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More On Outsourcing's Hidden Costs...


Re "Software: Will outsourcing hurt America's supremacy?" (Cover Story, Mar. 1): I read with incredulity the remarks of those who would have us believe that low labor rates form the basis of a software-outsourcing decision. When one computes the total impact of added engineering liaison, translation problems, remote-management requirements, and potential loss of proprietary rights, it's difficult to see why we want to lay off our U.S. talent base in favor of nurturing that of other countries. Tack on the financial burden of paying unemployment benefits to our citizens, and I'll wager that we have a negative net result. I'm sorry, I can't accept the logic.

John F. Schickler

Rochester, N.Y.

I spent 30 years writing operating-system and network-system software for major computer manufacturers. I know from personal experience that a knowledgeable software or firmware designer/programmer can embed any sort of information without detection so that information can be dumped to a foreign source without the knowledge of the computer owner. If the U.S. outsources our operating systems and firmware to other countries, we can kiss our national security good-bye.

Sylvia Parr

La Jolla, Calif. Thank you for your excellent editorial on outsourcing ("Outsourcing: Stop the hysteria," Mar. 8), as well as last week's section on software outsourcing. Another reality is that millions of Americans effectively make outsourcing decisions every day when they purchase goods made abroad. Free trade benefits the large majority of people, and the cost of protecting specific industry areas often imposes a far greater cost on other Americans. Meddling by politicians of both parties in competitive markets hurts not only us but other peoples around the world, too.

Chris Waldorf

Atlanta

Thirty years of mounting trade deficits now averaging about $450 billion per year should convince us that "free trade" doesn't work. When theory and data collide, we throw out the theory. Warren E. Buffett has proposed an import certificate (IC) program that would bring U.S. trade into balance and maintain it there, repatriating millions of jobs.

It's time for some fresh thinking.

Lawrence Briskin

Centerville, Ohio Re "The changing shape of inflation" (Editorials, Mar. 8): As inflation and deflation are monetary phenomena that relate to the supply of goods relative to the supply of currency, they cannot occur simultaneously. Likewise, because the dollar is a world-reserve currency and many currencies are tied to the dollar, the U.S. is the only country that can export or import inflation or deflation. China cannot export inflation to the U.S.; it can only raise the prices of Chinese goods relative to the dollar. For this to become inflationary to the U.S., the Federal Reserve would have to accommodate these price increases through monetary policy.

Michael Harrington

Santa Monica, Calif. I would not be too quick to dismiss the case against former Enron Corp. Chief Executive Jeffrey K. Skilling for insider trading ("The case against Jeff Skilling," News: Analysis & Commentary, Mar. 1). An automatic stock-sale plan, such as the one he adopted in November, 2000, offers no protection if the seller possessed material inside information at the time of adoption. According to your article, by late 2000, Enron's share price had started to fall, and "the company faced a crisis" in regard to the so-called Raptor transactions. The full extent of those transactions and the looming crisis were certainly not public information at the time Skilling adopted his automatic stock-sale plan. As a securities lawyer, I like the government's case better than Skilling's.

Robert Birnbaum

Boston Peter Coy's "Let's wage war on gas guzzlers" (News: Analysis & Commentary, Mar. 1) is the clearest-thinking article I've read on this subject. General Motors (GM), Ford Motor (F), and the rest will whine that they can't build cars that are as big as a school bus and get good gas mileage -- then Honda Motor Co. (HMC) and/or Toyota Motor Corp. (TM) will show them how to do it. If it weren't for the foreign competition, we'd all be driving cars that fall apart at 50,000 miles.

The only correction I would make to the increased federal fuel tax is to give it back to the people who are willing to conserve resources by buying fuel-efficient cars. The Bush Administration has to lead on this.

John Reidenouer

Nellysford, Va. Rumors of a PhD shortage rumble through academia every few years, but it's not that simple ("Is there a doctor in the B-school?" Management, Mar. 1). Many business schools have "ghost" vacancies. They can't fill the position because they don't have the money, but they won't delete the position because of internal politics and budget gamesmanship.

Classes are taught by nontenured clinical faculty and part-timers because they give the school budgetary flexibility and because they cost less (on a dollar-per-student-hour basis), not because there aren't enough PhDs available. Administrators portray this as a "least of evils" approach to the combination of growing enrollments and static or shrinking budgets.

Edward E. Rigdon

Georgia State University

Atlanta


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