It's no secret the pot is boiling a bit again with respect to America's trade-induced economic problems. Or, more properly, free-trade induced, as neither I nor any other protectionist I know is against trade per se. Or, to be even more precise, "free"-trade induced, because free trade isn't really free on the part of foreign nations, which block American exports by a thousand devices overt and covert.
The New York Times has an o-kay story on the problem here: As Jobs Go Global, U.S. Workers Pay.
Glad the NYT is running this, and glad Reuters wrote it.
But it's mild, mild stuff. In terms of my book Free Trade Doesn't Work, they've admitted to Chapter 5's dubious assumptions #3 (domestic factor mobility) and #4: (inequality). No mention of the other 7. I summarized these issues in an article here.
So they're really trying to preserve the conventional "free trade is, all things considered, best" model, by showing how observed problems do not refute that model but can be explained within it. As I noted in my book, none of my "7 deadly sins" are exotic stuff; they're all actually well-cataloged within conventional economics, if one knows where to look.
Expect more of this: the conventional wisdom is designed for defense in depth. The establishment's strategy is to make the smallest possible concession in the face of every new fact.
I wrote about the MIT "China Syndrome" report the article mentions when it came out, here:
The Third Way think tank has a new report out on dealing with China, "China's Trade Barrier Playbook: Why America Needs a New Game Plan," here.
Third Way styles itself, more or less, as a post-partisan "fresh thinking" good-government group. I'm not a huge fan, as they tend towards repackaging establishment-pleasing solutions in "new" garb, but they're sometimes worth reading.
Their report grasps the scale and nastiness of China's trade barriers against the U.S. But I can't take seriously any would-be trade reformer who supports the Trans-Pacific Partnership, which I debunked here.
Also, the report has some tediously naive stuff about how China supposedly doesn't know what's best for it (and how we can teach them!), to wit:
The United States should redouble its efforts to convince China's government, business and thought leaders that playing by the rules is ultimately in China's own interest. America might note, for example, that:• Increasing the value of the Yuan will help China control serious inflation,
increase domestic consumption and benefit China's consumers.
• Protecting IP is critical if China is to develop its own new ideas and build a
real innovation-based economy.• Fair, international technical standards will help Chinese companies sell
innovative products in foreign markets.• Assuring fairness for U.S. investors will win China allies as it seeks to
increase its own investment in the United States.
Like China's going to take trade pointers from the side that's currently losing!
Follow Ian Fletcher on Twitter: www.twitter.com/IanFletcher
No that's not what makes a true free trade zone. Federalization is the only thing that can enforce a true free trade zone. The US had many different homegrown and foreign currencies in times without a central bank and it was still a true free trade zone between the states; but only because there was enforcement from a 'higher power'.
So that's the goal of Free Traders, to create a worldwide government.
The great American sell-out continues unabated, as America loses more jobs and more industrial power to places like China. Our American business leaders are selling out America to Communist China, to fatten their own wallets only. America is being undermined from within.
This is the biggest issue of our time!
http://www.flixya.com/blog/3201910/Beautiful-Butterflys
Only in America are we stupid enough to let our MediaCorporatePoliticalMachine sell us this bunch of nonsense and then have us ask for more.
"Yes, please, outsource more of our labor/manufacturing/blue-white collar jobs...it's only inevitable and in our best interest. Please sir, may I have another?"
The travesty is that Obama bragged about his new great trade agreements and made it sound like the US got a great trade deal. and voters will actually believe him.,
As a German, it's probably natural I look at this generalization from a different angle. My first and main objection is to the matter-of-course stance you take the "free" is solely defined by the US/ US standards.
I think we can agree that business and economic philosophy in continental Europe is substantially different from the US. So, your definition would basically require that everyone trading with the US would have to fully adopt the US economic philosophy and model. ... I don't think that has much appeal.
Let me give some examples: Other than the US, we do not loathe our polities holding shares and voting power in major corporations. Why shouldn't then a government have the same right as a private investor when it comes to put additional funding (subsidies) into a business to catalyze revenues. Certainly, for example, no one objects when Warren Buffett provides an infusion of money on extremely favorable terms for a business he holds shares in. Why shouldn't then France and Germany grant favorable loans to Airbus?
Or even more so: SOPA ... which is a complete overreach of US IP laws into other jurisdictions.
The absurdity of US "free trade" claims manifests in this: They know that GM is rejected by many European customers. So, they claim it's an infringement of their "free trade" if legislation forces them to prominently display on their products: "Contains GM foodstuff". They claim it's their "free trade" right that just like in the US they can simply sell it AND disguise the facts.
On your point regarding goverrnment money going into business that is fine. As long as it does not violate WTO convenants which Germany signed along with other members.
Ultimately the US should put its workers and industries first to the benefit of our economy. That is common sense. Also, I think that the world really does not want to see the outcome of the continual diminishment of the US middle class until the point that people are so hard against the wall they feel they have nothing to lose.
http://www.morganstanley.com/views/gef/archive/2006/20060303-Fri.html
Globalization's New Underclass
"Stephen Roach (New York)
Billed as the great equalizer between the rich and the poor, globalizatÂion has been anything but. An increasingÂly integrated global economy is facing the strains of widening income disparitieÂs -- within countries and across countries. This has given rise to a new and rapidly expanding underclass that is redefining the political landscape. The growing risks of protectionÂism are an outgrowth of this ominous trend.
It wasn’t supposed to be this way. GlobalizatÂion has long been portrayed as the rising tide that lifts all boats. The surprise is in the tide -- a rapid surge of IT-enabled connectiviÂty that has pushed the global labor arbitrage quickly up the value chain. Only the elite at the upper end of the occupationÂal hierarchy have been spared the pressures of an increasingÂly brutal wage compressioÂn. The rich are, indeed, getting richer but the rest of the workforce is not. This spells mounting disparitieÂs in the income distributiÂon -- for developed and developing countries, alike.
It is a terrible idea, this new fascist liberalism that enjoins us to pack ourselves into cities, be the same, think the same, use the same products, farm only to produce specific export products. See the movie "Men With Guns" and that's what I'm talking about. To have democracy people need to see and touch their government and control it. To have freedom people need localized control of their food, their culture and government. I'm not advocating backing off our wonderful technology advances, I'm just saying a lot of what is ruining the world is misuse of that for cororate profit now human happiness health and prosperity. Those interests rarely coincide.
That's the last thing the political cartel wants to discuss, with the exception of Buddy Romer.
Mr Fletcher gives solid analysis and takes no prisoners. I am always pleasantly suprised when I learn something new "of value." I am shocked how often this happens when I read his articles.
It is safe to say I am an Ian Fletcher fan. Politicans and government officials need to listen closely to what he is saying and become fans of his as well. If they don't, the job crisis in the United States will continue and will see a good deal of political instablity in the United States.
We lost one-third of our manufacturing base in the last decade and there is not, and will not be, others jobs that can adequately compensate for this loss.
We need to solve our manufacturing problems in the ways Mr. Fletcher has suggested, or we are going to have some serious problems in the U.S. going forward.
o computer programmer
http://www.liveleak.com/view?i=4ea_1195705444
LiveLeak.com - "30 Days: Outsourcing" (2006) (Part 1/2)
The "star" is Chris Jobin, a programmer whose job was outsourced to India. He traveled to India and stayed for 30 days as an employee of a call center.
o accountant
o architect
o engineer
o radiologist
o car designer
o legal services:
http://www.manufacturingnews.com/news/10/0126/outsourcing.html
Outsourcing Firms And Foreign Countries Target More American Service Industries, Especially U.S. Law Firms
http://redwriteblue.blog.com/2011/11/04/releaf-america/
Note that not even one major national politician is talking about tackling the trade issue gorilla, just more retreads of already failed policies.
Thom Hartmann vs. Matt Patterson: The American Way
http://www.thomhartmann.com/users/unlawflcombatnt/blog/2011/03/tariffs-smoot-hawley-fairy-tale
Tariffs: The Smoot-Hawley Fairy Tale
"...But the effects on trade must also include the reduction in Imports, which ADDS to GDP. (A decline in imports increases GDP). If the import decline is added back to the GDP total (to measure the net trade balance), the "loss" becomes only -$0.2 billion from our GDP — or less than ½ of 1% of the total GDP decline.
In other words, the document-able "loss" from the Smoot-Hawley Tariff — the "net export" loss — contributed less than ½ of 1% of our our -46% GDP decline. Overall, the Smoot Hawley Tariff caused almost 0 damage to our economy during the Depression..."
http://www.youtube.com/watch?v=4PQrz8F0dBI
YouTube - 1. A prophetic interview with Sir James Goldsmith in 1994 Pt1
http://desip.igc.org/gatt01.html
Goldsmith on GATT: Part 1
"THE NEW UTOPIA: GATT AND GLOBAL FREE TRADE
by SIR JAMES GOLDSMITH
Federal Document Clearing House Congressional Testimony
SENATE COMMERCE GATT IMPLEMENTAÂTION
October 5, 1994
Global free trade has become a sacred principle of modern economic theory, a sort of generally accepted moral dogma. That is why it is so difficult to persuade politician Âs and economists to reassess its effects on a world economy which is changing radically.
The ultimate objective of global free trade is to create a worldwide market in products, services, capital and labour. Its instrument to achieve this is GATT, the General Agreement on Tariffs and Trade.
I believe that GATT and the theories on which it is based are flawed. If it is implemented, it will impoverish and destabilizÂe the industrialÂized world while at the same time cruelly ravaging the third world..."
Other Western countries, such as Germany, took steps to protect their labor markets from global labor arbitrage.
But the U.S. decided its workers should live by the Iron Law of Wages.
BUT - the supreme court deems their voice to be heard in terms of US political contributions as defacto citizens - so they vote their dollars to destroy the actual human US citizens national income base - bit by bit - and therefore discretionary income but they get free access with - no costs - to the US market under the rules they craft from the policitians being paid off
so they get the best of all worlds - free - world agents with a strong voice in US affairs with no citizenship responsibility in their mind
the political system isnt broken - it isnt designed to work - for other than the source of the money
I wonder, what is in the cards for us if (when) China's overheated/malinvested economy crashes?