Monday, January 12, 2009

Wishful thinking

I always hesitate to link to a piece that has nice things to say about me (even though I appreciate and like to read them), partly out of the way I was raised that says one doesn't toot one's own horn (which puts me way out of step with what people say is needed to succeed - and I believe it), partly because of a vague sense that the Internet might implode through infinite regress.

Nevertheless, I point you to a post from Citizen Carrie, not because I'm mentioned in it (grateful as I am), but for the part below me, where Carrie directs us to, first, a story in the Mercury News that discusses the fraud on the part of the Indian outsourcer Satyam, and second, a post from 2Truthy about "the culture of corruption" in Silicon Valley, and how it has been influenced by their sleazy dealings with Indian companies. There's a lot in the second piece, based as it is on an interview with a former CEO - there's a lot here, and I don't want to quote it all, but here's some:
It is unfortunately pretty likely that the fallout of Satyam’s scandal will be minimal, since I do know there are executives and vc’s scrambling around to do “damage control” in order to protect the Sacred Cash Cow of outsourcing. Ever hear of Compete America? A powerful lot of lobbyists who will stop at nothing to keep cheap workers coming in here from India whether Tata, Satyam, Wipro or the rest of them. It’s hard to say if it will backfire, but it is long overdue that it does. This practice of hiring Indians to do the work of local professionals has been an obvious boondoggle from the get-go, and anyone from the boardroom to the cubicles who is the least bit honest will tell you the same thing. It has been a disaster. Most of them don’t even speak English, and are they are thrust anyway at the local scientists whom they are supposed to “help round out” product teams before having to “train them” right before they are laid off. Is this right? Of course not. Does it happen? Every day around here.

The practice of hiring Indians was the brainchild of Larry Ellison and Bill Gates who realized, without any conscience, they could wildly, wildly pad their personal profits by paying their workers less, and get away with creating a culture of indebted servititude to boot. This is no small coincidence that the quality of customer service and product development has continued to degrade with the onset of outsourcing....

Although an American business person’s handshake was/is supposed to mean your word, this is not -- nor has it ever been the case with the Indian businesspeople, a predominant culture of back stabbers, liars and cheats, and this is no secret. That’s the way it is. Sure, we have our share of corrupt Skillings (Enron) and Maddoffs; but these people are far worse. From my first and last business dealings with Indians, they have no qualm with lying and cheating and they operate on this level as if it were expected. And they use the people of their populations as human trafficking chips so that our vc and business community leaders can exploit them for personal profit. I know that the collective spirit of our population would find this reprehensible, if they only knew. The perpetual chokehold Bill Gates and Compete America has on the U.S. government to silence the atrocities of outsourcing through its payoffs to elected officials is staggering, and the American public is left with only propaganda about how wonderful outsourcing is while it destroys the lives of Americans. It is a globalists dream, not an American one....

It’s no secret that venture capitalists will not fund start ups here who do not use questionable HR firms to hire H-1bs and other “preferred and/or recommended” Indian workers who are paid less than their American counterparts. It is also no secret that, with little exception (and there are a few exceptions, of course) the quality of the Indian workers is far inferior....

Funny, how Obama is talking about “IT spending.” The increase in IT health spending is no accident, and has his carbon footprint all over it. Do you really think IT health spending is going to cure cancer or expand access to quality healthcare? Hahahaha, the American public is duped again....

Satyam is on of several corrupt, shameful organizations that should never have taken root in this country, just like the other outsourcing companies that have ruined the quality of our products and lives of our scientists and their families.
This is pretty strong stuff, of course, but it comes from someone who is right in the midst of it. I have hesitated to tell my own story previously, because I'm very sensitive to a charge of racism, and I don't like to generalize my experience too far. But I lost my last full-time job in no small part due to an Indian fellow who wanted my position, felt he deserved it, and lied to our boss in order to make sure that I would be laid off and he would move up. This is a guy who was a decent programmer (but not incredible), here on an H-1B, and felt himself superior to all those around him. Was that because he is an Indian? I couldn't say (though I would say that, statistically, I've found more arrogance and superiority in south Asians; not 100%, but pretty high).

The Mercury News article states, contra to the above, that Bay Area executives are beginning to take another look at the costs and benefits of outsourcing, and that they're starting to be concerned about sending proprietary information overseas. (Two points: there are people, including this very blog, who have been warning about the perils of blithely shipping all kinds of data to our firm foreigh "friends"; and this quote, that "The full extent of outsourcing by U.S. companies to India is unknown." It is not at all hard to posit that there are powerful forces that have no desire to collect such data - odd, given how much information we collect on everything else.)

One suspects that 2Truthy's interview subject wouldn't believe that there will be any changes to existing practice. Neither would the Job Destruction Newsletter (I couldn't find a direct link to this particular issue, available through e-mail):
The blogosphere is abuzz over the Satyam scandal in India. Many of them are declaring the incident to be the beginning of the end of offshore outsourcing and a return to "Made in America" for all things in Computer/IT. Others hope that Satyam can be used as a silver bullet to put a stop to the H-1B visa program.

Folks, stop drinking the KOOL-AID!

In the grand scheme of things the Satyam scandal will probably amount to very little in terms of restoring jobs in the U.S. It might even make India more competitive because if Satyam folds, labor in India could become cheaper, which is the main reason we have lost so many jobs to that country in the first place. Ex-Satyam employees will have to go somewhere and big outsourcers like TCS (Tata) and Infosys will be waiting to offer them jobs at cut-rate salaries.
This seems about right.

All of this is why I urge us to take Obama's new plan with a huge chunk of salt. These "New Energy" jobs that are going to energize our economy, plus the massive investment in medical technology, how much of this activity is really going to take place here? Unless there is a tax break which amounts to the government paying the workers directly, the same competitive pressures will have those jobs flowing overseas with gusto. The wind turbines we're going to need will be made, not by newly middle-class workers in Iowa, but by the newly-idle factories of China.

These magic multipliers from the economic models do not take into effect the rise of a global workforce, and there's a really good chance that our "stimulus" will simply stimulate the economies of China and India. As usual, I'd love to see the press ask these questions of the new economic team, but I'm not holding my breath.


SBL said...

Great stuff...

Anonymous said...

Outsourcing is when you hire outside professionals or services to take on part of your business workload. You may want to outsource part of your work because you don't have the room, you need an expert, you have periodic busy periods, or you need more production to get orders out on time, etc. There are many ways outsourcing can save your business time and money.

2Truthy said...


I am sorry to hear about your experience being pushed out of your company by this H-1b worker. This happens so much out here that people stopped talking about it. But things are changing in the overall mood where people are telling it like it is. I have never seen such a spike in people not mincing words about this.

In addition to this former CEO "Mike" I have been speaking with, a number of people in the industry lately who have worked and are still working in tech are surpisingly candid about the "lying culture" of India. I wanted to elaborate on what appears to be a consistent, distinct description of what is meant by this "lying" culture. It is apparently described as one that is family connected with no qualms to screw the American with "the money" and with the jobs.

Another CEO of a current startup (who managed over 1,000 Indian workers in Bangalore while at a former now public software company) recently told Mr.2T that the Indian hotels would lie about his reserved room rates, tripling them when he would arrive due to family members from the Silicon Valley office calling up the family members in Bangalore to screw the American arriving at the hotel. When the president of the company addressed this at their meetings, the Indian workers would just shake their heads and say they didn't know anything about it, etc.

The most important thing Obama could do now is stop the flood of imported workers to take the white collar jobs that, by all recent media reports, this country is losing by the thousands daily. Tell me there are "not enough" millions of educated, underemployed and newly unemployed white collar workers in this country who are unwilling or unavailable to work!

But so far, talk of 3.5 million "shovel-ready" ditch digging road/building hard labor jobs is the only chatter coming down from the Obama administration as the solution to stimulating our Economy. Who is he shilling for and why is he mum on H-1b?

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