Don't get in the way of offshore outsourcing

A worthy speech by Bruce Mehlman, Assistant Secretary for Technology Policy, United States Department of Commerce, that addresses the issue of offshore outsourcing, particularly in the tech arena. Is this a trend to welcomed or feared? Mehlman discusses both sides of the debate and ultimately, I believe, comes out with the right prescription. These trends are ultimately good things, for our country and for humanity, but the transitions can be painful. There is the inevitable urge on behalf of government to "do something," encouraged by vested interests. The Bush Admin seems relatively resistant to that urge--that is, the best thing to do is to encourage growth and prosperity. Don't protect jobs that become irrelevant with the advance of technology and productivity, encourage the development of new jobs.

Here are a couple of examples from the speech that show how often decisions that protect one interest group merely punish another:

In 2001, New Jersey’s Department of Human Services (Division of Family Development) outsourced a basic call center used to support a welfare program to an Arizona firm, which then sent the work – nine jobs – to India. State legislators were outraged, and in the wake of controversy, the state returned the jobs to New Jersey. Unfortunately, the cost of the call center work was 20 percent higher when done back in the U.S., thereby reducing the amount of funds available for the welfare recipients for whom the call center is needed.

The Pentagon faced similar outrage when it sought to procure black berets from China. Lawmakers were incensed that U.S. tax dollars in the Defense Department, of all places, were not being used to support American manufacturers, and the hats were procured from a domestic supplier. Yet unfortunately this question is a bit more complicated. Since even the Defense Department faces a ceiling on its budget, Defense planners are forced to make tough choices every day. Every dollar spent on clothing is a dollar less for improving soldiers’ pay (to keep military families off food stamps), supporting forward deployments, designing new defense systems to better protect our men and women in harm’s way, and improving the accuracy of our precision-guided munitions to minimize noncombatant casualties. The choices become very real and very difficult.