Keep jobs in America ...

I'll bite. Show the numbers for the same statistics for the years 1980 ( or pick a year that's far back ) to the present. Show the number for percent jobless and percent so out of luck that they give up looking for work. Showing just two years' statistics doesn't prove much.

 

At a time when unemployment is high, there's going to be pressure to try directly to save every job possible. We talk about 2.4 million jobs lost since Bush took office, of those how many were jobs that were moved offshore? One study I saw said 300,000. I doubt we'd be celebrating if only 2.1 million net jobs had been lost vs. 2.4 million.

To me, the focus on outsourcing is merely because it's fairly easy to make the point. There are people who can't get jobs. Companies are moving jobs overseas. The easy connection is that the two are directly related, even if they aren't. I don't think anyone's ever lost political ground by promising to fight for Americans.

 

http://www.infoplease.com/ipa/A0855074.html

Here's a few selected years. You have to read the chart and pick out your numbers since the goods are factored in, but it covers 1980, 1990, 2000 and 2010 (projected, obviously).

According to this chart, our trade surplus in services was (in 1996 dollars, apparently):

1980: $23.4 billion
1990: $46.8 billion
2000: $80.6 billion

 

Here's a related article from the Economist (granted, it's about a month old):

The great hollowing-out myth
Feb 19th 2004
From The Economist print edition

Outsourcing to other countries has become a hot political issue in America. Contrary to what John Edwards, John Kerry and George Bush seem to think, it actually sustains American jobs

EARLIER this month, President George Bush's chief economic adviser, Gregory Mankiw, once Harvard's youngest tenured professor, attracted a storm of abuse. He told Congress that if a thing or a service could be produced more cheaply abroad, then Americans were better off importing it than producing it at home. As an example, Mr Mankiw uses the case of radiologists in India analysing the X-rays, sent via the internet, of American patients.

Mr Mankiw's proposition, in essence, is the law of comparative advantage, first postulated by David Ricardo two centuries ago and demonstrated to astonishing effect since. Yet the Republican speaker of the House of Representatives, Dennis Hastert, joined Democrats in their rebuke of Mr Mankiw for approving of jobs going overseas; another Republican called for his resignation. The White House gave Mr Mankiw only lukewarm support—unsurprisingly, since Mr Bush recently signed a bill forbidding the outsourcing of federal contracts overseas. And the Democratic presidential contenders? Mr Mankiw had just written their attack ads.

As if to underline the point, this week's Wisconsin primary was dominated by the subject of jobs, and the failure of the Bush administration to do enough to protect them from going off to India. In John Edwards, who wants to rewrite the North American Free-Trade Agreement (NAFTA), the American left may have found its cuddliest protectionist yet; support for the southerner surged after he spent much of a debate drawing implicit comparisons between his own skills as a jobs-defender and those of John Kerry, who has stuck to free trade only a little more loyally. The Democratic front-runner defends NAFTA, but rants about “Benedict Arnold” bosses betraying American workers by moving jobs overseas (presumably to boost returns for fat-cat investors, like, er, Mr Kerry's family).

As for what might be called the business lobby, this is in disarray. “Tech jobs are fleeing to India faster than ever,” moans the cover of Wired. Watch “Lou Dobbs Tonight”, America's main business show, and every factory-closing is hailed as proof of America's relentless “hollowing-out” at the hands of dark forces in China, India and indeed the White House. Strangely, no mention is made of the fact that a pretty tiny proportion of all jobs lost actually go overseas.

So what is really happening? Three themes emerge:

•Although America's economy has, overall, lost jobs since the start of the decade, the vast majority of these job losses are cyclical in nature, not structural. Now that the economy is recovering after the recession of 2001, so will the job picture, perhaps dramatically, over the next year.

•Outsourcing (or “offshoring”) has been going on for centuries, but still accounts for a tiny proportion of the jobs constantly being created and destroyed within America's economy. Even at the best of times, the American economy has a tremendous rate of “churn”—over 2m jobs a month. In all, the process creates many more jobs than it destroys: 24m more during the 1990s. The process allocates resources—money and people—to where they can be most productive, helped by competition, including from outsourcing, that lowers prices. In the long run, higher productivity is the only way to create higher standards of living across an economy.

•Even though service-sector outsourcing is still modest, the growing globalisation of information-technology (IT) services should indeed have a big effect on service-sector productivity. During the 1990s, American factories became much more efficient by using IT; now shops, banks, hospitals and so on may learn the same lesson. This will have a beneficial effect that stretches beyond the IT firms. Even though some IT tasks will be done abroad, many more jobs will be created in America, and higher-paying ones to boot.

Just you wait

The “jobless recovery” first, then. Despite strong productivity growth and an accelerating recovery from the recession of 2001 (the economy grew by an annual 4% in the fourth quarter of last year), jobs are being created at a feeble rate of 100,000 or so a month. The jeremiahs point out that a net total of 2.3m jobs have been lost since Mr Bush came to office.

Although this date is often used as the starting-point from which to make a comparison, it is a silly one. In early 2001 the hangover effects from the investment boom of the late 1990s were only starting to be felt. Unemployment, at 4.2%, was unsustainably below the “natural” unemployment rate, consistent with stable inflation, that most economists put at around 5%. In other words, perhaps two-thirds of those 2.3m jobs were unsustainable “bubble” ones. Given the scale of job losses—along with the shocks of a stockmarket bust, corporate-governance scandals and terrorist attacks—it is a wonder that the recession was so mild. By the same token, a mild recession is now being followed by a commensurately mild recovery.

This week, the White House retreated from a claim that 2.6m new jobs would be created this year. But there are reasons to think that job growth will be more robust. In particular, the remarkably strong productivity growth, running at twice its long-run average of 2.1%, must slow down eventually. In the face of rising order books, businesses will have to hire more workers.

This may already be happening in some parts of the country. William Testa, director of regional research at the Federal Reserve Bank of Chicago, points out that the downturn began in the mid-west (because of its relative emphasis on manufacturing, notably business equipment, the mid-west was hit first by the slump in business investment) and then spread to the coasts. Now a recovery is spreading in the reverse direction—starting on the coasts and ending up, alas for Mr Bush, in the key electoral states of the industrial heartland.

In the absence of an obvious jobs recovery, it is perhaps not surprising that the myth arose that the American economy was being buffeted by structural, not cyclical, forces. Yet it nevertheless is a myth—as three notable economists, William Baumol, Alan Blinder and Edward Wolff, point out in a recent book.*

Churning, they point out, has being going on in the American jobs market for years, and “the creation of new jobs always overwhelms the destruction of old jobs by a huge margin.” Between 1980 and 2002, America's population grew by 23.9%. The number of employed Americans, on the other hand, grew by 37.4%. Today, 138.6m Americans are in work, a near-record, both in absolute terms and as a proportion of the population (see chart).

Of course some firms wither—Reynolds Tobacco's workforce shrank by nine-tenths between 1980 and 2002—but others grow: Wal-Mart's by 4,700%. During the 1990s, about a quarter of all American businesses shed jobs in a typical three-month period, equivalent to 8m jobs. Yet jobs created greatly outnumbered these, to the tune of 24m over the decade.

The process leads to incremental shifts that can have profound cumulative consequences for some sectors of the economy. In 1960 only one in 25 workers was employed in the business-services and health-care industries. Today, one in six is. In terms of output, manufacturing has risen, but, thanks to that productivity spurt, these goods are produced by fewer people—12% of the workforce, less than half the proportion of three decades ago.

And what of China? Still piffling. Certainly, China competes with some labour-intensive American industries that have long been in decline, such as textiles and stuffed toys. In the mid-west, metal-furniture makers and small tool-and-die foundries face growing competition. Yet most Chinese imports are of consumer goods, competing with imports from other poor countries, whereas America's manufactures are chiefly capital goods. Even at their peak in 2001, the number of all “trade-related” layoffs represented a mere 0.6% of American unemployment.

As for the Indian threat, “offshoring” is certainly having an effect on some white-collar jobs that have hitherto been safe from foreign competition. But how big is it, really? The best-known report, by Forrester Research, a consultancy, guesses that 3.3m American service-industry jobs will have gone overseas by 2015—barely noticeable when you think about the 7m-8m lost every quarter through job-churning. And the bulk of these exports will not be the high-flying jobs of IT consultants, but the mind-numbing functions of code-writing.

Meanwhile, there is another side to the ledger. Instead of focusing on jobs lost to the globalisation of information technology, Catherine Mann of the Institute for International Economics in Washington looks at globalisation's power to reduce prices and so help spread new technology, new practices and job-creating investment through the economy.

She uses the example of cheaper IT hardware, one of the main aspects of globalisation in the 1990s. Most of the drop in prices for PCs, mainframes and so on was caused by the relentless advance of technology; but she still thinks that trade and globalised production—all those Dell Computer factories in China, for instance—was responsible for 10-30% of the fall in hardware prices. These lower prices led to higher American productivity growth and added $230 billion of extra GDP between 1995 and 2002, equivalent to an extra 0.3 percentage points of growth a year.

These days, software spending is increasing at twice the rate of hardware spending, as businesses struggle to make their new computers work better. The manufacturing sector is where such integration has gone furthest. In many other parts of the American economy, the process has barely begun—particularly among smaller- and medium-sized businesses. Mr Mankiw's example of the Indian radiologist shows how the internet could help lower costs and raise productivity in health care. Who would object to that?

Ms Mann concludes that if IT software sees falls in prices, thanks to globalisation, similar to those that IT hardware has seen, then the second wave of productivity gains—notably in the service sector—could be greater than the first, which was based mainly on manufacturing. Some service sectors, such as construction and health care, are ripe for gains, because their efficient use of IT is low.

Will the trend lead to jobs going overseas? You bet, but that is not a disaster. For a start, America runs a large and growing surplus in services with the rest of the world. The jobs lost will be low-paying ones, such as bank tellers and switchboard operators. Trade protection will not save such jobs: if they do not go overseas, they are still at risk from automation.

By contrast, jobs will be created that demand skills to handle the deeper incorporation of information technology, and the pay for these jobs will be high. The demand for computer-support specialists and software engineers, to take two examples, is expected by the Bureau of Labour Statistics (BLS) to double between 2000 and 2010. Demand for database administrators is expected to rise by three-fifths. Among the top score of occupations that the BLS reckons will see the highest growth, half will need IT skills. As it is, between 1999 and 2003 (that is, including during the recession) jobs were created, not lost, in a whole host of white-collar occupations said to be particularly susceptible to outsourcing.

Yes, individuals will be hurt in the process, and the focus of public policy should be directed towards providing a safety net for them, as well as ensuring that Americans have education to match the new jobs being created. By contrast, regarding globalisation as the enemy, as Mr Edwards does often and Messrs Kerry and Bush both do by default, is a much greater threat to America's economic health than any Indian software programmer.

 

Thanks for the stats link. So where did the non government jobs go? (If we're to believe the Labor Department statistics.)

The editorial is showing a bit of selective memory for choosing his stats but, hey, that's what editorials are for. IIRC there were less than 10,000 private sector jobs created for several months in a row prior to publication of this piece - maybe that's selective memory by me. I sure would love to know what field this guy would recommend for his kids' college education - I'm betting it's not IT. He's making the same argument Wired Magazine and Forbes made earlier this year for staying in IT. Otherwise he makes some good points.

 

The argument would be that the problem isn't job losses (because there are constant job losses) but new job creation not keeping up due to a variety of factors, mostly related to the economic slowdown and the bursting of the bubble prior to that (and the terrorist attacks didn't help, and my theory is that the Iraq war didn't help, either. And there's my small business theory, as well, that I've related in a different thread).

But who knows. I'm certainly no economist, but even if I were, it's not like economists agree on these things.

It just appears that the offshoring issue is one that's coming more from a political POV than from pure economic one, by and large.

 

This looked like a good thread to put this column of David Broder's. I frequently disagree with him, and with his "protagonist", but it's an interesting read and provocative...


One Bold Thinker Among the Democrats

By David S. Broder
Sunday, March 14, 2004; Page B07


On the left of the Democratic Party, they don't come any smarter than Barney Frank, the 12-term congressman from Massachusetts. Republicans enjoy debating him, because if you've beaten him, you know the next liberal will be easier.

In a March 4 speech, Frank took what has become a commonplace of political conversation, something that President Bush, Sen. John F. Kerry and scores of lesser lights constantly discuss -- namely, the frustrating job market -- and probed it in a depth one rarely hears from a politician.

By doing so, he carried the jobs debate to a level where the policy choices become so basic -- and challenging -- that ordinary pols and pundits fear to tread.

While most of those in office or seeking office suggest that tweaking the economy with modest measures such as more job training or new tax incentives will revive the great job-growing engines of the 1990s, Frank offers a more sweeping and disturbing hypothesis.

A fundamental shift has occurred, he says. "The ability of the private sector in this country to create wealth is now outstripping its ability to create jobs. The normal rule of thumb by which a certain increase in the gross domestic product would produce a concomitant increase in jobs does not appear to apply."

That is the basic reason, he suggests, for this jobless recovery -- why month after month the economic growth figures spell boom, and month after month unemployment remains stubbornly high and more thousands become so discouraged they give up the search for work.

Frank buttresses his argument by pointing out that the boom in corporate profits and the rise in the stock market have been accompanied not just by joblessness but by a decline in real wages, a falloff in private health insurance and a rise in income inequality.

All this suggests something more is at work than just bad luck or bad timing -- a shift requiring a fundamental re-examination of the available options.

Why is this boom leaving so many worse off? Frank's catalogue of causes is a familiar one: globalization and its handmaiden, the outsourcing of jobs to low-wage countries; the weakening of unions; the tilt of the tax system in favor of the wealthy investor. And Frank endorses the regular catalogue of remedies urged by Kerry and other mainstream Democrats. They include tougher trade rules, restoration of union organizing and bargaining rights and steps to make the tax system more progressive. Like everyone else, including Bush, he says education, innovation and skills training are the keys to a healthy long-term economic future.

But unlike others, Frank does not stop at that point. Just as he is bold in diagnosing the cause of the problem -- a private economy geared to producing wealth, not jobs -- he is equally daring in his remedies.

Toward the end of his speech, Frank uttered a sentence one can hardly imagine coming from the mouth of a 21st-century American politician. "Our problem today," he said, "is too little government."

When I asked him in an interview Thursday if he was sending a message to Kerry, Frank said, "It's a message for all Democrats. What I'm saying is we're in a situation now where we need the government, and where is it? We've cut taxes, we've criticized bureaucracy, we've almost condemned the public sector. I'm saying it's time to talk positively about government and use it to do what the private economy is no longer doing."

His proposal is to tax some of the wealth the private sector is now producing so abundantly -- "a fairly small percentage," he said, without being specific -- "and use it to employ people on socially useful purposes."

Frank urges that we "take some of the wealth that is being created by this wonderful thing, this increased productivity, this new technology and the ways of using it, and all this innovation, and let us use it for our own undisputed public purposes. Let us give cities and states more money so they can have more people policing, fighting fires, cleaning up the environment, repairing facilities that need to be repaired, enhancing train transportation, building highways, helping construct affordable housing in places where that is a crisis, helping pay for higher education for students."

As Frank acknowledged, this whole approach smacks "to some extent [of] the New Deal philosophy." And that is why no one, including the Democratic presidential candidate, is likely to endorse it wholesale.

But if you sense, as I do, a need to challenge Bush's belief that pumping up the private sector with more tax incentives and more deregulation is the only way to find the missing jobs, Barney Frank's speech fills a real void in the debate.

davidbroder@washpost.com

 

Bush's solution involves more government, too, just that the money goes to contracts given to his cronies to rebuild other countries.

 

link

In the 1990s, everyone was ridiculously optimistic, as the economy created new jobs at an unbelievable rate. Now that the economy is correcting itself, people (like Frank) are overly pessimistic. The first thing that is called for is for the government to step in. Not surprising, since it gives both parties more power. Here is a newer article from the economist about jobs in America (lots of good stuff discounting the fear-mongering from the protectionist crowd) :




Smile, these are good times. Truly

Mar 11th 2004 | WASHINGTON, DC
From The Economist print edition

Anxiety is turning to paranoia about jobs. Take a deep breath: most Americans have rarely had it better


ANOTHER month, another dismal set of job figures. America pulled out of its last economic recession way back in November 2001, yet the country's “jobs recession” finished only last autumn, by when 2.7m jobs had been lost since the start of the slowdown. Now, though economic growth has bounced back, new jobs refuse to do the same in this, the third year of recovery. In February, a mere 21,000 jobs were created, according to the official payroll survey, at a time when George Bush's economists forecast 2.6m new jobs for 2004. Mounting alarm at the White House, and increased calls for protection against what a growing number of Americans see as the root of most ills: the “outsourcing” of jobs to places like China and India. Last week the Senate approved a bill that forbids the outsourcing of government contracts—a curious case of a government guaranteeing not to deliver value-for-money to taxpayers. American anxiety over the economy appears to have tipped over into paranoia and self-delusion.

Too strong? Not really. As The Economist has recently argued—though in the face of many angry readers—the jobs lost are mainly a cyclical affair, not a structural one. They must also be set against the 24m new jobs created during the 1990s. Certainly, the slow pace of job-creation today is without precedent, but so were the conditions that conspired to slow a booming economy at the beginning of the decade. A stockmarket bubble burst, and rampant business investment slumped. Then, when the economy was down, terrorist attacks were followed by a spate of scandals that undermined public trust in the way companies were run. These acted as powerful headwinds and, in the face of them, the last recession was remarkably mild. By the same token, the recovery is mild, too. Still, in the next year or so, today's high productivity growth will start to translate into more jobs. Whether that is in time for Mr Bush is another matter.

As for outsourcing, it is implausible now, as Lawrence Katz at Harvard University argues, to think that outsourcing has profoundly changed the structure of the American economy over just the past three or four years. After all, outsourcing was in full swing—both in manufacturing and in services—throughout the job-creating 1990s. Government statisticians reckon that outsourced jobs are responsible for well under 1% of those signed up as unemployed. And the jobs lost to outsourcing pale in comparison with the number of jobs lost and created each month at home. Even here, the rate of job “churn” has, for unclear reasons, been falling since mid-2001.

Waiting for the job recovery might be a good time to take a broader measure of the material well-being of Americans. Their condition is widely held to be perilous. The economy, it is said, is being “hollowed out” by international competition and the connivance of business and political elites, creating “two Americas”, one rich, one poor. Median income of American households, commentators often say, has been stagnant, though census figures give a rise of one-fifth since 1980. Lou Dobbs, on CNN's “Lou Dobbs Tonight”, is just one media fabulist who makes his living by claiming that, as America is being “exported”, so the well-being of middle Americans is in a parlous state.

It is a good story, but false on many levels. For a start, this slow growth in median income overlaps with a scale of immigration into America outpacing all immigration in the rest of the world put together. Many immigrants have come precisely to take up the lowest-paid jobs. As a result, in the 20 years to 1999 some 5m immigrant households were added to those defined as below the poverty level. Yet among native-born Americans, poverty rates have declined steadily since the 1960s. In the case of black families, median incomes have recently been rising at twice the pace for the country as a whole.

Strip out immigrants, and the picture of stagnant median incomes vanishes. Indeed, for the nine-tenths of the population that is native-born, middle-income trends continue their improvement of the 1950s and 1960s. For these people, inequality is not rising, but falling. Gregg Easterbrook cheekily points out in his excellent recent book, “The Progress Paradox” (Random House), that if left-leaning Americans seriously want better statistics about middle-income gains, then they should simply close their borders.

Mr Easterbrook points to something else about the figures for median household income. A quarter-century ago a typical household had three members. Today, it has just 2.6 members. Simply by this effect, median households have seen their real incomes rise by a half.

Another measure of improved well-being is increased access to jobs. Between 1980 and 2002 Americans in work rose by over 40%, a far brisker pace than the 26% growth in the population. Some three-quarters of the adult population are now in work, close to a record and some ten percentage points higher than in Europe.

One reason is more teenagers in work: over the same period, teenage employment grew by nearly two-thirds. As Andrew Hacker points out in the New York Review of Books, teenagers are a significant source of low-paid labour in supermarkets, shopping malls and fast-food franchises. Exploitative? Hardly, since it helps them buy cars and independence.

Yet the chief reason for higher participation is more women in work, notably married women. Very roughly, in the past half-century the average weekly hours worked by married women have tripled, while hours worked by men and single women have stayed about constant. The usual reason given is that married women have had to work so that families can make ends meet. A recent study* by three economists, Larry Jones, Rodolfo Manuelli and Ellen McGrattan, published by the Federal Reserve Bank of Minneapolis, punctures that notion. They find that the tripling of married women's hours can be explained entirely by a gender wage-gap that has narrowed. That is, a smaller pay differential between men and women gives married women sufficient incentive to invest in education and careers.

Of course, many American households struggle to survive on minimum-wage jobs with employers who do them few favours. We will look at low-paid work in a future week. What this piece attempts to argue is that the middle is far from being hollowed out. As Mr Easterbrook emphasises, most Americans have at least two cars and their own house, and they send their children to college. Certainly a bigger share of household income is being spent on things that did not feature 50 years ago, such as high-tech health care. But it has brought the benefit of a longer and better life, and not just for the old: since 1980, infant mortality has fallen by 45%.

At the end of last year, America's household wealth, at $44 trillion, passed the previous peak set in early 2000. With Americans wealthier than ever, why are many so anxious? Perhaps they think prosperity will vanish in a puff of terrorist smoke or a housing-market collapse. Perhaps, tentatively, the suburbs, in which half of Americans live, are to blame. For the suburbs fulfil the American dream, but at a price. On the one hand comes greatly increased space: the typical American dwelling now has two rooms per person, double Europe's level or America's half a century ago. On the other hand, expectations grow for every family member to have her own computer, DVD player—and another car. Pile on top of that an annual family holiday by plane, a bass-fishing boat (Americans spend $25 billion a year on boats and jet-skis) and regular meals out (Americans now spend nearly half their food dollars in restaurants). The American dream may cost less than it used to, but it still comes dear. And in a sated society, there is less and less new to look forward to.

 

One more article:

link

The truth about the 'jobless recovery'
By Steve Chapman
Originally published March 16, 2004

WASHINGTON -- I read a grim news story about the economy the other day, which noted the strange phenomenon of "a nearly jobless recovery." Reported the Chicago Tribune, "If this were a normal recovery, the economy would have added 3.5 million jobs since it hit bottom 22 months ago. ... Instead, it has missed that goal by 3 million." The job market has been particularly bleak for white-collar workers, it said. And the economic weakness, everyone agreed, presented a major challenge for President Bill Clinton.
Yes, President Clinton. The story ran in March 1993, two years into the last economic recovery.

One thing we learn from history is that we usually don't learn from history. Today, with the economy generating few new jobs, pessimism abounds, and a lot of Americans have blamed our troubles on international trade. But the problem today is the same as in 1993 -- recoveries sometimes take their time in boosting employment. That one eventually generated jobs, and this one will, too.

These days, if you say a nice word about free trade, someone will inform you that free is a four-letter word. But scapegoating global commerce for the poor job market is silly. Bill Clinton presided over one of the longest and strongest economic expansions in our history -- while doing more to remove trade barriers than any president since Franklin D. Roosevelt.

Mr. Clinton and FDR are revered by most Democrats. But many Democrats have disowned the cause their heroes championed. Even Sen. John Kerry, the least protectionist of the Democrats who ran for president this year, often panders to those who want to pull up the drawbridge.

The job market is not good, but it's not as bad as commonly depicted. The official unemployment rate is 5.6 percent, which a few years ago would have been considered low. It's still considered low in Western Europe. In January, according to the Organization for Economic Cooperation and Development, the average unemployment rate among the 12 countries in the euro currency zone was 8.8 percent -- far above the 7.4 percent the OECD calculates for the United States.

Mr. Kerry, however, laments the loss of manufacturing jobs and vows to stop it. But we can't blame underpaid foreigners for the decline. As Cato Institute economist Alan Reynolds notes, "Manufacturing jobs could not possibly have moved to another country, since every industrial country has lost manufacturing jobs since 1995 -- particularly China, Japan and South Korea."

So what accounts for the shrinkage? The chief explanation is rising productivity, which allows companies to increase output with fewer workers. This is not a sign of weakness but a sign of strength, since it means lower costs and ultimately higher wages. It's one reason the U.S. auto industry built 24 percent more cars and trucks in 2003 than in 1990.

A lot of the complaints about the job market come from people in computer-related fields, where the story is different. During the unsustainable dot-com boom of the 1990s, companies bid furiously for workers, but when the bubble burst, it took a lot of jobs with it.

The fear is that all those jobs are being shipped off to India. But a study by the Institute for International Economics says that while 70,000 computer programming jobs have vanished since 1999, some 115,000 more lucrative jobs have been added for computer software engineers. "Higher-paying IT occupations have generally expanded since 1999," says the report.

The problem with trade is not that it destroys jobs, but that the jobs it destroys or threatens are visible, while those it creates are hard to spot. When we see call-center jobs being out-sourced to Bangalore, we want to know where new jobs will arise to make up for these losses. That, however, can't be known in advance -- which puts defenders of free trade at a disadvantage.

"It's very hard to foresee where jobs will appear," said Jagdish N. Bhagwati, an economist at Columbia University and the Council on Foreign Relations and author of In Defense of Globalization. "You can't think of anything, so you get depressed and say nothing is possible. When I was in the Indian government and trying to think of what we could export, all we could think of was jute and textiles. But we weren't entrepreneurs."

Luckily, plenty of people are, especially in the United States. In a free and open economy, capitalists will find new consumer needs to fill and new jobs for American workers to do, serving markets abroad as well as at home. If we take steps to shut our economy off from the world, of course, that won't be so easy.


Steve Chapman is a columnist for the Chicago Tribune, a Tribune Publishing newspaper. His column appears Tuesdays and Fridays in The Sun.

 

This is interesting...

http://www.epinet.org/content.cfm/webfeatures_snapshots