I'm sorry, Mark, but "you economists" deserve the criticism. (Actually, I don't include the Republican economists when I say that; they have their agenda which has ensured them a special place in Dante's Hell.) What makes me crazy is the economists who profess to care about the disadvantaged. I am utterly baffled by their failure to both properly understand the problem and see what should be the obvious solution.
What is the problem with outsourcing and globalization? It threatens the poor/working-class/middle-class in exactly the same way that mechanization threatened earlier generations. It eliminates jobs and creates labor surplus conditions that drive down wages.
The economic benefits of outsourcing/globalization could also be similar to those that mechanization/technology can offer. People who are no longer needed to produce the things we consume are available to produce other things of value. The only problem in both cases is that the marketplace does not automatically create those jobs at a pace that will sustain wages.
The answer to this problem should be supremely obvious to "you economists." Private sector entrepreneurs are not the only producers of wealth or jobs. Contrary to the claims of the Republican economists, the Government is a major producer of Real Wealth. Government expenditures on infrastructure and human capital are real economic investments that produce real long-run and short-run economic benefits. If the private sector needs less domestic labor to produce the products it sells, then that means more is available for the government to employ in the production of public wealth.
This is why outsourcing/globalization actually provides an opportunity to improve the quality of life of the American people. If the government were to increase its spending on public investments enough at the same time that all the outsourcing is taking place, the decline in real wages that Krugman, et al., lament would be reversed and real gains could be made. Create a modest labor shortage through increased government spending and most of the complaints that are currently being leveled at "you economists" would be silenced.
The poor/working-class/middle-class would be able to enjoy the best of all economic worlds---lower prices due to outsourcing AND healthy wage gains. The anxiety that families suffer through when their jobs disappear would be greatly diminished. I know that "you economists" know that this approach is the solution to the problem. You cannot possibly be oblivious to the realities of supply and demand in the labor market. That is why all of the shoulder-shrugging and hand-wringing over declining wages brought on by outsourcing and immigration is so infuriating. It may not be easy to muster up a consensus within the community of academic economists on the desirability of this kind of solution, but at least speak out and state courageously that it is the solution.
I even know why "you economists" are reluctant to advocate this solution. When your Republican friends start scraming about the horrors of inflation that such a solution would visit upon all of us, try responding with something other than, "Yes, that's true..." Consider referring, instead, to the remarkable performance of the Chinese monetary authorities, who were able in the 1990's to successfully 'slow down' their economy's 24% inflation rate until it again reached single-digit levels without bringing their economy's annual growth rate down below 7.2%. Have they not shown us that intelligently designed credit controls can put an absolute limit on the growth of the money supply? If banks are only allowed to lend a fixed quantity of money in particular loan categories, then---all else equal---hyperinflation becomes an absolute impossibility.
Our country's poor, working class, and middle class continue to suffer needlessly because our country's money managers are dedicated to minimizing unemployment only so long as the effort to do so does not threaten to allow inflation to grow beyond a certain absolute minimum. What people who work for a living need more than anything else in this country is a monetary authority that is dedicated to minimizing inflation only so long as the effort to do so does not threaten to allow unemployment to grow beyond a certain absolute minimum.
If "you economists" could start lobbying for such changes, I'm quite sure that you would no longer suck in the eyes of the disadvantaged class. You might even come to be seen as their heroes...
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