Monday, October 28, 2013

Outsource Schneider

By Jeff Simpson

The all time paid political hack, and sometimes "writer" at Jsonline, Christian Schneider is at it again.   The author of the Kyle Wood Fiasco(of which he was nominated for the rotten tomato in writing awards) is more of a paid advertiser for all things republican, than a serious writer. 

When the republicans get in trouble with some particularly bad piece of PR(which is regularly), say a prominent figure choked a woman, then Schneider comes to the rescue with a piece of fiction for everyone on the right to quote.

It is so nice for Journal Communications to give him this forum.  

This time his masters sent him out to defend.......Mary Burke!  Mary Burke has been taking some major hots for the fact that her company, Trek Bicycles, has outsourced 99.5% of their manufacturing.    This has cost Wisconsinites, JOBS.

Why do they need Schnieder?  That's simple.  If the evils of outsourcing, and how it has helped drive our economy into the ground, ever becomes a real issue in an election, the republicans would take an unprecedented beating.   They long touted the wonders of outsourcing(cheap labor, no rules, no unions), and have done their best to legislate that outsourcing becomes practically mandatory. 

Here is Schneider drivel:

"Offshoring," on the other hand, means moving jobs overseas, where products can be produced cheaper due to lower labor costs. For the workers whose jobs are moved to India, China or Mexico, offshoring — to use a technical economic term — "sucks."

But as is the case with almost everything in politics, outsourcing and offshoring pit concentrated vs. diffuse benefits. While moving jobs overseas costs identifiable jobs in the short term, it allows companies to make products cheaper, helping them grow and create more jobs right back here in the United States.
 And I thought Paul Ryan was ignorant on economics!   

First off, the wonders of outsourcing has brought us to a $38.6 BILLION trade DEFICIT.  To help Schneider out, let's spell it out:
We have brought in $38,600,000,000 worth of goods than we ship out. 

That is $38,600,000,000 more worth of goods that foreign workers made that we have bought, compared to what foreign countries have bought from American workers.  

What does that mean to you?  Record job losses

What does that mean to Schneider's bosses?   Pretty much all of the income growth and record profits!

The Polaroid is starting to come into focus.   Let's shake it a little bit more:

Remember this from Schneider:

While moving jobs overseas costs identifiable jobs in the short term, it allows companies to make products cheaper
in 2009 as a result of outsourcing, the Janesville, WI GM plant closed. 

In 2009, the average price of a car was $27,958.
In 2013, the average price of a car was $31, 258(record high).
(Ps: Chris - $31,258 is higher than $27,958)

2300 people unemployed in Janesville.   2300 people whose families had worked at GM for generations, all unemployed.   Now they only have to pay an extra $4000 for car if they want to buy!

These 2300 people who no longer will be building our cars, have spouses, children, bill,s pay taxes for the local school districts, shop at the malls, eat at local restaurants, AND worked hard and built a high quality, affordable product....well at least they used to.

I have no doubt that Schneider can find some CATO based "economist", when they are not busy sticking up for Paul Ryan's austerity budget, about the wonders of outsourcing.  Unfortunately for the rest of us, the real world disagrees. 

I probably expected too much out of someone who gets their business acumen from a reality TV show, but the facts on the ground(as they always do with Chris's column) differ greatly:

 But economists are unanimous that trade, including outsourcing, is hugely beneficial to economic growth at home and abroad."

This is highly misleading for two reasons. First, economists are unanimous in agreeing that trade could have major distributional consequences. And some prominent economists, such as Paul Krugman, have argued that the recent pattern of trade for the United States has had negative distributional consequences for large segment of the U.S. workforce.

The second reason that it is misleading is that economists are unanimous in believing that in the context of below full employment economy, like the one we have seen the last five years, a larger trade deficit implies lower growth and fewer jobs. In this context outsourcing hurts the economy.
Let's hope that Schneider does not get his parenting skills from Keeping up with the Kardashians.

As economist Dean Baker points out, that this is a  bipartisan problem(hence the defending of Mary Burke), not only does outsourcing not work, we have other problems:

At the same time, his trade policy has done little or nothing to expose highly educated professionals like doctors and lawyers to the same competition. This policy has the predicted and actual effect of depressing the wages of less educated workers relative to the most highly paid workers. This policy is exacerbated by maintaining an over-valued dollar, which further depresses the wages of those workers exposed to international competition to the benefit of those who are largely protected.
President Obama has also done nothing to combat the corruption in the corporate governance structure whereby corporate board members are paid hundreds of thousands of thousands a dollars a year to look the other way as top management pillages the company. A policy that subjects less educated workers to the most vigorous possible competition, while maintaining protection for those at the top will redistribute income upward, as we have seen over the last three decades. Both candidates seem to largely support such policies.
 The reality of the situation is, until we start manufacturing in America again we will never have a full recovery, nor will we be the Superpower we once were. 

Americans, not employed by the Bradley Foundation, are starting to get this and its scares the hell out of Chris's bosses!

PS: I do have to give Chris his due though.  He did hit the nail on the head with this line:

(Next up: What "Here Comes Honey Boo Boo" teaches us about the Laffer Curve.)

Since the Laffer Curve might be one of the few things (besides Congress) that has less credibility left than Honey Boo Boo


Now we know why Scott Walker placed this billboard in the shuttered GM plant grounds.  He felt that he was creating jobs by laying off 2300 fellow Wisconsinites. 

1 comment:

  1. Bice is actually worse -- even morons on the left proclaim he's great -- your own capper constantly parrots his crap and usually sings his praise.

    Even though yesterday capper wrote about pure walker-worship and all of bice's lies about the current criminal probe -- he would not call out bice for what he is.

    Jason stein is also a hack -- not really any different than christian -- just writing propaganda for a different audience.