If you start with the premise that Apple is probably the greatest company in America, and Steve Jobs may have been the greatest entrepreneur, you’d be in good company.
So when President Obama invoked the late Jobs’ name in his Democratic Convention speech as a role model, it made sense.
Encouraging kids to think creatively and reach for the stars is all good stuff, the American spirit.
However, when the president pivoted a few moments later, like the smooth politician he is, to criticize Mitt Romney on outsourcing and taxes, he failed or, er, forgot to highlight that Apple is one of the largest outsourcers in the world.
Also, Apple like so many “American” high-tech companies, makes use of offshore tax havens and techniques to shield revenues from US corporate tax rates.
How did we come to such a pass?
Start with the assumption that most US companies would prefer to do the bulk of their employing and manufacturing (and pay their taxes) here in America.
But we have become a very expensive place to do business, and in this global economy — just like at the grocery store — price matters. So although Apple likely would prefer to have its iPhone “assembled” (we’d call it manufactured) in the US, the costs for the same quality Apple customers demand would be prohibitive.
The work quality of Foxconn — Apple’s main Chinese “assembler” — is obviously high, and the cost to manufacture there is just under $200 for the new iPhone 5. Estimates say that in the US it would cost $500 to $600 with today’s red-tape regulatory structure.
Now, while we can’t compete on labor costs alone with China, we can make it less expensive to employ people here, by giving companies large 10-to-20-year corporate payroll tax cuts for new hires.
The federal government should also give long-term tax subsidies for companies willing to move their businesses back to the United States, which will increase tax revenues and jobs.
And it should be made easier and thereby cheaper to get approval to build factories and roads and infrastructure as well.
It’s a pro-growth model that would solve a lot of problems, such as the deficit, unemployment, Social Security and Medicare. Growth is the medicine America needs.
Why doesn’t Washington honor Jobs’ memory by doing something more than invoking his name for political gain?
Do something brilliant! Lower the costs of doing business here in America that are caused by bureaucracy.