In yesterday's Washington Post, Alan Sloan writes of the peril that could befall 950 Americans who work for Residential Capital, LLC—a mortgage services company in Waterloo, Iowa. The servicing of $365 billion worth of mortgages is currently for sale, in bankruptcy court. Should Ocwen Financial (a U.S. company) emerge as the highest bidder, all that service work would, presumably, move to India. Apparently—at least in the opinion of the owners of Ocwen—this is a service performed more profitably when performed abroad.
Like you, I cringe when I think about those 950 folks in Waterloo—Sloan sensitively brings their stories to life in his column. But in all fairness, we must also consider another group of Americans whom he fails (not purposely I'm sure) to recognize. They would be the folks who work, and would hope to start working, in the following industries:
Precious stones & metals
Mineral fuel, Oil, etc.
Optical instruments & equipment
Aircraft and parts
Iron and steel
These represent U.S. industries that export to India. Or I should say; the industries that capture the U.S. dollars (claims against U.S. stuff)—that companies like Ocwen invest in India—as they flow back to the U.S., to the tune of $10 billion from January to June of this year alone.
"Yes, but", says the self-proclaimed patriot, "we, nonetheless, buy more stuff from them—we run a merchandise "trade deficit" with India". "Yes, but", says those who understand trade, "that means they have dollars left over after they buy stuff directly from us—dollars that folks in other countries will gladly accept in trade (because they buy stuff from us) for whatever Indians desire from them". "Okay", says the spp, "but when you add it all up, we run a merchandise "trade deficit" with the world". "Ah yes, but", says twut, "the balance represents our capital account surplus, which represents foreign investment in U.S. assets".
As you can see, all things considered, our trade with India reaches far beyond India and benefits more than just the industries referenced above.
Here's the above in a short white board lesson: