applause.)

We should start with our tax code.  Right now, companies get tax breaks for moving jobs and profits overseas.  Meanwhile, companies that choose to stay in America get hit with one of the highest tax rates in the world.  It makes no sense, and everyone knows it.  So let’s change it.

First, if you’re a business that wants to outsource jobs, you shouldn’t get a tax deduction for doing it.  (Applause.)  That money should be used to cover moving expenses for companies like Master Lock that decide to bring jobs home.  (Applause.)

Second, no American company should be able to avoid paying its fair share of taxes by moving jobs and profits overseas.  (Applause.)  From now on, every multinational company should have to pay a basic minimum tax.  And every penny should go towards lowering taxes for companies that choose to stay here and hire here in America.  (Applause.)

Third, if you’re an American manufacturer, you should get a bigger tax cut.  If you’re a high-tech manufacturer, we should double the tax deduction you get for making your products here.  And if you want to relocate in a community that was hit hard when a factory left town, you should get help financing a new plant, equipment, or training for new workers.  (Applause.)

So my message is simple.  It is time to stop rewarding businesses that ship jobs overseas, and start rewarding companies that create jobs right here in America.  Send me these tax reforms, and I will sign them right away.  (Applause.)

Hopefully, the side will join the President and congressional Democrats in that effort.

Hopefully, but improbably.        At approximately 4:30 into his rebuttal (video, below) to the State of the Union message, Indiana Governor Mitch Daniels contended

The late Steve Jobs- what a fitting name he had- created more of them than all those stimulus dollars the President borrowed and blew.      Out here in Indiana, when a businessperson asks me what he can do for our sate, I say 'First, make money.    Be successful, if you make a profit, you'll have something left to hire someone else, and some to donate to the good causes we love.'

Steve Jobs was nearly unparalleled (and maybe not "nearly") in making a profit, roughly $8.3 billion of it.      But he used little of that money "to donate to the good causes we love," apparently choosing (as is his right) to donate little to charity.  

It's fitting, too,  that the notoriously anti-union governor of Indiana would identify the late co-founder of Apple as the prototype of a company which creates jobs.

It seems that Jobs did create jobs- just not primarily in the United States.        Soon after the entreprenuer's death in October, Mike Daisey, in an op-ed in The New York Times, acknowledged the "design perfection and business acumen" of Jobs, then added

Apple’s rise to power in our time directly paralleled the transformation of global manufacturing. As recently as 10 years ago Apple’s computers were assembled in the United States, but today they are built in southern China under appalling labor conditions. Apple, like the vast majority of the electronics industry, skirts labor laws by subcontracting all its manufacturing to companies like Foxconn, a firm made infamous for suicides at its plants, a worker dying after working a 34-hour shift, widespread beatings, and a willingness to do whatever it takes to meet high quotas set by tech companies like Apple.

I have traveled to southern China and interviewed workers employed in the production of electronics. I spoke with a man whose right hand was permanently curled into a claw from being smashed in a metal press at Foxconn, where he worked assembling Apple laptops and iPads.  

On Saturday, The Times reported

Apple employs 43,000 people in the United States and 20,000 overseas, a small fraction of the over 400,000 American workers at General Motors in the 1950s, or the hundreds of thousands at General Electric in the 1980s. Many more people work for Apple’s contractors: an additional 700,000 people engineer, build and assemble iPads, iPhones and Apple’s other products. But almost none of them work in the United States. Instead, they work for foreign companies in Asia, Europe and elsewhere, at factories that almost all electronics designers rely upon to build their wares.

“Apple’s an example of why it’s so hard to create middle-class jobs in the U.S. now,” said Jared Bernstein, who until last year was an economic adviser to the White House.

“If it’s the pinnacle of capitalism, we should be worried.”

Though Obama proposes to reward companies which employ Americans and stop rewarding companies which believe their patriotic duty is lowering the unemployment rate abroad, congressional Democrats have been down this road before.      Sixteen months ago, Senate Democrats voted overwhelmingly for legislation which would have exempted

companies that import jobs from paying the 6.2 percent Social Security payroll tax for new U.S. employees who replace overseas workers who had been doing similar work.

The two-year exemption would be available for workers hired over the next three years. The tax cut — estimated to cost about $1 billion — would be partially offset by tax increases on companies that move jobs overseas.

The bill would prohibit firms from taking deductions for business expenses associated with expanding operations in other countries. It would increase taxes on U.S. companies that close domestic operations and expand foreign ones to import products to the U.S.

The bill failed when every Republican in the United States Senate voted to encourage companies to keep employment up in other countries, and down in the U.S.

Good luck, Mr. President.    But getting congressional Republicans to commit to this country rather than other nations- when a rhetorical appeal to American Exceptionalism is far more emotionally satisfying- will not be easy.

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