Bush Distances Himself from Aide on Exporting Jobs

Reuters ^ | February 12, 2004 | Adam Entous

[Deliberator]

HARRISBURG, Pa. (Reuters) - Under pressure from fellow Republicans, President Bush distanced himself on Thursday from one of his top economic advisers who said the outsourcing of U.S. jobs to workers overseas may benefit the economy.

"The (economic) numbers are good. But I don't worry about numbers, I worry about people," Bush told students and teachers at a high school in Pennsylvania -- a pivotal state in this year's election and one of the hardest hit by factory job losses during his presidency.

Without mentioning by name the chairman of his Council of Economic Advisers, Gregory Mankiw, Bush said he was concerned "there are people looking for work because jobs have gone overseas" and vowed to "act to make sure there are more jobs at home" by keeping taxes low and by retraining displaced workers. Bush offered no new initiatives to curb outsourcing and aides said he opposed restrictions on free trade.

With political concern about unemployment heating up ahead of the November presidential election, critics have seized on Mankiw's characterization of "outsourcing" by U.S. companies as "something that we should realize is probably a plus for the economy in the long run."

Democrats said his comments and the council's annual report were evidence that the Bush White House is insensitive to the plight of out-of-work Americans.

Senate Democratic leader Tom Daschle predicted Mankiw would quit.

But Democratic Sen. Hillary Rodham Clinton of New York said, "This is the economic report of the president and not the economic report of Mr. Mankiw ... We cannot allow our Republican friends to shift the blame and the burden to Mr. Mankiw."

Senate Democrats said they would propose new protections for workers whose employers send their jobs overseas. Their proposal would require that outsourcing companies disclose their plans to their employees and to the Labor Department.

On Wednesday House Speaker Dennis Hastert of Illinois joined the bipartisan chorus of criticism from the U.S. Congress and the campaign trail, saying of Mankiw: "His theory fails a basic test of real economics."

The White House has rebuffed any suggestion that Mankiw resign. "That's kind of laughable," spokesman Scott McClellan said, adding: "Our economic team is doing a great job."

U.S. Commerce Secretary Don Evans defended the comments, telling CNBC: "What he praised was free trade and open trade. Every president since Herbert Hoover (1929-33) has said that free and open trade - as long as it's fair trade - is good for our economy."

At issue is the practice of a growing number of U.S. companies to move all or a portion of their operations to places like Mexico, India and China, where labor costs are lower and goods can be produced more cheaply, in order to improve corporate profits.

Nearly 2.8 million factory jobs have been lost since Bush took office and the issue looms large ahead of November's vote, where victory in rust-belt states like Pennsylvania could be key.

Underscoring its political importance to Bush's re-election, Thursday's visit was his 25th to Pennsylvania as president. He narrowly lost the state in the 2000 election, and analysts say he may have hurt his chances of winning it this year when he scrapped U.S. tariffs on steel imports in December to avert a trade war with Europe.

© Reuters 2004. All Rights Reserved.

[MattAMiller]

As counted by the number of people currently claiming unemployment benefits.

As counted by the number of people who say they're unemployed actually.

[drlevy88]

And not only that, but let the former engineer or other out-displaced professional try to land one of these jobs, or make a career out of one. Even though willing to swallow the vast reduction in standard of living, they won't be considered viable hires unless they hide their experience on their resumes, because the would-be employers will consider, with some logic, what might happen if the job market changes and lures these people away again. Mass overqualification is a real albatross that no economic model I know of takes into account.

[drlevy88]

Demonstrate that. Virtually all figures published in newspaper articles are from unemployment claims.

[drlevy88]

An "elite" who dares listen to the people. Fancy that.

[drlevy88]

No, we have elites who showboat with all sorts of cockamamey solutions

Describes Mankiw well. Pee on my back and tell me it's raining.

[ElCapitanAmerica]

How these figures are counted is a bit more complicated, but here's the official line.

http://www.bls.gov/cps/cps_htgm.htm

Because unemployment insurance records relate only to persons who have applied for such benefits, and since it is impractical to actually count every unemployed person each month, the Government conducts a monthly sample survey called the Current Population Survey (CPS) to measure the extent of unemployment in the country. The CPS has been conducted in the United States every month since 1940 when it began as a Work Projects Administration project. It has been expanded and modified several times since then. As explained later, the CPS estimates, beginning in 1994, reflect the results of a major redesign of the survey.

There are about 60,000 households in the sample for this survey. The sample is selected so as to be representative of the entire population of the United States. In order to select the sample, first, the 3,141 counties and county-equivalent cities in the country are grouped into 1,973 geographic areas. The Bureau of the Census then designs and selects a sample consisting of 754 of these geographic areas to represent each State and the District of Columbia. The sample is a State-based design and reflects urban and rural areas, different types of industrial and farming areas, and the major geographic divisions of each State.

Each of the 754 areas in the sample is subdivided into enumeration districts of about 300 households. The enumeration districts, in turn, are divided into smaller clusters of about four dwelling units each, through the use of address lists, detailed maps, and other sources. Then, the clusters to be surveyed are chosen statistically, and the households in these clusters are interviewed.

[Alberta's Child]

For more on Henry Ford, check out post #67 in this thread -- I think it illustrates some very crucial points that need to be considered whenever this subject is discussed.

[Alberta's Child]

So I should just sit back and enjoy watching us lose our technical expertise.

If it happens, there isn't a damn thing that you can do about it. For that matter, there really isn't anything that the President of the United States could do about it, either -- unless he can somehow figure out a way to force Americans to place a higher value on our engineers than they do on professional football.

Heck -- we can only hope that someone can figure out a way to outsource the Super Bowl halftime show to India.

[ElCapitanAmerica]

-- unless he can somehow figure out a way to force Americans to place a higher value on our engineers than they do on professional football.

Which will never happen as long as we can hire slave labor.

You are saying the president can't do anything about H1Bs, L1s and "guest worker" programs, which I mentioned in that post? That's funny, I thought the government handled these VISA programs .. hum ..

Hey, can I buy cheap drugs from Canada? No? Why is the government blocking me, but not doing anything about corporations getting slave wage labor overseas?

The president can't do anything about my credit card data being hosted and handled by workers in Pakistan? Did you read the story about Indians being bribed by gansters to obtain private data about US citizens in their databases? Nothing the government can do about that?

Why does the government get involved in regulations in this country, specially regulations for small businesses. By your logic, the gov. shouldn't have minimum wage. OSHA, taxes or anything that gets in the way of business.

Please explain.

[drlevy88]

You make a lot of handwaving that someone (e.g. in this case Ford's suppliers) has to get involuntarily shafted. But no proofs, only handwaving. There was a time not long ago when pretty much everyone down that food chain could afford a Ford. Not at the rate that Ford churned them out, of course, but could reasonably save up enough in a year or so to buy one.

[drlevy88]

If it happens, there isn't a damn thing that you can do about it. For that matter, there really isn't anything that the President of the United States could do about it, either -- unless he can somehow figure out a way to force Americans to place a higher value on our engineers than they do on professional football.

Now there's an idea. Let the NFL become the WFL (World Football League) and its draft and scope become worldwide. Tis only fair.

[Alberta's Child]

Why does the government get involved in regulations in this country, specially regulations for small businesses. By your logic, the gov. shouldn't have minimum wage. OSHA, taxes or anything that gets in the way of business.

You've raised an excellent point here. The United States has basically made a decision here about what our priorities are going to be, and your point is a perfect illustration.

In any modern society, there are a seemingly endless number of things that come into play when you talk about what we know as "the economy" -- things like GDP, the unemployment rate, the stock market, personal incomes, inflation, standard of living, trade balance, mortgage interest rates, interest rates on U.S. Treasury notes, currency exchange rates, etc.

Think of all these factors (as well as any others that you might want to consider) as an endless series of variables that somehow relate to each other but cannot all be controlled. It is almost always possible for a government to control any of these factors -- but it can only control one of them at a time with any real sense of certainty.

This country, if it wanted to, could actually maintain a system of full (and I mean 100%) employment for a long period of time -- but only if it were willing to pay a price in terms of other factors (such as a worthless currency and miserable standard of living) on our list.

Conversely, we could also institute a mandatory minimum wage of $500 per hour -- but only if we were willing to accept an unemployment rate of about 99%.

Or how about currency exchange? We could make the dollar as strong as we'd like -- but only if we can accept the inevitable trade deficit that would result.

We could even maintain the highest standard of living in the history of mankind (which is what we have right now) -- but we could never do this if we only consumed products or services that we made ourselves.

With all of these things in mind, I'll ask you a question: If you had a chance to control a single economic factor in the list I provided (or any other one), which one would it be?

[Alberta's Child]

There was a time not long ago when pretty much everyone down that food chain could afford a Ford.

You're absolutely right about that. And I'll tell you exactly when that time was: when companies like General Motors and Ford were effectively subsidized by the U.S. government (and therefore did not have to take advantage of any "inefficiencies" in the market like I described in Post #67).

This was done mainly through the military procurement process. I had a distant relative who was a mid-level executive for Ford back in the post-WW2 years, and he once described visiting a storage lot somewhere in the Midwest containing thousands of vehicles that had been purchased by the U.S. Army with no intention of ever using them.

[drlevy88]

but we could never do this if we only consumed products or services that we made ourselves.

Where does this naysaying come from? For years the US was much closer to this ideal if not perfect. For years the Fedguv operated on nothing BUT tariffs.

[ElCapitanAmerica]

BTW, somebody from India pointed this out to me;

This American History book had the illustrations offshored.

Abraham Lincoln - The Civil War President


Was this some world renown illustrator that they had to get from another country? Take a look
.
Looks pretty bland to me. How much did the publisher pay for this?
$1,400
(artist had 6 months to complete it) I'm sure somebody here could have done that for about the same price.

Offshoring of our history books, sure sounds patriotic doesn't it?

[drlevy88]

Support your claim that this was not possible without the military procurement.

[drlevy88]

You keep harping on market inefficiency as though it means someone has to get the shaft, not of their own laziness or willful incompetence. If the market consisted of me and you, and I made the things that you needed and vice versa that wouldn't be so. Just take that and expand that to a nation.

[Alberta's Child]

Where does this naysaying come from? For years the US was much closer to this ideal if not perfect. For years the Fedguv operated on nothing BUT tariffs.

Why did you post my quote out of context by leaving the first part of it out? It's worth noting that during the period in which the Federal government was able to operate on nothing but tariffs, the U.S. did not have the highest standard of living in the world.

And if you want to start going back to the mid-19th century to try to make your point, remember that the pre-Civil War period in this country was actually a massive "inefficiency in the market" for the entire country that was really almost an accident of history. At that time, the nation was effectively able to secure major assets for its use and development (the Great Plains, Rocky Mountain and Sierra Nevada regions, and West Coast) without really paying much of a price for them.

[ElCapitanAmerica]

You failed to answer any of my questions.

How about we don't remove any of our regulations but we demand that other countries "trading" with us adopt some of them? Is that too unreasonable, because we can never compete with workers anywere when their governments are as corrupt as India or as oppressive as China.

[Alberta's Child]

The United States would never have done something like that if it were not deemed "necessary" for one reason or another.