What do the Bush Administration's attempts to link Saddam's Iraq with 9/11 and the BusinessWeek cover story of June 18, '07 have in common? Both mislead Americans.
The BusinessWeek story and research by Michael Mandel is titled, "The Real Cost Of Offshoring." The rub is in the subtitle that says "U.S. data show that moving jobs overseas hasn't hurt the economy. Here's why those stats are wrong."
Anyone reading this and the text of the story would naturally think that offshoring (or some part of it) hurts the US economy, and stopping this offshoring will improve the economy. But the reverse still holds true.
All the article says is that the GDP growth is not being properly measured because of a "phantom" factor, so the growth may be half a percent less than calculated. This "would wipe out as much as 40% of the (reported) gains in manufacturing output."
What should have been emphasized is that cutting back on offshoring may protect specific manufacturing or service jobs, but it will make the overall US economy even less competitive and hence further reduce or even reverse GDP growth. UK under the much maligned and under-appreciated Tony Blair serves as a good counter-example. Its much fuller embrace of globalization and unrestricted offshoring of services has contributed significantly to its economic well-being and ten years of uninterrupted positive quarterly growth.
But BusinessWeek insinuates to the contrary. So people will draw the wrong conclusion about the many forms of offshoring, including international medical travel. Here's what I politely wrote to BW:
"Readers may draw the wrong conclusion from your June 18, 2007 cover story, 'The Real Cost of Offshoring.'
"Even if all the calculations and analyses are correct, it does not mean that putting the brakes on offshoring will improve the US economy, or even jobs and worker welfare in the long or medium term. On the contrary, in a globally competitive economy failure to embrace the efficiencies of globalization will make Americans worse off.
"Author Michael Mandel and economist Susan Houseman probably agree with this, but it needs to be stated explicitly."
I doubt they'll publish this.