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The Outsourcing Bogeyman
Foreign Affairs ^ | May/June 2004 | Daniel W. Drezner

Posted on 03/21/2004 10:26:31 AM PST by Steve Eisenberg

When a presidential election year coincides with an uncertain economy, campaigning politicians invariably invoke an international economic issue as a dire threat to the well-being of Americans. Speechwriters denounce the chosen scapegoat, the media provides blanket coverage of the alleged threat, and legislators scurry to introduce supposed remedies.

The cause of this year's commotion is offshore outsourcing -- the alleged migration of American jobs overseas. The depth of alarm was strikingly illustrated by the firestorm of reaction to recent testimony by N. Gregory Mankiw, the head of President George W. Bush's Council of Economic Advisers. No economist really disputed Mankiw's observation that "outsourcing is just a new way of doing international trade," which makes it "a good thing." But in the political arena, Mankiw's comments sparked a furor on both sides of the aisle. Democratic presidential candidate John Kerry accused the Bush administration of wanting "to export more of our jobs overseas," and Senate Minority Leader Tom Daschle quipped, "If this is the administration's position, I think they owe an apology to every worker in America." Speaker of the House Dennis Hastert, meanwhile, warned that "outsourcing can be a problem for American workers and the American economy."

Critics charge that the information revolution (especially the Internet) has accelerated the decimation of U.S. manufacturing and facilitated the outsourcing of service-sector jobs once considered safe, from backroom call centers to high-level software programming. (This concern feeds into the suspicion that U.S. corporations are exploiting globalization to fatten profits at the expense of workers.) They are right that offshore outsourcing deserves attention and that some measures to assist affected workers are called for. But if their exaggerated alarmism succeeds in provoking protectionist responses from lawmakers, it will do far more harm than good, to the U.S. economy and to American workers.

(Excerpt) Read more at foreignaffairs.org ...


TOPICS: Business/Economy; Constitution/Conservatism; Culture/Society; Foreign Affairs; Government
KEYWORDS: economy; freetrade; jobs; leftwingactivists; outsourcing; trade
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To: neutrino
You have my sympathy - holding on to an obsolete and discredited idea must be so very painful.

Such as mercantilism? Socialism? Government control of production and trade? I'll certainly believe your opinion on this matter, as you are an expert on obsolete and discredited ideas...

41 posted on 03/21/2004 8:58:33 PM PST by Charles H. (The_r0nin) (If [economic] ignorance is bliss, you must be the happiest man on the planet...)
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To: Charles H. (The_r0nin)
My position is in harmony with one Paul Craig Roberts, a former Assistant Treasury Secretary in the Reagan Administration. You can read his views here

But I suppose you view Mr. Roberts as a "goofball" too. I wonder how your background in economics compares with his? That would, I think, make amusing reading. Wouldn't it?

42 posted on 03/21/2004 8:58:55 PM PST by neutrino (Oderint dum metuant: Let them hate us, so long as they fear us.)
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To: Charles H. (The_r0nin)
China and India are growing rapidly - more rapidly than the US, by far. China and India protect their markets from outside trade.

Do read the link I gave you for Paul Craig Roberts. You might find it enlightening.

43 posted on 03/21/2004 9:01:50 PM PST by neutrino (Oderint dum metuant: Let them hate us, so long as they fear us.)
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To: neutrino
You are advocating the use government force to stop the free flow of business of a free people.

If you would use force to stop free trade, then you are in fact advocating government control of industry, if you advocate government control of industry, then you believe in the communist economic model, which has failed every single time that it's been tried, so in effect, you want to destroy America, which is the long-standing goal of communism.

So it stands to reason that you are a communist.

44 posted on 03/22/2004 6:07:05 AM PST by Luis Gonzalez (Unless the world is made safe for Democracy, Democracy won't be safe in the world.)
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To: neutrino
"China and India protect their markets from outside trade."

So now you want our government to behave like the Chinese government...you are a communist.

45 posted on 03/22/2004 6:08:27 AM PST by Luis Gonzalez (Unless the world is made safe for Democracy, Democracy won't be safe in the world.)
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To: neutrino; Charles H. (The_r0nin)
"China and India protect their markets from outside trade."

Protectionists suggest that because other governments restrict imports, the U.S. government should do the same. Said another way that means the U.S. government should limit the liberty of Americans because other governments limit the freedom of their citizens.

46 posted on 03/22/2004 6:14:46 AM PST by Luis Gonzalez (Unless the world is made safe for Democracy, Democracy won't be safe in the world.)
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To: Luis Gonzalez
You are advocating the use government force to stop the free flow of business of a free people.

(Chuckle). Really? I see. It turns out that I really don't much care for yard work. It's hot around here, and I see no reason to sweat. And I really hate to overpay for yardwork. So, why can't I just buy a slave or two? They are available, you know. So I buy a couple slaves, put them to work, flog them if they don't work hard or fast enough, and life is good.

This is a fine example of a free transaction between free people. The slaves don't matter. So, how do we implement the enabling legislation so I can get those slaves?

(/amused sarcasm)

47 posted on 03/22/2004 7:43:40 AM PST by neutrino (Oderint dum metuant: Let them hate us, so long as they fear us.)
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To: neutrino
"This is a fine example of a free transaction between free people. The slaves don't matter. So, how do we implement the enabling legislation so I can get those slaves?"

Another fine example of your absolute lack of logic...calling slaves "free people".

48 posted on 03/22/2004 8:08:47 AM PST by Luis Gonzalez (Unless the world is made safe for Democracy, Democracy won't be safe in the world.)
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To: Luis Gonzalez
Another fine example of your absolute lack of logic...calling slaves "free people".

And what, pray tell, is the practical difference between slavery and Chinese prison labor? Or, for that matter, eighty cents per day laborers?

The free traitors will reduce the workers of America to a status less than that of a slave. How less? Because the owner of a slave cares about the death of his property - at 80 cents per day, the laborer is quite disposable.

49 posted on 03/22/2004 2:49:13 PM PST by neutrino (Oderint dum metuant: Let them hate us, so long as they fear us.)
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To: neutrino; Luis Gonzalez; hchutch
Yes, I am all for using any and all means to stop offshoring

What kind of car do you drive?

50 posted on 03/22/2004 2:52:41 PM PST by Poohbah ("Would you mind not shooting at the thermonuclear weapons?" -- Maj. Vic Deakins, USAF)
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To: Poohbah
What kind of car do you drive?

A Cadillac Sedan de Ville - which was 93% made in America. It was the highest percentage I could find at the time. I regret that it wasn't 100%.

I have never purchased or owned a foreign car. I intend never to do so.

And, Poobah, I am curious - what kind of car do YOU drive?

51 posted on 03/22/2004 3:05:24 PM PST by neutrino (Oderint dum metuant: Let them hate us, so long as they fear us.)
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To: neutrino; hchutch; Luis Gonzalez
I have never purchased or owned a foreign car. I intend never to do so.

Good on you.

But, of course, you now demand that America do it YOUR way, at gunpoint.

And, Poobah, I am curious - what kind of car do YOU drive?

A Ford Focus ZX3. You see, unlike you, I can't afford an overpriced piece of crap like a Cadillac Sedan de Ville.

52 posted on 03/22/2004 3:16:21 PM PST by Poohbah ("Would you mind not shooting at the thermonuclear weapons?" -- Maj. Vic Deakins, USAF)
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To: Poohbah
But, of course, you now demand that America do it YOUR way, at gunpoint.

A simple tariff - which was the historic US norm - hardly qualifies as putting a gun to anyone's head.

And, Poobah, I am curious - what kind of car do YOU drive?

A Ford Focus ZX3. You see, unlike you, I can't afford an overpriced piece of crap like a Cadillac Sedan de Ville.

Now, Poohbah. My car isn't a piece of crap - it works very nicely, thank you. You realize that your car is produced in Mexico - at least you're helping our neighbors in Mexico instead of more remote locales. But I hope that next time you buy, you'll consider trying to get an American produced car.

53 posted on 03/22/2004 3:45:47 PM PST by neutrino (Oderint dum metuant: Let them hate us, so long as they fear us.)
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To: neutrino; rdb3; hchutch; Luis Gonzalez
A simple tariff - which was the historic US norm - hardly qualifies as putting a gun to anyone's head.

You're demanding that I fork over more money, on pain of government imprisonment, and lower my standard of living, just to benefit your preferred special interest group.

Now, Poohbah. My car isn't a piece of crap - it works very nicely, thank you.

At best, it works no better than mine, and in my experience (two neighbors and my mother own Sedan de Villes), it usually spends about one day a month in the shop. And you pay a great deal more money at initial acquisition just enjoy the privilege of subsidizing your local auto mechanic.

You realize that your car is produced in Mexico - at least you're helping our neighbors in Mexico instead of more remote locales. But I hope that next time you buy, you'll consider trying to get an American produced car.

If you're paying for the purchase cost differential, and the increased operations and maintenance costs, absolutely.

As long as I'm spending my money, I will buy the car that gives the best value. If that's an American car, great. Right now, it isn't. Until the American auto worker understands that "Made in the USA" acts as a warning label these days, and not as a symbol of pride, I'm not buying his product. I don't have money to burn.

54 posted on 03/22/2004 3:58:02 PM PST by Poohbah ("Would you mind not shooting at the thermonuclear weapons?" -- Maj. Vic Deakins, USAF)
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To: Poohbah
 
A simple tariff - which was the historic US norm - hardly qualifies as putting a gun to anyone's head.

You're demanding that I fork over more money, on pain of government imprisonment, and lower my standard of living, just to benefit your preferred special interest group.

You'll find that taxes are used to implement a variety of policies.  We might be able to adjust the income tax downward so that the tariffs would be revenue neutral.  And my preferred special interest group is the American people as a whole.

Now, Poohbah. My car isn't a piece of crap - it works very nicely, thank you.

At best, it works no better than mine, and in my experience (two neighbors and my mother own Sedan de Villes), it usually spends about one day a month in the shop. And you pay a great deal more money at initial acquisition just enjoy the privilege of subsidizing your local auto mechanic.

My experience has been much more favorable.  And it does have some advantages - OnStar being one of them.  Digital tire pressure indicators make run-flat tires more convenient.  No, I'm quite happy with the car.  I hope you're equally happy with yours.

You realize that your car is produced in Mexico - at least you're helping our neighbors in Mexico instead of more remote locales. But I hope that next time you buy, you'll consider trying to get an American produced car.

If you're paying for the purchase cost differential, and the increased operations and maintenance costs, absolutely.

(Chuckle) Now you want me to pay a special tariff just to benefit a special interest group of one?  I think not.

As long as I'm spending my money, I will buy the car that gives the best value. If that's an American car, great. Right now, it isn't. Until the American auto worker understands that "Made in the USA" acts as a warning label these days, and not as a symbol of pride, I'm not buying his product. I don't have money to burn.

American auto workers turn out a fine product.  But have you ever thought that if we protected American workers, YOU might have more money and more income?

Frankly, I'd be better off with a third world economy.  I could hire desperately poor people for a pittance and let them do all the unpleasant little things that life entails.  But I think America is better off with a strong middle class.  And free trade destroys that middle class.


55 posted on 03/22/2004 4:14:47 PM PST by neutrino (Oderint dum metuant: Let them hate us, so long as they fear us.)
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To: neutrino; hchutch; Texasforever; Luis Gonzalez; rdb3
American auto workers turn out a fine product.

Keep drinking the Kool-Aid, bubba. They charge too much and deliver too little.

But have you ever thought that if we protected American workers, YOU might have more money and more income?

Actually, I wouldn't, after the cost-push inflation got finished with my money, and the overall lowering of quality that comes when you shield people from competition.

But I think America is better off with a strong middle class. And free trade destroys that middle class.

There's one guy I can think of who would agree with you. His name was Karl Marx.

And the only nation that practices your notions re: trade with perfect fidelity is that economic superpower of the Pacific Rim...

...North Korea.

56 posted on 03/22/2004 4:33:52 PM PST by Poohbah ("Would you mind not shooting at the thermonuclear weapons?" -- Maj. Vic Deakins, USAF)
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To: neutrino; hchutch; rdb3; Texasforever; Luis Gonzalez
But I hope that next time you buy, you'll consider trying to get an American produced car.

If you're paying for the purchase cost differential, and the increased operations and maintenance costs, absolutely.

(Chuckle) Now you want me to pay a special tariff just to benefit a special interest group of one? I think not.

You demand that I spend my money in a way that pleases you. Either ante up the additional cost of doing business in a way that keeps you happy, or go have a morally improper and anatomically impossible relationship with yourself. I don't care which one you opt for.

You get what you pay for from me. Since you're paying nothing, you get nothing.

57 posted on 03/22/2004 4:38:55 PM PST by Poohbah ("Would you mind not shooting at the thermonuclear weapons?" -- Maj. Vic Deakins, USAF)
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To: Poohbah; iamright; AM2000; Iscool; wku man; Lael; international american; No_Doll_i; techwench
There's one guy I can think of who would agree with you. His name was Karl Marx.

ROTFLMAO!!! Marvelous! No, sir, you are incorrect. Mr. Karl Marx, my dear Poohbah - is in complete agreement with YOU! He was very much in favor of free trade!

You think not? Perhaps you would like to read his thoughts on free trade? Just for you, I have provided a very special link!

If you want on or off my offshoring ping list, please FReepmail me!

58 posted on 03/22/2004 4:58:50 PM PST by neutrino (Oderint dum metuant: Let them hate us, so long as they fear us.)
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To: neutrino
What kind of car do you drive?

2000 Dodge Caravan. Assembled in Canada. Engine is the made in Mexico base model. Executive management, mostly German, I suppose. Most of the parts, American, but even American parts have little bits and pieces on them coming from dozens of additional countries. Most of the engineering, American. Repairs, least of any car we've had, and we're up to 80,000 miles.

Any country that tries to regulate a stop to this is going to wind up as poor as, well, India, which is only in the early stages of recovery from decades of disasterous protectionism.

59 posted on 03/22/2004 7:42:04 PM PST by Steve Eisenberg
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To: Steve Eisenberg
Any country that tries to regulate a stop to this is going to wind up as poor as, well, India, which is only in the early stages of recovery from decades of disasterous protectionism.

That's the current conventional wisdom. But India has high trade barriers presently - and high growth as well. This represents a logical inconsistency - and, I think, illustrates a fallacy in the fundamental theory of free trade.

60 posted on 03/22/2004 7:50:40 PM PST by neutrino (Oderint dum metuant: Let them hate us, so long as they fear us.)
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