Outsourcing America
Gregory Mankiw spoke economic truth to the American people about offshore outsourcing and, of course, politicians from both sides of the aisle immediately attacked him and politicized the issue. What the editorial did not say, however, is why the politicians can so easily get away with their demagoguery: the complexity of economics.</br></br>For example, it is easy for people who have jobs to see those jobs being preserved by government interference and impossible for people who are looking for jobs to see jobs that were never created in the first place because of that same government interference.</br></br>When we wonder about the slowness of the current job recovery, we should be thinking about all the government actions that interfere with job creation, including payroll taxes, protectionist quotas and subsidies to favored businesses, excessive regulations that weaken our companies, massive federal spending and deficits, and overly generous unemployment benefits that subsidize voluntary unemployment and discourage employment flexibility.</br></br>In the long run, your editorial on outsourcing is correct. But as John Maynard Keynes said, "In the long run, we are all dead."</br></br>In the short run, a government of the people, by the people and for the people should ameliorate the worst effects of offshoring on U.S. workers rather than accelerate offshoring for the benefit of U.S. corporations.