Saturday, March 13, 2004
More on Madrid
Newsday reports that a videotape has been found:
The loose affiliation between a Moroccan terrorist group and Al Qaeda would not be shocking. Earlier this week I heard Daniel Byman present a World Politics review essay entitled "Al Qaeda as an Adversary: Do We Understand Our Enemy?" in which he suggested that Al Qaeda was willing to fund regional and/or national terrorist groups with material support and training as a way of advancing its "brand" as it were.
Friday, March 12, 2004
An outsourcing bibliography
Welcome, Foreign Affairs readers! If you want to comment on the essay, please go to this blog entry. If you're reading this it means you want to know where all the facts, figures, and quotations from "The Outsourcing Bogeyman" came from. I don't blame you -- as an academic, I'm leery of publishing an essay without the proper acknowledgments and citations.
Bruce Bartlett and Sreenath Sreenivasan provided useful and informative links to the outsourcing phenomenon. Many thanks to Virginia Postrel, Sebastian Rosato, and Nick Schulz for reading draft versions of the article and providing trenchant feedback. I am also grateful to Daniel Kurtz-Phelan, Gideon Rose, and James F. Hoge, Jr. at Foreign Affairs for their sage advice during the drafting process. Through their links and commentary, Tyler Cowen, Brad DeLong, Mickey Kaus, Glenn Reynolds, and especially Virginia Postrel made the writing of this essay considerably easier.
A crude version of this paper was delivered -- crudely -- to my American Foreign Economic Policy class a few weeks ago (amusing side note: I had planned to give a lecture on the topic when I drafted the syllabus back in November. The week I wound up delivering it was coincidentally the same week outsourcing was the cover story of Economist, Time, Business Week and Wired. The students were very impressed with the topicality). They provided me with excellent feedback. And finally, lots of blog readers posted their own comments in response to my myriad posts on the subject. Agree or disagree, their feedback helped me to figure out how best to frame my arguments.
Sources for quotations:
Mankiw's comments come from Warren Vieth and Edwin Chen, “Bush Supports Shift of Jobs Overseas,” Los Angeles Times, 10 February 2004. Reaction comments from Edmund Andrews, “Democrats Criticize Bush Over Job Exports,” New York Times, 11 February 2004. I posted about this here.
Stephen Roach's comment comes from "Debating the Jobless Recovery" on the Morgan Stanley web site. It should be noted that Roach is hardly an advocate of protectionism.
The IBM official was quoted in Bob Herbert, “White-Collar Blues,” New York Times, 29 December 2003. Nilekani was quoted in Steve Lohr, “Many New Causes for Old Problem of Jobs Lost Abroad,” New York Times, 15 February 2004. Fiorina's statement came from Carolyn Lochhead, “Economists Back Tech Industry’s Overseas Hiring,” San Francisco Chronicle, 9 January 2004.
The billboard quotation came from Elizabeth Becker, “Globalism Minus Jobs Equals Campaign Issue,” New York Times, 30 January 2004. Kerry's line about "Benedict Arnold CEO's" has been everywhere, but here's James K. Glassman's use of it.
Tom Daschle's later quote comes from Ted Landphair, “Outsourcing, Costly for US Workers, an Issue in Election Year,” Voice of America, 7 February 2004. Robert McTeer's very funny line comes from “Delta Air, General Electric Say Creating Jobs Abroad Helps U.S.,” Bloomberg, 23 February 2004. The Bloomberg story was also the source of information regarding how Delta Air Lines was able to create additional American jobs via offshore outsourcing.
While not a quote, the Commerce Department report I referenced is Raymond J. Mataloni, Jr., “U.S. Multinational Companies: Operations in 2001,” Survey of Current Business, November 2003. The relevant passage is on p. 89.
Sources for numbers:
Many of the sources can be found in the general references below. For the plethora of job loss projections, I relied on Clay Risen's “Missed Target," The New Republic, 2 February 2004; and CIO Magazine, “Offshore Outsourcing – The Backlash,” September 2003.
On the gap between Gartner's estimation of firm-specific job losses due to outsourcing versus Joglekar's estimates, see Thomas Hoffman, “Researcher Says Offshore Moves Don’t Leave to Big U.S. Job Losses,” ComputerWorld, 22 December 2003. Professor Joglekar was also kind enough to speak to me by phone -- I wish more of what he said could have fit into the final version of the essay.
On the overestimation of call center outsourcing, see Dick O’Brien, “Outsourcing threat is overstated,” ElectronicNews.Net, 26 January 2004. The TPI estimates came from this press release and this report comparing European and American outsourcing trends. See also Justin Pope, "Some Managers Hold Firm Against Pressure to Move IT Jobs Overseas," Associated Press, 1 February 2004.
The effect of sugar tariffs on jobs come from Aaron Lukas, “A Sticky State of Affairs: Sugar and the U.S. Australia Free-Trade Agreement,” Center for Trade Policy Studies, 9 February 2004. The total effect of steel tariffs on jobs was calculated based on annual costs projected in Gary Clyde Hufbauer and Ben Goodrich, “Next Move in Steel: Revocation or Retaliation,” Institute for International Economics Policy Brief 03-10, October 2003, p. 10.
IBM's fund for displaced workers can be read about in Stacy Cowley, “IBM Starts Fund to Aid Displaced Workers,” ComputerWorld, 2 March 2004.
The data on manufacturing output and employment can be found in this Alliance Capital Management report.
Data on insourcing comes from Michael Walden, “A Potent ‘Insource’ of U.S. Jobs,” Raleigh News and Observer, 2 February 2004, Lawrence Kudlow, "Outsourcing ‘Outrage,’" New York Post, 3 March 2004, as well as the Commerce Department.
Facts about the trade adjustment assistance program can be accessed at the U.S. Department of Labor's Employment and Training Administration Fact Sheet.
General references on outsourcing:
Space constraints made it difficult to cite them in the piece, but two worthwhile sources are Sreenath Sreenivasan's outsourcing page, which has tons of links, and Alan Greenspan's recent speeches and testimony that touch on the subject -- here, here, and here. Brink Lindsey has just written a policy brief, "Job Losses and Trade: A Reality Check," that's worth checking out. Finally, you can access all of my blog posts about outsourcing -- if you've read through the Foreign Affairs essay, several of them will look familiar.
Otherwise, here are the most in-depth treatments of the subject that I've seen:
International Data Corporation, Offshore Services: The Impact of Global Sourcing on the U.S. IT Services Market, November 2003.
Catherine Mann, “Globalization of IT Services and White Collar Jobs: The Next Wave of Productivity Growth,” Institute for International Economics Policy Brief 03-11, Washington, DC, December 2003
Jacob F. Kirkegaard, “Outsourcing – Stains on the White Collar?” Institute for International Economics working paper, January 2004
McKinsey Global Institute, “Offshoring: Is It a Win-Win Game?” San Francisco, CA, August 2003
Rafiq Dossani and Martin Kenney, “Went for Cost, Stayed for Quality?: Moving the Back Office to India,” working paper, Stanford University Asia/Pacific Research Center, November 2003
Ashok Bardham and Cynthia Kroll, “The New Wave of Outsourcing,” Fisher Center for Real Estate and Urban Economics, University of California At Berkeley, November 2003
Erica Groshen and Simon Potter, “Has Structural Change Contributed to a Jobless Recovery?” Current Issues in Economics and Finance 9 (August 2003): 1-7
Jyotti Thottam, "Is Your Job Going Abroad?" Time, 22 February 2004.
Gene Grossman and Elhanen Helpman, "Outsourcing in a Global Economy," NBER Working Paper No. w8728, January 2002.
Daniel Pink, “The New Face of the Silicon Age,” Wired, February 2004
General references on globalization and the U.S. economy:
Douglas Irwin, Free Trade Under Fire (Princeton: Princeton University Press, 2002).
Raghuram Rajan and Luigi Zingales, Saving Capitalism from the Capitalists (New York: Crown Business, 2003).
Kenneth Dam, The Rules of the Global Game: A New Look at U.S. International Economic Policymaking (Chicago: University of Chicago Press, 2001).
Kenneth Scheve and Matthew Slaughter, Globalization and the Perceptions of American Workers (Washington: Institute for International Economics, 2001).
Consumer-driven offshore outsourcing
A common meme from those who blast offshore outsourcing is that it's driven by rapacious firms eager to maximize short-term profits. This raises an interesting question -- what if consumers are the ones driving offshoring?
CBS Market Watch has a story on this as well.
A question to those who oppose offshore outsourcing -- should this expansion of consumer choice be banned or restricted?
If so, what other limitations should be placed so this sort of thing doesn't happen? Eliminate Wal-Marts? Japanese auto imports?
In other words, to what extent is the outcry over outsourcing a slippery slope to policies designed to block all forms of trade and technological innovation?
UPDATE: This story talks about how other firms are dealing with the offshoring phenomenon in their marketing strategies. Key line: "'No outsourcing' could become the latest twist on the 'made in the USA' slogan."
Just to be clear, even though I've defended offshore outsourcing as a good thing, I have no problem whatsoever with this kind of marketing strategy. If consumers prefer to pay higher prices in return for the satisfaction of buying American, that's fine. Consumer choice should not be restricted in either way.
Thursday, March 11, 2004
Open Spain thread
Not surprisingly, Glenn Reynolds has a link-rich post.
Is "Islamic liberal democracy" an unholy trinity?
Lee Smith has an provocative Slate essay on what Islamists are talking about when they talk about democracy. Among the highlights:
Later on in the essay, Smith acknowledges that Islamists who actually understand/support what constitutes a liberal democracy may not say so publicly:
So the $64,000 question -- what does Grand Ayatollah Sistani -- may be impossible to ferret out.
Blogs, politics, and gender
Henry Farrell argues that during the current campaign season, blogs will funnel more money to Democrats than Republicans. His reasoning:
Meanwhile, the political part blogosphere apparently does share one common trait -- gender. Brian Montopoli at CJR's Campaign Desk writes:
Just for the record, I was not part of the chess club when I was in high school -- my captaincy of the math team took up far too much of my time.
More seriously, Montopoli seems to go a bit off the rails at the end:
(link via here).
A follow-up question -- what about the readers of political blogs? Do they skew disproportionately male as well? That seems to be the (unfortunate) case among my commenters. [Maybe that's because they don't like posts like this one?--ed. I'll grant that as a possibility -- but I have yet to receive a single complaint on that front.]
Let me know what you think.
Wednesday, March 10, 2004
Gonna be an exhausting campaign
Kevin Drum has a great post up delineating the barbs and counter-barbs between the Bush and Kerry campaigns since Super Tuesday made Kerry the de facto nominee. There's been a fair amount of cross-fire for one week -- and reading between the lines, Kevin already seems exhausted by the campaign.
This leads me to wonder how the Feiler Faster Thesis will operate with eight months to go in this campaign. The thesis, to reiterate, is:
Feiler's implication is that campaigns will have constant twists and turns. There's another possibility, however -- if there are no external motivations for changes in strategy, voters could get bored fast.
That may be the case here. According to USA Today, the extent of party polarization in this election is at a historic high (however, as Eric Weiner points out in the Los Angeles Times, America is actually not politically polarized compared to other countries). The extent of polarization means there's a low probabilty of public opinion dramatically shifting one way or the other. Given that the two candidates are pretty close in terms of support, and the stability of that support, there may be no change in the relative position of the candidates for quite some time. Which means there's no incentive to change strategies for the near future.
Which means the campaign could get old fast.
I stress "may" because there are always exogenous shocks to the political system, so in all likelihood this situation won't last for 8 months. However, the Feiler Faster Thesis suggests that it will feel like eight months.
ANOTHER UPDATE: Josh Marshall advances the "exhaustion" meme.
The winners and losers in the current economy
The Heritage Foundation's Alison Fraser and Rea S. Hederman, Jr have a concise summary of who's benefiting and who's not in the current American economy. The key section:
So the sector that is supposedly most vulnerable to job loss from offshore outsourcing has actually created a significant number of jobs over the past year, when outsourcing was supposedly at its worst.
Bush defends trade -- Kerry defends reviewing trade
Brad DeLong is mostly correct in pointing out that the Bush administration has not been the most vigorous defender of open trade policies since the outsourcing brouhaha bubbled up. However, President Bush has apparently decided get off the fence and put the administration on the rhetorical offensive in reaction to Congressional moves to penalize corporations for offshore outsourcing. According to the Financial Times:
Here's a link to the entire text of the speech.
As part of the offensive, Zoellick's testimony before the Senate Finance Committee contains this opening:
Meanwhile, one of John Kerry's pledges on trade policy is as follows:
Looks like he'll be getting part of his agenda implemented through the help of Senate colleagues and the General Accounting Office:
Tuesday, March 9, 2004
A Syrian human rights protest
The New York Times reports that there was a human rights protest in a place where neither human rights nor protests are all that common -- Syria:
In addition to that, a U.S. diplomat was detained by Syrian security officials for an hour, prompting a vigorous protest from the United States.
Although security officials clamped down on the protest pretty much before it started, its organizer was released, because he gave an interview to the Associated Press after the protest. He sounds undaunted:
Monday, March 8, 2004
Kenneth Rogoff tests the Nixon analogy
Kenneth Rogoff, a professor of economics at Harvard -- and chief economist at the IMF from 2001 to 2003 -- has an amusing article in Foreign Policy on whether, when it comes to spending, Bush really is as bad as Nixon when it comes to domestic spending. His conclusion -- "Overall winner: Nixon—although Bush has eight months left."
He also makes the point that compared to the rest of the world, U.S. presidents seeking re-election are misers:
Go read the whole thing -- it's a nice primer on the political business cycle.
Jon Rauch on gay marriage
My previous post on gay marriage generated a fair amount of discussion pro and con. So, for those still interested in the issue, check out Jonathan Rauch's affecting New York Times Magazine essay on the subject. The most compelling section:
UPDATE: Tyler Cowen offers an economic rationale for gay marriages -- more money spent on weddings!
This reminds me of a moment when this issue flared up in the mid-nineties. I was watching a Sunday morning talk show with a gay friend. At one point she yelled at the television: "I don't want to overthrow the government!! I don't want to corrupt your children!! I just want to be able to register at Crate & Barrel!!"
Bad news for sci-fi geeks?
Maureen Ryan has a long story in today's Tempo section of the Chicago Tribune arguing that the big-screen success of Lord of the Rings will not translate into more sci-fi on television:
Read the entire thing -- it's a nice bashing of the proliferation of reality shows and Law & Order clones.
That said, two quibbles. First, as someone whose sci-fi enthusiasm is actually pretty erratic, was there ever a golden age of sci-fi on television?
Second, if there has been such a decline, could it also be explained by the improvement in big-screen special effects, which increases the incentive to produce sci-fi movies but reduces the incentive to create poor substitutes for the small screen? In other words, big-screen successes like LOTR are not complements for small-screen sci-fi, but substitutes.
Sunday, March 7, 2004
The decline and fall of Islamic extremism?
If this effort pans out, it would certainly constitute another blow to Al Qaeda.
Is this true in Saudi Arabia, where the difference between Wahabbi fundamentalism and official Saudi policy is tissue-thin? Both the Economist and the New York Times Magazine have stories on that country's internal debate about its religious and political future. The latter story has this to say about the Saudi state:
The Economist concludes that there is some reason for hope:
How conservative is Bush? How liberal is Kerry?
Northwestern University political scientists Jeffrey A. Jenkins has an interesting essay in today's Chicago Tribune on where George W. Bush and John Kerry stand in the political spectrum, using standard methods in the study of American political science:
For an introduction to the methodology Jenkins used for this op-ed, click here.
UPDATE: James Joyner provides a cogent critique of the Poole-Rosenthal method for determining ideological position:
ANOTHER UPDATE: Chris Lawrence has further thoughts on methodology. And Jenkins responds by posting comments here, here, and here. One point is particularly interesting -- Poole and Rosenthal used the early 1990's Kerry as an example of their methodology in their 1997 book Congress: A Political Economic History of Roll Call Voting. Kerry came out as quite liberal. What happened?: