You exported what?!

Friedman has an op-ed in the NY Times today about what he calls the 3rd wave of globalization, characterized by decentralization of services--re: exporting jobs overseas. With highly trained doctors, accountants and programmers in India, for example, US businesses can carve up a given project and farm out the service components to Bangalore for a fraction of the domestic cost. Friedman doesn't even hint at any awareness of the central role this issue played in the Kerry-Edwards race (and certain to get lots more press until November).  Edwards had criticized Kerry for voting for free trade agreements and blamed those agreements for the loss of US jobs.  But the free trade of products, without subsidies, is essential if we are to integrate developing nations into the global economy; this is likely what Kerry was supporting.  It is only when the factors of production, such as the labor force, are exported that this model breaks down.  Yet that is exactly what allows places like India to develop a thriving middle class.  The trick is to balance the need for such a global middle class with the protection of the American middle class.  One thing is clear: no one is going to win any domestic election without heavy protectionism on this front.