White House Outsourcing Remark Ignites Firestorm

Feb. 13 -- On Thursday — the day before the U.S. Commerce Department reported a record $489.4 billion trade deficit for 2003 — travelocity.com, the internet travel company, announced it was "outsourcing" 300 call-center jobs from Texas and Virginia to India.

Such news comes on the heels of the political firestorm set off earlier this week by President Bush's chief economic adviser, Greg Mankiw, who said "outsourcing" — sending white-collar service jobs abroad where labor is cheaper — was a good thing.

"It's something that we should realize is probably a plus for the economy in the long run," said Mankiw chairman of the White House Council of Economic Advisers. Outsourcing, Mankiw said, was part of a larger picture that would eventually be good for the American economy, "just a new way of doing international trade."

Though Mankiw's comments are somewhat less controversial in the world of economists, they became nearly radioactive in the world of politics, where perceived insensitivity to American job loss is seldom seen as shrewd.

Tom Donohue, U.S. Chamber of Commerce president and CEO, told CNN Mankiw's comments were "a pretty stupid delivery of a message in a political year."

Even normally loyal House Speaker Dennis Hastert, R-Ill., clearly felt the need to distance himself from the administration with which he works so closely.

"I understand Mr. Mankiw is a brilliant economic theorist, but his theory fails a basic test of real economics," Hastert said in a statement. "We can't have a healthy economy unless we have more jobs here in America."

Rep. Don Manzullo, R-Ill., chairman of the House Small Business Committee, called for Bush to fire Mankiw. "He would probably stick his finger in the face of one of my unemployed people and say, 'You are out of work. Congratulations. That is good for the economy, good for America,'" Manzullo said.