Tuesday, April 06, 2004


Rather than facing the serious issues raised by offshore outsourcing, Republicans have opted to muddy the waters of the debate with a quizzical new addition to the trade lexicon: 'insourcing.'

According to GOP spin doctors, "insourcing is the movement of foreign jobs to the United States" through foreign direct investment.

While FDI in the US really has little to do with the offshoring debate, it also has little to do with creating American jobs.

It turns out, most FDI in the US is used by foreigners to acquire already existing establishments in the US (thus reclassifying previously existing jobs as 'insourced'), often in the form of a change in ownership in stock. In this sense, 'insourcing' is the flip side of the coin to persistent and mounting US current account deficits, which requires foreigners to purchase more and more American assets to finance our appetite for imports.

Rob Scott hasthe low down on jobs from 'insourcing':

Between 1991 and 2001, foreign multinationals acquired firms employing 4.1 million workers. However, only 274,000 workers were employed in the newly established U.S. companies owned by foreign firms, for an average of 25,000 jobs per year over this period.


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