Hastert Faults Report on Exporting Jobs WASHINGTON, Feb. 11 — Speaker J. Dennis Hastert of Illinois, the top Republican in the House, joined Democrats on Wednesday in taking issue with [pretty darn good--LR] remarks by a White House economist that the movement of American jobs overseas could have economic and trade benefits.
In a statement, Mr. Hastert said he understood that Gregory Mankiw, chairman of the White House Council of Economic Advisers, was a “brilliant economic theorist.” “But his theory fails a basic test of real economics,” Mr. Hastert said. “An economy suffers when jobs disappear.”
Democrats in Congress have seized on the White House remarks, and a group of Democratic senators called on President Bush to repudiate them. Here is the relevant section of the testimony:
New types of trade deliver new benefits to consumers and firms in open economies. Growing international demand for goods such as movies, pharmaceuticals, and recordings offers new opportunities for U.S. exporters. A burgeoning trade in services provides an important outlet for U.S. expertise in sectors such as banking, engineering, and higher education. The ability to buy less expensive goods and services from new producers has made household budgets go further, while the ability of firms to distribute their production around the world has cut costs and thus prices to consumers. The benefits from new forms of trade, such as in services, are no different from the benefits from traditional trade in goods. Outsourcing of professional services is a prominent example of a new type of trade. The gains from trade that take place over the Internet or telephone lines are no different than the gains from trade in physical goods transported by ship or plane. When a good or service is produced at lower cost in another country, it makes sense to import it rather than to produce it domestically. This allows the United States to devote its resources to more productive purposes.
