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On November 6, 2006, Michael S. Teitelbaum, vice president of the Alfred P. Sloan Foundation, explained to a subcommittee of the House Committee on Science and Technology the difference between the conventional or false portrait that there is a shortage of US scientists and engineers and reality. The reality, Teitelbaum explained, is that the combination of offshoring, foreign guest workers, and educational subsidies have produced a surplus of US engineers and scientists that leaves many facing unstable and failed careers.

As two examples of the false portrait, Teitelbaum cited the 2005 report,
Tapping America’s Potential
, led by the Business Roundtable and signed onto by 14 other business associations, and the 2006 National Academies report,
Rising Above the Gathering Storm
, “which was the basis for substantial parts of what eventually evolved into the American COMPETES Act.”

Teitelbaum posed the question to the US Representatives: “Why do you continue to hear energetic re-assertions of the Conventional Portrait of ‘shortages,’ shortfalls, failures of K-12 science and math teaching, declining interest among US students [in science and engineering], and the necessity of importing more foreign scientists and engineers?”

Teitelbaum’s answer: “In my judgment, what you are hearing is simply the expressions of interests by interest groups and their lobbyists. This phenomenon is, of course, very familiar to everyone on the Hill. Interest groups that are well organized and funded have the capacity to make their claims heard by you, either directly or via echoes in the mass press. Meanwhile those who are not well-organized and funded can express their views, but only as individuals.”

Using the biomedical research sector as an example, Teitelbaum explained to the congressmen how research funding creates an oversupply of scientists that requires ever larger funding to keep employed. Teitelbaum made it clear that it is nonsensical to simultaneously increase the supply of American scientists while forestalling their employment with a shortage myth that is used to import foreigners on work visas.

Integrity is so lacking in America that the shortage myth serves the short-term financial interests of universities, funding agencies, employers, and immigration attorneys at the expense of American students, whose economic prospects are harmed by their naive pursuit of professions in which their prospects are dim. Initially it was blue-collar factory workers who were abandoned by US corporations and politicians. Now it is white-collar employees and Americans trained in science and technology.

Congress has had a parade of CEOs, ranging from Bill Gates of Microsoft and IBM executives on down the line, to testify that they desperately need more H-1B work visas for foreign employees as they cannot find enough American software engineers and IT workers to grow their businesses. Yet, all the companies who sing this song have established records of replacing American employees with H-1B workers.

For example, in 2009 Microsoft, IBM, Texas Instruments, Sprint Nextel, Intel, Motorola, and scores of other corporations announced thousands of layoffs of the qualified American engineers who “are in short supply.”

IBM has offered to help to relocate its “redundant” but “scarce” American engineers to its operations in India, China, Brazil, Mexico, the Czech Republic, Russia, South Africa, Nigeria, and the United Arab Emirates at the salaries prevailing in those countries..
http://www.informationweek.com/story/showArticle.jhtml?articleID=213000389

On January 28, 2009,
USA Today
reported: “In 2007, the last full year for which detailed employment numbers are available, 121,000 of IBM's 387,000 workers [31%] were in the U.S. Meanwhile, staffing in India has jumped from just 9,000 workers in 2003 to
74,000 workers in 2007.”

In order to penetrate and to serve foreign markets, US corporations need overseas operations. There is nothing unusual or unpatriotic about direct foreign investment in plant and equipment. However, many US companies use foreign labor to manufacture abroad the products that they sell in American markets. If Henry Ford had used Indian, Chinese, or Mexican workers to manufacture his cars, Indians, Chinese and Mexicans could possibly have purchased Fords, but not Americans.

In 2009 US Senators Charles Grassley and Bernie Sanders offered an amendment to the Troubled Asset Relief Program (TARP) bill that would prevent companies receiving bailout money from discharging American employees and replacing them with foreigners on H-1B visas.

The U.S. Chamber of Commerce and immigration advocates, such as the American Immigration Lawyers Association, immediately went to work to defeat or to water down the amendment. Senator Grassley’s attempt to prevent American corporations from replacing American workers with foreigners on H-1B work visas in the midst of the most serious economic crisis since the Great Depression was met with outrage from the U.S. Chamber of Commerce, an organization determined to protect the multi-million dollar bonuses paid to American CEOs for reducing labor costs by replacing their American employees with foreign employees.

On January 23, 2009, Senator Grassley wrote to Microsoft CEO Steve Ballmer:

“I am concerned that Microsoft will be retaining foreign guest workers rather than similarly qualified American employees when it implements its layoff plan.  As you know, I want to make sure employers recruit qualified American workers first before hiring foreign guest workers.  For example, I cosponsored legislation to overhaul the H-1B and L-1 visa programs to give priority to American workers and to crack down on unscrupulous employers who deprive qualified Americans of high-skilled jobs.  Fraud and abuse is rampant in these programs, and we need more transparency to protect the integrity of our immigration system.

“Last year, Microsoft was here on Capitol Hill advocating for more H-1B visas.  The purpose of the H-1B visa program is to assist companies in their employment needs where there is not a sufficient American workforce to meet their technology expertise requirements.  However, H-1B and other work visa programs were never intended to replace qualified American workers.  Certainly, these work visa programs were never intended to allow a company to retain foreign guest workers rather than similarly qualified American workers, when that company cuts jobs during an economic downturn.

“It is imperative that in implementing its layoff plan, Microsoft ensures that American workers have priority in keeping their jobs over foreign workers on visa programs.

“My point is that during a layoff, companies should not be retaining H-1B or other work visa program employees over qualified American workers.  Our immigration policy is not intended to harm the American workforce.  I encourage Microsoft to ensure that Americans are given priority in job retention.  Microsoft has a moral obligation to protect these American workers by putting them first during these difficult economic times.”

Senator Grassley is rightly concerned that recession layoffs will shield increased jobs offshoring and use of H-1B workers. On February 13, 2009, Pravda reported that “America has begun the initial steps to final outsourcing of it’s last dominant industry”--oil/gas and oil/gas services. Pravda reports that “as with other formerly dominant industries, such as light manufacturing, IT, textiles,” recession is “used as the knife to finally do in the workers.”

According to Pravda, “IT (Information Technology) is a prime example. The companies used the dot.com bust to lay off hundreds of thousands of tech workers around the US and Britain, citing low profits or debt. The public as a whole accepted this, as part of the economic landscape and protests were few, especially with a prospect of the situation turning around. However, shortly after the turn around in the economy, it became very clear that there would be no turn around in the IT employment industry. Not only were companies outsourcing everything they could, under the cover of the recession, they had shipped in tens of thousands of H-1B work visaed workers who were paid on the cheap.”
http://english.pravda.ru/world/americas/107104-america_dominant_industry-0

It is rare to find US Representatives and Senators, such as Grassley, who will take a stand against powerful special interests. Some do so inadvertently, forgetting that patriotism is no longer a characteristic of the American business elite. Hoping to stimulate American rather than foreign businesses, the House version of the economic stimulus bill, the American Recovery and Reinvestment Act of 2009, required that funds provided by the bill cannot be used to purchase foreign-made iron, steel, and textiles.

The Senate provision was more sweeping, mandating that all manufactured goods purchased with stimulus money be American-made.

The U.S. Chamber of Commerce, the National Association of Manufacturers, Caterpillar, General Electric, other transnational corporations, and editorial writers, whose newspapers are owned by corporate interests or are dependent on corporate advertising, set out to defeat the buy American requirement. As far as these anti-American organizations are concerned, the stimulus bill has nothing to do with American jobs or the American economy. It only has to do with the special interest appetites that have the political power to rip off the American taxpayers. [see Manufacturing & Technology News, February 4, 2009]

Representing the corporate interests, Senator John McCain declared the Senate provision to be “protectionism” and harmful to America. McCain alleged that the buy American provision would cause a second Great Depression. U.S. Chamber of Commerce President Thomas Donohue said that buying foreign-made goods was “economic patriotism.” President Obama even appointed apologists for jobs offshoring to his National Economic Council. The American economic elite hide their treason to the American people behind “free trade.”

The ruins of America’s once great manufacturing and industrial cities stand as monuments to the success that the US Chamber of Commerce and global corporations have had “in saving Americans from protectionism.” According to the 2010 US census data, the population of Detroit, Michigan, once America’s 4th largest city and a powerhouse of US manufacturing, declined by 25% in the first decade of the 21st century. With large areas of the once great city consisting of abandoned buildings and houses, the city is attempting to shrink its borders by 40 square miles.

In the first decade of the 21st century, Gary, Indiana, lost 22% of its population. Flint, Michigan, lost 18%. Cleveland, Ohio, lost 17%. Pittsburgh, Pennsylvania lost 7%, South Bend, Indiana, lost 6%, and Rochester, New York, lost 4%. These cities were once the home of American manufacturing and industrial might.

Between 1990 and 2010, St. Louis, Missouri, lost 20% of its population, and 19% of its housing units stand vacant. As the United States’ ability to make things disappears, the hubris of America’s leaders rises as they fancy themselves to be a hegemonic superpower. Photographs of the ruins that now comprise what once were centers of US productive might are abundantly supplied on the Internet. See, for example, “The Ruins of Detroit.”
http://www.marchandmeffre.com/detroit/

The wealth that has been extracted by jobs offshoring and financial fraud has reappeared in “Richistan,” a new country within America. Author Robert Frank describes the new world of the super-rich and their fantastic conspicuous consumption.

In Richistan there is a two-year waiting list for $50 million 200-foot yachts. In Richistan expensive Rolex watches are considered Wal-Mart junk. Richistanians sport $736,000 Franck Muller timepieces on their wrists, sign their names with $700,000 Mont Blanc jewel-encrusted pens. Their valets, butlers (with $100,000 salaries), and bodyguards carry the $42,000 Louis Vitton handbags of wives and mistresses.

Richistanians join clubs open only to those with $100 million, pay $650,000 for golf club memberships, eat $50 hamburgers and $1,000 omelettes, drink $90 a bottle Bling mineral water and down $10,000 “martinis on a rock” (gin or vodka poured over a diamond) at New York’s Algonquin Hotel.

Who are the Richistanians? They are CEOs who have moved their companies abroad and converted the wages they formerly paid Americans into $100 million compensation packages for themselves. They are investment bankers and hedge fund managers, who created and marketed the subprime mortgage derivatives that brought financial crisis to the world. One of them was paid $1.7
billion
in 2006. The $575 million that each of 25 other top earners were paid is paltry by comparison, but unimaginable wealth to everyone else.

The real wages and salaries of Americans who are not Richistanians are lower than a decade or several decades ago. With their debts at all time highs, with the prices of their main asset--their homes--collapsing from overbuilding, fraudulent finance, and foreclosures, and with scant opportunities to rise for the children they struggled to educate, Americans who are not privileged Richistanians face a dim future.

The financial crisis was piled on top
of
the devastation inflicted on Americans by jobs offshoring. The debt monetization that accompanies this crisis threatens Americans with inflation and the US dollar with the loss of its role as world reserve currency. The large federal budget deficits threaten the social safety net and the pension (Social Security) and health care (Medicare) systems for the elderly. Once again, the gains for a few come at the expense of the loss of the many.