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Dumbing down economic commentary

J Bradford DeLongJ Bradford DeLong is Professor of Economics at the University of California at Berkeley and a former Assistant US Treasury Secretary. His last piece in Webdiary was The Myth of the "Ownership Society".

by J Bradford DeLong

The world is a complex and intricate place. So how are we to understand even just a piece of it, say, the United States government and its economic policies? It is a big problem, for the standard sources that I was taught as a child to rely upon – newspapers and television news – are breaking down.

For example, in early February 2004, the then Chairman of the President’s Council of Economic Advisers, N. Gregory Mankiw, spent some time trying to explain the issues surrounding "outsourcing" to America’s elite political news reporters. Mankiw’s standard description of outsourcing is very much like mine – indeed, like that of all neoclassical and neoliberal economists – and goes something like this:

As with any change in technology that increases the volume of international trade in goods and services, the outsourcing of service-sector jobs creates winners and losers – but almost surely more and bigger winners than losers. Big winners are workers in poor countries who get better jobs working for firms that can now export services to rich countries. The major losers are those who previously held the now-outsourced service-sector jobs; they must now find new and different jobs and almost surely find that their skills are worth less.
But even in the US, losers’ losses are outweighed by winners’ gains. Workers in certain industries find their skills in higher demand as foreigners spend their increased dollar earnings, consumers benefit from lower prices, and shareholders and managers see their companies’ profits increase. However much we may worry about the distributional consequences of outsourcing, we should never overlook the fact that it increases the total size of the economic pie.

Mankiw made that argument, but he failed to be understood. Indeed, on February 10, 2004, he woke up to an unpleasant news story in the Washington Post: "President Bush’s top economist yesterday said the outsourcing of US service jobs to workers overseas is good for the nation’s economy.... Mankiw’s comments come as the president struggles to shore up support in manufacturing states that have lost millions of jobs....Mankiw’s conclusions may prove discordant during an election year..."

It happened again on February 11: "Democrats...lit into President Bush’s chief economist yesterday for his laudatory statements on the movement of U.S. jobs abroad.... Rep. Donald Manzullo (R-Ill.) called for the resignation of N. Gregory Mankiw..."

Of course, the Washington Post’s journalists know, on some level, that they were being unfair to Mankiw. They didn’t claim that what he said was inaccurate, or shortsighted, or analytically unsound. The descriptive terms they used – "discordant," "embarrassing," "political liability" – suggest that they knew they were giving Mankiw a raw deal.

But was there any sign of the standard economic analysis of outsourcing in their stories? Not one.

Greg Mankiw thought a bunch of reporters were coming to talk to him about the state of the economy and the analysis made by the Council of Economic Advisers in its "2004 Economic Report of the President." But the last thing the reporters wanted to do was to convey a thumbnail summary of Mankiw’s analysis of outsourcing. That’s simply not the business they saw themselves as being in.

The problem is not that the Washington Post and papers like it hire people who are unintelligent or lazy. The problem is that conveying accurate information about the economy is far down the list of priorities for normal news reporters. Making a splash matters. So does keeping track of who is up politically and who is down. So does pleasing your editors so that they’ll give your stories better placement, and pleasing your sources so that they’ll keep talking to you. Compared to these imperatives, there is little to be gained from informing the public about how the economy really functions and about the dilemmas of economic policy.

Indeed, the economy is vastly inferior to Hollywood as a source of glitterati gossip, but much economic reporting makes the coverage of the birth of Brad Pitt’s and Angelina Jolie’s baby look profoundly serious. Likewise, government is vastly inferior to the World Cup as a sporting spectacle, but much political reporting focuses on who played well and who played badly.

What can we do about this? The answer is simple, and it is a matter of demand, not supply. After all, few people go into journalism to deliberately mislead the public. If we demand better economic and political journalism the way we demand excellent coverage of the World Cup, we’ll get it.

Copyright: Project Syndicate, 2006.


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The Liberal's False Economy begins to hurt.

The Corporation based economic policies of the Howard Liberal Government was never sustainable. The massive privatising agenda and the deregulating of almost every restraint on businesses, merely increased the greed and the dishonesty of the majority of consumer predators who deal in the "fantasy" of "a free lunch".  Malcolm Fraser never made a truer statement - and his Treasurer John Howard, delivered four budgets for that Liberal government - and all in deficit.

Both Costello and Howard, bearing their best "serious" faces have now cautioned against debt.  Fair dinkum.  Talk about "closing the gate after...."!

It is obvious that I am not an economic genius so, this quote from my entry in the Canberra Times dated 15 September 2004 (id=76200) must mean that the Liberals would have also known what was so obvious:

"Diversions for a false economy? ....People should consider their burgeoning debts; loss of insecure jobs; reduced income for more effort, and the possibility of losing their mortgaged homes.

They will realise that Howard's false economy is feeding the credits of the unaccountable foreign businesses by increasing the debits of "the mob", then they will indeed need a "safety net" for everything.

Remember that the beneficiaries of Howard's reversal of the industrial revolution in 1850, is NOT for the people who elected him.

So, IF you are thinking of voting Liberal - Carpe Diem before it is too late." (End of quote)

Some accounting speak (and a cure for insomnia?)

Roger, in the interests of preventing a case of “Dumbing down economic commentary” I thought I might add a bit to your point “Perhaps there are the magician ways of "economists" that can make debt disappear or wealth appear such as Enron's mark-to-market accounting sleight-of-hand.”

Anyone who has seen the Enron movie “The smartest guys in the room” would have been given the impression that ‘mark to market accounting’ is a only method of falsifying company financial statements. The reality is far more mundane. ‘Mark to market accounting’ is not only widely used by firms around the world, it is actually a legal requirement in certain areas of business (e.g. accounting for the value of insurance company reserves). It is a very straightforward method of valuing financial assets (e.g. shares & bonds) based on movements in their market price. If you hold shares and the price goes up, you record a profit (unrealised), if they go down a loss. The problem with ‘mark to market’ accounting arises when said ‘financial asset’ is not widely traded and thus the assets’ price would need to be estimated. Enron was using ‘mark to market’ accounting on bandwidth and video on demand contracts, for which there was no equivalent ‘market price’. Enron massively overvalued these contracts (I believe some were actually worthless).

There are three common method of accounting, cash, accrual (maybe what Enron should have used) and mark to market, each method is capable of being used to falsify financial statements.

Greg thank you

It is always ennervating to read your work.

I hereby advise I am economically illiterate, and do write some hyperbole.

In fact, I write a lot. Only the dedicatedly ordinary would fail to see that.

Increasingly short things that have not yet happened

Rob Wearne: "The observations by Prof Delong apply more to the increasingly short term and dysfunctional nature of western society than anything else."

How does something become "increasingly" short term?

Like, the imminent collapse of western society has been predicted with complete assurance for centuries, right?

And this imminent event, while not occuring yet, is nonetheless being "increasingly" predicted? Or suddenly more likely to happen?

In the short term? As predicted by someone? According to some measure?

Is that what you mean?

And against what standard or basis of comparison is western society "dysfunctional"?

By comparison with global society? Which is itself demonstrably and profoundly influenced by western society?

Or some society not actually a part of global society? Or totally removed from western society?

Or in competition with western society?

Perhaps autarkic societies like North Korea, being the very epitome of a functional socialist non-western society?

Or if North Korea is not a non-western society, then doesn't that just indicate the global reach of western society?

In which case how can you say it specifically is dysfunctional? Or failing?

Since it cannot be contrasted with other, non Global societies?

Or do you mean it is failing compared with, say, Aboriginal society? Going as it does from strength to strength?

Or Inuit society? Or the native peoples of the Sud?

But only those not still under the influence of western society?

I mean, what could the term "increasingly short term and dysfunctional nature of western society" actually be supposed to be saying at the empirical, measurable level?

Is it failing at some "real" but "metaphysical" or "occult" level, perhaps?

Like, it's not "rational" in terms of the Hegelian world spirit or the dialectic or something?

Is the expression "increasingly short term and dysfunctional nature of western society" not even meant to be a substantive statement about the measurable, external world at all? Or the metaphysical world either?

But you say it as a catch-phrase, or shiboleth, intended to indicate an attitude or philosophical outlook or tendency on your part?

A stock-phrase calculated to impress us with an idea of "just who you are, man" and "where you are coming from"?

Like, by saying it you are using the phrase as a badge of honour, but not actually making any statement about the material, historical world?

What do you mean, actually?

The observations by Prof

The observations by Prof Delong apply more to the increasingly short term and dysfunctional nature of western society than anything else.

That journalists employed by the mainstream media reflect the base and lowest common denominator is no surprise considering that the profitability of mainstream media is subject to the licenses and special privileges that actually decrease competition in favour homogeneous mediocrity.

Although my views on political economy are light years apart from Margo’s and the editors they at least had the gumption to have a go at a private enterprise concern that has added diversity to the ordinary in Australian media.

With the exception of Chris and Greg, contrast that to the comments in this post that seek restriction and special privilege.

Practically and morally what do they actually mean – have a gun held against your head and hand over half of your working life to someone else, oh and by the way let’s create a system of further regulatory burden that means that the lazy and incompetent can send a small business to the wall by gaming the system.

And what is the result of all this welfare? We have had ever increasing percentages of dependency with unmarried mothers and sickness benefits exploding over time and the economically responsible putting off childbirth so that they can afford their mortgages.

This system of entitlement, waste, dole, bread and circuses is exactly the same recipe that led to the moral decline and fall of another great civilization 2000 years ago.

No, Ladies and Gentlemen, in the long term we are not so special that we are any different from the workers in China, India or Indonesia.

The confusion of the left is that it was not the government that created the wealth that allowed the shorter working hours and other benefits but our system of laws and economic freedom that allowed industrialisation and greater economic capacity.

Just look at the economic history of Ford in its heyday.

This is what the rapidly advancing third world is realising and addressing.

But who is "The Economy" ?

Every time bad news is slated home to the 30 second sound byte addicted, we are told "It will be good for the economy", but who is that? Is it the poor sod on welfare being told to get a job or lose benefits a la USA? Is it the lower middle income blue overalled building worker, struggling to make his wages meet at the end of the fortnight with his bills? Is it the Suit and Tie in George St., struggling to decide whether he should put the Jag in Kings Car Park, or use the one over the street?

In reality, none of these are the economy, per se. To my mind, the economy is a somewhat airy-fairy construct of neo-cons who review the taxes paid and decide who is going to get their butt inspected a bit closer (much in the way of Dubbyas butt getting up close and personall-ed, by the ever eloquent, man of the people, The Dear Leader, elsewhere referred to as "the dwarf". The economy is an increase in GNP measured against how much the country spent and how much the country sold.

If one takes the issue of outsourcing to its logical conclusion, we will eventually outsource all jobs, thereby increasing the GNP, thereby increasing profits/distributions to the big end of town, whilst making all the stinking masses into welfare recipients for 12 weeks, then telling them to bugger off and get a non-existent job on non-existent wages working for some overseas based multinational plastics manufacturer at wages that would have a coolie starving.

Howard constantly harps on about higher wages (17%), but fails to mention increased rents, increased mortgages (by size not percentage points of interest), increased fuel and living expenses, increased education (kids can't even get to Uni now without a wealthy parent or two), and then increased prices for the services offered by the people who do get to Uni (doctors, lawyers and other professional liars etc).

"What to do?", is ever the question posed by the stinking masses trying to keep up their monthly mortgage payments, feed, clothe and educate the kids etc.

The answer is always the same. Take responsibility at the polls. Don't turn up there flip-flopping over this candidate or that but rather look at what people have actually done to you as a voter. Who made Uni unattainable? Labor or Liberal/Coalition? Who put the tax on fuel at 38 cents per litre? Labor or Lib? Who took us into Iraq on the shirt-tails of the "World's Sheriff? Who killed 300 plus men, women and children in breach of the law of the sea? Who promised something he couldn't deliver in terms of mortgage interest rates?

Some pundits (and politicians for that matter) tell you an untried Government is an unskilled Government. News-Flash. Governments are not really the ones who do the running. They just do the directing, with the assistance of Permanent Secretaries and other parts of the Public Service. It has to be galling to realise that every time we change Government, the country doesn't go to hell in a handbasket. Rather things continue along nicely until the new Government gets a feel for who does what, and then they change a few directions. The Public Service are the ones who ultimately make it work.

Australian voters need to spend a little time working out the best use of the most powerful weapon in the Public Arsenal. It isn't Weapons of Mass Destruction at all. It is a simple vote. It can bring entire Governments to the position they should always be in. Servants of the Public. All of us. Not just their mates. This is true of both sides of politics. The Labor must listen to all voters, including the voters in Palm Beach. The Coalition needs to cast an ear in the direction of Inala and Macquarie Fields. Then and only then will Australians be in charge, instead of that muddle mouthed fool in Pennsylvania Ave, our current President.

Well done, Daemon

Well that's a solid little rant there, Daemon. I'm sure you're glad to get that all off your chest. It does help, though, if you want to be persuasive, to know what you are talking about and to get your facts straight.

First, I think that everyone, except the most economically illiterate, knows what the economy is and since writing on the economy has been around since before Adam Smith in the 18th century no-one will seriously entertain your view that it is a neo-con construct. Also only the most economically illiterate would accept, or indeed write, that:

The economy is an increase in GNP measured against how much the country spent and how much the country sold.

The economy is the aggregate economic activity of a country, conventionally measured through GNP, or more commonly GDP. Therefore an increase in GNP (or GDP) is a measure of the increase in the size of an economy. It is not the economy itself.

It is disingenuous of you (or perhaps you don't understand the basic terms of economics) to say that:

Howard constantly harps on about higher wages (17%), but fails to mention increased rents, increased mortgages (by size not percentage points of interest), increased fuel and living expenses, increased education (kids can't even get to Uni now without a wealthy parent or two), and then increased prices for the services offered by the people who do get to Uni (doctors, lawyers and other professional liars etc).

The 17% increase that Howard refers to is the increase in real wages; that is, the increase in wages above inflation since 1996. It is implicit that that increase is above increases in consumer prices as that is what inflation measures. That is elementary economics.

As to whether the government can claim credit for all that increase, rather than just reaping the rewards of the Hawke/Keating economic reforms or the generally favourable conditions caused principally by the rise of China, is entirely another matter.

As to who put the tax on fuel at 38c per litre, well, I don't know but 38c per litre seems surprisingly low to me. Did the Liberals under Howard decide to drop it or to stop indexing it annually, a measure introduced, as I recall, under Labor. Or are they covert Greenies who have decided to increase the excise so as to discourage fuel consumption and therefore the burning of fossil fuels that adds to global warming?

Who killed 300 plus men, women and children in breach of the law of the sea?

Well, that's an easy one. The evil bastards who organised the voyage of a dangerously overcrowded and leaking boat from Java, which sank 70 to 80 km off the coast of Java, thousands of kilometres from Australia and hundreds of kilometres from Australia's nearest possession, Christmas Island. Oh, and of course, their hangers-on and supporters in Australia who encouraged the poor people on that boat to undertake that doomed and reckless voyage. That is on their consciences, if they have any, but cannot be slated home to Howard. That issue has been exhaustively canvassed on Webdiary.

Who promised something he couldn't deliver in terms of mortgage interest rates?

Mark Latham? Kim Beazley? Bob Brown? I think you'll find that interest rates in Australia haven't gone up since the last election.

Still I join in your paean of praise for the humble vote. It is a wonderful corrective for political and economic mismanagement and from my days, many years ago, taking public opinion polls I have the highest respect for voters. I know that they make very rational calculations as to their interests and which party will best serve them.

Indeed if before the next election the economy, over which the government has little control, starts to go south, the voters are likely to say to the Liberals "well, you've had your chance. I think that it's time to look at the other mob and see if they can do better".

Of course, as the Commonwealth now has no debt, the government are in a position to offer the biggest bribe in Australian electoral history to make sure that the voters don't do that. If they look like they're in trouble they'll throw money at the electors. Just wait and see.

Throw Me A Life Jacket

Greg Moylan, I was taken by your last paragraph to Daemon Singer.

The "Commonwealth" as some peculiar ephemeral entity may indeed have no debt but since the "Commonwealth" R'Us and we are drowning in debt it hardly behooves us to laud that as a fact. Perhaps there are the magician ways of "economists" that can make debt disappear or wealth appear such as Enron's mark-to-market accounting sleight-of-hand.

In the real world, where we pay for tomatoes in real dollars, all that economic notionalism is truly "The Emperor's New Clothes". If we fall for it, we are avaricious as well as stupid. I am not optimistic. Generational amnesia and greed brings us one South Sea Bubble after another.

Currently, we are relying on highly over-inflated real estate values to prop up our sense of our wealth. I moved to Houston in 1986, a few years after the oil industry collapsed and by which time 1.5 million people had left Texas' Gulf Coast. The newspapers were full of ads for house sales where the owner was prepared to sell on a private deed of sale for a few thousands dollars if the buyer would just take over the payments. For those who were prepared to wait a couple of years until the market improved and a formal deed could be registered it was a great financial opportunity.  I had a work colleague who bought 3 houses that way.

In other cases, highly-mortgaged owners were just walking out without even locking the doors because they were in so much debt having purchased their houses at highly inflated prices. Overseas economists (are they to be believed?)  estimate that our housing market is over-priced by at least 25%. Could it happen here?

Roger, thanks for your

Roger, thanks for your comment. When I referred to the Commonwealth I was, of course, referring to the legal entity the Commonwealth of Australia, which came into being on the 1st of January 1901. It is no more an ephemeral entity than you are and no more peculiar than you are.  I do appreciate it when people get basic facts right.

Under the policies of the current government, and largely achieved through the good luck of a sustained resources boom, and the reforms of the previous Hawke/Keating governments, the Commonwealth has no debt.

I agree, however,  with your point that from a historical perspective we are carrying unsustainable levels of private debt and when there is a correction it will be painful for many people. If and when, and history tells us it will be when  rather than if, there is an economic turndown unless we are lucky and the bubble gently deflates (but I wouldn't count on that) then there will be hell to pay with, as you referred to regarding Texas, a crash in the property market  as the bubble bursts.

Either way, however, unlike the United States where record and unsustainable current account deficits are piling up on top of record and unsustainable fiscal deficits, the options  to achieve economic recovery will be better for Australia. As it has no debt and no fiscal deficit the government has the capacity borrow to prime the economy through tax cuts or spending on infrastructure etc. I'd rather be in our situation than that of the US.

The benefits of a liberal arts degree

Chris Shaw says;

"It seems to me that if outsourcing was such a good idea, then shouldn't the ousourcers be outsourced?"

"Or is this like warmongering, where the warmongers and their families get to avoid war, safe from any warmongering?"

That's a great comment, Chris. And proof you at least are not trying to dumb down economic commentary.

It seems to me that "outsourcing" is merely a case of the principle of comparative advantage in international trade, a concept that economists have been familiar with since Adam Smith, at least.

This has been the basis of all efforts to promote international trade pretty well since the time of the Enlightenment.

This is Smith's neat summation of the concept;

"If a foreign country can supply us with a commodity cheaper than we ourselves can make it, better buy it of them with some part of the produce of our own industry, employed in a way in which we have some advantage. " (Book IV, Section ii, 12)

For a fuller explanation, go to the link here.

Certainly, the benefits of international trade are often counter-intuitive, but any reasonably well educated person should have some understanding of the principle.

I suspect the journalists "misreporting" N. Gregory Mankiw when he discussed the issue of outsourcing were probably not so stupid as to fail completely to understand a concept that is a staple of basic economics literacy.

They were probably deliberately trivialising and distorting what he said because they have a moral responsibility as liberally educated white middle class people to ridicule anyone or anything even remotely connected with the Bush administration.

Particularly anything even remotely connected with the real world, such as global trade.

But I could be wrong.

I mean, if American journalism schools are anything like Australian journalism schools, they will be self educated for all intents and purposes (or perhaps have no education) and may never have had any formal instruction in economic theory.

Or anything else.

Outsourcing the outsourcers...

It seems to me that if outsourcing was such a good idea, then shouldn't the ousourcers be outsourced?

Or is this like warmongering, where the warmongers and their families get to avoid war, safe from any warmongering?

Wasn't it Lord Such, who pointed out quite rightly that the UK's competition policy had no competition, so was plainly invalidated  under the terms of it's own rules?

Economic pundits do their stuff, po faced every night on TV.  The degree of naivety required to earnestly receive their prognostications without laughing, is wanting in me.  Economics is looking more and more like late night TV poker - and less relevant to real life.

I think economics is a wholly owned subsidiary of the environment, the two basic ingredients of which are STUFF and ENERGY.  All else is a human confection.

Now that energy and some critical stuff (water, fertile soil, concentrated mineral deposits) are looking a bit shaky, will the economic fun-fair run down?  What measures will those with the most tickets resort to in order to go on riding the Big Easy?

Pies are very bad for waist lines unless well shared

Hi, M. F. McAuliffe. You have made an accurate and valid point. I think the most defining paragraph is “However much we may worry about the distributional consequences of outsourcing, we should never overlook the fact that it increases the total size of the economic pie."

The "distributional consequences" i.e., out of work for US citizens (jobs goes to sweat shop in India, offshore islands, China, Indonesia, Thailand etc., as you said) and public purse picks up tab for unemployment, health, and education. More buying power? Not locally, and cheaper? Aint relevent. That plasma TV may be cheaper but if you have just been foreclosed on your mortgage it is not on the shopping list. What is even worse is if a lower paid job comes by then the (minimal as it is) safety net of the state disappears in health and subsidies, including medical bills and medicines, no matter how essential. Inability to afford basic medicines is already a serious problem especially amongst the elderly in the US.

The other side to this is as State dependent persons hit hospitals which are mandated to give full and complete medical care for free in the USA, the tab previously picked up by higher fees for insured patients comes out of a smaller pool. This can spiral downwards very fast and result in a crash in medical services. Already there is outsourcing of such for those who can afford it for transplants ("lucky" donors from poor countries) and plastic surgery some find so essential, especially the older worker, and orthopaedic joint works.

Perhaps what we are looking at is a society locally that is cleansed of those who are not in the same earning group. Otherwise with the demise of the lower middle class and disappearance to the depths or into the skies of the upper middles class (depending upon whether your category is "outsourced" or as an executive your company merged into the single world monopoly), the mixing of haves (a lot) and have nots (anything much at all except memories and bitterness) will result great instability of society. We have been down this road so often before in history, why does greed/foolishness dictate the need to do it again?

I guess some think we just need free footy tickets 24/7 to keep em happy, eh? Oh and organ credit cards for n/dumbing entertainment when no jobs earn enough for it.

BTW did anyone catch that news item about free DNA testing for Chinese (to see if they are descended from a dynastic glory time)? More likely to identify future demand and supply areas in outsourcing donor business, but p'rhaps I am looking a gift horse in the mouth.

The total size of the pie may be like this guy’s waist line but those eating it are a tiny very fat mob


PS I like the idea of that jerk having his financial analysis job outsourced: see ya buddy, time to leave the walled estate and join the rest of the unwashed plebs in the times of restricted resources coming. There are plenty out there who are really hurting from the economic ruthlessness of global multinationals minimising their costs and pumping up profits while pushing for taxes down. It is people like this guy that are paid to fool the community into accepting it.


J Bradford DeLong is himself missing the complexity of the issue. What he has offered is a defence of the classic economic analysis which ignores everything but the numbers.

In the U.S. outsourcing benefits "workers in certain industries, consumers [from lower prices], shareholders and managers". The losers are the previous holders of the now-outsourced service-sector jobs."

If you measure the sum of money the sharholders + CEOs get, it may be greater than the sum of money lost by the former service-sector workers.

But there are more workers losing jobs than CEOs and shareholders gaining income. (For these workers shareholding is a matter of the 401(k). The loss of income is a far greater loss than the increase in whatever stocks are in the mix of funds their 401(k)s hold. Not to mention that early cash-in carries punitive restrictions and penalties.)

There are no jobs of equal pay to move to. What you have is the Wal-Martization of the service sector, where workers have very poor medical insruance, 1/4 of their children are eligible for State Medicaid, and a certain portion of the workforce is so poorly paid it qualifies for Food Stamps.

In short, you have a workforce that the public sector must underwrite, and which, being so poor, is confined to buying the products of 3rd-world sweatshops. (I have never seen an economist comment on that particular vicious circle. But then, I've never seen a poorly-paid economist.)

The fact that there are more displaced workers than CEOs + shareholders is, in a nominal democracy in an election year, a nominal embarrassment for the government which supports and encourages outsourcing.

The reporters were reporting on the implications of Mr. Mankiw's announcement - which he either hadn't considered at all or had considered so minor he consigned them to the "however much we may worry" category. (What condescension.) The reporters were not being unfair to Mr. Mankiw. It is not their job to patch up either his arguments or his humanity.

Professor DeLong has failed to notice the outsourcing of economic analysis. The argument he is defending would say that that outsourcing, too, is a Very Good Thing.

Or is outsourcing good when someone you'll never know loses a job, thereby increasing, however minimally, the current, putative value of your stock portfolio, but bad when it inconveniences you?

That's not an argument. That's special pleading, and has no place in a piece of "objective analysis".

As for joyful 3rd-world sweat-shops...

What is unfair is - the economy Mr. Mankiw is shoring up with his smugness, the one that "the standard economic analysis" is designed to praise.

more winners than losers

I don't understand the aggressive response to this article. The point is, surely, that a balanced economic response concedes that there will be losers from outsourcing, but that overall outsourcing is a net bonus for the American economy, including American workers, consumers and shareholders. I don't know if this holds for the Australian economy, but it would be interesting to find out.

But when a journalist gets hold of this, the narrow "splash" point that is made is a distortion of the article, and is further rewritten in fairly simplistic terms about whether or not the analysis is a benefit for the incumbent government.

Is there anyone in the world who does not believe, along with the author of the main article, that we are suffering a dumbing down of commentary and analysis?

Of course whether you think that is a good or a bad thing depends, I quess, on your own interests.

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