No issue is more misunderstood, or been more purposefully confused by the Romney and Obama campaigns, than outsourcing.
Outsourcing is merely the importing side of international trade—purchasing abroad goods and services, and components to assemble final products in the United States.
Just about everyone who has had a choice between buying an American-made product or an import—a car, a wedge of cheese or a movie on-line—must admit that two-way trade based on legitimate comparative advantages is a good thing.
If Americans expect folks abroad to purchase Boeing aircraft and Intel processors, then they had better be prepared to outsource some of what they purchase directly, or through the firms that assemble products domestically and their government.
The problem is not outsourcing but rather it is inappropriate outsourcing—purchasing abroad products that could be made as or more cost-effectively at home. That happens when: U.S. policy throws up unnecessary barriers to domestic production; foreign governments unfairly subsidize businesses or simply keep out competitive American products; or U.S. firms have an inappropriate bias toward foreign sourcing.
Those swell the trade deficit, which imposes great costs, and both President Obama and Governor Romney own some of that problem.
President Obama’s bans and tough restrictions on oil and gas development in the Gulf, off the Atlantic and Pacific Coasts and in Alaska do not benefit the global environment if those do not reduce U.S. petroleum use but merely shift U.S. sourcing abroad, where environmental risks may be less effectively managed. EPA imposed limits on CO2 emissions that shift manufacturing to China where similar regulations do not apply are a similar problem. Both kill U.S. jobs without an environmental benefit.
