So explain to me how they are investing in the America by moving operations from the US to China?
you are missing the point. our companies are already international - we are already in a period of globalization.
let us say that Widgets Inc was founded by the US, and produces it's widgets in the US, but has operations and sales in 25 countries world-wide. Demand is increasing, and Widgets Inc. needs to build a new factory. The money to do this will come from their highly profitable world-wide sales.
now, if they try to bring that money back to the United States to build said factory, the government will immediately seize a third of it. They will face a 35% loss on their investment before they even lay one brick or sell one extra widget. But if they build
overseas, then they don't lose a single penny. That first Widget can start paying down the cost of building the new factory, instead of paying down the cost of bringing that money back to the US.
Our idiotic tax code gives tells Widgets Inc that if they
dare try to expand operations here in the US from the money they make overseas, they will face a stiff penalty. my argument is, maybe, considering our high unemployment, it would be better for all concerned if we stopped forcing companies to keep their earnings overseas?
So by investing in America, do you mean, have their corporation here, enjoy the protection of the USA, but operate outside the USA to increase their profits because the American work is paid more then the Chinese National?
yes and no. labor costs, you see, aren't just the "cost of labor", but the "cost of labor in units of productivity minus costs". For example, when comparing the Chinese worker who earns $5 a day for $15 of value added to the American worker who earns $100 a day for $2000 value added, the American is actually cheaper. the problem becomes, whether or not
location in China (or Canada) becomes cheaper enough to make up for that loss in productivity.
To me that is not investing. Companies are outsourcing because of labor costs. If they could pay american workers dirt, they would stay here.
this is incorrect. Companies are outsourcing because of
costs; and a good chunk of that is indeed the US Tax Code.
My point they reap the benefits, e.g. infrastructure, protections, gov't contracts, etc., and they don't still don't invest in America. High employment happened because Wall Street got drunk and we let them, then we bailed them out. GE was moving ops outside America before this occurred. Nice try.
they don't invest in America because we make it unprofitable to do so. and High Unemployment is happening because we ****ed up the recovery with a series of ill-conceived keynesian 'stimulus' programs.
Simmer down or there will be further consequences.
