Economics

I have to say, in this totally unrelated post, that the discussion between 
David, Aaron and Giles D'Aymery has been informative.  And a tad snarky.  I'm 
a Creative Commons license fan m'self.


'Greenspan and Mankiw have also both advanced the argument that the jobs 
shipped overseas in manufacturing in recent years are not lost forever because 
a dynamic U.S. economy will produce new jobs in different fields.'


The more goods that are produced (efficiently), the lower the price, and the 
better the choice. Countries will make the products they are best at making, 
and countries that produce these same products inefficiently will be driven 
out of business. It's really not countries anymore, but corporations, though 
the economic theory dribbled out by lst semester econ courses still follows 
something like this.

Whenever I hear this theory, I think of Wal-Mart.  I think about the people 
who have to shop at Wal-Mart.  Poor people buying poor quality products 
because they can't afford better. (We could have a long discussion about what 
anyone wants or needs, but I've decided to put that issue to one side.)

What are we best at?   I was talking to a career consultant who was 
pessimistic about the ability of the U.S. to retain any job that does not 
provide a necessary service to a body.  Our future as barbers, nurses, car 
salesmen? 


Where will these new jobs come from?  If you've noticed, Bush seems to stop in 
at one local restaurant or another, throw his arm around the proprietor, and 
encourage the press corps to spend money, because that's how people stay in 
business (and employ others).  Well, no shit.  However, if the press corps has 
the time and money to float the entire U.S. economy, I'll just keep the 
pennies I've stashed underneath my mattress for a crust of bread later, 
thanks. 

-x



Bush Adviser Draws Ire for Job Comments
 
 
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Feb 12, 4:04 AM (ET)

By MARTIN CRUTSINGER 

WASHINGTON (AP) - Gregory Mankiw, President Bush's chief economic adviser, 
gained recognition as a Harvard college professor for writing a popular 
textbook that explained complex economic principles in clear and precise 
language.

But now he's finding that being too clear and precise in the political world 
can land a person in a lot of hot water.

Not only Democrats but the top Republican in the House are castigating Mankiw 
for comments he made on the hot-button political issue of the outsourcing of 
American jobs to foreign countries.

Mankiw, head of the president's Council of Economic Advisers, discussed the 
advantages that offshore outsourcing of jobs can provide to U.S. companies in 
the "Economic Report of the President" released this week.

 
Mankiw argued that in economic terms, the outsourcing of a customer call-
center job to India was the equivalent of buying a manufactured product 
shipped into this country from overseas.

"When a good or service is produced more cheaply abroad, it makes more sense 
to import it than to make or provide it domestically," the president's 
economic report stated in a chapter on trade.

Mankiw said Monday in a briefing on the report that "outsourcing is just a new 
way of doing international trade. More things are tradable than were tradable 
in the past and that's a good thing."

Mankiw's comments drew criticism from Republicans, including House Speaker 
Dennis Hastert, R-Ill., who released a statement Wednesday criticizing the 
remarks.

"I understand that Mr. Mankiw is a brilliant economic theorist, but his theory 
fails a basic test of real economics. An economy suffers when jobs disappear," 
Hastert said. "Outsourcing can be a problem for American workers and for the 
American economy."

Mankiw's comments were a red flag to the administration's critics, who have 
been charging that Bush has failed to address the loss of 2.2 million jobs 
since he took office or the 3 million lost manufacturing jobs that have 
occurred since July 2000.

Democratic presidential candidate Sen. John Kerry told supporters Tuesday that 
the administration was finally admitting what was behind its economic 
policies. "They said that shipping American jobs overseas is good for 
America," he said.

A group of Democratic senators led by Sen. Hillary Rodham Clinton of New York 
introduced a nonbinding sense of the Senate resolution on Wednesday taking the 
administration to task for Mankiw's comments.

White House spokesman Scott McClellan said Wednesday that Mankiw's job was not 
in jeopardy, calling the suggestion that the remarks might get Mankiw 
fired "laughable."

"The president is strongly committed to creating jobs here at home," McClellan 
said, adding that the administration also supported "free and fair trade."

Mankiw was also being called to task for a section of the economic report 
which stated China had not played a role in the huge loss of U.S. 
manufacturing jobs even though America's trade deficit with that country has 
soared in recent years, running at an annual rate of $124 billion through 
November of last year.

The report argued that the biggest manufacturing job losses in the United 
States have occurred mainly in industries where imports from China are 
relatively small.

Rep. Donald Manzullo, R-Ill., said that point flew in the face of the fact 
that thousands of people in his district had "lost their jobs specifically 
because those products are now being made in China."

But Federal Reserve Chairman Alan Greenspan defended Mankiw in an exchange 
with Manzullo.

Like many economists, Greenspan supports free trade, believing that allows 
each country to produce the products it makes best, providing consumers with 
the benefit of goods at the cheapest prices.

Greenspan and Mankiw have also both advanced the argument that the jobs 
shipped overseas in manufacturing in recent years are not lost forever because 
a dynamic U.S. economy will produce new jobs in different fields. 






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