Cash 4 Clunkers

Like most Americans with older cars in the driveway, I've taken notice of the U.S. Government's "cash for clunkers" program. They will pay you up to $4,500 toward the purchase of a new, more fuel efficient car than the old car you presently drive.

I guess the concept is to use government funding to get polluting gas-hogs off the roads in America. On the surface, it seems okay. Probably a noble thing to do. Saving the planet and making America less dependent on foreign oil and all.

But there are some things about this program that are starting to bug me. Let me explain.

First, the U.S. government funded $1 billion for this program. It was money we didn't have. So we borrowed it. We'll pay it back in 40 or 80 years. Meanwhile, we'll pay interest on it. Probably to China. Over the years, the interest costs will mount up to multiples of the billion dollars we borrowed. The debt will last far longer than the new, more fuel efficient cars.

Second, a billion dollars didn't cut it. We ran out of money. So our Congress funded the program with another $2 billion. Again, it is money that we don't have. So we're borrowing it. We'll pay it back in 50 or 90 years. Meanwhile we'll pay interest on it. Probably to China. Over the years - decades really - the interest costs will mount up to multiples of the billion dollars we borrowed.

Third, most of the reason people drive old gas-hog clunkers is financial. I mean few people, if they'll really be honest, enjoy driving vehicles that make them the laughing stock of the soccer team. I can't imagine anything Americans love more than a brand new car. It's the pinnacle that we all enjoy. If we can afford it, I'm convinced that the majority of Americans would get a new car. But that's the rub --- we can't afford it. So in order to get that new car, we'll apply the "cash for clunkers" that our government borrowed from Japan to the down payment. Then we'll get a loan that we can't afford the payments on, from the banks that our government bailed out.

Fourth, I notice that as we spent the first billion dollars on this program, there were five models of new vehicles that captured most of the sales. Four of them are made by Japanese companies. So our government borrows money from China ... to pay Americans to buy new cars that they can't afford ... and we buy them from the Japanese. Someone, please help me understand how this benefits our country!

Fifth, I saw a video on YouTube that explains how the government's web site for this program gives the government rights that you never intended to give it. View the video at http://www.youtube.com/watch?v=bWs12ccbOiE. You'll see that to get into the government web site, you have to agree to give the government access to all the information in your computer. Further, it gives the government the right to control your computer. As such, it gives the government the right to monitor all activity on your computer - including Skype phone calls. Is this really what you want to get from your government as you go about the patriotic duty of getting that new car?

So here's how I see it. Cash for clunkers? I don't think so. Not this time. Not now. Not with these conditions. Moreover, I'm more than disappointed to see that the average American who is participating is flocking to the Japanese dealers to do it. If Americans are going to continue to bury ourselves in so many ways, couldn't we at least buy American in the process!

Outsourcing's Agenda

I've blogged before (and so have others) about the concept of outsourcing. It's been said that Ross Perot invented the outsourcing industry with his company - Electronic Data Systems. In the past few decades it has grown to an industry. And outsourcing now encompasses much more than just running mainframe computers or computer networks. In fact, just about anything can be outsourced these days.

Perhaps the question most of us blog about is whether or not just about anything should be outsourced. What are the political issues? What are the moral issues? What are the business issues? Do we have the right issues in each category? There are many questions. At the same time, there are many experts who will sell you their advice to help you sort out the issues.

Oddly enough, I'm a fan of outsourcing. But I see it as a double-edged sword. It seems to cross boundaries (as most things in life do) and become problematic. What's good becomes bad. How do we know this? Well, the surest signs are when ordinary events (transactions) seem to have extraordinary significance. In other words, seemingly ordinary decisions seem to get made with decision criteria that is may not so ordinary, maybe no so expected. Perhaps it might be a seemingly ordinary decision that gets made --- with rather unfortunate views.

Two such decisions came about this week. First, we saw that Xerox announced it will spend about $100 million paying an Indian company to manage its data centers. (http://www.reuters.com/article/innovationNews/idUSTRE5342R120090405) Xerox laid off more than 3,000 people last year, slashing American jobs. Now they're busy securing jobs in India ... while Americans suffer the most devastating economy in our generation. What made this incredibly newsworthy was Xerox' timing. It couldn't have been worse!

Second, we say that Sallie Mae (a company that the U.S. federal government created and then spun off) is pulling back jobs from overseas. (http://uk.reuters.com/article/economyNews/idUKTRE5352TH20090406) Sallie Mae's operating company will create about 2,000 American jobs by pulling jobs from Mexico, Philippines and India. What made this story so newsworthy was Sallie Mae's alleged motive. It is said that Sallie Mae is trying to find favor with the U.S. federal government (its foreign parent) as it seeks to buy troubled assets at deep discounts (funded by American taxpayers).

Do you have that bad taste in your mouth? Offshore outsourcing has always tasted this way. It's always slashed American jobs to fund American greed. Stay tuned for more as the truth about offshore outsourcing continues to be revealed. Company after American company has drunk the Kool Aid on this one, folks. The best names in the business, from all the blue chip companies to the mid sized manufacturers --- have been busy shipping jobs overseas so they won't have to pay anyone in America a living wage. Now that our economy is crashing and burning and no American jobs are to be found --- we shall find out the real impact.

Can the American economy really recover when the jobs are all offshore? What do you think? And what of these companies -- most of which are falling on their swords -- that outsourced to offshore locations "in order to remain competitive?" What do you think? Do you suppose they really are more competitive?