March 31, 2004
KERRY V. SMITH:
Bush Administration Shows More Support of Free Trade (EDMUND L. ANDREWS, 3/31/04, NY Times)
Top officials at the Federal Reserve, though independent of the Bush administration, have sided with the White House in defending free trade.Ben S. Bernanke, one of the central bank's most visible and outspoken board members, said on Tuesday that foreign trade accounted for only a tiny fraction of the 2.2 million jobs that have been lost over the last three years.
Mr. Bernanke, citing estimates by outside economists that foreign trade may have led to the loss of as many as 167,000 jobs a year since 2001, said the numbers were small in comparison with the nation's overall pace of both job creation and job destruction. During the 1990's, Mr. Bernanke said, the United States lost about 15 million jobs a year but gained about 17 million jobs.
"Quantitatively, outsourcing abroad simply cannot account for much of the recent weakness in the U.S. labor market," he told an audience at Duke University's Fuqua School of Business.
Mr. Bernanke argued that the biggest reason for the weak job market was the rapid rise in domestic productivity, which has allowed companies to make more goods without hiring additional workers. American productivity has grown by about 5 percent a year for the last two years, twice its normal pace.
William Poole, president of the Federal Reserve Bank of St. Louis, told a college audience in Indiana that foreign trade and outsourcing would ultimately benefit the United States by reducing prices at home and expanding export markets.
"This process has been going on in the course of economic development for hundreds of years," Mr. Poole said. "So this is a fact of life. It's not something that we're going to reverse."
Unless the Democrats can repeal the basic laws of economics they're stuck with the fact that the Administration is right. So, the argument that John Kerry will stop the outsourcing is a de facto statement that he'll damage the efficient functioning of the economy. Posted by Orrin Judd at March 31, 2004 8:19 AM
Is also time for a lot of "disappointed" free-traders to stop whining about the short-lived Steel Tariffs and the Administratrion's decisions to pick its fights (avoiding Quixotic multilateralism where doomed to fail and focusing on bilateral treaties with willing states). If these guys can not see the difference between a Bush-Cheney Adminstration and a Kerry-say, Gephardt one they have lost all sense of perspective and self-interest.
Posted by: MG at March 31, 2004 9:02 AMLook for the articles claiming the Federal Reserves is part of the VRWC...
Posted by: AWW at March 31, 2004 9:18 AMBut Kerry's ads state that he will stop outsourcing and create 10 million jobs in four years through corporate tax incentives. By the time that approach might have an effect he would have to reinstate the CCC to achieve his goal.
Otherwise, it's been predicted that no matter what government does, if the economy continues its present strength, job growth will become a moot point. In other words it's going to happen anyway unless someone rains on the parade. That could be Jihadists or the would be Socialists.
Posted by: genecis at March 31, 2004 9:32 AMBreaking news: The Massachusetts Supreme Court has just issued a ruling that the basic laws of economics are unconstitutional. "Yep, it's right there in the constitution, yep it is," the Supreme Court wrote in its decision before eating their weight in baked beans.
Posted by: Just John at March 31, 2004 2:37 PM