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).
"Capitalism" has worked really well in all those communist regimes, right? Name a few.
While your understanding of the Loral treason is excellent, do not forget Loral's allies: Clintoon, Motorola, and Boeing.
Precisely why Jim Sensenbrenner, (R-WI) opposed some provisions of the Act. He has a 99.5% ACU rating and saw the same flaws.
Another problem is the cost of housing, which is usually a family's biggest expense. Back in the early '80s, a young, newly-divorced friend of mine with a toddler was able to afford a nice apartment in a nice section of Paterson, NJ, on a minimum-wage salary. Can't do that now. Even ten years ago, rents were not unreasonable. Since the mid-nineties, though, the cost of rent and mortgage have skyrocketed.
The heads of these corporations will one way or another convince the government to go to war ostensibly on America's behalf but really on the their behalf. The public will be sold a bill of goods, a pack of lies.
Not disputing the issues raised, but given we have a choice between Kerry and Bush, now is not the best time to be trying to solve this issue. The next president will appoint several Supreme Court Justices and set the agenda for the war on terrorism for the next 4 years. It's about like arguing monetary policy in 1942.
Not to worry. Neither Bush nor Kerry will pay any attention at all to these issues, whether elected or not.
Bush's econ bunch are all dedicated fans of the Determinist School of Economics--'those who cannot compete should die.' It's closely related to the Determinist School of Sociology--remember that one?
It's the Economic makeover of racism, derived precisely from Darwinism.
Wrong again. The Ford Fairlane in the late 60s had a 3 year product cycle, just the 67-69 model years, the Chevy Impala/Caprice had a 4 year cycle. Also most Chevelles were not muscle cars, but the midsized GM car that people bought to go from point A to point B.
A little reminder of very popular Richard King, WLW Cincinnati, 1960s. One of his sponsors was a Ford dealer and he'd get away with telling his listners to go there for a real good Falcon.
Since we are being hopelessly simplistic, how about, "those who won't compete should come to the rest of us for a handout." Remember that one, it caused more deaths worldwide than all wars put together?
IMHO, Bush's vision of an "ownership society" is patterened after the one that wealthy Mexican landowners established over the peon lower classes. His embrace of global corporatism is merely an expanded version of the one-party rule of the Mexican PRI.
ping
I have such suspicion - that a large section of establishment longs for Latinization of USA.
Before we get into ownership, we might consider the formation of capital that enables ownership. With the largest spending spree on record and the greatest credit expansion, the public has a fat chance of much ownership. Economic slavery would be a better term for the Bush-Greenspan vision of ownership. What the banker giveth, he can taketh away.
Anti-globalists are to Luddites as Elephants are to beekeepers.
Care to try again?
Birds fly over the rainbow, way up high. Birds fly over the rainbow, why then, oh why can't I?
Granting that he's not the quickest pony in the corral, but what has he said/done to bolster your optimism?
No, luddite.
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