- The Washington Times - Tuesday, March 30, 2004

CINCINNATI (AP) — Treasury Secretary John W. Snow said yesterday outsourcing of American jobs, a prominent issue in the presidential campaign, can help make the economy stronger.

“It’s part of trade,” he said. “It’s one aspect of trade, and there can’t be any doubt about the fact that trade makes the economy stronger.”

Mr. Snow said in an interview with the Cincinnati Enquirer that technology is allowing U.S. companies to downsize and become more efficient by linking contract workers through the Internet.

“You can outsource a lot of activities and get them done just as well, or better, at a lower cost,” Mr. Snow said during a stop here Monday. “If we can keep the American economy strong and growing and expanding, we’ll create lots of jobs.”

A new study forecast that U.S. software and technology companies will save $21 billion a year by 2008 through hiring workers in India and other low-cost nations, adding $124 billion to the U.S. economy.

The cost savings will cut U.S. inflation, increase productivity, boost wages and create 317,367 new jobs by 2008, according to the study funded by the Information Technology Association of America, which is based in Arlington and represents 500 companies such as AT&T; Corp., Amazon.com Inc. and IBM Corp.

Mr. Snow’s comments on outsourcing followed remarks on the same subject last month by N. Gregory Mankiw, chairman of President Bush’s Council of Economic Advisers. He stirred controversy by suggesting that shipping U.S. service jobs overseas could be good for the U.S. economy.

Mr. Mankiw was forced to apologize for his comments after they were attacked as being insensitive to the huge job losses the country has suffered over the past three years. Mr. Bush himself addressed the issue, saying he knew people in America were looking for work “because jobs have gone overseas.”

Mr. Mankiw said his comments should not have been construed as praising U.S. job losses because “nothing could be further from my view.”

While in Cincinnati, Mr. Snow met with Kroger employees, visited a bank’s operations center and dined with members of the Cincinnati Business Committee.

Talking about their business, Kroger managers summed up the current economic situation, Mr. Snow said. “The economy’s stronger, sales are going up, competition’s tough,” he said.

“I think that’s a message that you probably find repeated in every boardroom around America,” he added.

“I was struck by the fact coming in this morning, the number of foreign companies that have operations right here, proudly displaying their logos,” he said. “America can compete with anybody. What we need to do is not build walls but tear walls down.”

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