Last week on his CNBC TV show, Larry Kudlow shouted at his guests: “Corporate America has huge profits, why aren’t they creating jobs!?”
I can’t even believe how idiotic Kudlow is. Here is a man who believes in wide-open free trade, the crushing of unions, epic-scale outsourcing of jobs to foreign lands, the massive importation of workers, and the de-industrialization of America, and he can’t figure out why Corporate America isn’t creating jobs?
Note to Kudlow: exactly what part of IBM’s “No Americans” hiring policy don’t you understand?
Kudlow is the most vociferous advocate of our new Favela-style economy, and he is baffled by the sorry state of the US jobs market? WTF?
Look at this: during the economic disaster of 2009, Mexicans were having a grand time doing frivolous things like trying to set Guinness Book records. They set the record for the largest mariachi band in Guadalajara in September 2009. Meanwhile, people in Detroit were literally trampling each other to collect handouts from the government.
When you adopt a free-trade policy (NAFTA) with a low-wage country like Mexico, you are encouraging companies to move factories down there. And so they have. This is not rocket science.
Note to Kudlow: I know your brain, such as it is, is all befuddled now, but try to follow along anyway.
Corporate America is creating plenty of jobs – in China, in Mexico, in Argentina, in India. And even when they are forced to create jobs here, they use Kudlow’s immigration policies to avoid hiring Americans.
Look at this: because they have to keep their data centers close to home, IBM is being forced to create jobs in the USA. But if you are an unemployed American, don’t get your hopes up – so says Bob Cringely:
IBM is also building several new “global delivery centers.” One of these is in Dubuque, Iowa. Why Dubuque? It is my understanding that IBM hopes to reduce its labor costs and one way to do this is by choosing remote locations like Dubuque with few locals who could qualify to be IBM techs or engineers. Experienced IBMers being downsized in places like New York won’t move to Dubuque, so they can be replaced with cheaper (and younger) labor. Dubuque’s lack of native talent means IBM can staff the centers with mostly foreign H1-B personnel, again so they can pay them less and have no long-term benefits exposure.
Thomas Jefferson said: “Merchants have no country“, and we are seeing that concept playing out right now. If you adopt trade- and immigration policies that allow companies to eradicate their American workforces, they will do so.
Wide-open free trade is certainly the most efficient way to develop the global economy. However, it does not guarantee that the growth will be spread out evenly over the planet. In the first decade of free trade, the invisible hand has re-located the USA’s industrial base and millions of jobs to low-wage nations. Nations that aren’t even political allies of the USA.
The BRICs (Brazil, Mexico, India, China) and Mexico have never been US allies. In case you don’t know, our best allies are the UK, Canada, Australia, and Israel. IBM is moving a lot of jobs to Argentina too, but during the 1982 UK-versus-Argentina Falkland Islands war, the USA gave logistical support to the UK. (And we will probably do so again if Argentina tries capture the Falklands once more.)
Will the Chinese use the industrial capacity that we have transferred to them to build an army big enough to recapture Taiwan? Will the Mexicans use all of the auto plants that we have sent to them to build tanks to recapture the vast territory that we captured in 1848? Will NAFTA eventually make Aztlán a reality? The precedent for such events has already been established in BRIC-nation Russia’s recapture of territory from US ally, Georgia.
Free-trade has been a crushing blow to the US economy. Perhaps the invisible hand will direct some business our way soon, but as we see from the policies of our own corporations, things don’t look promising. Corporate America would create jobs in the USA again given appropriate trade- and immigration policies. I say, change the policies. Sacrificing our prosperity for the good of the global economy may sound noble, but in reality such a policy is actually treasonous.
If the cities of Guadalajara and Detroit had to field armies and meet in battle, who would win?