Tuesday
May222018

A Problem with "America First" and Saving Chinese ZTE Jobs

America First?  Can't say I'm a universally a defender of this policy but let me play devils advocate here.   What has ZTE done for America? 

Colluded against US companies with the Chinese government in order to transfer patent and trade secrets to a competitors?  Almost certainly.   Won US military contracts that appeared to be intentionally infested with spyware and posed serious military security risks?  Again, almost certainly.  What about given material aid to embargoed nations like Iran?   Yep, almost certainly.

The result:  a well earned ban on all US companies selling software or hardware to ZTE.   Except for some US orange reality TV executive taking pity on lost Chinese jobs, and lost - soon to be outsourced given ZTE’s well established practice - US revenue from selling said hardware and software. 

I just don't see "America First" moral consistency here. 

Offshoring takes a job and puts it in a different country with no net benefit to the host country.  Sell tech to ZTE and fully expect history to repeat itself.  Yes the host company might benefit by a production/tech transfer, but not the US GDP.  Compared to the "America First" stance on immigration - where every immigrant entry is seen as taking US citizen jobs - oversea outsourcing is somehow viewed as a favorable cost cutting measure.

Let me reference Okun’s Law:  a 1% increase in unemployment shift equates to a 3% drop in GDP, a 1% decrease in unemployment equates to a 3% increase in GDP (Gross Domestic Product).  Yes dear reader, a falling GDP is not really a very good thing.

Maybe let me put it this way, low paid immigrants actually live here, and actually spend money here, and even contribute to the economy here in a net positive way because they have to have living accommodations, have to eat, have to wear clothing, have to get around and largely have to work in lower paying less desirable jobs.  Even if immigrants compete for jobs with locals, as a whole they appear not to have a significant negative effect on the economy so long as they are not greatly focused in locality or intentionally impoverished.    

Outsourcing and offshoring directly increases unemployment.  It directly decreases GDP.  And yet democrats and republicans alike somehow see it as a vaguely good thing as under the guises of "globalism" or "revenue enhancement strategy."   

Encouraging outsourcing or offshoring should do not fit into any "America First" perspective.   

Do business with a company like ZTE at your own intelectual property and national economic peril.  ZTE has yet to reveal, at least to me, any net positive "America First" type reason why the US should encourage ZTE's continued existance.

 

 

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