Mitt adviser: outsourcing good thing
Mitt Romney has signed up two top architects of the Bush tax cuts for his potential presidential run: Glenn Hubbard, dean of the Columbia Business School, and Greg Mankiw, an economics professor at Harvard.
Mankiw, however, is probably best known for a rather ill-fated moment of candor in 2004. As chairman of the president's Council of Economic Advisors, he was presenting the annual Economic Report of the President when he praised the benefits of free trade and said: "I think outsourcing is a growing phenomenon, but it's something that we should realize is probably a plus for the economy in the long run."
At that point, the you-know-what hit the inexpensive, Chinese-made fan.
Coming in the midst of a contentious presidential election, Mankiw's comment was seized on by Democrats who said it showed the Bush administration's insensitivity to the plight of the displaced American manufacturing worker. Even House Speaker Dennis Hastert jumped on the bandwagon, saying Mankiw's outsourcing assertion "failed a basic test of real economics."
Now, if you read Thomas Friedman's book, The World Is Flat, you might be convinced that Mankiw was right. If your job has been shipped to India, it might be a tougher sale.
At any rate, Mankiw has a new side gig consulting Romney -- a job unlikely to be headed overseas anytime soon.
Also, he's got a fairly interesting, but very wonky, blog: http://gregmankiw.blogspot.com.
--Robert Gehrke
Mankiw, however, is probably best known for a rather ill-fated moment of candor in 2004. As chairman of the president's Council of Economic Advisors, he was presenting the annual Economic Report of the President when he praised the benefits of free trade and said: "I think outsourcing is a growing phenomenon, but it's something that we should realize is probably a plus for the economy in the long run."
At that point, the you-know-what hit the inexpensive, Chinese-made fan.
Coming in the midst of a contentious presidential election, Mankiw's comment was seized on by Democrats who said it showed the Bush administration's insensitivity to the plight of the displaced American manufacturing worker. Even House Speaker Dennis Hastert jumped on the bandwagon, saying Mankiw's outsourcing assertion "failed a basic test of real economics."
Now, if you read Thomas Friedman's book, The World Is Flat, you might be convinced that Mankiw was right. If your job has been shipped to India, it might be a tougher sale.
At any rate, Mankiw has a new side gig consulting Romney -- a job unlikely to be headed overseas anytime soon.
Also, he's got a fairly interesting, but very wonky, blog: http://gregmankiw.blogspot.com.
--Robert Gehrke
11:48 AM
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1 Comments:
As much as protectionists love to cry about offshoring, we've pretty much hit the end of most of it. Most of the countries with an infrastructure to support offshored operations have experiences tremendous wage growth from the jobs pouring in. This makes operations relocated there take longer to reach the "break even" point where the costs of moving have been recouped and the savings start. Because of this, offshoring is going to be minimized for the foreseeable future.
The real trend to watch is homeshoring, where a company relocates to another area within the US with lower land, labor, and utility costs, particularly rural areas. It's a lot cheaper to build in the US, you know the infrastruture is there, there's no language barrier, and you don't have to worry about 12-hour time differences between Houston and Calcutta.
Offshoring is dead, long live offshoring.
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