Posted on 09/10/2004 2:36:36 PM PDT by Willie Green
For education and discussion only. Not for commercial use.
OK, let´s suspend the bashing of President Bush and his Democratic presidential opponent John Kerry for their stupefyingly awful records and platforms on trade policy. Let´s turn instead to how their utter inability to understand America´s globalization challenges will sandbag other major policies they´re pitching. To date, there´s no better example than Bush´s goal of turning America into an “opportunity society.”
Anyone who likes free markets and capitalism, will rightly love the concept of an ownership society; and it´s no wonder that the Republicans are making it a centerpiece of their economic platform (even if most details remain to be filled in).
Ownership´s essence is that the individual knows how to handle resources better and more responsibly than the government. So the crises America faces in, say, health care costs and retirement security are best dealt with by giving Americans “more control over their lives,” in Bush´s words.
If the taxes currently financing government´s gigantic role in these areas are cut, then individual Americans can take the proceeds and purchase their own medical care, and make the investments they find most promising to pay for their golden years. Further, not only are individuals more likely to make the choices best for their circumstances, but they also will have overwhelming incentives to use their windfalls as efficiently as possible. Along with the elimination of costly government bureaucracies, these efficiencies will produce savings for the entire economy.
Ownership society advocates also seek, in the President´s words, to enable more Americans to use tax relief to “own their own home or their own small business,” as well as to choose their own job training program to keep them competitive in the global marketplace.
These ideas are so innovative and optimistic that only gloom and doom liberals and other economic girlie-men would object, right? Not by a long shot – at least if you pay any attention to the economy and its major features and trends.
Each of Bush´s proposals faces compelling objections on its own terms. For example, are individual investors really supposed to keep up with the nanosecond-by-nanosecond changes in the financial markets? Even most finance professionals fail at this task. Is health care really just like any other good or service, and will consumers really shop for it just like they shop for sneakers or SUVs?
But the biggest obstacle to the ownership society is the steady stripping from Americans of the resources needed to buy control over their lives. And one of the biggest forces behind this worsening incapacity is a trade policy designed to plunge Americans into competition with much lower-paid third world workers, and drive down domestic wages and salaries in the process.
The facts are beyond dispute – except among Washington´s bought and paid for globalization cheerleaders. Adjusted for inflation, total U.S. private sector wages peaked at $8.62 per hour (measured in 1982 dollars), in April, 1978 – scant years after the great opening of the U.S. economy to imports began in earnest. Real manufacturing wages peaked at roughly the same time, at $8.97 per hour. (We won´t bother with public sector wages because they´re not directly set by the market.)
Since these peaks, real private sector wages have fallen 4.4 percent – a performance previously unheard of in American history. And manufacturing wages, which are most affected by international competition, have fallen 5.6 percent. Worse, even though the economy has technically been recovering from the last recession for nearly three years, real private sector wages during this period are up only 0.4 percent, and real manufacturing wages are up only 1.4 percent.
More disturbing, signs keep appearing that the link between work and economic viability is growing weaker in America. Last month´s announcement that the official national poverty rate had risen in 2003 for the third straight year, to 12.5 percent, attracted deserved attention. At least as important, however, is the large and growing number of impoverished Americans who are working Americans. One in every four working Americans today earns less than $8.70 per hour (in 2004 dollars) – the effective federal poverty-level wage. As social policy analyst Beth Shulman wrote on Labor Day in the Washington Post, this trend “undermines our most fundamental [national] ideal: that if you work hard, you can support yourself and your family.”
Far from encouraging greater responsibility-taking, these trends inevitably are creating greater government dependencies. One indication: The share of Americans enrolled in government health-care programs such as Medicare and Medicaid stands at a two-decade high of 26 percent. And as made clear by rising federal budget deficits, the national appetite for public services regardless of the public´s willingness or ability to pay just keeps growing.
It should be obvious to everyone why stagnant and falling incomes will doom the opportunity society. Tax cuts will only marginally help workers who earn increasingly meager wages and, therefore, have less and less taxable income to begin with to cut and transfer to private health and retirement accounts. The idea that these workers will be able to buy a business or a home after tax cuts is downright moronic. Tax cuts will be equally pointless for workers deciding among job training programs if the economy keeps losing job opportunities that can pay a living wage.
In other words, tax cuts and privatization can´t drive U.S. economic policy unless the United States retains, or rebuilds, a meaningful tax base. If President Bush knows how to do this without reversing his outsourcing-centered trade policies, now´s the time to tell us. But that´s unlikely unless his opponents start asking him.
Alan Tonelson is a Research Fellow at the U.S. Business & Industry Educational Foundation and the author of The Race to the Bottom: Why a Worldwide Worker Surplus and Uncontrolled Free Trade are Sinking American Living Standards (Westview Press).
Right now, U.S. engineers design all kinds of things for which they are not paid since their ideas are immediately stolen by foreign countries.
Americans need to understand that the source of all wealth is the human mind. As a country and individuals, we can no longer afford to give our ideas away for free.
Well, if it is so then I prefer socialism with human face than your Dickensian capitalism. In Communist Poland I have seen a number of cases when people from capitalist Third World countries tried to immigrate to socialist Poland, those who succeeded were very glad they did it.
I will take socialist Sweden over capitalist Salvador in a second.
And you know what? If your project advances further the American people will make the same choice, unless you guys manage to supress them same way as your friends did in Salvador.
The prosperity of the entire society cannot be based on compounded earnings or usury. It is based on labor, creativity and wise national policies.
If you were my student you would not pass.
Interesting.
My friend - 75 years old single man, goes into debt without any scruples and enjoys good life. He told that he is making sure that when he dies someone will be sad (his creditors). :)
Some examples, please, and let's limit it to 4-year college degrees (no MS or PhD.)
Because we are not just a collection of autonomous individuals bumping into each other with social Brownian motion. We are a *country* - a national community - a *society.* I would think on September 11, on this day of all days, we would understand and appreciate the virtue of *patriotism.*
God created all people in His image, but some people have a greater claim on our allegiance than others. First there's our family, then our neighborhood, our city, then our state, and ultimately our nation. If we don't have a nation and a national consciousness, ultimately dead-end jobs for virtually everyone will be the *least* of our problems. You can't protect from invasion that which you do not value. Ask the Romans in the late fifth century AD.
When a company makes no profit, no work.. That is the way it is and that is the way it is going to be. Unless you want the government to control companies.
Sure - slaves are always cheaper than free men. Why not save on the transportation costs & just re-institute slavery in the US?
Not at all - in *some* schools. There's a strong bimodal distribution in what public schools turn out.
It's not online for free, but US News puts out an annual college guide that includes the demographic profiles of various university student bodies. Most "prestigious" universities are made up largely of students from public high schools, with private prep schools a close second. Obviously some schools in the US are preparing students for rigorous study.
Other schools aren't. That's another issue. But our economic problems are not immediately due to "poor public schools."
I don't think you know much about automotive.
There ARE no profits in manufacturing cars. The profits shown by GM this year are related solely to its financing operations (cars and houses.)
And in the USA, mechanization of the ag. sector is being ignored because of the low price of migrant labor.
Europe has FAR more sophisticated ag. machinery than we do.
And anybody who seriously thinks that bonus and stock incentives do NOT drive managers to make outsourcing decisions is smoking dope.
The reality is that short-term thinking has led to a dis-investment in machinery, R&D, and quality initiatives (like 6 Sigma) because one can make up ALL that saving by merely going to the slave labor market.
Voila! No big investment dollars, and enhanced profits = Big Bonus and Big Stock option gains.
They have caught us in the twin webs of oil addiction and terroism, and they know it.
Invade SA now !
BUMP
List of Lies: addendum
Red China is and will be a huge and growing market for US consumer goods.
Same-o for India.
Free trade makes democracy happen in Communist countries.
There are no intelligent American college students, and in particular, there are no American college students who study mathematics, engineering, or computer science.
It is necessary to have a PhD in Comp Science to write COBOL payroll application programs.
The Japanese lost everything following their disposal of US real estate assets. They are bankrupt as a nation.
Import limits and tariffs had NOTHING WHATSOEVER TO DO with the existence of Japanese auto plants in the USA beginning in the mid-'80's.
All Union members are fat, lazy, and stupid.
There are no longer any CORPORATIONS which pay taxes?
Who really pays THOSE taxes?
GWB is in a tight spot, you know it and I know it.
You would make "capitalism" a god.
Abe Lincoln, among others, disagrees when he states that 'labor is prior to capital, and there is no capital without labor.'
(I have the exact quote someplace)
IOW, you have swallowed the KoolAde of those who would reverse the priorities. The fact that the Wall Street Journal agrees with you does not make you correct. It makes THEM just as wrong.
It is becoming clear that you are a DU plant.
Who referred to the 'camel and the eye of the needle'?
Yup. That accounts for Toyota's #1 position in auto sales/US.
Have you read a newspaper in the last 30 years?
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