You want free market capitalism; you have it.

http://www.cnn.com/video/#/video/us/2008/03/27/verjee.passport.outsourcing.cnn

There are questions going around about whether this foreign manufacture is a security compromise to the whole US security mission.

The foreign companies manufacturer blank passports and chips (vaguely equivalent to having blank CDs made abroad).  Given suitable PKI this should not represent a security problem.

The real joke is that the apparent reason for this happening is that the US does not have the facilities domestically, to do this production – slight loss of pride.

Well that’s a good thing, because the alternative would be that the US government is chosen to outsource jobs to another country – a loss to the US economy.