Posted on 02/13/2004 6:11:03 AM PST by 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.
We can actually do a pretty simple test right here on FreeRepublic, by asking how many people on this board work in an industry in which they: 1) produce things that are made entirely in the U.S., from parts and/or raw materials that are supplied by U.S. sources; and 2) can afford to purchase the items they produce without incurring any serious financial hardship.
I'm willing to bet that the answer is going to be almost zero -- and anyone who can meet these conditions would then have to undergo a second level of scrutiny related to Point #1: Can everyone who works for the U.S. suppliers also purchase the end-product they are producing?
You're right. But the "economic dog" in this fight is pretty one-sided, in that I rely on a strong U.S. dollar against the Canadian dollar -- so my bets are clearly on this side of the border, not the other.
Handpick, handpick. You know there is almost no such animal any more. Even made in USA almost always mean "from foreign and domestic components."
We can always ask them if they ever found themselves in such a situation.
Even made in USA almost always mean "from foreign and domestic components."
My point exactly -- and that has been the case throughout most of U.S. history.
You really aren't getting it, are you? When the U.S. dollar is weak, Canadians buy U.S. products because they can afford to pay more for them than people in the U.S. can -- in other words, they have a higher standard of living than Americans.
You can root for it either way -- which is exactly what I'm saying through this entire thread. If you want to root for U.S. jobs, you have to root for Canada's higher standard of living. If you want to root for a high U.S. standard of living, you have to accept a trade deficit with Canada.
If you tell me that the U.S. can enjoy "both," then you are utterly ignorant on this subject.
For sports fans out there, it's worth noting that at the height of Canada's strong currency, the best team in the National Hockey League was the Montreal Canadiens. Over the last ten years when the Canadian currency has been weak, there hasn't even been a Canadian team in the Stanley Cup finals. Now you see how this currency business works in the sports world -- when Canada's currency is weak, one of the things they can't even afford is their own native-born hockey players.
That's exactly the point. Now you see how it works from both sides . . . While it is true that the person who mines and manufactures massive diamonds can't afford to buy them, is also works the other way around -- the person who buys them wouldn't be in the market for them in the first place if he was a miner or a diamond cutter.
Now look at it from the perspective of a home builder. Would you rather be a carpenter or electrician who builds $150,000 homes, or one who builds $1 million homes? If you're building $1 million homes, you'd be foolish to expect that you might be able to afford one. But the same holds true for the $150,000 homes, too . . . which is why a tradesman who had the option would rather be building the $1 million homes.
This is exactly how an economy works, despite our understandable desire for it not to be so -- the sum of labor and capital that is required to manufacture a product can't possibly be worth more than the price at which that product is sold.
And immorality. And godlessness, worshiping the golden calf. Who needs God, morals and discipline when all is provided for, all kinds of mad diversions and entertainment are freely available? Many in our welfare class are like this and it's spread well into our middle and upper classes.
I actually agree with everything in your post here, except the boldfaced part of the paragraph above. If you go back to what I said in #40 and look at everything I've posted since then, you will not find any case in which I said a "high standard of living" for our society is preferable to a "high level of employment" -- I simply acknowledged that having one of them required a trade-off in the form of the other. Anyone who does not recognize this is ignroant and naive to the point of being dangerous to our society.
The fact that the U.S. today desires a high standard of living is not my economic model -- it's the economic that I've been born into, and I have to survive in it whether I like it or not.
What I will say, though, is that almost anyone who tells me that they will be willing to "settle for less" in terms of material wealth in exchange for "health, comfort, and dignity" is full of crap. The easiest way to determine this is by putting together a list of 100 things that their parents' generation never had but are now so common that modern society takes them for granted, and ask them to cross out the ones that they are willing to give up in exchange for a "decent lifestyle." Most people would be hard-pressed to come up with even 20 of them, especially when they consider the implications of doing without some of them -- like a five-day work week (my grandparents' generation worked six days a week in union jobs!), a vacation at a place more than 100 miles from home, a second car (or even a first one, in the case of my grandparents), affordable air travel, a life expectancy in excess of 60 years, a low infant mortality rate, safe working conditions, clean air and water, advanced surgery, antibiotics, highly functional artificial limbs (if the need ever arises), joint replacement surgery, blood transfusions, your own home in the suburbs, air conditioning, refrigeration, fresh fruits and vegetables available in every season, a washing machine, a dryer, electronic calculators, ATMs, touch-tone phone service (forget about cellular phones!), voice mail, e-mail, personal computers, etc.
When you come up with that full list and start marking things off, I'm guessing you are going to find that anything you've crossed off is related specifically to personal entertainment. You can eliminate these things today regardless of what your financial condition is, and regardless of what the rest of society views as "essential" to their lives.
But that is exactly what is going to happen, when people are forced to spend themselves down to virtually nothing, just to pay their $1000 a month COBRA (because the wage earner(s) were laid off when their jobs went to India.)
Expect enough formerly middle-class people to move into shanties, and you've got the potential for a "revolution" on your hands. Given a choice, most people will vote in socialism before they'll accept their reduced circumstances as "free market corrections."
Don't get me started on biotech. If anyone's looked recently, biotech jobs are of basically two types: slave monkey technician jobs that pay $10 an hour and can be done by someone with a year or so at the community college, and PhD work. I find it more than laughable that 45 year old engineers laid off because the company outsourced to Bangalore are supposed to now "retrain" for PhDs in biochemistry, to do DNA research.
There's no reason why Bangalore universities can't crank out PhD biologists/biochemists as well. We're more than willing to let them come to the US anyway.
Exactly. Taking the money from the pockets of taxpayers so that foreign students on visas can come here, get a subsidized education, and then take US jobs is *suicidal madness.*
What we need is a tariff on products that are outsourced - it doesn't matter whether it's tennis shoes, computer software or hardware, or call centers. Companies that use *any* non-US outsourcing along the line should pay *tariffs* for that "privilege."
More expensive products? Perhaps. But perhaps less social chaos from the implosion of the middle class.
When I was in engineering school (back in the Pleistocene - ha ha), the Indian engineering students I met were almost exclusively Brahmin. (They were very comfortable discussing the caste/class aspects of Indian life; I didn't even need to ask to find out.) This means that, for India, they were of wealthy backgrounds. Most had fathers who had studied in England or Europe.
My husband worked with *many* Indians a few years ago, and it hasn't substantially changed.
One reason India *is* able to provide technical workers on the cheap is because India is a country *very* severely divided economically. The poor in India are still largely terribly poor - thus they're willing to work for "pennies" at the internal jobs within the country. Indian engineers may be making 1/4 of US ones, but they have servants, for instance. That's because there's such a huge "underclass" of very poor within that country, and not a lot of incentive to change it from within.
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