Bush Econ Advisor: Outsourcing OK

unemployment, layoffs, economic gloom AP

This campaign news analysis was written by Douglas Kiker of the CBS News Political Unit

If one thing illustrates the kind of year the Bush administration has stumbled and bumbled its way through in 2004, it was the comments earlier this week by the president's chief economic adviser, Greg Mankiw.

Mankiw wrote that the movement of U.S. jobs overseas due to cheaper labor costs – "outsourcing" he dubbed it in a remarkable display of political tone deafness – would prove "a plus for the economy in the long run," and was simply "a new way of doing international trade."

Mankiw's assertion – certainly sound economic theory and something that would play well at, say, a Harvard graduate school lecture – illustrates the political ineptitude the White House has exhibited in recent weeks that threatens its prospects for a second term unless things change course, and soon.

It did not take long for Republicans to realize Mankiw's comments were radioactive. GOP House Speaker Dennis Hastert lambasted him, saying, "His theory fails a basic test of real economics."

President Bush himself – who, it should be noted, Mankiw was speaking for when he wrote what he did – did not fire him (as he has with previous economic advisers who've gone off the reservation). But he quickly distanced himself from the theory that the "outsourcing" of jobs is a good thing.

Speaking Thursday in Pennsylvania, a key swing state in 2004, the president said: "The numbers are good, but I don't worry about numbers. I worry about people. There are still some people looking for work because of the recession. There are people looking for work because jobs have gone overseas. And we need to act in this country. We need to act to make sure there are more jobs at home and people are more likely to retain a job."

Democrats, of course, pounced. Senate Minority Leader Tom Daschle called Mankiw's assessment "Alice in Wonderland economics." House Minority Leader Nancy Pelosi said, "I'm sure American workers are shocked by the president's embracing of outsourcing."

And one can only imagine the gratitude among John Kerry's staff to Mankiw for saving them time by writing the Democrat's general election stump speech for free. You can hear the speech already, if you listen carefully: "I don't know about you, but I disagree with the Bush White House, which believes sending American jobs overseas is a good thing…"

Mankiw himself backed away from his report when the firestorm erupted. In a letter of apology – yes, a letter of apology – to Hastert, Mankiw wrote,"My lack of clarity left the wrong impression that I praised the loss of U.S. jobs."

The irony in Mankiw's misstep is that it came in the very same politically savvy report to Congress, the Economic Report of the President, in which he predicted the U.S. economy in 2004 would create an astonishingly optimistic number of jobs, 2.6 million, that would more than erase the estimated 2.2 million jobs that have been lost during the Bush administration's first three years.

Many economists, including a group surveyed by the Wall Street Journal each month to gauge the health of the economy, have said Mankiw's assessment doesn't hold water and is overly rosy.

The job-creation prediction was simply too politically convenient to be coincidental. How the "outsourcing" section slipped through the cracks is mind-boggling and comes on the heels of intelligence failures leading up to the war against Iraq, jaw-dropping budget deficits, a middling State of the Union Address and an unconvincing "Meet the Press" performance last Sunday; not to mention newly alive allegations that the president might not have fulfilled his National Guard obligations in the early 1970s.

Yes, some of President Bush's troubles can be attributed to the fact that he's had a bevy of Democratic presidential candidates bashing him around the clock. Yes, politics is cyclical and who's on the mat today could very well be on top of the world next week. Yes, every incumbent president carries the burden of being blamed for every problem the nation faces on his watch. And, yes, its' still a very long time until November.

But, sooner rather than later, President Bush needs a hit or he runs the real risk of being the second president named Bush to serve a single term.
  • David Hancock

    David Hancock is a home page editor for CBSNews.com.

Comments