“Candidates aim to tar rivals over the outsourcing of jobs”

Hi Gang:
The news article I have provided to you today appeared in the Thursday, October 14th edition of the Washington Times and deals with our nation's faltering economy and how candidates for political office are again doing what they do best- engage in a war of words and finger pointing while avoiding the immigration component of the economic crisis confronting our nation and our citizens.
The focus of the article is the issue of the outsourcing of jobs- the practice that far too many of our nation's corporations engage in; constructing factories overseas, especially in China, and thus not have to pay fair wages to workers in the United States an deal with various safety and environmental regulations they must comply with in the United States. 
There is a oft-quoted question that asks, "If a tree falls in a forest and no one is there to hear it, does it make a sound?"
Where today's news article is concerned, I will as a slightly different question:
"If jobs are created or returned to America, does it make a damned bit of difference if American citizens don't get those jobs?"
Certainly the outsourcing of jobs is of critical importance but it is only one half of the equation.  The other half of the equation that few are willing to address is Immigration and the impact of the failures to secure our nation's borders or create an immigration system that has real integrity has on almost every significant challenge that confronts our nation today.
Consider this quote from the news article concerning Nancy Pelosi, the Speaker of the House of Representatives:

Before leaving town, Mrs. Pelosi and House Democratic leaders also unveiled a "Make It in America" agenda that she said was aimed at "creating good-paying jobs here and not shipping them overseas."

However Ms Pelosi has often decried the arrest of illegal aliens in the United States as being "un-American" and had the chutzpah to make a speech in Mexico City back in October 2003 in which she said that when ICE had arrested some 250 illegal aliens who were working at Wal-Mart on October 23, 2003, that the workers had been "terrorized" by being arrested!
It would seem that while Ms Pelosi wants to ship jobs back to America, she couldn't care less if those jobs are ultimately taken by illegal aliens still leaving all too many Americans and lawful immigrants on the unemployment lines!
I recall that many years ago, when I was an INS special agent, we would often raid sweatshops in New York City and often found that no less than the labor unions would provide attorneys to represent the illegal aliens we arrested!   My colleagues and I used to be frustrated that even while the unions would air commercials in which singers would sing the jingle, "Look for the union label" the unions themselves apparently did not mind representing illegal aliens!  Although many of those sweatshops have been dismantled and the jobs have left the United States, more an more unions seem willing to represent illegal aliens because, after all, for the unions it is all about how many people they represent.  This is about collecting union dues and amassing as many members  
Let us remember that among the issues that are hammered by our nation's decades-long failures to secure our nation's borders and create an immigration system that has real integrity are those that impact our nation's economy and especially jobs because of the importation of cheap labor.  Importation of cheap labor is done in two ways- by unscrupulous employers hiring illegal aliens or by hiring foreign workers through various "temporary" nonimmigrant visa programs.  I placed the term "temporary" in quotation marks because at present, virtually nothing is done by the federal government to make certain that foreign workers actually report to work on jobs they are admitted to do and/or make certain that they leave when their authorized period of admission is up.
According to a recent news report, ICE, (Immigration and Customs Enforcement) has all of 272 special agents assigned to investigate and locate aliens who violate the terms of their admission into the United States.  Estimates as to how many aliens are present in the United States who have, in one way or another violated the terms of their admission range from four and a half million to five and a half million.  It is believed that 40% of the illegal alien population living in the United States did  not run our nation's borders but actually entered our nation via the inspections process- either securing visas and seeking admission into the United States or by entering the United States under the aegis of the Visa Waiver Program.
However, since US VISIT, the program that is supposed to track the arrival and departure of aliens has never been completely implemented even after well over one billion dollars has been spent on this program, there are no accurate statistics and, there may well be far more than five million such visa violators present in the United States.  This is particularly egregious since the 9/11 Commission established the creation of an effective and efficient means of tracking the arrival and departure of nonimmigrant aliens a major priority because of concerns about national security.  Meanwhile the freight forwarders such as Fed-Ex and DHL are easily able to track packages they move around the world with extreme accuracy and reliability!
 
On May 11, 2006 I was called upon to testify before House Subcommittee on Oversight and Investigations of the Committee on International Relations on the topic:
"VISA OVERSTAYS:

CAN WE BAR THE TERRORIST DOOR?"

You can read the transcript of that hearing, in its entirety at:

http://commdocs.house.gov/committees/intlrel/hfa27480.000/hfa27480_0f.htm

Instead of getting into the discussion of the obvious national security implications of our failures to prevent the entry of terrorists into the United States and the relative ease with which they can, and indeed have managed to embed themselves in our country I want to focus primarily on the impact of aliens on the job market in the United States.
Let us start out by considering the issue of the economics of the H-1B visa program.
Virtually everyone is familiar with landscapers and construction companies that hire illegal aliens.
These industries as well as, farms, meat processing plants and restaurants are known for hiring illegal aliens.  What many folks don't realize is that even "legal" immigration is fraught with fraud and abuses.
The high tech industries don't generally hire illegal aliens.  They hire temporary workers who have the education that makes them desirable as employees of many high tech industries.  These foreign workers also have another valuable trait:  they will accept significantly lower salaries than their American counterparts.  Often, immigration law firms, not unlike salesmen who want to close a deal, do whatever they can to get employers to hire foreign workers.  For the law firms, their livelihood depends on this and so they are very motivated to make certain that foreign workers take priority over American workers.
If you don't believe me, check out this video of a segment of Lou Dobbs Tonight that aired on November 15, 2007 and dealt with the issue of H-1B visas and made it clear that there is no shortage of American engineers, computer programmers and others with graduate degrees in the high tech industries.
(I would remind you that Faisal Shazhad, the "Times Square Bomber" who attempted to kill and maim as many innocent victims by detonating a bomb hidden in his SUV had been issued an H-1B visa as an accounting clerk!   How "high tech" a job is an accounting clerk?  Are there really any shortages of accounting clerks in the United States?)
Here is the link to that segment that runs about 5 minutes:

What will really infuriate you is the video of an immigration lawyers' conference in which lawyers were being coached to "not find qualified U.S. workers!"  The lecturer who is instructing the attorneys is a guy by the name of Lawrence M. Lebowitz, the Vice President of Marketing for the firm of Cohen & Grigsby.  This video was posted on You Tube by the Programmer Guild, an organization that is comprised of computer programmers.

This video runs for roughly 4 minutes and 30 seconds and I urge you to watch this video that was, I believe, made clandestinely.  This is the link to that video:

[youtube TCbFEgFajGU]

I want you to now consider that the Immigration and Nationality Act (INA) is that all-inclusive body of laws that regulates the entry of aliens into the United States and also their presence in the United States.  It deals with immigration benefits and the grounds under which an alien might be removed (deported) from the United States.

Under the INA, the law…"   

"…excludes aliens seeking to immigrate "for the purpose of performing skilled or unskilled labor," except that such aliens may be eligible for a visa if:

the Secretary of Labor has determined that (A) there are not sufficient United States workers who are able, willing, qualified and available at the time of application for a visa and admission into the United States and at the place where the alien is to perform the work, and (B) the employment of the alien will not adversely affect the wages and working conditions of the United States workers similarly employed."

Please consider what the law states and then consider the entire issue of foreign workers.

The immigration laws that in the mind of Nancy Pelosi and other "leaders" of our nation are egregious were promulgated with the clear intention of protecting the United States and the citizens of our nation.  One of the really important issues that the INA addresses is the issue of protecting the American worker.  Yet, Pelosi had the unmitigated chutzpah to declare that it was "Un-American" to arrest illegal aliens!

You have members of Congress doing everything in their power to expand the number of H-1B visas to facilitate the entry of foreign workers into the United States to undercut Americans attempting to support their families!

It is clear that there is no shortage of Americans with the high-tech skills, only a shortage of political leaders who have integrity and who are actually willing to represent their constituents.

Again, I want to make another point that is important to remember.  

Our government has mortgaged the future of our grandchildren with the "Economic Stimulus Package."  They claimed that it was vital to dump billions of our dollars into the economy to prime the economic pump and get our nation's economy moving.  If, indeed, this is what they had in mind, why did they not make E-Verify a part of the program to make certain that reasonable steps were being taken to help prevent illegal aliens from getting jobs?  Why are they not opposed to increasing the number of H1B visas as well?

If you wonder why I am linking the E-Verify program to the H-1B Visas the answer is simple and straightforward.  But in order to answer the question, I will pose a rhetorical question:  "What do illegal aliens and aliens on "temporary" work visas such as the H-1B visa have in common?"

The answer is that they are all foreign workers and as such, their goal is to take the money they earn and send as much of it back to their families in their home countries.  Each year between 100 billion and 200 billion dollars leaves our nation's economy for foreign countries.  This is money that is not earned by American citizens or resident aliens.  This is money that is not spent in the United States of America.  This is money that is not invested in the United States of America.  This money that is utterly lost to the economy to the United States of America!

By not discouraging foreign workers from coming to the United States and working and then sending money back home, our politicians make as much sense as the person who turns on the faucets on his bathtub in preparation for taking a bath but fails to close the drain.  He then comes back to the tub some time later and finds that all of the hot water he had planned to bathe in had disappeared down the drain!

At the same time, those politicians are undercutting their fellow American citizens and resident aliens who should expect the government to look out for their best interests. 

Finally, it is important to give some thought to a hearing that was conducted by the Senate Immigration Subcommittee, a subcommittee that is chaired by Senator Chuck Schumer.  The hearing I refer to was conducted on April 30, 2009 and entitled

"Comprehensive Immigration Reform in 2009, Can We Do It and How?"

Here is the link to the notice about the hearing:

http://judiciary.senate.gov/hearings/hearing.cfm?id=3793

If you go to that website and click on “Live Webcast” you will be able to see a video of the hearing.

Alan
Greenspan was one of the witnesses Mr. Schumer called to testify
before that hearing.  When you review Mr. Greenspan's testimony
you may be shocked to note that he referred to Americans who have
skills or education as the "privileged elite!"  He
provided a "solution" to the "problem" of Americans with skills and/or
education who earn more than Americans who have little or no skills-
flood the labor market with foreign workers who will accept lower
wages!  I kid you not! 

However, before you begin considering Mr. Greenspan's testimony, let me introduce Mr. Greenspan to you in a way that I suspect he (and his friend Chuck Schumer) would rather he not be introduced.

First I would suggest you check out an article that Newsweek published about Alan Greenspan's “contribution” to the economic meltdown.

The article written by Michael Hirsh and was entitled:

THE WORLD FROM WASHINGTON

Greenspan's Folly

The former Fed chief's culpability in Wall Street's woes.

The article can be found at:

http://www.newsweek.com/id/159346

When Alan Greenspan served as the Chairman of the Federal Reserve Bank, he was an extremely strong proponent for providing loans and credit to a broad spectrum of people including those who, as it turned out, never should have been granted credit.

Of course by focusing on our nation being a “consumer nation” Greenspan saw in people, an army of consumers who would be willing to mortgage their futures and the future of our nation to by more “stuff!”

This may have yielded tremendous profits for corporate America, but it undermined the economic foundation of our country and countries around the world.

On April 8, 2005 he addressed the Federal Reserve Board at the Federal Reserve System’s Fourth Annual Community Affairs Research Conference, Washington, on the issue of “Consumer Finance.”

Here is the link to his prepared remarks at that conference:

http://www.federalreserve.gov/BoardDocs/speeches/2005/20050408/default.htm

I have provided you, immediately below, with two quotes from that statement from that conference on “Consumer Finance.”

Here is the first to consider:

“A brief look back at the evolution of the consumer finance market reveals that the financial services industry has long been competitive, innovative, and resilient. Especially in the past decade, technological advances have resulted in increased efficiency and scale within the financial services industry. Innovation has brought about a multitude of new products, such as subprime loans and niche credit programs for immigrants. Such developments are representative of the market responses that have driven the financial services industry throughout the history of our country.”

Here is the second:

“Home mortgage loans, as we know them today, are a fairly recent product born of the failures of the mortgage finance system during the Great Depression. Clearly, radical change was needed. One of the most significant responses to this need was creation of the Federal Housing Administration, which instituted a new type of mortgage loan–the long-term, fixed-rate, self-amortizing mortgage–which became the model that transformed conventional home mortgage lending. A whole industry–thrift institutions–grew up around this one product.

The development of a broad-based secondary market for mortgage loans also greatly expanded consumer access to credit. By reducing the risk of making long-term, fixed-rate loans and ensuring liquidity for mortgage lenders, the secondary market helped stimulate widespread competition in the mortgage business. The mortgage-backed security helped create a national and even an international market for mortgages, and market support for a wider variety of home mortgage loan products became commonplace. This led to securitization of a variety of other consumer loan products, such as auto and credit card loans.”

As you read his statements on mortgages and loans to a wider spectrum of borrowers I want you to remember that this is precisely what contributed to the economic avalanche that landed our nation in the crisis we are now digging out of!

So now, one of the architects of the worldwide economic landslide stands before the Senate Immigration Subcommittee and makes his recommendations! This is a level of chutzpah that is amazing, even by Washington standards!

I would urge you to read Greenspan's testimony in its entirety after you read my perspectives about what he stated just last week as Mr. Schumer and the other “usual suspects” fired the opening round in yet another effort to jam “Comprehensive Immigration Reform” down the throats of the citizens of our nation. This dangerous legislation would forever alter our country in so many ways and, none of them for the better.

I will start out by asking you to consider two paragraphs that appear at the beginning of his testimony:

There are two distinctly different policy issues that confront the Congress. The first is illegal immigration. The notion of rewarding with permanent resident status those who have broken our immigration laws does not sit well with the American people. In a recent poll, two-thirds would like to see the number of illegals decreased.

But there is little doubt that unauthorized, that is, illegal, immigration has made a significant contribution to the growth of our economy. Between 2000 and 2007, for example, it accounted for more than a sixth of the increase in our total civilian labor force. The illegal part of the civilian labor force diminished last year as the economy slowed, though illegals still comprised an estimated 5% of our total civilian labor force. Unauthorized immigrants serve as a flexible component of our workforce, often a safety valve when demand is pressing and among the first to be discharged when the economy falters.

Dr. Greenspan certainly seems to recognize the wishes of the great majority of the citizens of our country but then seems to miss the point. It might even be concluded that he sees the laws of the United States, especially the immigration laws and the desires of the citizens of the United States as little more than “speed bumps” when he states that “…illegal immigration has made a significant contribution to the growth of our economy.”

You have to wonder what he would say about the impact of money that drug dealers gain by their criminal activities provided that they then invest their ill-gotten money in the stock market or real estate. It is critical to understand that illegal activities are, to put it succinctly, illegal!

Greenspan certainly falls into the category of those who “Know the price of everything and the value of nothing!”

Furthermore he states that from 2000 to 2007 illegal aliens accounted for nearly 20% of the increase in our nation's total civilian work force.

Greenspan makes the assertion that the impact of this massive increase of the illegal aliens workforce only has a “marginal” impact on the wages of America's working poor. While I will certainly not lay claim to being an economist, I recall that back in high school and certainly in college, the most basic principle we were taught about economics was the principle of “supply and demand.” (As you read my commentary, however, you will see that perhaps Mr. Greenspan really does understand this basic principle of supply and demand, but chose to obfuscate his real beliefs by the artful use of deceptive language.)

Numerous studies conducted by highly respected economists make it clear that wage suppression is significant when the marketplace is flooded with illegal aliens who not only reduce labor costs to factory owners and other businesses that make it a practice to intentionally hire illegal aliens because the illegal workforce will work for substandard wages, but because, generally speaking, illegal aliens are rarely provided with health insurance and often will work for long hours without demanding overtime wages. Often illegal aliens are paid “off the books.”

The employers who resort to this illegal tactic don't pay into the Social Security program or other government mandated programs such as Workman's Compensation.

The availability of this illegal labor force makes it increasingly unlikely that American citizens and lawful immigrants will be hired when the likelihood of discovery of their violations of law is all but zero.

Mr. Greenspan states that he believes that it is vital for the United States to encourage more foreign workers to enter the labor force in the United States because of the failings of the educational system of the United States.

Certainly our schools are failing our nation's students.

What Mr. Greenspan conveniently neglected to discuss is the impact of the estimated 2 million illegal aliens who currently attend our nation's schools and the 3 million United States citizen children who were born to illegal alien parents. These figures were provided in a recent Congressional Budget Office study that also found that it cost from 20% to 40% more to educate children who lack basic English language skills as compared with those students who are already fluent in the English language when they begin attending school.

The report that contained the statistics about students and many other such statistics and facts was entitled, “The Impact of Unauthorized Immigrants on the Budgets of State and Local Governments

DECEMBER 2007”

That report can be found at:

http://www.cbo.gov/doc.cfm?index=8711

I am not saying that all of the ills of our nation's schools can be traced solely to the massive influx of illegal aliens and their children, but I do believe it would be absurd to ignore the large impact that these millions of pupils scattered across our nation have on the educational systems of virtually every state.

Furthermore, the fallacy in Mr. Greenspan's assertions about the failings of the educational system and the need to bring in foreign students and workers is the impact that foreign workers have on wages and opportunities.

The labor market, in many areas, has a finite need for workers. If most or all of the needs for employees are being met by foreign workers, legal and illegal, who will accept lower wages than their U.S. Citizen and resident alien counterparts, the vast majority of employers will simply hire the foreign workers who will accept lower wages and not even consider hiring American workers even if they possess the sort of education that would make them suitable employees.

This, in turn, makes many of the “high tech” professions less attractive. What incentives are their for a bright American college student to devote years of his (her) life to a course of study, often at great financial expense, if the salaries that the profession for which they are studying will not provide them with salaries that are commensurate with their expenditure of time, effort and money?

I think the answer to the question I asked was answered in an obscure manner by Greenspan. Consider this quote from his testimony:

The second bonus would address the increasing concentration of income in this country. Greatly expanding our quotas for the highly skilled would lower wage premiums of skilled over lesser skilled. Skill shortages in America exist because we are shielding our skilled labor force from world competition. Quotas have been substituted for the wage pricing mechanism. In the process, we have created a privileged elite whose incomes are being supported at noncompetitively high levels by immigration quotas on skilled professionals. Eliminating such restrictions would reduce at least some of our income inequality.

As you read the preceding paragraph, I want you to stop and think what he is really saying. It would certainly appear that his point is that by not bringing in more foreign workers, skilled workers are able to earn more money than unskilled workers.

What is wrong with that? Should a person who lacks an education and a trade earn the same money as someone who has a specific skill or education? He talks about a “privileged elite whose incomes are being supported at noncompetitively high levels by immigration quotas on skilled professionals.” He ends that paragraph by saying, “Eliminating such restrictions would reduce at least some of our income inequality.”

What “income inequality” is Mr. Greenspan referring to?

I can assure you that Mr. Greenspan was not discussing the CEOs of corporations who now earn as much as 400 times as much as those who are employed by their companies. He certainly did not discuss the so-called “Golden Parachutes.”

Mr. Greenspan concealed his insidious perspectives in language that obfuscated his beliefs. His goal is clear, if the United States would open up its borders to an unlimited flow of aliens, both legal and illegal, labor costs could be driven down and profits for corporations would be driven up!

It would almost appear that Mr. Greenspan believes that anyone who is not a CEO or high-ranking member of management should be earning little more than minimum wage, including those Americans who are highly skilled and even possess college degrees!

Traditionally, the middle class was comprised of those people who made economic progress by acquiring skills and education. This is what the “American Dream” was all about!

My personal story is not much different from many people in the United States.

My parents never attended college but made certain that I did. They hammered it into my head ever since I can remember, that education was the key to success!

The “American Dream” also included parents working their tails off to provide opportunities for their children that they themselves could never hope to realize.

So, while Greenspan knows that he cannot simply say that a college education would be all but worthless as the country opens its doors to a virtually unlimited supply of college educated aliens, if you look between his words, it would appear that this is precisely what he is saying!

Next consider the paragraph I have copied below:

Our skill shortage, I trust, will ultimately be resolved through reform of our primary and secondary education systems. But, at best, that will take many years. An accelerated influx of highly skilled immigrants would bridge that gap and, moreover, carry with it two significant bonuses.

First, skilled workers and their families form new households. They will, of necessity, move into vacant housing units, the current glut of which is depressing prices of American homes. And, of course, house price declines are a major factor in mortgage foreclosures and the plunge in value of the vast quantity of U.S. mortgage-backed securities that has contributed substantially to the disabling of our banking system.

So, now we see that by bringing in more skilled workers to drive down the wages of skilled American workers, the houses that were vacated due to foreclosure that are now the property of banks could be sold to these aliens, increasing the profits for the banks that have been holding the bag on these properties as they sell these houses to foreign workers!

In closing his prepared testimony, Mr. Greenspan sounds a cautionary note that should give us all “cause for pause.” Read his words:

Clearly a line must be drawn between, on the one hand, allowing the nation to be flooded with immigrants that could destabilize the necessary comity of a society and, on the other hand, allowing the nation to become static and bereft of competition, and as a consequence to lose its economic vitality.

The United States has always been able eventually to absorb waves of immigration and maintain its fundamental character as a nation, particularly the individual rights and freedoms bestowed by our Founding Fathers. But it must be conceded that the transitions were always more difficult than hindsight might now make them appear.

Clearly Greenspan is many things, but he is no fool!

He understands that opening the floodgates to permit massive numbers of aliens to enter our country will create the potential for turbulence.

But for him the priority is profits for those at the top of the food chain.

I don't wish to put words into Greenspan's mouth, but it would appear that in his view, the middle class needs to be eliminated!

Bringing jobs back to America is an important goal- however, of at least equal importance, is to see to it that citizens of the United States and lawful immigrants get those jobs and at living wages!  The failures of the federal government to secure our nation's borders and enforce the immigration laws from within the interior and aggressively and effectively combat rampant visa fraud and immigration benefit fraud would nullify any efforts made to create jobs inside the United States!

If reading this makes it difficult for you to sleep now- perhaps you could do something worthwhile- perhaps you might spend a couple of your sleepless hours writing letters to your elected representatives this evening and remind them that Election Day is just months away!
We the People can add to the consternation of these politicians who are failing to live up to their oaths of office by contacting them and making it abundantly clear that election day is coming and they should think of election day as their personal "Day of Reckoning!"
Our government must live up to its obligation of protecting its own citizens and, indeed, all who are present in our country from the criminals and terrorists who would threaten our lives and the survival of our nation and our way of life.  In the end, the government is actually those who are elected to act as our "leaders."   Those who fail to truly lead and look out for those they are supposed to represent, need to be sent packing this coming Election Day!

If our country is to survive and if our children and their children are to get their share of the "American Dream" the citizens of this nation must take their citizenship seriously!
We the People must be the best citizens we can be, citizens who are worthy of the gallantry demonstrated by our valiant men and women in the military, law enforcement and firefighters, who routinely go in harm's way in defense of this nation and our citizens.  
My goal in writing this and other commentaries is to point out our nations many failings before more victims pay the ultimate price for the incompetence and ineptitude of our government.
The first step in problem-solving is to first identify the problems and vulnerabilities and then devise strategies to overcome them.
Any politician who refuses to work to secure our borders and create an immigration system that has integrity is either corrupt or too dumb to keep his (her) job.  Any politician, irrespective of party affiliation who favors Comprehensive Immigration Reform and the outrageous betrayal that this would represent given the national security implications that this program would have, should be shown the door at the next election! 
If you find yourself to be in agreement with this commentary, I ask that you forward it to as many of your friends and family members as possible and encourage them to do the same.  We need to create a "Bucket Brigade of Truth!"
In less than 3 weeks, each and every member of the House of Representatives is up for reelection and more than one third of the members of the United States Senate will have to face their constituents. They need to be reminded that they work for us, We the People!

However, the practice of good citizenship does not end in the voting booth, it only begins there.

The large scale apathy demonstrated by citizens of this nation has emboldened elected representatives to all but ignore the needs of the average American citizen in a quest for massive campaign funds and the promises of votes to be ostensibly delivered by special interest groups. There is much that we cannot do but there is one thing that We the People absolutely must do- we must stop sitting on the sidelines!


The collective failure of We the People to get involved in make our concerns known to our politicians have nearly made the concerns of the great majority of the citizens of this nation all but irrelevant to the politicians.I implore you to get involved!

If this situation concerns you or especially if it angers you, I ask you to call your Senators and Congressional "Representative. This is not only your right- it is your obligation! 

All I ask is that you make it clear to our politicians that we are not as dumb as they hope we are!

We live in a perilous world and in a perilous era. The survival of our nation and the lives of our citizens hang in the balance.

This is neither a Conservative issue, nor is it a Liberal issue- simply stated, this is most certainly an AMERICAN issue!

You are either part of the solution or you are a part of the problem!

Democracy is not a spectator sport!

Lead, follow or get out of the way!

-michael cutler- 


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"Bordering on Insanity!"

Candidates aim to tar rivals over the outsourcing of jobs

The Washington Times

8:29 p.m., Thursday, October 14, 2010



With unemployment stuck above 9 percent, Democrats have increasingly seized on outsourcing of U.S. jobs as a campaign issue, arguing the GOP's policies have encouraged companies to shift work overseas.

Republicans say a punitive corporate tax structure and burdensome federal regulations are responsible for both unemployment and outsourcing.

The only problem is that neither side can pinpoint just how much the migration of jobs is responsible for the gloomy economic picture.

"Nobody knows how many jobs have moved overseas," said Michael Montgomery, an economist with IHS Global Insight"The reality is, the statistics aren't kept for the simple reason that it is almost impossible to gather those statistics. You can make estimates of it, but you can't prove it."

That uncertainty has left candidates and outside groups free to boil complex economics and labor flows down into a pointed blame game on the campaign trail.

The issue dominated Democrats' efforts during their short September legislative stint, as Senate Majority Leader Harry Reid unsuccessfully pushed a bill designed to end tax breaks for U.S. companies that move jobs and manufacturing plants overseas. House Speaker Nancy Pelosi pushed through a bill that would raise tariffs on Chinese imports if the communist nation keeps an artificial lid on its currency.

Before leaving town, Mrs. Pelosi and House Democratic leaders also unveiled a "Make It in America" agenda that she said was aimed at "creating good-paying jobs here and not shipping them overseas."

Since then, polls have shown increasing voter anxiety over outsourcing of jobs, and China has become a common target for both parties to attack – a trend that is likely to increase after the Commerce Department released numbers on Thursday showing that the trade deficit with the Asian giant had ballooned to $28 billion in August, up from July's $25.9 billion.

The concerns over trade and outsourcing of jobs to China have been on full display in Pennsylvania, where Rep. Joe Sestak, the Democratic candidate for the state's open Senate seat, plans to meet Friday with employees of a small company near Harrisburg to speak out against the ongoing job loss and outline the steps the country can take to keep and expand employment opportunities in the state. The meeting follows a campaign ad, sponsored by the Democratic Senatorial Campaign Committee, in which a narrator claims Mr. Sestak's Republican opponent, Pat Toomey, "is fighting for jobs. In China."

"In Congress, Toomey voted to give China a special trade status. Toomey's vote for China helped cost us 2.4 million jobs. Job-killer Pat Toomey, maybe he ought to run for Senate in China," the narrator says.

The Toomey camp shrugs off the attack, saying that the Republican's support of trade has helped Pennsylvania's economy grow and helped thousand of businesses and farms in the state who rely on exporting their goods and services around the world. The campaign also said that former President Bill Clinton, a Democrat, supported China's entrance into the World Trade Organization.

Meanwhile, the Republican National Congressional Committee is running at least 10 ads that hammer incumbent Democrats for supporting the $812 billion stimulus package that included money for grants that went to green-energy jobs in China.

"Why did Tim Walz vote for a bill that allowed more than $1.5 billion to go to companies overseas?" a narrator asks in an ad running in Minnesota's 1st Congressional District, which Mr. Walz represents. "Walz helped create jobs in China, and we paid for it."

The political fight is likely to increase. Democratic strategists James Carville and Stanley Greenberg last week advised candidates to focus on the "offshoring" debate after they found in a survey that fair-trade arguments could help Democrats avoid losses in November. In a memo, they implored Democrats to attack Republicans for supporting free-trade agreements with Colombia, Panama and South Korea and protecting "the loophole for companies outsourcing American jobs."

It also encouraged them to say, "I have a different approach, to give tax breaks for small businesses that hire workers and give tax subsidies for companies that create jobs right here in America."

Meanwhile, the AFL-CIO has created a job-tracker database that it says lists on more than 400,000 corporations that have exported jobs, violated health and safety codes or engaged in discriminatory or other illegal practices.

The ongoing debate overlooks the fact that most economists generally agree that the decline of American manufacturing and the increase in white-collar jobs relocating offshore are a natural step in embracing the modern global economy.

"All you have to do is look at the price tags of the stuff that comes from Asia, specifically China, and compare that with what it was five or 10 years ago," Mr. Montgomery said. "That benefit is spread across larger number of people than just ones who are directly affected by their job moving to China."

Mr. Montgomery estimates that no more than 500,000 of the 8 million jobs lost since the start of the recession are attributable to offshoring.

The issue of outsourcing started gaining attention in the 1970s when manufacturing jobs started migrating to countries such as Taiwan and Mexico, where labor was cheaper.

But in this decade, as the recession has taken its toll and more high-paying white-collar jobs have started to follow manufacturing positions overseas, the debate over trade has mushroomed.

In the 2004 presidential election, Sen. John Kerry, Massachusetts Democrats, blasted away at President George W. Bush after his top economic adviser wrote that the movement of U.S. jobs offshore owing to cheaper labor costs would prove "a plus for the economy in the long run."

Four years later, Sen. John McCain, Arizona Republican, came under fire in the Republican presidential primary after he told a crowd in Michigan, "I've got to give you some straight talk: Some of the jobs that have left the state of Michigan are not coming back.

"They are not. And I am sorry to tell you that," he said.

While many believe that statement, and many like it, have made sound economic sense, with the economy and job loss first and foremost in voters' minds, Democrats and Republicans have learned that when it comes to winning an election, nice-sounding political rhetoric can trump unfortunate economic realities, said Steven M. Suranovick, an economics professor at George Washington University.

"Voters and workers are looking for short-term solutions to a problem that has been here for a couple years now, and it is very easy for politicians to pick up on and point the finger at outsourcing as a way of gathering support – especially among blue-collar workers," he said.

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