The Bush Mantra
The Bush Mantra
Date: Wednesday, February 11, 2004 1:58 PM
JOB DESTRUCTION NEWSLETTER
www.ZaZona.com
Bush released his "Economic Report of the President" for 2004. The Indian press calls Chapter 12 of that report Bush's mantra on outsourcing. They are very happy because the matra says that, "When a good or service is produced more cheaply abroad, it makes more sense to import it than make or provide it domestically." The report is also very kind to China as it concluded that Chinese exports to the United States, are not "a primary factor in the displacement of American manufacturing workers."
Since the Bush report appeared there has been a large number of articles appearing in the media that explain to the public that outsourcing is good for America. You can read a sampling of those articles below. If none of this makes sense to you, read Article #8.
Article 1:
http://www.orlandosentinel.com/news/nationworld/orl-asecmbushecon10021004feb10,1,3095277.story?coll=orl-home-headlines
The movement of American factory jobs and white-collar work to other countries is part of a positive transformation that will enrich the U.S. economy over time, even if it causes short-term pain and dislocation, the Bush administration said Monday.
Article 2:
http://economictimes.indiatimes.com/articleshow/msid-478100,curpg-1.cms
Outsourcing to add 22 mn US jobs
Diana Farrell, director, McKinsey Global Institute, said, "People in the US are looking at it as a job issue. They are not economists and therefore, they dont necessarily see the whole picture. Whats going to happen is that offshoring is actually going to benefit US businesses even more than India." She said it was a profoundly new way of doing things and would change the structure of organisations.
Offshore was about global wealth creation and integrating economies, she explained,
Article 3:
http://www.azcentral.com/arizonarepublic/news/articles/0210bush-economy10.html
Bush report lauds 'outsourcing' jobs
The movement of American factory jobs and white-collar work to other countries is part of a positive transformation that will enrich the U.S. economy over time, even if it causes short-term pain and dislocation, the Bush administration said Monday. "Outsourcing is just a new way of doing international trade," said N. Gregory Mankiw, chairman of Bush's Council of Economic Advisors, which prepared the report. "More things are tradable than were tradable in the past. And that's a good thing."
Article 4:
http://straitstimes.asia1.com.sg/topstories/story/0,4386,234549,00.html
Bush adviser defends jobs outsourcing
The President's top economist argues that importing cheaper services will benefit US consumers and the economy In recent years, companies have shipped software engineering jobs and other customer service operations abroad, especially to India. Even hospitals have joined the trend, hiring radiologists abroad. Driving the point home, Mr Mankiw suggested that outsourcing of health-care jobs to lower-wage countries could help control the upward spiral of US health-care costs. 'We don't have a comparative advantage in producing clothing, textiles, and that's one of the reasons we've tended to lose textile jobs,' he said. 'Maybe we've learned that we don't have a comparative advantage in radiologists.' Calling a technician in India is economically no different from buying a car from Japan, he added.
Only the delivery system has changed.
Article 5:
http://timesofindia.indiatimes.com/articleshow/489154.cms
Bush blesses outsourcing to India
President Bush and his administration have reiterated their commitment to free trade , including explicitly backing the idea of outsourcing to countries such as India. In his 412-page "Economic Report of the President" transmitted to the Congress on Monday ... But as far as India is concerned, one particular paragraph in the voluminous report will provide great reassurance to a section of the economy. It pertains to outsourcing , the hot button topic of the day, and here is the Bush mantra on the subject in Chapter 12 titled "International Trade and Cooperation." Specifically referring to India as an example of an outsourcing destination, the Bush report says "when a good or service is produced more cheaply abroad, it makes more sense to import it than to make or provide it domestically." With that commitment, the Bush administration has effectively thrown its weight behind outsourcing at a time when the several Democratic contenders and sections of the media are beating up on the idea in the face of economic troubles and due to election posturing.
Article 6:
http://www.nytimes.com/2004/02/11/opinion/11KRIS.html?th
Yet, as an Indian friend, Sunil Subbakrishna, pointed out to me, there is one step we should take in response to this wave of outsourcing:
bolster our second-rate education system. Mr. Subbakrishna, a management consultant specializing in technology, notes that in his native Bangalore, children learn algebra in elementary school. All in all, he says, the average upper-middle-class child in Bangalore finishes elementary school with a better grounding in math and science than the average kid in the U.S. I saw the same thing when I lived in China and interviewed college applicants there. In 1957, the Soviet launching of Sputnik frightened America into substantially improving math and science education. I'm hoping that the loss of jobs in medicine and computers to India and elsewhere will again jolt us into bolstering our own teaching of math and science.
Article 7:
http://www.tdn.com/articles/2004/02/10/biz/news03.txt
The Economic Report of the President made the same point: "When a good or service is produced more cheaply abroad, it makes more sense to import it than make or provide it domestically." The report also analyzed another hot-button political issue, Chinese exports to the United States, and concluded that they are not "a primary factor in the displacement of American manufacturing workers."
Article 8:
http://www.thespoof.com/news/spoof.cfm?headline=s2i2064
It's a Good Job if You Can Get It
The loss of 2.2 million jobs in the United States since the beginning of the Bush Administration is actually a good thing, White House sources said yesterday. While acknowledging that the loss of the two million plus jobs is painful for the American workers and their families who are unemployed, Mr. Mankiw offered some hope. " Once the weather warms up the Administration is planning on hiring each and every one of these losers as ditch diggers to help widen the gap between the rich and poor of this great nation. Then, once we dont need them anymore, well just kill em, I guess."
http://www.orlandosentinel.com/news/nationworld/orl-asecmbushecon10021004feb10,1,3095277.story?coll=orl-home-headlines
By Warren Vieth and Edwin Chen
Los Angeles Times
February 10, 2004
WASHINGTON -- The movement of American factory jobs and white-collar
work to other countries is part of a positive transformation that will
enrich the U.S. economy over time, even if it causes short-term pain
and dislocation, the Bush administration said Monday.
The embrace of foreign "outsourcing," an accelerating trend that has
contributed to U.S. job losses in recent years and become an issue in
the 2004 elections, is contained in the president's annual report to
Congress on the health of the U.S. economy.
"Outsourcing is just a new way of doing international trade," said
Gregory Mankiw, chairman of Bush's Council of Economic Advisors, which
prepared the report. "More things are tradable than were tradable in
the past. And that's a good thing."
The report, which predicts that the nation will reverse a three-year
employment slide by creating 2.6 million jobs in 2004, is part of a
weeklong effort by the administration to highlight signs that the
recovery is picking up speed.
In his message to Congress Monday, Bush said the economy "is strong and
getting stronger," thanks in part to his tax cuts and other economic
programs.
He said the nation had survived a stock-market meltdown, recession,
terrorist attacks, corporate scandals and war in Afghanistan and Iraq,
and is finally beginning to enjoy "a mounting prosperity that will
reach every corner of America."
The president repeated that message during an afternoon "conversation"
on the economy at SRC Automotive, an engine-rebuilding plant in
Springfield, Mo., where he lashed out at lawmakers who oppose making
his tax cuts permanent.
"When they say, 'We're going to repeal Bush's tax cuts,' that means
they're going to raise your taxes, and that's wrong. And that's bad
economics," he said.
Democrats who want Bush's job were quick to challenge his claims.
Sen. John Kerry of Massachusetts, the front-runner for the Democratic
presidential nomination, supports a rollback of Bush's tax cuts for the
wealthiest Americans and backs the creation of tax incentives for
companies that keep jobs in the United States -- although he supported
the North American Free Trade Agreement, which many union members say
is responsible for the migration of U.S. jobs, particularly in the auto
industry, to Mexico.
Campaigning Monday in Roanoke, Va., Kerry questioned the credibility of
the administration's job-creation forecast.
"I've got a feeling this report was prepared by the same people who
brought us the intelligence on Iraq," Kerry said. "I don't think we
need a new report about jobs in America. I think we need a new
president who's going to create jobs in America and put Americans back
to work."
The president's 411-page report contains a detailed diagnosis of the
forces contributing to America's economic slowdown and a wide-ranging
defense of the policies Bush has pursued to combat it.
It asserts that the last recession began in late 2000, before the
president took office, instead of March 2001, as certified by the
official recession-dating panel of the National Bureau of Economic
Research.
Much of the report repeats the administration's previous economic
prescriptions.
For instance, it says the Bush tax cuts must be made permanent in order
to have their full beneficial effect on the economy.
Social Security also must be restructured to let workers put part of
their retirement funds in private accounts, the report states. Doing so
could add nearly $5 trillion to the national debt by 2036, the
president's advisers note, but the additional borrowing would be repaid
20 years later and the program's long-term health would be more secure.
The report devotes an entire chapter to an issue that has become
increasingly troublesome for the administration: the loss of 2.8
million manufacturing jobs since Bush took office and critics' claims
that his trade policies are partly to blame.
His advisers acknowledge that international trade and foreign
outsourcing have contributed to the job slump. But the report argues
that technological progress and rising productivity -- the ability to
produce more goods with fewer workers -- have played a bigger role than
the flight of production to China and other low-wage countries.
Although trade expansion inevitably hurts some domestic workers, the
benefits eventually will outweigh the costs as Americans are able to
buy cheaper goods and services and as new jobs are created in growing
sectors of the economy, the report said.
The president's report endorses the relatively new phenomenon of
outsourcing high-end, white-collar work to India and other countries, a
trend that has stirred concern within such affected occupations as
computer programming and medical diagnostics.
Government should try to salve the short-term disruption by helping
displaced workers obtain the training they need to enter new fields,
such as health care, Mankiw said, not by erecting protectionist
barriers on behalf of vulnerable industries or professions. "The market
is the best determinant of where the jobs should be," he said.
Warren Vieth and Edwin Chen are reporters for the Los Angeles Times, a
Tribune Publishing newspaper.
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http://economictimes.indiatimes.com/articleshow/msid-478100,curpg-1.cms
Outsourcing to add 22 mn US jobs
KALPANA SHAH
TIMES NEWS NETWORK[ TUESDAY, FEBRUARY 10, 2004 10:01:40 AM ]
MUMBAI: On Day 1 of Nasscom 04, speakers tackled the issue of
outsourcing and how politically sensitive it has become in the US,
because jobs are moving out of that country. But speakers from the US,
including analysts, CEOs and researchers, all said they believed
outsourcing was here to stay and that going offshore was the only way
companies stay competitive.
Diana Farrell, director, McKinsey Global Institute, said, "People in
the US are looking at it as a job issue. They are not economists and
therefore, they dont necessarily see the whole picture. Whats
going to happen is that offshoring is actually going to benefit US
businesses even more than India." She said it was a profoundly new way
of doing things and would change the structure of organisations.
Offshore was about global wealth creation and integrating economies,
she explained, adding that it would create more high-value jobs in the
US than people could imagine today.
Based on the research that the McKinsey institute had carried out, Ms
Farrell said conservatively, for every dollar invested in the offshore
space, $0.58 was directly saved. This could be either redistributed to
investors or customers. But she added that there were indirect benefits
to the US, in terms of the import of US goods and services into India
by Indian service providers, and so there was some transfer of profit
back to the parent in the US. She pointed out that the Bureau of Labour
Statistics was predicting a job gain of 22m in the US by 10, against
a job loss of 2m due to offshoring.
Steven Gruber, managing partner, Oak Hill Capital Management and
non-executive chairman, EXL Service, (a BPO company with operations in
India) said, "Indian companies must worry about extreme legislation
that might come out of the political battle to win elections in the
US." This could be in the form of new banking regulations that ban
sharing of customer data.
"The negative public opinion, fanned by the media, can have real
repercussions against the offshore wave," Mr Gruber said. He added that
he would advise the Indian government and IT companies to lobby hard
and try and sell the positives to the US public.
Daniel Grisworld, associate director, Centre for Trade Policy Studies,
Cato Institute said, "People dont understand what a great
opportunity offshoring is for US companies. Apart from huge savings, it
allows US companies to concentrate on their core competencies and the
people (in the US) can move on to higher paying, more creative, more
value generating jobs."
He added that the election rhetoric in the US was always worse than its
final result.
) Bennett, Coleman and Co., Ltd. All rights reserved.
http://www.azcentral.com/arizonarepublic/news/articles/0210bush-economy10.html
Bush report lauds 'outsourcing' jobs
Work coming, president says
Warren Vieth and Edwin Chen
Los Angeles Times
Feb. 10, 2004 12:00 AM
WASHINGTON - The movement of American factory jobs and white-collar
work to other countries is part of a positive transformation that will
enrich the U.S. economy over time, even if it causes short-term pain
and dislocation, the Bush administration said Monday.
The embrace of foreign "outsourcing," a trend that has contributed to
U.S. job losses and become a campaign issue, is contained in the
president's annual report to Congress on the health of the U.S.
economy.
"Outsourcing is just a new way of doing international trade," said N.
Gregory Mankiw, chairman of Bush's Council of Economic Advisors, which
prepared the report. "More things are tradable than were tradable in
the past. And that's a good thing."
The report, which predicts that the nation will reverse a three-year
employment slide by creating 2.6 million jobs in 2004, is part of a
weeklong effort by the administration to highlight signs that the
recovery is picking up. Bush's economic stewardship has become a
central issue in the campaign. The White House is eager to demonstrate
that his policies are producing results.
In his message to Congress Monday, Bush said the economy "is strong and
getting stronger," thanks in part to his tax cuts and other economic
programs. He said the nation had survived a stock market meltdown,
recession, terrorist attacks, corporate scandals and war in Afghanistan
and Iraq, and was finally beginning to enjoy "a mounting prosperity
that will reach every corner of America."
Bush repeated that message during an afternoon "conversation" on the
economy at SRC Automotive, an engine-rebuilding plant in Springfield,
Mo., where he lashed out at lawmakers who oppose making his tax cuts
permanent.
"When they say, 'We're going to repeal Bush's tax cuts,' that means
they're going to raise your taxes, and that's wrong. And that's bad
economics," he said.
Bush's 411-page report contains a detailed diagnosis of the forces
contributing to America's economic slowdown and a wide-ranging defense
of the policies Bush has pursued.
It asserts that the last recession began in late 2000, before the
president took office, not March 2001, as certified by the official
recession-dating panel of the National Bureau of Economic Research.
Much of the report repeats the administration's previous economic
prescriptions. It says that the Bush tax cuts must be made permanent to
have full beneficial effect.
Social Security must be restructured to let workers put part of their
retirement funds in private accounts, the report argues. That could add
nearly $5 trillion to the national debt by 2036, the president's
advisers note. Additional borrowing would be repaid 20 years later. The
program's long-term health would be more secure.
The report devotes an entire chapter to an issue that has become
troublesome for the administration: the loss of 2.8 million
manufacturing jobs since Bush took office. Critics claim that his trade
policies are partly to blame.
His advisers acknowledge that international trade and foreign
outsourcing have contributed to the job slump. The report argues that
the ability to produce more goods with fewer workers has played a
bigger role than the flight of production to China and other low-wage
countries.
http://straitstimes.asia1.com.sg/topstories/story/0,4386,234549,00.html
FEB 11, 2004
Bush adviser defends jobs outsourcing
The President's top economist argues that importing cheaper services
will benefit US consumers and the economy
WASHINGTON - Taking on an increasingly strident election issue,
President George W. Bush's top economist has defended the outsourcing
of service jobs to workers overseas as being good for the American
economy.
Just as consumers in the United States have enjoyed lower prices from
foreign manufacturers, so too should they benefit from services being
offered by overseas companies that have lower labour costs, said Mr N.
Gregory Mankiw, chairman of the White House Council of Economic
Advisers on Monday.
His comments come as Mr Bush struggles to shore up support in
manufacturing states that have lost millions of jobs and Democratic
presidential aspirants make economic nationalism a centrepiece of their
attacks on the administration.
Senator John Kerry, for instance, has skewered 'Benedict Arnold'
companies that take 'American jobs overseas and stick the American
people with the bill'.
In recent years, companies have shipped software engineering jobs and
other customer service operations abroad, especially to India. Even
hospitals have joined the trend, hiring radiologists abroad.
Rebutting the critics, Mr Mankiw argued that firstly, the job situation
will improve - 2.6 million new jobs are expected to be created by year
end - and secondly, the outsourcing trend was a new and positive
chapter in world trade liberalisation.
As the Economic Report of the President released on Monday pointed out:
'When a good or service is produced more cheaply abroad, it makes more
sense to import it than make or provide it domestically.'
Driving the point home, Mr Mankiw suggested that outsourcing of
health-care jobs to lower-wage countries could help control the upward
spiral of US health-care costs.
'We don't have a comparative advantage in producing clothing, textiles,
and that's one of the reasons we've tended to lose textile jobs,' he
said. 'Maybe we've learned that we don't have a comparative advantage
in radiologists.'
Calling a technician in India is economically no different from buying
a car from Japan, he added. Only the delivery system has changed.
India, the target of much American anger over job losses, has condemned
as unfair moves by US lawmakers to restrict outsourcing.
Trade and Commerce Minister Arun Jaitley said recently that such
protectionism ran counter to the oft-repeated stand of the US, whose
'main mantra is market access'.
Mr Mankiw's defence of the positive effects of outsourcing has been
seconded by business leaders and analysts.
Some observers, like Senior Minister Lee Kuan Yew, have made the point
that it is unstoppable. In a recent interview with YaleGlobal, he said
that even if the Americans were to curb it, its rivals such as the
British and the Japanese won't.
'If you deprive yourself of outsourcing and your competitors do not,
you're putting yourself out of business,' he warned.
The latest White House economic report also analysed another hot-button
political issue - Chinese exports to the US - and concluded that they
are not 'a primary factor in the displacement of American manufacturing
workers'.
The US trade deficit with China reached US$124 billion (S$209 billion)
last year, but the report noted that the largest manufacturing job
losses in the US have come in industries without strong Chinese
competition. -- Los Angeles Times
http://timesofindia.indiatimes.com/articleshow/489154.cms
The Times of India Online
Printed from timesofindia.indiatimes.com >World >The United States
Bush blesses outsourcing to India
CHIDANAND RAJGHATTA
TIMES NEWS NETWORK[ WEDNESDAY, FEBRUARY 11, 2004 03:41:50 AM ]
WASHINGTON: President Bush and his administration have reiterated their
commitment to free trade , including explicitly backing the idea of
outsourcing to countries such as India .
In his 412-page "Economic Report of the President" transmitted to the
Congress on Monday, Bush presented an upbeat prospect for the US
economy this year, including creation of 2.6 million jobs and a 4 per
cent growth.
But as far as India is concerned, one particular paragraph in the
voluminous report will provide great reassurance to a section of the
economy. It pertains to outsourcing , the hot button topic of the day,
and here is the Bush mantra on the subject in Chapter 12 titled
"International Trade and Cooperation."
Specifically referring to India as an example of an outsourcing
destination, the Bush report says "when a good or service is produced
more cheaply abroad, it makes more sense to import it than to make or
provide it domestically."
With that commitment, the Bush administration has effectively thrown
its weight behind outsourcing at a time when the several Democratic
contenders and sections of the media are beating up on the idea in the
face of economic troubles and due to election posturing.
Elaborating on the administrations stand, a Senior White House
official later described outsourcing as the "latest manifestation of
the forces of free trade and increasing international specialisation in
production."
"An open world trading system is generally a positive contribution to
economic prosperity. It increases living standards both at home and
abroad," explained Bushs Economic Advisor Greg Mankiw, adding, "That
is the reason the President has actively pursued trade agreements to
open up markets abroad."
Mankiw warned though that even as the administration pursued a more
open trading system around the world, "we have to acknowledge that any
economic change, including those that come from trade, can cause
painful dislocations for some workers and their families."
However, the goal of policy, he said, should be not to stop change but
"to ease the transition of workers into new, growing industries."
Bush telegraphs his mind on Outsourcing:
"One facet of increased services trade is the increased use of offshore
outsourcing in which a company relocates labour-intensive service
industry functions to another country. For example, a US firm might use
a call-centre in India to handle customer service-related questions.
The principal novelty of outsourcing services is the means by which
foreign purchases are delivered. Whereas imported goods might arrive by
ship, outsourced services are often delivered using telephone lines or
the Internet. The basic economic forces behind the transactions are the
same, however. When a good or service is produced more cheaply abroad,
it makes more sense to import it than to make or provide it
domestically."
http://www.nytimes.com/2004/02/11/opinion/11KRIS.html?th
February 11, 2004
OP-ED COLUMNIST
Watching the Jobs Go By
By NICHOLAS D. KRISTOF
o be permitted to read the rest of this column, you must first click
here and answer the question correctly:
Go on, try it. After all, 83 percent of Japanese high school seniors
got it right (though only 30 percent of American seniors). The correct
answer is (c). If you answered incorrectly, though, keep reading -
think of it as a social promotion.
The topic today is the growing furor over the outsourcing of jobs to
India - and, more broadly, educational lapses here. One reason for the
jobless recovery in the U.S. is that it doesn't make much sense to have
an American radiologist, say, examine your X-ray when it can be done so
much more cheaply in New Delhi.
Indeed, why should computer software be written, taxes prepared,
pathology specimens examined, financial analysis done or homework
graded in the U.S., when all of that can be done more cheaply in
Bangalore? I.B.M. is moving thousands of jobs to India and China, and
Reuters says it will have Indian reporters cover some U.S. companies
from there.
All this is unsettling. But to me the alarm seems overwrought - and
dangerous, for it is likely to fuel calls for protectionism. A dozen
years ago, there was a similar panic about high-tech jobs going abroad,
and people said that Asia would be making computer chips while
Americans produced potato chips.
Instead, free trade worked. Some autoworkers lost their jobs, but
America emerged stronger than ever. Studies by Catherine Mann of the
Institute for International Economics suggest that it is the same this
time. Outsourcing raises American productivity, gives our economy a
boost, increases foreign demand for U.S. products and leaves us better
off.
Yet, as an Indian friend, Sunil Subbakrishna, pointed out to me, there
is one step we should take in response to this wave of outsourcing:
bolster our second-rate education system.
Mr. Subbakrishna, a management consultant specializing in technology,
notes that in his native Bangalore, children learn algebra in
elementary school. All in all, he says, the average upper-middle-class
child in Bangalore finishes elementary school with a better grounding
in math and science than the average kid in the U.S.
I saw the same thing when I lived in China and interviewed college
applicants there. The SAT wasn't offered in China, so Chinese high
school students took the Graduate Record Examinations - intended for
would-be graduate students - and many still scored in the 99th
percentile in math.
The latest international survey, called Trends in International
Mathematics and Science Study, found that the best-performing eighth
graders were, in order, from Singapore, South Korea, Taiwan, Hong Kong,
Japan, Belgium and the Netherlands. The U.S. ranked 19th, just after
Latvia. (India and China weren't surveyed.)
"For too many graduates, the American high school diploma signifies
only a broken promise," declares a major new study released yesterday
by three education policy organizations. Called the American Diploma
Project, it found that 60 percent of employers rated graduates' skills
as only "fair" or "poor."
The broader problem is not just in schools but society as a whole:
There's a tendency in U.S. intellectual circles to value the humanities
but not the sciences. Anyone who doesn't nod sagely at the mention of
Plato's cave is dismissed as barely civilized, while it's no blemish to
be ignorant of statistics, probability and genetics. If we're going to
revere Plato, as we should, we should also remember that his academy
supposedly had a sign at the entrance: "Let no one ignorant of geometry
enter here."
In 1957, the Soviet launching of Sputnik frightened America into
substantially improving math and science education. I'm hoping that the
loss of jobs in medicine and computers to India and elsewhere will
again jolt us into bolstering our own teaching of math and science.
http://www.tdn.com/articles/2004/02/10/biz/news03.txt
Bush bullish on economy
By Washington Post
Feb 10, 2004 - 07:38:39 am PST
WASHINGTON -- Wading into an election-year debate, President Bush's top
economist Monday said the outsourcing of U.S. service jobs to workers
overseas is good for the nation's economy.
Shipping jobs to low-cost countries is the "latest manifestation of the
gains from trade that economists have talked about" for centuries, said
N. Gregory Mankiw, chairman of the White House Council of Economic
Advisers. Just as U.S. consumers have enjoyed lower prices from foreign
manufacturers, so too should they benefit from services being offered
by overseas companies that have lower labor costs, he said.
Mankiw's comments come as the president struggles to shore up support
in manufacturing states that have lost millions of jobs and Democratic
rivals make economic nationalism a centerpiece of their attacks on the
administration.
U.S. job growth is sluggish, though many sectors of the economy appear
to be recovering smartly. Mankiw released the White House's annual
Economic Report of the President Monday, predicting 2.6 million new
payroll jobs by the end of the year. But such projections have proved
problematic. Last year's report projected 1.7 million new jobs would be
added in 2003. The 2002 report was even more optimistic, predicting 3
million new jobs in 2003.
Instead, the nation lost 53,000 payroll jobs last year, the Labor
Department says.
"I know there will be jobs in the future," Mankiw told reporters at a
news conference, "because I know this is a vibrant economy, a dynamic
economy."
Those comments echoed a speech by Federal Reserve Chairman Alan
Greenspan last month. Greenspan counseled that workers hurt by
outsourcing "can be confident that new jobs will displace old ones as
they always have."
Mankiw's defense of the "offshoring" of jobs has been seconded by other
economists and business leaders. A recent study by the management
consulting firm McKinsey & Co. also concluded that business investment
in service sector jobs abroad will ultimately help the U.S. economy.
But Mankiw's conclusions may prove discordant during an election year,
when many workers remain concerned about their prospects.
"It's a kind of flip thing to say when people are losing their jobs,"
said Franklin J. Vargo, vice president of international economic
affairs at the National Association of Manufacturers, a group that has
strongly supported the president.
In recent years, companies have shipped software engineering jobs, data
entry and customer service operations abroad, especially to India. Even
hospitals have joined the trend, hiring radiologists on the other side
of the world to read X-ray images shipped to them over the Internet.
Mankiw said the trend is a new and positive chapter in world trade
liberalization. Calling a computer technician in India is economically
no different from buying a car from Japan, he said. Only the delivery
system has changed. Market forces are finding which countries can
deliver labor most efficiently, Mankiw said. And deciding that certain
jobs must remain in the United States would be the equivalent of the
state economic planning that ultimately brought down the Soviet Union.
Indeed, outsourcing of health care jobs to lower-wage countries could
help control the upward spiral of health care costs, he suggested.
"We don't have a comparative advantage in producing clothing, textiles,
and that's one of the reasons we've tended to lose textile jobs,"
Mankiw said. "Maybe we've learned that we don't have a comparative
advantage in radiologists."
The Economic Report of the President made the same point: "When a good
or service is produced more cheaply abroad, it makes more sense to
import it than make or provide it domestically."
The report also analyzed another hot-button political issue, Chinese
exports to the United States, and concluded that they are not "a
primary factor in the displacement of American manufacturing workers."
The U.S. trade deficit with China reached $124 billion last year,
nearly twice as large as the U.S.-Japanese imbalance, the next biggest
bilateral trade deficit. But the report said the largest manufacturing
job losses in the United States have come in industries without strong
Chinese competition.
Such conclusions may only exacerbate Bush's problems in manufacturing
states, numerous manufacturing executives said Monday. Vargo declared
the analysis of the China trade to be simply wrong.
"These guys just don't get it, period," said Paul Kennedy, a
self-described Republican and president of Kennedy Die Castings Inc. in
Worcester, Mass.
On Friday, Laurie S. Moncrieff, chief executive of Schmald Tool & Die
Inc. in Burton, Mich., met with Sen. John Kerry (Mass.), the
front-running Democratic candidate for president. Monday, the lifelong
Republican declared, "I'm starting to get on the bandwagon of, 'Whoever
can beat Bush, I'm voting for him,' and I'm not the only one."
Gary Henderson, purchasing manager of Aircraft Precision Products Inc.
in Ithaca, Mich., who has worked for Republican lawmakers on Capitol
Hill and in Lansing, said, "Let's put it this way. The Bush/Cheney yard
sign that was in front of my house may just stay behind the Oldsmobile
this fall."
Such executives have different specific complaints. Kennedy said Bush's
push to slash taxes on investment dividends showed a propensity to look
out for large corporations and shareholders, not for small business and
job creation. Jack Metzemaekers, chief executive of Scott Electronics
Inc. in Salem, N.H., said he was "very upset" that Bush's budget for
2005 would slash funding for the Manufacturing Extension Partnership, a
national consulting program, from $235 million to $39 million.
Moncrieff focused on China.
Democrats have homed in on economic nationalism issues, or what Kerry
has called "Benedict Arnold" companies or executives that take
"American jobs overseas and stick the American people with the bill."
Sen. John Edwards, D-N.C., has decried "policies that make it
profitable for companies to shift jobs overseas."
Kerry issued a statement Monday saying the president's economic report
amounted to "empty promises and false hope for middle-class families."
The report projects strong economic and job growth for years to come.
The economy should expand by 4 percent this year and by 3.4 percent in
2005, the report predicts. The unemployment rate, currently at 5.6
percent, should fall to 5.4 percent in 2005 and 5.2 percent in 2006,
with payrolls expanding by 6.2 million over the next two years.
http://www.thespoof.com/news/spoof.cfm?headline=s2i2064
It's a Good Job if You Can Get It
Written by Chuck Terzella
The loss of 2.2 million jobs in the United States since the beginning
of the Bush Administration is actually a good thing, White House
sources said yesterday. The "Outsourcing" of jobs to foreign countries,
" Is just a new way of doing international trade," said N. Gregory
Mankiw, Chairman of the Bush Administrations Council of economic
Advisors, " and thats a good thing. Think about it, who would you
rather hear when you get in touch with a companies customer support
center or a telemarketer calls, a desperate sounding American who is
barely surviving on a minimum wage phone job, or a cheerful Indian or
Asian voice that is pitifully grateful for whatever crumbs they can
get? Besides, aren't those accents cute?"
While acknowledging that the loss of the two million plus jobs is
painful for the American workers and their families who are unemployed,
Mr. Mankiw offered some hope. " Once the weather warms up the
Administration is planning on hiring each and every one of these losers
as ditch diggers to help widen the gap between the rich and poor of
this great nation. Then, once we dont need them anymore, well
just kill em, I guess."
Last year the Administration predicted that 1.7 million jobs would be
created, instead the nation lost 53,000 jobs. "Yeah, we were a little
off on that one," admitted Mankiw, " For one thing, we figured on a
longer war with Iraq that would kill off a lot more of our troops and
thereby create new jobs, both in the military and at home. We were
disappointed there, but the Occupation of Iraq seems to finally be
getting our death tolls to the acceptable numbers we had hoped for that
will really make the job market pop."
By the end of this year the Administration is pledging that 2.6 million
new jobs will have been created and most economists tend to agree.
Unfortunately, the new jobs will be in India, The Philippines, Mexico
and China. The United States is still expected to bleed jobs. but the
good news is that very few Americans will end up on Welfare. With the
tightening of the Welfare rules most Americans are not eligible for
benefits, thereby eliminating the pain and embarrassment of having to
enroll.
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