Harvard economist Greg Mankiw has a pretty tranquil life these days, at least compared to what he went through a couple of years ago. As chairman of Bush’s Council of Economic Advisors he uttered the completely mainstream comment (mainstream among economists, that is) that international trade is a good thing that tends to benefit all nations involved. He said that offshore outsourcing is merely a new kind of trade in which exports come to our shores via the internet or our phones, instead of by ships and planes. Many reporters simply yawned at what was then regarded as an uneventful press conference. Then the LA Times ran a story titled “Bush Supports Shift of Jobs Overseas.” What followed was a (clichÃ? alert) political firestorm. Our nation worried that the teachings of Adam Smith and David Ricardo no longer applied to our new economy. Speaker Hastert called for Mankiw’s head and Candidate Kerry had himself a great issue. He railed against “Benedict Arnold CEOs” and outrageous tax policies that supposedly encouraged this kind of traitorous activity. Politicians penned more than 200 anti-outsourcing bills, mostly at the state level (although few were passed). Today the panic has largely subsided, at least for now. In this paper Mankiw looks back at that loopy time. Pretty interesting stuff. Related: A study Adrian Moore and I wrote on the topic Related: My pre-election take on Kerry-Edwards’ rhetorical strategy BTW, later on Kerry backed away somewhat from his infamous line:
Actually, it seems this explanation isn’t entirely accurate. But more importantly–does Ben Affleck still think outsourcing is “criminal“?