Huffpost Technology
THE BLOG

Featuring fresh takes and real-time analysis from HuffPost's signature lineup of contributors

William K. Black Headshot

A "Capitalist Tool's" Defense of Apple Morphs into an Anti-Obama Screed

Posted: Updated:
Print

Forbes' (which bills itself as the "Capitalist Tool") publisher, Rich Karlgaard, writing in the Wall Street Journal, defends Apple's creation of a criminogenic environment that produces endemic anti-employee control fraud by its suppliers and unlawful and brutal working conditions that Apple refuses to stop.

How does a defense of Apple's suppliers driving their workers to suicide end up attacking Obama? Here's Karlgaard's clumsy but brazen effort. He relies on the January 21, 2012 New York Times article, which recounts Obama's February 2011 dinner meeting with Steve Jobs and other executives. This is Karlgaard's version of the conversation between Obama and Jobs as reported by the New York Times.

It turns out Apple employs 40,000 workers in the U.S. but has 700,000 workers in China. Last year President Obama asked Mr. Jobs why that was so. "Those jobs are never coming back," Mr. Jobs reportedly said, then turned the heat back on Mr. Obama's anti-business policies.

Sadly, Mr. Cook [Jobs' successor] is not allowed to display this kind of cheek, even if his sweet soul wanted to.

Except that this is not what happened. Here is what the actual article reported about the exchanges between Jobs and Obama (and other executives).

Not long ago, Apple boasted that its products were made in America. Today, few are. Almost all of the 70 million iPhones, 30 million iPads and 59 million other products Apple sold last year were manufactured overseas.

Why can't that work come home? Mr. Obama asked.

Mr. Jobs's reply was unambiguous. "Those jobs aren't coming back," he said, according to another dinner guest.

[Much later in the article.]

At dinner, for instance, the executives had suggested that the government should reform visa programs to help companies hire foreign engineers. Some had urged the president to give companies a "tax holiday" so they could bring back overseas profits which, they argued, would be used to create work. Mr. Jobs even suggested it might be possible, someday, to locate some of Apple's skilled manufacturing in the United States if the government helped train more American engineers.

First, Obama did not ask why Apple did not employ American suppliers and American workers. He asked the right, constructive question: how can we reverse that situation. Jobs responded that it hopeless. American suppliers could not compete with Asian suppliers. Obama was the "can do" guy seeking information from an expert. Jobs was the counsel of hopelessness.

Note a subtle matter, if Karlgaard was accurate about his second point -- that Jobs negative response was based on "Mr. Obama's anti-business policies" -- then Apple's failure to hire American suppliers would not have been a hopeless situation. Obama would simply have to reverse his (purported) "anti-business policies" and all (or at least much) would have been well.

Second, Jobs did not respond to Obama's question about how to help get Apple find it desirable to hire American suppliers by "turn[ing] the heat back on Mr. Obama's anti-business policies." Jobs was not "cheek[y]" to President Obama. His response was that it was hopeless. Karlgaard indulges in a personal fantasy that demonstrates how small a person he is. He would love to be rude to the President of the United States by showing him a great deal of "cheek." Jobs did not share Karlgaard's pathetic fantasy.

Third, the executives did not criticize or ask for an end to "Obama's anti-business policies." Here again are the policy changes they suggested.

[T]he executives had suggested that the government should reform visa programs to help companies hire foreign engineers. Some had urged the president to give companies a "tax holiday" so they could bring back overseas profits which, they argued, would be used to create work. Mr. Jobs even suggested it might be possible, someday, to locate some of Apple's skilled manufacturing in the United States if the government helped train more American engineers.

The executives did not complain about any "anti-business policies" or ascribe such policies to Obama. They made three suggestions: increased visa quotas allowing foreign engineers to work in the U.S., a "tax holiday" on repatriating overseas profits, and increased government subsidies to "train more American engineers."

Our visa policy favors admitting engineers and students who wish to study engineering. The H-1B visa program primarily admits engineers and scientists. The H-1B visa quota was expanded greatly under President Clinton to the point (in 2000) that not all H-1B visas were used. In 2004, President Bush and a Congress controlled by Republicans allowed Clinton's increased quotas to expire, which substantially reduced the H-1B visas.

Taxing corporations is not an "anti-business" policy, and all modern presidents have taxed corporations. A "tax holiday" is an extraordinary subsidy to corporations that already pay an exceptionally low effective income tax rate.

Increased government support for training U.S. engineers was the third suggestion. Once more, Jobs was not criticizing an "anti-business" policy, much less "Obama's anti-business policies." The government already subsidizes the training of U.S. engineers. The federal and state governments have numerous specialized programs supporting the training of engineers and scientists. Jobs wanted larger governmental subsidies for training engineers.

Obama has proposed larger governmental subsidies for training engineers. Obama warned that the Great Recession would devastate state and local finances. States used to provide the great bulk of the funds for public universities, which train most of our engineers. Obama proposed to avoid the devastation of state finances by providing a large revenue sharing component to the stimulus bill. Revenue sharing provides the states with unrestricted funding that they can use to protect their priorities (e.g., educating more engineers) from cutbacks. Revenue sharing was a concept developed originally by Republicans. Unfortunately, the Republicans and "blue dog" (conservative) Democrats announced their opposition to the funds for revenue sharing. Even more unfortunately, Obama caved to their demands rather than risk their threat to kill the entire stimulus bill. If any party is an obstacle to greater federal and state spending to train American engineers it is the Republican Party. President Obama is a strong proponent of increased federal and state spending to train engineers and scientists.

From Our Partners