Dynamist Blog

Stifling Good News about Outsourcing

The California Assembly commissioned a study, from the respected Public Policy Institute of California, on the economic effects of outsourcing jobs overseas. The study found that outsourcing actually increases employment in California. Now the Assembly is sitting on the study. Dan Weintraub has the story:

A new analysis commissioned by the Legislature suggests that sending American jobs overseas, far from being a blow to employment, can actually help preserve existing jobs and create new ones.

The paper, prepared by the Public Policy Institute of California, warns lawmakers against trying to stem the practice by prohibiting offshoring in state contracts, noting that such a ban would drive up the cost of services and take money away from other programs in the budget.

I have seen a copy of the report, sent 10 days ago to the Assembly Office of Policy Planning and Research, which requested it in May. But that office has yet to release the document publicly, and a spokeswoman for the researchers who prepared it said the paper is still a draft that is being reviewed by the Assembly for possible revisions.

"It's a work that is very close to being completed," said Abby Cook, spokeswoman for the policy institute. "We're waiting for some final feedback."

That feedback is not likely to be warm from the Democrats who control the Legislature. Many of them have jumped on the outsourcing issue, hoping to demonstrate their affinity with working people.

The last thing they want is a study done in their name that claims shipping jobs overseas is not only good for the economy, but for workers as well.

But that, more or less, is the conclusion of the 47-page report, for which authors Jon Haveman and Howard Shatz culled all the recent research on the issue and examined trends in California employment. While conceding that data on the latest trends are still in short supply, Haveman and Shatz wrote that offshoring is probably overrated as an economic phenomenon for good or ill, but that, if anything, it is likely to be a net positive.

"Because of the dynamics of the U.S. economy and offshoring's expected effect on productivity, the overall, longer-run effect of offshoring may be to increase living standards at home," they wrote....

That's not just economic theory. The numbers in the real world support this view. Between 1991 and 2001, wrote Haveman and Shatz, U.S. firms that expanded their employment abroad also increased their domestic employment by 5.5 million workers. Their share of overall U.S. employment also increased during this period.

The LAT has more:

"What data are available suggest that the number of jobs being offshored is small relative both to the overall labor market and to the number of people working in the relevant at risk-occupations," the report says. "The bigger challenge for California is the ... movement of jobs from California to elsewhere in the United States."

The report warns that foreign countries might retaliate by limiting their purchases of California goods, and that the state may end up spending more taxpayer money if it hires only companies offering domestic workers, because the higher labor costs will make the contract prices larger.

"At a time when California is considering decreases in help to the poorest Californians and making other difficult spending choices, limits on offshoring will aid above-average wage earners," the report said.

The Assembly's Office of Policy Planning and Research, which commissioned the report for $25,000, has not released it, but a copy, dated Aug. 12, was obtained by The Times.

That passage appears in an article reporting that the legislature has passed the first of six anti-outsourcing bills. A bill to "prohibit the state from hiring outside service contractors, such as software companies and call centers, if they planned to use foreign workers for the jobs" is headed to the governor's desk. Only a girly-man would sign it.

Who Stole "The Scream"?

Maybe the thieves were terrorists, suggests a story in today's Dallas Morning News.

When art economist David Kusin read about The Scream being snatched, the first thought that came to his mind was terrorism.

Mr. Kusin speculated about the reasons behind the theft only because he was asked to by a reporter. But as president of Dallas-based Kusin & Co., which helps governments and banks value artwork used as collateral for loans, he's tapped in to the art world in a way few people are.

"Norway is not a member of OPEC, and its oil production is completely independent," he reasons about the world's third-largest oil exporter. "As a result, the country is resented in many fundamentalist Islamic circles because it goes its own way."

The heist could be an effort to get Norway to fall into step in return for the famous painting. Such a scenario takes the widely held belief that the artwork was stolen for ransom into a frightening realm.

Sounds a bit far-fetched to me--but then this is a strange crime. (A Google search turns up several articles in major publications quoting Kusin. He's a bona fide art expert.)

Hitting the High Notes

What's up with the version of "The Star Spangled Banner" they play at the Athens Olympics? When they get to the high notes at "the rockets' red glare," the music gets very thin, as though they're straining to avoid cracking. But these aren't singers. They're instruments. Weird.

UPDATE: For the answer, Tim Sandefur points to these posts at Musical Perceptions.

More Journalism with a Time Machine

On Reason's Hit and Run, Jacob Sullum catches Harper's editor Lewis Lapham engaging in time-machine journalism:

Perhaps the most revealing part of the article is the paragraph where Lapham pretends to have heard the speeches at the Republican National Convention that does not open until a week from today. Referring to "the platform on which [George W. Bush] was trundled into New York City this August with Arnold Schwarzenegger, the heavy law enforcement, and the paper elephants," Lapham writes:

The speeches in Madison Square Garden affirmed the great truths now routinely preached from the pulpits of Fox News and the Wall Street Journal--government the problem, not the solution; the social contract a dead letter; the free market the answer to every maiden's prayer--and while listening to the hollow rattle of the rhetorical brass and tin, I remembered the question that [Richard] Hofstadter didn't stay to answer. How did a set of ideas both archaic and bizarre make its way into the center ring of the American political circus?

True, the issue is dated September, but I got my copy in early August, and Lapham must have written those words in July. Didn't it occur to him that his readers might notice he was claiming to have witnessed an event that had not occurred when the magazine went to press? Evidently, Republicans are not the only ones Lapham thinks are stupid.

Hurricane Recovery

As Floridians struggle to recover from Charley, Glenn Garvin's great 1993 Reason feature on the aftermath of Hurricane Andrew bears re-reading.

More on the Aesthetic Imperative

One of the pleasures of correctly identifying a business trend is reading well-reported articles that develop new angles. (The publicity from getting quoted is nice too.) Since Dilbert has raised the issue, this seems like an opportune time to flag a couple of well-done pieces from the past few months:

Jason Tanz in Fortune looked at how well-established industrial companies are using aesthetics as a competitive tool:

Of course, it's no surprise that companies like Apple and Herman Miller are good at design. What is surprising is how many downright dowdy manufacturers are successfully reinventing themselves as design-driven shops. Master Lock, for instance, would be happy to sell you one of its sleek new Titanium Series padlocks, developed with the aid of Design Continuum in Boston. (If you're not crazy about this particular model, don't worry. "We change our designs every year, almost like the auto industry," says John Heppner, Master Lock's president and COO.) AC Delco now offers a car jack that mirrors the curves and colors of the wackiest concept car. And in the past few years the Stanley Works--a 160-year-old company--has released a raft of new offerings that range from a one-piece Antivibe hammer that cuts down on vibration to a laser-equipped stud finder. "You're seeing lots of companies that have very good technological histories saying, 'That's great, but it's not enough in this marketplace,' " says Virginia Postrel, a columnist for the New York Times and author of the new book The Substance of Style. "Now they're trying to find a way of using design to make their technologies resonate."

It's working. In 2001, Whirlpool introduced its Duet line of washers and dryers, which have soft curves and splashes of color; now the company has 19% of the front-loading washer market, up from zero two years ago. In 1999, Coleman revamped the design of its coolers to make them look more streamlined; by 2001 its cooler sales had increased 40%, and Coleman led the category for the first time in ten years. (It sells 100,000 of its hip solid-steel coolers — which retail for around $100 — annually.) And in the two years since it was released, Stanley's newest Antivibe has become one of America's top-selling hammers.

And Bobbie Gossage in Inc. examined small-business strategies. HarperCollins has posted an excerpt from the first chapter of The Substance of Style online here; in it, I discuss GE Plastics' use of aesthetics as a competitive tool. (Interestingly, the excerpt is from a slightly earlier draft of the chapter than the one that actually appears in the book.)

But I Bet the Lawyers Got Real Money

From John John Paczkowsk's "Good Morning Silicon Valley" in today's San Jose Mercury News:

Hey, those Martha Stewart sounds are even scarier this year... What do you call a stack of 48 copies of "Martha Stewart Living: Spooky Scary Sounds for Halloween," or another of375 copies of "Entertainment Weekly: The Greatest Hits 1971?" How about a CD price-fixing settlement award? As a result of a class-action lawsuit filed in 2000 by 43 states, the nation's five major record lables are adding thousands of CDs to the collections of state libraries, schools, government organizations and other non-profit groups. And according to most reports I've seen, the CDs the labels are shippping, are trash. Unless, you've got a better word for 1,400 copies of Whitney Houston's CD single "The Star-Spangled Banner" or 58 copies of Michael Bolton's "Timeless".

I've omitted dead or otherwise annoying links; the remaining one is worth checking out.

UPDATE: Danny Noonan of Electric Commentary blogged on this topic last month:

The Milwaukee Public Library got, in part: 188 copies of Michael Bolton's 'Timeless," 375 of "Entertainment Weekly: The Greatest Hits 1971," 104 copies of Will Smith's "Willennium," 11 of "Martha Stewart Living: Spooky Scary Sounds for Halloween," lots of Christmas music, and everything in between, from nearly all genres from rap to classical - and even 77 copies of a CD by chanting Spanish monks.

There was even mold growing on a few of the 520 CDs received in Mequon - a five-disc 1999 set titled "Respect: A Century of Women in Music."

PayPal Charges

Several readers have written that they've tried to make contributions to support this site via PayPal, only to be charged $5 for "shipping and handling." The shipping charge is left over from book sales, which actually involve shipping, and shouldn't apply to donations. I'm happy to say that I've now fixed the problem. Or at least I think I have. Thanks for all your support.

Strengthen the Good

The blog-based grassroots fundraising effort, Strengthen the Good (see below for more info) has identified its first charity: a relief fund to help victims of Hurricane Charley, which will be matched dollar-for-dollar (up to $100,000) by a local community foundation. Click through here for more info and to see how to give.

Spinning Egyptian Anti-Americanism

The incomparable Chuck Freund, who has seen more Arabic-language movies than most people have seen movies, is spitting mad at the b.s. his former employer is promulgating about Egyptian pop culture:

Today's Washington Post has a front-page story about anti-Americanism in Arab pop culture, leading with a description of the latest film from Egypt's best-known moviemaker, Youssef Chahine. The new film, entitled Alexandria . . . New York, is "a cinematic divorce paper," according to the Post. Writes reporter Daniel Williams, "Chahine said he had long admired the United States and its biggest city, but now he has made a film brimming with resentment."

Oh yeah? Spare me Chahine's supposedly lost admiration. The last time I saw Chahine take up the subject of the U.S. he once "admired" so much, he portrayed the country as an old whore pandering to Jews. That's the conclusion of his 1978 "masterpiece," Alexandria . . . Why? The film tells the story of an Egyptian film student in the 1940s who wants to come to the U.S. to study. At the movie's end, he's on a ship approaching New York. What we see is the Statue of Liberty itself in the guise of that fat, painted whore, welcoming not the Egyptian student, but instead a group of European Hasidic Jews complete with long sidecurls. The overpainted Ms. Liberty laughs lasciviously, exposing her mouthful of bad teeth, while a Jewish chant is playing on the soundtrack.

It gets more devastating from there. Read the whole thing, which includes recommendations for Egyptian artists worth covering. And if you haven't read it already, check out Chuck's feature-length look at how pop culture might liberate the Muslim world.

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