Wednesday, April 07, 2004


Is the attack on "Outsourcing" Leftist racism?: "Media bias is sometimes found not only in what makes it into print but also what doesn't. This is evident in the campaign theme of "outsourcing." There probably isn't a Democratic politician who hasn't used the term to attack President Bush, and this has resulted in a flurry of news stories about the subject. But in all the media coverage, have you heard anyone refer to outsourcing as a "racial code word"? For the uninitiated, racial code words are words politicians (usually Republicans) are accused of using to supposedly help them win votes by raising whites' fears of minorities. ... To the extent that outsourcing is a racial code word, the code isn't all that secretive. An organization calling itself Make America Work For Us, which is affiliated with the 527 group Media Fund, is running an attack ad that begins, "During the past three years, it's true that George W. Bush has created more jobs. Unfortunately, they were created in places like China." As the commercial proceeds, the camera pans out to reveal a factory covered with Chinese symbols. One can only imagine the outrage that would occur if a conservative group had run such an ad."

Call center employees replaced by lower-wage workers in India don't "deserve" to lose their jobs. But that does not mean they have a right to keep them, any more than candle makers had a right to block electric lighting or blacksmiths had a right to prevent the introduction of the automobile. In all of these cases, the need to make a profit in the face of competition drove people to produce better goods or services or to produce them more cheaply. The upshot of this process has been lower prices, higher productivity and a standard of living unparalleled in history. Economic progress requires a constant shifting of resources to their most productive uses

Fighting back on outsourcing: "What has been seriously lacking in the outsourcing debate thus far is hard data. Now, at last, we are starting to get some serious studies with good numbers. They paint a very different picture of the outsourcing phenomenon ..Global Insight found that the total number of jobs lost to IT outsourcing last year was only 104,000; this amounts to just 2.8 percent of IT jobs in the United States. A much larger number were lost due to unrelated factors, including the collapse of the dot-com boom in 2000, the recession, and rising productivity. The most important finding of the Global Insight study is that the cost savings from outsourcing don't just flow into higher corporate profits. They contribute significantly to higher output in the United States, which leads to job increases elsewhere in the economy"

The hot-button issue for the Democratic Party this year is "outsourcing," the latest political euphemism that seeks to stigmatize companies voting with their feet and escaping high taxes and onerous regulations that drive up the cost of labor, increase the cost of capital and drive down rates of return on investment... The enemy of American jobs is not Japan, India or China, but rather stupid policy made in Washington, D.C. Therefore, a more apt metaphor is "refugee CEOs" who are fleeing punitive government policies that hurt both capital and labor.


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