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Home Publications Blogs Beat the Press When Obama/Bush Work to Increase Boeing's Profits, The NYT Tells Us They Are Concerned About Jobs

When Obama/Bush Work to Increase Boeing's Profits, The NYT Tells Us They Are Concerned About Jobs

Sunday, 02 January 2011 21:21

In reporting on a WikiLeaks cables showing U.S. State Department officials acting as sales agents for Boeing, the New York Times decided to tell readers that the real motivation was high-paying jobs for American workers. This leak might be seen as rather embarrassing since most small businesses cannot count on top State Department officials spending their time pushing their product. These businesses have to pay for their own marketing.

However, the NYT threw in the comment:

"It is not surprising that the United States helps American companies doing business abroad, given that each sale is worth thousands of jobs."

Of course most immediately each sale means tens of millions of additional profit for Boeing. The NYT presents no basis whatsoever for its assertion that the concern for American jobs was a larger motivational factor for the State Department sales pitches than the concern for Boeing's profits.

It is also worth noting that in the standard trade models that economists use to argue the merits of lower trade barriers, each sale is not worth "thousands of jobs." The standard trade models assume a fully employed economy. In these models, at best an additional sale could mean that a small number of workers are employed at modestly more productive jobs, leading to small gains in wages and efficiency. If administration officials actually believed that each sale of a Boeing jet abroad means thousands of jobs then they do not accept the standard economic arguments that are used to push for trade agreements. 

Comments (7)Add Comment
Extraordinary Trade Renditions
written by Union Member, January 02, 2011 10:08
According to Thomas Frank's WHAT'S THE MATTER WITH KANSAS, Boeing has managed to dramatically reduce hourly wages at it's American manufacturing plants in the last 20 years.

Then Boeing attempted it's 20 Billion dollar fuel leasing Ponzi Scheme with the American Taxpayer. Too bad it didn't work out, they could still be benefiting from Obama's extension of Bush's tax Ponzi Scheme.

And Tim Russert, who called Social Security a Ponzi Scheme on air with Chris Mathews in the spring of '08 six months before people saw what a real Ponzi Scheme is (with Bernie Madoff) had Richard Perle (Boeing's most powerful Washington spokesman) on Meet the Press to commemorate the fourth anniversary of the U.S. invasion of Iraq.

Fly me to a black site.

Dean's post was stolen straight out of 1904
written by Veblen, January 02, 2011 11:43
http://books.google.com/books?...&dq=theory of business enterprise&pg=PA294#v=onepage&q&f=false
its even worse than that
written by professor dick, January 03, 2011 12:55
Boeing, for the 787, traded both manufacturing and design jobs for future orders, and, of course, to weaken the bargaining power their machinist and engineering unions.

Furthermore, Boeing does not like being the last major US manufacturer whose freedom of action is constrained by its unions, especially the freedom to set compensation where they want it. Profitable or not, watch them demand a two-tier wage structure during the 2012 negotiations.
written by skeptonomist, January 03, 2011 8:21
I think that Dean, Paul Krugman and others have been arguing in other contexts that a solution to low employment in the US is increased exports (from a devalued dollar, among other things), so whether or not a "standard" economic model is employed anything that increases employment should be a good thing. The decision of whether official support of a particular trade deal is good or bad from the standpoint of employment should probably be made on the basis of where the jobs are. If Boing is going to be building its airplanes in the US this would seem to be a good thing. US trade policy has previously favored many deals in which factories are built in other countries, and that obviously favors US capital but not US labor.
Adam Smith's Wealth of Nations: From Butcher and Baker to Boeing
written by izzatzo, January 03, 2011 9:39
The NYT presents no basis whatsoever for its assertion that the concern for American jobs was a larger motivational factor for the State Department sales pitches than the concern for Boeing's profits.

Any economist knows that the motivation for profit cannot possibly be inconsistent with the maximum welfare of hired labor.

As explained by Adam Smith, that's the whole point of capitalism - the pursuit of self interest creates wealth unbeknownst to the pursuers through specialization, the way a Blind Watchmaker creates a complex clock through random evolutionary forces with no source of internal guidance beyond the incentive to survive in the face of fierce competition.

Adam Smith and Milton Friedman both pointed out by example, that no one entity could ever make the turbine blade of a jet engine, requiring instead thousands of invisible hands from which it emerges like a Phoenix among the ashes of self interest pursuit.

Give it up Mr Nanny. Let the Nanny provide a sales function so Boeing can create wealth. It doesn't make any difference what the NYT says about jobs over profit. We're all invisible to the results that matter. Free markets work if you just leave them alone. Profit and jobs go together like bread and butter.

Stupid liberals.
written by Jack Lohman, January 03, 2011 11:59
No, the politicians are concerned about profits and their piece of the action (campaign contributions).

Jack Lohman
written by vorpal, January 03, 2011 1:55
Thank you for bringing this up Dean. Now we know what "American interests" are. They are synonymous with the interests of the oligarchs.

By the way, in an interview on Democracy Now , Noam Chomsky makes a similar observation. I recommend watching it.

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.