Outsourcing: Stop The Hysteria

Shame on the Democratic Presidential candidates for scapegoating globalization in their primary campaigns. Opposing NAFTA "to keep American jobs right here in America," as John Edwards does in his TV ads, is protectionist claptrap. Decrying "Benedict Arnold companies and CEOs shipping jobs overseas," as John Kerry has, is insulting nonsense.

Both candidates know that even as America "exports" jobs when U.S. companies send operations offshore, it "imports" jobs as foreign corporations invest in the U.S. Both understand that a dynamic economy churns constantly, sending lower-valued jobs offshore as people move up into more highly valued employment. It's time for the Democrats to stop their demagoguery and propose policies that work.

Sadly, the Bush Administration is behaving no better than the Democrats. Republicans pounced on the President's chief economist, Council of Economic Advisers Chairman N. Gregory Mankiw, when he spoke the economic truth -- that outsourcing enhances growth by cutting costs and hiking efficiencies. The GOP leadership criticized outsourcing.

The two Democratic Presidential candidates who criticize outsourcing and the Republicans who agree with them ignore a pretty basic economic lesson: When production costs are lowered, jobs are created. For example, the outsourcing of computer hardware to Asia in the '90s made the information-technology revolution possible by lowering costs and spurring demand in every industry. As a result, millions of jobs were created in the U.S.

Edwards, Kerry, and the President should be talking about programs to make people more competitive: extending federal trade-impact programs to service employees to help them retrain; extending jobless insurance to people hit by outsourcing to give them time to retool; spurring innovation by hiking spending on research and development; promoting broadband; and providing financial aid to students so more graduate from college. (Despite alarms about outsourcing of high-tech jobs, only 2.9% of college grads in the U.S. are unemployed.)

The Democratic Presidential candidates should knock off the rhetoric of economic fear and offer plans to deal with the reality of America's economic future. Voters deserve it.

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