Arguments for protectionism

Protectionists believe that there is a legitimate need for government restrictions on free trade in order to protect their country’s economy and its people’s standard of living.

The "Comparative Advantage" argument has lost its legitimacy

The Comparative Advantage argument is used by most economists as a basis for their support of free trade policies. Opponents of these policies argue that the Comparative Advantage argument has lost its legitimacy in a globally integrated world—in which capital is free to move internationally. Herman Daly, a leading voice in the discipline of ecological economics, emphasizes that although Ricardo's theory of comparative advantage is one of the most elegant theories in economics, its application to the present day is illogical: "Free capital mobility totally undercuts Ricardo's comparative advantage argument for free trade in goods, because that argument is explicitly and essentially premised on capital (and other factors) being immobile between nations. Under the new global economy, capital tends simply to flow to wherever costs are lowest—that is, to pursue absolute advantage." ^[10]
Protectionists would point to the building of plants and shifting of production to Mexico by American companies such as GE, GM, and even Hershey Chocolate as proof of this argument.
The Comparative Advantage argument is also premised on full employment. According to the Wikipedia entry on Comparative Advantage, “if one or other of the economies has less than full employment of factors of production, then this excess capacity must usually be used up before the comparative advantage reasoning can be applied”. Protectionists believe that it is therefore erroneous to base trade policy on the principle of Comparative Advantage in those countries that suffer from significant unemployment or underemployment.

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What's My Motivation? The Arguments for Immigration Reform

from American Thinker

December 24, 2010

by Mark Browning

A hailstorm brought the useful life of my mother's roof to an end this summer.  An acquaintance of mine came to the house, gave Mom a bid, and left with a deposit check.  When his crew arrived a few days later, their appearance shocked my mother.  Apparently, she had expected the 2010 counterparts of Archie Bunker and Ralph Kramden.  Instead, she had six workers, one of whom could speak English -- sort of.

In a recent American Thinker essay, Christopher Chantrill explored the motivations that might lead a new contractor to hire "undocumented" workers rather than tax-paying, on-the-books, legal workers.  By tacking on a 32% surcharge in the form of payroll taxes, our government provides a profound disincentive for small-scale employers to play by the rules.

I understand how money matters can lead a roofing contractor to hire the most recent arrivals from Chiapas rather than the most recent graduates of Rydell High School.  That 32% could allow our contractor to underbid the rule-followers by 10% and still pocket a lot more in the way of profits.  It's not right, but it is understandable.

Similarly, I can understand the forces that would drive a young man from the rural reaches of Mexico over the Rio Grande and onto that roofing crew.  If I had the choice between staying home and earning perhaps $500 a month or heading north and earning double that at minimum wage, I'm pretty sure I'd have my bag packed.  That's an understandable motivation as well.

Just as easily, I understand the motivation of people like my mother who take advantage of that lower-paid, off-the-books labor.  Mom could have insisted on a strictly legal crew. Had she been able to find such a group, she'd have probably paid at least a 20% premium for the privilege of being proper.

While I understand all of these motivations, I cannot wrap my mind around the motivation of those who want to wave a legislative wand and grant amnesty, citizenship, or some other fast-track benefit to vast numbers of illegals.

One of the most common arguments regarding illegals is that they "work jobs that Americans won't do."  With 9% unemployment, we have Americans too good to perform certain honorable trades like roofing?  Of course, the people who believe this rubbish have good reason.  After all, none of the people with whom they hung out with at Berkeley were interested in roofing.  The people who staff the NPR fund drive are not looking for jobs as meat cutters.  Nobody at Whole Foods seems to want to be a garment worker.  Isn't it obvious that Americans don't want the jobs that these kindly pilgrims have come here to work?

If these people lived near me, they'd know the sheetrock finishers, the carpenters, and other manual laborers who have found their livelihood challenged by immigrants.

Of course, that argument is not a motivation for condoning illegal immigration; it's just a rationale, an excuse.  Even if no legal worker wanted to put roofs on houses, does that mean we ought to throw open the borders?  There are many things that I do not want to do in my life, but necessity forces me to do them.  Perhaps we could find some nice Sudanese people to stand in line at the DMV for us.

Many of the illegal immigrant apologists simultaneously argue for the extension of unemployment benefits.  Do these people not realize that the illegal immigrants, most of whom are not generating any money for the unemployment benefit fund, are at the same time generating the need for benefits?  Let's say we could magically oust a million illegals, replacing them with a million unemployed legal workers.  Even at minimum wage, those million legals would generate nearly a billion dollars in unemployment taxes, while saving perhaps $15 billion in benefits.  Plus, these people would be paying FICA taxes and would presumably not be sending big chunks of money out of the country to be spent there.  Something tells me that this would be more stimulative than most of what Washington has tried in the past two years.

Another apparent motivation of the amnesty crowd is fairness.  In their minds, American citizens have no right to say who can and cannot live, work, and die in this country.  I notice that these same people have no problem determining who can and cannot live in whatever home they own or rent.  Many of this crowd live in exclusive areas where the impact of illegal immigration is very slight.  Their fairness argument, then, seems to only extend so far.

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Big Lies, Little Lies

November 07, 2010

from vdare.com

By Paul Craig Roberts 

If we cannot trust what the government tells us about weapons of mass destruction, terrorist events, and the reasons for its wars and bailouts, can we trust the government’s statement last Friday that the US economy gained 151,000 payroll jobs during October?

Apparently not.  After examining the government’s report, statistician John Williams (shadowstats.com) reported that the jobs were "phantom jobs"created by "concurrent seasonal factor adjustments."  In other words, the 151,000 jobs cannot be found in the unadjusted underlying data. The jobs were the product of seasonal adjustments concocted by the BLS.

As usual, the financial press did no investigation and simply reported the number handed to the media by the government. 

The relevant information, the information that you need to know, is that the level of payroll employment today is below the level of 10 years ago.  A smaller number of Americans are employed right now than were employed a decade ago.  

Think about what that means. We have had a decade of work force growth from youngsters reaching working age and from immigration, legal and illegal, but there are fewer jobs available to accommodate a decade of work force entrants than before the decade began.  

During two years from December 2007 - December 2009, the US economy lost 8,363,000 jobs, according to the payroll jobs data. As of October  2010, payroll jobs  purportedly have increased by 874,000, an insufficient amount to keep up with labor force growth. However, John Williams reports that 874,000 is an overestimate of jobs as a result of the faulty "birth-death model," which overestimates new business start-ups during recessions and underestimates business failures.  Williams says that the next benchmark revision due out next February will show a reduction in current employment by almost 600,000 jobs. This assumes, of course, that the BLS does not gimmick the benchmark revision. If Williams is correct, it is more evidence that the hyped recovery is non-existent. 

Discounting the war production shutdown at the end of World War II, which was not a recession in the usual sense, Williams reports that "the current annual decline [in employment] remains the worst since the Great Depression, and should deepen further." 

In short, there is no employment data, and none in the works, unless gimmicked, that supports the recovery myth. The US rate of unemployment, if measured according to the methodology used in 1980, is 22.5%.  Even the government’s broader measure of unemployment stands at 17%. The 9.6% reported rate is a concocted measure that does not include discouraged workers who have been unable to find a job after 6 months and workers who want full time jobs but can only find part-time work.

Another fact that is seldom, if ever, reported, is that the payroll jobs data reports the number of jobs, not the number of people with jobs. Some people hold two jobs; thus, the payroll report does not give the number of employed people.

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Mercantilism

     This is just note to remind you of the term mercantilism. It's strange, but when reading this passage, China immediately came to mind. Read further and maybe you will agree with me. Merry Christmas and Happy New Year. ------lee 

From Wikipedia, the free encyclopedia

     Mercantilism is an economic theory, thought to be a form of economic nationalism,^[1] that holds that the prosperity of a nation is dependent upon its supply of capital, and that the global volume of international trade is "unchangeable". Economic assets (or capital) are represented by bullion (gold, silver, and trade value) held by the state, which is best increased through a positive and healthy balance of trade with other nations (exports minus imports).
     The theory assumes that wealth and monetary assets are identical. Mercantilism suggests that the ruling government should advance these goals by playing a protectionist role in the economy by encouraging exports and discouraging imports, notably through the use of subsidies and tariffs respectively. The theory dominated Western European economic policies from the 16th to the late-18th century.^[1] 

For more...

US Falling Behind Across the Board

After reading this article, it's hard to not to think that we are doomed to be serfs. We may be too stupid to exist as a viable nation let alone a major power or a superpower. Although published in 2005, it is even more relevant in 2010.  ------lee

July 26, 2005

By Paul Craig Roberts 

     Yesterday I reported that the US, formerly a superpower until afflicted with "new economy" syndrome, has lost so much manufacturing capability that it can scarcely produce one submarine every two years and one aircraft carrier every five years. US manufacturing capability is so reduced and shrinking so fast that the president of the American Shipbuilding Association recently said that in the next several years "more and more manufacturing of ship components and systems will migrate to China."
     Not to worry say free trade economists. Shipbuilding is just one of those old manufacturing things that the nanotech US economy is better off without. Alas, according to Manufacturing & Technology News (July 8), so much manufacturing capability has already left the US that American nanotechnology capability is largely limited to pilot-scale, low-volume manufacturing.
In testimony before the House Science Subcommittee on Research, Matthew Nordan of Lux Research, Inc., said that any American nanotech ideas are likely to "be implemented in manufacturing plants on other shores."
     Nordan says that in some fields of nanomaterials "the manufacturing train has already left the station." The US may even be falling behind in generating nanotech ideas. Last year China led the world in nanotech research, producing 14% more research papers than the US. Even South Korea and Taiwan spend more per capita on nanotech R&D than the US.
Sean Murdock, executive director of the NanoBusiness Alliance, told the subcommittee that the US could not live on ideas alone. Intellectual property is fine, Murdock said, but "if you look at the total value associated with any product, most of the value tends to accrue to those that are closest to the customer—that, in fact, make it."
     Murdock also pointed out that an equally important part of intellectual property is manufacturing process knowledge—the manufacturing ability to turn a new principle into salable things. Without the ability to commercialize and manufacture products based on the new ideas, we not only lose the ability to capture most of the economic rewards but also eventually lose the ability to think up the ideas. Without process knowledge from manufacturing, it is difficult to recognize promising nanotech innovations.
     In recent years I have stressed the erosion of the conditions on which the case for free trade rests. Production functions based on acquired knowledge lack the uniqueness required for the operation of comparative advantage, and the international mobility of capital and technology allows those factors of production to seek absolute advantage abroad in skilled, disciplined, low-cost labor. The real conditions in the world today no longer conform to the assumptions of free trade theory.
     Thus, once world socialism collapsed and the highspeed Internet was up and running, first world living standards were no longer protected by unique accumulations of capital and technology. The changed conditions made it possible for American companies to use employees drawn from large excess supplies of foreign labor as cheaper substitutes for American employees.
     The difference in labor cost is massive. Anyone who says the difference is irrelevant has no idea what he is talking about.
     Nevertheless, as I emphasized three decades ago prior to Asia becoming an alternative manufacturing location for US companies, the US is severely disadvantaged for tax reasons as well. Because of tax reasons the US has a high cost of capital.
     The American Producers Council Coalition recently stated the problem to the President’s Advisory Panel on Federal Tax Reform. Every major trading partner of the US, including every other OECD country and China, relies on border-adjusted taxes that abate taxes on their exports to the US, while taxing US goods imported from the US.
     This discrimination is reinforced by the US tax system, which imposes no appreciable tax burden on foreign goods and services sold in the US but imposes a heavy tax burden on US producers of goods and services regardless of whether they are sold within the US or exported to other countries.
     The solution is to abandon the income tax and replace it with a value-added or sales tax or even tariffs.
     The Founding Fathers based US finances on the tariff. They did this because they understood that an income tax was a form of enserfment or slavery. A free person is a person who owns his own labor. Income taxes mean that the government owns a share of each person’s labor, just as feudal lords owned a share of the peasants’ labor.
     Tariffs also help a country develop its industry by protecting its products from competition from lower cost producers abroad.
    
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New Deal For U.S. Manufacturers

     Another blast from the past from Pat.
    ------lee
   
By Patrick J. Buchanan 
September 29, 2006
     In July, our trade deficit hit yet another all-time record, $68 billion, an annual rate of $816 billion. Imports surged to $188 billion for the month, as our dependency on foreigners for the vital necessities of our national life ever deepens.
     China's trade surplus with us was $19.6 billion for July alone, moving toward an all-time record of $235 billion for 2006—the largest trade deficit one country has ever run with another. Our deficit with Mexico is running at an annual rate of $60 billion. With Canada, it is $70 billion. So much for NAFTA. With the European Union, it is running at $160 billion.
     America as the most self-sufficient republic in history is history. For decades, U.S. factories have been closing. Three million manufacturing jobs have disappeared since Bush arrived. Ford and GM are fighting for their lives.
     Bushites boast of all the new jobs created, but Business Week tells the inconvenient truth: "Since 2001, 1.7 million new jobs have been created in the health care sector. ... Meanwhile, the number of private sector jobs outside of health care is no higher than it was five years ago."
     "Perhaps most surprising," writes BW, "information technology, the great electronic promise of the 1990s, has turned into one of the biggest job-growth disappointments of all time. ... (B)usinesses at the core of the information economy—software, semiconductors, telecom and the whole gamut of Web companies—have lost more than 1.1 million jobs in the past five years. Those businesses employ fewer Americans than they did in 1998, when the Internet economy kicked into high gear." [What's Really Propping Up The Economy, September 25, 2006]
     Where did the high-tech go? China. Beijing's No. 1 export to the United States in 2005, $50 billion worth, was computers and electronics.
     If Americans are the most efficient workers on earth and work longer hours than almost any other advanced nation, why are we getting our clocks cleaned? Answer: While American workers are world-class, our elites are mentally challenged. So rhapsodic are they about the Global Economy they have forgotten their own country. Europeans, Japanese, Canadians and Chinese sell us so much more than they buy from us, because they have rigged the rules of world trade.
     While the United States has a corporate income tax, our trade rivals use a value-added tax. At each level of production, a tax is imposed on the value added to the product. Under the rules of global trade, nations may rebate VAT levies on exports, and impose the equivalent of a VAT on imports.
     Assume a VAT that adds up to 15 percent of the cost of a new car in Japan. If Toyota ships 1 million cars to the United States valued at $20,000 each, $20 billion worth of Toyotas, they can claim a rebate of the VAT of $3,000 on each car, or $3 billion—a powerful incentive to export. But each U.S. car arriving at the Yokohama docks will have 15 percent added to its sticker price to make up for Japan's VAT.
    This amounts to a foreign subsidy on exports to the United States and a foreign tax on imports from America. Uncle Sam gets hit coming and going. It is as though, after firing a round of 66 in the Masters, Tiger Woods has five strokes added to his score for a 71, and five strokes are subtracted from the scores of his rivals. Even Tiger would bring home few trophies with those kind of ground rules.
     The total tax disadvantage to U.S. producers—of VAT rebates and VAT equivalents imposed on U.S. products—is estimated at $294 billion.
     Exported U.S services face the same double whammy. A VAT equivalent is imposed on them, while the exported services of foreign providers get the VAT rebate. Disadvantage to U.S. services: $85 billion annually.

Why do our politicians not level the playing field for U.S. companies?

     First, ignorance of how world trade works. Second, ideology. These robotic free-traders recoil from any suggestion that they aid U.S. producers against unfair foreign tactics as interfering with Adam Smith's "invisible hand," which they equate with the hand of the Almighty.
Third, they are hauling water for transnational companies that want to move production overseas and shed their U.S. workers.
     How could we level the playing field? Simple. Impose an "equalizing fee" on imports equal to the rebates. Take the billions raised, and cut taxes on U.S. companies, especially in production. Create a level playing field for U.S. goods and services in foreign markets, and increase the competitiveness of U.S. companies in our own home market by reducing their tax load.
     U.S. trade deficits would shrivel overnight. And jobs and factories lately sent abroad would start coming home.

Isn't it time we put America first—even ahead of China?  

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Is this our America anymore?

Once again, Mr. Buchanan has the nail on the head. Just whose country is this? It's hard to believe this is going on. It is almost surreal. We have massive unemployment, the leader of our country is out to lunch or golfing, and our legislative leaders are determined to bankrupt us.  Unbelievable.  ------lee

from World Net Daily
by Pat Buchanan
Posted: December 16, 2010
6:19 pm Eastern
© 2010 

Buried in the Oct. 30 Washington Post was a bland headline: "Report Points to Faster Recovery in Jobs for Immigrants."

The story, however, contained social dynamite that explains the rage of Americans who are smeared as nativists and xenophobes for demanding a timeout on immigration.

In the April-May-June quarter, foreign-born workers in the U.S. gained 656,000 jobs. And native-born Americans lost 1.2 million.

From July 1, 2009, to June 30, 2010, foreign-born Hispanics gained 98,000 construction jobs. Native-born Hispanics lost 133,000. Black and white U.S. construction workers lost 511,000 jobs.

According to the Center for Immigration Studies, from Jan. 1, 2000, to Jan. 1, 2010, 13.1 million immigrants, legal and illegal, entered the United States, a decade in which America lost 1 million jobs.

From 2008 and 2009, the figures are startling. In 24 months, 2.4 million immigrants, legal and illegal, arrived, as U.S. citizens were losing 8.6 million jobs.

Query: Why are we importing a million-plus workers a year when 17 million Americans can't find work? Whose country is this?

Why do we not declare a moratorium on all immigration, until our unemployment rate falls to 6 or 5 percent? Charity begins at home. Ought we not take care of our own jobless first before we invite in strangers to take their jobs?

According to the Pew Hispanic Center, each year between 300,000 and 400,000 "anchor babies" are born to illegal aliens. These newborns are entitled to citizenship, free health care and education, welfare and food stamps.

Concerned about the impact of illegal aliens on the United States? Don't miss Tom Tancredo's book, "In Mortal Danger: The Battle for America's Border and Security"

Their parents – almost all are poor or working-class – rarely pay any state or federal income tax.

How long can we keep granting citizenship and full social welfare benefits to the children of people who break our laws and break into our country or overstay their visas? How long can we keep bringing in workers to take jobs when our unemployment rate hovers around 10 percent?

Again, according to the Pew Center, the number of anchor babies here now is about 4 million. Add to that 3 million to 4 million born each decade, and it will not be long before Colorado, Nevada, Arizona and Texas resemble California, which is on the brink of default.

If no action is taken, the Republican Party will soon be unable, even in wave elections, to win the presidency, as it won nothing and indeed lost state legislative seats in California in 2010.

The border will disappear, and America will be a geographical expression, not a country anymore.

Legal scholar William Quirk describes a new phenomenon in the invasion of America: "maternity tourism." Pregnant Asian women pay $15,000 to agents to ensure they are in the United States when their child is born so that they can return home secure in the knowledge he or she will be a U.S. citizen with the right to a U.S.-taxpayer subsidized education in college.

Though the nation has awakened to the threat to social cohesion and national solvency, Harry Reid is still attempting to ram through a lame-duck Senate an amnesty for illegal aliens up to age 30 who claim they were brought here before they were 16, have a high school diploma or GED and state that they intend to go to college within six years.

An estimated 2.1 million illegal aliens would be amnestied, put on a path to citizenship, and be eligible for student loans and more.

According to Alabama's Jeff Sessions, ranking Republican on the Senate Judiciary Committee:

"Aliens granted amnesty by the Dream Act will have the legal right to petition for entry of their family members, including their adult brothers and sisters and the parents who illegally brought or sent them to the United States, once they become naturalized U.S. citizens. In less than a decade, this reality could easily double or triple the 2.1 million green cards that will be immediately distributed as a result of the Dream Act."

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Riding the Free Trade Raft Over the Falls

I thought I'd add a little more historical perspective to the issue of protectionism.  An old commentary by Pat, but a very good one. -----lee

by Patrick J. Buchanan
April 18, 2005

     These are not the halcyon days of the Republicans' champion of open borders and free trade, Jack Kemp.
     The "Minutemen," who appeared in Cochise County, Ariz., April 1 to highlight the invasion President Bush will not halt, are being hailed by conservative media and congressmen as patriots, as they are dismissed by the president as "irrational vigilantes."
     Comes now the trade shocker for February. The deficit hit an all-time monthly record: $61 billion. The annual U.S. trade deficit is now running at $717 billion, $100 billion above the 2004 record.
     Smelling political capital, Hillary Clinton and Chuck Schumer are co-sponsoring a 27 percent tariff on goods from China. Beijing ran a $162 billion trade surplus with us in 2004 in what trade expert Charles McMillion calls "The World's Most Unequal Trading Relationship."
     The waters are rising around the Kemp Republicans. For these gargantuan deficits are sinking the dollar, denuding us of industry and increasing our dependence on imports for the components of our weapons, the necessities of our national life and the $2 billion in borrowed money we need daily now – to continue consuming beyond our capacity to pay.
     Brother Kemp is correct in his Washington Times column in saying Beijing has not been manipulating its currency. China fixed the value of the renminbi at eight to the dollar in 1994, just as we once tied the dollar to gold. Beijing rightly objects, "It is not our fault your dollar is sinking."
     But here, the free-traders enter a cul de sac. They recoil at tariffs like Lucifer from holy water, but have no idea how to stop the hemorrhaging of jobs, technology, factories and dollars, except exhortation and prayer. For as 19th-century liberals, they believe free trade is "God's Diplomacy." Whoever rejects it sins in the heart. True believers all, they will ride this raft right over the falls and take us with them. This unyielding belief in the salvific power of free trade is, like socialism, one of modernity's secular religions.
     As Kemp's column testifies, these folks are as light on history as they are long on ideology. Kemp claims "there is no demonstrable instance in economic history where nations were made worse off by free and open trade. There are only the doomsday scenarios spun out of the imagination of half-baked economists ..."
     But between 1860 and 1914, Great Britain, which began the era with an economy twice the size of ours, ended it with an economy not half the size of ours. Britain worshipped at the altar of free trade, while America practiced protectionism from Lincoln to McKinley to Teddy Roosevelt to Taft. Tariffs averaged 40 percent and U.S. growth 4 percent a year for 50 years.
     Bismarckian Germany did not exist in 1860. But by 1914, by imitating protectionist America, she had an economy larger than Great Britain's. Were it not for protectionist America shipping free-trade Britain the necessities of national survival from 1914 to 1917, Britain would have lost the war to Germany, so great was her dependence on imports. A real-life "doomsday scenario," thanks to a few dozen German U-boats.
     Jack Kemp notwithstanding, protectionism has been behind the rise of every great power in modern history: Great Britain under the Acts of Navigation up to 1850, the America of 1860 to 1914, Germany from 1870 to 1914, Japan from 1950 to 1990 and China, which has grown at 9 percent a year for a decade. As China demonstrates, it is a mistake to assume free trade, or even democracy, is indispensable to growth.
     Kemp trots out Smoot-Hawley, the 1930 tariff law, for a ritual scourging, suggesting it caused the Depression. But this, too, is hoary myth. In the 1940s and 1950s, schoolchildren and college students were indoctrinated in such nonsense by FDR-worshipping teachers whose life's vocation was to discredit the tariff hikes and tax cuts of Harding and Coolidge that led to the most spectacular growth in U.S. history – 7 percent a year in the Roaring Twenties. Under high-tariff Harding-Coolidge, the feds' tax take shrank to 3 percent of GNP.
     As high tariffs and low or no income taxes made the GOP America's Party from 1860 to 1932, the Wilsonianism of Bush I and Bush II – open borders, free trade, wars for global democracy – has destroyed the Nixon-Reagan New Majority that used to give the GOP 49-state landslides. Bush carried 31 states in his re-election bid. He would have lost had Democrats capitalized on the free-trade folly that put in play, until the final hours, the indispensable Republican state of Ohio.
     Kemp calls China our trade partner – surely a polite way to describe a regime that persecutes Catholics, brutalizes dissidents, targets 600 rockets on Taiwan, lets North Korea use its bases to ship missile and nuclear technology to anti-American regimes, and refuses to denounce racist riots designed to intimidate our Japanese allies.
     As some on the Old Right have said since Bush I succeeded Reagan, open borders, free-trade globalism and wars for democracy are not conservatism, but its antithesis. And they will drown the GOP.
     The Republicans jumping off the raft into the river and swimming desperately for shore testify to it more eloquently than words.  


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Obama Solution to Stop Outsourcing - Stop Counting Jobs Outsourced (No, Seriously!)

Will the tea party congress make sure that this bureau is fully funded?--rng
By Mike Elk

March 3, 2010 - 2:17pm ET

The numbers are outrageous, sickening even. How can anyone stand to look at them?

     Since 2000, the U.S. has lost 5.5 million manufacturing jobs, with 2.1 million of those jobs being lost in the last two years alone. Since 2001, over 42,400 factories have closed in the U.S., and another 90,000 are considered at severe risk of closing. The last time so few were employed in manufacturing was in 1941, before World War II spending pulled that sector out of its Great Depression slump.

Numbers like these make me want to cry.

     So President Obama has come up with a big and bold solution to deal with the problem. He's going to shut down the federal office that counts how many jobs are being shipped overseas.

It’s like ignoring a bully that picks on you in grade school. If we just ignore companies like Whirlpool that take stimulus money and ship jobs overseas—maybe they will stop doing it.

     That will show those big multinational companies. Hit them where it really hurts—in their egos.

     Seriously, folks, this is what President Obama is really proposing. From The Washington Post:

Like a scorekeeper for the world, a tiny unit within the Bureau of Labor Statistics tracks globalization's winners and losers, and the results are not always pretty for the United States. Manufacturing jobs here, for example, have fallen faster since 1979 than in Canada, Germany or Japan. Compensation for those jobs dropped here in 2008 but jumped in South Korea and Australia.

Soon, however, Americans may be spared the demoralization in these numbers: The White House wants to shutter the unit that produces them.

President Obama's budget would eliminate the International Labor Comparisons office and transfer its 16 economists to expand the bureau's work tracking inflation and occupational trends.

     Remember how as Iraq became a quagmire, President George W. Bush said he wasn't fazed by the news because he didn't read the newspaper? President Obama looks as if he is taking a similar approach to job outsourcing. Just ignore the problem and it will go away. You don't miss what you don't measure.

It didn't work in our misadventures in Iraq and it certainly won't work in dealing with how to compete in the global economy.

     High-wage countries like Germany have figured out a way to compete with China and Mexico. In 2008, Germany ran a $267-billion trade surplus, while the United States ran a $568-billion deficit.

How did that happen?

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Obama won't 'walk the talk' on outsourcing jobs to India: Presidential biographer

The fix was in.Take note of the final sentence--this is China's and India's century.  The way we are going it will be. -----lee


1 Nov, 2010, 11.47AM IST,AGENCIES

WASHINGTON: Presidential biographer William Chafe has said that the US President Barack Obama may talk tough about clamping down on outsourcing jobs to India, but his international upbringing and perspective would make it difficult for him to take literal steps in this regard.

According to the Wall Streets Journal, Chafe has said that Obama's background makes him unique in the history of American presidents as not only he is the only president who spent his childhood years in an Asian country, Indonesia, but also is the only one known to be of a mixed racial background and whose seminal political experience involved working as a community organizer in a slum.

"So unlike Ronald Regan who saw Russia as the 'evil empire,' or George Bush, who spoke of the 'axis of evil,' Obama doesn't deal in binary terms. Obama wants to engage the rest of the world on its own terms, in a dialogue of respect," Chafe, a longtime American history professor at Duke University who is now vice provost for undergraduates at the school, added.

It is speculated that during his visit to India later this week, talks between him and Indian Prime Minister Manmohan Singh would include sensitive topics like U.S. companies' outsourcing jobs to India.

With the American economy still struggling with high unemployment, the exporting of jobs to India, a hot topic during Obama's election campaign, remains a sensitive subject, the paper said.

Chafe, who is finishing a biography of Bill and Hillary Clinton has said that where President Clinton "grew into an international role" in his second term, becoming obsessive about trying to win peace in the Middle East, Obama started his presidency with a strong international understanding, and added that because of his background, Obama will likely be even more pro-India than Clinton.

"Obama recognizes the 21st century is in India and China--not in Europe, he is going to be more open in recognizing the power of India and the power of the Indian economy," he added. 

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