From: Dehede011@aol.com
Date: Sat Aug 09 2003 - 03:51:02 MDT
In a message dated 8/9/2003 4:09:14 AM Central Standard Time,
bpaatsch@bigpond.net.au writes: I imagine there would be little disagreement between Rafal,
Hubert and Damien that before "the end" the human condition globally could and
should be much better than it is now. The point then seems to be to find ways
to traverse the terrain between here and there.
Brett,
If you are concerned with the capital flight from the US and the
resulting job losses in the US the answers seems fairly obvious from this
viewpoint.
First, The US government is the problem not the solution. American
investors have gotten tired of being subject to OEO, AFL/CIO, OSHA, EPA, IRS and
the thousand and one other alphabet laws and regulating or taxing agencies.
As far back as the sixties when I first began working in management American
companies were attempting to get out from under by excaping highly regulated
states to those that would offer some shelter. Now we have the international
flight as a continuation of that early effort.
If you wish to stop American investors from fleeing this country get
rid of the encumbrances of doing business here.
Second, Recognise that the market will eventually follow the jobs that
follow the investment money. This means there will be opportunities for
intreprenuers that can tap into the supply of cheap American labor to supply
products to the American market.
Third, This is really a sub section to "Second." I don't know what
the efficiency of foreign foreign manufacturing is relative to American
manufacturing but it seems like it couldn't be good.
I know from consulting to manufacturing as an "efficiency expert" that
labor constitutes a small percentage of the total manufacturing dollar. When
you compare that to the cost of shipping products back to the US and
marketing them here any direct labor savings have to be slender.
On the other hand in today's environment overhead costs can easily be
three or four times the labor costs in the total manufacturing cost.
Taxes and regulatory costs are an important part of that overhead.
But, that takes us back to my first point.
Let me give you an example. I did a cost cutting project for Ford
Motor Company back in the early 80s. In the first six plants they assigned me I
acted as a leader and found them four million dollars in labor savings. If
we had time to discuss all the surrounding circumstances that was no big deal.
On the other hand in my retirement I have taken up the study of Tax
Accounting. I am learning that an expert team of tax accountants can often save
companies much more money than I ever could. Of course as soon as soon as
the Congress discovers what the companies are doing they yell foul. At that
point hearings are held and in comes the Justice Department to close the "loop
hole" by criminal prosecution if possible or by recommending to Congress a new
law. Then Congress gets some favorable press, they pick up a few votes, and
overseas goes some more investment money.
Those wiley tax accountants and tax attorneys have pointed out once
again that it is cheaper overseas where you don't have to contend with the IRS,
OEO, EPA, etc as well as the Republicans and Democrats in Congress.
Ron h
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