Out of Control Policy Blog

Today our jobs. Tomorrow our women?

From Dobbs to Dodd, seems like everyone's getting lathered up about outsourcing. Those Indians and Chinese will undermine our nation, and greedy "Benedict Arnold" CEOs just love helping them do it.

From the WSJ (sorry no link), here's a take on CNN's Lou Dobbs:

Not too long ago, the people who watch Lou Dobbs' evening business program on CNN tuned into see someone who looked just like Lou Dobbs ranting about free trade and corporations that outsource jobs -- "Exporting America," he calls it. This didn't compute. The Lou Dobbs everyone thought they knew was a font of economic reason.

Every night of the week now, no matter how big or small the rest of the day's news, the Lou nobody knew finds time to kvetch about outsourcing, "cheap overseas labor" and about a Nafta free-trade agreement that flung open the door to "illegal aliens" whom he's happy to routinely identify as "Mexicans."

Then there's Sen. Christopher Dodd: "Giving jobs away is destroying our manufacturing base. What we're telling companies is that at least with taxpayer money, you need to do it differently."

And now the platitudes have taken legislative form:

The Senate voted 70 to 26 yesterday for a scaled-back plan to curb the use of federal funds for contracting work done outside the United States.

The proposal would prevent the government from buying goods such as automobiles and services such as software made overseas in China, India or other nations. The initial measure was weakened by a provision that the Secretary of Commerce must certify that the step doesn't lose more jobs than it saves.

The Dobbs-Dodd coalition might want to put down their pitchforks for a moment and pause to listen to folks like Russell Roberts:

When an American outfit creates a call center in India or sends some of its software-design business there, it's able to do more with less -- more output with fewer workers, less capital, and fewer raw materials. Costs go down.

These savings come from different sources -- innovation and productivity changes, importing goods rather than making them, or using foreign labor for services that used to be done in-house. All of these allow companies to get more from less, which means America is more productive as a nation. The result is higher wages and a better standard of living for the average American.

That's the story of the last 100 years of the U.S. economy. In 1900, 40% of the country's work force was in agriculture. Today, the percentage is about 2%. That transition was driven by innovation, getting more from less. Prices fell. People spent less money on food. That freed cash to be used on new products, and new companies could be created.

Ted Balaker is Producer


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