Posted on 03/20/2004 11:24:07 AM PST by RWR8189
WHO IS the unilateralist candidate for president this year, the man who's willing to push our allies away and who questions the patriotism of those who disagree with him? That would be John Kerry, at least on the issue of trade. Kerry may like to portray himself as a multilateralist, whom foreign leaders are secretly rooting for. But when it comes to trade policy and the outsourcing debate, he claims that it's America versus the world.
The recent flap over outsourcing--the buzzword for American companies' hiring professional workers abroad--is almost purely political. Reliable data show that America is not "losing" jobs to foreign workers. "Despite the political outcry over the outsourcing of white-collar jobs to such places as India and Ghana, the latest U.S. government data suggest that foreigners outsource far more office work to the U.S. than American companies send abroad," reports the Wall Street Journal. Indeed, according to the Commerce Department, the value of "legal work, computer programming, telecommunications, banking, engineering, management consulting and other private services" performed by U.S. workers for foreign clients rose about 7 percent in 2003. In other words, "outsourcing" is a net creator of jobs for Americans, not to mention its benefits for the overall health of the economy.
Despite this, Republicans have been on the defensive ever since the February 9 press briefing of Gregory Mankiw, chairman of the President's Council of Economic Advisers. "Outsourcing," Mankiw explained, "is just a new way of doing international trade. We're very used to goods being produced abroad and being shipped here on ships or planes. What we're not used to is services being produced abroad and being sent here over the Internet or telephone wires. But does it matter from an economic standpoint whether values of items produced abroad come on planes and ships or over fiberoptic cables? Well, no; the economics is basically the same. More things are tradable than were tradable in the past, and that's a good thing."
All true. The outrage from Democrats over the remark unfortunately was not matched by a vigorous White House defense. Indeed, a number of Republicans in Congress piled on against Mankiw.
Even by Washington standards, political rhetoric on the outsourcing issue has been abysmal. For example, on the night of the Wisconsin primary, John Kerry tarred all companies that do business outside America's borders as traitors: "We will repeal the tax loopholes and benefits that reward Benedict Arnold CEOs and companies for shipping American jobs overseas." He was a bit more scrupulous the next day, in response to a union member asking if he would pledge to keep jobs in America. Kerry replied with surprising candor: "I don't want to lie to you. If a candidate stands here and said 'yes' to you in answer to that, they're not telling you the truth. You know, we don't have the right constitutionally to stop a company from going overseas if it wants to."
Kerry has mostly received a free ride from the media over his demagoguing on outsourcing and flip-flops on past support for free-trade agreements like NAFTA. And no one in the media seems to have recognized the glaring discrepancy between his trade policy--which would alienate almost every foreign government--and his frequent complaints that the Bush administration has "pushed away our allies."
Kerry early on saw political possibilities in exploiting the outsourcing issue. In November 2003, he introduced a bill to regulate U.S. companies' use of call centers abroad by requiring "each employee in the call center to disclose [his or her] physical location." The press release announcing the bill stated that requiring operators to disclose they are foreigners would "go a long way to preserve U.S. jobs."
There is an unusual premise to Kerry's legislation: It assumes that if Americans discovered they were speaking to foreigners they would either hang up the telephone or protest in some other manner. It is not clear how the bill would save jobs, unless you assume Americans have little tolerance for even the most modest level of international engagement. Of course, the entire preoccupation with call-center jobs is a bit strange, since Kerry and other members of Congress had previously passed "Do Not Call" legislation that, according to telemarketing industry estimates, could eliminate as many as two million U.S. call-center jobs.
Some innovative U.S. companies have already come up with solutions to the outsourcing controversy that do not risk a trade war or other foreign policy harm. California-based E-Loan offers its customers a choice of having their loan paperwork processed in India or in the United States. Customers are informed that if they press the "India" button, their loan will be processed in one day, while the U.S.-based work may take two days or longer. More than 80 percent of customers for home equity loans, according to the company, have chosen to have their work done in India--a choice that some elected officials would like to take away from them.
The Bush administration's political performance on the outsourcing issue could be stronger. The president recently warned against "economic isolationism," which put Kerry and some Democrats on the defensive for a day or two. However, the administration has itself been inconsistent on the trade issue.
The stakes internationally are high. President Bush declared last year at West Point that a pillar of U.S. foreign policy is to advance liberty on all continents. Free trade in goods and services can be an important tool for accomplishing peacefully what our soldiers are, in part, fighting for in Iraq, namely a transition to a freer and more prosperous world that, in turn, will make Americans more secure.
New York Times columnist Thomas Friedman recently described his conversations with some of the young Indians being accused of taking American jobs:
Kiran Menon, when asked who his role model was, shot back: "Bill Gates--I dream of starting my own company and making it that big." I asked C.M. Meghna what she got most out of the work: "Self-confidence," she said, "a lot of self-confidence, when people come to you with a problem and you can solve it--and having a lot of independence." . . . There is nothing more positive than the self-confidence, dignity and optimism that comes from a society knowing it is producing wealth by tapping its own brains--men's and women's--as opposed to one just tapping its own oil, let alone one that is so lost it can find dignity only through suicide and "martyrdom."
Friedman noted a striking contrast between his conversations with these young outsourced workers and conversations he had had "on the West Bank, talking to three young Palestinian men, also in their twenties, one of whom was studying engineering. Their hero was Yasser Arafat. They talked about having no hope, no jobs, and no dignity, and they each nodded when one of them said they were all 'suicide bombers in waiting.'" Friedman warned: "There is more to outsourcing than just economics. There's also geopolitics. It is inevitable in a networked world that our economy is going to shed certain low-wage, low-prestige jobs. To the extent that they go to places like India or Pakistan--where they are viewed as high-wage, high-prestige jobs--we make not only a more prosperous world, but a safer world for our own 20-year-olds."
Even though the rest of the world views U.S. trade policy as an important element of U.S. foreign policy, commentators here have been slow to see Kerry's trade rhetoric, including implied threats to pull out of existing trade agreements, as problematic. The closest thing to a critique came in a March 15 Washington Post editorial: "It is hard to know what Mr. Kerry means by his trade-and-labor rhetoric, just as it is hard to know how to balance his pro-trade votes in the Senate against his campaign denunciation of 'Benedict Arnold' companies. It's good that Mr. Bush is attacking on these issues, and it's time for Mr. Kerry to clarify his thinking."
It's clear that Democrats believe denouncing "outsourcing" is a political winner for them, despite the potential for real harm their proposals would bring. A bill by Senator Tom Daschle, cosponsored by Kerry, would make notifications of "mass layoffs" more stringent in U.S. law than in France and Germany. Daschle's measure, which soon may be offered as a Senate floor amendment, would require U.S. companies to provide 90 days' notice to the federal government when transferring work abroad that affects the jobs of as few as 15 employees. The vague definition of "offshoring" in the bill and the way global companies routinely create and eliminate jobs worldwide could discourage some large companies from adding U.S.-based jobs in the first place.
Federal Reserve Board chairman Alan Greenspan recently warned a House committee that the "protectionist measures" now being proposed are "alleged cures" that "would make matters worse rather than better. They would do little to create jobs, and if foreigners were to retaliate we would surely lose jobs."
The administration and elected officials who know better need to speak up before this year's campaign degenerates into a bidding war of bad ideas. Otherwise, Americans will face the prospect of fewer jobs, higher prices, and a less free and prosperous world.
Cesar Conda, who formerly served as Vice President Dick Cheney's assistant for domestic policy, is a board member of Empower America. Stuart Anderson is executive director of the National Foundation for American Policy, an Arlington, Va.-based public policy research organization.
I'd call it M'lord Mayor of London if it would help fight offshoring!
Yes, indeed. It has dramatically reduced the cost of transferring information. By what principle is it wrong that businesses should exploit that?
Innovation leads to change.As painful as the change can be, this is how progress under capitalism works. I don't see how government forcing consumers to use higher cost alternatives provides a net benefit to America.
Is all trade bad? Where would you draw the line? 100% tariff on all imports? Terrorists could disrupt domestic transportation, too. Shoud every man grow his own food and makes his own clothes?
The commercial banks called in the business loans to such an extent, that tens of thousands of businesses went insolvent, fired their employees, and closed their doors.
Once again, I repeat my remarks about the Scapegoating of Smoot-Hawley and the REVISIONIST HISTORY vis a vis the FEDERAL RESERVE!!!In the early 1940's, people KNEW the FEDERAL RESERVE had done them in!!!
Tariffs...Shamiriffs...
Calling the LOANS on the BULK of small to Mid-size Business...EVERYONE KNEW!!!
The problem today is almost ALL so called BUSHBOTS have been willingly BRAINWASHED!!!
Of course, I had the "luxury" of learning "geography" and "HISTORY" for FIVE YEARS in grade school...we were TESTED on the CONTENT of the Smoot Hawley AND the FORDNEY-McCUMBER Tariffs...something you Public School survey...skim once over lightly...pupils swallowed...HOOK, LINE, and SINKER!!!
Who is going to buy your exports when your taxing their imports at tremendous rates?
Tariffs are there to protect the local economy. There is no need to import anything that can be produced at home.
Does it really protect the local economy? All tariffs do is have the government prop up failing and inefficient industries that cannot compete in the free market. When domestic manufacturers have no real incentive to improve production techniques, they will not invest in new technology, nor will they find better and more efficient means of productions, because they have Uncle Sam propping them up and eliminating competition.
You also impede the creation of new jobs, and threaten jobs that rely on imports/exports to function.
In the end we all pay higher prices on all of our goods, imported and domestic, and any gains made in increased wages is eaten up by inflation
No, revenue generating exports are good and the importation of some items is essential.
All exports are good but only essential imports are good? Are saying that we Americans are special and deserve better terms than other countries?
Where would you draw the line? 100% tariff on all imports?
100%, 1000%, or an outright ban. Tariffs are there to protect the local economy. There is no need to import anything that can be produced at home.
On the same principle, there is no need to import anything from another US state that can be produced in one's home state. Why not ban non-essential interstate commerce and protect Virginians, or Iowans, or whomever?
Terrorists could disrupt domestic transportation, too.
It is much harder to disrupt an economy that is virile and broadbased, then it is to choke off a few ports. International trade only facilitates terrorist activities.
I see your point here, but I think any reduced exposure to terrorism from limiting trade would have to be offset by the increased dangers of a world where no one trades. A poorer world is a less safe one, I believe.
Shoud every man grow his own food and makes his own clothes?
We are all free to do so. If it makes sense for you then by all means go ahead.
Indeed we are free to do so. But obviously most of us will live better if we produce some things and trade for the others. It wouldn't be easy to be one's own housebuilder, automaker, and plumber.
The only effective "tariff" we can have is the one that we have now. A weak dollar.
You have no "need" to own an "assault weapon," or an SUV, or a home larger than 600 square feet, or more than two pairs of shoes...
Hey, let's just eliminate freedom, because it lets people make irresponsible choices. Once we execute enough people who disagree with you, I'm sure we'll have the glorious workers' paradise you seem to demand.
SFW? It's the same mentality.
You are still free to buy, spend, and behaive as you please. But, it has to be produced here to protect your nation.
You contradicted yourself there.
And you're saying EVERYTHING has to be produced here?
OK. I take it you're willing to accept a substantially lower standard of living. Quite frankly, a lot of things that you insist on manufacturing here can't be sold profitably at the cost of doing business in this country. And a lot of other items will be demanding a larger share of your income, anyway.
Things like food, shelter, and clothing.
I presume is something that you might care about; since it is the very mechanism that establishes your freedoms in the first place.
Ah, the state establishes our freedoms.
You realize that's the Marxist mode of thought, right?
But that's not surprising. Your idea, after all, has been implemented by that economic powerhouse of the Pacific Rim, the Democratic People's Republic of Korea.
If that's what you want...well, feel free to learn Hangul and emigrate.
First, who said all and when? Second, I draw the line called balanced trade. Very easy.
I was asking if you thought all trade was bad because of your comment that 1000% tariffs or even a total ban would be OK. I think I misunderstood, and you were saying that a total ban just on non-essential imports was OK. I think this is what you meant by balanced trade. Please correct me if I am reading you wrong.
I still don't see, though, how we can take the position that all exports are good but only essential imports are good. Our trading partners would expect the same terms. That means international trade of only essential goods and services. But trade of non-essential goods benefits all parties enormously. That's what I was trying to highlight by asking if trade is, in princple, a good thing.
Are you saying that it's not the economics, but that the security risks to our country are so high that we should stop all non-essential trade? Cutting the world economic growth rate drastically is a high price to pay. I'd rather we get on the ball inspecting containers, etc. A poorer third world will be more dangerous to us, as the article was saying.
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