This is the Cato Daily Podcast for Wednesday, January 28th, 2009.

I'm Caleb Brown.

When Barack Obama talked on the campaign trail, he often invade against companies that receive tax

breaks after shipping jobs overseas.

Dan Griswalt, director of the Cato Institute's Center for Trade Policy Studies

says singling out those companies now for tax hikes and have a particularly

painful negative side effect.

Well first when they talk about shipping jobs overseas what do they mean exactly?

And if they mean U.S. companies investing in operations abroad, well you're indicting pretty

much all of corporate America.

About 2,500 U.S. companies have affiliates abroad, that's the definition

of a multinational company, they have between 9 and 10 on average affiliates abroad.

Why do they invest abroad?

Because that's where their customers are.

You know, 94% of the world's, 95% of the world's population lives outside the United States,

three quarters of the world's buying power. Investing in foreign companies is increasingly the way U.S. companies reach

their customers.

You know, for every billion dollars that U.S. companies export from the United States and goods.

They're selling $6 billion worth of goods

from their foreign affiliates.

They invest abroad because they're closer to their customers.

Yes, they can take advantage of certain realities in the host country.

...