One of the problems with the outsourcing debate is that the estimates about job losses due to offshoring are mostly coming from management consultants, who appear to be basing those numbers on some really shoddy guesstimates. Official data collection from the Bureau of Labor Statistics didn't sem to directly address this phenomenon. My back-of-the-envelope calculations from the BLS Mass Layoff data suggested that the number of people laid off due to offshoring was less than 3% of total layoffs.

Starting this calendar year, however, the BLS decided to ask employers whether offshore outsourcing -- or onshore subcontracting that led to offshore outsourcing -- was the reason for the mass layoff.

Data for the first quarter are now available for extended mass layoffs -- and it turns out that my 3% estimate was incorrect. This is from the Bureau of Labor Statistics press release:

Of the 239,361 private sector nonfarm workers who were separated from their jobs for at least 31 days in the first quarter of 2004, the separations of 4,633 workers were associated with the movement of work outside of the country, according to preliminary data. Domestic relocation of work--both within the company and to other companies--affected 9,985 workers....

In establishments that had layoffs related to the movement of work, the average size of a layoff was 135 workers. This compares with an average of 199 for all establishments that had extended mass layoffs in the first quarter of 2004....

Sixty-eight percent of the layoff events involving the movement of work and 65 percent of the laid-off workers were from manufacturing industries during the first quarter of 2004.

So, to conclude -- the percentage of jobs lost due to mass layoffs -- in turn due to offshore outsourcing -- as a percentage of total jobs lost through mass layoffs was not 3% -- it was a whopping 1.9%. So my back of the envelope calculations from a few months ago are an exaggeration. My apologies.

The caveats -- this data does not cover two other kinds of job loss via outsourcing -- 1) Those let go due to ousourcing when fewer than 50 people were let go; and 2) Those jobs created de novo overeas that may have been created in the U.S. instead were it not for the outsourcing phenomenom.

At the same time, this data also does not cover two kids of job gains via outsourcing -- 1) Those jobs created via insourcing, when a foreign firm hires U.S. workers; and 2) Those jobs created via the budgetary savings reaped from outsourcing.

The bottom line -- offshore outsourcing is responsible for a piddling number of lost jobs.

I'll be commenting on these figures this evening for Nightly Business Report on PBS. Check your local listings!!

UPDATE: Here's how Reuters plays the story:

The bulk of outsourced jobs never leave U.S. shores, the government said on Thursday in a new report suggesting concerns over American workers losing jobs to cheaper foreign labor may be exaggerated.

Nine percent of non-seasonal U.S. layoffs in the first quarter were due to outsourcing, but less than a third of the work was sent overseas, the U.S. Labor Department said in releasing new figures on mass layoffs and outsourcing.

"In more than seven out of 10 cases, the work activities were reassigned to places elsewhere in the U.S.," the Bureau of Labor Statistics said in its report on mass layoffs for the January-to-March period.

Only trouble is, the headline says "OUTSOURCING CAUSES 9% OF U.S. LAYOFFS" -- which is true but includes onshore as well as offshore outsourcing.

Blogging will be light the next couple of days, as I'll be attending/presenting at the Council on Foreign Relations National Meeting. I'm bringing the wi-fi, but this meeting is an all-day affair, and blogging is not an accepted social practice at CFR meetings.... yet.

Last year, Howell Raines resigned while I was en route -- I wonder if something big will happen this time around.....

Matt Stoller has a post over at Blogging of the President entitled, "Daniel Drezner, The Mediocre Reasonable Conservative." I'm going to reprint the bulk of it here so no one can claim anything was taken out of context:

It really does seem like there are no grown-ups in the Republican Party anymore. There are just infants who don't throw tantrums and get tenure because of it.

I speak, of course, of Daniel Drezner and his cowardly ilk. The guy's dishonesty and defensiveness has been amply demonstrated [See my response to the linked post here--D.D.], and since the Iraq tar baby happened he's turned almost exclusively towards talking about outsourcing. This is an evasive escape hatch if I've ever seen one.

Now he's defending the anti-semitic attacks on George Soros:

As Stephen Bainbridge points out, there's some evidence to support Blankley's claim that Soros accused the Jews of fomenting anti-Semitism...

I've concluded that Soros is a political loon of the first order. It is ridiculously easy to attack George Soros without ever discussing his religion.

Two points on this. One, the attacks on Soros were anti-semitic, and ignoring this piece of the pie is to ignore the hate-filled mess that is the modern GOP. Drezner's point is that an attack on his religion is analytically unnecessary - what about the fact that it's really a bad thing to say, and what that fact says about the attackers? Two, calling a serious thinker on international politics a 'loon' without evidence is tantamount to intellectual cheating. I don't care how often you're published in the New Republic, this is not respectable discourse, this is the aiding and abetting of toxic politics.

This is not surprising, because it's what Drezner and other desperately pathetic 'moderates' do all the time. [See my response to the linked post here--D.D.] First, they join in the catcalls and jeer at liberals for being unserious. Then, as the bad news trickle in, they moderately distance themselves both from the Democrats and the extreme Republicans. As the bad news gets worse, they continue to act appalled at the level of political discourse, without pointing fingers at the people whose motivations they completely misinterpretted and whitewashed. Finally, they ignore the situation and pronounce themselves independent, with both sides meriting disdain and maybe Bush their vote. At no point is their a glimmer of recognition that they were seriously, disastrously, horrifically wrong, and that lots of people are dead because of it. Nor do they realize that they are wrong because the people they rely on are far far more extreme than they are believe.

These guys are like the business elite who dealt with Hitler, hoping they could control him because they held the money. Drezner thinks he has good ideas and speaks at academic conferences, so he bears no responsibility for policing his own side. 'I don't have a side', he'd probably jeer back, 'Neither candidate represents my viewpoint'. Yes, you do have a side, professor, and it isn't just that you advised the original Bush/Cheney campaign. When you say that 'first-rate political loon' and holocaust survivor George Soros has accused the jews of fomenting anti-semitism, you've picked your side.

Wow -- how to respond:

1) Yep, it's true -- I was clearly defending "the anti-semitic attacks on George Soros" when I said in the post Matt linked to that I thought Tony Blankley excelled at "saying unbelievably stupid things," or when I said "Blankley is clearly an ass. As a Jew, I find that last bolded sentence repugnant" or when I approvingly linked to Eugene Volokh's post on why Blankley's statement was anti-Semitic.

It's a good thing Matt wasn't selective in how he quoted the post, or someone might have gotten the wrong impression.

2) As for the charge that I've neglected Iraq as difficulties have mounted -- once again I'll plead guilty to Stoller's charge. I've only discussed the mistakes made in Iraq here, here, here, here, here, here, here, here, here, here, here, here, here, here, and here over the past six weeks.

3) Stoller has a fair point in stating that "calling a serious thinker on international politics a 'loon' without evidence is tantamount to intellectual cheating." Of course, I think have a fair point in saying that Soros is not a serious thinker on international politics. Part of the reason I didn't go further into thoughts on Soros is that they're going to appear in another venue. However, if Stoller wants some evidence, here's a brief snippet from my forthcoming review of The Bubble of American Diplomacy:

The most obvious example of Soros’ inconsistencies comes on the question of whether the war on terrorism is really a war or a law-enforcement operation. He starts out by saying that it should be the latter (p. 26): “We need detective work, good intelligence, and cooperation from the public, not military action.” A scant 16 pages later, however, he allows that, “The invasion of Afghanistan was justified by its role as the home base of Al Qaeda.”

The Bubble of American Diplomacy is riddled with assertions that are either wrong or contradicted a few pages later. For example, on pages 59-60, Soros makes the jaw-dropping claim that compared to nation-building in Iraq, “conditions were much more favorable in Afghanistan.” Clearly, neither country is a walk in the park when it comes to statebuilding. That said, on what possible basis can Soros claim that a country with one-third the per capita income, one-tenth the amount of paved roads, three times the infant mortality rate, and double the number of primary languages and ethnicities than Iraq is a better candidate for nation-building?

4) Finally, for someone who gets outraged at offensive and anti-Semitic rhetoric (a truly bold position), I'm not sure whether it's rhetorically useful for Stoller to say I'm "cowardly" or compare me with "the business elite who dealt with Hitler." After reading that latter point in particular, my first reaction was, "gee, Matt Stoller is an anti-Semitic schmuck." My second reaction is the title of this post.

Stoller would probably label this post as "defensive" -- because it is. I have no qualms labeling his original his post as "dishonest."

UPDATE: Stoller has another post up on this, as well as this comment to this post. Shorter Stoller:

1) "Frankly, what I said was inappropriately written in anger and just based on the tone probably deserved a lot less effort than he gave it."

2) "[Calling Soros a "loon"] set me off. Calling someone insane who is clearly not to score political points is central to this mindset."

3) "The problem as I see it is the essential unwillingness of someone like Drezner to admit what he knows is true - Iraq is an attempt at empire perpetrated by deeply illiberal individuals."

My short responses:

1) Don't worry Matt -- I won't be devoting much time or effort to your prose in the future.

2) For the record, George Soros is clearly not insane, and I apologize if I gave that impression (thouh I don't think I did). He's accomplished many great things as a philanthropist. But even he describes his political views as "rabid." When they're not that, they're banal. If Stoller wants to take Soros seriously, fine -- that's his waste of time.

3) Oh, please -- an empire that sent in fewer troops than was necessary? An administration that now seems hell-bent on getting out of the country? Where's your evidence for empire?

My latest guest post on Glenn Reynolds' MSNBC blog is up -- and surprise, surprise, it's about Reagan's legacy.

Go check it out.

From a purely selfish perspective, I shouldn't give a rat's ass one way or the other about the ability of gay Americans to get married. I'm not gay; I wasn't prevented from getting hitched. I think the argument that gay marriage undercuts the institution is hogwash, so whether it's legal shouldn't matter to me. I would derive some empathetic pleasure from seeing gay friends getting married, but that hasn't happened yet, so no effect there. There are many excellent reasons to support it, but none of them would appear to affect me directly.

However, The Onion reminds me of one personal incentive to support gay marriage with their fake news story, "Gay Couple Feels Pressured to Marry.":

Ever since last month, when Massachusetts became the first state to allow same-sex weddings, parents, friends, and coworkers have been pressuring Kristin Burton and her girlfriend Laura Miyatake to marry, the couple of 14 months said Monday.

"As soon as the news coverage about gay marriage started, my mom called me up," said Burton, who works as a nursing-home administrator. "Of course, she didn't directly ask me when I was going to marry Laura. First, she asked how Laura and I were getting along, and how business was at Laura's shop. But then she reminded me about my dad's heart disease and told me that he could go at any time. When she started to talk about how nice it was at my brother's wedding, I told her I was late for my yoga class."

Burton and Miyatake said they never expected the court's decision to add so much tension to their relationship.

"It seems like just yesterday I was annoyed because straight people were awkwardly asking if we were 'friends' or 'partners,'" Miyatake said. "Now, every convenience-store clerk who guesses we're gay asks us if we're going to get married under the new law. It's sort of a touchy subject, okay?"

The ability to ask my gay friends and colleagues when they're planning to get hitched and watch them squirm with discomfort answering the question -- that's going to be enjoyable.

A while back, I blogged here and here about how American consumer behavior seems generally unaffected by the spectre of outsourcing -- i.e., Americans make choices based more on price than origin of production.

To be fair, some people do not think this way -- click here for a few examples courtesy of Newsweek. Beyond anecdotal evidence, however, what do Americans now think about outsourcing? And do these feelings affect their behavior?

Two recent polls -- one by the Employment Law Alliance ("the world’s largest independent network of labor and employment attorneys") and one by Ipsos (for the Associated Press) suggest some commonalities and cleavages on the issue.

On the one hand, the polls largely confirm that most Americans are mercantilists at heart. The Ipsos poll shows that 69% of Americans believe that outsourcing hurts the country -- and only 17% think it helps the economy. 58% of respondents in the ELA poll believe that companies outsourcing work that could be done by Americans to offshore contractors should be penalized by the US government.

At the same time, the ELA poll shows that 46% of Americans believe that offshoring has been exaggerated by the media. Still, it would be hard not to conclude that most Americans think offshore outsourcing is a bad thing.

So how does this affect actual consumer behavior? Here the answer changes. On the one hand, the Ipsos poll shows that when asked to choose between a product made in the USA and a similar one made elsewhere, 93% of Americans say that they'd buy the American product. However, if the foreign good is cheaper, that percentage falls to 54%. Furthermore, a slight plurality (38% to 35%) do not check product labels so as to "buy American."

The AP story by Will Lester goes on to suggest a generational divide in the economic reaction -- with younger folks more sanguine:

"That's not a big deal to me, where it was made," said Serena Evans, a machine operator from Hurt, Va. "I look for the cheapest product, because I barely have the money to buy it."

Evans, 24, was typical of her age group.

Nearly two-thirds, 63 percent, of those younger than 30 said they seldom if ever check to see where a product is made -- more than three times the number who do. A majority of young adults said they would buy a lower-priced product from another country over a more expensive U.S. one.

Americans 60 and older were almost twice as likely to say they usually or always check labels to see where a product is made. And by more than 2-to-1, they said they would buy an American product even if it cost more than foreign goods.

As the story concludes, "Fresh concerns about U.S. jobs being shipped overseas are not being turned into renewed public sentiment to buy American."

So, to sum up -- Americans do not like offshore outsourcing as a phenomenon -- but over time, and increasing number of them are happy to reap the benefits of it as consumers.

This is really the biggest intellectual divide on the outsourcing issue -- whether one thinks the most important effect of offshoring is on employment or on consumption. Most Americans say the former but do not act on it. The data I've seen suggest that outsourcing's effect on employment is negligible -- and the effect on consumption is a positive one.

The Reagan tributes continue apace (mine will be up shortly). The immediacy of his passing, combined with the fact that the last time president who served two full terms died was thirty-five years ago, means there's going to be a bit of rhetorical overkill.

For an example, consider Ralph Peters' New York Post column (link via James Joyner). The column does an excellent job of describing how the morale and training within the ranks of the military improved dramatically under Reagan. But it also contains this bit of comparison between Jimmy Carter and Ronald Reagan:

Then came Ronald Reagan

Yes, he raised Defense budgets dramatically. And the money mattered. But the increased funding and higher pay wouldn't have made a decisive difference without the sense that we had a real leader in the White House again. The man in the Oval Office genuinely admired the men and women who served. When he saluted his Marine guards, he meant it. The troops could tell. (emphasis added)

Maybe I'm reading too much into this, but to me Peters' implication was that Reagan's predecessor did not mean it when saluting the Marine guards.

Now, like Virginia Postrel, the stark contrasts between Carter and Reagan is the reason why I registered as a Republican at age 18. But Peters goes too far here. Jimmy Carter was a graduate of the United States Naval Academy and served for seven years as an officer in the Navy. His service was in the nuclear-submarine program under Admiral Hyman G. Rickover, a man known for having some pretty high standards. As James Joyner points out, "[Carter] presided over many of the changes that would lead to the fielding of terrific new equipment in the early 1980s."

Was Carter a failure as a president? Good God, yes. But I have no doubt that when Carter saluted the Marine guards (see below), he meant it as well.

To be fair to Peters, I may be jumping on poor phrasing rather than Peters' actual intent. But there it is.

UPDATE: Thanks to William Kaminsky for linking to this New York Times story on presidential salutes -- turns out that Reagan was the first president to return a military salute. [So, like, this trashes your Carter argument, right?--ed. Only if you relegate every other President before Reagan -- including Washington, Madison, Lincoln, TR, FDR, Truman, and Eisenhower -- into the same category as Carter.]

A brief follow-up to my last post on efforts to recall Venezuelan President Hugo Chavez.

The New York Times reports that a referendum date has been set in Venezuela for Hugo Chavez:

A recall referendum on President Hugo Chávez, whose rule has bitterly divided Venezuelans, has been scheduled for Aug. 15, electoral authorities said Tuesday night.

The president's opponents learned Thursday that they had collected enough signatures to force a referendum but had worried that with administrative or legal challenges, he could push the vote past Aug. 19, the fifth anniversary of his coming to power. According to the Constitution, a vote to recall Mr. Chávez at that point would allow his vice president to run the country and permit Mr. Chávez to run for re-election in 2006.

In a brief statement, Ezequiel Zamora, vice president of the five-member National Electoral Council, said the Aug. 15 date would permit Venezuelans to remove Mr. Chávez's administration and, within 30 days, elect a new president.

So, hurdle one -- canceling the referendum via a technicality or legal delay -- has been cleared. However, the BBC reports that Chavez will not be taking this challenge lying down: "He has already begun campaigning, warning voters of the consequences of an opposition victory."

It seems that California is not the only state that is coming to grips with the costs that come from outlawing offshore outsourcing.

The AP's Allen Breed reports that in the wake of efforts to block the offshore outsourcing of government contracts, some state legislatures don't like the pricey hangover:

Governors and legislators in two-thirds of the states have ordered or proposed antioutsourcing actions.

But many of those efforts at "economic patriotism" have run headlong into another time-honored American tradition: taxpayers' demands that the government give them the most bang for their buck....

When Kansas officials learned that food stamp questions were being answered by workers in India under a contract with an Arizona company, state senators added language to the budget requiring the work be done in the United States.

But the language was deleted when negotiators learned it would boost the state's costs by $640,000, about 38 percent.

The Boston Globe's Diane E. Lewis reports on the effect that offshore outsourcing is having on IT salaries:

Technology specialists with hot skills continue to command top salaries and bonuses despite the outsourcing of some information technology jobs to India, Russia, Ireland, and other countries, according to a report released today.

Offshore outsourcing has had little impact on the salaries of those with critical skill sets such as senior network architects or senior database management staff, said the report by the META Group, based in Stamford, Conn. Based on a compensation survey of 650 large and midsized firms with at least $200 million in annual revenue, the report includes salary data for 180 information technology positions in 14 industries.

The technology research firm found that technology workers with general skills are more likely to experience stagnant wages than those whose expertise is in demand. The survey also found that 19 percent of the companies polled outsource IT work to foreign countries. Of those, the majority send jobs to India.

Opponents of outsourcing jobs offshore have maintained the practice causes layoffs and depresses salaries in the United States, forcing many full-time IT professionals to seek work in other professions or turn to temporary contract work.

The IEEE-USA, which represents electrical engineers, electronics engineers, and computer specialists, declined to comment on the META Group findings yesterday. The industry group has spoken out against the outsourcing of IT jobs. A spokesman said the organization needed time to study the report.

Maria Schafer, the report's author and a senior program director at META Group, said salaries for IT specialists are starting to return to their 2000 levels.

Read the whole article -- and you can download the executive summary of the META group report by clicking here (registration required).

Given that 2000 was the peak of dot.com hysteria, the salary rebound is pretty impressive.

UPDATE: This elaboration on salary structure comes from page 11 of the executive summary:

1) companies paying staff this much more than others in the organization are very eager to retain these individuals; 2) there is a continuing and strong market for experienced individuals with critical skills; and 3) the job market is picking up. The rate of increase in salaries has slowed, but IT staffs have held onto salary levels because their role is necessary to the organization. There are many more available workers — due to the net effects of continuing vendor-side layoffs in the high-tech sector, fewer opportunities for consulting, and the overall sluggishness in companies of all sizes — yet the issue of quality in the available labor pool is compounded by a continuing lack of some skills (mainly in the highly specialized areas that represent emerging technology needs, such as wireless, security, and data management).

As for the magnitude of offshoring (from page 16):

Of the 20% of organizations that are currently engaged in sourcing (or siting) labor offshore, the percentages vary substantially for how much companies are deploying labor this way. Forty percent of this number have only 5% or less of their total workforce deployed offshore.

I have no doubt that hundreds of tabloid writers and millions of Americans are salivating over Jennifer Lopez's third marriage -- this time to Latin crooner Marc Anthony. [There are other reasons millions of Americans might salivate over J. Lo--ed. You know my preferences when it comes to Latino film stars.]

Far be it for danieldrezner.com to deny Americans their God-given right to mock celebrities. However, since I've been defending American celebrities as of late, let me stick up for J. Lo's recent nuptials. Consider the following:

1) J. Lo's moving up the talent chain. This Bill Zwecker column in the Chicago Sun Times nicely encapsulates J Lo's romantic history:

first marriage -- waiter Ojani Noa
post-first marriage -- rapper Sean "P. Diddy" Combs
second marriage -- dancer/choreographer Cris Judd
post-second marriage -- actor Ben Affleck
third marriage -- actor/singer Marc Anthony

There is an encouraging trend here. With each successive relationship, J. Lo's beau seems to have an increasing amount of talent -- which presumably raises the level of mutual respect between Miss Lopez and her significant other. One can easily make the claim that Anthony is the best singer of the lot, but one could also say he's the best actor of the lot -- Anthony's one many film appearances include a lovely turn as the mute waiter in Big Night. Plus, it's not like Marc is going to be swept away only by J. Lo's beauty -- his previous marriage was to former Miss Universe Dayanara Torres

2) "Marcifer" have a lot in common. Turns out J. Lo and Anthony have known each other and been friends for more than a decade. Furthermore, as the Sun-Times story notes:

[T]he superstar's sister, WCBS-TV entertainment reporter Lynda Lopez... has said, "Jennifer and Marc's similar background, Puerto Rican culture and heritage, professional interests and approach to life" will bode well for a long-term "Marc-ifer" marriage. Lopez grew up in a poor, working-class neighborhood in the Bronx, and Anthony was raised in a similar New York neighborhood in East Harlem. Both stars share similar musical and film interests.

Maybe these two crazy kids have a future together.

3) Compare J. Lo with some of her peers. Consider the recent statements of some other women who aspire to achieve celebrity status in more than one artistic realm.

The Associated Press reports the following about singer/actor/dancer Janet Jackson:

Long before she exposed her right breast to the world during the Super Bowl halftime show, Janet Jackson says she had thoughts about sex.

"As I've gotten older, I've come to realize that I had a very active sexual mind at a very young age. I hope that doesn't sound bad," Jackson tells Blender magazine for its June/July issue....

"My first crush was on Barry Manilow. He performed on television, and I remember taping it. When no one was around, I used to kiss the screen."....

Now, Jackson says she expresses more grown-up urges through one of her alter egos, named Strawberry: "She's the most sexual of them all, the wildest."

The other character living inside her is Damita Jo, which is her middle name and the title of her latest album. Damita Jo, she says, is "a lot harsher, and quick to put you in your place."

Okaaaaayyyyyy.......

Meanwhile, here's the latest on fashion designer/model/actress Paris Hilton, according to MSNBC's Kat Giantis:

Is there anything more demanding than being rich and famous? Not according to Paris Hilton, who complains to Entertainment Tonight (via the New York Post) that she's, like, suffered for her art. "We're in the middle of nowhere, like 45 minutes away from, like, civilization and it's, like, all real," the eloquent heiress says of filming "House of Wax" in Australia.

"It's, like, really cold and last night we were shooting at this sugar mill and it really smelled bad. And I didn't wear shoes, like, I don't know."

Continues the beleaguered Paris, "We're in the middle of nowhere and there's bugs everywhere. Everything's real. I'm actually running through a forest with bare feet -- it hurts. I've done my own stunts, like falling. I hurt my knee -- it was bleeding. But it looks good, so it's worth it."

4) J. Lo's marriage has already lasted longer than Britney Spears'.

By celebrity standards, Miss Lopez seems to have her head screwed on reasonably straight. We here at danieldrezner.com wish the newlywed couple the best of luck!

UPDATE: Kat Giantis has further details on the wedding itself, plus the following:

Optimistic British bookies are giving 3-1 odds that Jenthony will split by the end of the year, reports Reuters. They are also offering 10-1 odds that the star will eventually wed more times than Elizabeth Taylor, who tied the knot eight times with seven husbands. But while Jen may seem fickle in her affections, she still has a long way to go before she joins Liz in Hollywood's elite club of serial committers.

In fact, her three aisle walks can't compare to the likes of Zsa Zsa Gabor (married nine times, including one union that lasted just a day); Mickey Rooney (married eight times, once to statuesque beauty Ava Gardner); Lana Turner, Larry King, and Martha Raye (all married seven times); Gloria Swanson and Hedy Lamarr (married six times); Billy Bob Thornton and Martin Scorsese (married five times and counting); and Lorenzo Lamas, Melanie Griffith, and Christie Brinkley (all married four times and counting, though in Melanie's defense, she did marry Don Johnson twice).

Hey, I'm moving up in the world -- my New York Times review of Jagdish Bhagwati's In Defense of Globalization is the topic of an Alan Tonelson essay at the leading protectionist web site, americaneconomicalert.org.

I think Tonelson is trying to be light-hearted in his post, but his effort is worthy of a mild fisking. Tonelson's essay is indented and italicized-- my response is not:

We here at Globalization Follies would have more confidence that globalization cheerleaders know what’s best for typical Americans – and their counterparts around the world – if they even occasionally displayed the dimmest understanding of these populations. But dreaming up self-serving, wildly off-base caricatures is so much easier than studying and learning.

We here at danieldrezner.com would have more confidence that globalization opponents know what’s best for typical Americans – and their counterparts around the world – if they even occasionally displayed the dimmest understanding of basic economics. But dreaming up self-serving, wildly off-base caricatures is so much easier than studying and learning.

What else can be made of University of Chicago professor Daniel Drezner’s recent observation that, “There is a need for someone to step into the breach and defend globalization using the language of the average Joe,” and concluding that, “If anyone can rise to this challenge, it should be Jagdish Bhagwati.”

Tonelson must not have have actually read the rest of the review, which was sufficiently critical of whether Professor Bhagwati actually rose to that challenge to prompt an response from Bhagwati.

Bhagwati’s supposed claim to the common touch? He’s “an esteemed international economist…a university professor at Columbia, and a senior fellow at the Council on Foreign Relations.” Further burnishing Bhagwati’s populist credentials: “He has advised the World Trade Organization and the United Nations.”

Actually, what I was saying that there was a need for an economist to use the language of the average Joe. That requires two things -- a good economist and a good writer. The passages Tonelson cites are the background I provided (as any competent reviewer should) about Bhagwati's bona fides as a good economist. If Alan had read just a teensy bit further down that paragraph, he would have seen that I also said: "Born in India, educated in Britain and now an American citizen, he can claim to understand all points of view. He has won multiple prizes for excellence in economic writing." (emphasis added)

Don’t get us wrong. Bhagwati could indeed rival Jimmy Kimmel as a Regular Guy. But teaching at an elite university and nesting in the symbolic heart of America’s semi-official establishment as prima facie evidence? We’re still shaking our heads.

Yeah, nesting in the heart of America’s political establishment (Washington, DC) as "a Research Fellow at the U.S. Business & Industry Educational Foundation" displays a much greater common touch.

At the same time, should anyone really be surprised by Drezner’s cluelessness about popular views of globalization? After all, large and growing numbers of Americans live in a thoroughly and increasingly globalized world, facing mounting foreign competition and weakened job security. Academics like Drezner and Bhagwati, in their lofty, tenure-protected ivory towers, do not.

Sigh. Again, if Tonelson had actually bothered to read the review, he would have noticed that the paragraph before the one he quoted contained the following: "Public opinion polls repeatedly show Americans to be wary about globalization. The problem is not that economists are starting to doubt their own arguments -- the problem is that the rest of society neither understands nor believes them. Between statistical evidence showing that trade is good for the economy and tangible anecdotes of sweatshops and job losses, most citizens trust the anecdotes."

Oh, and about the Americans facing "weakened job security"? Funny thing about that assertion. As Brink Lindsey pointed out a few months ago, the aggregate number of jobs destroyed in the U.S. economy fell by 9.6% between 2001 and 2002 (from 35.4 million to 32 million).

Tonelson gets a C- in wit and an F in reading comprehension.

[So let's see -- Bhagwati didn't like your review, and the protectionists didn't like your review. Does anyone like your review?--ed. Chester thought it had many fine points.]

Practicing what I preach, instead of posting my latest mini-essay on offshore outsourcing here at danieldrezner.com, I've outsourced it to... GlennReynolds.com. Regular readers will recognize some of the material, but there's a lot of new stuff as well!

Go check it out.

Alex Tabarrok at Marginal Revolution has a post showing that Minnesota and Maryland have enacted minimum price laws for gasoline, and are enforcing them against gas stations that are charging too low a price per gallon or are offering free coffee with gasoline as an inducement. In the case of Minnesota, many of the gas stations are attached to Wal-Marts.

This got the attention of Brad DeLong, who agrees with Tabarrok. Brad has an excellent rebuttal to claims that Wal-Mart-type organizations merely undercut prices to create exploitable monopolies for the future, a la Microsoft:

Suppose it sells gasoline cheap, wipes out all competitors in the area, and then raises prices to $12 a gallon. What happens then? Well, the underground storage tanks of its defunct competitors are still there. Gas pumps are cheap. $12 a gallon is a lot of money. You get lots of new entrants taking over the locations of the old gas stations, and competing with Walmart. If Walmart wants to maintain its monopoly, it must limit price to make new entry unprofitable. And since new entry is easy and cheap--since the market is contestable--the limit price is not that high above the competitive price.

Walmart cannot acquire a monopoly by underpricing--"predatory pricing," it is called--without giving a large present to consumers. And the contestability of the market means that it cannot take that present back once it has acquired a monopoly. Few industries have cost structures such that attempts at monopolization through "predatory pricing" harm consumers. Even in the case of Microsoft, it is not clear that Microsoft's success was bad for users: users got a lot of pretty good software cheap for quite a while, and even those who (like me) are Apple customers found the prices of our software reduced by competitive pressure from Microsoft. I think Microsoft's success was (probably) bad for consumers, but it is definitely an issue to be debated.

Readers familiar with danieldrezner.com's position on Wal-Mart will chuckle at the last paragraph in DeLong's post:

You can claim that minimum-gasoline-price laws are bad because independent gas station owners are morally worthy people, the salt of the earth, the backbone of America, and they deserve to have the power of the state deployed to protect them and their livelihoods against the amoral efficiency calculus of the market. I will laugh at you if you do, but you can make that claim. You cannot make the uninformed and ignorant claim that minimum-gasoline-price laws actually lower the long-run price of gasoline by "protecting" us from rampant monopoly--unless you have some reason to believe that gas stations are not part of a contestable market.

Let me hear you say, "Amen!"

They all excel at saying unbelievably stupid things.

Let's start with Mohammed and Blankley -- both of them blame Soros for the Asian Financial Crisis. About Mahathir's anti-Semitism, click here and here.

Blankley's statement is the new one. He said the following on the June 3rd Hannity & Colmes:

BLANKLEY: This a man who blamed the Jews for anti-Semitism, getting Abe Fluxman (ph) -- excuse me -- head of the Anti-Defamation League to call it an obscene statement.

This is a man who, when he was plundering the world's currencies in England in '92, he caused a Southeastern Asian financial crises in '97.

RICHARD ABORN: Please, come on. Wait a second. You're so far beyond the facts. Hold on.

BLANKLEY: He said that he has no moral responsibility for the consequences of his financial actions. He is a self-admitted atheist. He was a Jew who figured out a way to survive the holocaust. (emphasis added)

Mark Kleiman says this demonstrates "how much of the [Republican] campaign [against Soros] was based on simple anti-Semitism." Indeed, Vincent Morris of the New York Post reports that in a Republican National Comittee memo e-mailed to congressional staffers, "Republican lawmakers are encouraged to use 'floor speeches' and other opportunities to blast Soros, who has given millions of dollars to various groups to help defeat President Bush." (link via the Poor Man).

OK, let's try to referee this:

1) Blankley is clearly an ass. As a Jew, I find that last bolded sentence repugnant. So I'll just nod my head at what Eugene Volokh said:

[W]hen a person just trots out someone's Jewishness (or whiteness or blackness) in a context where it seems to make very little sense (the first Blankley reference to his Jewishness does make sense, but the second does not), it does at least suggest that the person is more focused than he should be on who's a Jew and less on the merits on the debate -- and it certainly hints at broader hostility to Jews.

2) Kleiman's larger assertion rests on extremely shaky foundations -- it would be like blaming the entire Democratic party for anything idiotic Michael Moore said about the Bush administration. Furthermore, as Stephen Bainbridge points out, there's some evidence to support Blankley's claim that Soros accused the Jews of fomenting anti-Semitism.

I have very mixed feelings on Soros. The man is and was a first-rate philanthropist. That, said, having read The Bubble of American Diplomacy, I've concluded that Soros is a political loon of the first order. It is ridiculously easy to attack George Soros without ever discussing his religion.

3) Finally, while Blankely was, to repeat, clearly way out of bounds, the Republican decision to go on the offensive against Soros is perfectly legit. He's dedicated large sums of money to attacking the Bush administration. According to the Post story, "Soros has said in interviews that he has concluded that ousting Bush is the most important thing he can do with his life." The trigger for the Hannity & Colmes discussion was Soros' statement comparing the Abu Ghraib prison scandal to the 9/11 attacks. In Bubble of American Diplomacy, Soros admits that he's become "quite rabid" in his political views. He's entered the political arena -- which means he's opened himself to political attacks.