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The Right Wing and the demise of American Factories

When you are dealing with your fellow human being, it is sometimes difficult but very necessary to be careful of stereotypes, eg. Jews are ……, African Americans are……, Catholics are ….., and, yes, we minorities have some special stereotypes reserved for you white, Anglo Saxon Protestants.  In general, I would say that it is best for all of us to keep them to ourselves and forget them at our earliest convenience.

On the other hand, I would suggest that stereotypes regarding politics and politicians are often true.  After all, it was they who decided what they wanted to be noted for.

In last Thursday’s presidential debate, John King of CNN, an Apple aficionado (disclosure: me, too) asked Rick Santorum, ”Let’s talk about something: Apple Computer is a breathtakingly important American company. It’s one of the most respected companies in the country. I carry Apple products to do my work every day. It employs about 500,000 people … in China. It is based in the United States. Has some employees here — about 46,000 — most of them in retail stores and at the headquarters. 500,000 of them are in China. As a President of the United States, what do you do about that?

Without missing a beat, Santorum gave the stereotypical Republican answer, “Apple, you have all those employees over there, you make all those profits over there. If you want to bring that money back, right now you pay a 35% tax. Under our plan, if you bring it back and invest it in plant and equipment here in Charleston – you pay nothing. You put that money to work, if you invest it, you pay nothing – it’s a powerful incentive.

It made a good sound bite.  I would bet that the people of Charleston just ate it up!  It plays well with the sort of people who would vote knee-jerk Republican (yes, I know, I just used a stereotype).  The answer is also quite wrong.  I would bet my iPad, iPod, iPhone, and yes, even my iMac (oops, no, the iMac is owned by my iWife)  that if such an offer were made to Apple, they would laugh.  It is too little and too late.

The Sunday New York Times has an article by Charles Duhigg and Keith Bradsher on “How the U.S. Lost Out on iPhone Work”.  I would recommend that you read the entire article, but I want to touch on a few points:

According to the article, last year, President Obama had dinner with a number of top luminaries in the tech arena.  Steve Jobs was there and was asked what it would take to bring all the Apple work back to American shores.  According to other dinner guests, Mr. Jobs’s reply was unambiguous, “Those jobs aren’t coming back”.

Apple executives believe that the vast scale of overseas factories as well as the flexibility, diligence and industrial skills of foreign workers have so outpaced their American counterparts that, “Made in the U.S.A.” is no longer a viable option for most Apple products.  Right now, Apple employs 43,000 people in the United States and 20,000 overseas.  Many more people work for Apple contractors, such as Foxconn — the maker of most iPads, and iPhones.

There are many stories about Apple forcing a re-design at absolutely the last minute, like the time when Steve Jobs realized that putting his iPhone in his pocket with his car keys would scratch the glass.  With days to go before introduction, he insisted that his iPhones would not be sold with glass that could be easily scratched.  A design change was made by the Chinese factory and, within 96 hours the factory was producing the redesigned iPhone at the rate of 10,000 per dayThere is no American factory that could do that.

The NY TImes article goes on to quote Betsey Stevenson, a former chief at the Labor Department.  She said,  “Companies once felt an obligation to support American workers, even when it wasn’t the best financial choice.  That has disappeared. Profits and efficiency have trumped generosity.”

Privately, according to the Times,  Apple executives say the world is now such a changed place that it is a mistake to measure a company’s contribution simply by tallying its employees — though they note that Apple employs more workers in the United States than ever before.

They say Apple’s success has benefited the economy by empowering entrepreneurs and creating jobs at companies like cellular providers and businesses shipping Apple products. And, ultimately, they say curing unemployment is not their job.

“We sell iPhones in over a hundred countries,” a current Apple executive said. “We don’t have an obligation to solve America’s problems. Our only obligation is making the best product possible.”

Certainly there are parts of the Chinese economic system that we do not want, or should not want to copy:  the low workers pay, the very long work days, etc.  On the other hand it wouldn’t hurt to beef up our schools.  One of the reasons for the Chinese success is the fact that they produce quality scientists and engineers at a rate that we cannot possibly match.

Do understand this issue is not all about money (or tax breaks).  Even if the pay of the Chinese worker were raised significantly,  and the workday shortened, we still could not compete. We are not producing anywhere near the amount of engineers and scientists that we need if we are to stay competitive.

So what is the problem?  The American Right Wing is clearly more interested in DENYING science instead of teaching it.  Too many schools have eliminated biology instead of facing a possible lawsuit over denying biblical teaching, or trying to combat fanatical right-wing school boards.  Too many schools won’t teach about global warming and the possible solutions due to the fear of a lawsuit by some right wing group.  And, of course, there is that promise that god made in the bible, right after the great flood, that he would’t try to destroy the earth again!  So, even thinking about global warming is silly!

At one time our American companies built all of their products in the United States.  Then, they saw the advantage of farming out some of the very low tech items overseas (e.g, pencils, toys, car bumpers, etc.).  Now, we have, in some cases, the product designers (often times Chinese citizens) living in the US and designing in the US, but the high tech items are then built overseas, because American industry lost its ability to do it.

The right wing continues to get a firmer and firmer grip on the Republican party.  As they do so they make it harder for skilled foreigners to get into this country, and they are attempting to make it impossible for our schools to teach the subjects that they should be teaching.  They are cutting science funding so that Americans cannot afford a science  or engineering education.  I fear that in, say, another 10-20 years high tech companies like Apple, Microsoft, Intel, etc., will not be able to come up with any good reason why they should remain “American” companies.  The designers as well as the producers will be foreign born (a great deal of them are, already).  At that point, they will owe it to their stockholders to LEAVE.  Since most of their facilities are overseas anyway, it wouldn’t take much for them to go.  If you don’t believe that, just don’t forget that 30 years ago, when Apple was making ALL their products in the U.S — and bragging about it  — no one in their right mind would have predicted that by 2012 Apple would be making NONE of their products in the United States.

Ideas, right or wrong, are powerful things.  About 1600 year ago, some non-sensical ideas based on a book called, “The Bible”, written by, people wandering around in the dessert with nothing better to do, destroyed the Roman Empire (ref: “The Decline and Fall of the Roman Empire”, — Gibbons), now it is destroying the United States.  Will we learn in time, or is it already too late?


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