Outsourcing and Tax Evasion

Romney as CEO : Bain Capital : : President : U.S. Government
During my entry about Mitt Romney whereupon I managed to come up with only one good thing to say about him, I said the following:
Con > Shady Business Practices
I won’t go into full details on Romney’s shady business practices while at Bain Capital or as governor of Massachusetts, but the list is long. Shifting money through tax shelters, leaving Americans jobless, outsourcing jobs to overseas companies, and so on. He’s running on a platform of being a savvy businessman. I’m not impressed.
My point in mentioning Romney’s business experience is that this is the primary reason touted by the Republican Party. To quote Romney from his acceptance speech at the RNC on Aug. 30, 2012:
He took office without the basic qualification that most Americans have, and one that was essential to the task at hand. He had almost no experience working in a business. Jobs to him are about government.
In the same speech, Romney said, “I will begin my presidency with the jobs tour” and “I have a plan to create 12 million new jobs.”
Romney made an unsurprising slip of the tongue the next day:
Paul Ryan and I understand how the economy works, we understand how Washington works, we will reach across the aisle and find good people who like us, wants to make sure this company deals with its challenges, we’ll get America on track again.
So, let’s boil down these ideas:
a)      Romney thinks jobs don’t come from government
b)      Romney running of the government can result in twelve million new jobs (he didn’t explain how)
c)       Romney thinks that Obama doesn’t have any experience in business and is unqualified to run the country
d)      Company… err, country, I meant country
Also, add to the list the number of speakers at the convention who trucked out Romney’s experience in the public sector running Bain Capital.
The analogy being argued is, Romney as CEO : Bain Capital : : President : U.S. Government
So if Romney will be treating the presidency in the same manner he ran Bain Capital, it’s fair to look at his business practices and see if they would be analogously beneficial to the U.S. Government if he treated the presidency the same way.
Outsourcing and Tax Evasion
So when I mentioned Romney’s business practices, I wasn’t talking about the merits of outsourcing and tax evasion to a company. I was talking about the merits of outsourcing and tax evasion specifically for the U.S. Government. I certainly can see the merits of structuring a business to maximize profits; no company is voluntarily going to hand the government more money than it can manage, if it can help it.
However, I don’t see the benefits of a company outsourcing and evading taxes to the federal government. And that’s the crux of the problem: I don’t see how experience running a business that outsourced jobs and evaded paying taxes translates to being a good president for the U.S., specifically because all of the business techniques Romney employed would not benefit the country in the same way it would benefit a company.
This, I suppose, is where [Frankly.]’s opinion differs from mine:
Also, I always find it an absurd thing that people try to say Romney outsourcing jobs is bad for the U.S. Most any educated economist would disagree with this. Outsourcing creates efficiency and is one reason I get to be an accountant and not a farmer. [Frankly.]
RYN: Yeah, I suppose we completely disagree on the principle of outsourcing jobs being bad for the United States. I tend to think outsourcing creates efficiency – other countries get to do what they’re better equipped to do, we get to do what we’re better equipped to do. By outsourcing we free up resources that would otherwise be tied up – that’s how we get the incredible innovation that we do. [Frankly.]
I seem to be in the minority on these viewpoints when I discuss them with my friends, but I think people take for granted how prosperity and utility is created. Arguing against outsourcing to me is like arguing that we should all farm for ourselves and not get any of our food from the grocery store. Most of us aren’t very good at farming and would rather not do it, so it makes sense for us to be scientists and accountants and to use the resources gained there to buy our food from the grocery store. It’s not clear to me why this principle does not apply on a national scale. It’s fair to say that it’s more complicated on a national scale, but I’m not sure what complication makes something as fundamental as comparative advantage not advantageous. [Frankly.]
Perhaps [Frankly.] is correct, and that outsourcing creates efficiency. However, I’m skeptical. I suspect that outsourcing can lead to corruption and slavery. Outsourcing appears an avenue to get cheap, unregulated, non-union labor. Benefit to the company? Yes. Benefit to the American consumer—sometimes. Benefit to the U.S.? Debatable, but probably no. Benefit to the world at large? I don’t think so.
Take as fairly recent examples, Apple’s factory conditions at Foxconn in China, Indian slave children making low-cost clothes destined for Gap, workers for Wal-Mart suppliers forced into slave labor, and Nike physically and mentally abusing workers at a Converse factory in Indonesia. I didn’t have to look very hard before finding the abuses of international companies using outsourced labor.
All that said, I still don’t see how running a business that outsourced domestic jobs and structured its business practices to avoid paying taxes translates into running a country well. The country, despite what Romney and the Republicans appear to believe, is not a company.
<div style=”margin: 0in 0in 10pt”>We could focus on Romney’s time spent as governor of Massachusetts (a state whose correct spelling always evades me. Thank you, Spell Check). Romney doesn’t talk much about it. I suspect I wouldn’t like the results there, either.