David Brooks: Companies That Outsource Create More Jobs Domestically

If it's Friday, it means PBS viewers are going to be treated to their regular dose of hackery from David Brooks during one of his appearances on The Newshour. This week Brooks is asked to weigh in on the presidential election and Brooks wants us to
up

If it's Friday, it means PBS viewers are going to be treated to their regular dose of hackery from David Brooks during one of his appearances on The Newshour. This week Brooks is asked to weigh in on the presidential election and Brooks wants us to believe that one, the only voters who might be moved by the fact that Mitt Romney made massive amounts of money shipping jobs overseas are "people who don't pay attention to politics."

I'm not sure what world he's living in, but that is one issue I can tell you those who don't pay attention to politics along with those that do definitely don't like and are not happy about. I don't think it matters if you pay attention to politics or not to decide that you might not want the guy that you would never want to buy the company you work for, ever, because he'll raid your pension, fire you, make you reapply for work for half your previous salary and then maybe have the whole joint close up shortly after while he walks off with millions of dollars. I think there are some votes to be moved if that narrative makes its way into the general electorate's consciences.

Brooks also wants us to believe that "companies that outsource do create more jobs domestically." I don't know what jobs he's talking about, but I've seen no evidence of that. They do create a lot of jobs, just not in the United States. That would be the whole point of outsourcing them David, to get that cheap labor overseas to keep your overhead down, because God knows that CEO's got to make his huge salary for the year or the world will come to an end.

The one thing I've found about Brooks is that he likes to repeat himself a lot and once he's got his talking points for the week, he's going to go out there and repeat them in every venue he gets a chance to. He said pretty much the same thing during his conversation with Gail Collins which was published earlier this week here but elaborated quite a bit more than in the PBS clip above: The Debate We Should Be Having:

David: Obama’s ad is cynicism on stilts. Companies that outsource jobs become more competitive. They grow faster and then end up hiring more people at home. Outsourcing increases employment levels. Outsourcing increases productivity. It also decreases the prices consumers pay for stuff. Obama knows all this. He’s just paying the economic nationalism card for his own gain.

As for Bain leveraging debt on companies, that’s overstated. Companies Bain bought did not have higher default rates than other companies. That’s true for private equity firms as a whole too. I don’t like the way these firms prosper even when the turnarounds fail, but overall, their strongest incentive is to make the turnaround succeed.

Gail: I acknowledge that most of that behavior at Bain seems to have happened after the fatal year of 1999. But here’s the weird part of the argument we’ve been having about when Romney really, truly severed himself from Bain. Whenever it was, he’s never suggested that there’s anything that happened after he left that he disapproves of.

David: Nor should he. Outsourcing jobs is sometimes a good decision. So is firing people. When the government ran G.M. and Chrysler, Obama fired people and he sold Chrysler to a foreign company.

Besides, do people find it immoral when Toyota outsources jobs to America — or Nissan or Airbus or any other foreign company? Somehow outsourcing that comes here is wonderful but outsourcing that goes there is unpatriotic.

It seems lost on Brooks that the "outsourcing" those foreign companies are doing is to sell goods in America. The outsourcing the companies Mittens shipped overseas were to use cheap foreign labor and sell the goods back to America. It's not the same thing. And President Obama didn't "fire" anyone. He bailed out the auto companies to keep our economy from being destroyed. He wasn't running them.

I don't think either party has been protectionist enough with our trade policies and the Democrats need to be fighting harder against outsourcing and hitting the Republicans for refusing to fix our tax laws which reward companies for shipping jobs overseas. That said, Brooks' remarks, as usual, are ridiculous and full of false equivalencies making excuses for Romney's behavior and pretending that no one is going to care he profited personally from being a corporate raider who went after pension funds, busted unions and shipped jobs overseas to line his own pocket. I sincerely hope he's wrong about who's paying attention or who starts to as the election gets closer. It seems to me to be typical Villager fare where if an argument is hitting home and working too well, he's going to trash it to try to discourage them from continuing the line of attack. Thankfully it appears the Obama campaign isn't paying much attention to Brooks and his ilk of late.

Transcript from PBS below the fold.

JEFFREY BROWN: All right, so let's continue here.

I want to pick -- and pick up on what Judy was saying, but also what -- the point you were just making. There are a lot of things being thrown around this week, outsourcing and who creates businesses and what is infrastructure and the role of government you were putting in that.

But there is sort of the makings of a serious discussion. But are we having those?

DAVID BROOKS: No, I absolutely agree.

DAVID BROOKS: There is the makings of a serious discussion of what sort of role of government, what sort of society, what sort of capitalism we want to have.

And I do think there is -- that's implied in a lot of these arguments. Barack Obama's really attacking Romney on all the things people don't like about capitalism, the high -- the high creative destruction involved, especially in private equity.

Will we actually have that discussion? I'm extremely doubtful, in part because what they're targeting are people who don't pay attention to politics. Everybody who pays attention has already decided.

JEFFREY BROWN: That's who they're speaking to now?

DAVID BROOKS: And so they want a very simple message.

So, for example, Barack Obama has not been an enemy of outsourcing. Throughout his whole campaign, he understands that -- I think outsourcing -- people, companies that outsource do create more jobs domestically. He understands it's part of the global economy, it's part of the things that make countries abroad grow, that make us grow.

He's got a very simple-minded ad attacking Romney for being a guy who ships shops overseas. But to actually have a debate about capitalism and about the role of government would require more nuance than I think we're going to from either side, precisely because they are paying attention to people who don't pay attention.

JEFFREY BROWN: What do you think?

E.J. DIONNE: Well, I do think that you are talking about a rather small part of electorate.

I mean, if you look at polls, 53 percent is what Obama got the last time. He is hovering around 47, 48 percent. You're talking about he needs some share of the difference, the 6 percent or -- 5 percent or 6 percent of difference.

I agree with David that there is a real debate underlying this. I don't entirely -- I don't agree with him that the outsourcing issue is as clear-cut as he says. There was a presentation this week by an economist who talked about the costs in increased unemployment, lower labor force, participation in parts of the country from Chinese imports, and that outsourcing really does have a cost to a significant share of the American population.

Obama is talking about how tax benefits go to companies that ship jobs overseas over companies that create jobs here. He's talking about the need to restore American manufacturing.

I think the debate Obama wants and that Romney should want to engage in from his side is whether this new kind of capitalism, where so much money is made in the financial sector, is the kind of capitalism that builds up our country and that we have much more emphasis on finance, much less on manufacturing, and, lord knows, much less on labor.

And I think that that is the fight that underlies this. And I think we're going to get there eventually.

JEFFREY BROWN: Oh. Well, that's optimistic.

DAVID BROOKS: We will see.

One thing I do agree with E.J. on, if Romney is going to be a personification of capitalism, he does have to say what kind of capitalism he's for. He does have to say too much resources have been going to finance. He does have to say some of these things these bankers are doing makes me sick. He has got to distinguish that from the part that he has been part of, which is the creative destruction part, which is -- does involve -- sometimes involves job losses, but it involves making companies more efficient so they thrive in the long run.

So he has to give a speech saying, this is the capitalism I believe in, or else he is going to get tarred with the LIBOR scandal.

JEFFREY BROWN: That is a hard argument to make. I mean, it's easy to sort of intellectually, but it is. . .

DAVID BROOKS: In elections past, people gave serious speeches. Barack Obama gave a serious race speech.

It used to be, if you ran for president, you trotted out all these serious policy speeches that people like E.J. and I paid attention to.

DAVID BROOKS: Now that is all gone. They don't care about us anymore.

JEFFREY BROWN: So you will have to talk to each other, right?

E.J. DIONNE: I enjoy talking to David.

But that is a very awkward case for Mitt Romney to make. I agree. He's got to make it. And I would love to see a debate over the future of American capitalism and what kind we want. But it is awkward for him to talk about the problems with finance and the shift of resources towards finance, when obviously that's how he has made his money.

And the problem with his Bain story is, yes, he can tell some good stories about companies like Staples and others that he put money into that thrived. But he wants to evade all the stories where they made a lot of money even when the companies tanked, when they piled companies with debt.

There are kinds of capitalism that he's been involved in that I think raise some legitimate problems in the eyes of voters.

About Heather

Comments

We welcome relevant, respectful comments. Please refer to our Terms of Service for information on our posting policy.