--> Gill Blog: Battling to Maintain Objectivity in an Election Year

Gill Blog

Friday, May 14, 2004

Battling to Maintain Objectivity in an Election Year

As the India trip winds down and I become better attuned to some of the basic realities of globalization, I can't help but see how sound policies can be impacted by the forces of election year politicing. Much to the suprise of many, India elected a new government yesterday in a campaign where some politicians have routinely resorted to promising free electricity if elected. In a country where the differences between haves and have nots has always been pronounced, it can be understood why some voters lacking formal education might buy into such ludicrous promises, but our basic hope about democracy is that those who cast ballots make somewhat informed decisons. Surely, we would expect that voters in the world's most advanced democracy would laugh at such rhetoric.

Unfortunately, expectations are not always realized. As the US election nears, politicing becomes crucial. Accordingly the messages conveyed and promises made start to take on a quality eerily similar to promises of free electricity. Let's continue with our outsourcing discussion and look at how the press is able to find ways that literally tug at the emotions of the voting public. Radio-Flyer, the Chicago-based manufacturer best known for it's production of the little red wagons we all seemed to own when we were kids, has announced it's shifting manufacturing operations from Chicago to China:
Outsourcing - the trend of businesses cutting costs by shipping U.S. jobs overseas - continues to be a red hot issue in Campaign 2004. As Treasury Secretary John Snow outlined his views in a Tuesday newspaper interview on creating jobs in the U.S., word spread that Radio Flyers will soon be made in China. Radio Flyer Inc., maker of the little red wagon that has been symbolic of childhood for generations of American children, said it will keep its headquarters and distribution business in Chicago but decided the Chicago plant where the metal wagons are built is too expensive to maintain. With the plant closing later this year, Radio Flyer will lay off nearly half its 90 employees.
Can there possibly be a better way to reinforce the evils of outsourcing than showing how dark foreign forces can steal away an American icon?

While the outsourcing debate reaches a fevered pitch, it is refreshing to come across items that actually present their own version of reality using hard statistics. This article in The Economist does an excellent job attacking each assertion point by point by using readily available data:
Despite strong productivity growth and an accelerating recovery from the recession of 2001 (the economy grew by an annual 4% in the fourth quarter of last year), jobs are being created at a feeble rate of 100,000 or so a month. The jeremiahs point out that a net total of 2.3m jobs have been lost since Mr Bush came to office. Although this date is often used as the starting-point from which to make a comparison, it is a silly one. In early 2001 the hangover effects from the investment boom of the late 1990s were only starting to be felt. Unemployment, at 4.2%, was unsustainably below the “natural” unemployment rate, consistent with stable inflation, that most economists put at around 5%. In other words, perhaps two-thirds of those 2.3m jobs were unsustainable “bubble” ones.
Despite the attempt to instill some reason and objectivity, don't expect the anti-outsourcing rhetoric to tone down until at least November.


Post a Comment

<< Home