Why Kerry and Dems are clueless on trade

Instapundit linked to this article at ContraCostraTimes.com entitled 'U.S. receiving more 'outsourced' jobs than it's losing.' Indeed. But what illuminates is this quote from Kerry, "not if you talk to any worker that's out there." The American worker who loses a job because of Free Trade is here, is visible, and you can court his vote. But it ignores all the other beneficiaries, like the guy who gets a job directly because of free trade, the guy who gets a job indirectly, and the overall lower prices paid by consumers.

1) Direct Job Creation.
We have seen several cases, and I have posted on some of them regarding outsourcing creating more jobs than are being lost. See here, here, here and a related post on values in economics here. Generally, when a company outsources some jobs, two things happen, it lowers costs and so creates new high paying jobs with some of the money. The famous IBM case (discussed here by Kim du Toit, with my comments here.) involved IBM moving some jobs oversees to create new ones at higher rates of pay. See this by Clay Risen in The New Republic, where he points out, "IBM, for example, plans to offshore 3,000 programming jobs this year. But, at the same time, it will also create 5,000 jobs in the United States. Does that count as jobs lost, jobs gained, or both?" So this is direct job creation (net 2000 better jobs) via free markets and outsourcing.
2) Indirect Job Creation
Porphyrogenitus has a post on a recent Financial Times article on free trade. The FT requires subscription, so no link. When the economy as a whole benfits through low prices, low interest rates, and vigorous trade, jobs are created by someone other than the outsourcer. Going back to the IBM example, IBM customers, who saved money on IBM products can use that money instead to create jobs, while at the same time, those 5,000 engineers, project supervisors, and managers are spending more money on consumer goods than the 3,000 programers were last year, so more jobs are created through consumer expansion.
3) Lower Prices
Even if wages are held constant, we benefit from falling prices. When you can combine higher wages and lower prices, you really create benefits to Americans.

The problem John Kerry has is in finding people who are advantaged by cases #2 and #3. The Contra Costa Times finds a BMW employee who is in the Carolinas because of free trade, rather than say in Bavaria. As many commentators have observed, the Clinton-Gore administration knew this about free trade and pushed for NAFTA despite the fact that John Kerry can find people harmed by it. Show me a policy and I'll show you someone harmed by it. This is because no policy is ever a pareto optimum. What Kerry is either not aware of, or is cynically demagoging, is that people harmed by outsourcing are directly aware of it, and those who benefit are generally (our BMW worker aside) unaware, or only vaguely aware.

If Kerry and other Dems are aware that the policies they advocate are harmful, but advocate them anyway, they are unfit. So, here's hoping they are just ignorant.