Stimulus Plan Causing Outrage... In India
wesmorgan1It seems that the stimulus bill (no, I'm not going to type that big long name again) includes one particularly nifty little provision. It precludes those businesses receiving bailout monies from bringing foreign workers to the US with H-1B visas. From India Times:
In India, there has been a swift outcry. "This is just irrational protectionism," says Montek Singh Ahluwalia, deputy chairman of India's Planning Commission. "It makes no economic sense at all."
Here's some critical analysis, from the same article:
Data released by the U.S. Citizen & Immigration Services showed that in 2008, for the second year running, many of these visas went to Indian IT services companies that were sending engineers to the U.S. temporarily to work. In effect, a visa that had been designed for U.S. corporations to remain competitive at a time of talent shortage had become a blessing for the U.S. operations of global Indian companies, allowing them to send engineers from India, rather than hiring locally.
So, basically, a condition of accepting stimulus monies will be to hire Americans, instead of making exceptions to immigration quotas to bring in foreign workers. I suspect that the long-term effect of this requirement will be that the canard of "those skills just aren't available among American workers" will be laid to rest, and that the H-1B visa program enjoys permanent cutbacks as a result.
I'm OK with that.
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Reader Comments (31)
By all means, let's insert as much Buy American language (including labor) as possible into these bills. After all, we want to piss off some of our best allies, don't we?
Let 's wait and see whether Wes would apply "Buy American Only" argument to illegal immigration (who took away labor jobs from American poor and lower middle class).
HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA!
Tell you what, LAI - see that little "search box" to the upper right? You go read my past statements on illegal immigration and come back to this thread. Go ahead, we'll wait...*snicker*...
Wes,
Just checking where you stand. So you are saying that we should send all those illegal immigrants back to their host countries, right?
"Just checking," my butt. Just admit that you fired off yet another piece of snark without a clue. *laugh*
I'm all for buying American myself. I do, whenever possible. I just have one question, though...what kind of car(s) do you have, Wes?
Wes,
Afraid to apply your logic to illegal immigrantion? *Laughing* my butt!
Instead of lowering taxes and making the cost of doing business lower in America, the left wants to drive business away from America and playing this stupid protectionist game. Who in their right mind would want to invest in America if it becomes more like Europe?
Why waste money bailing out those failing companies? How does bailing out Detroit help American auto industry?
Wes is absolutely right. Hey, I love India. They're a great country, an important trading partner and a strong democratic ally of ours. But sorry, I have to come down on the side of American workers.
The truth is we have plenty of people capable of doing these IT jobs and if we don't, we have plenty of unemployed to be re-trained. Under the Bush admin, these H-1B visas were used to bring in cheap labor. Big business lobbied Bush so that they could bring in IT workers from India who make half of what Americans were making. This is just another reason why I'm happy the Stimulus Plan passed.
I'm assuming that you drive an American car, too.
Using Egg 's logic, the left would rather have the Palestinians be poor and dependent on "foreign aids" to make them feel good. Instead of becoming good IT engineers working for American companies, they would pursue more useful career with Hamas!
This is how free market is helping the hard working people across the globe to achieve higher living standards. The way to compete is to lower corporate taxes and give tax incentives for people to invest in America and to innovate for more good jobs for Americans.
GR, my current vehicles are a Suburban and a Ford Windstar. I've never owned a "foreign" car, unless you count the previous Windstar that came from a Canadian plant.
As far as H-1Bs are concerned, the program has been abused for a LONG time. DoJ finally busted some small players, with 11 arrests in 7 states. Microsoft is laying off thousands while simultaneously benefiting from thousands of H-1B visa positions; the company refuses to divulge the US/H-1B breakdown of its layoffs.
Silicon Alley Insider has several articles on the subject, although they're very strongly against H-1Bs in general; apply salt as needed.
LAI, if you're incapable of using a website search function, just drop it. Given the volumes posted on this blog on that particular subject, you can go do the reading for a change instead of demanding to be spoonfed.
You're beginning to remind me of a Pekingese - lots of yapping, but little substance.
Outstanding! Thanks..
Wes,
Sounds like you cannot answer the argument. So try your typical distraction again? I think you are simply trying to be cute and make a silly point. If you really don't understand my argument, then let me know and I can explain to you slowly again.
You haven't made an "argument," LAI - you made an unwarranted ad hominem attack that doesn't match the facts, and you're too bloody lazy/stubborn/ignorant to do the five-minute search that would show you everything I've written here on that subject.
I'm done with it; I have no patience for fools.
Wes,
I know people working at Microsoft. There are deadwoods there for a long time. Microsoft hasn't had a layoff for a while! The silly point is to use this H1B visa issue to somehow justify this porkulus bill. When people go shopping, you look for the best possible product with the cheapest possible price. The way to help American workers is to scrap this porkulus bill and lower taxes to help them keep their jobs and American businesses to create new jobs. You can play the protectionist game all you want. If you don't create a better env for business, you will be bankrupt. Again, how does bailing out Detroit help American auto industry and American workers in the long run?
Who said anything about "using this" to "justify this porkulous bill?" Are you incapable of discussion without attack? Once again, you're off the mark; my objections to the stimulus package, while they may not be quite as extensive as some, are on record, on this very blog. Kindly do a bit of reading before going into attack-dog mode, OK? Moving on...
You seem to be arguing that government's role is to help American business, but not American workers. I would suggest that government has obligations in both areas. If we're going to help American business, it seems reasonable to expect said businesses to, in turn, bolster American workers. For its part, Microsoft is laying off 5000 workers. Microsoft has received close to 5000 H-1B visas over the last three years. I think it entirely reasonable to ask Microsoft how many H-1B holders are included in these layoffs.
As far as the H-1B visas are concerned in general, take a look at last year's H-1B activity. Yes, Microsoft was the biggest US-based recipient of H-1B approvals (with 1037 visas), but the top four recipients of H-1B visas were:
all of which are Indian outsourcing firms. That's right, Indian firms are getting US visas to put Indian workers in the US to outsource jobs from US firms, thus displacing US workers. These four firms were #1, #2, #3 and #6 on the 2007 H-1B list, accounting for another 9319 visas with which they displaced US workers. The 2006 list shows those four firms as #1, #2, #4 and #5, accounting for another 14,136 visas. Now, H-1B visas are valid for six years, and can be extended in 1- and 3-year increments if the holder is applying for a green card, so we're talking about a compound effect of 35,000 IT jobs in the last three years alone.There are severe flaws--and, as noted in previous comments, outright fraud--in the H-1B program. It's entirely reasonable to throttle its use by US firms receiving government help. Heck, I'd support an overall cutback; it's one thing to let the labor market "settle matters itself," but quite another to actively enable business to undercut US workers.
This is the free market way to distribute the wealth to poorer countries around the world if those countries work hard, play by the rules, and produce good workers at lower price. Aren't you saying that we American should be more responsible helping other less fortunate people? That 's why I would rather have the Palestinians become good IT engineers like the Indian engineers (even to compete with Israeli engineers) and work for American companies.
So how do you help American workers without protectionism? By lowering corporate taxes and more tax incentives to invest and create jobs in America. You make the cost of doing business lower in America and it will encourage business to hire more workers in America. For example, the suspension of the payroll tax will help both American workers and American businesses at the same time. American businesses are the ones providing jobs for Americans.
Well, you know....
* Hoover cut taxes in the face of the 1929 crash - how'd that turn out? (Hint: three years later, he went for the largest peacetime tax increase in US history)
* Reagan cut taxes in 1981. What happened in 1987? (Hint: his GOP successor raised taxes)
* George W. Bush cut taxes in 2001. How'd that turn out? (Ahem.)
The pattern you're looking for is "tax cuts, boom, bubble, crash."
Here's an interesting thought on the subject, from the same author:
Wes,
The country would have recovered much quicker without the New Deal. FDR 's treasurey secretary admitted as much. Reagan tax cut is responsible for the economic growth from 1983-1999. Bush 1 was an economic liberal and he was hoodwinked by the dems into raising taxes and non-defense spending at the same time. That slowed down the recovery and he lost the election! Bush tax cut in 2001 help keep the economy growing even after 9/11 and the GWOT. Do you know the economic of 9/11? One lone shooter can paralyze the economy of Northern Virginia for a month! The economy starts going South in 2007 after the dems took over congress in 2006. The financial mess we are in can be put at the feet of the Dems for sure.
How does liberal economic policies working out for the poor in Michigan, DC, NJ, and CA etc...? The liberal dems have been running DC for how long now? How is the poor faring there?
Given that we'll disagree about the specifics of 1929/1981/2001, we should probably just leave them be.
What did you think about the general "bias toward reinvestment" as opposed to "bias toward profit taking" analysis? If the goal is wealth creation, I should think we'd favor the former...
That great liberal icon John Kennedy slashed taxes, and the economy grew dramatically.
But we're focusing on the wrong thing. The proper concern is keeping the size of government small. If that is done, taxes will automatically go down.
Wes,
Business is meant to make a profit. Good business have good short term and long term plans. If you cannot make a profit, you will be out of business. Period! Nothing wrong with profit per se. You can do both. Some states give companies tax break for 5 years to open up new manufacturing plants/facilities etc... to attract investment. They also lower corporate taxes to lower the cost of doing business in their states. The result is more people are employed. It works every time! High taxes took the more capital away from the private sector, and the gov is usually if not always worse in terms of spending those money!
What, exactly, is the financial health of the states? Specifically, what's the financial health of those states that offered those big tax cuts/credits to attract employers, or cut taxes on all businesses?
Look at Texas for a good example. Last year, Governor Perry decided to suspend the employer tax that pays into the state's unemployment insurance fund, thus giving--at at a rate of $10 to $19 per employee--a $90 million tax cut to Texas businesses; he also fired off some early bond payoffs to replenish the fund, thus effectively cutting business taxes by another $280 million in 2008. Now, less than a year later, the fund is facing a $447 million shortfall. The state government will have to raise taxes on employers, issue bonds, borrow money or some combination of the three, in order to meet its obligations. (Sources here and here. The latter source actually projects a $750 million shortfall in the fund...)
Now, some might think this an extreme example, but the funding crisis was triggered by a change of less than 2% in the state's unemployment rate, from 4.2% to 6%. That kind of swing is not outside the realm of contingency planning. I would suggest that 'tax cut fever' overcame the 'save for a rainy day' mentality that state governments should follow, and Texas is either going deeper into debt or raising taxes to resolve the issue.
I'm not opposed to targeted tax cuts. I'm definitely unconvinced of the "tax cuts as panacea" and "tax cuts as soon as possible" approach often favored by conservatives.
Wes,
Honestly the economic and budget health of Texas is far better compared to CA, Michigan, NJ, NY etc... Tax cut is not a panacea, sure. The other part of the equation is reduce spending. If you spend more than you make, you will go bankrupt eventually.
Actually, the tax policy of Texas has helped the state weather the recession much better compared to other states with liberal policies listed above. CA is about to go bankrupt. Why? Because business and people are leaving the states. Tell me again how high taxes have helped CA, Michigan, NJ, and NY so far?
Wes,
Texas is doing so bad that as of February 5, 2009, Texas is one of only six states not facing a budget deficit. For a comparison, here are the deficits of states with high taxes and liberal economic policies: CA ~ 13B, NY ~ 13B, NJ ~ 3B.
I guess you can believe whatever you want.
Another impressive statistic here:
From November 2007 to November 2008, 71% of jobs created in the US were created in Texas.
Of course, this explains why the Lt.Governor says there's a "hole in the budget," and why they have to further cut spending. Note that my original statement was that the $700 million shortfall is projected for this year, which is not reflected in the sources you cited.
So, I think we're both right. Texas has not faced a deficit in recent years (as you noted), but faces one now (as I noted).
Oh, and the Sunshine Project's "71%" statistic is a little off. The original source (the Comptroller) says that 71% of jobs created in the 15 states with job gains were created in Texas. (I'm assuming that means that they only compared their job numbers to those states that had a net gain in jobs; other states could have created more jobs, but still had a net loss...that's just a weird way of stating it...) That's pretty good, to be sure, but that doesn't translate to "71% of jobs created in the US."
(I AM glad to see the Lt. Governor talk about ensuring a strong balance in their Rainy Day fund. That's where Kentucky screwed up some years ago - they did a tax cut, but didn't replenish our version of the 'rainy day fund' first...and, naturally, that came back to bite us.)
Wes,
No matter how you spin, Texas is the best state for job creation! And their financial health is very well compared to CA, NY, NJ, and MA. I think if we look at the facts honestly and objectively, we can conclude that Texas is a success of tax-cutting policies compared to the utter failures of liberal high tax policies in states like CA, NY, NJ, and MA.
Let 's be intellectually honest enough to acknowledge that simple fact instead of spinning!