One of America's biggest problems these days is our mechanism for solving problems. Maybe it's just paranoia of an exasperated political independent, but it often seems no sooner is a policy issue identified as a bona fide national "Problem" than ideologues of both political factions establish irreconcilable positions on said issue, making any solution requiring non-partisan compromise almost impossible.

Take the example of "offshoring", the rapidly expanding corporate practice of sending U.S. manufacturing and service jobs to lower-cost workers overseas. Recent media debates over offshoring, aroused by the manifestation of hundreds of thousands of white-collar service jobs being sent to India, might make one think it is already too late for fair-minded non-partisans to weigh in. Typically in these debates, the conservative viewpoint is represented by a contingent of academic economists and public officials stubbornly proclaiming that offshoring is not a problem but really a "good thing". Opposing them are liberal spokespersons advocating immediate protectionist measures and vague spending programs to assist the "offshored" workers (measures dismissed out of hand by the conservatives as "anti-growth and counter-productive"). The exchanges of rigid claims and angry accusations such forums inevitably produce discourage those of us yearning to hear thoughtful discussion and non-ideological compromise. But despite all this sound and fury, I am beginning to entertain hopes that it's not yet too late to develop positive and consensual national solution for this increasingly disquieting and controversial issue.

One source of hope is the actual political arena, where positions on this issue are not yet fixed along party lines. Dick Gephardt (D) and Pat Buchanan (R) both oppose globalization and free trade, while John Kerry (D) and George W. Bush (R) support them. And in 2004's increasingly contentious election year, when many of the key swing states (Ohio, Michigan, California, etc.) are also some of those most impacted by offshoring, we see candidates of both parties, undeterred by ideology or budget deficits, making vague promises to help the outsourced. Another encouraging development is the promising consensus building among some more open-minded political economists that some kind of aid for the offshored is needed. Most importantly, despite all the talk of division and gridlock, there remains a significant uncommitted swing vote among moderate voters and legislators of all persuasions to make possible the enactment of some effective long-term solutions to the trade and jobs policy challenges raised by offshoring, should one of the parties choose to advocate them.

The key to wringing results from this potentially positive situation is to focus on the plight of the workers and communities, the victims or potential victims of offshoring. Politicians may give lip service to theories learned in Economics 101, but their immediate and constant focus is on winning votes in the next election. They are aware of growing concerns about offshoring among voters of all persuasions who have little interest in arcane economic theories but want to know what can be done to the ease the personal problems created by offshoring's job losses.

These personal problems are very frightening to those involved and their families. First are worries about the next job, which, if one is available at all, will probably be a lesser job with fewer dollars and benefits. Moving is always suggested, but the "where-to" is not always clear. ("To India, where my job went?") And then are the problems associated with the lesser-quality job: coping with less money, surviving health problems with no or reduced medical insurance coverage, and, finally, and perhaps most important, finding the good new job opportunities (that the "no problem" economist and officials have promised) and figuring out how to get the training to qualify for them. This is a daunting swarm of challenges for one person or small group to deal with on their own. It is especially true when one's job loss, or fear thereof, is part of multiple layoffs affecting large numbers of people in the same specialties, the same industry and/or region. The problems start to seem too vast to handle. Small wonder that so many of the so-afflicted become deeply discouraged and turn to supporting protectionist solutions that can create their own serious problems, making matters even worse.

It is mostly spokespersons of the left who are advocating government programs to alleviate the immediate problems of the offshored and offer more positive options for their energies. Typical is Rep. Barney Frank (D. Mass.) who sees the loss of hope in some areas nearing Depression levels, and who advocates some form of "new New Deal" to counter it. Also concerned about the despair factor, but also about its negative impact on trade policy-making, is C. Fred Bergsten, Director of the Institute for International Economics and former Assistant Treasury Secretary in the Carter Administration. In the Jan. /Feb. 2004 issue of FOREIGN AFFAIRS magazine he advocated certain short-term and long-term government programs to help minimalize both problems. But significantly, even some conservatives are getting concerned. Daniel Drezner, Assistant Professor of Political Science at the University of Chicago and self-styled "libertarian Republican" in an article, "The Outsourcing Bogeyman", in the May/June 2004 FOREIGN AFFAIRS, trotted out all the usual anti-protectionism arguments but then went on to strongly advocate expanded assistance programs for offshored workers for "psychological" reasons, i.e. to minimize the potential political mischief (support for protectionism) from "those actually affected (by offshoring as well as) those who fear they will be."

So now commentators of both left and right are advocating assistance for the offshored. But what of claims such spending programs are "anti-growth and counter-productive"? Are Frank, Bergsten, and Drezner advocating bad policy? Not according to certain new economic studies, showing that social spending of the sort they advocate has stimulated, not harmed, growth or productivity in other developed OECD nations and need not do so in the United States. One of these studies, "Growing Public" (Cambridge Univ. Press, 2004) by University of California economics professor Peter H. Lindert, makes a strong case that intelligently crafted and carefully applied social spending in areas such as education, pensions, public health, housing, etc. have indeed led directly to increased productivity, economic success, and greater prosperity, even within societies, like Sweden's, that Americans think of as welfare states. Alluding to the conflict between his findings and conservative opinion, Lindert comments, "It is well known that higher taxes and (social) transfers reduce productivity. Well known - but unsupported by statistics and history."

In trying to assess the cost-effectiveness of the various programs advocated for the offshored, I've chosen to give particular weight to Lindert's opinions. Firstly, I find his non-partisan orientation cuts through the gridlock of theoretical "certainty" blocking dialogue in this controversial policy area. Secondly, his conclusions about the strengths and weaknesses of the different European economies, unlike those of his more conservative colleagues, correspond more closely with what I perceived myself during 37 years as an international businessman and traveler in Europe. From 1959 through 1992 I observed (often with a direct business interest) as various European nations revived themselves from post-WWII devastation to near-equality with the U.S., using supposedly anti-productive high-tax/social-spending policies. I also observed up close, as various problems arose, not from the welfare-state policies per se, but from various political and economic blunders by later groups of politicians, less skilled or scrupulous than those who created Europe's post-war economic miracle.

The "statistics and history" Prof. Lindert cites are based on studies of the historical experience of 15 developed OECD countries. His findings expressly support the fundamental elements of the programs most advocated. A representative example of such a program is Bergsten's proposal of a long-term strategy of "improving education and (raising) the overall skill level of the population;" and a short-term policy of "effective governmental assistance to workers who are displaced by increased trade flows (in the form of) stronger safety nets to cushion the transitional costs of job displacement and more effective training and other adjustment programs to help workers qualify for new positions."

Lindert's studies of the economic data from past efforts of the kind Bergsten proposes are very encouraging as to what can be achieved and what can be avoided. For example, he finds that overall; government programs to improve "education and the overall skill level" have consistently had a directly positive impact on growth and productivity within all countries studied, even when other educational options existed. As to "stronger safety nets" for outsourced workers recommended by Bergsten and others, Lindert's data shows countries that have opened themselves to globalization successfully have not engaged in a "race to the bottom" by reducing social protections for their workers. On the contrary, they have increased the social transfers needed to build better safety nets. On the all-important health-care component of national safety nets, Lindert takes a broader position, noting that productivity and overall longevity are much higher in properly balanced public health systems, because such systems tend to provide greater support for the health of younger, less affluent working people, who also benefit more from public health systems' greater emphasis on preventive medicine. His findings are lukewarm regarding "programs to help workers qualify for new positions", as he found no data to confirm that the best-known such program, the retraining and job-search services of Sweden's highly praised worker relocation program, had done much to improve Swedish work force productivity.

Also useful in our offshoring debate (and a good example of Lindert's non-partisan point of view) are his insights on how Americans might do things better. For example, in advocating universal social programs, Lindert notes that more generous, less heavily means-tested programs - healthcare, unemployment, pension programs, etc. - are cheaper, more cost-efficient, and less bureaucratic in European "welfare states" than US programs, whose fixation with cheating and waste creates expensive bureaucracies. He also sees proof that well-thought-out unemployment programs have created better growth and productivity because they took inherently unproductive workers out of the work force without spending vast sums, as America does, to try to get them to reform. And if Lindert seems "liberal-ish" to some readers, they should note his conclusions about failures of American public education pin the blame squarely on a) lack of accountability, b) lack of school choice, and c) the excessive power of teachers' unions - hardly a leftist viewpoint. But Lindert's data is not 100% encouraging. Regarding America's ability to benefit from the kind of social programs examined, he notes foreign nations with greater population homogeneity had more successful social welfare programs than those with less, causing him to wonder if lack of ethnic homogeneity and greater disparity between upper, middle and lower income groups in the US than in Europe and Japan is what really undermines such programs here.

If this is so, perhaps the more limited programs proposed by Daniel Drezner are better places to start in the US, based as they are on certain existing, but flawed, programs. Although Drezner downplays the threat of offshoring as a mere "bogeyman" scare, a problem "less one of economics than of psychology", he sees the protectionist form of these fears as reason enough to take some action. To depoliticize these fears, he advocates two programs: first, reform of the Trade Adjustment Act (TAA), enacted in 2002 to help trade-affected workers return to suitable employment as quickly as possible. As presently set up, the TAA denies aid to offshored workers unless sales or production in their industry sector declines; but, Drezner points out, the sectors doing offshore outsourcing today are almost all prospering because of it. His second proposal is the creation of other insurance programs to provide apparently needed supplements to those offered under the TAA, to benefit workers losing jobs to offshoring. (It is interesting that other conservative sources, including the Website of the Heritage Foundation, also advocate reforms to make TAA more helpful to the offshored.)

Another interesting aspect to Drezner's ideas is he sees them as largely placebo measures, believing that "the perception of possible (offshoring-caused) unemployment is considerably greater than the actual likelihood of losing a job". Drezner therefore believes such programs would "impose a very small cost…while relieving a great deal of employee anxiety", an outcome that would greatly please taxpayers, politicians, and, who knows, maybe even the offshored.

Being an historian, not an economist, I can't judge the validity of Lindert, Bergsten, and Drenzel's respective contentions and proposals. My experience, however, does cause me to find among them an interesting mix of consensus on the significant social and psychological impact of offshoring. This is very promising, because I see off shoring as a human and political problem, requiring human and political solutions that avoid falling into obvious economic mistakes, such as protectionism. I believe that there is a non-partisan consensus in this country that a) is wary of both protectionism and the "laissez-faire", let-them-fend-for-themselves policy toward offshored workers and b) recognizes the sacrifice of fellow citizens "wounded" in our international economic competition and wants to help and rehabilitate them, just as we do the US soldiers who fight our foreign wars.

Conservative economists, such as Drezner, may contest the value of such sentiments, but the awareness Drezner himself shows regarding the political realities of offshoring encourages me to challenge him (call his bluff, perhaps) to join with others more to his left to get his proposed reforms enacted. If we work on fulfilling even Drezner's minimal goals - keeping in mind Lindert's findings regarding the problems and non-problems of such programs - we can craft a well-thought-out American plan to help the genuinely offshored. If we can reduce or do away with the fears and anxieties of the job-losers - actual or potential - and keep them from unduly influencing the trade policy debate, we will be better able to asses the true impact of offshoring on our economy. If Drezner, Lindert, and Bergsten are correct, proper programs can stave off some serious potential mistakes, provide a much-needed dose of social aid and justice, and do so with a very small cost and economic downside. These are the people I'd like to see debating the off-shoring issue in the media. And I'd like to see them getting the attention of non-partisan, moderate voters and politicians, the only viewing public that has the power to enact the policies needed to defuse this potentially dangerous situation.

*Charles W Graham is a graduate of Bowdoin and an independent business consultant based in Camden, Maine. A former international banker in New York and Chicago, he has been active in non-partisan politics for many years.