Greenspan jawboning again re "protectionism" and "under-educated" US workforce. Here's one of several "updates" on his remarks today:
forbes.com
UPDATE 1-Greenspan-Limiting trade not answer to US job loss
Reuters, 03.11.04, 10:16 AM ET
(Adds details from Greenspan speech, background)
WASHINGTON (Reuters) - Federal Reserve Chairman Alan Greenspan Thursday urged Americans not to turn high anxiety about U.S. job losses into support for protectionist trade measures, which could hurt rather than help the situation.
In prepared remarks to the House Education Committee, the Fed chief waded into a burgeoning political argument with a strong call for an open trade environment that appeared to echo President Bush's sentiments.
"As history clearly shows, our economy is best served by full and vigorous engagement in the global economy," Greenspan said a day after Bush inveighed against any effort to restrict access to U.S. markets by saying it might hurt U.S. exporters.
Greenspan noted "new protectionist measures" were being proposed, without specifying what he was referring to, and said they could be self-defeating.
"These alleged cures could make make matters worse rather than better," he said. "They would do little to create jobs and if foreigners were to retaliate, we would surely lose jobs."
In the runup to November's presidential elections, Democrats have sought to tag the Bush administration with the blame for a jobless recovery, saying that "outsourcing" of U.S. jobs to cheap-labor countries like India and China could and should be slowed.
Sen. John Kerry, who has the Democratic presidential nomination virtually locked up, sought union workers' support on Wednesday by saying Bush tax cuts helped the rich while doing nothing to protect middle-class jobs.
"Everywhere I've been in this campaign, I've met working Americans who are getting the short end of the stick," Kerry said before the AFL-CIO labor federation in Chicago. "Jobs on the run. Wages and salaries dead in the water."
Kerry has also blistered corporate chieftains who shift jobs out of America, referring to "Benedict Arnold CEOs" who lack loyalty to their employees.
In his remarks, Greenspan said job insecurity was "understandably significant" when nearly 2 million Americans have been on the unemployment lines for more than six months.
"New job creation is lagging badly -- the ironic consequence of accelerated gains in productivity," Greenspan said. "In all likelihood, employment will begin to increase more quickly before long as output continues to expand."
He said putting up barriers to foreign trade and guarding jobs might work in the short run but not indefinitely.
"Our standard of living would soon begin to stagnate and perhaps even decline as a consequence," Greenspan suggested.
He said it would be more fruitful to consider reforms in the education system to ensure that workers with needed skills in technology are available. That would have the coincidental benefit of easing some of the pressure that has driven wages of highly skilled employees up while pay for less-skilled workers has been virtually stagnant.
Copyright 2004, Reuters News Service |
