Who's the real 'outsourcer in chief'? Why Obama, Romney both shoulder blame.

The trend of outsourcing US jobs predates either President Obama or Mitt Romney, but both have contributed to it in different ways, according to one economist. 

Charlie Neibergall/AP/File
President Obama speaks at the TPI Composites Factory, which manufactures wind turbine blades, earlier this year in Newton, Iowa. Republicans say Obama's energy policies have led to outsourcing.

Team Obama says Mitt Romney has been a big outsourcer of US jobs. Now Mr. Romney fires the same charge back at President Obama.

Who's right? And how important is this issue to voters?

Although both sides have used the phrase "outsourcer in chief" about the other, it wouldn't be fair to view either the president or his Republican rival as a prime culprit in the shift of US jobs overseas. That trend became well established without either of them playing a central role.

But some economists say it's valid to find some fault with both leaders on the issue of jobs moving offshore. And it's an issue that many voters care about, so you can expect to see more attack ads on this subject between now and Election Day

Instances of inappropriate outsourcing "swell the trade deficit, which imposes great costs" on the economy, economist Peter Morici argues in a written analysis Wednesday. "Both President Obama and Governor Romney own some of that problem."

Amid the election campaign's broader focus on jobs and economic growth, both campaigns are purposefully confusing the issue in their political advertisements, he adds.

In one swing state, the Obama team recently asked in an ad: "Does Iowa really want an outsourcer-in-chief in the White House?" The ad points to a Washington Post article describing how Bain Capital, the company Romney founded and headed, invested in firms that that specialized in helping other employers expand operations overseas.

Romney and fellow Republicans have turned the label around. "This president has been outsourcing a good deal of American jobs himself by putting money into ... solar and wind energy companies that end up making their products outside the United States," Romney said in another swing state, Colorado. "If there's an outsourcer in chief, it's the president of the United States, not the guy who's running to replace him."

But outside fact checkers have rated some Republican claims – such as one that says $500 million has gone to fund electric-car production in Finland – as exaggerated or deceptive. 

Similarly, watchdogs including FactCheck.org and the Washington Post's own "Fact Checker" have poked holes in Obama's ads. "We found no evidence to support the claim that Romney – while he was still running Bain Capital – shipped American jobs overseas," says a recent analysis by FactCheck.org, a project of the Annenberg Public Policy Center of the University of Pennsylvania.

In Mr. Morici's view, the legitimate problem is what he calls inappropriate outsourcing – when the location of jobs and production is influenced by government trade barriers or subsidies, for example. 

He says Obama has contributed to the offshoring trend in several ways: He has failed to take a tough stand on anticompetitive trade practices by China, and he has taken a relatively restrictive stance on oil and gas development in the US, thus shifting energy jobs overseas.

As for Romney, the private-equity industry focuses on buying and reselling businesses – often resulting in the movement of brands, patents, and factories overseas, Morici says. Although private-equity restructuring deals may play a useful role in the economy, they have "an inherent bias toward outsourcing," he adds.

Not every economist agrees with Morici that inappropriate outsourcing is a major problem.

But the voting public views it as a significant concern. One Gallup poll last year asked Americans their top ideas for creating more US jobs. The top solution offered – ahead of tax cuts, stimulus efforts, or streamlining regulation – was to stop sending jobs overseas. 

Outsourcing gets a bad rap even though it's a basic element of a free-market economy, says Morici, an economist at the University of Maryland. Free trade, including the sourcing of parts and labor overseas, brings enormous benefits to the economy, he and other trade experts say. 

"If Americans expect folks abroad to purchase Boeing aircraft and Intel processors, then they had better be prepared to outsource some of what they purchase," Morici writes.

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