The loss of American jobs to cheaper labor markets overseas is part of a ``creative destruction'' process that ultimately makes the U.S. economy more efficient, said Robert McTeer Jr., president of the Federal Reserve Bank of Dallas. ``Good economics says you don't try to stop destruction of jobs in the creative destruction process,'' McTeer said in a speech today to Texas community-college teachers in Fort Worth. ``We have to have an environment in which new jobs are being created to replace those lost.''
The U.S. economy has lost 1.05 million jobs since the current expansion started in November 2001, creating grist for Democratic Party challengers, including Senator John Kerry, who are trying to oust President George W. Bush from the White House in November's election. Some members of Congress are calling for legislation to help stem the loss of jobs to cheaper labor markets such as India and China. ``I'm kind of concerned about the general trend away from free trade in the rhetoric these days,'' McTeer said in response to a question following the speech. ``A lot of this talk is the equivalent of saying we want to be inefficient -- that we want to a lot of work to get what we want,'' McTeer said. ``If we just want jobs, we should outlaw bulldozers and just make people use shovels.''
Job Training
One way to make the upheaval easier is to improve the amount and quality of job training available to displaced workers, he told the teachers. ``I do think there's a problem with the American workforce having to move into more conceptual jobs'' without adequate training, he said. McTeer, who participates in Federal Open Market Committee decisions though doesn't have a vote on setting the benchmark interest rate this year, didn't address current monetary policy at length. Commenting on a language change in the last FOMC statement on Jan. 28, McTeer said, ``To me, `patient' means exactly the same thing as `considerable period.' '' The FOMC said in the latest statement that it ``believes it can be patient in removing policy accommodation.''
In June, the Fed lowered its benchmark overnight bank lending rate to 1 percent, the lowest since 1958, to help spur the economy, promote job growth and stave off a possible further slowing in the rate of inflation. ///www.bloomberg.com