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Subject: The inherent danger of IT outsourcing
Nanheyangrouchuan    11/8/2009 6:49:26 PM
Everyone brags about how we screwed the USSR by putting bugs into the IT hardware we shipped to them. Yet our traiterous, lecherous IT executives have screwed the US by allowing China and other countries to do the same to us by putting trojan horses in the chips we import and the IT BPO we outsource. The IT industry must be punished relentlessly and mercilessly for its high treason against the US. "http://www.drudgereport.com/flashbrb.htm" click here Support The DrudgeReport; Visit Our Advertisers POWER OUTAGES IN BRAZIL WERE CYBER ATTACKS Fri Nov 06 2009 18:56:53 ET Former Chief of National Intelligence Says U.S. Unprepared for Such an Attack A series of power outages affecting millions of people in Brazil in 2005 and 2007 were the result of cyber attacks, 60 MINUTES has learned. The two-day event in Espirito Santo State affecting more than three million people in 2007 and another, smaller event in three cities north of Rio de Janeiro in January 2005 were perpetrated by hackers manipulating control systems. The revelation is part of a Steve Kroft investigation into how computers and the Internet can be used as weapons to be broadcast on 60 MINUTES Sunday, Nov. 8 (7:00-8:00 PM, ET/PT) on the CBS Television Network. Former Chief of U.S. National Intelligence Retired Adm. Mike McConnell believes it could happen in America. ?If I were an attacker and wanted to do strategic damage to the United States, I would either take the cold of winter or the heat of summer,? he tells Kroft. ?I would probably sack electric power on the U.S. East Coast, maybe the West Coast and attempt to cause a cascading effect.? If hackers did attack the U.S. power grid, ?The United States is not prepared for such an attack.? says McConnell. Congressman Jim Langevin (D.- R.I.), who chaired a subcommittee on cyber security, agrees. He says that U.S. power companies need to be forced to deal with the issue after they told Congress they would take steps to defend their operations but did not follow up. ?They admit that they misled Congress,? says Langevin, and they still haven?t made much progress. ?The private sector has different priorities than we do in providing security. Their?bottom line is about profits,? he tells Kroft. ?We need to change their motivation so that when see vulnerability like this, we can require them to fix it.? Computer hackers have struck in the U.S. already. ?People talk about cyber Pearl Harbors, ?we probably had our electronic Pearl Harbor,? says Jim Lewis, director of the Center for Strategic and International Studies which oversaw a study on cyber security for the Obama Administration. He is referring to a breach of computer security resulting in the downloading of huge amounts of critical information from several governmental departments, including Defense, State and Commerce. ?So we probably lost the equivalent of a Library of Congress worth of information in 2007,? he says. A bigger event than even that, says Lewis, was a breach of the CENTCOM Network, the U.S. command fighting the wars in Afghanistan and Iraq. ?We know it was a foreign country. We don?t know which one?this was a very sophisticated set of skills,? Lewis tells Kroft. Banks are also targets; more money has been stolen by cyber thieves than by those walking into banks so far this year in the U.S. ? over $100 million says FBI Agent Sean Henry. But you don?t hear much about it. ?When there?s a network breach, the owners of the network are not keen to have it known?it might impact their business,? says Henry. Money being stolen isn?t even the biggest threat says McConnell, because a worse scenario would be if the hackers were to destroy the system that accounts for all the money and its movement. That would create a bank rush and financial pandemonium. McConnell worries it will take some horrific event to get the country focused on shoring up cyber security. ?If the power grid was taken off line in the middle of winter and it caused people to suffer and die, that would galvanize the nation. I hope we don?t get there,? he tells Kroft.
 
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VelocityVector    What I See Firsthand   11/8/2009 7:11:27 PM

Virtually, pun, all of my clients' new non-defense-related software is being developed in other countries.  I know many development types here in the US who are unable to find work at a level that meets their skills, almost universally their tasking is way below what they can do better than practically anybody anywhere else.  If lucky, these folks end up as minders supervising the overseas work.  Many others aren't using their development skills at all, at least not above-board.  As a consequence, foreigners are obtaining a strategic edge in terms of accumulating knowledge and our software engineering grads are feeling that they have wasted their time learning how to build useful things.  This is all attributable to the desire by MBAs to go as cheaply as possible and keep margin for themselves.  Nobody wants to pay for anything anymore, like copyright and Walmart, if they can get something close for less they will.  Self-destruction of a nation's technical talent pool encapsulated.  0.02

v^2

 
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YelliChink       11/9/2009 12:32:46 AM
The way I see it, it's not just about MBA or corporation.
 
It's the ruling class, the elite, the über rich, who are the problem. One can work hard and get an MBA, but, chances are, he'll not be able to be accepted into high office of very large corporation and politics easily, unless he married the right woman, or has some very good connections.
 
Unlike ruling class of some other countries, the elite class in the US regard themselves the ruler of the world, and that's the problem. Until they start to fear ruling class of some other country to replace them, or be able to pull them like puppet master, they will fear you more, thus the usual "screw middle class" policy. Repucrat and Demoblican are the same.
 
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sinoflex       11/9/2009 1:26:20 AM
I wonder how many corporations have outsourced the administration of their computer servers to foreign interests.  Why bother hacking when you have the keys handed to you? 
 
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sentinel28a       11/9/2009 6:01:08 PM
It probably also doesn't help that the government is so unbelievably hostile to businesses that they feel they have no choice but to outsource.  Otherwise they go bankrupt under the crushing taxation and, given the "burn the rich" environment we have in this country, why should they stay?
 
 
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Nanheyangrouchuan       11/9/2009 7:54:30 PM

The way I see it, it's not just about MBA or corporation.

 

It's the ruling class, the elite, the über rich, who are the problem. One can work hard and get an MBA, but, chances are, he'll not be able to be accepted into high office of very large corporation and politics easily, unless he married the right woman, or has some very good connections.


 

Unlike ruling class of some other countries, the elite class in the US regard themselves the ruler of the world, and that's the problem. Until they start to fear ruling class of some other country to replace them, or be able to pull them like puppet master, they will fear you more, thus the usual "screw middle class" policy. Repucrat and Demoblican are the same.

But the US doesn't have the "old families" that the rest of the world has.  The buddy system (aka Ivy League fraternities) got many CEOs their jobs, the heirs of family fortunes are typically pretty useless in this country, only good as cannon fodder for reality entertainment. 
 
The children of much of the world's elite families also have that problem, but at least they have a framework for educating the next generation.  So you have the US frat boy system up against the world's blue blood system.
 
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Nanheyangrouchuan       11/9/2009 8:18:10 PM

It probably also doesn't help that the government is so unbelievably hostile to businesses that they feel they have no choice but to outsource.  Otherwise they go bankrupt under the crushing taxation and, given the "burn the rich" environment we have in this country, why should they stay?

 


Utterly idiotic.  We started outsourcing chip manufacturing back in the 80s (under your "son of heaven" Reagan).  Outsourcing then and now has always been about working the crap out of people for a pittance of a wage.  There are plenty of white collar sweatshops in India and China, legions of accountants, programmers, analysts and process engineers in white shirts, in cubicles, putting in 12 hour days, 6 days a week.  And these aren't "ready to go" college graduates, most international companies spend millions per year per country retraining the grads to be up to western caliber. 
 
It's about not paying overtime, no maternity leave, you can fire pregnant women, military like obedience, a vast population ready for abuse and cultures long tuned to absolute deference to authority.  Also, no unemployment insurance, social security, medicare or troublesome environmental or work safety laws.
 
Got a bad back from sitting in your chair for 12 hour stretches?  Too bad, 10 more fresh backs await your chair.
Pregnant?  Hope you husband has a good job.
Black mold in the vents?  Wear a mask.
Haven't seen your children during waking hours?  There is a national holiday in 7 months.
That machine cut off your thumb?  That's why you have two.
Was it our product that was defective, or your inability to anticipate its failure?  And if you go to the local court and file a lawsuit, a few gentleman may be waiting to escort you home, after stopping by the emergency room.
 
 
All so that some bloated chump with a MBA can declare "capitalism in our time" while trading military technology for just the chance to talk about a potential contract with a member of the city/county/provincial government.
 
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sentinel28a       11/10/2009 2:23:17 PM
I don't disagree, Nan--but it's also true that the US government creates a hostile environment for businesses, even those that want to stay in this country and don't use Asian sweatshops.  There's no excuse for those kind of places and I'm not making one.  But I will say that if we continue taxing the bejesus out of business in America and making it impossibly expensive to operate here, companies will continue to relocate where the climate isn't as nasty.  It's not just capitalism--it's survival.  If I have a choice of staying in California and going out of business, or moving to India and staying solvent, what do you think I'm going to do?
 
Forcing companies to move offshore makes sweatshops more likely, not less. 
 
This hostility is nothing new, either.  FDR specifically targetted big business during the New Deal, and the result was a double-dip depression.  Maybe it's rooted in American culture, since Jefferson and Jackson utterly loathed the idea of manufacturing and industrialization, but it's something we need to change.  Either that, or we ditch capitalism and go Marxist, which'll make things immensely worse.
 
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Le Zookeeper    IT recovery begins in India   11/10/2009 11:26:28 PM
 
Deloitte to hire 15,000. Accenture 8000.  unemployment rate 10.2%/17.5% - like I said folks who have no jobs are going to have to move overseas. This is turning into a flood.
 
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Nanheyangrouchuan       11/11/2009 4:03:50 PM
We'll avoid Wal-marts in the discussion, who by contract force their suppliers to outsource specifically to China.
 
I'll agree on the tax issues, even liberals can acknowledge that a flat tax is good for everyone and very fair. The problem is, a huge part of the financial services industry exists to deal with a complex tax law.  We've seen how much clout these guys carry, we've bailed them out so they can go back to business as usually while 15% of us are unemployed and another 10% are former mid-level people now flipping burgers, making coffee and cold calling for magazine subscriptions.  You don't really think that the US or even state governments are going to obliterate such a large and influential economic sector, do you?
 
And taxes in places like China aren't any better.  The gov't promises VAT rebates but revokes them as punishment or when more revenue is needed, at the drop of a hat and with little or no warning.  Official, the fire department, the police do "inspections", declare a problem and you have to pay a fine on the spot.  Shanghai, Beijing, Guangzhou and I think Chongqing now have social safety nets called the "3 golds", SS, medicare and unemployment.  Employers are required to pay into these systems.   You may think that tax rates are less in these countries, but also remember they have little real enforcement, so many foreign companies still don't pay any or at least all of their taxes.  India and China are working with the US and EU tax people to build their own hard nosed tax enforcement system.
 
Companies can get around paying most taxes using legal loopholes.  Much less so with worker safety and environmental regs.  And I kid you not that there is a subculture of Chinese factory workers who have all lost an appendage.  And you've seen the pics of the pollution (spend a week in Chongqing or Wuhan so you can have a burning throat and eyes every day).
 
Companies are also obsessed with low pay.  What is never mentioned is the tens of millions of USD that these companies spend having to retrain university grads be functional workers.  These students are students in the purest form, and have never had a paper route, baby sat, cut grass or flipped burgers before they get an engineer or analyst job.  And you may read about some of the truly bright people that come out of the schools, but those people are the same rare breeds who over here become VP by 30 and CEO before 45.  They don't sit in cubicles and crunch numbers in the US, China or India, they go out and make things happen and are too smart for the dullard expat middle managers sent over there.
The cubicle types are nothing more than carbon based calculators, waiting for someone to tell them exactly what to do, how to do it and when to do it.
 
Foreign companies also like the idea of people being legally bound to their job, if they are not born and raised in the locality their job is in.  I wouldn't be surprised if India had this system, but in China its called a "hu kou", or household registration.  This is not a commie practice, it is a feudal practice from when serfs were bound to the land of their birth.  If you are born in Xian, you cannot just show up in Beijing or Shanghai, get a job, buy a place and settle down.  You are an illegal immigrant without access to courts or social welfare.  So if you get hired from out of town, you are bound to your employer, even if that employer is foreign.  You must also get permission from your employer to get a loan, get married, etc.  Locally hired foreigners in China also must do this, and I can speak from first hand experience. 
 
Sounds more medieval than capitalistic, eh?  So foreign companies wield a large amount of power over the personal lives of their employees.  And they love that.
 
What they didn't see coming was large municipalities creating a penalty system for hiring non-local workers.  In Shanghai as of 2004, any company, especially foreign, that hired non-locals had to pay 10,000 RMB per month to the local gov't.  I have no doubt it has gone up, especially now.  And municipal governments do pander to their locally born populations in an oddly democratic way, so "hire local, buy local" is legally and financially enforced.
 
Foreign companies are under alot of pressure to increase outsourcing to maintain favor with officials and to maintain an open door for getting domestic contracts.  I'll bet India does alot of stuff like this.  In China, all foreign companies know that they cannot leave the country.  Well, the foreigners can le
 
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