Monday, November 21, 2011

The Looting of American Creativity

From Forbes, an important piece about how the captains of our biggest industrial corporations have been looting our creative capacity and pocketing whatever they can take.

You should call it looting. It's the sort of thing we used to read about when mobsters bought a company and hollowed it out before dumping it, but now it's the model used by big capital management companies. (It sounds a lot like how Mitt Romney got rich: by selling off parts of companies he acquired, laying off masses of employees, and pocketing the cash.)

Such single-minded (you might say narrow-minded or short-sighted) pursuit of profits is a loser's game. It's not sustainable, not responsible. (Remember when American business used to be responsible?) In the cases cited here, where capacity is sold off overseas, it's certainly not very patriotic, even if the tycoons involved do wear a flag lapel pin. What's the word I'm looking for? What's the opposite of creative? Sure: destructive. That's the preferred model of the last thirty years in American businessthink. You could write a vampire movie using this business model.

Creative assets have been invented and developed in the U.S. often with large taxpayer investment, collective genius harnessed and supported by universities and government scientific grants. But in many cases the things Americans helped create are no longer American; they've been offshored to evade societal obligations. Obligations that responsible Americans used to be proud to shoulder. And the infrastructure and educational system that nurtured the creativity is left to rot because the profiteers refuse to pay back into the creative cycle. They've looted the creative infrastructure, offshoring our American genius to evade taxes. As if the American genius was theirs to take. What happens to the inventors once their creativity has been mined and sold away? The huge dividends from this process have been pocketed by a very narrow class.

We are taught by the media to distrust migrants, but the multinational corporate model is a migrant too, a much less helpful version, a more dangerous version, without nationality, without any sense of responsibility or loyalty or conscience. Without any wish to be American unless it profits them and doesn't tax them. Here's an interesting 2007 article from investigative journalist Lucy Komisar about how Merck and other companies do their offshore shuffle.

First they came for the blue collar jobs, and I said nothing. Then they came for the white collar jobs... What mid-century cautionary tale am I reminded of here? This warning article was published six years ago by the Economic Policy Institute. Did we listen?

But (and are we surprised?) offshoring doesn't fulfill the promises it makes, as this 2007 article from CIO magazine demonstrates.

"Sixty percent of companies that send their operations offshore fail to meet their operation performance expectations, and more than a third (34 percent) fail to mee their savings expectations, according to a new study from global management consulting firm A. T. Kearney."

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