Werkers of the World

I’m referring, of course, to an op-ed by Justin Muzinich and Eric Werker which proposes a tax credit designed to encourage investment in the developing world. It is an ingenious idea based on a proven model,

In 2000, Congress created a program giving businesses that invest in poor communities within the United States a tax credit equal to 39 percent of the cost of the investment. The theory was that poverty and joblessness in poor communities could be ended only by developing local businesses, not by an aid check. Seven years later, so many businesses want to invest in poor areas that only a quarter of the companies that applied for tax credits in 2006 received them.

and it seems obviously preferable to traditional overseas development aid, which P.T. Bauer memorably, and mostly accurately, referred to as “government-to-government transfers.”

Unfortunately, Greg Mankiw, who has some experience in trying to communicate easily misunderstood ideas in the political arena, is probably barking up the right tree when he writes,

Imagine what would happen, however, if a political candidate of either party were to come out in favor of the proposal. The opposition would quickly lambast it as the “outsource American jobs to third-world sweatshops tax credit.”

Perhaps (a) framing this as an alternative to foreign aid and (b) the support of the religious rightroots would nevertheless make this a winner, or at least not a straightforward loser. That remains to be seen.

Incidentally, I think “religious rightroots” is a useful term. I realize that “rightroots” is meant as the right-wing equivalent of “netroots,” but consider that much of what we think of as the “religious right” is dominated by leaders with no followers. In contrast, evangelical leaders like Rick Warren have a large number of followers and admirers, which is to say grassroots support, and yet they tend to have more moderate views than the old religious right leadership.