George Bush and Lies About The Economy

The Wall Street Journal has an interview today with George Bush that gives great insight into the disinformation, lies and, charitably, cognitive dissonance that underpins the Administration's economic policy.

"We have lost sight of what it means to be a nation willing to be aggressive in the world, and spread freedom or deal with disease," he said in an interview with The Wall Street Journal. "We have lost our confidence in the ability to compete internationally."

Actually, we've been pretty aggressive in the world. Putting aside that little mess in Iraq, the U.S. has tried for the past several decades to impose an economic system that, increasingly, people don't want. In Costa Rica, for example, 100,000 people turned out to protest the Central American Free Trade Agreement, which only passed by the barest of majorities in a national referendum. The same kinds of protests can be found in other corners of the world.

The truth is that one reason for this press offensive is that Bush and Republicans are concerned about the deep dissatisfaction bubbling up even from their own ranks about the insanity of so-called "free trade." There is a huge political moment at hand when two-thirds of Republicans say they believe trade has been a bad deal for Americans.

The reaction from Bush---and, frankly, from the media pundits and still a few Democrats---is pretty typical: blame the people. We're afraid, we don't understand the "real" benefits from trade and we should just buck it up and be brave and confident. I can't help but feel that the president---who made his own fortune thanks to connections and cronies and friends of the family, not hard work---is calling for economic bravery with the same voice that stirred inside him when it came to serving in Vietnam: let someone else carry the burden.

Then, in the interview, the president just turns to a series of whoppers:

In the interview, Mr. Bush repeated his belief that free trade and globalization are good for Americans. "There's a lot of high-paying jobs as a result of trade," he said, noting that the current strength of U.S. exports is helping to pump up overall domestic growth. He also reiterated his often-stated belief that trade helps lift poor nations out of poverty. That, in turn, could help relieve the pressures that create illegal immigration to the U.S., he said.

But Mr. Bush also observed that skepticism toward free trade and globalization appears to be growing. "The United States has been through these trends in the past," he said, noting that tariffs levied before the Great Depression and in its early days exacerbated the nation's economic decline. "This country has got to make sure that we don't isolate ourselves or try to wall ourselves off from the world."

In fairness, these are whoppers that the president is not alone in making.

Whopper #1: the current rise in exports has very little to do with the imposition of so-called "free trade" agreements like CAFTA. It's almost entirely due to the fall in the dollar---which was overvalued. I've pointed out sometime ago that bringing down the dollar was a better way of dealing with the Chinese currency question and our overall trade deficit than the war of words with the Chinese over China's currency valuation. Yeah, a lower dollar makes tourism more expensive for Americans but the real people annoyed by a lower dollar are the executives at Wal-Mart (and other companies) who love a high dollar that makes their imports from slave-labor countries cheap.

Whopper #2: what, exactly, is the number of high-paying jobs resulting from trade? I'm not surprised that the Journal lets that assertion go unchallenged. But, it is highly questionable if not an outright lie. In fact, the opposite is likely true, as I underscored in highlighting a story by Louis Uchitelle of The New York Times. Here's the important excerpt:

Across America, more than 30 million people have been forced out of jobs since the early 1980s, the Bureau of Labor Statistics reports, and regaining lost incomes has not been easy. Nearly 50 million new jobs have been created over that same period, according to the bureau, so there are always new opportunities but more often than not at lower pay. Among those who have lost work, only a third held new jobs two years later that paid as well as those that were lost, according to the bureau's surveys of displaced workers. Another third of those displaced were in jobs that paid, on average, 15 to 20 percent less than their previous employment -- while the final third had dropped out of the labor force entirely.

Sure, trade has created some high-paying jobs--I'm guessing in the banking and financial services sector at the very high end. But, the actual stats show that, broadly speaking, most people are not finding "a lot" of high-paying jobs.

Whopper #3: that so-called "free trade" alleviates poverty. So-called "free trade" is based on the search for the lowest wage possible. In fact, so-called "free trade's" promise of economic growth is false. Let me say that again: false. If you look at the facts, as my colleague Mark Weisbrot did. I cited a piece of Mark's incisive analysis which is worth repeating here:

If we ignore income distribution and just look at income per person - the most basic measure of economic progress that economists use - the last quarter-century has been a disaster. From 1960 to 1980, per capita income in Latin America grew by 82 percent, after adjusting for inflation. From 1980 to 2000, it grew by only 9 percent; and for the first five years of this decade (2000-2005), growth has totaled about 4 percent. To find a growth performance in Latin America that is even close to failure of the last 25 years, one has to go back more than a century, and choose a 25-year period that includes both World War I and start of the Great Depression.

Whopper #4: is a natural extension of the previous whopper---so-called "free trade" will alleviate immigration. Actually, it is exacerbating the movement of people. If you just look at Mexico, NAFTA was a disaster, and is a principle reason people are coming from Mexico to the U.S. because that so-called "free trade" deal helped crash the peso and impoverish millions of people who could no longer survive on their land.

I can't end without adding this little tidbit on executive compensation:

"Do I think some of the salaries are excessive at the top? I do," the president said. "I don't think it's the role of government to regulate salary. But I do believe it's a role of boards of directors to be very transparent with shareholders about these different packages, the employment packages that these executives get."

Excessive executive compensation "just sends a signal of unfairness, and people in America want...fairness," Mr. Bush said,...

Two whoppers on that end:

Whopper #1: The administration has been dead set against the attempt to make private equity pay its fair share of taxes. Is there anything more unfair that sends a particular signal to people than the ability of private equity big shots to pay just 15 percent on their income, as opposed to the 35 percent other rich people pay? As one expert points out, the Administration is content to let them write their own rules.

Whopper #2: And, of course, George Bush talking about economic fairness is akin to, well, George Bush talking about "stratergy" in Iraq.

Can we ever hear some truth about "globalization" and so-called "free trade."

Comments

[SamThornton]

Modern definition of an American Economist:

A person expert in explaining why their catastrophic mistakes are brilliant successes.

[timm0]

Most anyone who has lost a manufacturing (or foreign outsourced) job - or is close to someone who has lost one of those jobs - has a pretty good understanding of how good the "free trade" deal is for us/US.

The simple fact that so many Dems (not just the nauseating DLC fake Dems) reject this low-hanging campaign issue tells me that there are too many foxes in the hen house. You don't even need to really squabble too much with the nuance of the neocon lies surrounding "free" trade to win on this issue... it's like mccain/lie­berman/et. al. telling the men/women who've been blasted by IEDs in Iraq (and their families) that the streets of Baghdad are perfectly safe to stroll. Details of the fallacy are practically irrelevant - if you've been harmed by the problem, it's a bit difficult to believe that the problem doesn't exist. Millions have been harmed by "free" trade. They don't need to hear someone prove it to them - they (we) want the problem addressed!

[vox populi]

Of course you need it. That's because Walmart has decimated good paying jobs in the US, and you're feeling that downward pressure in YOUR job.

It's called a race to the bottom, and yes, you're in it.

Read The Walmart Effect or take the audiobook along for a ride if you want to know to what extent Walmart is undercutting your life and why you "need it".

You need to see the larger picture. You need it because of it. It's like a disease or an infection.

What if Walmart was able to do away with minimum labor standards and wages? Then your situation would get even worse (The Walmart Effect details how this one company effects every other wage in every other industry). Then you'd need them more.

You think they're doing you a favor? They're shooting the country up with cheap China Junk, which just destroys jobs and creates a need for more cheap China Junk. It's classic pusher behavior. Destroy the integrity of the host, and they'll need you even more.

Yeah, you need Walmart. That's the symptom, not the treatment.

[LeftRight]

Walmart in the area here just posted that they've done very well in the year since they opened. They provide 430 (approximately) I had to search through the last 12 months to find out that other companies in the area had either shut down, or cut back, for a total of 650 jobs. How is this a positive? They've made more than 200 people more than they hired lose their jobs, and the average pay in those 650 were higher than walmart by a good 10-20%.

I understand those who shop at walmart, I used to myself, till I could afford not to, but this is ridiculous.

[nowaterboardUSA]

Bush believes whatever suits him despite the facts. I think most people have caught on to this by now. Those who haven't are willfully ignorant.

[BillZBubb]

So called free trade has been a major loser for the US and the US worker. It has, however, been a bonanza for corporate bosses.

The right wing myths about trade that Bush and his fellow right wing corporatists push are laughable even with just a minimum of investigation. For instance, they have been very clever in their propaganda blaming Smoot Hawley FOR the Depression. That lie has been spouted so many times that the usual right wing loonies believe it as revealed truth.

Unfortunately, given the DLC and corporatist influence inside the Democratic party, we can't even hope for change anytime soon.

[BobLablah]

Actually Al Gore blamed Smoot Hawley for worsening the depression in his dabate with Ross Perot. Check out Wikipedia for more info on Smoot Hawley.

[oldpotsmuggler]

Wal Mart is not alone in having a thing for affordable imports. I call Wal Mart my 15% pay raise, and I don't know about you but I need it to make ends meet.

(The "slave labor" part I don't favor, obviously, but the part about impoverished folks having jobs that would not exist otherwise often on balance a positive.)

[JudyGee]

Impoverished folks, as you say, who are forced to take a job at any pay no matter how low, and then forced to buy crap at cheap China prices because they can't afford going anywhere else, is the equivalent of the Company Store that enslaved migrant workers during the Great Depression. The more we enable Wal-Mart, and its Chinese spiderweb, the more desperate we will become, and just like the insects they imagine us to be, the less likely we are to escape. When American workers unionized, they were set upon by dogs and cops with guns, and plenty were killed, and there were great sacrifices. And, from that emerged a great middle-class and the dignity of work.
We have choices.