Saturday, December 27, 2003

Fisking Bob Herbert

Brad DeLong does an excellent job of pointing out the nonsensical nature of Bob Herbert's latest rant about offshoring.

First of all, it's job shift--not job loss. "[S]ome Americans who otherwise would have had high paying jobs either have no jobs, or else lower paying jobs," but other Americans who would have had no jobs or else lower paying jobs have higher paying jobs, and Americans who buy what they make pay less and so have higher real incomes. We pay for the stuff that Indians sell us by giving them dollars, and those dollars are useless to them unless they use them to buy U.S. exports (or trade them to people who will use them to buy U.S. exports) or invest them in America--thus providing financing for American businesses to expand their productive capacity.

Thus to Bob Herbert the group of non-persons--those who simply do not count--is quite large: it's not just Indians who are non-persons, it's not just American consumers, it's also Americans who work in export industries and Americans whose jobs in construction or capital-goods production are ultimately financed by capital inflows.

[............]

I wonder about Bob Herbert: is he smart enough to have, when he looked in the mirror this morning, thought, "I see a man who is trying to keep India a desperately poor country?"

If only more on the left were so sensible about the benefits of trade - not that the American right is currently doing any better in practice.

PS: I highly recommend reading the comments accompanying this post, if only for their amusement value. The economic illiteracy displayed by some of the contributors is really staggering! Doesn't it occur to them that there is a reason why Brad DeLong is a tenured Professor of Economics at Berkeley while they aren't? That as a macroeconomist he might actually know a thing or two more about international trade than they do? No, instead we see some directing the sorts of childish insults they usually fire at right-wingers in his direction. Says it all, really.