IN the 2004 political season, offshore outsourcing — the practice of hiring lower-paid service workers in places like India to carry out tasks previously done by higher-paid American workers — became an important issue.

The debate flared after the annual Economic Report of the President was issued in February 2004, just as the Democratic presidential primaries were heating up and payroll job growth was sluggish. Answering reporters’ questions about a section of the report on trade, N. Gregory Mankiw, then the chairman of the White House’s Council of Economic Advisers, made a statement that would be utterly unobjectionable if uttered in a classroom at Harvard, where he taught before joining the Bush administration and to which he has returned.

The crux of it was this: ”outsourcing is just a new way of doing international trade.”

The phrase was translated into headlines, as well as politically motivated press releases, that accused Mr. Mankiw, and hence President Bush, of supporting the wholesale export of jobs from Bangor to Bangalore. Democrats and Republicans hastened to condemn the remark, which Mr. Mankiw hastened to clarify.

For Mr. Mankiw, the episode, which he recounts in a recent working paper that he wrote with Philip L. Swagel, former chief of staff at the council, stands as a case study of what happens when an academic economist is tossed into the meat grinder of the news cycle — and of the public’s general lack of economic education. ”This is the sort of stuff I talk about in the first week of my introductory economics class,” he said.

Outsourcing has yet to make a significant appearance in this year’s political campaign. The furor surrounding the practice seems to have subsided quickly once the ballots were tallied in November 2004.

Mr. Mankiw and Mr. Swagel found that the number of references to ”outsourcing” in four major newspapers spiked from about 300 in 2003 to 1,000 in 2004, but has since fallen. As the number of jobs has risen steadily — albeit not impressively — politicians now seem preoccupied with other issues, like Iraq and energy. Read more…

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