Candidates’ Responses to Debate Question on Outsourcing

I’ve had little to say about the presidential campaign since it really doesn’t matter whether President Obama gets re-elected or George Romney replaces him.  We’ll get the same thing on the only two issues that really matter – trade and immigration.  Each made it clear that we’ll get more immigration because we’re a nation of immigrants, etc.  Neither  understands anything about the role of immigration in driving up unemployment and in making our energy and environmental challenges that much more impossible to address.  No surprise there.

No surprise on trade either, but their answers were so predictably sophomoric and so illustrative of exactly what’s wrong with this country, that I can’t let them pass without comment.

By this point in the debate, I was dismayed that not a single question had yet been asked on the subject of trade.  Finally, near the very end of the debate, audience member Carol Goldberg hit the nail on the head (in terms of what’s ailing our economy) with this question:

The outsourcing of American jobs overseas has taken a toll on our economy. What plans do you have to put back and keep jobs here in the United States?

Romney responded first:

…  people think it’s more attractive in some cases to go offshore than to stay here. We have made it less attractive for enterprises to stay here than to go offshore from time to time. What I will do as president is make sure it’s more attractive to come to America again.

Companies didn’t leave the U.S. for China because it was a more attractive place to do business.  Get serious.  When they began the exodus from the U.S. in favor of China, China was a primitive, communist, hell-hole of teeming humanity struggling to scoop enough rice from paddies to feed themselves.  They left the U.S. – the richest, most advanced nation on earth because China was a more attractive place to do business?  Don’t be ridiculous.  Even the prospect of cheap wages wasn’t enough to offset all of the logistics costs associated with moving operations over there, training illiterate workers and suffering the consequences of poor quality.  Companies went to China for one reason:  in pursuit of a virgin, untapped market of 1.2 billion consumers.

Now, we’re going to have to make sure that as we trade with other nations that they play by the rules. And China hasn’t. One of the reasons — or one of the ways they don’t play by the rules is artificially holding down the value of their currency. Because if they put their currency down low, that means their prices on their goods are low. And that makes them advantageous in the marketplace.

If you’ve been a follower of this blog, you already know that this claim about currency exchange rates is completely unfounded.  Although it may seem logical, the data shows that there is absolutely no relationship between exchange rates and trade imbalances.

Predictably, Romney went on to blame corporate tax rates and even “Obamacare.”  I won’t waste time on that part of his response.

Then Obama got his turn.  He emphasized his approach of doubling exports, and had the audacity to claim that we’re on track to meet that goal.

And we are on pace to double our exports, one of the commitments I made when I was president. That’s creating tens of thousands of jobs all across the country. That’s why we’ve kept on pushing trade deals, but trade deals that make sure that American workers and American businesses are getting a good deal.

We are not on pace to double our exports.  In the most recent month, we lagged that pace for the 11th consecutive month by the largest amount yet.  And while one can say that rising exports have added jobs, one must also then admit that the greater increase in imports has wiped out even more.  And the trade deals he’s pushed?  Since implementation of the deal with South Korea, our trade deficit with that nation has worsened by 31%.

Moderator Crowley (who I thought did an outstanding job) then posed her own question about trade:

iPad, the Macs, the iPhones, they are all manufactured in China. One of the major reasons is labor is so much cheaper here. How do you convince a great American company to bring that manufacturing back here?

Following Romney’s patent answer about leveling the playing field, making China play by the rules, and making America “more attractive,” Obama had this to say:

Candy, there are some jobs that are not going to come back. Because they are low wage, low skill jobs. I want high wage, high skill jobs. That’s why we have to emphasize manufacturing. That’s why we have to invest in advanced manufacturing. That’s why we’ve got to make sure that we’ve got the best science and research in the world.

Huh?!?!?  Manufacturing ipads, Macs and iphones represents “low wage, low skill jobs?”  Are you kidding me?  These are the very latest, most technologically advanced products on the market!  If these aren’t high wage, high skill jobs, then just what the hell is?  What exactly is he proposing that we would make here?  If making these things isn’t “advanced manufacturing,” what is?  And we already have the best science and research in the world.  Apple developed those products here, but then immediately sent the manufacturing to  China.  Why?  Because their potential (but unrealized) market is four times as large as ours and China insists upon them being manufactured there as a condition for access to their market.  I wish Crowley could have followed up with questions like these.

All we get are the same answers we’ve been listening to for decades:  “level the playing field.”  “Make them play fair.”  “Complain about currency manipulation.”  “Compete harder.”  “Cut corporate taxes.”  Has any of it made a bit of difference, except to allow our trade imbalance to grow steadily worse?

How I wish I could have been a 3rd candidate responding to that question.

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2 Responses to Candidates’ Responses to Debate Question on Outsourcing

  1. ClydeB says:

    Having just recently seen your chart of exports vs goal, I literally jumped our of my chair when Obama made his claim of being on target. Possibly the boldest prevarication of the many in the debate. It is unlikely, however, that many in the audience know what the facts are.
    It was significant, that he actually used the word tariffs in one of his answers.

    • Pete Murphy says:

      I think that was in his description of action that his administration took against Chinese tires. And he criticized Romney for calling the tariff “protectionist.” We need for our leaders to become more comfortable with the concept of tariffs and more dismissive of the “protectionist” label. The tire situation begs the question: if it worked, why not do the same thing for every product?

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