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CounterPunch
March 21, 2005
A Threat Greater Than Terrorism
By PAUL CRAIG ROBERTS
Paul Craig Roberts was Assistant Secretary of the Treasury in the Reagan administration. He was Associate Editor of the Wall Street Journal editorial page and Contributing Editor of National Review.
Outsourcing converts domestic supplied goods and services into imports. It divorces Americans from the incomes and careers associated with the production of the goods and services that Americans consume. That divorce is highly detrimental for Americans. As foreign labor is substituted for US labor in the production of tradable goods and services, the displaced US work force seeks employment in domestic services that cannot be outsourced. This increases the supply of labor, thus depressing wages, in those labor markets already impacted by the entry of high rates of legal and illegal immigration.
By turning domestic production into imports, outsourcing increases the trade deficit. America pays the import bill by turning over the ownership of her wealth, and the income streams that wealth produces, to foreigners. Thus, Americans not only lose jobs and careers but also the ownership of their companies, real estate, corporate and government bonds. The incomes from these lost assets pass from Americans to foreigners.
Today America's consumption and the government's budget deficits are financed by foreigners, principally Asians. There are now so many dollars in foreign hands that the willingness of foreigners to hold more is declining. For the past three years foreign central banks have been diversifying their reserve holdings away from dollars into other currencies.
What outsourcing is doing for America is destroying entire sectors of US manufacturing, entire high tech occupations, the value of a college education, the design and innovative capabilities of the US economy, and the dollar as reserve currency. This is a lot of destruction. It goes far beyond what terrorists can inflict.
http://www.counterpunch.org/roberts03212005.html
March 21, 2005
A Threat Greater Than Terrorism
By PAUL CRAIG ROBERTS
Paul Craig Roberts was Assistant Secretary of the Treasury in the Reagan administration. He was Associate Editor of the Wall Street Journal editorial page and Contributing Editor of National Review.
Outsourcing converts domestic supplied goods and services into imports. It divorces Americans from the incomes and careers associated with the production of the goods and services that Americans consume. That divorce is highly detrimental for Americans. As foreign labor is substituted for US labor in the production of tradable goods and services, the displaced US work force seeks employment in domestic services that cannot be outsourced. This increases the supply of labor, thus depressing wages, in those labor markets already impacted by the entry of high rates of legal and illegal immigration.
By turning domestic production into imports, outsourcing increases the trade deficit. America pays the import bill by turning over the ownership of her wealth, and the income streams that wealth produces, to foreigners. Thus, Americans not only lose jobs and careers but also the ownership of their companies, real estate, corporate and government bonds. The incomes from these lost assets pass from Americans to foreigners.
Today America's consumption and the government's budget deficits are financed by foreigners, principally Asians. There are now so many dollars in foreign hands that the willingness of foreigners to hold more is declining. For the past three years foreign central banks have been diversifying their reserve holdings away from dollars into other currencies.
What outsourcing is doing for America is destroying entire sectors of US manufacturing, entire high tech occupations, the value of a college education, the design and innovative capabilities of the US economy, and the dollar as reserve currency. This is a lot of destruction. It goes far beyond what terrorists can inflict.
http://www.counterpunch.org/roberts03212005.html
