Lou's Blues

Date: Friday, November 14, 2003 11:08 AM

JOB DESTRUCTION NEWSLETTER

www.ZaZona.com

It was only a matter of time until someone accused Lou Dobbs of being a
xenophobic populist. This article appeared in Reason Magazine, a
Libertarian magazine that claims that they write for "free minds and
free markets."

Julian Sanchez brushed aside the effects of H-1B but then in an
insulting vendetta against American programmers he admits that H-1Bs
depress salaries - a stunning admission for a Libertarian since they
usually deny the laws of supply and demand. Now for the insult: He
wrote that the only way American programmers will ever get their
inflated salaries back is if Asians "lobotomize themselves and go back
to farming."

If anyone needs brain surgery it's Julian Sanchez. A full frontal
lobotomy would prevent him from hurting himself, and since he doesn't
use his brain when he writes, nobody would notice the difference.

http://www.reason.com/links/links103003.shtml

October 30, 2003

Lou's Blues

Lou Dobbs and the new mercantilism

Julian Sanchez

Columbia University economist Jagdish Baghwati once quipped that
defenders of free trade have "no prizes or surprises." "No prizes"
because the basic case for free trade is in many ways the same as that
made in the time of Adam Smith and David Ricardo--not the sort of
innovative technical work that garners Nobels. "No surprises" because
it often seems as though free traders are trapped in a public policy
version of Groundhog Day, forced to refute the same fallacious
arguments over and over again, decade after decade.

Throughout the 1990s, it looked as though, perhaps, the debate had
finally been resolved in favor of open markets and an ever more global
economy. In 1992, after all, both major party candidates vowed to
champion the North American Free Trade Agreement. Even now, people
around the world report positive attitudes toward trade, and little
regard for the warning cries of the giant-puppets-and-black-masks
antiglobalization crowd.

Ah, but what a difference a decade makes. The economic party in America
is decidedly over for the moment. It's no longer just blue-collar
workers but also affluent tech professionals who increasingly are being
forced to face competition on a global labor market. At a time when
nationalist "us versus them" thinking is back in vogue, the temptation
is strong to find someone--ideally brown people with funny accents--to
carry the blame for our economic woes.

One of the loudest spokesmen for this emerging xenophobic populism has
been Lou Dobbs, host of CNN's Lou Dobbs Tonight. In recent months,
Dobbs has devoted large chunks of his daily program to investigative
series with such titles as "Exporting America" and "A Crowded Nation."
The persistent message of these reports is that Americans are being
harmed by foreign high tech workers, undocumented laborers (a phrase
that sends Dobbs into apoplexy) and cheap overseas manufacturing.

This habitual cross-border finger pointing may boost ratings, but it
doesn't make much sense, either theoretically or empirically. From 2001
to 2002 new H1-B visa applications declined sharply. This suggests that
the rough IT job market is less a function of foreign workers
displacing domestic ones than of both being squeezed by poor economic
conditions. The same dynamic seems to be at work in the manufacturing
sector, where, according to the Cato Institute's Dan Griswold, real
imports of manufactured goods fell 5.4 percent in 2001 (after four
years of robust increases) as domestic manufacturing output fell by 4.1
percent. And despite the current recession, manufacturing output is
still up 40 percent from a decade ago. Throwing up barriers to trade
under those circumstances would simply yield fewer goods at higher
prices for American consumers.

Like so many others, Dobbs frames the debate about outshoring in the
tech sector in terms of preserving America's "competitiveness." But as
economist Paul Krugman has argued, this "dangerous obsession" with
competitiveness rests on the utterly misguided notion that countries
can be thought of as corporations writ large, "competing" with each
other in the same way that Coke competes with Pepsi. Even if we accept
that language, however, it is not clear that state action can provide a
solution. Dobbs (and tech workers disillusioned by the bursting of the
dot-com bubble) might fondly wish that highly educated professionals in
Asia would be kind enough to lobotomize themselves and go back to
farming for the sake of inflating U.S. programmers' wages. Alas, that's
unlikely to happen. If American tech firms are unable to benefit from
the skills of foreign workers, we may rest assured that their foreign
competitors will.

Even when they're not overseas, Dobbs has little affection for the
foreign-born. His most recent effort in print, a U.S. News and World
Report opinion piece decrying our "population overload," was written
with a crayon. We are clearly meant to recoil at a series of
context-free factoids, such as the purportedly alarming observation
that in a developed, high-tech economy where ever more efficient
agricultural techniques are practiced, we're "losing" farmland. And
buggy whip factories too, I imagine. Another fantastic non sequitur
blames immigrants for a brief uptick in regional air pollution,
blithely ignoring a trend of two decades of improvement in American air
quality [PDF].

Perhaps the most risible claim in the piece--and competition is
stiff--is Dobbs' allegation that population growth "threatens our
liberties and freedom." He cites Cornell Ecologist David Pimentel, who
says, "Back when we had, say, 100 million people in the U.S., when I
voted, I was one of 100 million people. Today, I am one of 285 million
people, so my vote and impact decreases with the increase in the
population... So our freedoms also go down the drain." Dobbs and
Pimentel share an atavistic notion of freedom, what classical liberal
Benjamin Constant called the "liberty of the ancients," which is to
say, the power one exercises through democratic politics. It occurs to
neither that Constant's "liberty of the moderns," the freedom to shape
one's own life through voluntary associations with others, is enhanced
by greater trade and interaction.

Both in his columns and on his television program, Dobbs' makes his
position seem superficially plausible only by focusing myopically on
costs and resolutely ignoring benefits. He counts the strain on
infrastructure created by growing populations, but not the support for
that same infrastructure provided by more people working and paying
taxes. When we look at both sides of the ledger, according to the
calculations of the late economist Julian Simon, we find a net benefit
from immigration.

When it comes to trade, Dobbs' one-sidedness gets things even more
dramatically backwards. I had always been under the naive impression
that we have jobs in order to be able to buy the stuff that we want.
Whether I consider my salary "low" or "high" then depends on how
expensive that stuff is. Dobbs, apparently, is inspired by a more
Puritan work ethic. On his account, we want jobs for their own sake; if
other people are willing to offer us goods more cheaply than we can
make them ourselves, this cruelly robs us of the opportunity to work
longer and harder.

Dobbs, of course, is an educated fellow, and presumably familiar with
these arguments. But providing a voice for those eager to blame a Dark
Other for the world's ills can only be good for ratings. And that, at
least, ensures that Lou gets to keep his job.

Julian Sanchez is Reason's Assistant Editor. He lives in Washington,
D.C.
jsanchez@reason.com

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