I actually don't think outsourcing should be banned in principle, because companies that outsource do so for legitimate reasons. Here are some reasons that I can think of that companies outsource:

1. Opportunity costs and time advantage: companies are better served by outsourcing so they can spend their time at what they are better at.
2. Cost saving: by outsourcing, you do not need to invest in infrastructure. Also saves on training costs, and maximize your employees preexisting skills.
3. Specialized services: members of an outsourcing company have specific and specialized skills, enhances your company by partnering with experts.

Do these seem like bad things? I would say absolutely not! Companies should outsource because it lets them focus on what they're good at. For example, company X is pouring tons of resources into manufacturing a new product, where they research and develop (R&D) the technology, and employ/train manpower. Now, they have to advertise the thing! So, what companies can do is outsource their advertising to a sales/marketing firm: this keeps the costs of the company down, and hands the advertising to experts who do it for a job; company X won't have to train their own employees to advertise, they stick to what they're good at. It's a similar concept to an assembly line, if you think about it: everyone does their task and it's what they're best at, and it raises productivity.

I don't think Obama is concerned about outsourcing; politicians like to say things like "outsourcing is bad because it doesn't hold companies accountable." What does that mean? It's typical politician jargon for saying nothing. How I look at it, is actually outsourcing would appeal to Obama because it falls under "job creation," where it's not that company X is hiring more workers, but company Y is taking on company X as a client and achieving a task for them. There doesn't seem to be anything wrong with that!

What Obama is having trouble with is if companies offshore their service. This is what Obama is identifying as the problem here. What happens with offshoring is that company X will go to a foreign country, instead of company Y, and hire foreign workers at a cheaper rate than a domestic firm. This I see as a BIG problem. This isn't helping Americans, like those who work for company Y, so what Obama is trying to say is that companies should not be outsourcing their tasks abroad. I'm not entirely versed on what Obama specifically says on the issue, but I would probably think that he says some vague blanket comment like the one mentioned earlier, that doesn't directly address domestic outsourcing.

I completely agree with Obama here: outsourcing abroad is not an effective direction for companies to go, and it certainly doesn't help companies in America. What I don't agree with is eliminating outsourcing entirely, because there are clear win-win economic deals to be made when companies outsource domestically. Company X and company Y both benefit if they divvy up their services, sticking to what they are best at.

Now, I am not an advocate for outsourcing, because it does take jobs away from people who want and need them. But I can see the up sides and down sides to outsourcing. I do not believe that it should be banned, but it should certainly be limited.

Outsourcing also doesn't necessarily mean over seas. Often it is local, or national outsourcing, and that means we are supporting Americans.

Supporting another country isn't a bad thing, because it makes their standards of living better, and make them more competitive. Look what happened in, I want to say, Thailand and the Phillipines. They make better wages now, and eat and sleep better. They own more (I can't believe I just said that, but it's true. All this money that they have made has allowed them to work less hard in the fields, and buy things that they may or may not need, which may or may not be a good thing. Afterall if you really needed an item before, wouldn't you already have it - I know I'm thinking like an economist. Bad bad bad.)

Outsourcing jobs allows for innovation and initiative. Many of the jobs outsourced are jobs that we as American's don't want. Many of these jobs were telemarketing, manufacturing or Customer Service. This allows, and sometimes forces people to find something else. For many it is an education, which can only further them, if they apply themselves. An extreme example, and an example not necessarily of outsourcing was rock mining. Mexicans were the only ones willing to risk their lives mining rocks. Or vegetable picking. They, among other minorities, were the only ones willing to labor in the fields. I was one of the minority underaged children at two locations. I did not see any white people picking cucumbers or strawberries! :)

Outsourcing can be bad as well.

It doesn't make us (in house) learn things because someone else (outsourcing) can do it. It allows us to be lazy.

It can be costly in terms of time and effort. What if the company didn't hold up it's part of the bargain and there is NO laws to help you, the victim? At least in the US there are regulations (though some are not upheld).

That's all I can remember from my IT, economics, and accounting courses. :)

Obama is tough on it because it is what America wants, and he is trying to appease that desire. If all this does is create jobs or brings back jobs from over seas, how can that be a bad thing?

I kind of sort of wish that there would be a limitation. Say only 20% of your business can be outsourced. Of course that would put the pajama makers in Cali out of business, because they don't actually make any of their pajamas, because it would cost too much to do it in house or in the US.