Outsource the work of our economic advisers

seattle times ^ | February 19, 2004 | Froma Harrop

[dennisw]

Outsource the work of our economic advisers

I read that my first job after college is being outsourced to India. Reuters Ltd., the wire service, is hiring workers halfway around the world to report on American companies' earnings, dividends, oil discoveries — anything that could move a company's stock price. Reuters will now pay Indians a fraction of what it was spending to employ Americans doing my old job.

That's the wave of the future, we are told. Skilled jobs are pulling up anchor and sailing off. Computer-programming jobs have already left by the thousands. Radiologists on other continents are reading our X-rays and CAT scans.

Intel CEO Craig Barnett says that approximately 300 million educated people in India, China and Russia can "do effectively any job that can be done in the United States." Bear in mind, there are only 144 million jobs in America.

I offer no easy plan for slowing the trend. But I'll darn well not celebrate it.

Last week, N. Gregory Mankiw, chairman of the president's Council of Economic Advisers, stated that outsourcing American jobs was good for the country in the long run. A chorus of economists and financial pundits sang hymns to his wisdom.

A noble exception was Barron's columnist Alan Abelson. He noted that Mankiw's comment nearly coincided with a University of Michigan survey showing a sharp drop in consumer sentiment. Consumers see a growing threat to their jobs and may be thinking twice about spending more money. And Mankiw's sunny view of outsourcing only confirms their suspicions that the federal government will do little to ease the pains of globalization.

Abelson then speculates on how outsourcing might apply to the Council of Economic Advisers itself. First off, the three dozen economists who work there earn far more than the $10 an hour paid to their Asian counterparts. Secondly, the Americans don't do a great job. The council had predicted a net gain of 1.7 million jobs for 2003, when, in fact, the United States lost jobs. And the council's estimate of 2.6 million new jobs this year is "ludicrously" optimistic. Why not send the council's research work to Bangalore? After all, Abelson writes, "our putative Indian economists couldn't have done — or possibly do — any worse."

And what would the out-of-work economists do? They could "simply follow their chief's advice and find new jobs ostensibly immune to outsourcing," Abelson says. "Peddling real estate, perhaps, or waiting on tables."

Let me add that some Wall Street firms have already sent financial-analysis work to India. It can be easily done.

Thanks, Alan Abelson, for lampooning those cheerful predictions of an outsourced world. The peppy defenses of outsourcing were getting me down. The worst ones contend that it will free us from the scourge of dull work. Janet Yellen, who headed the council in the Clinton administration, says that outsourcing may hurt "the more standardized part of high tech" work, but Americans will keep the high-end tech jobs.

Daniel Pink, author of an article on outsourcing in Wired magazine, echoes her optimism. Pink was recently on C-Span blowing a lot of Silicon bubble talk about American "dynamism," "big-picture thinking" and "high concept" employment. He noted that only "routine, relatively standardized white-collar work is going overseas."

Well, that would describe about 99 percent of all white-collar jobs. Not to worry. Pink thinks Americans will be left with the fun work. They'll be "software experts who can manage international 24-7 work teams." Yep. We'll all be sitting right there at the controls overseeing global armies of programmers. How Americans get to be the managers goes unexplained.

The problem is, there is no limit to the jobs that can go elsewhere. We can no longer pretend that laid-off factory workers need only take some computer classes and they'll be economically secure. Their skills, it turns out, are shared by about 300 million Indians, Chinese and Russians.

My job at Reuters was crummy in many ways — stressful, deskbound, often boring. But it taught me things. I had arrived knowing nothing about business and left knowing something. "Standardized" white-collar jobs represent more than paychecks. They offer training, as well.

If outsourcing is the future, so be it. But let's not play American workers for the fool. Their future doesn't look good at all.

[Luis Gonzalez]

That wasn't a "borderline" personal attack, that was a comment on the obvious.

Would I ever to decide to attack you on a personal level, there will be nothing borderline about it.

[Regulator]

Intel CEO Craig Barnett says that approximately 300 million educated people in India, China and Russia can "do effectively any job that can be done in the United States."

Including his.

[hedgetrimmer]

Outsource David Rockefeller and the Council of the Americas. They are BAD hombres and shame America for their avarice and lack of patriotic values.

[Joe Hadenuf]

Who is the one that said a few days ago that out sourcing was good for us?

[jpsb]

The new big lie

"No nation has ever gotten rich by forcing its citizens to pay more for domestic goods and services that could have been procured more cheaply abroad." -- Bruce Bartlett

Incorrect, USA 1776-193x

[WilliamofCarmichael]

RE: "This is a topic constantly brings out the struggles between two different economic philosophies."

I disagree. There is no struggle. I suspect that most of us are for true free trade.

Why is it always thought to be free trade v. protectionism? We are NOT talking free trade IMO.

BTW I think that it is just fine that capitalists send jobs chasing after cheap labor. But that ain't free trade. They should stop with the "holy" free trade BS. It's cheap labor! Period. Fine.

We're moving some of our comparative advantage to China, etc. so that goods and services can be repatriated. So what does offshoring have to do with Ricardo? I know, I know. I'm too uneducated to understand but maybe some others will get it. TIA.

No, I do not want the government to run business -- nor do I want government to continue to support business with the Ex-Im Bank, OPIC, etc. Neither way is capitalism.

[hedgetrimmer]

For the record, there is no such thing as free trade in the world today. So support Mankiw is supporting a utopian fantasy rather than the real world.

I know you were on an earlier thread about outsourcing. That India and Brazil are conducting economic warfare against the US is clear and they have said it is exactly what they are doing recently. China has never been shy about how they will destroy us via our economy. How can you support a government official who is ignorant or chooses to be ingnorant of the facts about economic warfare against America called "free trade". I am curious to know. I am also curious where an actual free trade agreement exists in this world. I have never seen one, I have only seen managed trade by globalist unconstituional organizations who hate America.

[Joe Hadenuf]

Certainly Bush can do something about it. Perhaps he can begin by not having his administration make what amount to policy statements giving full support of exporting labor. Not all things require a law to be written or an exectutive order to be signed in order to have an effect. Simply pointing out that this is is bad for our country can at least stem the tide.

I agree, good post.

What is truly amazing, is that this adminsistration has suggested that mass exporting of businessess out of America is good for us, while on the other hand thay want give jobs to illegal aliens that they say American's don't want.

I don't know about the rest of you, but I'd bet the rent, if Clinton or his administration ever yapped these lines, most here would have come completely unglued.

[Luis Gonzalez]

Would you be talking about the same guys who started a whole Revolution over being forced to pay higher prices on goods due to government imposed charges?

[FITZ]

Neither way is capitalism.

Today's "capitalism" looks a lot like "communism" when it believes that only a communist country can control the labor well enough to keep it cheap enough.

[hedgetrimmer]

Also, for the record. Have you read the mission statement of the WTO? They actually forge the global trade policy. They state over and over again, that the goal of the World Trade organiztion is poverty reduction . Poverty reduction is a form of global welfare. It means that the rich must give to the poor. Go to yahoo! news and look up WTO. Every time there is a meeting of the WTO or hemispheric trade organizations based on the framework of the UN, like the OAS, the OIC, the CIS, the EU and ASEAN, you will see that they hate 'rich' countries and want them to give away more, while they set up so called trade agreements, as with India and Brazil, that block so called 'rich' countries from participating in them. This is not free trade , but they lie and call it that and many Americans don't know the difference because they refuse to see the harm these agreements cause to our economy and our people .

[FITZ]

Anyone foolish enough to believe there is anything like free-trade now should think of something they might like to try to sell in Canada or Mexico, fill up a semi and try to take it over --- see how far they'll get. NAFTA is something like 900 pages??? Not very free.

[jpsb]

You mean taxes? Yea we can talk about taxes as soon as you stop lying about our history.

[jpsb]

Good post! Bump.

[Fledermaus]

For stating the truth? Wow! Now we are a dictatorship where you can't even DISUCSS an issue lest people like you get your panties in a bunch and whine simply because you can't understand the complexity.

Amazing.

[FITZ]

You're right --- that was a twisting of our history:

In 1773, Britain's East India Company was sitting on large stocks of tea that it could not sell in England. It was on the verge of bankruptcy. In an effort to save it, the government passed the Tea Act of 1773, which gave the company the right to export its merchandise directly to the colonies without paying any of the regular taxes that were imposed on the colonial merchants, who had traditionally served as the middlemen in such transactions.

With these privileges, the company could undersell American merchants and monopolize the colonial tea trade. The act proved inflammatory for several reasons. First, it angered influential colonial merchants, who feared being replaced and bankrupted by a powerful monopoly. The East India Company's decision to grant franchises to certain American merchants for the sale of their tea created further resentments among those excluded from this lucrative trade. More important, however, the Tea Act revived American passions about the issue of taxation without representation.

The law provided no new tax on tea. Lord North assumed that most colonists would welcome the new law because it would reduce the price of tea to consumers by removing the middlemen. But the colonists responded by boycotting tea. Unlike earlier protests, this boycott mobilized large segments of the population. It also helped link the colonies together in a common experience of mass popular protest. Particularly important to the movement were the activities of colonial women, who were one of the principal consumers of tea and now became the leaders of the effort to the boycott.

http://odur.let.rug.nl/~usa/E/teaparty/bostonxx.htm

[hedgetrimmer]

Joe Hadenuf the current adminstration is only following the mandates set up with the Clinton and previous adminstrations with regard to NAFTA and FTAA. The group that is pushing the western hemispherica economic zone called the FTAA is the Council of the Americas. All high ranking officials of the current administration has spoken before this group, they act like the government while our real government acts as consultants that do their bidding.

The Council of the Americas directs the Organization of the America States which leads the Summit of the Americas, where President Bush announced that the US would pay illegals social security and allow a borderless society where illegals could move freely in and out of this country.

This group the OAS, feels that America is too 'rich' and must harmonize with the rest of Latin America so that the FTAA can occur. Part of the harmonization effort, in my opinion, is to offshore jobs so that the American middle class is smaller and has less influence on government.

Please look up http://www.oas.org and http://www.americas-society.org. These groups are having a profound influence over America although they are never discussed by our government or the press.

The OAS is the sponsor of the Summit of the Americas. This summit is the source of the social security directive for illegals, in their meeting in 2001 in Canada. They are also the source for president Bush's amnesty program, it is a directive from a 1999 summit. The OAS is a federation of states and acts as a parliment. The summit of the Americas is a governmental conference with real influence over our American Congress and president.

[blowfish]

Yeah, but he has a (D) next to his name. That makes a big difference.

[Luis Gonzalez]

There truly isn't this "vast outsourcing" of jobs out there, unemployment rates today are equal to the ten year average of the 1990's and the market is reasonably sound, still overpriced, but strong nevertheless. As the baby boomers begin to retire, so does the median age of the workforce, so there are less available workers, and if a strong market, an unemployment rate in the 5-6% rate, and low taxes where an economic boom in the 90's, then it has to mean one now.

Federal spending is up roughly three percent over Clinton's as a percentage of GDP, but not quite as high as the percentages under Reagan and Bush I. And yes, we are running a deficit, but we are fighting a war, and historically, government spending spikes during times of wars, hot OR cold.

The why of those figures has a lot to do with basic economics as well.

You get what you pay for.

Clinton corrupted the American experiment, Ronald Reagan defeated communism, and the Bush's have taken on militant Islam.

I'm sending Bush a check.

[Fledermaus]

This is a topic constantly brings out the struggles between two different economic philosophies. If you're absolutely sure about where you stand on this topic and you've completely shut the other side out on the subject than you probably wont check it out anyway.

Well put. But with the vast amount of totally uneducated morons, I see it more as struggles between idiots and those much smarter.

We spend billions and billions of federal, state and local money on schools and the vast majority of kids graduating high school and college can't think, can't debate, can't do simple math, can't comprehend simple English, doesn't understand science or even cares, and gets bored by anything more intellectual than an MTV video. Thus, they can't find high paying jobs and have to work in factories or retail or service jobs and bitch about their wages and benefits and join unions to make themselves feel better just to spend 40 hours a week putting a grommet into a hole!

And after all the government regulations and cost of hiring these people and even having to train them to put the grommet into the hole because they spent their high school days drinking beer, doing drugs and breeding like rabbits, they demand raises, more health insurance, more time off, etc.

And they wonder why their job is going overseas to emerging countries trying to escape poverty and despotism and communism full of people that think a 40 hour work week is heaven? Especially since they are just as efficient at putting a grommet in a hole because they want the job more and consider it an opportunity instead of an entitlement!

And it's just a dang grommet being put into a hole people! It's not worth $20 an hour!!!!!!!!