Perhaps Mr. Dobbs would care to do some stories on WHY U.S. companies are almost forced to seek cheap labor outside the U.S., due to disastrous liberal policies here.
Just a thought.
Posted on 05/27/2005 11:14:22 AM PDT by LowCountryJoe
(Viewpoint): Every so often we witness the meltdown of a public figure. Recall Nixon, Howard Dean's scream or boxer Mike Tyson's bite of an opponent's ear. CNN business anchor Lou Dobbs has been committing the journalistic equivalent of biting someone's ear off in public. The host of "Lou Dobbs Tonight" has transmogrified from serious reporter to hysterical mountebank over one pet issue: foreign job outsourcing.
He has joined the chorus decrying the trend of U.S. businesses moving some operations offshore to economize on labor.
So what's the problem? Doesn't business have a responsibility to enhance profits by using resources efficiently? Not according to Dobbsians. To them, getting such "cheap labor" is illegitimate, even unpatriotic. They apparently feel American business has an obligation to give charity jobs to uneconomic workers.
What's wrong with that? The Dobbs position is dispatched by metaphor: When the car was invented, thousands of buggy-whip industry employees lost their jobs. Should government have outlawed car manufacture 100 years ago? Automation in general has sent many assembly-line workers into unemployment lines. Should automation therefore be prohibited by regulation?
The answers are obvious. Technological advancement causes short-term pain along with greater long-term gain. Technology, as implemented by business, may produce short-run unemployment. But this effect is dwarfed by jobs created over the long run through improved productivity.
This "outsourcing" phenomenon embodies the same principle.
Business is motivated to secure low-cost labor resources. Often offshore workers serve this interest of U.S. firms. Yes, our corporations seek "cheap labor," in the pejorative locution. (Sometimes U.S. labor resources serve the same end for foreign producers. "Insourcing," anyone?)
Why not prohibit such a job-dislocating practice by law to preserve American jobs? Because that would be economically myopic. What would happen if offshore-outsourcing U.S. firms were no longer allowed to do that? Our hamstrung firms would no longer be competitive in world markets.
Those entities would then be forced to downsize or even go out of business, thereby eliminating many more jobs!
Also, foreign governments would retaliate, prohibiting outsourcing to the U.S.
Because the amount of U.S. job insourcing is much greater than the outsourcing (did you know that?), this would produce a further loss of U.S. jobs.
Yes, let us choke U.S. business out of business. It is the perfect liberal egalitarian remedy: Let all the formerly employed be equal in their unemployment and misery.
At least the Democrats would then have a higher unemployment rate to use as a wedge issue while making the world safe for French corporations.
Self-evident economics notwithstanding, Dobbs drones on, traducing our economy.
The whole U.S. economy? Yes, Dobbs' sensationalized list of outsourcing companies now numbers over a thousand! The ironic lesson is lost on him: If something means everything, it means nothing. Lou's litany of "Benedict Arnold" companies is a fair proxy for the whole private economy, so his point disintegrates into gibberish.
Anyway, the evidence says this is pretty much a nonissue. The proportion of 2003 U.S. job losses attributable to foreign outsourcing was only 1%, according to the Bureau of Labor Statistics.
That is 1% of gross layoffs, not 1% of the labor force! This is why outsourcing is a small price to pay for the long-term bounty of efficiency and employment gains.
Another way of looking at it: In an average year our economy loses about 10 million jobs gross, of which around 100,000, or 1%, are due to outsourcing. So how can our country stay in business? Because the economy also creates 11.5 million jobs in an average year for a net gain of 1.5 million.
That frames the true perspective. Apparently, American business does pretty well for American labor.
Ironically, the offending party is the one that has recklessly slandered U.S. businesses that are merely performing their economic mission.
Dobbs has injudiciously alleged that numerous U.S. firms are "Benedict Arnolds" of the economy. This is just anti-free trade claptrap, and it could bring a new round of recessionary protectionism.
Ultimately, Dobbs is hoist on his own petard. If anyone is betraying our economy it is Dobbs, especially considering the damage his propaganda can do in terms of inducing erroneous public perceptions and, in turn, support for bad policy.
The sound you hear is onrushing overregulation, trade war and macroeconomic contraction. Perhaps you can think of other demagogues who railed against convenient domestic demons.
I suspect I speak for many former fans as I express the utmost disappointment in Dobbs, now exposed as a modern-day subversive in the Benedict Arnold tradition.
Perhaps Mr. Dobbs would care to do some stories on WHY U.S. companies are almost forced to seek cheap labor outside the U.S., due to disastrous liberal policies here.
Just a thought.
Quote: When the car was invented, thousands of buggy-whip industry employees lost their jobs. Should government have outlawed car manufacture 100 years ago?
The displaced buggy whip makers were hired by the car companies at even higher wages and in even greater numbers. Remember Ford's $5 per day wage (which was incredible for the time)
It's weird how now it's "THE LEFT" that wants lower import taxes, fewer regulatory controls on business, and less government interference on personal shopping choices.
What I find really strange is the number of far right conservatives that see no problem with buying $$billions of products from a communist country that has nukes and war plans against us. Let alone sending them hi-tech information and factories.
Ronald Regan is probaly turning over in his grave.
Now I have to warn you expat my hatchet is sharp and i'm done cutting out all the multi flora rose and I know you still have your machete. Let us not create our own mini Rwanda this fine sunny Friday afternoon.
I read a lot of economics, nut I'm a johnny-come-lately to the field, trying to atone for a useless liberal arts degree.
My favorites are Economics in One Lesson by Hazlett, Freedom to Choose, by Friedman, and Thomas Sowell's Basic Economics and Applied Economics.
I'm no China apologist, but this is such fear mongering on your part. Don't you suppose that a country that relies on us for so much for their economic output, like China does, would find it in their best interests to not engage us. Add to the fact that we could [but probably would not] suspend their capital accounts and not allow them to cash out of their US debt holdings, this would be like getting all of our past goods for free from them. But you keep on looking for the dark clouds among the numerous silver linings as I'm sure you [and others] are keeping the anti depressant segment of the pharmaceutical industry very profitable.
"but" I'm a johnny-come-lately
Great article. The decision NOT to outsource places jobs in jeopardy too.
"...U.S. job insourcing is much greater than the outsourcing (did you know that?)"
The above statement may be valid but it does not mention that the insourced jobs pay less than the outsourced do. Presently, there are more college graduates without jobs than there are unemployed high school dropouts.
Most of the insourced jobs do not require any technical skills and it is exactly among the college graduates that the unemployment rate is high, particularly among engineering and computer science graduates.
Many students are shying away from pursuing a technical degree. This situation will bite us in the ass in the future.
Well, we still have nukes and war plans against them, too, don't forget.
If we continue trade with China, and as they continue trading with the rest of the world, wouldn't the average wages of the Chinese worker begin to rise? As the cost of their labor goes up, wouldn't it be less attractive for U.S. industries to outsource there?
Now, as for MOST FAVORED trade status, I do not believe China deserves that status, and I agree completely that we should not be continuing Clintonian policies of giving them industrial and weaponry technology.
And American business (some at least) expect those very same "uneconomic workers" to put on uniforms and fight to protect the fat asses of business. Go figure.
National pride comes before such petty considerations with China. Japan in 1941 was utterly dependent upon the US for raw materials. Did that stop them in their march for empire, even though they knew it would lead to conflict with the US some day ?
I will respond in detail to this very, very foolish article later.
American business operates within a Pax Americana under the protection of American law and American might. On occasion it asks American boys to die for that Pax Americana. So yes, you are right.
American business DOES owe America.
Good point. In the old days, people went from carraiges and bicycles into the auto business. This is not new technology replacing old technology. This is just shipping jobs overseas so you don't have to adhere to US laws and the free market, but still get to enjoy the advantages of US citizenship and US taxpayer dollars. No innovation whatsover.
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