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.

[Fledermaus]

Foil Hat Alert!

[Joe Hadenuf]

Bump..... This is not a recovery. How long are American workers going to be under constant fear of losing thier jobs because the economic experiment being conducted by this administration? This is not free trade. India and China are basically composed of serfs. Imagine a private business competing against a dollar a day prison labor. It can't be done. This threatens not only our economy, but our national security as well as out long term stability as a nation. How long will we survive as a nation of real estate agents, dish washers and baby sitters? Who exactly is going to pay for these services?

[Luis Gonzalez]

Tell me your version of history then.

Don't forget to include elves.

I like elves.

[Once-Ler]

How long are American workers going to be under constant fear of losing thier jobs because the economic experiment being conducted by this administration?

Forever. You understand nothing about capitalism or free markets. You will have to support fascism (government support of industry) or socialism (government control of industry) to get the security you demand. I pray that God forever frustrates you so that your children and my children do not pay the price for you ignorance.

[Fledermaus]

Why would you bump the most infantile economic thought ever written?

Every premise is incorrect and proven wrong for decades.

[edeal]

Typical of your replies on this suject, you are more interested in sloganeering and name calling than an actual debate. Why not spend more effort in trying to be logical and manufacture an argument and less time attempting to be clever and insulting.

The simple coincidence of two schools of thought having one portion that sounds similar on the surface does not mean the two are equal ideas.

Further, it seems you are more interested in intentially misreading my points as to have another reason to resort to more dismissive comments. At no point did I make the statement that I thought that government should have more direct oversight over industry. Oversight, by the way means "Watchful care; superintendence; general supervision", which is not equivelent to disalloying a corporation from entending enfluence across state lines. Which requires no general supervision. Perhaps that was just an oversight on your part?


You are aware of the term laissez-faire as it relates to economics? My claim was that small business should be treated in that fashion. (This translates into less regulation). Big business and big government go hand in hand. The behavior of a big corporation is closer to system under Marxism than anything I have remotely proposed. In marxist regiemes you have a command economy in which the few direct the means of production.

Perhaps you are not aware that one of the first acts of Stalin was to sieze control of private party such as farms and small businesses. People were then treated as collectives with no individual rights. Decisions were made centrally by planning boards and there was little autonomy on the personal level.

This is basically the very model of the large corporation. No individual responsibility, as the corporation is simply a collective entity. Individuals on the local level are not empowered to make any real decisions, as power is concentrated in the hands of a small oligarchy.

Congress already uses the interstate commerce clause to regulate everything in an extra-Constitutional fashion. I think this should end. However, it is clearly stated in the US Constitution that Congress does have the power to regulate interstate commerce. And to that end, to prevent single corporations from extending their influence beyond the boundaries on one state. This results in less regulation because it removes the need of the Federal octipus from intervening in the affairs of business, since the activities of the corporation will reside comletely in the juridiction of one state.

If you think that the conclusion that several regulations should be repealed and other actions should be instituted which result in less regulation by the federal government as expanding direct government oversight on industry, then we are not speaking the same language. Just in case we are not, mine is called English.

[hedgetrimmer]

NAFTA is over 900 pages, and GATT is over 30,000 pages. I am sure they have added to these treaties since the first agreement was signed.

So all you free traders out there. If free trade means that person A in country A can trade with person B in country B without tariffs or any hindrance, why is GATT 30,000 pages long? Why are there so many trade agreements, like NAFTA, FTAA, CAFTA, etc etc etc? How many pages are they? Why do they need more than a sentence that says, we agree that country A will trade freely with country B without government interference or tariffs or fees?

[Joe Hadenuf]

LOL...

[Once-Ler]

P.S. That, and the double speak about government having more direct oversight over industry translating into smaller government.

Excellent posts as usual Luis. FR is lucky to have such a clear thinking poster. Thank you for making the complex ideas of capitalism and economic trade easy to understand...for those who really want to understand.

[Joe Hadenuf]

Why would you bump the most infantile economic thought ever written? Every premise is incorrect and proven wrong for decades.

You mean this one?

This is not free trade. India and China are basically composed of serfs. Imagine a private business competing against a dollar a day prison labor. It can't be done.

Because I believe it. Why?

[hedgetrimmer]

You know what? I have high school aged kids, and I don't know anybody that acts like that.

You shouldn't smear everybody like that. It looks like you have a very poor opinion of America.

The jobs are going overseas because our government is paying companies to take them there. They have numerous programs like OPIC and the INF that use America taxpayer dollars to pay American companies to go overseas. Your blanket accusation that Americans are can't think therefore they cannot get jobs is not based in reality.

What do you have against the American people? Certainly they are more intelligent and better educated than many of the illegal immigrants invading this country, yet you think they are not worth the money it takes to support themselves in their own country.

[Fledermaus]

According to the last US Census, 13% believe the moon is partly made of cheese...now I see how that could be true.

[Once-Ler]

but the minute it was signed was when Mexicans began coming over by the millions --- before NAFTA it was a trickle, after NAFTA it was a deluge.

Between 1900 and 1910, 8 million people emmigrated to the US according to the US Dept of Commerce - Bureau of the Census.

The only thing new in the world is the history you don't know--Harry S Truman

[Joe Hadenuf]

Why would you bump the most infantile economic thought ever written? Every premise is incorrect and proven wrong for decades.

You mean this one?

This is not free trade. India and China are basically composed of serfs. Imagine a private business competing against a dollar a day prison labor. It can't be done.

Because I believe it. Why?

According to the last US Census, 13% believe the moon is partly made of cheese...now I see how that could be true.

Good response Fred.

[endthematrix]

What of the nation that consumes and does not produce? A two tier system of financial gurus planning the world and the waiters that serve them at the steak bar. Luis, gotta love those spinsters at the NCPA. They'll sell a deficit as good and being a world spender as a national honor. No nation gets rich when the well runs dry!

[Joe Hadenuf]

According to the last US Census, 13% believe the moon is partly made of cheese...now I see how that could be true.

Was that the one taken in Tennessee?

[hedgetrimmer]

According to the last US Census, 13% believe the moon is partly made of cheese...now I see how that could be true.

Again, are you accusing your fellow Americans? There are quite a few people who post on this board who are gobal socialists who hate Americans and smear them in every opportunity. Your blanket statements against the American people have not been supported by any facts in your posts.

[endthematrix]

The trade deals the US enters does not favor the worker or the nation as a world dominator, period. Be it an accident or design, the failure to change it will cause America's lead role in the world.

[hedgetrimmer]

Hello once-ler. All those immigrants did not come from a single country. All those immigranst were assimilated and did not demand dual citizenship and bilingual education.

[Luis Gonzalez]

The well run dry?

Give Americans some credit, there's never been a deeper well.