March 6, 2006, Op-Ed Columnist PAUL KRUGMAN
President Bush's main purpose in visiting India seems to have been to promote nuclear proliferation. But he also had some kind words for outsourcing. And those words help explain something that I know deeply puzzles the administration's political gurus: Mr. Bush's dismal polling on economic issues.
Now the American economy isn't doing as well as Bush partisans think it is. In fact, since the end of the 2001 recession, the recovery in jobs, output and especially wages has been unusually weak by historical standards. Still, the economy is expanding, so it's impressive just how large a majority of Americans disapproves of Mr. Bush's economic management.
Why doesn't Mr. Bush get any economic respect? I think it's because most Americans sense, correctly, that he doesn't care about people like them. We're living in a time when many Americans are feeling economically insecure, but a tiny elite has been growing incredibly rich. And Mr. Bush's problem is that he identifies so totally with the lucky, wealthy few that in unscripted settings he can't manage even a few sentences of empathy with ordinary Americans. He doesn't feel your pain, and it shows.
Here's what Mr. Bush said in India, when someone raised the question of the political backlash against outsourcing: "Losing jobs is painful, so let's make sure people are educated so they can find — fill the jobs of the 21st century. And let's make sure that there's pro-growth economic policies in place. What does that mean? That means low taxes; it means less regulation; it means fewer lawsuits; it means wise energy policy."
O.K., so you're a 50-year-old worker whose job has just been outsourced, and Mr. Bush tells you that you should go get a 21st-century education and rejoice in the joys of a lawsuit-free economy. Uh-huh.
Actually, Mr. Bush's remarks were even more off-key than they seem, coming during a visit to India. India's surge into world markets hasn't followed the pattern set by other developing nations, which started their export drive in low-tech industries like clothing. Instead, India has moved directly into industries that advanced countries like the United States thought were their exclusive turf. When Business Week put together a list of areas "where India has made an impact ... and where it's going next," that list consisted almost entirely of high-technology activities like software and chip design.
What this means is that American workers whose jobs are threatened by Indian competition are, in many cases, people who thought they already had acquired the skills to "fill the jobs of the 21st century" — but have just discovered that Indians, who are paid about a tenth as much, also have those skills.
Am I saying that we should try to stop outsourcing? No. But if you don't feel conflicted about the effects of globalization, if you don't worry about the many losers from the process, you aren't paying attention. And American workers deserve a better answer to their concerns than yet another assertion that a rising tide raises all boats, because that's manifestly untrue.
The fact is that we're living in a time when most Americans are seeing little if any benefit from overall income growth, because their share of the economic pie is falling. Between 1979 and 2003, according to a recent research paper published by the I.R.S., the share of overall income received by the bottom 80 percent of taxpayers fell from 50 percent to barely over 40 percent. The main winners from this upward redistribution of income were a tiny, wealthy elite: more than half the income share lost by the bottom 80 percent was gained by just one-fourth of 1 percent of the population, people with incomes of at least $750,000 in 2003.
And those fortunate few are the only people Mr. Bush seems to care about. Look at what he had to offer after asserting, in effect, that workers get outsourced because they don't have the right education: lower taxes, deregulation and fewer lawsuits. Funny, that doesn't sound like "pro-growth" policy to me. Instead, it sounds like a wish list for wealthy individuals and big corporations.
Mr. Bush once joked that his base consisted of the "haves and the have-mores." But it wasn't much of a joke. His remarks in India show that he really can't imagine what it's like not to be a member of a privileged economic elite.