On August 10, 2012, Paul Harris writes in The Guardian about outsourcing.
Such scenes have been common in America as manufacturing has fled abroad in search of cheaper wages.
But, in the midst of the 2012 presidential election, Freeport is different. For Sensata is majority-owned by Bain Capital, the private equity firm once led by Mitt Romney, that has become a hugely controversial symbol of how the modern globalised American economy works. Indeed, Romney still owns millions of dollars of shares in the Bain funds that own Sensata.
So as Sensata strips out costs by sacking American workers in favour of Chinese ones, the value of Romney’s own investments could rise, putting money into the pockets of a Republican challenger who has placed job creation in America at the heart of his bid for the White House.
The story of how Bain became involved in a car factory in a small town amid the rolling farmland of northern Illinois is emblematic of modern financial wheeling and dealing.
To reinvigorate “Make It In America” and “Made In America,” the government should create financial incentives and tax provisions to reward American companies that bring manufacturing back to the United States from abroad, promote manufacturing investment, and incentivize more investment by foreign companies, all with the condition that the employees will share in the ownership benefits generated by the new capital formation projects. The result will be more broadened employee ownership and in-sourcing of jobs created by the new capital formation projects, and make America self-reliant.
The government should impose robust import levies and tariffs (tax) on particular classes of imports that are determined to be manufactured outside the United States and exported back to the United States that do not qualify as “Fair Trade” and unfairly undercut an American-make equivalent. At present, American business corporations are increasingly abandoning the United States and its communities to invest in productive capital formation outside the United States, particularly in China, Mexico, India, and other parts of Asia. As a result, America is experiencing the deindustrialization of America. This has forced policy makers to adopt a redistributive socialist solution rather than a democratic capitalist one whereby democratic economic growth of the earning power of the citizens would flourish simultaneously with new, broadly-owned productive capital formation investments in the United States. Such overseas operations have the advantage of “sweat-shop” slave labor rates relative to American standards, low or no taxation, supportive infrastructure provisions, currency manipulation, and few if any environmental regulations––which translate to lower-cost production. Thus, producing the same product or service in the United States would be far more expensive. For most people, economic globalization means a growing gap between rich and poor, technological alienation of the labor worker from the means of production, and the phenomenon of global corporations and strategic alliances forcing labor workers in high-cost wage markets, such as the United States, to compete with labor-saving capital tools and lower-paid foreign workers. Unemployment is high and there is an accelerating displacement of labor workers by technology and cheaper foreign labor, resulting in greater economic uncertainty and unstable retirement incomes for the average American citizen––causing the average citizen to become increasingly dependent on government wealth redistribution programs.
We need a policy change, which assures truly “Fair Trade” and that exponentially reduces the exodus of our manufacturing prowess and invigorates America’s entrepreneurial exceptionalism and competitive spirit to create products and services in the spirit of “the best that they can be.” We need policies that will de-incentivize American multinational corporations and others from undercutting “American Made,” while simultaneously competitively lowering the cost of production through expanded capital worker ownership. At present, the various incentives in place do not broaden capital ownership but instead further concentrate ownership.
