muses of the moment

January 30, 2013

Outsourcing: it doesn’t work at a certain point

Filed under: Economic Crisis, Odds 'n ends, The Financial Crisis, Unemployment — totallygroovygirlfriday @ 1:01 am

Boeing’s new Dreamliner is the perfect textbook example of why outsourcing doesn’t work. Not only does it mean fewer, if any, design and manufacturing jobs in the US, it produces a shoddy product that goes over budget anyway.

Click here.

Like anything else, outsourcing has a break-even point. Boeing just learned that the hard way. That is one of the problems with the American way of thinking: if it works, do even more of it. That is not how anything in economics, investing, labor, business, education, health, exercise, food, Fed, anything, works. Nothing. There is a point on any line where best way moves to less and then worst. It’s a bell curve. But humans are greedy and they always topple from the height of the top of the bell curve or tipping point. It’s a shame.

GG has mentioned this concept before in describing the 2007 housing market crash. There is a point when you run out of people to buy houses. Even non-living people. Just as there is a tipping point in the number of facebook users. And ipod users. TV and radio manufacturers went through the same tipping point.

Even gold buyers…but we are not there yet 🙂

A high in any cycle or wave is usually 2 or more tipping points coming together. The more of the tipping points coming together at the same time, the worst the low that is following.

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