[White House] Report: Exporting Jobs Overseas Will Help U.S

LA Times ^ | Feb 9, 2004 | Warren Vieth and Edwin Chen

[ETERNAL WARMING]

Report: Exporting Jobs Overseas Will Help U.S

WASHINGTON — The movement of American factory jobs and white-collar work to other countries is part of a positive transformation that will enrich the U.S. economy over time, even if it causes short-term pain and dislocation, the Bush administration said today.

The embrace of foreign "outsourcing," an accelerating trend that has contributed to U.S. job losses in recent years and has become an issue in the 2004 elections, is contained in the president's annual report to Congress on the health of the U.S. economy.

"Outsourcing is just a new way of doing international trade," said Gregory Mankiw, chairman of Bush's Council of Economic Advisors, which prepared the report. "More things are tradable than were tradable in the past. And that's a good thing."

The report, which predicts that the nation will reverse a three-year employment slide by creating 2.6 million jobs in 2004, is part of a weeklong effort by the administration to highlight signs that the recovery is picking up speed. Bush's economic stewardship has become a central issue in the presidential campaign, and the White House is eager to demonstrate that his policies are producing positive results.

In his message to Congress, Bush said the economy "was strong and getting stronger," thanks in part to the administration's tax cuts and other economic policies. He said the nation had survived a stock market meltdown, terrorist attacks, corporate scandals and a global economic slump, and was finally beginning to enjoy "a mounting prosperity that will reach every corner of America."

The president repeated that message during a "conversation" on the economy with workers at SRC Automotive in Springfield, Mo., an employee-owned firm that rebuilds car engines. In one of his most fervent appeals yet to make his tax cuts permanent, he said congressional opponents are seeking to impose a broad new tax hike. "Make no mistake about it," he said.

The president's 411-page report contains a detailed diagnosis of the forces contributing to the economic slowdown that began about the time Bush occupied the White House, and a wide-ranging defense of the policies he has pursued to combat it.

It asserts that the last recession actually began in late 2000, before Bush took office, instead of in March, 2001, as certified by the official recession dating panel of the National Bureau of Economic Research.

Much of the report repeats the administration's previous economic prescriptions. The Bush tax cuts must be made permanent, it says, to have their full beneficial effect on the economy. Social Security must be restructured to let workers put part of their retirement funds in private accounts, it argues, to address a long-term funding shortfall.

But the report devotes considerable attention to an issue that has become increasingly troublesome for the administration: the loss of 2.8 million manufacturing jobs since Bush took office, and critics' claims that the administration's trade policies are partly to blame.

The report acknowledges that international trade and foreign outsourcing have contributed to the job slump. But it argues that technological progress and rising productivity — the ability to produce more goods with fewer workers — have played a bigger role than trade.

Although trade expansion inevitably hurts some workers, it says, the benefits will eventually outweigh the costs as Americans are able to buy goods and services at lower costs and as jobs are created in growing sectors of the economy.

The report endorses the relatively new phenomenon of outsourcing high-end white-collar work to India and other countries, a trend that has created concern within affected professions such as computer programming and medical diagnostics.

[ambrose]

This thread should be fun.

[oceanview]

the Kerry campaign will be using this within days....

[ETERNAL WARMING]

Like my friend MD says: "Let me get this straight; Bush is going to export the well paying white collar jobs to Pakistan, India and Red China. This will magically create an entirely new group of jobs within the US. Bush will then import a bunch of Pakistanis, Indians and Red Chinese to fill these jobs, i.e., he will match any willing worker with any willing employer."

Yep. That's why everyone's income is plunging while the top 5% have seen 10% increases even in a bad economy.

The sell out to business interests continues, even tho it places this nation in grave peril and the quality of our lives is destroyed. More "fuzzy math" anyone?

[briant]

This hurts me than it hurts you-bump.

[ambrose]

The industrial revolution wasn't any fun for the people caught in the middle of the transformation either, but I don't think anyone can argue it wasn't an improvement over the Agrarian society that preceded it.

Now we're entering the Information Revolution.

[middie]

Orwellian is the only reference such outrageous rationale' brings to mind. Perhaps with a touch of Lewis Carrol's admonition when the Mad Hatter scolded that: " When I use a word it means exactly what I intend it to mean, nothing more and nothing less...." Anyone who believes that explanation please contact me, I have a few acres of Florida swamp land to sell with my assurance that, even though it is insect, snake and alligator infested now and of absolutely no use, it soon will sprout a totally new city with gleaming homes and shopping centers here in the middle of the Everglades.

[ETERNAL WARMING]

I'm sure the Kerry Campaign knows all about it..this is the LA Times, afterall.

[ETERNAL WARMING]

Now we're entering the Information Revolution.

Yes. Information that is now being "outsourced" as we speak.

[skip_intro]

It wasn't the Mad Hatter - it was Humpty Dumpty.

[Lijahsbubbe]

More "fuzzy math" anyone?

Republican National Committee +
Democratic National Committee +
Big Business =
A bunch of backscratchers

[Fee]

I think the new paradigm for jobs is finding services that cater to the new rich in this country. The Chinese and Indians are being paid to provide services and products, and the profits from the labor cost savings are flowing back to the US corporations and to the pockets of the ones who run, manage and suppport the organization (CEO's, board members, upper management, lawyers, etc). When they go home they will need services and products. We the unlucky ones (really our children, grandchildren) must figure out what services or products they will be willing to pay good money for.

[oceanview]

farming jobs weren't sent offshore, the # of people required to conduct farming activites was reduced by technology. to be sure, the same thing is happening in manufacturing (one part of the decline in employment), automation and technology reduce the number of workers required, even in china.

but that is not what is happening in tech and IT. there aren't fewer programmers, its just that less americans hold those jobs, more in India do. there aren't fewer call center people, its just that less americans hold those jobs, they are now in India, and the Phillipines. IBM doesn't have fewer accounting and finance people, its just that the americans that once held those jobs have lost them to workers in brazil. In fact, employment in IT/tech is INCREASING, its just all happening offshore.

the comparison to farming and manufacturing is not valid.

[mrsmith]

The section of the report:
"Services trade is growing in importance in the world economy
(Chart 12-2). The services sector, for trade purposes, includes
travel and transportation-related services, royalties and license
fees, and other private services, such as finance, insurance and
telecommunications. The service-providing sector is the largest
component of the private economy in the United States, providing
more than 86 million jobs in 2003 and accounting for over half of
total GDP. In 2002, the United States exported services worth
almost $300 billion, about 30 percent of total exports of goods
and services.
Worldwide services trade totaled $1.5 trillion in 2002, compared
to goods trade of over $6 trillion, but services trade has been
growing faster. Unlike goods trade, in which a product can be
loaded on a ship at one port and off-loaded anywhere in the world
with little need for the exporter and importer to interact,
services trade generally requires extensive interaction. Some
services can be provided at a distance, such as software services.
For others, such as tourism, the customer must come to the location
of the service provider. For others, such as some consulting work,
the service provider must come to the customer. The liberalization
of services trade involves the movement of individuals as well as
the regulation of investment and other business activity. For
American banks to sell many of their services abroad, they must
open branches in their target markets (Box 12-1). As a result,
negotiations to liberalize trade in services have moved beyond
border measures such as tariffs (taxes on imports) to deal with
subjects that have traditionally been the domain of domestic
regulation.
One facet of increased services trade is the increased use of
offshore outsourcing in which a company relocates labor-intensive
service industry functions to another country. For example, a U.S.
firm might use a call-center in India to handle customer
service-related questions. The principal novelty of outsourcing
services is the means by which foreign purchases are delivered.
Whereas imported goods might arrive by ship, outsourced services
are often delivered using telephone lines or the Internet. The
basic economic forces behind the transactions are the same,
however. When a good or service is produced more cheaply abroad,
it makes more sense to import it than to make or provide it
domestically. "

[sourcery]

[Shermy]

Now we're entering the Information Revolution.

"Information economy" jobs were theorized as an outcmoe of NAFTA. Now those are the very jobs fleeing to India.

Bush, when he talks about "new jobs" doesn't even bother to mention where they'll come from.

[oceanview]

that is true, I have posted on similar threads that mechanics at Mercedes dealers make $85K and up.

there are plenty of areas unaffected by this: sales, law, real estate, government, many others. just stay away from tech.

[oceanview]

because he doesn't know. To be fair, the Dems have no clue on this problem either, but they know how to make use of it politically.