2NC Impact Calc It also solves the case – trade makes war unthinkable. Jason Brooks, Department of Journalism at Carleton University, May 1, 2000, Garvey Contest Essay, “Make Trade, Not War,” http://www.independent.org/students/garvey/essay.asp?id=1456 Free trade is, in one sense, like a nuclear weapon. Which seems strange to say because trade is associated with peace and prosperity, while nuclear weapons are synonymous with apocalypse and terror. But here is how they are alike: they both prevent war by making it more costly. A strong argument exists that the only reason the Cold War never got “hot” between the United States and the Soviet Union was that nuclear weapons made outright conflict unthinkable. Trade, in a similar way, binds the fortunes of people in the world together. It is the best assurance of peace. By forging bonds between customers and suppliers around the world, trade gives citizens a vested interest in the wellbeing of people in other countries—war becomes a matter of mutual assured destruction, if you will. With trade, a war abroad will have fallout at home. But while trade has the deterrent effects of powerful weapons, is far preferable because of its other advantages. Where weapons are expensive, free trade brings prosperity and freedom. Where weapons bring terror, free trade fosters harmony and encourages people to resolve disputes without violence. Richard Cobden, a nineteenth century British industrialist and politician, often argued in favor of trade over armaments to discourage war. His recipe for peace remains as true today as it was more than 150 years ago: “The more any nation traffics abroad upon free and honest principles, the less it will be in danger of wars.” Free trade is indeed the wellspring of peace. This specifically turns their econ impacts – economic collapse can only cause war if war is seen as profitable; in a world of free trade, war would just make economic conditions worse. Khalilzad 1995 The U nited S tates is unlikely to preserve its military and technological dominance if the U.S. economy declines seriously. In such an environment, the domestic economic and political base for global leadership would diminish and the U nited S tates would probably incrementally withdraw from the world, become inward-looking, and abandon more and more of its external interests. As the United States weakened, others would try to fill the Vacuum. To sustain and improve its economic strength, the U nited S tates must maintain its technological lead in the economic realm. Its success will depend on the choices it makes. In the past, developments such as the agricultural and industrial revolutions produced fundamental changes positively affecting the relative position of those who were able to take advantage of them and negatively affecting those who did not. Some argue that the world may be at the beginning of another such transformation, which will shift the sources of wealth and the relative position of classes and nations. If the U nited S tates fails to recognize the change and adapt its institutions, its relative position will necessarily worsen. Free Trade Good – Hege Free trade is key to U.S. hegemony O’Driscoll and Fitzgerald, ‘2 [Dr. Gerald P. and Sara J., Former Director of the Center for International Trade and Economics at the Heritage Foundation and Policy Analyst at the Center for International Trade and Economics at the Heritage Foundation, “Trade Promotes Prosperity and Security,” December 18, http://www.heritage.org/Research/TradeandForeignAid/BG1617.cfm] . A strong economy undergirds a strong national defense, and the strong U.S. economy is one source of the military strength of the United States. The national security strategy also argues, however, that the economic strength of other friendly countries will enhance U.S. security. Economic freedom sustains economic growth and wealth creation. Free markets foster the spirit of entrepreneurship and innovation that creates new products and jobs. This creative economic process in turn generates higher incomes, savings and wealth creation, and economic development in nations. It is fitting that economic freedom be included as part of the national security strategy Nuclear war Kagan – 7 [Robert, Senior Associate at the Carnegie Endowment for International Peace, “End of Dreams, Return of History” Policy Review http://www.hoover.org/publications/policyreview/8552512.html#n10] Finally, there is the United States itself. As a matter of national policy stretching back across numerous administrations, Democratic and Republican, liberal and conservative, Americans have insisted on preserving regional predominance in East Asia; the Middle East; the Western Hemisphere; until recently, Europe; and now, increasingly, Central Asia. This was its goal after the Second World War, and since the end of the Cold War, beginning with the first Bush administration and continuing through the Clinton years, the United States did not retract but expanded its influence eastward across Europe and into the Middle East, Central Asia, and the Caucasus. Even as it maintains its position as the predominant global power, it is also engaged in hegemonic competitions in these regions with China in East and Central Asia, with Iran in the Middle East and Central Asia, and with Russia in Eastern Europe, Central Asia, and the Caucasus. The United States, too, is more of a traditional than a postmodern power, and though Americans are loath to acknowledge it, they generally prefer their global place as “No. 1” and are equally loath to relinquish it. Once having entered a region, whether for practical or idealistic reasons, they are remarkably slow to withdraw from it until they believe they have substantially transformed it in their own image. They profess indifference to the world and claim they just want to be left alone even as they seek daily to shape the behavior of billions of people around the globe. The jostling for status and influence among these ambitious nations and would-be nations is a second defining feature of the new post-Cold War international system. Nationalism in all its forms is back, if it ever went away, and so is international competition for power, influence, honor, and status. American predominance prevents these rivalries from intensifying — its regional as well as its global predominance. Were the United States to diminish its influence in the regions where it is currently the strongest power, the other nations would settle disputes as great and lesser powers have done in the past: sometimes through diplomacy and accommodation but often through confrontation and wars of varying scope, intensity, and destructiveness. One novel aspect of such a multipolar world is that most of these powers would possess nuclear weapons. That could make wars between them less likely, or it could simply make them more catastrophic. It is easy but also dangerous to underestimate the role the United States plays in providing a measure of stability in the world even as it also disrupts stability. For instance, the United States is the dominant naval power everywhere, such that other nations cannot compete with it even in their home waters. They either happily or grudgingly allow the United States Navy to be the guarantor of international waterways and trade routes, of international access to markets and raw materials such as oil. Even when the United States engages in a war, it is able to play its role as guardian of the waterways. In a more genuinely multipolar world, however, it would not. Nations would compete for naval dominance at least in their own regions and possibly beyond. Conflict between nations would involve struggles on the oceans as well as on land. Free Trade Good – Disease Trade is key to economic growth and living standards Indur M. Goklany, an independent scholar and the author of The Precautionary Principle: A Critical Appraisal of Environmental Risk Assessment August 22, 2002, http://www.cato.org/pubs/pas/pa447.pdf Trade is an integral part of the cycle of progress. Freer trade directly stimulates economic growth,36 helps disseminate new technologies, and creates pressures to invent and innovate.37 For instance, competition from foreign car makers accelerated the introduction of several automobile safety and emission control systems to the United States, improving both environmental and human well-being.38 Trade also helps contain the costs of basic infrastructure, including water supply, sanitation, and power generation (although the full benefits are often squandered because of corrupt, inefficient, and opaque bureaucracies and governments).39 Finally, as will be discussed below, trade has globalized food security. That’s key to solve disease Indur M. Goklany, an independent scholar and the author of The Precautionary Principle: A Critical Appraisal of Environmental Risk Assessment August 22, 2002, http://www.cato.org/pubs/pas/pa447.pdf Are the trends in the various measures of human well-being improving as globalization marches on? Have gaps in these measures between the rich and the poor countries widened and, if they have, is globalization responsible? Figure 1, based on cross-country data, shows that various indicators of human wellbeing improve as countries become wealthier, with improvements coming most rapidly at the lowest levels of wealth. There are several possible explanations for this association. First, economic development indeed improves these indicators. Greater wealth translates into greater resources for researching and developing new technologies that directly or indirectly advance human well-being.19 It also means increased resources for advancing literacy and education, which, too, are generally conducive to greater technological innovation and diffusion. 20 Equally important, wealthier societies are better able to afford new as well as existing, but underused, technologies.21 For instance, with respect to health—captured in Figure 1 by both infant mortality and life expectancy— these include “old” technologies such as water treatment to produce safe water, sanitation, basic hygiene, vaccinations, antibiotics, insect and vector control, and pasteurization,22 as well as newer science-based technologies such as AIDS and oral rehydration therapies, organ transplants, mammograms, and other diagnostic tests. They also include agricultural technologies that increase crop yields, thereby increasing available food supplies and reducing hunger and malnourishment, which then reduces the toll of infectious and parasitic diseases. 23 4 Historically, reducing hunger and undernourishment has been among the first practical steps nations have taken to improve public health. That step has reduced infant mortality and increased life expectancy.24 And if despite increased food production a country is still short of food, greater wealth makes it possible, through trade, to purchase food security.25 Greater wealth also makes it more likely that a society will establish and sustain food programs for those on the lower rungs of the economic ladder.26 Therefore, while “you can’t eat GDP,”27 the larger GDP is, the less likely you are to go hungry or be undernourished. As Figure 1 illustrates, greater wealth, through a multiplicity of mechanisms—higher literacy, greater food supplies, and greater access to safe water— leads to better health.28 effect, devoting what once was literally a lifetime to learning their trade. And having acquired expertise, those doctors and researchers are poised to contribute to technological innovation and diffusion in their chosen fields and to guide others along the same path. Thus better health helps raise human capital, which aids the creation and diffusion of technology and thereby further advances health and accelerates economic growth. Both wealth’s and health’s causes and effects probably reinforce each other in a set of interlinked cycles. One such cycle is the health-wealth cycle in which—as we have seen—wealth begets health and health, wealth. Another cycle consists of food production, food access, education, and human capital, which also helps turn the health wealth. That solves extinction. Col. William Fox, M.D., Commander of Bayne-Jones Army Hospital, Command Surgeon of the Joint Readiness Training Center, medical degree from the Uniformed Services University of the Health Services, Winter 1997-98, Parameters, Vol. XXVII, No. 4, “Phantom Warriors: Disease as a Threat to US National Security,” http://carlisle-www.army.mil/usawc/Parameters/97winter/fox.htm HIV is a pandemic killer without a cure, and viruses such as Ebola-Zaire are merely a plane ride away from the population centers of the developed world. Viruses like Ebola, which are endemic to Africa, have the potential to inflict morbidity and mortality on a scale not seen in the world since the Black Plague epidemics of medieval Europe, which killed a quarter of Europe's population in the 13th and 14th centuries. These diseases are not merely African problems; they present real threats to [humankind] mankind. They should be taken every bit as seriously as the concern for deliberate use of weapons of mass destruction. Trade Now US is expanding trade now. Wessel ’10 (JULY 1, 2010 Free-Trade Winds May Be Blowing Again By DAVID WESSEL Write to David Wessel at [email protected] Wall Street Journal The longstanding U.S. campaign for ever-freer global trade was a casualty of job-destroying recessions and widespread American suspicion that free trade means making it easier for China to steal American prosperity. But we may—emphasize may—look back on the past few weeks as the moment when the trade tide turned. Consider three noteworthy developments. One, President Barack Obama promised his Russian counterpart he'd push harder to bring it into the World Trade Organization. Russia agreed to resume imports of U.S. chickens. Hey, all trade politics is local: The U.S. sold $750 million a year in chicken parts to Russia until Moscow blocked them on Jan. 1, citing concerns over the chlorinated wash used to clean them. Two, Mr. Obama suddenly revived a U.S.-South Korea free-trade pact, aiming for a handshake deal when he visits Seoul in November while conveniently deferring any congressional vote until after this fall's U.S. elections. Three, leaders of the Group of 20, the de facto board of directors of the world economy, publicly acknowledged the obvious: The nine-year-old Doha round of world trade talks won't end in agreement this year. But privately, they had a candid conversation about what it would take to end the current stalemate. Economists argue that trade helps both exporters (yes, jobs) and importers (not only more, cheaper goods, but also competition from abroad that keeps domestic producers on their toes). Embracing that view, President Bill Clinton persuaded skeptical Democrats to approve the North American Free Trade Agreement, the Uruguay Round and the admission of China into the world-trading system. Mr. Obama, who took office in an economy far worse and far more hostile to trade than the one Mr. Clinton inherited, appears less convinced of the virtues of free trade per se. He loves exports, easily sold as creating jobs. But he seems to view world trade like a basketball game: He wants to win, and doesn't like feeling that others are taking advantage of his team. He needles aides who worked in the Clinton administration that they let China into the WTO with a better hand than the one he has to play. Aides counter that China would be even more of a threat if not bound by WTO rules. He is unpersuaded. The attempt to revive the South Korea deal began several weeks ago in a late-afternoon conversation between the president and his chief of staff, Rahm Emanuel. The president was looking for ways to shore up U.S. backing for South Korea after North Korea's new aggressiveness, had promised to increase U.S. exports and wanted to reinforce US. economic ties to Asia. Mr. Emanuel saw the South Korea deal as addressing all three objectives. Very quietly, the U.S. has moved to broaden its trade ties, with deals looking likely with Russia and South Korea, says WSJ's David Wessel. Winning Democratic votes for any free-trade pact will be tough, but this one—unlike, say, the pending Panama agreement—is more than symbolic. South Korea is the 14th largest economy in the world now. As recently as 2003, the U.S. was its largest trading partner; last year it ranked fourth after China, the European Union and Japan. Mr. Obama will press Korea to dilute rules that limit imports of U.S. autos and beef in exchange for trying to get the pact through Congress. If he succeeds, he will be sure to boast that he got a better deal than the original one President George W. Bush struck with Korea. The Doha stalemate was raised Sunday at a closed-door lunch for G-20 leaders, with their sherpas listening from another room. One leader described a Doha deal as "the cheapest form of stimulus." Mr. Obama, according to a person familiar with the talks, was blunt. He said the Doha offers on the table would benefit "major emerging economies"—an obvious reference to China, India and Brazil—and do little for the U.S. or for smaller developing countries, which still face tariffs on their exports in bigger emerging markets. He cited an estimate, by Washington's Peterson Institute for International Economics, that the current Doha deal would add only $6 billion a year to U.S. exports of goods—less than one day's worth. Which is why there's so little enthusiasm for it even among traditional business interests. His point: Any hope of U.S. backing—with the political pain that would inflict on Democrats—requires broadening the deal beyond manufactured goods and agriculture to the barriers that U.S. services companies still face in major emerging markets and on tough issues like protecting U.S. intellectual property. Britain's new Conservative prime minister, David Cameron, agreed. "[I]t doesn't look like it's going to progress unless we do something different, and the discussion we had was...that we should look at enlarging the scale and ambitions of the [Doha] round, perhaps looking at bringing in some of the elements of services," he said in Toronto. (Mr. Cameron, it seems, has been boning up on a quote attributed to Dwight D. Eisenhower: "If a problem cannot be solved, enlarge it.") Mr. Obama's trade strategy is becoming clearer. In international forums, as he did at the Copenhagen climate-change talks, he is arguing that China is posing as a developing country even though it has grown up and needs to be treated like the economic powerhouse it is. At home, he knows—no matter what his economists tell him—that neither voters nor Democrats in Congress will be convinced that free trade is good for them. So he is styling himself as a tough bargainer, who can beat other countries at their own game. We won't know for a year or so whether this is just talk or something more significant. Wages Rising Wages are rising. Katie Johnston Chase, Boston Globe, “Raises give workers a lift,” 8/22/2010, http://www.boston.com/business/articles/2010/08/22/companies_plan_to_raise_wages_but_will_workers_spend_or_save/ As the economy sputters back to life, businesses that made major cuts to survive the recession are beginning to invest in their employees again during the recovery. Nearly 90 percent of companies are increasing salaries this year, according to two national surveys, and 98 percent expect to do so next year. Increased productivity and business confidence are increasing wages. Chris Isidore, CNN Money, “Good job news: Wages are rising. Really.” 3/5/ 2010, http://money.cnn.com/2010/03/04/news/economy/better_paychecks/index.htm He said companies are adding hours back for workers who had been put on a part-time basis during the worst of the recession. He said there also was a much better environment than a year ago for year-end bonuses that were paid in February. "As things stabilize, businesses are starting to spend a little more," Biderman said. Sohn said strong gains in productivity are also allowing employers to pay their skilled workers more. Productivity rose at nearly a 7% rate in the fourth quarter, according to the government. Wages are rising – key to consumer spending. New York Times 8/2 [Bloomberg News, “Bernanke Says Rising Wages Will Lift Spending”, August 2, 2010] Federal Reserve Chairman Ben S. Bernanke said rising wages would probably spur household spending in the next few quarters, even as weak job gains dragged down consumer confidence. Wages are steadily rising. Paul Vigna, Market Talk, “Newsflash: Wages are Rising (Mind the Caveats),” 8/13/2010, http://markettalk.newswires-americas.com/?p=13186 Okay, here’s a little pinprick of light in an otherwise dark sky: wages the economy like a goblin, but, hey, a gain’s a gain these days. At least, that’s what the Department of Labor is saying. “Real” are rising. It’s because we’re working longer hours, and because deflation looms over wages, as in earnings adjusted for inflation, in July were up 0.2% from June, as an increase in the workweek offset a decline in hourly wages. Average weekly earnings are up 2% from the recent low hit in October 2009. On the year, hourly earnings are up 0.4% and weekly earnings are up 1.6%, a function of the fact that we’re all working longer hours. Consumer Demand Rising Consumer demand is rising now – key to growth. New York Times 8/2 [Bloomberg News, “Bernanke Says Rising Wages Will Lift Spending”, August 2, 2010] Investors and the public have been closely watching signals about the economy and the Fed’s possible policy moves to address problems. While the United States has “a considerable way to go” for a full recovery, “rising demand from households and businesses should help sustain growth,” Mr. Bernanke said on Monday in a speech in Charleston, S.C. “We are maintaining strong monetary policy support for the recovery,” he said in response to an audience question, without discussing any further action the Fed could take to aid growth. The remarks signal that Mr. Bernanke and his colleagues, when they meet in Washington next week, will stop short of making major changes in their policy statement or taking new steps to lower interest rates and reduce unemployment, said John Ryding, a former Fed researcher. Consumer spending, which accounts for about 70 percent of the economy, “seems likely to pick up in coming quarters from its recent modest pace,” Mr. Bernanke said. “Further action still has a pretty high hurdle to get over,” said Mr. Ryding, chief economist and a founder at RDQ Economics in New York. “The status quo on policy remains.” Fed policy makers are now starting to consider how to bolster the recovery and reduce unemployment after a year of developing tools to remove record monetary stimulus. A report last week showed that the American economy, recovering from the worst recession since the 1930s, slowed to a 2.4 percent annual rate in the second quarter, less than forecast, as a scarcity of jobs eroded consumer spending. The economy “is now expanding at a moderate pace,” Mr. Bernanke said at the Southern Legislative Conference, a group of lawmakers from 15 states. “To be sure, notable restraints on the recovery persist,” including housing, commercial real estate and the labor market, he said. A lesson from the Great Depression is that “we need to make sure that monetary policy continues to provide the support the economy needs until we begin to see sustained growth and particularly growth in jobs,” Mr. Bernanke said in response to a question. The Fed chief devoted most of the speech to current and long-term budget problems for state and local governments. States are cutting spending to close a combined $84 billion of budget deficits. The reductions are “weighing on economic activity,” Mr. Bernanke said. Mr. Bernanke and the Federal Open Market Committee will meet on Aug. 10 in Washington to discuss interest rates and the economy. Options outlined last month by Mr. Bernanke to aid growth and keep rates low include using communication to convey the path of borrowing costs, reduce the rate the Fed pays on excess reserves deposited with the central bank and expand the balance sheet through asset purchases. The Fed signaled in June that Europe’s debt crisis might harm American growth and repeated a pledge to keep interest rates near zero “for an extended period.” The central bank cut the benchmark interest rate almost to zero in December 2008 and turned to purchases of Treasury, housing-agency and mortgage-backed securities as the main tool of monetary policy. Alan Greenspan, Mr. Bernanke’s predecessor as Fed chief from 1987 to 2006, said in an NBC interview on Sunday that the slowing recovery felt like a “quasi-recession” and the economy might contract again if home prices declined. Last week, James Bullard, the St. Louis Fed president, said that the central bank should resume purchases of Treasury securities if the economy slowed and prices fell rather than maintain a pledge to keep rates near zero. “The U.S. is closer to a Japanese-style outcome today than at any time in recent history,” Mr. Bullard said, warning about the possibility of deflation. At a speech on Monday, however, Mr. Geithner said that the economy was “healing” and was in no danger of confronting a deflationary threat like the challenges that have faced the Japanese economy. Deflation Brink We are on the brink of a deflationary spiral – a new shock could collapse the economy. Tom Petruno, LA Times, “For markets, back to worrying about the worst-case scenario,” 8/14/2010, http://articles.latimes.com/2010/aug/14/business/la-fi-0814petruno-20100814 Much of the important economic data of the last few weeks have pointed to slower growth in the U.S. and overseas. That has been enough to spark another worldwide sell-off in stocks, though a modest one compared with what hit the markets in the spring. More striking has been the rush to buy the bonds of governments that investors believe will always find a way to pay their debts — the U.S. and Germany, for example. The already low market interest rates on those bonds fell further this week as more buyers piled in, happy to accept ever-shrinking yields in exchange for a sense of security. With the annualized yield on 10-year Treasury notes at 2.68% on Friday, a 16-month low, "The bond market is telling you a very pessimistic story" about the economy, said Bill Strazzullo, market strategist at Bell Curve Trading in Freehold, N.J. In other words, the fear pushing bond yields down isn't about whether the world is facing just a temporary economic slowdown. Rather, it's dread of another calamity: a further shrinkage of the economy that would set off a deflationary spiral, meaning a broad and sustained decline in prices of goods, services and assets . Worries about deflation surged amid the credit crisis of 2008, then largely went away as the global economy rebounded last year. They have roared back over the last two months as the U.S. recovery has ebbed while a key measure of inflation has held below the 1% level. 2NC Link Magnifier The brain drain caused by the plan snowballs – creates a cycle of dependency and encourages a culture of emigration in Latin America. Dalia Acosta, Inter Press Service, “Brain Drain - No Solution in Sight,” 10/3/2008, http://ipsnews.net/news.asp?idnews=44114 For decades, remittances have been seen as the positive side of South-to-North migration flows, together with the generation of transnational networks of professionals and better training for workers who, if they ever return to their home country, can contribute to local development with their knowledge. "My staying in another country is the main and almost sole way to ensure a livelihood for my family" in Cuba, said Hernández. For her part, Gutiérrez said that "Just knowing that my parents have enough money to buy what they need to eat properly puts my mind at ease." But remittances increase foreign dependency, foster patterns of consumption that are foreign to local realities, encourage more people to emigrate, and strengthen a culture of emigration that deters national investment and the formation of human capital, says Keith Nurse, a professor at the University of the West Indies in Trinidad and Tobago. The boom in remittances to Latin America and the Caribbean during the 2001-2006 period appears to have come to an end with the current economic troubles in the United States. According to a study by the Inter-American Development Bank (IDB), remittances from the U.S. have remained stagnant for the last two years at around 46 billion dollars. Regardless of whether the flow of remittances shrinks or grows, the "losses for the countries whose intellectual wealth emigrates will always be greater than any compensation they receive through means other than the attainment of stability for their skilled human resources, based on their own internal development," Casañas asserted. Offshoring Frontline 1. Outsourcing is declining now and will continue to slow. Nick Heath, Silicon, “Outsourcing: New deals are in decline,” 7/22/2010, http://www.silicon.com/technology/it-services/2010/07/22/outsourcing-new-deals-arein-decline-39746128/ Cash-strapped companies are holding off on signing new outsourcing contracts, according to research released this week. Figures from outsourcing advisory firm TPI showed a global fall in the value of new or restructured outsourcing deals signed during the second quarter of 2010. The value of new or restructured outsourcing deals signed during the second quarter of 2010 was $18.1bn, a drop of about 13 per cent compared to the value of deals agreed during the first quarter of the year. Demand for IT outsourcing (ITO) fell particularly sharply during the second quarter, with the value of ITO deals dropping by almost 30 per cent compared to the first quarter of 2010. The value of new or restructured deals for business process outsourcing (BPO) - where a third party takes charge of an entire division of an organisation such as HR or finance - rose by 60 per cent in Q2 compared to Q1, however. However BPO growth remained weak by historical standards, according to TPI. When divided by sector, the figures showed a fall in the value of new outsourcing contracts in the financial services, manufacturing and telecom and media industries, with growth in the travel, transport, hospitality and retail sectors. Looking ahead, Mark Mayo, partner and president with TPI Global Operations, said in a statement that the global outsourcing market will continue the "slow and uneven recovery that it began last year". 3. Turn – H-1Bs cause outsourcing – even if companies don’t leave, they send their workers overseas. Hira 09 [Ron Hira, an assistant professor of public policy at Rochester Institute of Technology, is co-author, with Anil Hira, of Outsourcing America, “It's Time to Overhaul H-1B Visas”, April 2, http://www.businessweek.com/magazine/content/09_15/b4126063331942.htm] Then there's the mistaken belief that granting H-1B visas helps prevent the outsourcing of American jobs. In fact, the program is expediting that offshoring, and not just because of "knowledge transfer." Offshore outsourcing firms with U.S. operations, including Infosys (INFY) and Wipro Technologies (WIT), now dominate the top ranks of employers getting H-1B workers. In 2008, such firms accounted for 7 of the top 10 H-1B visa recipients, getting almost 12,000 of the 85,000 quota. They use their U.S. operations to train their foreign workers, who learn more about U.S. clients and then rotate back to their home countries to provide service more effectively. 2NC Link Wall And, wealthy Americans are uniquely key. Ylan Q. Mui, Washington Post, “Waiting for Deep Pockets to Open,” 9/9/2009, http://www.washingtonpost.com/wpdyn/content/article/2009/09/08/AR2009090803519.html?nav=rss_business In this new era of frugality, well-to-do shoppers have gone into hiding and stowed away their splashy logos. But they may hold the key to a consumer recovery. Affluent shoppers are the most important segment of consumer spending, which in turn drives the national economy. The top 20 percent of the nation's households -- with income of at least $150,000 -- account for 40 percent of all spending, according to government data. That makes them a crucial spoke to any turnaround. "Unless these people turn up, a lot of companies won't turn up ," said Milton Pedraza, founder of the Luxury Institute, a consulting firm. "When they are not spending, it definitely impacts all of us in a negative way." A shock to wages will cause financial panic, collapsing the economy. The Economist, “The greater of two evils; Deflation in America,” 5/9/2009, lexis There is something to both fears. But inflation is distant and containable, while deflation is at hand and pernicious . Fears about deflation do not rest on the 0.4% decline in American consumer prices in the year to March. Although this is the first such annual decline since 1955, it is the transitory result of a plunge in energy prices. Excluding food and energy, core inflation is 1.8%. Rather, the worry is of persistent price declines that characterise true deflation. With unemployment nearing 9%, economic output is further below the economy's potential than at any time since 1982. This gap is likely to widen. House prices are not part of America's inflation index but their decline is forcing households to reduce debt, which could subdue economic growth for years. As workers compete for scarce jobs and firms underbid each other for sales, wages and prices will come under pressure. So far, expectations of inflation remain stable: that sentiment is itself a welcome bulwark against deflation. But pay freezes and wage cuts may soon change people's minds. In one poll, more than a third of respondents said they or someone in their household had suffered a cut in pay or hours. The employment-cost index rose by just 2.1% in the year to the first quarter, the least since records began in 1982. In 2003, during the last deflation scare, total pay grew by almost 4%. Does this matter? If prices are falling because of advancing productivity, as at the end of the 19th century, it is a sign of progress, not economic collapse. Today, though, deflation is more likely to resemble the malign 1930s sort than that earlier benign variety, because demand is weak and households and firms are burdened by debt. In deflation the nominal value of debts remains fixed even as nominal wages, prices and profits fall. Real debt burdens therefore rise, causing borrowers to cut spending to service their debts or to default. That undermines the financial system and deepens the recession. From 1929 to 1933 prices fell by 27%. This time central banks are on the case. In America, Britain, Japan and Switzerland they have pushed short-term interest rates to, or close to, zero and vastly expanded their balance-sheets by buying debt. It helps, too, that the world has abandoned the monetary straitjacket of the gold standard it wore in the 1930s. Yet this anti-deflationary zeal is precisely what alarms people like Mr Meltzer. He worries that the price of seeing off deflation is that the Fed will be unable or unwilling to reverse itself in time to prevent a resurgence of inflation. Fair enough, but inflation is easier to put right than deflation. A central bank can raise interest rates as high as it wants to suppress inflation, but it cannot cut nominal rates below zero. Deflation robs a central bank of its ability to stimulate spending using negative real interest rates. In the worst case, rising debts and defaults depress growth, poisoning the economy by deepening deflation and pressing real interest rates higher. Central banks that have lowered rates to nearly zero are now using unconventional, quantitative tools, but their efficacy is unproven. Given the choice, erring on the side of inflation would be less catastrophic than erring on the side of deflation. New link – plan results in offshoring. Ron Hira, assistant professor of public policy at Rochester Institute of Technology, “Beware the H-1B Visa,” 2007, http://www.businessweek.com/debateroom/archives/2007/09/beware_the_h-1b_visa.html The problems don’t stop with cheap labor. The H-1B visa is so critical to the offshore outsourcing industry that India’s Commerce Minister has dubbed it the "outsourcing visa." Seven of the top 10 H-1B employers are offshore outsourcing firms, none of whom hire many Americans, gobbling up tens of thousands of H-1B visas along the way. Rather than preventing it, the program speeds up the outsourcing of high-wage high-technology jobs. None of this should be surprising given the raison d’etre of modern corporations, maximizing profits. Businesses do not exist to maximize their U.S. workforce or improve competitiveness in the U.S. If companies can lower costs by hiring cheaper foreign guest-workers, they will. If they can hire vendors who hire cheaper foreign guest-workers, they will. And who can blame them? If they don’t take advantage of blatant loopholes, their competitors surely will. Cheap labor and outsourcing explain why the H-1B program is oversubscribed. Offshoring kills the economy and collapses heg. Op Ed News, “H1-B Visa Foreign IT Workers and the Immigration Bill,” 5/25/2006, http://www.opednews.com/articles/opedne_runner_060525_h1_b_visa_foreign_it.htm The transfer of high wage IT U.S. jobs to lower cost foreign workers via offshoring and H-1B visas is currently contributing to unprecedented levels of unemployment among American electrical, electronics and computer engineers. Offshoring and H-1B visas also pose a very serious, long-term challenge to the nation's leadership in technology and innovation, its economic prosperity, and its military and homeland security. New link – visas short circuit the labor market cycle. Seattle Post Intelligencer, “A tech labor shortage myth? Exploring the H-1B visa debate,” 4/3/2009, http://blog.seattlepi.com/microsoft/archives/165656.asp Boeing's engineering union, SPEEA, is in a unique position to comment on the issue: It is one of few unions in the country that represents high-tech workers. (SPEEA stands for Society of Professional Engineering Employees in Aerospace.) SPEEA Legislative Director Stan Sorscher has been monitoring the H1-B visa debate since 2000. He says that in a true labor shortage, wages should rise in keeping with the simple rules of supply and demand . "If we had a shortage of soybeans, the price would go up. If we had a surplus of oil, the price would go down, " Sorscher said. "And eventually we'd buy less soybeans and consume more oil." He points out that in 1999, a labor shortage driven by the high-tech boom employees free concierge service, ping pong tables, permission to bring one's dog to work and so on. led to a bidding war for workers, affording such High wages would drive more students into those skilled fields. "If instead you bring in 150,000 foreign workers and you're only graduating 120,000 new students annually, you've short-circuited the labor market," Sorscher said. "Our policy to bring in the foreign workers has the effect of short-circuiting the labor market and preventing us from ever producing enough domestic workers." Once domestic workers are discouraged from entering the field, the U.S. becomes dependent upon foreign workers, he says. That kills the economy. Chris Farrell, Business Week, “Failing U.S. Education Will Dumb Down Economic Growth,” 6/24/2010, http://www.businessweek.com/investor/content/jun2010/pi20100624_409585.htm The demand for well-educated workers is only growing, and the effect is cumulative. Powerful economic forces such as the rise of brutal global competition and the spread of sophisticated information technologies will continue to push employers to value better educated workers who are comfortable working in teams, quick to adjust to new tasks, and well-schooled in the latest high-tech gear. At least that's one conclusion to draw from a recent paper by Anthony Carnavale, director of the Georgetown University Center on Education and the Workforce. He projects that the economy will create 47 million job openings up of 14 million new jobs and 33 million jobs replacing current workers who have retired, become disabled, or died. from 2008 to 2018, made The key finding: Most of the jobs demand some postsecondary education, with about 30 million openings requiring at least some college education and 21 million an associate's, bachelor's, or graduate degree. If educated workers aren't readily available, companies will automate the tasks or find educated employees overseas. After all, with many developing economies devoting more resources to university education, America's share of the world's college-level workers has shrunk from some 30 percent to about 15 percent, according to Carnevale and two Georgetown University colleagues, Jeff Strohl and Nicole Smith. Sad to say, the ranks of poorly educated Americans are growing. The growth in high school graduation rates has slowed since the 1970s. The nation's four-year high school graduation rate hovers around 69 percent, according to the Alliance for Excellent Education, a Washington (D.C.) organization that advocates better high school performance. Some minority groups do even worse, with a 56 percent dropout rate for Hispanics and 54 percent for African Americans. Tougher Road for Dropouts The Center for Labor Market Studies at Northeastern University calculates that the average high school dropout will have a lifetime negative net fiscal contribution to society of some -$5,200. The average high school graduate generates a positive lifetime number of $287,384. The sharply lower figure for dropouts aged 18 to 64 reflects lower annual federal, state, and local tax payments, higher cash and in-kind transfers, and the costs of incarceration relative to a high school graduate. (The comparable figure for a college graduate with only a bachelor's degree is $793,079.) Following the Great Depression and World War II, it appeared that the U.S. and other major industrial nations had banished the well-known phenomenon of mass unemployment. Most workers, including those who labored on a factory floor, lived a middle-class lifestyle, and the unemployment rate largely moved up and down with the business cycle. But the specter of mass unemployment once again haunts the U.S. The Great Recession is exposing the cumulative effect of a three-decade shift toward high-education jobs and a failing education system. The trend has always been morally wrong—and financially stressful for low-income households. But now the swelling numbers of less educated unemployed-and-underemployed working-age adults is starting to call into question whether the U.S. can mount a sustained, robust economic recovery. Years of subpar growth and high unemployment would be a bitter lesson for Americans, college-educated or not. Our links outweigh their turns – 1. Our link is short term – benefits of immigration take at least 7 years to come to fruition. Peri ’10 (Giovanni Peri University of California, Davis June 2010 The Impact of Immigrants in Recession and Economic Expansion This paper was written for the Migration Policy Institute’s Labor Markets Initiative to inform its work on the economics of immigration. Giovanni Peri is an Associate Professor of Economics at the University of California, Davis and a Research Associate of the National Bureau of Economic Research in Cambridge, Massachusetts. He has done research on human capital, growth, and technological innovation. More recently he has focused and published extensively on the impact of international migration on labor markets and on productivity and on the determinants of international migration. He recently received a John D. and Catherine T. MacArthur Foundation grant for the study of international migration and its impact in the United States and a World Bank grant for the study of return migration in Europe. While data on gross domestic product (GDP) suggest that the worse of the recession is probably over, the US labor market is still deeply depressed. Unemployment rates in the United States are at levels not experienced for two decades. Between January 2009 and January 2010 about 3.9 million jobs were lost.1 It is natural, therefore, to revisit questions about the impact of immigrants on the labor market and on the economy through the lens of the current economic situation. Are the shortrun effects of net immigration2 on native workers’ employment and income less beneficial (or more harmful) if immigrants enter the United States during a recession? Does the economy have the same capacity to “absorb” new workers when immigrants join the US economy in a recession? Do the longrun gains or losses to the US economy from immigration depend on the phase of the cycle during which immigrants enter the country? These questions have become particularly relevant in the last two years and the present report tries to address them. Most (though not all) economic research over the last decade has emphasized the potential gains that result from immigration to the United States. Immigration can boost the supply of skills different from and complementary to those of natives,3 increase the supply of low-cost services,4 contribute to innovation,5 and create incentives for investment and efficiency gains.6 Quantifying these gains is not easy, but steady progress has been made in identifying and measuring them. There is broad consensus that the long-run impact of immigration on the average income of Americans is small but positive.7 In particular, recent studies have identified measurable gains for the highly educated and small, often not significant, losses for less-educated workers. These empirical analyses, however, have focused on the “long run.”8 But the present economic recession and its persistent labor market consequences make the long run seem rather distant, and more pressing concerns about the short run have taken center stage.9 Immigration’s economic benefits mostly result from its effect on immigrant and native workers’ occupational choices, accompanied by employers’ investments and reorganization of the firm. For instance, immigrants are usually allocated to manual-intensive jobs, promoting competition and pushing natives to perform communication-intensive tasks more efficiently. This process, at the same time, reorganizes firms’ structure, producing efficiency gains and pushing natives towards cognitive and communication-intensive jobs that are better paid. These effects may take a few years to unfold fully. In the meantime and before the adjustments take place, do immigrants crowd out natives from the labor market? How long does it take for firms to adjust their investments and organization in order to benefit from the new supply of skills? Are these processes easier and less costly during an economic expansion than in an economic downturn? Until very recently no comprehensive analysis of the short-run effects of immigration on the US labor markets has been possible.10 The reason is that yearly representative data from the Current Population Survey, typically used to analyze production and labor markets, have contained information on the place of birth of individuals only since 1994 (as opposed to the decennial census that has always included that information). Hence, it is only during the last few years that sufficient data has accumulated in order to analyze the short-run (yearly) impacts of net immigration on labor market outcomes. Moreover, between 1994 and 2007, only the mild 2001 recession was observed, providing limited variation over the economic cycle. While several influential academic papers have emphasized how the short-run effects of immigration on wages and employment could be different from long-run effects, those differences were based on theoretical assumptions rather than on empirically estimated evidence. Using empirical methods in line with the best practice used to analyze and quantify the long-run effects of immigration, this report will provide some evidence to inform these questions. It begins by analyzing the short-run impact of immigration on employment, income, and other factors that affect income, such as investments, hours worked, and productive efficiency, examining the speed with which the economy adjusts to accommodate new immigrants. It then extends this analysis to investigate how these shortrun effects, and possibly the medium-run effect (over four or five years), depend on the state of the economy when immigrants enter the labor market. Finally, it discusses the implications the results may have for immigration policy. The results suggest that in the long run, immigrants do not reduce native employment rates, but they do increase productivity and hence average income. This finding is consistent with the broad existing literature on the impact of immigration in the United States. A new analysis of the short-run impacts of immigration, however, finds some mild negative effects: immigration may slightly reduce native employment at first, because the economic adjustment process is not immediate. Lower average income is also likely in the short run. The long-run gains to productivity and income become significant after seven to ten years. The results moreover suggest that the short-run impact of immigration depends on the state of the economy. When the economy is growing, new immigration creates jobs in sufficient numbers to leave native employment unharmed, even in the relatively short run. During downturns, however, new immigrants are found to have a small negative impact on native employment in the short run (but not the long run). The economy does not appear to respond as quickly to new immigrants in terms of new job creation and productivity boosts during recessions. 2. Immigration yields no benefits in times of recession. Peri ’10 (Giovanni Peri University of California, Davis June 2010 The Impact of Immigrants in Recession and Economic Expansion This paper was written for the Migration Policy Institute’s Labor Markets Initiative to inform its work on the economics of immigration. Giovanni Peri is an Associate Professor of Economics at the University of California, Davis and a Research Associate of the National Bureau of Economic Research in Cambridge, Massachusetts. He has done research on human capital, growth, and technological innovation. More recently he has focused and published extensively on the impact of international migration on labor markets and on productivity and on the determinants of international migration. He recently received a John D. and Catherine T. MacArthur Foundation grant for the study of international migration and its impact in the United States and a World Bank grant for the study of return migration in Europe. A third difference between expansion and downturn concerns the response of physical capital per worker. During a downturn investments do not respond as quickly to immigration as in expansion. This time the difference in response is close to being statistically significant within the two- and the four-year intervals. Since the economy has unused capacity during downturns, this may make firms reluctant to expand their productive capacity and/or to adopt the technologies (and pay the fixed cost) that would best take advantage of immigrant labor. However in the long run (seven- to ten-year intervals) no difference in adjustment is observed independently of the short-run effects. It is worth emphasizing that the results imply that net immigration during expansionary periods may have positive short- and long-run effects on native jobs and hours worked. However, net effect on native jobs in the short run. immigration during a downturn may have a crowding-out AT: Link Turns They can’t solve their offense – a large amount of visas are based on false information. Patrick Thibodeau, Computerworld, “Widespread problems, fraud found in H-1B program,” 10/9/2008, http://www.computerworld.com/s/article/9116758/Widespread_problems_fraud_found_in_H_1B_program An internal report by the U.S. Citizenship and Immigration Services (USCIS) examining the H-1B visa program has found evidence of forged documents and fake degrees, and even "shell" companies giving addresses of fake locations. The USCIS report, released Wednesday by U.S. Sen. Chuck Grassley (R-Iowa), indicates that serious violations of the H-1B program by employers are so common that one in five visas are affected by either fraud or "technical violations." This means that potentially thousands of employers may be violating the rules, some willfully. Employers didn't pay prevailing wages in some cases and benched employees when there wasn't work, while some employees worked at jobs that differed from what the application claimed they would be doing. In one bizarre case, an H-1B holder was found "working in a laundromat doing laundry and maintaining washing machines," the report said. "This report validates the major flaws in the H-1B visa program," Grassley said in a statement. "It's unacceptable that these fraudulent activities are slipping through the cracks when there is so much legitimate demand for H-1B visas." H-1B Link An overwhelming amount of H-1Bs are subject to fraud which magnifies our deflation link. India Verified, Indian News Source, “H1B Visa Fraud uncovered expect more legislation,” 4/4/2010, http://www.indiaverified.com/blog/2010/04/h1b-visafraud-uncovered-expect-more-legislation/ In a report released by the USCIS, the US Citizenship and Immigration Service, has indicated that upwards of 1 in 5 (or 20%) of all H1B visas contain serious errors, such as faked addresses, fake degrees, and other structural errors indicating that employers are seriously violating the H1B visa program. The H1B visa program is already majorly unpopular in technical circles even though technology employers insist that they need the program to remain competitive. “It is clear that oversight, including an auditing function, are desperately needed to clean up the corruption,” Hira said. “But we shouldn’t forget that the major problems with the H-1B program are caused by massive loopholes that allow firms to legally pay below-market wages and displace and undercut American workers. Those wouldn’t show up in this investigation because they are entirely legal and wouldn’t be considered fraudulent or a violation.” Grassley and Sen. Dick Durbin (D-Ill.) have been ardent critics of the H-1B program, pushing for reforms and tougher enforcement. Source: Computer World The interesting part is that in the break down in the report (here) in 14 of the cases (making up 27% of all the audited files) the person who was working under the H1B visa program was not paid the prevailing wage for like or similar skills. This opens the door to the argument that employers are using the program to undercut prevailing wage, and lower the employment costs that they currently incur. The other problem is that the economy is already in trouble, undercutting wages just adds to fuel to the fire of worker discontent. The other trick used was to take out the costs associated with getting the H1B visa out of the employee’s wages; essentially the employee was paying for their own visa. That is also a violation of the program. If you extrapolate the numbers, the insistence of using H1B visa employees to undercut wages becomes a very likely scenario, and one that is going to cause problems for employers when they want to expand the program. Fraud like this diminishes the The audit conducted by the USCIS only reported on 249 audited cases, out of some 94,000 H1B visa employees in the USA right now. good that the program can do, and when used against local workers by artificially deflating wages or holding wages stagnate, that is where the real argument is going to come into play. Lack of visa mobility makes negotiating for higher wages impossible. Matloff, 03 (Norman Matloff, Professor of Computer Science, University of California, On The Need For Reform Of The H-1b Non-Immigrant Work Visa In Computer-Related Occupations, 12/12/2003 9:54 AM, MatloffTYPE11-7-03.DOC) V. H-1Bs As a Source of Cheap Labor As shown in Part IV, the industry’s stated reasons for hiring so many H-1B workers are not supported by the data. Instead, the central attraction of H-1Bs for employers is as a means of reducing labor costs. To show the cheap-labor nature of H-1B hiring, it is first important to lay the foundation by citing the source of the H-1Bs’ exploitability. Part V.A will explain why most H-1Bs are de facto indentured servants. It will then present a variety of quantitative looks at the use of H1Bs as cheap labor, and then turn to comments from the industry itself. Finally, Part V.E will show how Type I savings may be demonstrated without any data at all, simply by appealing to fundamental economic principles. A. De Facto Indentured Servitude of the H-1Bs The industry lobbyists have argued that the H-1Bs are not exploited, on the grounds that if an H-1B worker were paid less than comparable Americans, he/she would simply move to another employer. For example, Stuart Anderson, the author of the ITAA report and later the architect of the H-1B expansion bills in 1998 and 2000,203 quoted an employer as saying, “You cannot pay foreignborn engineers less. These are smart people; if you try to fool with them, harsh reality, though, is that the H-1Bs typically cannot “go someplace else,” and are forced to stick with their exploitative employers. Most H-1Bs hope to be sponsored by their employers for permanent residence, i.e. green cards.205 This is a multi-year process. Toward the end of the 1990s, the processing time for the two largest H-1B nationalities, Indian and Chinese, was approaching six years.206 During the time an H-1B’s green card application is being processed, he/she is essentially immobile; switching employers during this time would necessitate starting the green card process all over again, an unthinkable prospect for most.207 they will go someplace else.”204 The H-1B holders are undereducated and have much lower median wages. Ron Hira, prof. of public policy at RIT, “Does Silicon Valley Need More Visas for Foreigners?” 3/19/ 2007, http://online.wsj.com/article/SB117388283731536825.html So, Robert's first premise, that the H-1B program is a bridge to immigration doesn't hold up. By citing the Masters and PhD degree statistics, Robert is implying that all About half of the H1B holders have just a bachelors degree, and more importantly H-1B wages tend to be very low. According to the latest or most H-1Bs are advanced degree holders and thus the best and brightest. Again, this is simply not supported by the government data. government statistics, the median wage for new H-1B holders in computer occupations was only $50,000. This is far below the median wages for those occupations. And they are even below what a brand new graduate gets as a starting salary. So, H-1B workers are paid even below rank-and-file workers. So, his premise that the H-1B program is only used for the best and brightest is simply not supported by the facts. We need to have a discussion based on how the H-1B program operates in reality based on facts as a first step. Sensible solutions require good problem diagnosis, and Robert simply has his diagnosis wrong. H1-B visas depress wages- studies prove Thibodeau ‘9 (Study: H-1B use cuts tech wages by up to 6% By Patrick Thibodeau April 27, 2009 12:00 PM Computerworld - The use of H-1B workers by U.S. companies is decreasing wages by as much as 6% for some IT workers, according to a study by researchers at New York University's and the University of Pennsylvania's business schools. The study, released earlier this month by professors from the Stern and Wharton schools of business, concluded that H-1B workers' entry into the U.S. at current levels is causing a 5% to 6% drop in wages for computer programmers, systems analysts and software engineers. The study also found that offshore outsourcing decreases wages for a broader category of workers, including IT managers, by 2% to 3%. The IT workers most likely to be affected by the downward pressure on wages are recent college graduates and people changing jobs, the researchers said. The authors of the study, Prasanna Tambe, an assistant professor at Stern, and Lorin Hitt, a professor at Wharton, said they used data from multiple sources, including a "leading online job search site" that they wouldn't identify. Tambe and Hitt said they combined the demographic and wage data of individual companies available at the job-search site with information on H-1B visas and outsourcing available through the government and other public sources. The study was based on information compiled on 156,000 IT workers employed at nearly 7,500 publicly held U.S. firms, Tambe and Hitt said. The data from the combined sources provided what they called a "micro-data" view of public companies that hire H-1B visa holders and offshore workers. T he goal of the study was to "precisely look at how domestic workers are being affected by globalization," Tambe said. "I'm not making a judgment on whether that is good or bad." In addition, the researchers wrote, "we simply sought to dispel the myth that globalization generates no losers" and to provide U.S. policymakers with data on how the H-1B program affects IT wages. They did urge lawmakers to carefully weigh the effects of globalization on workers "against the macro-level economic effects." H1-B visas depress wages- fraud ensures exploitation Synder ‘9 (Bill Snyder OCTOBER 08, 2009 H-1B visas: A mess that could get even worse[ InfoWorld's Bill Snyder argues why the H-1B visa has got to go. ] It's bad enough that American workers are losing jobs to foreign labor imported via the broken H-1B visa system. Now there's even more evidence that unscrupulous companies are exploiting the hopes and labor of foreign workers who obtained those visas as they searched for better jobs and better lives. Two of those workers, an MBA student named Vimal Patel and an Indian software programmer Prasad Nair, were featured in an investigative story on the H-1B mess in the current issue of BusinessWeek. Their stories have a lot of complications, and Patel -- who wound up working at a gas station -- apparently committed a relatively minor violation of the law. But those young men and many others paid thousands of dollars to companies that promised them jobs that ultimately didn't materialize or turned out to be for significantly less money than they had been led to expect. Aside from humanitarian concerns, is there a reason why you should care about these guys? There is. With layoffs continuing to decimate the technology industry -- about 100,000 IT workers lost their jobs in the last 12 months -- employers can still bring in as many as 85,000 H-1B workers, including 20,000 who hold advanced degrees from U.S. universities. And now some of the outsourcers are preparing to move jobs to Mexico if visa regulations get tighter. The system works against U.S. workers, and it leaves plenty of room to exploit foreign workers. It's broken and needs to be fixed. Visa fraud rate of 20 percent The cases of Patel and Nair mirror a pattern of lawbreaking and exploitation by employers uncovered last year by the U.S. Citizenship and Immigration Services (USCIS). Indeed, the agency found evidence of fraud or other violations in 20 percent of H-1B visa petitions. The Justice Department took notice and brought suit against a number of companies, including Vision Systems Group, Cognizant Technology, and Patni Computer Systems. Sen. Charles Grassley (R-Iowa) has been one of Washington's most outspoken critics of the H-1B visa. In a letter last week to USCIS director Alejandro Mayorkas, Grassley said the agency should be asking "companies up front for evidence that H-1B visa holders actually have a job awaiting them in the U.S.," so they will not end up being "benched," or unpaid until work is found. "Employers need to be held accountable so that foreign workers are not flooding the market, depressing wages, and taking jobs from qualified Americans. Asking the right questions and requesting the necessary documents will go a long way in getting out the fraud in the H-1B program," Grassley wrote. Talk of depressed wages is not just hot air. A recent study found H-1B visa use is reducing IT wages in some fields, including programming, by as much as 6 percent. That comes from research by Prasanna Tambe, an assistant professor of information, operations, and management sciences at the New York University's Stern School of Business, and Lorin Hitt, a professor of operations and information management at Wharton School of the University of Pennsylvania. IT services to Mexico? It could happen It's worth remembering that the globalization of IT services (along with many other sectors) is very far down the road. Indian firms are reportedly laying the groundwork for a move of some services to Mexico and Canada should U.S. regulations become too strict. A report in DNAIndia quotes Apurva Shah, a Mumbai-based analyst: ""Companies such as TCS, Infosys, and others are setting up delivery and development centers in Mexico and Canada, which are close to U.S. This helps firms save on costs as well as serve U.S. customers from those locations, since people from Mexico and Canada do not need H-1B visas under the North American Free Trade Agreement (NAFTA)." I have no idea how reliable this report is, and there are many jobs that could not be done offsite. But moving at least some of the work now done in the United States by H-1B visa holders is certainly plausible, and I'll bet that Indian techies working in Mexico will be paid even less than now. As for Patel, he's facing deportation, and Cygate Software and Consulting, the company that brought him to New Jersey on allegedly false pretenses, is facing a criminal charge. H-1B: A solution in search of a problem When H-1B first became law in the 1990s, the premise was simple and made sense: The growing technology industry couldn't find enough skilled workers to fill key jobs. In response to lobbying by the industry, Congress permitted companies to hire foreign workers under a new provision of immigration law that established fairly liberal quotas for skilled workers. Fair enough -- but that's no longer the case. With thousands of highly skilled and experienced IT workers looking for jobs, it's hardly plausible to talk about a labor shortage. No doubt there are exceptions. But not 85,000, which is the total number of H-1B slots available this year and last. There needs to be a moratorium on H-1B entrants to the labor market. But before we point fingers at the foreign-born workers who come here to better their lives and support their families, we should condemn the companies that exploit them. Even employers admit they use visas to depress wages. Matloff, 03 (Norman Matloff, Professor of Computer Science, University of California, On The Need For Reform Of The H-1b Non-Immigrant Work Visa In Computer-Related Occupations, 12/12/2003 9:54 AM, MatloffTYPE11-7-03.DOC) 2. Even the Industry Admits H-1Bs are Used to Reduce Labor Costs— The industry has admitted that it desires to control labor costs ITAA report, for instance, says, At a certain level, in a global market, U.S. companies risk their profitability if they must pay individuals premiums beyond that which customers are willing to pay for the product or service those employees produce . . . The lack of mobility of labor across international borders, whether through practical or legal restrictions, means that a current inability to hire skilled people in America pushes U.S. companies to outsource abroad or relocate facilities internationally to obtain labor at a competitive price.259 and that H-1Bs provide a means to do so. The Similarly, consider these statements from top officers at Gemini, the first from 1998 and the second from 2002: Robert Walley, executive vice president of Gemini, says that unless his company and others are able to find a new source of workers, “it would increase the prices of the resource pool. The people out there looking for jobs, they’re demanding premium salaries now, and it will just drive that higher.”260 Global outsourcing is a growing business, said Bob Pryor, a vice president of Cap Gemini Ernst & Young and head of the firm’s outsourcing practice in the Americas. In the past, he said, US companies relied on foreign workers with H-1B visas to reduce costs. “Now they are focusing on offshoring,” or sending the work overseas.261 Sun Microsystems, one of the firms which has most vigorously lobbied for expansion of the H-1B program, made the following complaints about the labor market for UNIX system administrators: Costs continue to rise . . . . At Sun we clearly feel the hiring pinch. Qualified SA professionals have thinned out in the Silicon Valley over the years. This smaller pool of candidates has driven salary expectations even higher than they are in other parts of the country. . . . Contractors continue to inflate local salary expectations.262 In other words, Sun does not want to pay the market rate, suggesting that they use H-1Bs for either Type I or Type II savings.263 . 2NC Solvency Wall Skilled migration is already tied to the economy – the current system is too unresponsive and should be more flexible. Giovanni Peri, associate prof. of economics at UC Davis, “The Impact of Immigrants in Recession and Economic Expansion,” June 2010, http://www.migrationpolicy.org/pubs/Peri-June2010.pdf Moreover, the short-run impact of immigration depends on the state of the economy: When the economy is growing, new immigration creates jobs in sufficient numbers to leave native employment unharmed, even in the relatively short run and even for less-educated native workers. During downturns, however, the economy does not appear to respond as quickly. New immigrants are found to have a small negative impact on native employment in the short run (but not the long run). In other words, immigration unambiguously improves employment, productivity, and income, but this involves adjustments. These adjustments are more difficult during downturns, suggesting that the United States would benefit most from immigration that adjusts to economic conditions. While immigration already responds to some extent to the economic cycle (particularly illegal immigration), the current immigration system makes legal immigrant inflows particularly unresponsive. Binding visa caps to the market cycle would make it vastly more responsive, maximizing the benefits of skilled immigration while minimizing the costs. Michelle Mittelstadt, Migration Policy Institute, “Immigration Unambiguously Improves U.S. Employment, Productivity and Income But Involves Adjustments, New Study for MPI Finds,” 6/7/2010, http://www.migrationpolicy.org/news/2010_6_07.php There is broad consensus among economists that immigration has a small but positive impact on the average income of Americans over the long term. But far less analysis has been done on the impact of immigrants on the labor market in the shorter term, particularly when viewed through the lens of the recession and its lingering labor market effects. In a new Migration Policy Institute report, The Impact of Immigrants in Recession and Economic Expansion, University of California, Davis economist Giovanni Peri finds that immigration unambiguously improves employment, productivity and income but that it also involves some short-term adjustments (such as worker retraining or adoption of new technology). The paper was commissioned to inform the work of MPI’s Labor Markets Initiative, which is conducting a comprehensive, policy-focused review of the role of legal and illegal immigration in the labor market. The report, which examines short- and long-run impacts of immigration on average and over the business cycle of growth and contraction, finds that: * Immigrants do not reduce native employment rates over the long run (10 years), while increasing productivity and average income for native-born workers. Immigration to the United States over the 1990-2006 period can be credited with a 2.9 percent increase in real wages for the average U.S. worker. * The adjustment process, however, is not immediate. When immigration occurs during a downturn, the economy does not appear to respond as quickly as it would during economic expansions and there is evidence of modest negative impacts on employment and average income in the short run. These impacts dissipate over periods of up to seven years. * During periods of economic growth, by contrast, new immigration creates jobs in sufficient numbers to leave native employment unharmed even in the short run. This holds true even for less-educated workers. Immigration during economic expansions has no measurable, short-term negative effect on income per worker. “Adjustments to employment, productivity and income are more difficult during downturns,” Peri said. “This suggests that the United States would benefit most from an immigration system that better adjusts to economic conditions, allowing legal immigrant inflows to be more responsive to the economic cycle.” In the report, Peri suggests allowing employers’ demand for work visas to play a stronger role in determining the number of visas issued annually, and that a share of the visas be allocated to less-skilled workers, particularly those who perform primarily manual jobs that native workers increasingly are much less interested in filling. “This report offers further evidence yet of the need for the immigration system to become significantly more responsive to the U.S. economy’s constantly evolving labor market needs, so that the benefits of immigration can be captured more fully and any negative effects neutralized,’’ said MPI President Demetrios Papademetriou. “Establishing an independent executive-branch agency that would make regular recommendations to the president and Congress for adjusting employment-based immigration levels would inject a greatly needed degree of flexibility into the current rigid immigration system.” The counterplan avoids the DA – allowing the cap to be flexible prevents the displacement of American workers. Giovanni Peri, associate prof. of economics at UC Davis, “The Impact of Immigrants in Recession and Economic Expansion,” June 2010, http://www.migrationpolicy.org/pubs/Peri-June2010.pdf In order for immigration to boost productivity and income per worker, the state economy must make some adjustments, and this takes time. However, most of these gains are realized within seven years. The results suggest that if the gross inflow of new immigrants is allowed to vary with the strength of labor demand (downturns and expansions) this would minimize the short-run economic costs of adjustment. New immigrants could be allowed to flow into the United States in larger numbers during an expansion when demand is stronger and firms are more willing to invest than during a recession when they would temporarily crowd a depressed labor market. The details of such policy are not easy to implement and require consideration of a number of details about the current US visa system. Moreover the fact that the majority of new permanent residence permits is awarded based on family (and not employment) reasons make the current legal immigration system ill-suited to respond to economic incentives. Rather that spelling out the details of potential employment-based immigration policies let me simply indicate some general ideas and facts to be kept in mind when designing the policies. AT: Labor Market Test Fails/No Data 3. This arg assumes the status quo – only the counterplan can rectify data shortages. Demetrios G. Papademetriou, president of the Migration Policy Institute, et al., Doris Meissner, former Commissioner of the US Immigration and Naturalization Service, Marc Rosenblum, senior policy analyst at MPI, and Madeleine Sumption, associate policy analyst at the Migration Policy Institute, “Harnessing the Advantages of Immigration for a 21st-Century Economy: A Standing Commission on Labor Markets, Economic Competitiveness, and Immigration,” May 2009, http://www.migrationpolicy.org/pubs/StandingCommission_May09.pdf Nonetheless, while decisions about immigration policy will inevitably transcend economic costs and benefits and touch upon deeper questions of how immigration defines us as a nation, many issues can be quantified. The Standing Commission would eventually provide systematic, detailed, credible, and evidence-based analysis of the costs, benefits, and economic impacts of all aspects of immigration—analysis that we currently lack. The mandate of a Standing Commission should thus be to analyze the labor market impacts of immigration and propose adjustments in employment-based immigration levels and requirements that meet employers’ needs and promote America’s economic growth and competitiveness while minimizing job displacement and wage depression. Judgments can be made about immigrants’ overall contributions, their progress in the labor market, and the impacts on native workers—including the locational and career paths of native workers who previously worked in industries now dominated by immigrants. The Standing Commission, therefore, would have two primary tasks: - Gathering and analyzing key data on immigration and US labor markets, and Making specific recommendations to the president and Congress regarding adjustments in the levels and kinds of labor market immigration. 4. This arg just doesn’t assume our labor test – it is literally a numerical comparison between the average unemployment rate and occupational unemployment rates, which are done every year. For proof, here’s the data on the tech sector: Catherine Rampell, NYT, “Once a Dynamo, the Tech Sector Is Slow to Hire,” 9/6/2010, http://www.nytimes.com/2010/09/07/business/economy/07jobs.html Job growth in fields like computer systems design and Internet publishing has been slow in the last year. Employment in areas like data processing and software publishing has actually fallen. Additionally, computer scientists, systems analysts and computer programmers all had unemployment rates of around 6 percent in the second quarter of this year. 5. The Commission would draw cross-sectional and longitudinal data from multiple sources, making its analysis highly accurate. Demetrios G. Papademetriou, president of the Migration Policy Institute, et al., Doris Meissner, former Commissioner of the US Immigration and Naturalization Service, Marc Rosenblum, senior policy analyst at MPI, and Madeleine Sumption, associate policy analyst at the Migration Policy Institute, “Harnessing the Advantages of Immigration for a 21st-Century Economy: A Standing Commission on Labor Markets, Economic Competitiveness, and Immigration,” May 2009, http://www.migrationpolicy.org/pubs/StandingCommission_May09.pdf First, a full analysis of which immigrants fare best (according to their socioeconomic characteristics, the work they perform, and the category through which they longitudinal data. Building on the existing model of the New Immigrant Survey, data on multiple cohorts of new immigrants, with sufficient sample size to disaggregate analysis to regional, state, occupational, and industry levels, would allow a greatly improved understanding of how immigrants assimilate into the US labor market. The Standing Commission would also be expected to make use of all existing government data including the US Current Population Survey (CPS), American Community Survey (ACS), and the Longitudinal Employment and Household Dynamics (LEHD), which links employer data from unemployment records to Census Bureau data on households. entered the country) requires Second, current research on the impacts of immigration largely comes from the academy and nonprofit sectors. As noted earlier, many of the products of both types of institution are problematic and, in any event, do not amount to the systematic, wide-ranging, and “just-in-time” research results the government often requires. A properly staffed body such as the Standing Commission could coordinate research (conducted in-house and commissioned from outside researchers) in order to ensure that important policy questions are being answered as and when required. AT: Predictability/Uncertainty 2. Flexibility and responsiveness are not mutually exclusive with predictability – the clear standards established by the counterplan solve predictability. Cristina Rodriguez, prof. of law at NYU, “CONSTRAINT THROUGH DELEGATION: THE CASE OF EXECUTIVE CONTROL OVER IMMIGRATION POLICY,” 2010, Duke Law Journal, lexis The regime governing labor migration should be flexible and capable of evolving along with the country’s economic and demographic needs. At the same time, the regime must be relatively stable and predictable, both to allow employers and other economic actors to plan and manage their expectations, and to build public confidence in and acceptance of the system as a whole. These objectives of responsiveness and stability may be in tension with one another, but this tension can be softened. Responsiveness to facts on the ground can help ensure predictability, and stability does not necessarily require that admissions numbers remain constant, only that they reflect evolving needs in a nonarbitrary manner. The salient point for the purposes of this Article is that the decisionmaking structure for immigration policymaking ought to be capable of balancing these objectives. Creating a flexible system equipped to respond to changing circumstances will help promote efficiency and economic growth and create capacity for preventing illegal immigration through nonenforcement-oriented means, thereby helping to mitigate the negative effects of such immigration on U.S. workers and secure ongoing public confidence in the regime. To be flexible, the system must be capable of responding to facts on the ground. The system should be able to adapt to fluctuations in the U.S. labor market, as well as to changes in the economic and demographic circumstances outside the United States that help shape migratory flows, particularly in the American hemisphere. Determining the number and types of immigrants to admit does depend upon value judgments concerning who should become part of the polity, on what terms, and with what effects on existing residents—the so-called “membership decision.” But the process also has a technical dimension that requires databased projections about market dynamics and future economic and social needs. Regulating immigration effectively, therefore, demands a system equipped to evolve in response to the sociology and economy of migration. Predictability, on the other hand, requires avoiding dramatic fluctuations in rules. A predictable system will be somewhat insulated from day-to-day political pressures, whether in the form of interest group lobbying or the anti-immigrant, restrictionist shocks that occasionally arise from the electorate. Predictability not only allows employers and workers to manage their expectations, but also helps facilitate a stable and orderly flow of migration, which in turn helps secure public acceptance of immigration. Predictability and responsiveness need not be mutually exclusive. A regime that adjusts in response to changed circumstances can also be predictable, if interested parties understand how the government anticipates and then adjusts to fluctuating conditions, or if clear standards, set out in advance of the actual decisionmaking, guide changes to the numbers of visas available from year to year. A goal of the decisionmaking structure, therefore, should be to determine how much predictability affected parties require to make decisions about their futures, and to be transparent about the mechanisms used to identify changed circumstances. 3. A flexible cap is good for businesses and innovation. John Yantis, AZ Central, “Tech companies seek to increase cap on visas for foreign-born skilled workers,” 8/1/2010, http://www.azcentral.com/business/articles/2010/08/01/20100801biz-tech-companies-seek-increase-cap-visas-foreign-born-skilled-workers-0801.html#ixzz10fSdsQ3G Companies who want to increase the cap say they try to hire Americans first, but they insist the statistics don't lie. "Half the master's and Ph.D. degree graduates are foreign-born students out of our universities, so we would like to recruit them," Cleveland said. "And to have a static cap on H-1Bs at 65,000 is self-defeating and counterproductive. The economy goes up and down. If there's more flexibility in that cap, if there's a market escalator, that is helpful to companies that are on the cutting edge of technology." Standing Commission would streamline data collection and provide accurate market analysis. Demetrios G. Papademetriou, president of the Migration Policy Institute, et al., Doris Meissner, former Commissioner of the US Immigration and Naturalization Service, Marc Rosenblum, senior policy analyst at MPI, and Madeleine Sumption, associate policy analyst at the Migration Policy Institute, “Harnessing the Advantages of Immigration for a 21st-Century Economy: A Standing Commission on Labor Markets, Economic Competitiveness, and Immigration,” May 2009, http://www.migrationpolicy.org/pubs/StandingCommission_May09.pdf In other words, creating a Standing Commission on Labor Markets, Economic Competitiveness, and Immigration would establish a body charged with carrying out research and analysis that is not now available and that is vital for informed policymaking. The Commission’s findings and recommendations to the president and Congress would facilitate regular reviews of labor market immigration levels and visa allocations and form the basis for making adjustments as circumstances require. In this way, greater flexibility could be introduced into the system with the numbers of permanent employment visas, for example, being revised much more regularly than the current two-to three-decade interval. In contrast with previous one-time “blue-ribbon panels” like the Hesburgh and Jordan Commissions, an expert commission would create a resource for ongoing reviews by Congress of labor market and all immigration. By providing high-quality data and evidence-based recommendations specifically related to labor market immigration and its economic effects, a Standing Commission is also likely to raise the level of discourse and knowledge within Congress and the executive branch, as well as among the range of stakeholders engaged in the immigration policy debate. Several other industrialized states have successfully done so with their labor immigration bodies (see Box 1). 7. Competitiveness is high now – prefer our ev, it assumes trends. Titus Galama and James Hosek, RAND Corporation, “U.S. Competitiveness in Science and Technology,” 2008, http://www.rand.org/pubs/monographs/2008/RAND_MG674.sum.pdf We find that the United States continues to lead the world in science and technology. The United States grew faster in many measures of S&T capability than did Japan and Europe, and developing nations such as China, India, and South Korea showed rapid growth in S&T output measures, but they are starting from a small base. These developing nations do not yet account for a large share of world innovation and scientific output, which continues to be dominated by the United States, Europe, and Japan. The United States accounts for 40 percent of total world R&D spending and 38 percent of patented new technology inventions by the industrialized nations of the Organisation for Economic Cooperation and Development (OECD), employs 37 percent (1.3 million) of OECD researchers (FTE), produces 35 percent, 49 percent, and 63 percent, respectively, of total world publications, citations, and highly cited publications, employs 70 percent of the world’s Nobel Prize winners and 66 percent of its most-cited individuals, and is the home to 75 percent of both the world’s top 20 and top 40 universities and 58 percent of the top 100. 8. Domestic innovation and competitiveness aren’t key to heg and competitors’ growth is unsustainable. Reihan Salam, Schwartz Fellow at the New American Foundation, “ROBERT PAPE IS OVERHEATED,” 1/21/ 2009, http://www.theamericanscene.com/2009/01/21/robert-pape-is-overheated Pape spends a lot of time demonstrating that U.S. economic output represents a declining share of global output, which is hardly a surprise. Yet as Pape surely understands, the more relevant question is how much and how readily can economic output be translated into military power? The European Union, for example, has many state-like features, yet it doesn’t have the advantages of a traditional state when it comes to raising an army. The Indian economy is taxed in a highly uneven manner, and much of the economy is black — the same is true across the developing world. As for China, both the shape of the economy, as Yasheng Huang suggests, and its long frontiers, as Andrew Nathan has long argued, pose serious barriers to translating potential power into effective power. (Wohlforth and Brooks give Stephen Walt’s balance-of-threat its due.) So while this hardly obviates the broader point that relative American economic power is eroding — that was the whole idea of America’s postwar grand strategy — it is worth keeping in mind. This is part of the reason why sclerotic, statist economies can punch above their weight militarily, at least for a time — they are “better” at marshaling resources. Over the long run, the Singapores will beat the Soviets. But in the long run, we’re all dead. And given that this literature is rooted in the bogey of long-term coalition warfare, you can see why the unipolarity argument holds water. At the risk of sounding overly harsh, Pape’s understanding of “innovativeness” — based on the number of patents filed, it seems — is crude to say the least. I recommend Amar Bhidé‘s brilliant critique of Richard Freeman, which I’ll be talking about a lot. Pape cites Zakaria, who was relying on slightly shopworn ideas that Bhidé demolishes in The Venturesome Economy. The “global diffusion of technology” is real, and if anything it magnifies U.S. economic power. “Ah, but we’re talking about the prospect of coalition warfare!” The global diffusion of technology is indeed sharply raising the costs of military conquest, as the United States discovered in Iraq. The declining utility of military power means that a unipolar distribution of military power is more likely to persist. And yes, it also means that unipolar military power is less valuable than it was in 1945. EXT – US Attracting Foreign Students Now US is outpacing other countries. Karin Fischer, The Chronicle, “Number of Foreign Students in U.S. Hit a New High Last Year,” 11/16/ 2009, http://chronicle.com/article/Number-of-ForeignStudents-in/49142/ Other international educators, however, point out that the United States remains the top destination for foreign college students, despite efforts by colleges in Australia, Canada, and elsewhere to attract them. US is still the biggest destination of foreign students and there are alt causes to growth elsewhere. International Herald Tribune, “U.S. Schools Attract Smaller Share of International Students,” 9/12/2010, http://www.nytimes.com/2010/09/13/education/13iht-educBrief13.html The United States remains the destination of choice for students pursuing advanced degrees in science and technology. It is also the favorite for students from Japan, where more than 64 percent of those who study abroad go to the United States, as well as South Korea (60 percent), Mexico (52 percent) and India (51 percent). But as students become more mobile, and English becomes a language of instruction in universities across northern Europe, U.S. universities may have to work harder if they want to continue to attract the world’s brightest students. AT: China Impact China can’t compete with the US, and they are economically dependent on the US. David Weinberger, Heritage, “Why China is Not an Economic Threat to the United States,” 2/3/ 2010, http://blog.heritage.org/2010/02/03/why-china-is-notan-economic-threat-to-the-u-s/ Aside from the fact that China’s GDP numbers are illusory (largely because of how the country calculates its GDP), a significant portion of the growth China is experiencing is not creating wealth, it is merely taking it from other countries. In other words, Chinese growth is partly the result of detraction from, not addition to, world GDP, which means much of its success is dependent upon others. This is because of the way China’s economy is set up. China relies on its trade surplus with the rest of the world as the lifeblood of its economy. It exports vastly more than it imports. Seen in this light, China sucks GDP from other countries in addition to creating its own. Therefore, while it may be leading the world in GDP growth, to a notable extent these GDP gains are the result of China using the world to boost itself higher. That does not mean, however, that China does not produce anything. To the contrary, over the last couple of decades, China has contributed to the world economy. While China’s production has historically met consumer demand to keep prices low around the globe, the world-wide recession is now causing China to oversupply due to weak global demand, which could lead to deflation. This is hardly an indication of a sound, robustly-growing economy. If China does not start developing more of its own domestic economy for its people, trouble looms. Further, China is not America’s banker, as many people believe. President Obama’s stimulus package was bad policy, but the notion that China is now funding our economy as a result is a fallacy. America could get by without China funding its debt. What’s largely unknown is that China officially holds less than 7 percent of U.S. treasuries, and that Chinese bond purchases declined in 2009, to under $100 billion, while our deficit soared to an all-time high of $1.4 trillion. Moreover, China does not buy our debt for our sake; it does so it because it depends on an economy as large and sound as ours for its own growth propelled through trade: The same set of rules that keep its currency undervalued means, by law, it can’t spend at home the huge pile of cash that it sits on. In that respect, China is more directly tied to us than we are to them. If the United States were to discontinue trade with China, it would hurt them more than us. Finally, China is not going to surpass the United States as the world economic leader any time soon. We control about a fourth of the wealth in the world – more than China, India, Japan and the rest of Asia combined. Other indicators are just as definitive. The average American earns close to fifteen times more than the average person in China. If the United States keeps tax rates low, shows spending discipline, and brings the deficit down to promote solid economic growth, there is strong reason to believe that China will never surpass the United States as the world’s largest economy. EXT – Competitiveness Not K2 Heg The US benefits from innovation in other countries, and our educational model insures a competitive economy. John Kay, Financial Times, “The east’s innovators are no threat to the west,” 12/2/ 2008, http://www.bhide.net/venturesome_press/John_Kay_FT_Dec_3_08.pdf Such policies are described as “techno nationalism” in an important recent book called The Venturesome Economy by Amar Bhidé. Techno nationalism is derived from the belief that economic growth depends on high technology and that we will benefit fully from it only if it is our own high technology. Techno nationalism is as common in Europe, which believes it is falling behind, as in America, which fears it may be overtaken. But the fear that western economic prosperity is endangered by China’s flood of engineering graduates is not only exaggerated: it may be the reverse of the truth. The central fallacy of the New Economy bubble was that most of the benefits of new technologies would go to pioneering companies. But the repeated experience of economic history is that competition ensures that the larger part of the benefits of these technologies accrue to users. In an admittedly speculative calculation, the American economist Bill Nordhaus has suggested that consumers get more than 97 per cent of the value of innovations. What is true of companies is also true of states. The US has a world leading position in information technology but the products of that technology are available everywhere with minimal delay. And cheaply: the profits of Microsoft, though large in absolute terms, are less than 0.1 per cent of the national income of the US and Europe. That is why economist Paul Romer can observe that: “In 1985, I paid $1,000 per million transistors for memory in my computer. In 2005 I paid less than $10 per million and yet I did nothing to deserve or help pay for the windfall.” But Prof Bhidé is not so sure that Prof Romer did nothing to deserve it and nor am I. What distinguishes the US is not just its innovative technologists, but its innovative manufacturers, retailers and consumers. Discoveries are made in an environment that is responsive to ideas, ready to embrace change and always willing to try out something new. People who are likely to invent things want to be part of a culture that is open to novelty, and cultures that are open to novelty are those that will reward innovators best. That is why there are so many entrepreneurs of Chinese and Indian origin in the US – and Britain – even as more and more mundane jobs are outsourced to China and India. The pesky American students who are ready to challenge every assertion the instructor makes contrast with students from other cultures who believe their aim is to transcribe every authoritative statement that is delivered. These voluble business students are the bane of the MBA teacher’s life. They are also the people who make American business great. Commercial and economic success, even in technological industries, depends not on the quality of technology, but on the match between technology and the needs of its customers. That is why the growing technological capabilities of China and India create more commercial opportunities than threats for American and European businesses. The US still benefits from innovation elsewhere – trade and demand for complementary US innovation. Titus Galama and James Hosek, RAND Corporation, “U.S. Competitiveness in Science and Technology,” 2008, http://www.rand.org/pubs/monographs/2008/RAND_MG674.sum.pdf A future in which a significant share of new technologies is invented elsewhere will benefit the United States as long as it maintains the capability to acquire and implement technologies invented abroad. Technology is an essential factor of productivity, and the use of new technology (whether it was invented in the United States or elsewhere) can result in greater efficiency, economic growth, and higher living standards. The impact of globalization on U.S. innovative activity is less clear. On the one hand, significant innovation and R&D elsewhere may increase foreign and domestic demand for U.S. research and innovation if the United States keeps its comparative advantage in R&D. On the other hand, the rise of populous, low-income countries may threaten this comparative advantage in R&D in certain areas if such countries develop the capacity and institutions necessary to apply new technologies and have a well-educated, low-wage S&T labor force. 9. No impact to heg. Brooks and Wohlforth – 2 (Stephen Brooks and William Wohlforth, Both are Associate Professors in the Government Department at Dartmouth, “American Primacy in Perspective,” Foreign Affairs, July / August 2002) TO UNDERSTAND just how dominant the United States is today, one needs to look at each of the standard components of national power in succession. In the military arena, the United States is poised to spend more on defense in 2003 than the next 15 -- 20 biggest spenders combined. The United States has overwhelming nuclear superiority, PICK A MEASURE, ANY MEASURE the world's dominant air force, the only truly blue-water navy, and a unique capability to project power around the globe. And its military advantage is even more apparent in quality than in quantity. The United States leads the world in exploiting the military applications of advanced communications and information technology and it has demonstrated an unrivaled ability to coordinate and process information about the battlefield and destroy targets from afar with extraordinary precision. Washington is not making it easy for others to catch up, moreover, given the massive gap in spending on military research and development (R&D), on which the United States spends three times more than the next six powers combined. Looked at another way, the United States currently spends more on military R&D than No state in the modern history of international politics has come close to the military predominance these numbers suggest. And the United States purchases this preeminence with only 3.5 percent of its GDP. As historian Paul Kennedy notes, "being Number One at great cost is one thing; being the world's single superpower on the cheap is astonishing." America's economic dominance, meanwhile -- relative to either the next several richest powers or the rest of the world combined -surpasses that of any great power in modern history, with the sole exception of its own position after 1945 (when World War II had temporarily laid waste every other major economy). The U.S. economy is currently twice as large as its closest rival, Japan. California's economy alone Germany or the United Kingdom spends on defense in total. has risen to become the fifth largest in the world (using market exchange-rate estimates), ahead of France and just behind the United Kingdom. It is true that the long expansion of the 1990s has ebbed, but it would take an experience like Japan's in that decade -- that is, an extraordinarily deep and prolonged domestic recession juxtaposed with robust growth elsewhere -- for the United States just to fall back to the economic position it occupied in 1991. The odds against such relative decline are long, however, in part because the United States is the country in the best position to take advantage of globalization. Its status as the preferred destination for scientifically trained foreign workers solidified during the 1990s, and it is the most popular destination for foreign firms. In 1999 it attracted more than one-third of U.S. military and economic dominance, finally, is rooted in the country's position as the world's leading technological power. Although measuring national R&D spending is increasingly difficult in an era in which so many economic activities cross borders, efforts to do so indicate America's continuing lead. Figures from the late 1990s showed that U.S. expenditures on R&D nearly equaled those of the next seven richest countries combined. Measuring the degree of American dominance in each category begins to place things in perspective. But what truly distinguishes the current international system is American dominance in all of them simultaneously. Previous leading states in the modern era were either great commercial world inflows of foreign direct investment. and naval powers or great military powers on land, never both. The British Empire in its heyday and the United States during the Cold War, for example, each shared the world with other powers that matched or exceeded them in some areas. Following the Napoleonic Wars, the United Kingdom was clearly the world's leading commercial and naval power. But even at the height of the Pax Britannica, the United Kingdom was outspent, outmanned, and outgunned by both France and Russia. And its 24 percent share of GDP among the six leading powers in the early 1870s was matched by the United States, with Russia and Germany following close behind. Similarly, at the dawn of the Cold War the United States was clearly dominant economically as well as in air and naval capabilities. But the Soviet Union retained overall military parity, and thanks to geography and investment in land power it had a superior ability to seize territory in Eurasia. Today, in contrast, the United States has no rival in any critical dimension of power. There has never been a system of sovereign states that contained one state with this degree of dominance. The recent tendency to equate unipolarity with the ability to achieve desired outcomes single-handedly on all issues only reinforces this point; in no previous international system would it ever have occurred to anyone to apply such a yardstick. CAN IT LAST? MANY WHO ACKNOWLEDGE the extent of American power, however, regard it as necessarily self-negating. Other states traditionally band together to restrain potential hegemons, they say, and this time will be no different. As German political commentator Josef Joffe has put it, "the history books say that Mr. Big always invites his own demise. Nos. 2, 3, 4 will gang up on him, form countervailing alliances and plot his downfall. That happened to Napoleon, as it What such arguments fail to recognize are the features of America's post -- Cold War position that make it likely to buck the historical trend. Bounded by oceans to the east and west and weak, friendly powers to the north and south, the United States is both less vulnerable than previous aspiring hegemons and also less threatening to others. The main potential challengers to its unipolarity, meanwhile -- China, Russia, Japan, and Germany -- are in the opposite position. They cannot augment their military capabilities so as to balance the United States without simultaneously becoming an immediate threat to their neighbors. Politics, even international politics, is local. Although American power attracts a lot of attention globally, states are usually more concerned with their own neighborhoods than with the global equilibrium. Were any of the potential challengers to make a serious run at the United States, regional balancing efforts would almost certainly help contain them, as would the massive latent power capabilities of the United States, which could be mobilized as necessary to head off an emerging threat. happened to Louis XIV and the mighty Hapsburgs, to Hitler and to Stalin. Power begets superior counterpower; it's the oldest rule of world politics."