Dynamist Blog

OUTSOURCE THE HEADLINE WRITERS

Maybe the LAT copy editor who wrote this headline is afraid of Indian competition in the Internet era. Or maybe he or she is just a partisan: Bush Supports Shift of Jobs Overseas.

You can make a case that the headline is accurate, but it's a stretch. The story itself, which is reasonably good, is about the annual report of the Council of Economic Advisors, not some campaign speech by the president. While I'm sure the White House signed off on the report, Bush is not Greg Mankiw.

The movement of American factory jobs and white-collar work to other countries is part of a positive transformation that will enrich the U.S. economy over time, even if it causes short-term pain and dislocation, the Bush administration said Monday.

The embrace of foreign outsourcing, an accelerating trend that has contributed to U.S. job losses in recent years and has become an issue in the 2004 elections, is contained in the president's annual report to Congress on the health of the economy.

"Outsourcing is just a new way of doing international trade," said N. Gregory Mankiw, chairman of Bush's Council of Economic Advisors, which prepared the report. "More things are tradable than were tradable in the past. And that's a good thing."

More important than the election-year political bias is the subtle but extremely important difference between supporting "shift of jobs overseas" and supporting trade and specialization--the processes on which economic growth depends. Expanding the international division of labor doesn't shift "jobs" overseas. It shifts "some jobs" overseas, while creating new ones at home. The transition can be extremely painful for the workers affected, but the process itself is valuable. That's why government policies should address the specific problems of specific people, not attack the process as a whole.

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