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    Americana in Arabic..., 2004-02-12 16:33:41 | Main | "He is, right now, the free and fairly elected President of Haiti."..., 2004-02-18 12:57:16

    offshoring is good for you:

    but it's not, but it's good for Indians, can't we all be good little altruists now?

    From a bunch of economists I would expect some actual argument somewhere in this, which by normal standards would require some facts to argue about. There don't seem to be many to work with, and thus the argument looks like this - Dobbs and Glassman - a completely nonsensical discussion between nonsensical people. Something I'm personally all for, so off I go.

    So far as I can tell they can't even come up with statistics as to how many jobs are being "exported", you get CNN backing this major investigative enterprise and the best they can do is provide a list of companies engaging in the practice. A brief glance suggests the list already encompasses most domestic economic activity - so who you gonna boycott? If I take Cosma Shalizi's advice, as I am prone to, I would go read Lori Kletzer and end up with an estimate that 78% of manufacturing job losses were due to productivity gains and that trade pressures can only account for a small fraction of the observed job losses through the 80s and 90s.

    So what do we do when our well-paying jobs are replaced by machines (or, now, Indians) and we start flipping burgers out of the back seat of a van down by the river for a living? The usual answer has been to tax the profit-reaping machine owners - and now out-sourcers - and make people do busy work in the defense industry in the US, or give them a stipend to produce art in Denmark, or somesuch. Scotland I believe has recently started using the proceeds to fund baby production. Any given dynamic sector of the economy is ripe for the creating. Without DARPA I wouldn't have a job to lose, so I suppose I should be looking to fields where the defense industry is putting up major R&D - leaving me with the unpromising jokes of the Joint Strike Fighter and Star Wars, both of which have outlived their military usefulness as anything more than pork-barrel busy work. In the meantime corporate profits are soaring and we're not taxing it anyway, and, contrary to predictions, corporations aren't investing it, at least not on us, so there you go, blame it on domestic industrial policy.

    Applied research in the defense budget, which involves specific, achievable goals within six to 10 years, would receive only $3.83 billion, a 13-percent decrease from the $4.43 billion it received in fiscal year 2004. And the funding request for basic research, generally seen as having a payoff in 10 to 20 years, is $1.31 billion in fiscal 2005, down 4 percent from the actual funding of the previous year.

    ... Past successes include the Internet, laser technology, and the global-positioning system.

    So much for the dynamic sector of Bush's economy.

    That small fraction is still a loss to trade, but probably not enough to justify the heat of the argument, and one need merely visit a free trade zealot's website to learn the fantastic gains we acquire: cheap goods made by slavesque labor in China or Indonesia (via walpickler) due to the tyrannical nature of their governments and our corporations, or cheap services provided by rather exceptionally compensated Indians due to the absurd relative dollar values of a basket of goods across borders that turns Indians magically into "cost efficiencies" - you can pay them one-fifth what you pay an American and they're quite possibly making more than the American in real wages. I would prefer India to the Chinese, but it's apparently beyond the pale to suggest using trade agreements to support democratic or humanitarian reform - or more relevantly essential labour reforms - since any and all trade just does that magically all by itself - hence China's amazing steps towards that end in the past two decades... Or something.

    Assuming the ostensible theoretical predictions of Ricardo and HO theory have some limited degree of viability in the real world (a poor assumption when the vast benifits of the practice of the theory accrue to a very narrow strata of the population, etc., but then poor assumptions are the basis for economic theory) we are trained to expect a re-allocation of labor assets in the importing country to follow it's comparative advantage into some other export-led field, so long as your capitalists can figure out what exactly that is supposed to be. Where is our comparative advantage with the rest of the world? My best guess as of my third glass of imported scotch: namebrand. What are we doing to that industry? As everybody is perfectly aware, destroying it, thoroughly.

    But the forecast on new U.S. jobs is not heartening. Wednesday, the federal Bureau of Labor Statistics unveiled a study projecting what kinds of jobs will be created in this country between now and 2012. The bulk of new jobs, in health and information technology, will not require much education, the study said. And most jobs will pay below average.

    ...other growing information tech jobs, including software engineers and network and data communications analysts, that require more education and pay better offer a more encouraging picture.

    We could add: with the benefits accruing to the - apparently quite idle - rich, what are we going to do about it? Contrary to zealot fundementalist fear-mongering over "protectionist lobbies", the AFL-CIO has, among others, perfectly reasonable ideas for changing the rules of the game without tossing out the zealots' beloved Ricardo. Fair trade is still free trade.


:: posted by buermann @ 2004-02-17 00:26:01 CST | link





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