Wednesday, May 9, 2007

May 10, 2007 - The Naked Economist

As in "the emperor has no clothes." It's not hypocrisy on the part of conventional statist economists that makes them so weird but that they can't see a phenomenon for what it is. So says unconventional economist Dean Baker, anyhow.

"Alan Blinder, a Princeton University professor and former Clinton administration economist, had a lengthy piece in the Washington Post Outlook section that told readers that offshoring "rattles" him. After reading this, and other pieces Blinder has written on the topic, I am still at a loss to understand what he finds rattling.

It is important to keep in mind that Blinder is not retreating an inch from his support of free trade, as he clearly states in the column and the title, "free trade's great, but offshoring rattles me." Offshoring appears to be rattling because it is not just less educated people like manufacturing workers who lose their jobs due to offshoring, but also some highly educated workers like software engineers.

But where is the problem here for a committed free trader? We told the autoworkers and textile workers who lost their jobs or get lower wages because of trade that life's tough, get used to the global economy. Is there any reason that we should treat more highly educated workers differently? After all, who should be better prepared to compete in a global economy than a person with an advanced degree in a cutting edge field?" [Links in original text]

Baker makes some very good points and I recommend his article.

Read it all here.

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