This is a fascinating view into how Bob thinks. This article, right up until the conclusion is excellent.
It lays out in great detail how the ever rising health care costs are hurting companies. It also in detail explains how the car companies were only focused on the short term and that ended up bankrupting them. But IBM takes the long view and that's why they are still in business.
And Bob concludes that the problem is short tern thinking? That took me by surprise since it's almost the exact opposite of the case he just made.
Bob thinks this is all because of focus on short term profits and we somehow need to stop that. But how?
Isn't it obvious that instead we should make the US worker more competitive?
For labor intensive industries that may only go so far when people in the developing world work for A LOT less. But not all industries are labor intensive. And the standard of living in China is rising fairly fast. A bit slower but still rising in India.
Isn't reducing the costs of health care and pensions the most obvious answer to how to make US workers more competitive?
Exactly how to do it for health care is a political topic, so lets not discuss that on HN. But even Bob mentioned severing the pension from the company.
He's saying that what's good for IBM -- a long-term plan to outsource work and replace Americans with foreign workers -- is bad for the US and bad for US workers. So the problem for companies is short-term thinking, and the problem for US workers is that intelligent long-term corporate planning leads to some combination of outsourcing and importing foreign workers.
OK that makes more sense then what I thought he meant. But it doesn't make that much sense when you consider that the ultimate end is economic collapse.
If corporations just put up with what ever conditions we force on them, in the short therm great, but in the long term we're screwed.
The ultimate end is more likely a new equilibrium, in which the difference between the cost of living in the BRIC is closer to the industrialized Western world than it is now. Also, don't forget productivity gains are fueled by new technologies, and the US are still way ahead of the competition in research.
There's not a huge barrier to new discoveries in the US being utilized in other countries, and our only advantage in conducting research is infrastructure for distributing money. Over the next ten years, that could be closed by a cash-rich nation that wanted to (China).
But as they close the gap over the next 10 years, their standard of living and their wages are also going to keep rising. And at some point the gap is small enough that the extra cost of shipping it from China to the US isn't worth it.
It lays out in great detail how the ever rising health care costs are hurting companies. It also in detail explains how the car companies were only focused on the short term and that ended up bankrupting them. But IBM takes the long view and that's why they are still in business.
And Bob concludes that the problem is short tern thinking? That took me by surprise since it's almost the exact opposite of the case he just made.
Bob thinks this is all because of focus on short term profits and we somehow need to stop that. But how?
Isn't it obvious that instead we should make the US worker more competitive?
For labor intensive industries that may only go so far when people in the developing world work for A LOT less. But not all industries are labor intensive. And the standard of living in China is rising fairly fast. A bit slower but still rising in India.
Isn't reducing the costs of health care and pensions the most obvious answer to how to make US workers more competitive?
Exactly how to do it for health care is a political topic, so lets not discuss that on HN. But even Bob mentioned severing the pension from the company.