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'Of course there are alternative options, which would not require the departure of most Americans from America for new lives on distant shores. One would be a n

by J3L2404 16y ago

'Of course there are alternative options, which would not require the departure of most Americans from America for new lives on distant shores. One would be a new social contract, in which the American people, through representatives whom they actually control, would ordain that American corporations are chartered to create jobs in the U.S. for American workers, and if that does not interest their shareholders and managers then they can do without legal privileges granted by the sovereign people, like limited liability.'

yequalsx 16y ago
I think too, in addition to what you suggest here, is that the size and scope of corporations needs to be limited. A company like Citi is too big to control. It is so big that its collapse would cause problems for the country even if the source of the collapse comes from its dealing in other countries. We need a new system but it appears to me that what we have in the U.S. and elsewhere is regulatory capture. I don't see anything changing in the near term.
- eru 16y ago
  How about breaking the country up into smaller pieces? Citi can only be too big to fail, if there's a big country behind for the guarantee. Small countries would also ease regulatory capture, since all those small regulatory regimes would have to compete with each other.
  - arethuza 16y ago
    It is arguable that creating a very attractive environment for international corporations can actually make the problem worse - look at Ireland.
    - yummyfajitas 16y ago
      Why do you believe Ireland's attractive business environment caused their current problems? Do you believe Ireland would be better off without Google and various others locating HQ in Ireland?
      - arethuza 16y ago
        My own suspicion is that the high levels of inward investment to Ireland primed the asset bubble that developed there, Of course, the problem wasn't caused by the likes of Microsoft, Google etc. setting up their offices there but it probably did contribute to the irrational exuberance that keeps these bubbles growing. It is a pretty scary situation they are in: http://www.bbc.co.uk/blogs/thereporters/robertpeston/2010/11/hl_ireland_an_extreme_version.html http://www.bbc.co.uk/blogs/thereporters/robertpeston/2010/11...
        yummyfajitas 16y ago
        Is this summary of the dangers correct: attractive business environment -> investment, growth -> optimism -> increased risk of bubbles?
    - patrickk 16y ago
      Creating an attractive environment for international corporations has largely been good for Ireland, and not the root cause of our current woes - that would be the ridiculous decision by our Minister of Finance to issue a blanket guarantee to our major banks, which were oversized relative to the size of our domestic economy. This has resulted in the current bailouts and humiliation. The 'Celtic Tiger' (booming Irish economy) went through two main periods - c.1995 - 2001 (Celtic Tiger part 1), and 2003-2007 (part 2). The first period was fueled by foreign direct investment by American multinationals - if I recall correctly, American companies have more net investments in Ireland than they do in China. Ireland exported more computer services in 2002 than the US did, which is pretty mind-boggling. This export-led growth teed up the next stage, which was simply an out of control housing bubble. See this for more information: http://en.wikipedia.org/wiki/Celtic_Tiger#Downturn.2C_2001.E2.80.932003 http://en.wikipedia.org/wiki/Celtic_Tiger#Downturn.2C_2001.E... I'm hoping our open nature, which leaves a country vulnerable in a global recession, will allow us to recover quickly. Iceland seems to be doing ok and they were worse off than we were. There are some signs of a recovery e.g. Facebook recently announced expansion in their Dublin office. Google and Apple are also expanding here, exports are up, and curtailing the out of control public servants wage bill will make us more cost competitive internationally.
      - yequalsx 16y ago
        I don't know much about the situation in Ireland. My understanding corresponds with what you wrote in your first paragraph. I wonder, though, if there was a perceived need to guarantee the banks in order to keep Ireland attractive to multi-nationals. Iceland, I believe, did not guarantee its banks' deposits outside of Iceland. Iceland has been able to recover much better than Ireland has. Iceland had no need to placate the business environment for multi-nationals though. I'm interested in knowing your thoughts on Ireland still being part of the Euro. Do you think it's a good idea? Is it a good idea simply because it's good for multi-nationals?
        patrickk 16y ago
        "I wonder, though, if there was a perceived need to guarantee the banks in order to keep Ireland attractive to multi-nationals. Iceland, I believe, did not guarantee its banks' deposits outside of Iceland. Iceland has been able to recover much better than Ireland has. Iceland had no need to placate the business environment for multi-nationals though." I don't think it was to placate multi-nationals that the banks were guaranteed- it was partly to keep peoples' confidence in the banks (preventing a run on the banks, see this for an explanation of a bank run: http://en.wikipedia.org/wiki/Bank_run http://en.wikipedia.org/wiki/Bank_run) and partly to keep investor confidence up so that the banks could continue issuing bonds to investors in London and New York. The first part worked, I can still get cash from an ATM as normal, without fear that my current account will evaporate. The second part, investor confidence, failed spectacularly and now the government is pouring billions into the banks, as is the European Central Bank, which is into the Irish banks for well over a €100bn and no end in sight yet. It's necessary for government intervention because the markets won't touch the banks with a 10-foot barge pole at the moment. http://www.ft.com/cms/s/0/21920684-046d-11e0-8a3c-00144feabdc0.html?ftcamp=rss#axzz17jLupkAC http://www.ft.com/cms/s/0/21920684-046d-11e0-8a3c-00144feabd... The boys in Brussels and Berlin are getting completely fed up with this situation I'd imagine. "I'm interested in knowing your thoughts on Ireland still being part of the Euro. Do you think it's a good idea? Is it a good idea simply because it's good for multi-nationals?" Up until the current recession, I'd have said the euro has been good for Ireland. It's great for tourism, trade, it's very convenient and yes, it's good for multinationals too. It's easy to see how much you're getting screwed buying a meal in Paris, and lowers transaction costs from currency exchanges. However, what we really need now is more control over our fiscal policy, currently impossible due to ceding that power to the ECB - which is mainly concerned with keeping inflation under control in Germany, and keeping the whole Euro project from collapsing. The ECB doesn't really care about Ireland as such (our economy like a tiny bug on the hide of a massive elephant), but they need to keep us afloat due to contractual arrangements and to keep the euro alive. Currently, we really need to devalue our currency, something our government did in 1993, which would make us more attractive to investment and make us more competitive. We also need to keep interest rates low for a long, long time, so homeowners don't start defaulting on their mortgages in massive numbers like the US subprime situation. If the German economy starting picking up as people start buying Mercs and Beemers again, the ECB will hike up interest rates, which will be disastrous for Irish homeowners potentially leading to an even worse situation than we're in now. So it would probably be good for Ireland to not be part of the euro at the moment, but if the world doesn't fall apart and things get better (and the euro doesn't collapse, which is still a very real prospect) then the benefits of the euro will start to outweigh it's disadvantages once again.
    - yequalsx 16y ago
      I think there is a fine balancing act that governments need to do. Generally it's nice to have companies do business in your country (provided they don't engage in shoddy business practices or cause too much damage to the environment) but if it's done to quickly or there becomes too great a reliance on attracting large multinationals then problems follow. It's not good for a country to be beholden to multi-national corporations or for there to be regulatory capture.
  - lukeschlather 16y ago
    It would be a race to the bottom. We largely already see that in the "developing" world. When a factory causes sufficient growth that a country demands higher wages, the multinational that owns the factory picks up and moves to an even more impoverished nation, and the worse-off are climbing over each other trying to create the most lenient regulations to attract business. Then once the corporation has departed, the original country collapses back into poverty. Rinse and repeat over decades.
    - yummyfajitas 16y ago
      Then once the corporation has departed, the original country collapses back into poverty. Could you provide an example of this part?
      - lukeschlather 16y ago
        Venezuela or Nicaragua. Though obviously the departure isn't necessarily the choice of the corporation in either of those cases. Well, in Nicaragua I'd say the most recent event was the hurricane, and so regulation wasn't the cause of industry's (tourism's) departure. But I still stand by the general theme, that multinational corporations are engaged in something of a bait-and-switch, even if there's no intentional malice behind it. And in Venezuela, one can blame Chavez, but clearly his platform resonates with people because of a pattern of exploitation, even if Chavez himself turns out to be merely a new vector for exploitation.
        yummyfajitas 16y ago
        I agree that corporations departing can cause (or be caused by) a bad economy. But neither of your examples are part of the chain of events you described: Investment -> growth -> higher wages -> low-wage seeking investment leaving -> decline I fully agree with all steps in this chain besides the last. As you say, Nicaragua was a natural disaster and Venezuela was an unnatural disaster. I agree that both of these things can cause a nation to decline, and can also cause foreign corporations to flee the country. But I wasn't asking whether disasters can harm a country and also chase away foreign investment.
eru 16y ago
Sounds like: Those evil foreigners are taking our jobs.
- exit 16y ago
  when actually it's: evil corporations are creating a class of disenfranchised workers. the essential evil is this notion of nationality. for most of history people had the ability to vote with their feet. nationality is essentially undemocratic in that respect.
tomjen3 16y ago
Wtf is wrong with this board? This is the place for getting shit done, and all I find are a bunch of whiney people, with the same complaints you would find on the democratic underground or counterpunch.
matwood 16y ago
While we're at it we should throw out foreign companies who create jobs here. Toyota, Honda, and BMW all have plants in the US...oh wait
nhangen 16y ago
Are you suggesting socialism as the answer to the issue? I don't understand how in a place where we talk about building fortunes via startups and innovation, we also talk about stifling the very motivation for these companies to exist. You do this, and suddenly every company moves overseas and chooses to pay taxes in another country, at which point we lose the possibility of jobs and the tax money that these companies provide.
- yequalsx 16y ago
  Not every company has moved out of socialist-like Sweden. There are motivations beyond just profit and profit isn't always the best form of motivation.
  - nhangen 16y ago
    There's a big difference in the culture of a company that was built in a socialist country versus that of one built in a capitalist country. Perhaps private companies have more wiggle room. Rather than mandating, why not buy enough stock to have an influence on company decisions?
jkeel 16y ago
What this article describes is what I've been noticing but I've tried to focus on my startup. Although, that said I worry that there are big shifts occurring that people are not paying attention to. While we are are trying to create our business we need to remember that we are part of a community. Whether it be our country, state, county, city, district or neighborhood we need to ensure that those communities stay functional by participating as a citizen in this country. I fear that some (not all) of the mega corporations are so motivated by profits that they forget any duties to their country. Although, why should they as many are now multi-national and stock holders consist of many rich foreigners that do not live here. If we want to be able to do business here and be successful we need to make sure that the country continues to be a high quality place to live (and work) for the average US citizen. Just my 2 cents.

by J3L2404 16y ago

yequalsx 16y ago

I think too, in addition to what you suggest here, is that the size and scope of corporations needs to be limited. A company like Citi is too big to control. It is so big that its collapse would cause problems for the country even if the source of the collapse comes from its dealing in other countries. We need a new system but it appears to me that what we have in the U.S. and elsewhere is regulatory capture. I don't see anything changing in the near term.

eru 16y ago
How about breaking the country up into smaller pieces? Citi can only be too big to fail, if there's a big country behind for the guarantee. Small countries would also ease regulatory capture, since all those small regulatory regimes would have to compete with each other.
- arethuza 16y ago
  It is arguable that creating a very attractive environment for international corporations can actually make the problem worse - look at Ireland.
  - yummyfajitas 16y ago
    Why do you believe Ireland's attractive business environment caused their current problems? Do you believe Ireland would be better off without Google and various others locating HQ in Ireland?
    - arethuza 16y ago
      My own suspicion is that the high levels of inward investment to Ireland primed the asset bubble that developed there, Of course, the problem wasn't caused by the likes of Microsoft, Google etc. setting up their offices there but it probably did contribute to the irrational exuberance that keeps these bubbles growing. It is a pretty scary situation they are in: http://www.bbc.co.uk/blogs/thereporters/robertpeston/2010/11/hl_ireland_an_extreme_version.html http://www.bbc.co.uk/blogs/thereporters/robertpeston/2010/11...
      - yummyfajitas 16y ago
        Is this summary of the dangers correct: attractive business environment -> investment, growth -> optimism -> increased risk of bubbles?
  - patrickk 16y ago
    Creating an attractive environment for international corporations has largely been good for Ireland, and not the root cause of our current woes - that would be the ridiculous decision by our Minister of Finance to issue a blanket guarantee to our major banks, which were oversized relative to the size of our domestic economy. This has resulted in the current bailouts and humiliation. The 'Celtic Tiger' (booming Irish economy) went through two main periods - c.1995 - 2001 (Celtic Tiger part 1), and 2003-2007 (part 2). The first period was fueled by foreign direct investment by American multinationals - if I recall correctly, American companies have more net investments in Ireland than they do in China. Ireland exported more computer services in 2002 than the US did, which is pretty mind-boggling. This export-led growth teed up the next stage, which was simply an out of control housing bubble. See this for more information: http://en.wikipedia.org/wiki/Celtic_Tiger#Downturn.2C_2001.E2.80.932003 http://en.wikipedia.org/wiki/Celtic_Tiger#Downturn.2C_2001.E... I'm hoping our open nature, which leaves a country vulnerable in a global recession, will allow us to recover quickly. Iceland seems to be doing ok and they were worse off than we were. There are some signs of a recovery e.g. Facebook recently announced expansion in their Dublin office. Google and Apple are also expanding here, exports are up, and curtailing the out of control public servants wage bill will make us more cost competitive internationally.
    - yequalsx 16y ago
      I don't know much about the situation in Ireland. My understanding corresponds with what you wrote in your first paragraph. I wonder, though, if there was a perceived need to guarantee the banks in order to keep Ireland attractive to multi-nationals. Iceland, I believe, did not guarantee its banks' deposits outside of Iceland. Iceland has been able to recover much better than Ireland has. Iceland had no need to placate the business environment for multi-nationals though. I'm interested in knowing your thoughts on Ireland still being part of the Euro. Do you think it's a good idea? Is it a good idea simply because it's good for multi-nationals?
      - patrickk 16y ago
        "I wonder, though, if there was a perceived need to guarantee the banks in order to keep Ireland attractive to multi-nationals. Iceland, I believe, did not guarantee its banks' deposits outside of Iceland. Iceland has been able to recover much better than Ireland has. Iceland had no need to placate the business environment for multi-nationals though." I don't think it was to placate multi-nationals that the banks were guaranteed- it was partly to keep peoples' confidence in the banks (preventing a run on the banks, see this for an explanation of a bank run: http://en.wikipedia.org/wiki/Bank_run http://en.wikipedia.org/wiki/Bank_run) and partly to keep investor confidence up so that the banks could continue issuing bonds to investors in London and New York. The first part worked, I can still get cash from an ATM as normal, without fear that my current account will evaporate. The second part, investor confidence, failed spectacularly and now the government is pouring billions into the banks, as is the European Central Bank, which is into the Irish banks for well over a €100bn and no end in sight yet. It's necessary for government intervention because the markets won't touch the banks with a 10-foot barge pole at the moment. http://www.ft.com/cms/s/0/21920684-046d-11e0-8a3c-00144feabdc0.html?ftcamp=rss#axzz17jLupkAC http://www.ft.com/cms/s/0/21920684-046d-11e0-8a3c-00144feabd... The boys in Brussels and Berlin are getting completely fed up with this situation I'd imagine. "I'm interested in knowing your thoughts on Ireland still being part of the Euro. Do you think it's a good idea? Is it a good idea simply because it's good for multi-nationals?" Up until the current recession, I'd have said the euro has been good for Ireland. It's great for tourism, trade, it's very convenient and yes, it's good for multinationals too. It's easy to see how much you're getting screwed buying a meal in Paris, and lowers transaction costs from currency exchanges. However, what we really need now is more control over our fiscal policy, currently impossible due to ceding that power to the ECB - which is mainly concerned with keeping inflation under control in Germany, and keeping the whole Euro project from collapsing. The ECB doesn't really care about Ireland as such (our economy like a tiny bug on the hide of a massive elephant), but they need to keep us afloat due to contractual arrangements and to keep the euro alive. Currently, we really need to devalue our currency, something our government did in 1993, which would make us more attractive to investment and make us more competitive. We also need to keep interest rates low for a long, long time, so homeowners don't start defaulting on their mortgages in massive numbers like the US subprime situation. If the German economy starting picking up as people start buying Mercs and Beemers again, the ECB will hike up interest rates, which will be disastrous for Irish homeowners potentially leading to an even worse situation than we're in now. So it would probably be good for Ireland to not be part of the euro at the moment, but if the world doesn't fall apart and things get better (and the euro doesn't collapse, which is still a very real prospect) then the benefits of the euro will start to outweigh it's disadvantages once again.
  - yequalsx 16y ago
    I think there is a fine balancing act that governments need to do. Generally it's nice to have companies do business in your country (provided they don't engage in shoddy business practices or cause too much damage to the environment) but if it's done to quickly or there becomes too great a reliance on attracting large multinationals then problems follow. It's not good for a country to be beholden to multi-national corporations or for there to be regulatory capture.
- lukeschlather 16y ago
  It would be a race to the bottom. We largely already see that in the "developing" world. When a factory causes sufficient growth that a country demands higher wages, the multinational that owns the factory picks up and moves to an even more impoverished nation, and the worse-off are climbing over each other trying to create the most lenient regulations to attract business. Then once the corporation has departed, the original country collapses back into poverty. Rinse and repeat over decades.
  - yummyfajitas 16y ago
    Then once the corporation has departed, the original country collapses back into poverty. Could you provide an example of this part?
    - lukeschlather 16y ago
      Venezuela or Nicaragua. Though obviously the departure isn't necessarily the choice of the corporation in either of those cases. Well, in Nicaragua I'd say the most recent event was the hurricane, and so regulation wasn't the cause of industry's (tourism's) departure. But I still stand by the general theme, that multinational corporations are engaged in something of a bait-and-switch, even if there's no intentional malice behind it. And in Venezuela, one can blame Chavez, but clearly his platform resonates with people because of a pattern of exploitation, even if Chavez himself turns out to be merely a new vector for exploitation.
      - yummyfajitas 16y ago
        I agree that corporations departing can cause (or be caused by) a bad economy. But neither of your examples are part of the chain of events you described: Investment -> growth -> higher wages -> low-wage seeking investment leaving -> decline I fully agree with all steps in this chain besides the last. As you say, Nicaragua was a natural disaster and Venezuela was an unnatural disaster. I agree that both of these things can cause a nation to decline, and can also cause foreign corporations to flee the country. But I wasn't asking whether disasters can harm a country and also chase away foreign investment.

eru 16y ago

Sounds like: Those evil foreigners are taking our jobs.

exit 16y ago
when actually it's: evil corporations are creating a class of disenfranchised workers. the essential evil is this notion of nationality. for most of history people had the ability to vote with their feet. nationality is essentially undemocratic in that respect.

tomjen3 16y ago

Wtf is wrong with this board? This is the place for getting shit done, and all I find are a bunch of whiney people, with the same complaints you would find on the democratic underground or counterpunch.

matwood 16y ago

While we're at it we should throw out foreign companies who create jobs here. Toyota, Honda, and BMW all have plants in the US...oh wait

nhangen 16y ago

Are you suggesting socialism as the answer to the issue? I don't understand how in a place where we talk about building fortunes via startups and innovation, we also talk about stifling the very motivation for these companies to exist. You do this, and suddenly every company moves overseas and chooses to pay taxes in another country, at which point we lose the possibility of jobs and the tax money that these companies provide.

yequalsx 16y ago
Not every company has moved out of socialist-like Sweden. There are motivations beyond just profit and profit isn't always the best form of motivation.
- nhangen 16y ago
  There's a big difference in the culture of a company that was built in a socialist country versus that of one built in a capitalist country. Perhaps private companies have more wiggle room. Rather than mandating, why not buy enough stock to have an influence on company decisions?

jkeel 16y ago

What this article describes is what I've been noticing but I've tried to focus on my startup. Although, that said I worry that there are big shifts occurring that people are not paying attention to. While we are are trying to create our business we need to remember that we are part of a community. Whether it be our country, state, county, city, district or neighborhood we need to ensure that those communities stay functional by participating as a citizen in this country. I fear that some (not all) of the mega corporations are so motivated by profits that they forget any duties to their country. Although, why should they as many are now multi-national and stock holders consist of many rich foreigners that do not live here. If we want to be able to do business here and be successful we need to make sure that the country continues to be a high quality place to live (and work) for the average US citizen. Just my 2 cents.