Sunday, October 3, 2010

A Big Reason Why Politicians Attack "Outsourcing"

Many campaigning politicians love to blame "outsourcing" for the woes of the US job market, and to brand their opponents as supporting policies - like US FTAs and blanket opposition to tax hikes on US multinational corporations - that "send American jobs overseas."  Indeed, the "outsourcing" bogeyman has become an express part of the Democratic Party's "Make It in America" campaign platform, and "pro-outsourcing" accusations are a staple of Democrats' campaign advertisements for the 2010 mid-term elections.

Now, there are plenty of economic and historical facts undermining these politicians' anti-outsourcing demagoguery - something that Democrats themselves have recently admitted.  And these same Democrats have also acknowledged that one of their primary motivations for pushing the outsourcing meme - despite its, ahem, factual limitations - is because the issue polls well (i.e., most Americans are scared of, and/or confused about, outsourcing).

But that's not the only reason our elected officials like to blame outsourcing for the troubled American economy.  Indeed, as today's IBD editorial demonstrates, pols also like to focus on offshoring because it diverts voters' attention away from what actually causes American companies to move offshore: a startling decline in the American economy's global competitiveness caused by our elected officials' awful tax and regulatory policies.  IBD makes this clear in its comparison of Sen. Barbara Boxer's (D-CA) attempts to tar her opponent, Carly Fiorina, as a dirty rotten outsourcer with Boxer's actual record of uniform support for policies that destroy American companies' ability to compete in the global economy.  Among Boxer's biggest "job-killing votes":
The corporate tax. Boxer claimed in Wednesday's debate that she wants to "incentivize" U.S. companies not to ship jobs overseas. Maybe she was referring to her yes vote on S. 3816, which ends the tax deferral for multinational firms. The idea was to hike taxes on companies' overseas operations so they would hire more here. Instead, we've "incentivized" companies to move headquarters and jobs to low-tax countries. Even the Democrat-led Senate knew it was a job killer. Boxer didn't.

Free trade. In the debate, Boxer patronizingly said Mexico was important to California because it was a top trading partner. No kidding. California's economy is steeped in foreign trade, accounting for 11.4% of U.S. exports, which underperforms its 14% slice of the economy.

Maybe that's because Boxer has steadfastly kept California out of foreign trade. She opposed NAFTA with Mexico and Canada in 1993 and continues to oppose all free trade. She voted no on trade deals with some of the state's most logical, natural trading partners — Singapore, Chile, Peru, the Dominican Republic, El Salvador, Honduras, Guatemala and Costa Rica, to name a few.

In last year's supplemental stimulus package she voted to shut Mexican trucks out of the U.S., a move that so angered Mexico it imposed retaliatory tariffs on states like California because of her stance. Even today, Boxer opposes selling her state's goods tariff-free in new markets like Colombia, Panama and Korea.

Radical environmentalism. Boxer says her top priority is cap-and-trade legislation, an energy tax that would saddle California's businesses with high costs based on questionable science. California will pay for this in thousands of lost jobs and billions of dollars of investment that will move to friendlier states and countries.

Boxer also opposes offshore drilling on environmental grounds — and the jobs it would create. Fiorina "stands with Big Oil; she doesn't stand with the people of California," Boxer declared, not getting that Big Oil and its suppliers could provide 70,000 new and well-paid jobs for her state if it could drill from the vast 10.5 billion barrels of oil reserves sitting idle off California's coast.

Worst of all, Boxer has declined to waive the Endangered Species Act against California's own breadbasket, the Central Valley. She approved a waiver for a similar case in New Mexico, but denied it to California. Fiorina condemned Boxer's callous indifference, pointing out that "a nameless, faceless bureaucrat decided the smelt was endangered" and 90,000 jobs were lost.

As water was cut to the southwest Central Valley in 2007, unemployment rates rose above 16% in Fresno and as high as 40% in Mendota; agricultural operations fled to Mexico. Mendota's jobless farmworkers were reduced to accepting charity food from China — outsourcing that came because of Boxer's vote.
One big thing that IBD failed to mention (although with a competitiveness-killing laundry list like that, maybe they just ran out of space) was Boxer's vote for ObamaCare.  As I've noted several times, that law's new tax burdens on American businesses, when coupled with the fact that we already have the world's second-highest corporate tax rate, are a recipe for the further erosion of these businesses' global competitiveness and the loss of companies and jobs to an increasing number of countries that understand simple economics and have thus adopted more business-friendly tax and regulatory policies.

In short, Boxer and her buddies in Congress have squeezed the US economy as hard as they can, and they then have the audacity to complain when American jobs and companies overflow to other, less-pressurized markets.  They refuse to acknowledge that their hyper-aggressive tax and regulatory actions have caused these natural, opposite reactions, and they instead propose physics-defying ways to "seal" the economy (through protectionism) that either are totally unworkable or exacerbate the job/company-losses they're allegedly trying to stop.

It'd be funny if it weren't so darn devastating for the US economy.

But, hey, maybe Sen. Boxer and her buddies will learn this simple lesson when American voters outsource their jobs to more qualified candidates.

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