President Obama has recently announced as part of the politician’s ever-present toolkit of pandering the “In-Sourcing” initiative, which is of course penalizing companies for reducing costs and then giving subsidies to companies to spend foolishly in politically-important districts. Of course how could politicians know more than business-people what is outsourcing and what is merely reducing the costs of production so we can all buy better things at less cost, but, that of course is the ultimate question in political economy.
Then of course we have the National Export Initiative where the self-same president wants to double exports by 2014. Let’s examine how silly this is. In the first instance we are penalizing American companies – those that are still listing their stocks here as opposed to elsewhere, for now – for investing abroad (outsourcing in the pejorative). Then we are trying to encourage these same businesses to sell their stuff to overseas markets. So on the one-hand we have a policy to reduce the purchasing-power of overseas markets (“in-sourcing”) and on the other hand we are trying to sell more to these same export markets. It’s a bad joke.