Saturday, July 21, 2007

Outsourcing.

A developing nation is like a growing child. In sharp contrast, a developed nation is like an adult who has long since stopped growing.

A developing nation is like a growing child and therefore changes every year. A developed nation does not change much yearly. Developed nations do grow but usually grow slower than developing nations.

Yes, Americans are a competitive people and probably could outperform other workers in an even playing field. It could be because the American youth grow up with better nutrition and almost on skateboards. Yes, the important thing is to start early and some American kids are almost raised on skateboards. Most of these youthful skateboard Americans eventually join America's energetic workforce, while a handful of them become juvenile delinquents, party animals, and adrenaline junkies. I have known some female Americans who look stronger than Asian males. The kind of things the American youth can do in a skate park continues to baffle me. With a population of 300 million, 98% literacy rate, and little disparity between rich and poor, USA is no nation to be underrated. However, the role of immigrants in USA should not be ignored either. (To find out more about skateboards, please go to http://www.google.com/ and then type the word SKATEBOARDS.)

Just as there are different kinds of Indians, there are different kinds of Americans. Some Americans are unwilling to accept the old values of starting at entry level and working their way to the top: that is, they want to go straight to the top, like being a supervisor, manager, or CEO. While some Americans are underrated, there are a few Americans who are overrated. Some Americans will not accept anything less than get rich quick work. Some Americans will give numerous excuses for being unemployed, even when there is work available. It is widely known that Americans have a higher turnover rate in the work environment than the Japanese. Some American females do not work because they are waiting for a rich male to come by and marry them. Just because a person moves fast in the work environment, it does not mean that the person is productive because if you move too fast you can make mistakes too; and mistakes can be costly. If you think Americans do not make mistakes, then you had better guess again. Yes, there are different kinds of Americans, and Indians are no exception.

My heart, however, goes out to single moms in USA who raise the children through hard work because of good-for-nothing boyfriends/dads or dads/boyfriends who disappear. If the boyfriend/dad disappears, then the mother has to raise the children on her own. So my heart goes to the mother in USA who raises the children through hard work. Yes, always love your mother. Mother's love for the children is hard to beat.

I have not known of a people who are as dedicated to their work as the Japanese. I have not known of a people who have reverence for work as the Japanese do. Japanese punctuality is hard to beat. It would be hard to prove that Japan had benefited from well qualified and talented immigrants as USA has. With a population of 127 million and100% literacy rate, Japan is no nation for Indians to ignore. India is a non-aligned movement nation. Japan is a developed nation, while India is a developing nation. It is unlikely that Japan would grow as fast as she did in the 1950's and 1960's. Now it is India's turn to grow. It would be naive of Japan if she did not take advantage of India's growth potential. A closer relationship between Japan and India would be mutually beneficial. Both are Asian nations. My personal experience tells me that Japanese and Indians would have few problems working together. I dare say that I have not known of a people who have reverence for work as the Japanese do.

Economic activity, however, is not about even playing fields. Economic activity is about the law of comparative advantages, whereby you have your market niche and I have my market niche. Sometimes different communities have a different market niche. Immigrants in USA do have their market niche. For India, it seems that India has her so called demographic dividend to her advantage. To find out more about India's demographic dividend, please go to http://www.google.com/ and type the words INDIA'S DEMOGRAPHIC DIVIDEND.

In the 1960’s, 1970’s and 1980’s, and probably even now, there was a brain drain from developing nations to USA. This brain drain was a gain to USA and a loss to developing nations. Many developing nations complained about USA benefiting from the brain drain; but the complaints of developing nations fell on deaf years in USA. It is no secret that USA had benefited from this brain drain. Though it was the US flag that was planted on the moon, it is no secret that immigrants from many nations had either directly or indirectly contributed to USA’s showpiece project, the space program. There are numerous universities in USA that have some immigrant instructors. USA has always benefited from well-qualified and talented immigrants.

This is year 2007. It might be possible that the situation may have been reversed, or at least partially reversed, or at least beginning to reverse. The good news for India is that, as India’s economy improves, some Indians living outside India are returning to India. Yes, slowly but surely the Indian Diaspora are returning to Mother India; and these returnees may have something to contribute to India’s economy. In year 2007 some manufacturing facilities close shop in USA and reopen in Asia. Some people call this outsourcing. Some Americans complain that outsourcing increases unemployment in USA. Not quite. Outsourcing helps Americans keep their buying power and standard of living. To find out more, please keep reading.

No American will work for less than US$6 per hour. If it is union labor in USA, then Americans would get paid US$10 per hour, US$15 per hour, or even more. Let us take the case of shoes. The reason why Americans can buy cheap tennis shoes or sneakers for $10, $20, $30 is because these shoes are made in Asia. Some of the Asian workers get paid 20 cents per hour, 30 cents per hour, or 40 cents per hour, 75 cents per hour, and 100 cents per hour. This explains why Americans can buy cheap imported shoes and other manufactured goods from developing nations. If tennis shoes were made in USA, then the $30 shoes would probably cost about $90 or $120, etc because US cost of labor is much higher than cost of labor in developing nations. If all the goods were made in USA, then the current retail prices in USA would have to be multiplied by 3 or 4 times, etc. again because US cost of labor is much higher than cost of labor in developing nations. If all the goods were made in USA, then the US retail prices would increase because it reflects US cost of labor; if the retail prices increase, it would result in a decrease in the buying power of Americans; if there is a decrease in the buying power of Americans, then there would be a commensurate decrease in the standard of living of Americans. The only way out is for the manufacturer to close the manufacturing facility in USA and reopen in Asia and take advantage of the cheap labor in Asia. Have you noticed that every once in a while, the retailers in USA give special discount sales and drop prices of some items by 20% or 30%. Some times the American retailers put up price tags that state “Buy one get one free”. Do you actually think that all these items are made in USA? Give me a break. For your information, many Americans (and me too) do build their lives around buying discount sales items, but I would imagine that this is a world-wide phenomenon. If these items are all made in USA, I doubt it if you could get this very many special discount sales, and “Buy one get one free” offers. Many retail stores in USA would probably close shop if all the imported items on display are removed; and if the retail store closes shop, then the retail store employees risk becoming unemployed. From Asia will come cheap goods which will enter USA and fill the shelves in American retail stores. Americans will buy the cheap goods and continue to keep their buying power and standard of living. Yes, Americans are dependent on cheap goods manufactured in Asia. In this case Americans are the buyers, and Asians are the producers/sellers. But Asians as sellers are also dependent on American buyers. Yes, the buyer is dependent on the seller; and the seller is dependent on the buyer.

In short, made in Asia/Latin America shoes are cheaper than made is USA shoes, made in Asia/Latin America fabric is cheaper than made in USA fabric, made in Asia/Latin America computers are cheaper than made in USA computers, made in Asia/Latin America microwave ovens are cheaper than made in USA microwave ovens. It is not often that I see made in USA shoes, fabric, computers, or microwave ovens or television sets. If you go into the homes of the Governors and Mayors and other politicians of USA, you have a pretty good chance that some of the household appliances or fabric they use are not made in USA. Like many other people I just love to buy the cheapest goods in the retail stores. None of my under-wears are made in USA and I wonder what the politicians use?

If international trade stops tomorrow, then it would hurt both sides. Both the buyer and the seller would be hurt by a stop in international trade.

Let me look for some signs. For example, I have been told that nothing is made in the Silicon Valley (California) any more. If it is true, it is not surprising. It is probably because the manufacturing facilities have relocated to Asia or Latin America. It is a changing world and we have to take life one day at a time. I think international trade and economic interdependence in going to increase.

On the other hand, there are some good signs for USA too. Please do not underestimate Americans. Please do not be premature enough to sign away USA yet. America is not done yet. I think some Japanese cars are manufactured in USA. So it is possible to persuade some Japanese manufacturing facilities to relocate to USA too. I have read of at least one European model automobile which is designed in California, manufactured in Mexico, and the chassis is from Argentina. Yes, it is challenging trying to keep up with these changes.

There is more for USA and EU in the future. Let us suppose that China and India continue to increase exports to USA and EU. As China and India increase exports to USA and EU, they will grow economically, and this may turn out to be a good sign for USA and EU in the long run. As China and India grow economically, they would grow richer. I have read something to the effect that by year 2020 both China and India would have a growing middle income group. This combined middle income group from China and India would have more buying power. At least some of the year 2020 or year 2030 Chinese and Indians may buy USA and EU goods and services and visit USA and EU as tourists, which would enrich USA and EU. What does this mean? Before 2030 USA and EU would enrich the developing nations through international trade. After year 2030 international trade will continue with both sides enriching each other. May be. I don’t know, and neither do you. The future is uncertain. We will take life one day at a time and when we get to 2020 or 2030 we will know. If you are from USA or EU please do not celebrate yet, because we are talking about year 2020 or 2030.

In the long run it is going to be a win-win for both developed and developing nations; and so can we all breathe easy now?
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Always love your mother.*Be altruistic.*Always buy packaged goods with the name of the producer on the package*Always buy from supermarkets and chain stores*Support teamwork, team spirit, and team based problem solving.* Learn Judo, Karate, Aikido, Jujitsu. Tai Chi, Yoga and walk for fitness.* Yoga is about the chakras, and achieving self-mastery and samadhi and achieving full 100% Godhood. *All 6.5 billion of us can return to full 100% Godhood* I would recommend that the best preparation for our youth would be the military experience. Yes, an experience in the military service would do our youth some good. You should have a life of duty. Your duty to yourself. Your duty as a husband. Your duty as a wife. Your duty as a parent. Your duty as an employee. Your duty as an employer. Your duty as a taxpayer. Your duty as a voter. Your duty as a teacher. Your duty as a student and so on. * Engage in sports and exercise.* Be a profit-maker.* Do not give away goods, services, or ideas free of charge; and do not take goods, services, or ideas free of charge.* Self-defense is an inviolable human right.* Always use condoms* All 6.5 billion of us Gods are both buyers and sellers; but at any given time you are either a buyer or seller* All 6.5 billion of us are Gods and can return to full 100% Godhood through self-improvement*One way to engage in self-improvement is to try to never to repeat your mistakes*Your divine powers within you are your natural powers within you*An economy is composed of areas of surpluses and areas of shortages; when there is a surplus it is time to move to an area of shortage; ideally there would be no shortages and rationing in this world*

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