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Treasury secretary defends outsourcing

Treasury Secretary John Snow on Tuesday defended U.S. corporations' right to send U.S. jobs offshore to cheaper-labor countries, and said a more productive source for jobs might be found by breaking down global trade barriers.
/ Source: Reuters

Treasury Secretary John Snow on Tuesday defended U.S. corporations' right to send U.S. jobs offshore to cheaper-labor countries, and said a more productive source for jobs might be found by breaking down global trade barriers.

Snow was asked on CNBC television whether he would advise U.S. corporations to reduce the rate at which they are "outsourcing" U.S. jobs by having them performed in countries like China and India.

"I think American companies need to do what they need to do to be competitive, and as they're competitive, it's good for their shareholders, it's good for their consumers and it's good for their employees," Snow said.

He added: "Enterprises that don't succeed don't create many jobs."

Snow was interviewed from New York, where he visited Wall Street investment houses and made multiple television appearances repeating that the economy was growing and that as it does so, "lots of jobs are going to be created."

He declined to specify how many jobs might be created, though, and how many of the roughly 2.8 million factory jobs lost since the Bush administration took office might be regained this year.

"I'd like it to be the biggest possible number," Snow said, maintaining his distance from a forecast in the Economic Report to the President earlier this month that 2.6 million jobs could be created this year, comparing this year's average employment with last year's average.

Estimates are that it would take average job growth of about 300,000 jobs a month to achieve the administration's goal -- a figure that far exceeds most private forecasts.

Snow also backed up Gregory Mankiw, chairman of the White House's Council of Economic Advisers, who ran into a firestorm of criticism for praising the shifting of U.S. jobs overseas.

Snow noted that Mankiw had "indicated he was misinterpreted from some lack of clarity in what he said" and had in fact sent a letter to U.S. House of Representatives Speaker Dennis Hastert that apologized for creating "the wrong impression."

Job losses and outsourcing, often using computers to ship work -- ranging from x-ray analysis to preparing data information -- to countries where people earn far less and have fewer legal protections in the workplace have become hot-button issues in the runup to November's presidential vote.

Snow said that the United States, with 5 percent of the world's population, still had plenty of opportunity to pry open foreign markets. "We've got to make sure that the rest of the world is open to our farmers, our agricultural producers and out manufacturers," he said.