Back in the days when Michael Kinsley was the designated liberal on CNN’s “Crossfire” show, paired off against Pat Buchanan or Robert Novak, he would answer the complaints of actual liberals that he really wasn’t a liberal himself by agreeing with them. Kinsley was and still is a man of the cautious, corporate center, which means liberal on social and cultural issues and an Aspen/Jackson Hole corporate elitist on economics. Which is to say, while he’s a trenchant social critic, he hasn’t even noticed the bankruptcy of mainstream economics.
For evidence of this assertion, readers need look no farther than Kinsley’s column today, which ran in both the Los Angeles Times and Bloomberg News. In it, he attacks the Obama campaign for going after Mitt Romney for offshoring jobs—because, he argues, offshoring is really a good thing. Well, he doesn’t actually argue it. Instead, he simply asserts that “most economists believe in the theory of free trade, which holds that a nation cannot prosper by denying its citizens the benefit of cheap foreign labor.”
Most economists also believed that their economic models were accurate right up until they failed to predict the current recession, but we’ll let that one pass.
Kinsley fails to consider the effect of offshoring and free trade on not just job creation but also incomes in the United States. As Princeton economist Alan Blinder, who was the deputy chairman of the Federal Reserve in the mid-90s, has demonstrated, more than 40 million American jobs could be offshored, which has resulted in holding down or decreasing wages in those sectors. Kinsley has also failed to note that wages today are at their lowest level as a share of both corporate revenues and GDP since before World War II, and that the effects of foreign wage competition are a significant factor in that decline.
Kinsley disparages Obama’s campaign for “insourcing,” noting that “one nation’s insourcing is another nation’s outsourcing, and retaliation can quickly lead to a trade war in which everyone loses.” Perhaps Kinsley hasn’t noticed that most other nations, China most particularly, offer major subsidies to companies that will relocate to their shores, while our own government, still largely in the sway of Kinsley’s received beliefs, uniquely does not. When it comes to wooing companies, we’re the only wallflower at the dance. We don’t have a trade war in which everyone loses, as Kinsley fears. We have a trade war in which we alone are the losers—most importantly, vis-à-vis China.
Has Kinsley visited the Rust Belt lately? Noted the wage stagnation of the past three decades, or the wage decline of the past ten years, since the U.S. granted China permanent normalized trade relations? Is he sentient? Not, in answer to all these queries, by the evidence of his columns.
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