"There are only two ways of telling the complete truth—anonymously and posthumously."Thomas Sowell

Wednesday, March 09, 2016

When the White Knight Triumphs

The federal government sends foreign aid, in the form of both economic and military assistance, to other countries every year. Something less than 1% of America's four trillion dollar budget is spent in this way. Broken down, it looks like this:
In fiscal year 2013, the U.S. government allocated the following amounts for aid:
Total economic and military assistance: $40.11 billion
Total military assistance: $8.03 billion
Total economic assistance: $32.08 billion
of which USAID Implemented: $17.46 billion
Recently, I have seen a lot of very liberal people, people who applaud our foreign aid contributions, get deeply upset that private corporations ship jobs overseas. US corporations paid roughly $6 trillion in wages each year from 2001 to 2011. So, ten years at $6 trillion per year: $60 trillion in wages. Meanwhile:
... over the 2001-2011 period, U.S. workers who were directly displaced by trade with China lost a collective $37 billion in wages as a result of accepting other lower paying jobs.
Notice: the feds handed over $32 billion out of $4 trillion in one year in direct payments overseas. US corporations handed over $37 billion out of $60 trillion in jobs and wages overseas (while giving out an additional $4 to $5 billion a year in straight-up charity). Liberals celebrate the former and lament the latter. Why?

If the federal government can send federal money to overseas in order to provide economic assistance, why can't private companies do the same thing? That's all the corporations are doing when they ship out jobs - corporations are just making wealth transfer payments. Which I thought Democrats loved?

So, for those of you on the liberal left, explain why the dissonance. Do people in China not have a right to work for a living? Mexicans shouldn't be employed... is that it?

"Ah," I hear them say, "but those people deserve a living wage!" Ok. But what kind of living wage comes with a free check from the American government? When all the bribes are done, how much of these government-to-government transfer moneys end up in the pockets of corrupt officials? Meanwhile, how much of the corporation-to-individual transfer payments get lost that way?

At least with Nike, IBM, Apple, et. al, we are relatively sure we know how much money each individual worker walked away with. We can count very precisely how many poor people now have at least some change in their pockets. With government-to-government transfers, we don't ever really find out. For all we know, that money gets transferred straight from a government bank account to the local president's private Swiss account. Even better, with corporation-to-individual transfers, we actually get something back: an iPhone, a pair of sneakers, something. The poor get a chance to contribute, to make a difference in the world. With government transfers, we get the fleeting good will of a ruler who may be assassinated tomorrow, and the poor get nothing at all.

So, I ask again, on what grounds do liberals get upset about American jobs getting shipped overseas? What precise liberal principle is violated? Individual poor people get money, Americans get cheaper goods, accountants get paid well to tax-shelter the profits... aside from the American worker, who loses?

And even the American worker isn't really any worse off. As a result of job transfers, he gets the same cheaper goods every American non-worker gets, and, if government transfers were to replace the corporate transfers, he would have gotten shafted ten times worse on the taxes anyway. After all, the government has to get the 10-fold increase in money they give way from someone. America's middle class is richer than 95% of the rest of the world. It's not like anyone else was ever going to pay for this wealth transfer, no matter who initiated it.

So, again, why the outrage on the left when corporations move jobs overseas? Do you not like the fact that we can actually track poor people and watch them become wealthier because of their new jobs? Is that what upsets you? Or do you just not like anyone but government acting as a white knight?


LFC said...

Some movement of manufacturing jobs overseas by US corps. to 'developing' (i.e. poorer) countries was likely inevitable. But when a steep loss in manufacturing jobs (some relatively well-paying) in effect destroys the economic base of entire towns and communities, and when nothing comparable replaces that base, then off-shoring of jobs has in some cases fairly devastating social/economic effects that the analysis in this post doesn't capture or even acknowledge. One doesn't even have to travel to -- one can just read about -- the effects of loss of industries and the associated jobs on, for example, former steel towns in Ohio and Pa. to gauge the impact.

US corps are interested in their profit margins and everything else for them is secondary. Pretending that their offshoring of jobs is somehow motivated by an altruistic desire to help the world's poor is quite ridiculous. That a Bangladeshi garment worker working for long hours and at low wages may yet be, in some sense, better off working in a factory (assuming -- a big 'if' -- it doesn't collapse and kill her) than she wd be remaining in her village is purely incidental from the standpoint of the multinationals' motivation. Many corps. still have to be forced to pay living wages and give decent conditions to their workers, esp those removed from the immediate sphere of attention of most of the public in rich countries, b/c the corps are not going to do that themselves out of some presumed altruism.

Tim Kowal said...

"It constantly amazes me that defenders of the free market are expected to offer certainty and perfection while government has only to make promises and express good intentions." Lawrence W. Reed

But it's even simpler than that: outcomes are irrelevant; the left will judge you by your faith, not your works.

Tom Van Dyke said...

But it's even simpler than that: outcomes are irrelevant; the left will judge you by your faith, not your works.

The key point I got from Adam Smith's better book, "The Theory of Moral Sentiments": Only motives and intentions matter. This is how Mitt Romney won every poll category except "Cares about people like me" and got stomped.

Could be why Trump's doing so well and that felon Hillary Clinton as well. Trump wants to save your job from foreigners and Hillary wants to save you from, well, reality.

LFC said...

outcomes are irrelevant; the left will judge you by your faith, not your works

Since this is a flat assertion, it is best met with a flat denial. Motives and outcomes are often interrelated, as I think is the case in offshoring of jobs. I don't think anyone on the left objects to all the outcomes of offshoring; rather, the objections go to some of the outcomes. The post also ignores that much of the 'left' would not be unqualified fans of the U.S. aid program as now structured. I'd venture to suggest that the $8 billion military aid vs. ~$32 billion economic aid breakdown is misleading -- a fair amount of 'security assistance' (i.e., in effect mil. aid) prob. shows up in the budget, rather misleadingly, under the 'economic' heading. Also, the U.S. gives most of its food aid not in cash but in actual commodities, which is not the practice of other donor countries and ends up being mostly (though prob not entirely) a subsidy program for large agribusiness.

Tom Van Dyke said...

The left excuses economic imbecility because fiscal responsibility is 'mean-spirited.' Hillary proposes $1 trillion in new giveaways and looks like a moderate because Bernie's prposing $10 trillion. They "Care about people like me."

The fiscally realistic Bill Clinton wing of the party and the now-defunct Democratic Leadership Council are as dust in the wind. Results do not matter, only motives.

Globalization has brought a billion people out of poverty. But since it is ostensibly motivated by greed, it is intrinsically bad.


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