Friday, July 2, 2004

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Josh Marshall outsources his research

I'd like to congratulate Joshua Micah Marshall for improving his productivity by recycling a John Kerry press release in his snarky post on offshore outsourcing. Sure, some bloggers might have dug a bit deeper to get more information -- like the fact that John Kerry's policy proposals on outsourcing would have zero effect on the job losses Marshall broods about. And sure, by completely outsourcing his research to Kerry's campaign, Marshall may have missed just a few of the nuances involved in the debate on offshore outsourcing -- but Marshall did post first on this. Congratulations, Josh!!

[Hey, didn't you just do this as well?--ed. Yeah, but I said it was a press release when I did it.]

More seriously, in the wake of mediocre job numbers for June, Paul Blustein has a Washington Post story that's worth checking out on the topic. The lead paragraphs look scary:

A report by an influential consulting firm is exhorting U.S. companies to speed up "offshoring" operations to China and India, including high-powered functions such as research and development.

In blunt terms, the report by the Boston Consulting Group warns American firms that they risk extinction if they hesitate in shifting facilities to countries with low costs. That is partly because the potential savings are so vast, but the report also cites a view among U.S. executives that the quality of American workers is deteriorating.

However, the story goes on to quote some interesting research findings:

Matthew J. Slaughter, a professor at the Tuck School of Business at Dartmouth, pointed to research he published in March using Commerce Department data to show how offshoring can have a positive impact on U.S. job growth, as part of the "churn" in employment that constantly eliminates jobs but also adds them.

Although U.S. multinationals expanded their overseas payrolls by 2.8 million from 1991 to 2001, in moves that often involved factory closures and layoffs in the United States, they expanded their U.S. employment levels by nearly 5.5 million, according to Slaughter's study. That is partly because as such firms expand the scale of their operations abroad, they need more personnel at home to handle functions such as marketing, logistics, finance and product design. For similar reasons, McKinsey & Co., one of Boston Consulting's main rivals, has estimated that for every $1 invested abroad by U.S. companies, the U.S. economy gains $1.14, which can be plowed into job-creating enterprises.

Click here for a case study that buttresses Slaughter's aggregate data. And here's the relevant table:


posted by Dan on 07.02.04 at 11:58 AM


Medicore job news for May?!?!

Uhhh don't you mean June?

May was lower than April, but it was more than twice the payroll number for June.

posted by: Steve on 07.02.04 at 11:58 AM [permalink]

Sorry, I meant June -- fixed now.

posted by: Dan Drezner on 07.02.04 at 11:58 AM [permalink]

Hey, how 'bout outsourcing CEOs?
You wanna really save money?
Some Indian exec will do the job for MUCH less than $10 mil cash plus $40 mil stock options.
Think of the advantages:
1. No more "death tax" debates cuz American CEOs wouldn't have money, or the ones that did wouldn't be American.
2. Ditto for worries about how to tax capital gains, etc.
3. No more decline in productivity... we just outsource CEOs to a country with child labor and let them do the dirty work there; some 12-year-old kids with the whips hanging over their heads will do jussst fine.
But why stop there?
Let's outsource our stock market, and, say, the Fed, to Siberian shamans using bone-bead abacuses? They'll be cheaper and surely can't do any worse.

posted by: steverino on 07.02.04 at 11:58 AM [permalink]

Is there anything other than the "stop whining" quote which is, as you put it, "outsourced?" Not sure if siezing on a sound bite counts. Not at all sure it counts as plagiarism, anyhow.

posted by: Seth on 07.02.04 at 11:58 AM [permalink]

Bet we can outsource poli-sci professors too.

posted by: Susan on 07.02.04 at 11:58 AM [permalink]

Woah there Dan,

The report that JM links to is in a online source called and was written by Rachel Konrad.

The fact that John Kerry may have ripped off some headlines to throw in as talking points in a press release doesn't mean that John Kerry's campaign created this report for dissemination.

Or is that what you're alleging? If reporting or writing on a topic that happens to also be commented on by a political campaign was wrong, then nobody would talk about anything.

Or again are you asserting that the Kerry campaign made this up whole cloth?

posted by: oldman on 07.02.04 at 11:58 AM [permalink]


Even if we take the numbers in your chart at face value they don't look so good.

Dividing the 2001 number by the 1991 number for domestic and international, we find that overseas growth in that period was 42% while domestic growth was by 31%. In other words US multinationals were growing employment by 35% (42/31=35.5) more overseas than domestically. That's a fairly large discrenpency.

I would also bet that the numbers weren't evenly distributed, and the trend has been accellerating most likely so the discrepency will grow even larger with time.

This is just looking at the numbers you've presented and taking them at face value.

posted by: oldman on 07.02.04 at 11:58 AM [permalink]


"Snarky"? You don't have to be Krugman or DeLong to know that job numbers, while improving recently, are down significantly during the George II reign. That's the reality and the political story. Leave optimization and competitive advantage to the economic theorists. People are worse off, despite poorly aimed tax cuts that will strangle the economy with deficits far into in the future, and endanger Social Security and Medicaid. And despite the stimulus of an war which, however much SH deserved to be overthrown, has isolated us internationally and placed our "intelligence" community in bondage to idealogues.

It's about the election; outsourcing will happen regardless. JMM has made his decision. You are still into intellectual dithering.

posted by: Adams on 07.02.04 at 11:58 AM [permalink]

"Bet we can outsource poli-sci professors, too".

Yes, we can; and this is already happening. It's called "distance learning". Taped lectures are delivered via the Web for students to view; students submit assignments on-line to be graded by teaching assistants in India. Once the professor's lectures have been taped, he's no longer needed; nor are the American teaching assistants or even classroom space. No expenses, no staff, pure profit.

posted by: Jon Meltzer on 07.02.04 at 11:58 AM [permalink]


What is with JFK and Gephardt? (See Drudge today, Mon., July 5.)

Me thinks this is very predictable. JFK selects Gephardt as his VP.

- The same Gephardt who "killed" Dean in Iowa.
- Because of this "kill", JFK won Iowa.
- Once Gephardt lost Iowa, he promptly endorsed JFK.

This is JFK paying back to "the white man" who gave him the nomination. Had Gephardt not "killed" Dean in Iowa, JFK would be discussed as a possible VP in press today.


posted by: Ali Karim Bey on 07.02.04 at 11:58 AM [permalink]

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