I won’t be the first to note how President Obama’s first response to his “shellacking” in the election, mostly over persistent high unemployment, was a trip to India, a nation that personifies American job losses to offshoring.
Are we supposed to be comforted by his assertion that India is not merely a nation of call centers? Indeed, it is not. India has millions of high-skilled workers who can do the jobs of Americans for a fraction of the cost. American corporations are well along in taking advantage of this.
The administration considered the highlight of the “jobs trip” the announcement of $9.5 billion in export deals, said to “support” 53,670 U.S. jobs. Boeing was a big winner, with $4 billion in military transport aircraft, showcasing how arms are one of our last big export clusters. General Electric was given a deal for engines for combat aircraft.
If all this sounds more like managed trade than “free trade,” it is. It’s hard to see if small exporters can get the same presidential mojo as the big players (many of whom also rooted for his downfall). And the deals will make little dent in a trade deficit that stood at $46.3 billion in August alone. For the year, we have a $7 billion deficit with India.
Tell all this to Michigan and Ohio. It won’t go over. It’s a world of surplus labor, much of it high skilled, transnational corporations and capital markets hostile to the interests of the American middle class. A few advanced nations, especially Germany, have found the way to keep thriving. Meanwhile, Americans continue to live beyond their means as the world’s biggest “consumers,” instead of saving or buying local. Treasury Secretary Tim Geithner’s pleas for “rebalancing” somehow don’t include this.
Today’s Econ Haiku:
Amazon gives new meaning
To the bottom line