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Kerry’s Economic Jingoism is the Wrong Choice for America

Original Article

Within minutes of the start of the third presidential debate, Sen. John Kerry mentioned outsourcing — three times. It’s been his favorite word and economic lodestar since his Iowa primary victory last winter. In Kerry’s world, CEOs who use foreign labor are “Benedict Arnolds” for their efforts to succeed in the global economy.

Media have obliged Kerry’s outsourcing demagoguery with front-page coverage and silent acceptance of its false premise — that America is somehow the victim in a world of increasingly open and free markets.

“It’s a little scary to me that people are thinking of this as a zero-sum game,” said Microsoft Chairman Bill Gates in a recent speech referring to the outsourcing debate. “China and India are the big change agents for the years ahead.”

China and India are the chief culprits in Kerry’s economic worldview, but they represent something Americans should embrace, not fear: countries once overwhelmed by economic failure that want to be more like us.

The protectionism that Kerry’s flat-Earth economic jingoism implies would jeopardize American innovation and technology leadership, and lead the global economy away from the increasing prosperity that newcomers to its bounty, such as China and India, are beginning to enjoy. Other peoples’ success means more opportunity for our own.

“We’re at the start of a process where the whole world is getting into this virtuous cycle,” Gates said in his Oct. 1 talk in Berkeley, Calif.

The dynamism of the increasingly free global economy is profound. In a recent study by Brink Lindsey of the Cato Institute, 17.8 million net new private-sector jobs in the U.S. were created from 1993 to 2002. Yet, to reach that number, some 327.7 million jobs were created and another 309.9 million lost. In other words, for every one net new job created, there were 18.4 new job additions offset by 17.4 job losses.

Just think of what today’s world would look like if we had pursued a policy of stasis through the decades, of trying to keep all current jobs in place, despite the cost or dynamic market pressures of capitalism. Would we have the automobile, the airplane, the computer?

In Kerry’s home state of Massachusetts, some 221,000 jobs are directly attributable to “insourcing” from foreign companies such as Honda, Novartis and Nestlé. To which former Delaware Gov. Pete DuPont asked of Kerry in a recent column, “Should the CEOs of those companies be required by their governments to shut down these plants and bring these jobs home to Japan and Europe?”

As economist Art Laffer points out, “Every dollar’s worth of a job lost to an outsourcer is a dollar’s worth of a job gained by an American exporter.”

And while no one wants to be the person to seem cold in the face of real jobs moving to China or India, the plain truth is America gains far more from the global economy, of which outsourcing is a part, than it loses. In fact, we are the world’s leading beneficiary of it in the form of reduced cost to consumers and the heightened demand for American goods from increasingly prosperous peoples.

By almost any metric, the Bush economy that embraces free-market ideals is strong. The unemployment rate of 5.4 percent is lower than the average unemployment levels in the 1970s, 1980s and 1990s. Nearly 2 million net new jobs have been created in the past 15 months. There are more people employed in America than ever before — some 138 million.

Bush’s four tax cuts in four years, while “too small” for recent Nobel Prize winning economist Edward Prescott, have helped lead to an economy growing at levels not seen in 20 years. These tax cuts helped bring us back from the shock of 9/11, and the estimated 1 million jobs lost from it. Now, a mere three years removed from that tragic day, America enjoys the strongest growth rate of any industrialized nation, despite it being by far the largest in the world.

While the differences in the war on terror are profound and understandably of chief concern in this election, the No. 2 concern of the economy offers voters an equally clear choice.

It is one between Kerry’s flat-Earth economic jingoism in the ignoble tradition of Patrick Buchanan and Ross Perot, or that of President Bush’s confident embrace of the increasingly free and integrated markets that help us all.

According to Gates, “We have to go into risky new areas. That’s what’s going to allow the United States to stay at the forefront.”

Freer trade, with its bumps and bruises along the way, but with its long-term promise of prosperity in a more peaceful world, is the right choice in this election.

Bush understands that; Kerry does not.

John C. Drescher is a senior fellow at the Discovery Institute in Seattle and director of its Technology and Democracy Project.