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).
What in the world are you smoking?
For all intents and purposes we have no US auto industry.
Excellent post!
American labor survived quite nicely as US industrial technology developed to the acme of technological supremacy.
What has that to do with the massive shipment of jobs to underdeveloped countries?
You're a protectionist.
Regrettably, I wish I could do the same since his opponent is the odious John Flip-floppin Kerry.
But, for me, his bellicose, internationalist foreign policy and globalist economic philosophy make him the most frightening US president since FDR.
I hereby declare this the LOSERS OF AMERICA thread.
Reforming the depilated and degenerated American Education system. Restoring VIGOR.
You can also consider Moon being made of green cheese. It is your right.
This is a glaring weakness in the economic policy of the Republican party...fortunately (or unfortunately?) the Democrats are as dedicated to globalization as the Republicans and so they have been unable to exploit this weakness.
Politics aside, we've moved from a manufacturing economy to a service economy and are rapidly transitioning to a native american economy (big enough chiefs have jobs that pay out many feathers and everyone else is scalped).
The strength of this country is proportional to the strength of the middle class and between jobs and taxes, the middle class is weaker than ever.
Agreed.
I very regretfully, very vigorously deny all three points.
:) Something like that.
Yeah right. What idiot at DU could amass more than a pocketful of change for the bus?
Since Bush's response we haven't been -- except in the war zones.
We are not yet safe in the world, but far more so.
Bush's commandership has seen us carry out successful wars in Afghanistan and Iraq. Libya gave up without a fight, it seems.
We are still at combat in Iraq and Aghanistan. Post war combat. Minor insurrections, and policing. The slow and not always straight process of establishing order after the war. We won those wars. Afghanistan throughout history has a place none can conquer and hold, or conquer and last their any amount of time without major losses. Yet we are. And we will leave there in peace, their place the better for it. Better for us, by us. Better for them, and it will become, is become, by them, with our guidance and brotherly assistance.
Iraq we defeated amazingly. Can't be denied. Little loss of men or blood to us. The post-war phase, more diificult, more forbearance and aggravation. Yet things are greatly improved there and so too the world's safety and peace. Onne reason among others is that the vilest of French and German "realpoltik" has been tossed rudely out of those territories. Good riddance.
Many of their complaints have valid roots. Only -- the cure to those is better sought with Mr. Bush.
We are still at combat in Iraq and Afghanistan.
Paragraph 6:
Iraq we defeated amazingly.
Look, support the traitorous Wolfowitz policy till your blue in the face, but can't you do better than this?
Yeah, sure, and Brer Rabbit defeated the tar baby.
When that stops, look out below.
BUMP
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