Outsource, Outsource, and Outsource Some More

when President Bush’s chief economist, Gregory Mankiw, observed in February that foreign outsourcing “is probably a plus for the economy in the long run,” reaction was swift. In a press release the following day, John Kerry thundered: “Unlike the Bush Administration, I want to repeal every tax break and loophole that rewards any Benedict Arnold CEO or corporation for shipping American jobs overseas.” Hillary Rodham Clinton chimed in: “I don’t think losing American jobs is a good thing. The folks at the other end of Pennsylvania Avenue apparently do.” Even Republican House Speaker Dennis Hastert piled on, saying the ex-Harvard professor’s “theory fails a basic test of real economics. An economy suffers when jobs disappear.” In March, the Republican Senate overwhelmingly passed an amendment that would deny certain federal contracts to companies that outsource work abroad.

So is foreign outsourcing “just a new way of doing international trade,” as Mankiw and other free-traders argue, orisita threat to American jobs foisted on us by corporate traitors trolling the globe for cheap labor?

About the Author

Daniel Griswold

Daniel Griswold is a senior research fellow and the co-director of the Trade and Immigration Project at the Mercatus Center at George Mason University.

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when President Bush’s chief economist, Gregory Mankiw, observed in February that foreign outsourcing “is probably a plus for the economy in the long run,” reaction was swift. In a press release the following day, John Kerry thundered: “Unlike the Bush Administration, I want to repeal every tax break and loophole that rewards any Benedict Arnold CEO or corporation for shipping American jobs overseas.” Hillary Rodham Clinton chimed in: “I don’t think losing American jobs is a good thing. The folks at the other end of Pennsylvania Avenue apparently do.” Even Republican House Speaker Dennis Hastert piled on, saying the ex-Harvard professor’s “theory fails a basic test of real economics. An economy suffers when jobs disappear.” In March, the Republican Senate overwhelmingly passed an amendment that would deny certain federal contracts to companies that outsource work abroad.

So is foreign outsourcing “just a new way of doing international trade,” as Mankiw and other free-traders argue, orisita threat to American jobs foisted on us by corporate traitors trolling the globe for cheap labor?

About the Author

Daniel Griswold

Daniel Griswold is a senior research fellow and the co-director of the Trade and Immigration Project at the Mercatus Center at George Mason University.