Tuesday, July 17, 2012

Missed Opportunity

Mitt Romney and Barack Obama
Photo source: CBS News

The Obama campaign ad said, “Mitt Romney’s firms shipped jobs to Mexico. And China.” The Romney campaign's response: an analysis by FactCheck.org that explained the outsourcing of jobs, conducted by firms controlled by Romney’s Bain Capital, took place after he had left the company in 1999 to turn around the Salt Lake City Winter Olympics. But since Romney continued to own Bain for another three years, an extremely fruitless debate followed as to what his role was during that period. Accusations that Romney “committed a felony” and that Obama was running a “dishonest campaign” filled the airwaves.

By distancing himself from these decisions, Romney leaves Obama’s premise unchallenged: that outsourcing is bad. Nothing could be further from the truth. Outsourcing, in this context, is just free trade with foreign countries – trade that would not take place unless both countries were better off. As scientist and writer Matt Ridley noted in his book, The Rational Optimist: How Prosperity Evolves, “The message from history is so blatantly obvious – that free trade causes mutual prosperity while protectionism causes poverty – that is seems incredible that anybody ever thinks otherwise. There is not a single example of a country opening its borders to trade and ending up poorer.”

The attack on Romney goes to show – yet again – that Obama doesn’t understand where prosperity comes from. Romney missed an opportunity to set him straight.


  1. This attack shows that the American voters may not "understand [or agree] where prosperity comes from." Romney's campaign is smart to steer away from championing outsourcing.

  2. Tracey: You are correct that American voters do not agree on the relationship between international trade and prosperity. This is unfortunate, because the economics of it have been well-known for 200 years. In any case, one thing a leader has to do is build consensus where this is disagreement. Reagan did it on this issue, so I know it's possible.