Readers, hope you’ll enjoy this segment. But be warned, the presentation style is a bit manic. We discuss how outsourcing and offshoring are more about transferring income from low-level workers to middle and senior level managers than cost savings.
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I’m glad to see Latin America getting more exposure, because Latin America is, as Greg Grandin puts it, “empire’s workshop.”
It is in Latin America, with the dirty wars, mass murders, genocides, political assasinations, and brutal military coups and dictatorships, all done with the complicity and orchestration of the United States government, that neoliberalism was first inflicted. And it is here where a beachhead has been established — in Argentina, Uruguay, Brazil, Venezuela, Bolivia and Ecuador, some of the first victims of neoliberalism — against neoliberalism and the violence and brutality that always accompanies it.
And one should not be lured into believing these are things that happened in the past. The current US-backed humanaitarian disaster taking place in Honduras makes this clear. This interview speaks to that disaster, and the role the US government is playing in it:
One of the great defects of human behavior which always frustrated the historian Carroll Quigley was that each nation, including our own, regards its own history as unique and the history of other nations as irrelevant to it. If the people of Spain, Greece, Ireland, Portugal and Italy, and indeed the United States, could learn from the experiences of Latin America, they could save themselves a great deal of grief.
frum mejico,
accurate, as usual-there WAS video-over 6 hours of, showing detailed documentary of events leading up to sept. 11, 1973…Spanish title was “Bloody September”…Poly-Sci students, circa 1975-6, saw this video. Needless to say, it is no longer available…Chile’=Alliende’…
It may be just some ignorance on my part but I will go anyway.
It seems that most of the economic woes are attributable to economic rent seeking activity, purposefully designed to plunder national resources…resources that ought to belong to the folks who live on the land – and not privateers.
A huge amount of debt overhang (debt on assets far above the asset price) needs to be forgiven – wash the decks clean…debt that can not be paid back, will not be paid back.
Then, after this reset, introduce a tax system that is based on land values/real estate where, any gain in the price of real estate beyond the measure of inflation is taxed at 100% – this should prevent speculative bubbles and prevent a situation we see in the USA and elsewhere, where the cost of putting a roof over ones head or, the cost of doing business and living is speculative and unstable . Currently, income does not keep pace with outgo on the individual level.
Tax should hammer the rent and non-wealth producing sectors while relieving the wealth creating sector.
“In spite of the ingenious methods devised by statesmen and financiers to get more revenue from large fortunes, and regardless of whether the maximum sur tax remains at 25% or is raised or lowered, it is still true that it would be better to stop the speculative incomes at the source, rather than attempt to recover them after they have passed into the hands of profiteers.
If a man earns his income by producing wealth nothing should be done to hamper him. For has he not given employment to labor, and has he not produced goods for our consumption? To cripple or burden such a man means that he is necessarily forced to employ fewer men, and to make less goods, which tends to decrease wages, unemployment, and increased cost of living.
If, however, a man’s income is not made in producing wealth and employing labor, but is due to speculation, the case is altogether different. The speculator as a speculator, whether his holdings be mineral lands, forests, power sites, agricultural lands, or city lots, employs no labor and produces no wealth. He adds nothing to the riches of the country, but merely takes toll from those who do employ labor and produce wealth.
If part of the speculator’s income – no matter how large a part – be taken in taxation, it will not decrease employment or lessen the production of wealth. Whereas, if the producer’s income be taxed it will tend to limit employment and stop the production of wealth.
Our lawmakers will do well, therefore, to pay less attention to the rate on incomes, and more to the source from whence they are drawn.”
Written around 1925 – Tax Facts
Spectacular Yves! you were the only one handing a sledge hammer to the common man! your gift of diction smashes through barriers, while exposing the accusations that we are warranting of this created havoc.
Courage is knowing what not to fear. Plato
GIVE’EM HELL YVES
It sure is manic ……….
Attention deficit disorder goes global.
He has got the banks tactics about right.
It will not stop.
But we knew this back in 1984….its a old movie.
http://www.youtube.com/watch?v=zu0rP2VWLWw
The UK started to go into current account deficit in 1984 just after the early 80s mini depression where the economy was structurally adjusted to accept core European goods (at the expense of northern Industrial workers) which was going into extreme surplus because of Franco – Germanic policies of local scarcity at that time.
Both the big bang and the birth of the euro was the same event.
Eventually creating the China monster on much the same principles of local scarcity relative to output in the industrial conduit economy.
The world is owned by the banks.
Its got to the stage where the UKs negative trade balance is sucking in a massive amount of real goods based on its rentier activities alone
The banks own the shop.
Yves explains this quite well.
As the UKs income form the rest of the world peaked in Q1 2008 before crashing never to recover.
Afterwards the system managers get payed for managing a system which cannot return a real return…..
As Yanis V. describes – its a bankruptocracy .
The more bankrupt they become the more power they get in return for “their services” which bulks out the UKs trade balance when really there is nothing behind it.
The services exports is a result of real goods coming in – the managers can simply drive around in circles (sucking in oil) and claim they are adding value.
Quite absurd but very dark at the same time.
Its the trade structure dummies.
The global externalties from this layered debt system is quite fantastic.
Indeed the costs were always unsustainable – really beginning during the Tudor era for Ireland.
Its just now that there is no more worlds to conquer that the chickens are coming home to roost.
Manic? Hardly. Just tons of info. All correct as far as I know. Yves’ example of the furniture industry is lucid because she shows there is no good economic reason for offshoring the furniture industry. Not for wood, not for the labor arbitrage, not for better tax deals in China. Only for the middlemen. The dealmakers. Which include the financiers of the new operation. The old factory could not bring trade goods without regulation to market. These guys can.
Actually, not quite the middlemen. It’s coordination costs, so part of it is middlemen like brokers but the other part is middle managers. To me, it speaks to issues in the 20%….
I concur with StO, rapid-fire information dissemination is not equivalent to “manic.” Nonetheless, I think there is a great deal of validity in her observations as well as Lambert’s reply (above). Moreover, both speak to the fact that J. Tainter is [ahem] “confused” in that he doesn’t seem to understand the difference between “complexity” and “complication.” Only 1 species on this planet has ever deliberately and with malice aforethought introduced complications solely for individual aggrandizement. It is, in point of fact, the cornucopia of complications upon complications (e.g. “rent seeking”) that collapse societies through time immemorial.
In a country “governed” by “the majority,” what happens when “the majority” are ignorant, ill-informed and irrational? Do you think we’re finding out now?
The “majority” has no power. If they did you’d see things that have 80% popular support like universal health care, increases for SSI, or decreases in corporate welfare. The “minority” who do have power, however, are just as self-interestedly ignorant, ill-informed and irrational.
“POWER” (force)….some of us here have studied over decades:
http://www.network54.com/Forum/256969/message/1316262338/Mike+Lee+-+Rare
Mike’s beginning students were treated to first lesson-“It is the DISempowered who seek “fair”…”
I saw this yesterday (I’m so sad I watch RT live) and concluded Yves says more in less than 2 minutes than I’ve heard in 20 years in business school mainstream. We had a whole discipline discussing such when I started (industrial relations), but this was done in by the rise and rise of human resources management and its fascism (unitary perspective).
The real arguments involved are very old (centuries). My take is that money is now used like a drug (drugs till are currency and payment for work and Chinese bureaucrats were once paid in ‘white’). Control of production and supply and not being dependent on the stuff (i.e. rich) is key.
Great piece. So the outlines of the big war of the 21st century are being described. Destroying global finance and the big banks are the only way for humanity to gain its freedom.
Until we invent kinder humans we will only replace one group of tyrants for another.
It May be rapid fire, but I wish there was more things like this to wake up all the americans who watch/listen/read the major media outlets.The information would go right over the heads of most people(due to the fact that the major media feeds them crap, and despite filling 24hrs a day of news feeds with crap, says very little of any substance);but it hopefully would get them asking,”what the hell was that all about?”Maybe that would be the beginning for more people.To start down the road of knowing,how they are being screwed.How their childrens futures are being limited, and steered in the wrong direction.
“Permit me to issue and control a nation’s currency and I care not who the middlemen are.”
The banks make the decisions, not the middlemen. I suppose those sympathetic to MMT would be discouraged at the notion that centralized control of currency inevitably leads to corruption and class warfare.
I suppose those sympathetic to MMT would be discouraged at the notion that centralized control of currency inevitably leads to corruption and class warfare. slothrop
Inexpensive fiat is the ONLY ethical money form for government debts. Anything else is fascism.
But you’re correct that we need genuine liberty wrt the payment of private debts but ONLY for private debts. That means that fiat should have no unavoidable advantages wrt the payment of private debt.
And the above ideas aren’t new. They are implied in Matthew 22:16-22 (“Render to Caesar …”) written about 2000 years ago.
Very nice, and manic can work.
My 1990’s were spent in retail bank middle management, listening to McKinsey, Andersen/Accenture and Bain kiddies spruiking outsourcing anything and everything. This was before options, so occasionally common sense prevailed. But we spent a lot of time and effort refuting the arguments that had been peddled to largely incompetent (as opposed to morally bankrupt) board members by the
Mozzie,
lucid historical..
I think this show is starting to grow on me.
I survived the first instalment without seizing uncontrollably, and it’s kind of nice to see good content in formats that are initially a little intimidating (for lack of a better wrod).
Johnny One Note here: The people who “represent” us in Washington were carefully selected by the wealthy for their compliant economic opinions. Whoever spends the most money in a congressional primary wins, about 97% of the time. Most of that money comes in big chunks from multi-millionaires and corporate lobbyists.
If we want rational and just economic policy we are going to have to change the way we select the people who make that policy. Letting them get selected by millionaires and then expecting to change their minds afterward is sheer folly.
We need a constitutional amendment that says that money isn’t speech and corporations have no rights, only priviliges. (The Sanders/Deutch SADA, for example) Campaign money is the handle by which corporations control politics. It will be a huge fight – an existential one for corporate power. The UK and other major industrial powers will have their own corporate vs. human power battles as well, but we have to tend to our own problems.
Don’t focus on the product – fix the machine that produced it.