Don't ship jobs overseas?

Of course, I've heard it before. Am now hearing it again. But then the disbelief at what's being said is intact. Note what Obama said in his address to Congress, 'We will restore a sense of fairness and balance to our tax code by finally ending the tax breaks for corporations that ship our jobs overseas.'

I am surprised that the American President can't get it. That shipping jobs overseas is done so as to capitalise on the efficiencies that flow out of the concept of 'location economies'. That value chain activities must be performed at that location where its most efficient. If that means shipping value chain activities to India. so be it. It ends up making that business firm more efficient. The reverse, that is, keeping the activity in the US only renders the value chain inefficient, and that's a no-no when it comes to the buyer. 'Cos the buyer out there is not willing to pay for those inefficiencies.

Sure. its great rhetoric for Obama. But then, isn't it time to drop it, now that he's in the White House? Isn't it time to embrace fundamentals principles of business and get on with it? I am surprised that there are Americans even now, who are still mesmerised by Obama's empty rhetoric. Pity!

Comments

sanjay mahar said…
Even if the US proposes a tax on companies doing work offshore or offers a tax break for those that do not.The changes would not be large enough to offset the 20 per cent to 30 per cent benefit companies get in lower labor costs when they do certain work offshore
Charlotte said…
Medtronic - Northridge, CA, systematically dismantled and shipped much of its manufacturing and employment offshore. I find such an action un-American and distasteful. Now their pumps have been found faulty; reported failures have resulted in death of patients and product recalls. Please join me in boycotting Medtronic, and the medical equipment & devices they design and build.
vishnuprasath said…
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