No. of Recommendations: 6
If the company is foolish enough to outsource the engineering, they let much of the engineering staff go. They will have real problems in the future because they've lost the knowledge base when the few remaining engineers leave or retire.

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Correctamundo.

You cannot stay current on software technologies like cloud computing reviewing terms & conditions documents for someone else to write the code.

You cannot stay current with semiconductor manufacturing techniques conduting quarterly "quality reviews" on a firm in Malaysia actually growing the crystals, slicing 'em up and etching the chips on them and selling them back to you.

In some sense, America's current economic trend is very akin to an Alzheimer's patient. The root causes of our predicament have been building so slowly for so long, there hasn't been a AH HA moment that allowed people to realize THIS policy produced THAT bad effect and needs to be rethought. Instead, the cumulative effect of a lot of short-term decisions have slowly started fogging our memory about WHAT types of activity produce value and WHAT sorts of regulation and education produce a stable climate that facilitates that activity.

One other point worth making...

Given the interdependency between our economy and the rest of the world, a major meltdown here will produce a major meltdown worldwide. Granted, if someone finds some path through this mess that allows the current financial fraud to unwind gracefully over 3-5 years, the debt position in which America has placed itself will leave us on the short end of virtually any pair-wise comparison with other economies with larger populations or less dependency on energy and insane consumer overspending. However, since there aren't any precedents for a graceful collapse of a bubble of this scale, the more likely scenario will make a major dent in living standards in any country similarly dependent on oil or the stability of dollar denominated debt (Treasuries or bonds / CDOs). Of course the problem with that scenario (besides the obvious one) will be a collapse of America's ability to provide any thought leadership to the rest of the world politically or economically.


WTH
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