[A. Pole]

bump

[indcons]

Read later.

[Paul Ross]

"...People who argue this way implicitly assume that the foreign capital inflows are going to the construction of new plant and equipment, or at least into new businesses bringing new jobs. However, the facts are different. In recent years, the vast bulk, in some years almost 100%, of foreign capital inflows represent foreign acquisition of existing US assets. Foreign ownership of US stocks, bonds, and real estate is heavy and rising. Foreign ownership means that the current and future income streams produced by these assets belong to foreigners. We are paying for current consumption (imports) by giving up our wealth and future income flows. Being a net importer of capital in this case means that we are consuming wealth, not producing it."

Precisely.

The empirical misrepresentations by the import lobby as to precisely WHAT is happening economically has needed case-by-case critical debunking for a very long time.

[raybbr]

We do not dispute that global gains might exceed first world losses. Nevertheless, the flow of factors of production to absolute advantage in place of comparative advantage vitiates the case for free trade--that it produces mutual gains to the countries involved. What we may be witnessing is global capitalism destroying national sovereignties, leading to a global government, much as Marx described capitalism’s role in the overthrow of feudalism and the rise of the nation-state.

Might, being the operative word. Yet, do we really need to take the chance that losses might not exceed gains?

[raybbr]

Some try to avoid the issue of comparative advantage with an argument that we always benefit anytime we can acquire a good or service at a lower opportunity cost. This is true as partial equilibrium analysis. If 20,000 US workers involved in the production of brassieres lose their jobs to cheaper foreign producers, their loses will be outweighed by gains to 100 million American women. However, we cannot generalize this argument without the assumption of trade based on comparative advantage. If the full range of domestic labor involved in tradable goods and services can be replaced by cheaper foreign labor, the loss of incomes outweighs the lower prices. The lower prices themselves will be lost to currency devaluation.

I can see their eyes glossing over and their brains shutting out this passage declaring "Brassiere makers are the buggy whip makers of yesterday".

[B-Chan]

SLAM DUNK. Great post, A.Pole. -- both a lesson and a warning.

Too bad no one here will heed it.

[WilliamofCarmichael]

This time would the critics (one critic, at least) of Mr. Roberts pul-leeze! respond with something substantive?

(One critic came close recently but had to streach a bit claiming Robert's was discounting Nov's job gains with announced future job losses. At least the critic tried.)

Mr. Roberts makes sense to me and I want to know why he's wrong.

I am already well aquatinted with the names used to "refute" Mr. Roberts in all the prior threads (some are pretty good general-purpose, non-specific put-downs. Thanks).

What are the facts that refute him?

[ARCADIA]

Libertarians might say all to the good. But this overlooks that they live in a sovereign country. The downward adjustment in wages and salaries necessary to bring the US into equilibrium with the global labor market requires reductions that cannot be achieved.

Exactly. At some point the system will be forced beyond the point of no return; beyond where we can maintain a standard of living through a stream of endless debt. That is when the the trading arraignment will end. When that happens the US and much of Europe will precarious position, our domestic suppliers will have to race to meet the new demands. We would need to raise new capital to finance the expansion of our domestic productive resources; even if it means writing off and defaulting on part of the debt. Free trade proponents are playing a very dangerous game; we know about the short term gains, but once those are exhausted, we will be left with long term instability, and even the real possibility of a major war.

[dennisw]

Excellent article

[Fee]

Schumer has half the answer but he is also the problem. It is call illegal immigration. On one hand he understands the problem of corporate globalism, but he relies on Hispanic and Asian voters in NY as his winning coalition in every election, so when it comes to enforcing our borders and immigration laws he is absent from duty. The cost of taking care of education, welfare, and emergency health problems, plus the domestic downward pressure on nontechnical (and soon technical) job salaries is somehow absent from Schumer's strategy to protect American standard of living. As far as I am concern the problem is with part of the GOP and most of the Democrat Party.

[WilliamofCarmichael]

What we may be witnessing is global capitalism destroying national sovereignties, leading to a global government, much as Marx described capitalism’s role in the overthrow of feudalism and the rise of the nation-state. . .A hidden agenda might be behind "globalism"--the international redistribution of first world income and wealth.

I've been saying for years, it's a Marxist revolution from the top down -- with NEP built in, enter the useful idiots.

Yo! useful idiots. When they start asking you if you sell rope, run away!

Who are they? Try your New Democrat Third Way progressive ("a free market is needed to build wealth in developing countries") comrades for starters -- and while you're in Devos, look around. You'll be surrounded by "they." That's where "they" make the rules -- and "they" are just getting started.

[WilliamofCarmichael]

Try to imagine the political instability in store for the US as the ladders of upward mobility collapse. The reality toward which we head is not a libertarian paradise.

It's been done, kinda. The movie "Falling Down" introduced the "angry white man." The new version is about angry Americans.

And Mr. Roberts didn't even talk about "guest workers" and the importance of remittances for the redistribution of wealth. The WTO is about to start setting the rules, it has only to ask the ILO and the migrant "rights" industry, What do you want is to do?

[WilliamofCarmichael]

". . .offshore production for home markets was not the reason for the capital flows[; i.e. real free trade. To wit:]. When Japanese and Germans invest in automobile plants in the US, it is to produce products for sale in US markets, not to displace car production in Japan and Germany by selling cars produced in the US in their home markets.

How many times has that point been made in these threads -- I have yet to receive an answer to my question BTW. If "free traders" point to insourcing to show the benefits of "free trade" why do our corporations say that they must move production off shore? Foreigners are moving here to produce and sell here. Go figure.

[meadsjn]

This article was posted when it was new in 2004 and the discussion quickly degenerated into the standard name-calling. Damn shame, IMO, because the points are critical to our future as a nation. The global economic utopia envisioned by the Free Traitors is just as elusive and false as that envisioned by the Marxists.

Below is a link to a great excerpt from When Corporations Rule the World by David C. Korten, 1995. I don't recognize the author and don't know his affiliations, but the excerpt discusses some of the changes in mindset in the schools of economics in recent years.

The Betrayal Of Adam Smith

[jpsb]

Please send this article to the White House and Congress, they need to read it.

[Hop A Long Cassidy]

There are some assumption (or definition) problems in this article. If labor is freely mobile (as implied in this article) then there is no such thing as a "country."

Capital has always been mobile between countries for centuries; it always goes where it is treated best. Labor generally has not been very mobile. It is held in check by "citizenship".

Also, this argument goes back to the issue of deductive logic versus inductive. Many recent (inductive) studies show that increasing economic freedom results in higher GDPs per Capita. By choosing to be the most economically free country in the world, Hong Kong moved from one of the lowest GDPs per person to one of the richest ones -- exceeding the GDP per Person of the U.K.

I am a proponent of economic freedom and also believe in a "country." Therefore, assuming we still have "citizenship" (no illegal aliens) there is (or should be) no such thing as inter-country mobile labor (as described or implied in this article).

The authors are trying to make "offshoring" appear as mobile labor, when it is a one time shift of Communist countries suddenly waking up to capitalism.

The US is not the most economic free country in the world, but fortunately it's in the top 15 or so. The managed economic freedom implied by the article is a lot like forcing students to become voluntary workers: loss of freedom is always a step backwards. Keep the borders, but maximize political and economic freedom; reduce government interference; don't increase taxes on consumers by raising tariffs; encourage labor rates within the country to be flexible and movement of jobs between states to be free; maximize choice. The inductive studies have already shown the way to wealth for all citizens. A rising tide floats all boats.

[streetpreacher]

BTTT

[Havoc]

How long have we been making these points almost verbatim - to deaf ears.. We've been sold out by these profit at any cost addicts. One-worlders are exploiting this blindness to accomplish their ends. In the end, the US loses as it is sold down the river. This is why free trade is viewed largely as a matter not unlike treason. One cannot afford to treat these profit at any cost addicts in the same fashion one would treat a cocaine or Meth addict. One cannot wait for the eventual ruin of the addict to dictate a new course being needed. Their ruin is ours. What is the answer? To me it is simple, it's an about face that involves legal strictures to stop Good produced here for this market from being produced elsewhere for this market.
Capital and wages must exist for this market before this market has resources to enable it to consume imports. Addiction to "higher" profits by subversive activity has blinded many and made them propagandists defending their profits with nonsense.

It's time to make multinationals go the "clean and sober" route by force of law. And politicians owned by corporate interests will not be willing to do this as recent history has exemplified. The same has been shown re illegal immigration. Force had to be applied to move the hand of the collective corporatist politicians. If they understand that citizens will act in the absence of action from their elected representatives, they will move. But action here is not as easy as with illegal immigration and may tend toward
revolutionary activities. If that is the case, and I believe it to be so, then the shake up over this will get pretty nasty before it gets better. And it may well result in a constitutional convention.

One thing is certain, people cannot continue living middle class lives on lower class incomes. In my community, the flow of high wage jobs is outward, not inward. And the same is true all around us. Jobs that once paid very good, high incomes are seeing adjustments downard for newhires. That means that the cunsumption within communities of local low wage services is falling due to inability to afford said services.

A strong man can remain strong if he keeps up his training routine. If he stops his regime of weights and good diet, he will remain strong for a while; but, not indefinitely. Muscle gives way to flab without use and training as any bodybuilder can tell you. So saying the economy is strong while it sits on it's laurels belies the fact of where it is headed. In relative terms, the economy is strong. In real terms it is weakening and getting weaker by the day. Free trade is the degenerative disorder driving it.