Maybe I've been around Silicon Valley too long (born here), but the key paragraph of the whole story really is this -- Mr. Grove acknowledged that it was cheap

Maybe I've been around Silicon Valley too long (born here), but the key paragraph of the whole story really is this -- Mr. Grove acknowledged that it was cheaper and thus more profitable for companies to hire workers and build factories in Asia than in the United States. But in his view, those lower Asian costs masked the high price of offshoring as measured by lost jobs and lost expertise. Silicon Valley misjudged the severity of those losses, he wrote, because of a “misplaced faith in the power of start-ups to create U.S. jobs.” MBAs and money people look at immediate costs, managers look at engineering costs, lost in the off-shoring debacle is...you actually aren't saving money in the long term. There are specific exceptions in the case of leveraging specific expertise -- for me, looking for a WinMo optimized two way DH key handshake in assembler, send the code and email Dec 23, receive the results Dec 25, was great. But most outsourcing isn't targeting specifics, it's the generalities and that is a big issue. Costs are masked.