A standard right wing talking point is that tax cuts for the rich and corporations create jobs.

This is, actually, true. They create jobs overseas.

The tax cuts’ two bills, in 2001 and 2003 – changed laws so that personal income tax rates were reduced, exemptions for the Alternative Minimum Tax increased, and dividend and capital gains taxes also cut.

Yet in the debate, it seems of no moment to either side whether the tax cuts were effective in achieving their goal of spurring business investment and making the US economy more competitive.

Our own examination of US non-residential investment indicates that the reduction in capital gains tax rates failed to spur US business investment and failed to improve US economic competitiveness.

The 2000s – that is, the period immediately following the Bush tax cuts – were the weakest decade in US postwar history for real non-residential capital investment.

Not only were the 2000s by far the weakest period, but the tax cuts did not even curtail the secular slowdown in the growth of business structures.

http://crooksandliars.com/ian-welsh/tax-cuts-rich-create-jobs-outside-us

The logic of this is simple enough. If you have money to invest, you're going to invest it where it'll return the most. Right now and in the past couple decades that is either in leveraged financial games, or it is in economies which are growing fast and have low costs. The US does not have high growth compared to China or Brazil or many other developing countries. It has high costs compared to those countries as well.

If you can build a factory overseas which produces the same goods for less, meaning more profit for you, why would you build it in the US?

Until that question is adequately answered, by which I mean "until it's worth investing in the US", most of the discretionary money of the rich will either go into useless speculative activities like the housing and credit bubbles, which don't create real growth in the US, or they will go overseas.

There are a number of ways this question can be answered.

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Via Sirota, this is just depressing. I don't see how green jobs can revitalize the economy if they don't stay here:

The US firms have offshored 22,000 green technology jobs to India since January 1, 2009, Doug Brown, co-author of the influential 2009 Green Outsourcing Report, informed TNIE.

“We see the (green job offshoring) trend increasing as the US and the UK outsourcing buyers are seeking lower cost in labour and energy consumption. There are few suppliers who match credentials and outcomes of Indian firms,” he said.

The annual industry study by Brown-Wilson Group, which surveyed 4,000 global firms, was released last week.

The report lists Patni, HCL, WNS, Wipro, Mastech and Tech Mahindra among important Indian green vendors who are benefiting from the offshoring wave.

Among the non-Indian firms, Xerox, Accenture, IBM Global, CSC, Capgemini, Oracle, HP/ ED S, Aramark, SITEL and Perot lead the list.

As most of these firms run large delivery centres in India, the boom in their green offshoring business is expected to further create jobs in India.

Noting an interesting irony, the authors of the report say, “In the US, green stimulus plan is creating low-wage installation and construction jobs.” But, in India, which is usually associated with cheap and low-skill work, “…New green jobs include higher dollar engineers, strategic business management and support technicians charged with designing innovative environmental friendly solutions,” they add.

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Natasha Chart at Open Left:

Glenn Hurowitz recently wondered who's going to help Tibet bring down China, like the Russians were brought down in Afghanistan and the British in India.

International pressure and protest seems to carry no weight among the Chinese. Their government is still arresting monks for "unauthorized gatherings", they're still shooting and killing Tibetans. They've also been shipping weapons to Zimbabwe's dictator, who's currently ignoring the results of an election that voted him and his party out of power. They buy 90 percent of Sudan's exported oil, and sells them small arms destined for Darfur. Darfur, where the Sudanese government is carrying out air attacks against helpless civilian targets. Oh yes, and they're now the world's top carbon polluter, though the US still remains the top carbon polluter per capita.

Yeah, that Chinese government, complete jerks, tyrants, to put it charitably. People are surprised that the Olympic torch protests seem only to have stirred Chinese nationalism, surprised that the Chinese don't understand why people are angry. Still, I think Glenn asks the wrong question. Because who is it that raised China up? The lack of self-awareness in this situation isn't exclusive to the Chinese, people everywhere have an amazing capacity to accept almost anything as normal.

Indeed, let's cut right to the heart of the matter: whom else will we buy our shoes from?

I looked this up once when I was working at my community college paper in 2005. There was an editorial insistence on doing a fashion insert, so I contributed something about sweatshops and the offshoring of clothing manufacture. (I know, total killjoy.) I found a copy of that article in my old files, and according to the research that I'd done at the time, the US had lost over 860,000 textile and apparel jobs since 1993, and China was making 80% of the world's shoes.

Sure, if you have (usually) more money to spend, you can find shoes made somewhere else. But not everyone has that kind of time or latitude. Funny thing, though, now shoe manufacturers are closing down in China. Now that "many factories have to meet social obligations" and workers have been agitating for better pay, manufacturing jobs are slowly starting to leave China as they once left the US. Read on...