SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Politics : Politics for Pros- moderated
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: LindyBill who wrote (41272)4/28/2004 1:24:14 PM
From: LindyBill   of 793845
 
Cafe Hayek - Jobs, Investment, & the Trade Deficit
By Don Boudreaux on Trade

Robert Samuelson discusses John Kerry’s proposal to encourage U.S. firms to invest more at home and less abroad. Kerry’s idea, of course, is to appear to address the alleged problem of job “outsourcing.”

Samuelson reports data from the Commerce Department showing that the extent of “outsourcing” is vastly exaggerated. For example, in 2002 73.1 percent of U.S. multinationals’ employees were in America compared to 77.9 percent in 1977. This difference hardly amounts to a sea-change in corporate hiring practices.

But a deeper point deserves mention. Many of the same people who fret that “outsourcing” is a major trend that will dramatically reduce American living standards simultaneously fret about the trade deficit. Paul Craig Roberts leads this pack of pessimists. These frets are inconsistent with each other.

The trade deficit (more precisely, the current-account deficit) rises when foreigners spend more of their dollars on American assets and, hence, spend fewer on American exports. That is, a high trade deficit in America means that foreigners are investing heavily here. Heavy foreign investment in the U.S. signals that foreigners are optimistic about the future of the U.S. economy. More importantly such investment creates capital in the U.S. – capital that raises the productivity and, hence, the wages of American workers.
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News