Summary
It is only fitting that Paul Samuelson, the first Nobel Laureate in economics, and whose textbook introduced U.S. readers to Keynes, would be among the first mainstream economists to question whether unfettered international trade, in the context of massive outsourcing, would necessarily leave a developed economy such as that of the United States better off-even in the long run. The combination of a new set of rules to limit international capital movements and to expand labor mobility across borders, together with measures to ratchet up economic growth and thus increase worldwide demand for labor, would alter the current process of globalization and harness it to the needs of working people worldwide.
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Outsized Offshore Outsourcing
At a press conference introducing the 2004 Economic Report of the President, N. Gregory Mankiw, then head of President Bush's Council of Economic Advisors, assured the press that "Outsourcing is probably a plus for the economy in the long run [and] just a new way of doing international trade."
Mankiw's comments were nothing other than mainstream economics, as even Democratic Party-linked economists confirmed. For instance Janet Yellen, President Clinton's chief economist, told the Wall Street Journal, "In the long run, outsourcing is another form of trade that benefits the U.S. economy by giving us cheaper ways to do things." Nonetheless, Mankiw's assurances were met with derision from those uninitiated in the economics profession's free-market ideology. Sen. John Edwards (D-N.C.) asked, "What planet do they live on?" Even Republican House Speaker Dennis Hastert (Ill.) said that Mankiw's theory "fails a basic test of real economics."Mankiw now...See the full content of this document
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