How Apple undermined the US economy

I’ve always bought Ford and General Motors cars, partly because I wanted to support jobs for my fellow Americans.

As Abraham Lincoln reportedly put it, “When I buy a shirt from England, I get a shirt and England gets a dollar.  But when I buy a shirt from America, I get a shirt and America gets a dollar.”

At the same time, I’ve always bought Apple computer products, and, in so doing, I may have done more to undermine the U.S. economy than I did when I bought a Ford Escort or a GM Saturn.

9554-1329-applecash-140611-lI read an article yesterday on a blog called Moneyball Economics about how Apple offshored the American smartphone industry to South Korea, Taiwan and mainland China.

This is a big thing.  The writer, Andrew Zatlin, pointed out that the United States imported nearly $100 billion worth of smartphones each year, half of them Apple iPphones.  Smartphones are the third largest U.S. import, behind oil and automobiles.

He said it is like a Marshall Plan for these three countries.  The iPhone industry creates a million jobs in eastern Asia and provides valuable technological knowledge that makes those countries more competitive in the world.   They aren’t all Apple smartphones, but Apple has half the market and sets the pace.

Zatlin wrote that Apple also undercut the U.S. economy by choosing to buy semiconductor chips from Samsung in South Korea rather than Intel in the United States.  This involved transfer of valuable technological know-how to Samsung, which it used to develop its own smartphone products in competition with Apple.

The United States needs a strong semiconductor industry not just for itself, but because a secure supply of semiconductors is necessary for the American armed forces.  U.S. military strategy is based on electronic warfare, which cannot function without semiconductors.  It also can’t function without a secure supply of oil, but that’s a topic for another time.

The problem is not just Apple.   Everything the company did was consistent with U.S. law and U.S. policy.   Japan, China, South Korea and other countries have an industrial policy to protect and promote high-tech manufacturing at home.  The United States does not.


When Will Apple Stop Screwing the U.S. Economy? by Andrew Zatlin for Moneyball Economics.  Hat tip to Mike the Mad Biologist

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