Thursday, December 30, 2010

So simple, even Frank Sobotka gets it.

For years, I had friends tell me that The Wire was the best show on TV. Since I didn't even have cable, it was difficult for me to watch.

Now Direct TV is rerunning the series and I have to say that that my friends were right. If you get a chance to watch the series do so. Buy the DVD's if you can't catch them somewhere else.

I'm currently into season two that focuses on the illegal activity on the Baltimore Docks. What's incredible to me is the out and out graft that goes on in our ports. Whether it's human trafficking, drugs, out and out theft of cargo, the port is polluted with people gaming the system. It just makes you wonder how you can get a TV at Best Buy for under $10,000.

Yet, I had to find it hilarious when Frank Sobotka, the union head of the port, starts telling the guys that they need to clean up all the graft because companies are moving their shipments to other ports of entry and soon there won't be any jobs at the Baltimore port.

See even union guy Frank understood that everyone operates on a cost/benefit principle. Something our politicians can't seem to get their arms around.........

Heading into the new year, there's plenty of optimism about the stock market rising, corporate profits recovering and companies hiring. There's just one problem on that last jobs item: Many will be overseas.

On those rare occasions when it's not demonizing businesses as bastions of corporate greed, the White House and all its supporting players spend their time pondering why U.S. businesses, with mountains of cash, won't use at least some of it to hire workers. A mere 900,000 jobs were created in 2010, while U.S. companies sat on $1.1 trillion in cash.

Last week, President Obama went so far as to meet with 20 CEOs for several hours over this, "asking the attendees to dialogue with him on a shared agenda focused on moving our economy forward," according to a White House statement.

We don't have any inside lines as to what was said, but news is trickling out the Obama administration is starting to think about doing something big to end the jobs drought in the U.S.

The something big would be to lower the U.S. corporate tax, which at 35%, stands as the second-highest in the developed world. President Obama only told NPR that he discussed "simplifying the system, hopefully lowering rates, broadening the base."

If so, and if there are no accompanying sleights of hand to extract cash from businesses some other way, as some reports have it, it's good news. Nothing inhibits the creation of U.S. jobs quite like high corporate taxes and their accompanying regulatory regime.

The fact is, companies sitting on cash aren't doing nothing. They're hiring overseas, creating 1.4 million jobs in 2010 alone, according to the Competitive Enterprise Institute.

That's not because they prefer foreigners to Americans, but because the bad business climate here pushes them to do so.

The rest of the world is a vastly different place from Obama's U.S., which is characterized by high taxes and protectionist set-asides for politically connected unions that shut out free trade.

In places like Indonesia, Singapore, Taiwan, India and Thailand, nobody demonizes business or blasts trade. Instead great efforts are made by the state and the private sector to draw in foreign investment by becoming more competitive than their rivals.

U.S. multinationals go to these places not because labor is cheap but because these policies also create boomtowns with lots of customers. Incredibly enough, sometimes overseas profits and jobs provide a lifeline for troubled U.S. companies back home. Take GM — today, its Brazil and Korea operations help keep it afloat.

Article here....

1 comment:

Anonymous said...

Slowly, very slowly I've started to see a shift in some people's thinking. Not with the career politicians but with the previously disengaged middle class. This group is normally apolitical. They assumed that Obama could steer the economy to prosperity. They have seen unprecedented economic activism with very poor results. This middle class group, for the first time has begun to actually think things through. They are saying to themselves: "I've been told that the more businesses are punished the better it is for me. But seriously, how does it work to my benefit if my employer is punished?".

That's the question many are asking nowadays for the first time. And most have begun to make the connection that Obama is a terrible shot, and when fires his economic bazooka at my employer, 9 times out of 10 he hits me.