There are two facets of President Obama’s victory that Indians should keep in mind. One, as a Democrat enraged at the goings-on on Wall Street during his first campaign, he did nothing in office to bring to book those financial barons who brought the world to its knees through misinformation and plain deceit; post-meltdown Wall Street conglomerates were “rewarded” with bailouts at the taxpayers’ expense, despite their unethical practices.
Second, that he is the first President since Franklin Delano Roosevelt in 1936 to be re-elected by voters, even though the unemployment rate is a little over 7 per cent.
No other President since FDR has done as much to help the victims of America’s banking and financial growth — “the byproduct” as John Maynard Keynes wrote in another context, “of the activities of a casino”. But, like almost every other president since FDR he has been unable or unwilling to shut those casinos.
Against this backdrop, how will Obama’s economic policies impact India? American companies will continue to engage in offshoring and outsourcing. Their profitability, “shareholder value” and of course their chief executives’ bonuses depend on low costs and high profitability. That abiding credo made American idol Steve Jobs blankly and brutally refuse Obama’s request to bring back jobs to the US from China.
Democrats or Republican lawmakers can make the difference to corporate bottomlines only at the end of the surplus-value chain — through tax measures. Romney did not want to tax the rich, wishing that the poor would fend for themselves. Obama would like to tax them to support the poor. But — and that’s important for India — he will not substantially intervene in the supply chain that American corporations from Corning to Apple and Dell have perfected through offshoring.
““Outsourcing” has acquired a new twist that the Democrats will play up: localised sub-contracting. American firms within US are increasingly relying on contract labour for frozen-pizza making and back-office IT work. Indian IT firms have been cashing in on this as ‘body-shippers’— onsite work — and that is why they also cavil at falling visa quotas. Obama wants jobs in the US; Romney wanted to outsource. Both will be on the same page if US companies outsource jobs within America to contract labour — usually immigrants. That is how jobs can be and are being created in the US: That is, the ones that Apple does not ‘export’ to China or Bangalore. Obama cannot stop that; the consumer wants low priced products, the shareholder high-valued stocks.