In this campaign, economic “truthiness” has long since disappeared. The latest evidence of this is the flap over Governor Romney’s claim on the campaign trail and in ads running in Ohio that Chrysler is planning to ship jobs to China by opening a plant to make Jeeps in that country. Another ad makes a similar claim for General Motors. This produced sharp rejoinders from GM and Chrysler, and earned Romney four Pinocchios from the Washington Post’s factchecker, Glenn Kessler. My cynical side mainly deplores the ineptitude of Romney’s timing: He should have waited until later in the week before the election in order to avoid the blowback from the Obama team and zealous factcheckers.Barfield's point about the economics of outsourcing/offshoring is something I've discussed here many times: the vast majority of this routine economic practice is undertaken to satisfy foreign demand, not to ship foreign-made goods back to the United States, and it typically leads to more US employment, not less. The FT's Alan Beattie reiterates these facts in a nice blog post that also belittles the whole Jeep kerfuffle:
But more seriously, there is a depressing, deeper irony in all of this. On the one hand, Romney long ago should have stepped up to the plate with a full-throated defense of offshoring/ outsourcing as a key element of the competitiveness of US (and other nations’) corporations—and ultimately as a force for generating additional jobs back in the US. These ads undercut the larger economic message on the imperatives of global competition his campaign has fitfully attempted to mount.
But not to fear. Help has come from an unlikely source: The eye-opening defense of Chrysler and GM mounted by Obama’s surrogates. Last evening on the Chris Matthews show (I know, hardly the place for economic wisdom or even literacy), Matthews and Steven Rattner (backed by NY Times reporter Bill Vlasic) ridiculed Romney by pointing out that offshoring/outsourcing by corporations was a positive good for the US in that in today’s global economy, in order to survive and succeed, US corporations had to produce their products in the markets they wanted to serve.
Rattner stated that this is a basic fact of life for the automobile industry. Jeeps made in China would feed a growing Chinese consumer demand for this iconic car, and would not come back to the US. This basic fact flies in the face of Obama dogma, which largely equates foreign investment by US corporations as the work of “Benedict Arnolds,” as John Kerry asserted in 2004.
I suppose it’s too late to demand that the Obama guys pull down all those ads condemning Romney as the “Outsourcer-in-Chief”; but maybe the Romney team can quickly flood a few Ohio TV markets with the “Rattner defense.”
More sympathy might be due to the Obama campaign if it didn’t itself routinely equate foreign investment with sending jobs overseas, particularly its ill-advised attacks on the idea that a territorial corporation tax system would reward US companies for offshoring employment. As informed opinion on the subject routinely points out, the overall evidence is that foreign investment is a complement rather than a substitute to domestic expansion. If you want the specifics, read this.If Beattie's links don't convince you about the economic benefits of outsourcing/offshoring for the US economy, go here or here. Or if you want to understand the abject absurdity of political ploys to curb outsourcing, go here.
Of course, none of these truths will change the last few days of the 2012 campaign's moronic trade discourse, but the Jeep controversy does leave me wondering one thing: why didn't Kessler, Matthews, Vlasic and their media colleagues (particularly at the Washington Post) mount such a rational defense of outsourcing when the President and his PAC were spending millions of dollars to demagogue the "evil" outsourcing of Bain Capital and Mitt Romney?
Man, I can't wait for this campaign to be over.