In Madrid, 200 are dead and 1,500 wounded. Available evidence indicates that Al-Qaeda is to blame. Part of the reason why the evidence against Al-Qaeda is so compelling is that since 9/11 this group has targeted groups outside the U.S that support America. In this case, the prime minister of Spain has been an outspoken supporter of George W. Bush's invasion of Iraq.So where will Al-Qaeda strike next?
Across America, the hot topic isn't terrorism or the war in Iraq; it's jobs. And the main scapegoat for the lack of job growth is outsourcing. This process is not new; in fact, American companies have been outsourcing jobs for decades. But now, instead of just manufacturing jobs, U.S. companies are now outsourcing customer service and other white-collar jobs.
There is a city in southwestern India with a highly educated population of about four million. The city of Bangalore, India, has been the recipient of many of the newly outsourced jobs. Because of India's much lower standard of living, educated Bangalorans (am I the first to use that term?) are gratefully accepting jobs at wages that white-collar Americans would consider an insult.
And while America is thousands of miles, not to mention an entire ocean, from the main sources of Al-Qaeda members, Bangalore, India is only a few hundred miles from the Pakistani border. It's certainly a lot closer to the hate-mongering religious schools of Pakistan, Afghanistan and Saudi Arabia than is Madrid.
What would happen if several well-placed bombs exploded near the call centers of Bangalore? Companies that are relying on cheap customer service centers to fuel profits would find themselves unable to provide that service. American hospitals that rely on web-based diagnostic centers would be unable to tell their patients what's wrong with them.
But that's just the immediate consequence. It could get far worse.
Once the initial reaction set in, the stock market would tumble. If companies can't outsource their service jobs to cheap markets, their profit margins will shrivel. Smaller profits means lower stock values, just as the markets are showing signs of rebounding from three bad years in a row. All this uncertainty could trigger another serious recession. With falling profits, falling stock prices and nervousness all around, companies will start laying off workers in an effort to stem the tide.
In a year or two, it could mean a resurgence in job creation, as Americans become more willing to accept low-wage jobs. Prices would remain low, a falling dollar could result in greater exports and fewer imports. Even manufacturing might return to our shores as the risks of shipping from unsecured foreign ports get higher.
In the long run, though, other countries would slide into recessions, perhaps deep ones, as American dollars no longer flow in. The world economy could see a downturn rivaling that of the 1930s, and we know what that led to.
It's a good thing I'm not a terrorist.
Copyright 2004, Dan Jacoby
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