Outsourcing ire just sound and fury?

Barack Obama’s presidential campaign speeches have been harsh when it comes to criticising outsourcing. Many dismiss his words as little more than election hot air, reports Pramit Pal Chaudhuri.

Barack Obama’s presidential campaign speeches have been harsh when it comes to criticising outsourcing. Many dismiss his words as little more than election hot air. Others worry a protectionist Democratically-controlled Congress will make Obama a prisoner of his rhetoric.

HT Image

Obama’s anti-outsourcing attacks were the most savage when he battled Hillary Clinton for the Democratic nomination. The nadir was in April 2007 when he drew parallels between a student massacre at Virginia Tech University and outsourcing. The latter was also a form of “violence” against US workers who “suddenly have the rug pulled out from under them because their job is moved to another country.” Soon after, his campaign called Clinton the “Democrat from Punjab” because of her investments in outsourcing-related firms.

After he won his nomination, Obama seems to have toned down his rhetoric but says he will abolish tax incentives for companies that outsource. He has also said, “We live in a more competitive world, and (outsourcing) is a fact that cannot be reversed.” The reason Obama may not take decisive action is that the US’s own IT workers aren’t demanding it.

Says Jacob Kierkegaard, an economist at the Peterson Institute of International Economics, “On IT-related outsourcing I am quite relaxed. US IT workers are back to two per cent unemployment. My distinct impression is that the Democrats’ considerable protectionist energy will be channeled elsewhere.”

Vivek Wadhwa, a technology expert at Harvard University agrees saying Obama may try to provide incentives to keep research and development jobs from going overseas. “He has put a populist spin on this, but that is what they do in politics.” The greater concern, say even Obama advisors, is the expected Democratic sweep of Congress will force an Obama administration further left on protectionist issues than even he wants.