BTP is back after the gods of cyberspace silenced it for the weekend. I'll start with leftover business from the weekend. Alan Blinder, a Princeton University professor and former Clinton administration economist, had a lengthy piece in the Washington Post Outlook section that told readers that offshoring "rattles" him. After reading this, and other pieces Blinder has written on the topic, I am still at a loss to understand what he finds rattling. It is important to keep in mind that Blinder is not retreating an inch from his support of free trade, as he clearly states in the column and the title, "free trade's great, but offshoring rattles me." Offshoring appears to be rattling because it is not just less educated people like manufacturing workers who lose their jobs due to offshoring, but also some highly educated workers like software engineers. But where is the problem here for a committed free trader? We told the autoworkers and textile workers who lost their jobs or get lower wages because of trade that life's tough, get used to the global economy. Is there any reason that we should treat more highly educated workers differently? After all, who should be better prepared to compete in a global economy than a person with an advanced degree in a cutting edge field? Blinder's answer on this one is especially peculiar. He wants us to train workers for highly skilled occupations that require face to face contact, like brain surgeons and divorce lawyers. He argues that these workers will not have their wages depressed by direct competition with their counterparts in the developing world. But, this is clearly a policy choice and one that is very hard to justify for any economist committed to efficiency and equality. After all, we quite deliberately put many workers who do jobs requiring face to face contact into direct competition with low wage workers in the developing world. We do this by bringing in immigrants to work as dishwashers, custodians, and nannies and many other low paying occupations. The economic gains from having well-qualified immigrants from the developing world also work as brain surgeons and divorce lawyers would be enormous, as Mr. Blinder surely knows. So, why would he advocate subjecting workers in low paying occupations to competition from workers in the developing world, while protecting U.S. workers in the most highly paid occupations. That sounds like a policy intended to promote inefficiency and inequality. BTP eagerly awaits explanations for why this free-trader is so explicitly embracing protectionism.
--Dean Baker