Tuesday, February 17, 2004


GWB not excepted: He protected U.S. steel makers and thereby shafted U.S. steel users; He protected U.S. sugar producers and thereby sent U.S. candy manufacturing jobs off to Canada and Mexico

But it mainly seems to be Leftists who are trying to make a big deal out of the fact that lots of jobs are done overseas these days. In Australia, it is the Australian Labor Party and in the USA it is the Democrat Presidential hopefuls. The Italian Fascist dictator Mussolini did the same 80 years ago too. He tried to make Italy self-sufficient ("autarky") -- which greatly increased Italian poverty. John Kerry, however, is the last one who should be bringing up the subject: "The Kerry family business, H.J. Heinz Co. of Pittsburgh, operates 22 factories in the United States and 57 in foreign countries. I don't think that Kerry should shut down The Heinz 57, but he might drop the rhetoric and talk about trade responsibly. He should support, not trade's contraction, but its expansion, like George W. Bush, Bill Clinton and every president since Herbert Hoover."

There is, however, a difference between 'good politics' and 'good economics'. One of Bush's economic advisors, Gregory Mankiw (Chairman of the Council of Economic Advisers) has got a lot of flak for noting the basic economic truth that 'outsourcing' (moving manufacturing and service jobs offshore) is ultimately good for Americans' job prospects. Why? Because the lower costs mean there is a bigger surplus to reinvest (and you need investment to create jobs) and the lower costs also mean that the American companies who move their operations to where it is cheapest are more likely to withstand international competition. This good economics seems regrettably to be bad politics -- as the argument has always been too complicated for many voters to understand. That the whiners are all trying to force everyone to pay more for all the goods and services that they buy might help some people to realize what is at issue, however. The basic reality is that jobs come and go all the time and trying to change that is like trying to hold back the tide.

Very often, of course, industry moves elsewhere because of excessive red tape and bureaucratic controls, something 'liberals' usually add to -- but you won't hear them mentioning that!

Free trade has done wonders for electic guitars. Most of them are now made in Korea and are both better and cheaper.

And many classes of jobs are a dodo everywhere: "A strange idea has taken hold that if jobs are lost in one place, then some other place must have gained them. Somebody somewhere must have gained the millions of farm jobs we have lost, for example. Lou Dobbs of CNN appears as obsessed with this bizarre notion as he once was with space.com. Even stranger, those afflicted with Dobbsian trade phobia assume the places that gained jobs must be other countries, not other counties. Yet manufacturing jobs could not possibly have moved to another country, since every industrial country lost manufacturing jobs since 1995 -- particularly China, Japan and South Korea. And the United States has a huge surplus in business services with every region in the world -- that is, the United States sells much more 'outsourcing' to other countries than it buys from them."


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