OPINION
Outsourcing and Protectionist Rhetoric in the Senate

When old ideas meet new technology, the result is sometimes a comedy of errors. Such is the case for New York Senator Hillary Clinton, whose outdated thinking produced many a blunder. On one recent occasion, she played the protectionist card on the issue of outsourcing and got caught in her own hypocrisy.

In a March 3, 2004, interview, Senator Clinton told CNN's Lou Dobbs that America must "quit giving incentives to people for moving jobs offshore." She also said "if we do nothing, we're going to continue to export American jobs." The senator appeared to be against outsourcing, but her actions speak louder than words.

Seven days later Hillary Clinton welcomed Tata Consultancy Services (TCS), a branch of Tata Group, an Indian conglomerate, to New York at an event with a host of other officials. Arup Gupta, president of TCS America, claimed last year that on development work, TCS sends 70 percent of the work offshore, and 30 percent is done in the United States. This fact didn't seem to faze the senator who proudly claimed that Tata created a full "10 jobs" for Buffalo.

Ten jobs isn't really something to brag about, but that doesn't seem to matter in Hillary's world. Not that outsourcing is a bad thing -- quite the opposite.

Increasing Trade in a Global Economy

America gains just as much as other countries by increasing trade. In a global economy, it is in the best interests of all to move toward each entity's competitive advantage, and money made in one place is often spent in another.

Senator Clinton probably understands this, otherwise she might not have been so friendly to TCS, but she should drop the outdated protectionist rhetoric.

Hillary's second mishap involving technology is one she may not yet realize. She wants to grow jobs in manufacturing by creating a new government manufacturing researching department modeled on DARPA. What she doesn't realize, however, is that any new manufacturing research group would be looking at ways to automate manufacturing and that would temporarily create fewer jobs in America, not more.

But that would not be a bad thing either.

Opsware chairman Marc Andreessen points out that, just as in agriculture, automation will make America more efficient and productive, growing the pie for everyone. "Manufactured goods will keep getting cheaper and more plentiful, manufacturing companies will get continually more productive, and jobs will be continually created in areas around manufacturing like product design, automation technology development and management, marketing, sales , financial management, etc." he said.

But in the short run, it will mean loss of jobs -- something apparently not considered by the senator, who is also fighting the automation of TV ratings.

A Strange Battle

In this strange battle, Hillary found herself siding with Fox News Corporation. Conservative Rupert Murdoch might seem an unusual teammate for Democratic Senator Clinton, but in an odd twist of events, the two put ideological concerns aside.

Nielsen Media Research, whose ratings have been used for decades to set TV advertising rates, announced that it would replace the old paper "diary system" of collecting ratings with a computerized version. The announcement should have been a blip on the news radar, but because more accurate ratings threatened News Corp.'s revenue, a huge drama ensued.

Anyone who has participated in Nielsen's old diary system knows that viewers often guessed at what they were watching, as they didn't always record it in real time. Computerized processes changed the inaccuracy of this system, and what it showed was that ratings for some News Corp. programs aimed at minorities fell. That was enough to convince Senator Clinton that it was safe to use another old idea -- the race card.

Political Fire

The political fire was fueled by a group of racial grievance specialists called "Don't Count Us Out," which was funded by News Corp. But while the group complained that Nielsen's new system would undercount minorities, the reality was that Nielsen was actually overcounting them, and, in terms of viewing habits, what Nielsen found proved quite interesting.

Black Entertainment Television (BET) and Telefutura received higher African American and Latino viewership under the computerized system than under the diary system, showing that "minority programming" is alive and well -- just not on the Fox network.

Hillary Clinton should have seen this information as validation that minorities are being served by the marketplace, but instead she chose to take the old race-victim route that she believes will help her win votes in the next election.

Senator Clinton's record on technology issues reads like a comedic text on what not to do in policy making. Technology can help America be more efficient and will make everyone better off -- if only legislators, including Senator Clinton, will allow it.