I spent much of the day yesterday pointing out how stupid it was for Obama to put outsourcer, China nut, and TBTF bankster Jeff Immelt in charge of his Council on Jobs and Competitiveness. Meanwhile, Paul Krugman and Robert Reich have been focusing on Obama’s frame for the problem as “competitiveness.”
In his piece, Krugman calls the frame “hackneyed” (and Jeff Immelt’s op-ed on it “vacuous”). He then links to an older discussion on competitiveness of his, in which he explains,
The rhetoric of competitiveness turns out to provide a good way either to justify hard choices or to avoid them.
Reich makes largely the same point about how meaningless the term “competitiveness” has become.
Whenever you hear a business executive or politician use the term “American competitiveness,” watch your wallet. Few terms in public discourse have gone so directly from obscurity to meaninglessness without any intervening period of coherence.
Reich goes on to show how competitiveness might mean:
- American exports (which, if that was your definition, would require lower American wages)
- Balance of trade (which, if that was your definition, would lead to dollar devaluation and currency wars)
- Profits of American-based companies, which, if that were your definition, Reich notes, we’d be doing great:
In case you haven’t noticed, the profits of American corporations are soaring. That’s largely because sales from their foreign-based operations are booming (especially in China, Brazil, and India). It’s also because they’ve cut their costs of production in the US (see the first item above). American-based companies have become global — making and selling all over the world — so their profitability has little or nothing to do with the number and quality of jobs here in the US. In fact, it may be inversely related.
- The number and quality of American jobs
Reich argues that the only way to improve our “competitiveness” by that last measure–the number and quality of American jobs–is to make investments America is probably not willing to make.
The only sure way to improve the quality of jobs over the long term is to build the productivity of American workers and the US overall, which means major investments in education, infrastructure, and basic R&D. But it’s far from clear American corporations and their executives will pay the taxes needed to make these investments. Read more