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).
Wow, you've been around a long time.
Bull. I fully believe that we should be able to manufacture things here and be competitive about it. If we can't compete, then we should plainly do something else. If it is economical to ship a log to China, have it cut into lumber, built into chairs, and the chairs shipped back to the U.S. and delivered to the office of the U.S. Chair company... and do it all cheaper than the U.S. Chair company can do it... Then the fault is not China's. It is ours. If U.S. Chair company cannot compete with China Chair Company halfway around the world... then they had better get out of the chair business and find something they can competently do. Requiring consumers to simply pay more (double? triple?) for a chair in order to support a failed business model is just plain stupid and hurts more people than the import model does.
I am old enough to remember the entire Cold War with the Soviets and every incident of Chi-coms murdering tens of millions of their own citizens. Believe me, "socialist masters" know how to govern.
Today in China they themselves and their "princelings" are much of the emerging capitalist class. The capitalists who aren't Party cadre are honored by the Party some even invited to join the Central Committee. They know how to govern and get rich.
I remember the calls to trade with the Soviet moderates lest we play into the hands the "hardliners." We did not trade with the Soviets. We "won" the Cold War.
The Chinese Communist Party remains supreme over state, over everything.
You may be right that the Party won't exist in 25 years but I believe it will be due to the 800 million in the areas outside of the special economic zones who feel left out of the prosperity and are mad as hell for a variety of reasons.
We can thank Communist Labor Unions rising up here in America for much of the overeach - beyond safety and equitable employee/employer relations enforced by government that they were supposedly created for - to now being pure inflationary factors...thankfully that are dying off. Now it's called the Federal Minimum Wage...
Oh, I understand it perfectly. The comparisons you pose (of course) are a red herring. Corporations or the Red Cross...please. Decent American corporations in the past, looked to make a nice profit; but also had their eye on their neighbors and country as a whole. This was particularly true after WWII; when we had an entire generation who realized just how great we have it here.
As your type incessantly points out, many foreign companies have plants here. HOW, may I ask, is that possible? I thought that our wages were too high, our regulations too great, and our taxes to stringent for anyone to make money. Simple, they operate on the truly successfully business model: good product, loyal employees, good (not whorish) profit. We have literally handed our enemies the technology and money with which to destroy us; and they (to this day) continue to hand it to terrorists nations.
The children and grandchildren of this generation will pay the ultimate price; just as they did in the 30's and 40's for a similarly self-centered generation in the early 1900's.
"Oh, I understand it perfectly. The comparisons you pose (of course) are a red herring. Corporations or the Red Cross...please. Decent American corporations in the past, looked to make a nice profit; but also had their eye on their neighbors and country as a whole. This was particularly true after WWII; when we had an entire generation who realized just how great we have it here."
What anyone chooses to do with their own money is their business. If they want to donate to charity, help the community etc, that is great but it should not be forced on them. The bottom line is without profit, they can't help anyone out. If you can't adapt to changing conditions or refuse to change you get left behind period. It may not be fair but that's life.
"As your type incessantly points out, many foreign companies have plants here. HOW, may I ask, is that possible? I thought that our wages were too high, our regulations too great, and our taxes to stringent for anyone to make money. Simple, they operate on the truly successfully business model: good product, loyal employees, good (not whorish) profit. We have literally handed our enemies the technology and money with which to destroy us; and they (to this day) continue to hand it to terrorists nations."
My type is hands off capitalist and I don't apologize for it. If you don't like it, tough. My philosophy is that your moral obligation is to amass as much wealth as you can. I could be poor and volunteer some of my time ladling soup at the local mission or I could strive for multi-millions and donate enough money to the mission to keep them in business for two years. Which scenario is the most helpful?
I guess the foriegn companies here are like our oil companies all over the middle east. You go where the business is.
"We have literally handed our enemies the technology and money with which to destroy us; and they (to this day) continue to hand it to terrorists nations."
I can't argue with you here but that is irrelevant to capitalism as an economic system. Blame it on morally weak individuals.
"The children and grandchildren of this generation will pay the ultimate price; just as they did in the 30's and 40's for a similarly self-centered generation in the early 1900's."
I think they will pay the ultimate price due to a piss poor public education system run by the commies at the NEA that think feeling good about yourself is more important than educating students to compete in a dynamic changing world. Let's face it, these kids are ill prepared for entry into the work place.
How? Visits to progressive sites like the DLC's New Democrat On Line (ndol.org) find where they intend for "free" trade to be rules-based, they make the rules through their influence in international organizations. Who are they? World leaders, Davos, the UN, universities, NGO’s, international labor -- i.e., Clinton and people of the Clinton ilk.
They assure their street-demonstrating anti-WTO leftist comrades that they will not allow laissez faire capitalism and they will bring social justice, economic justice, racial justice, and environmental justice to the world as the free market creates prosperity. Socialism is the objective, however.
IMO that’s a Marxist revolution from the top down with a built in New Economic Plan (NEP).
Our corporations’ rush to transfer technology to developing countries in exchange for "cheap" labor and the mere promise of future markets make them willing dupes of the Third Way socialists among whom are the governments of those developing countries.
IMO it’s best we stick to trading with countries that earned their "comparative advantages" the old fashion way. They developed their own economies first then they competed with us. Forget the social justice crap let the developing countries develop their economies without the need for handouts. That'll put an end to dreams of world socialism. It might cause war? Like we Earthlings need a reason?
Much of what you say makes sense, except that comparative advantage exists quite apart from any attempt to regulate it. You can't simply regulate "fairness" in wages without implicitly penalizing the consumers of that labor.
If "fairness" needs to be regulated, then it is, by definition, unfair. So we make sure that shirts sell for no less that $200 each in the U.S. and penalize millions of consumers for the benefit of a small number of employees... some benefit.
Erik, without spending more time than I care to waste right now, I'll give it to you in a nutshell. Capitalism works wonderfully within closed markets. When you try to expand it across the global divide a lot of very strange things start to take place.
When corporations become transnational, they become robber barons that would sell their grandmother for a buck. We spend literally centuries or even decades to develop techniques that place us in a superior position. Then globalists gave that technique to our fiercest competitor.
It doesn't matter if it's just tools and dies, military technology or even strategic information that might threaten us.
When Loral gifted China with our MIRV and gyroscope technology, they provided the means for China to hit our cities with exponentially better accuracy than they were able to before. They also facilitated China putting multiple warheads on their nukes.
Corporations have no loyalty. If the U.S. goes down, that corporation is fine, since it has branches in Germany and Singapore.
I have no problem with Nike creating shoes in China, as long as those shoes are sold in China. That's a productive way to create jobs globally and increase the standard of living over there.
When Nike creates shoes in China a then ships them back here, it eliminates a good paying job here. Yes, that is important.
While some folks laugh that off, where do they think local, regional, state and federal tax dollars come from? Is it any wonder that local communities, states and the federal government are hurting for tax revenues?
The next time you go to your kid's PTA and they lament cutbacks, lost financing, ask yourself how happy you are that income taxes that should have increased along with increased wages over time, haven't.
Yet here in the U.S. are foreign-owned companies that employee thousands of Americans (a very good thing!) making and selling goods and services (more good things!) right here in good ol' America.
The foreign companies are making it here. Why can't American corporations make it without going offshore? Please keep in mind I am talking about "imported productivity" not true free trade of making and selling over there. I am talking about making goods and services over there and importing them to sell here.
I'm not an expert on the Patriot Act, so I'm not going to make any blanket statements. I will say that the next time we get a guy like Clinton or his wife in there, I do believe the Patriot Act will be abused.
As for Pat, I like the guy but he's just brain dead when it comes to the middle-east. Terrorism will not go away on it's own. It will continue until we terminate anyone willing to carry it out.
As for Joe, I liked him when he was in office, but I've never thought him to be capable of playing in the deep end of the pool.
Obviously, I'm not talking about myself. I'm talking about the segment of our society who will never be either socially or intellectually capable of tasks much greater than assembly work or other simple manual labor. It is a simple fact that some human beings are born with more intellectual skills than others. One of our greatest acheivements, as a society, was finding way for these folks to achieve the American dream. Now, we are not only pulling the rug out from under them by sending their jobs overseas...we are also illegally importing labor to further the problem. Do you really want these marginal people being CNA's in your Mother's nursing home...or caring for your children? Or would you rather support them, cradle to grave, with socialism...which is what you will get if you keep it up. They may be unskilled, but they have a vote.
My philosophy is that your moral obligation is to amass as much wealth as you can
You do know, that you can't take it with you...right? I'm sure the next generations will be impressed with that philosophy as the bombs are falling on their heads.
Let's face it, these kids are ill prepared for entry into the work place
Please, do tell, what wonderful new economy should they be preparing for? In the past, industry replaced agriculture slowly...so people gravitated to those jobs. Tech replaced industry, so people (naturally) gravitated to those jobs...only to see them moved overseas. I keep hearing about the "new" opportunities to be afforded by re-education. You seem to know all about this...what "brave new world" should these people be training for?
Well, you pose a good question. I think alot of it is the tax break foriegn corporations get in the US that they don't get at home and some of that same situation works for American corporations. It is not coincidence that alot of American companies are incorporating offshore where money grows tax free. Additionally, lawyers are killing all productivity in the US. Corporations are moving offshore to protect assests from frivolous lawsuits looking for deep pockets. You can't even start a small business in the US without being regulated to death and paying attorneys to walk you through all that regulation. Small businesses open for business with unnecessary debt.
"I'm talking about the segment of our society who will never be either socially or intellectually capable of tasks much greater than assembly work or other simple manual labor. It is a simple fact that some human beings are born with more intellectual skills than others. One of our greatest acheivements, as a society, was finding way for these folks to achieve the American dream. Now, we are not only pulling the rug out from under them by sending their jobs overseas..."
Just went to monster.com and selected manufacturing and production.
This is the result from one site and I am sure there are many other unfilled positions on other sites or not even posted to the internet.
Jobs 1 to 50 of more than 5000
There are over 5000 manufacturing jobs unfilled in the US posted on this on job site.
"You do know, that you can't take it with you...right? I'm sure the next generations will be impressed with that philosophy as the bombs are falling on their heads."
Your right. You provide for your family and you could create an endowment that would provide to charity for many years to come or even indefinitely if it was managed correctly. Settling for being poor, you help no one.
"Please, do tell, what wonderful new economy should they be preparing for? In the past, industry replaced agriculture slowly...so people gravitated to those jobs. Tech replaced industry, so people (naturally) gravitated to those jobs...only to see them moved overseas. I keep hearing about the "new" opportunities to be afforded by re-education. You seem to know all about this...what "brave new world" should these people be training for?"
Get over it already. Manufacturing is dead here. Learn programming, networks, satellites, copmputer aided design, engineering, etc. They need to study mathematics and science not "It's normal to have two dads". If as you say, they are not intellectually suited for this and are better at trade skills there are all kinds of things in metal working, construction, air conditioning and duct work, landscaping, roofing, plumbing, road building, tarnsportation, truck driving, etc that pay just as well or better than manufacturing today.
Absolutely correct! But that's not going to stop the Third Way Democrats and other internationalists through their influence in everything that governs and regulates (UN, trade agreements, WTO, governments of countries, etc.) from trying.
I am not communicating fully. There is no intent to "benefit . . . a small number of employees" in the U.S. The intent is to benefit the overwhelming numbers of peoples in all the world -- IMO at the expense of employees in the U.S.
If you read their articles on ndol.org they agree that American job losses is a price that must be paid. On that they agree with conservative "free traders."
The difference is they see it as the road to world socialist government IMO ("social justice, etc."), the conservative "free traders" see it as business and immediate profits, what awaits them in the future?
Who are the ndol.org folks? They are movers and shakers in the Democrat Party. Not all Party leaders agree with them, of course. They are the Clinton wing (nuts). On these matters they have plenty of support from the conservative "free traders" clamoring for "cheap" labor -- that includes "guest workers" by the millions. Labor migration is part of the respective plans both have.
Over 5000, in a country of 250 million. Nice try.
Your right. You provide for your family and you could create an endowment that would provide to charity for many years to come or even indefinitely if it was managed correctly. Settling for being poor, you help no one
I'm not settling for being poor. My point WAS...which you conveniently ignore...is that not everyone has the intellectual capacity to become wealthy. In fact, half of our population, is "below average" in intelligence. Your myopia will lead us to socialism, because these people VOTE. Either they have decent jobs, or they will vote for the rest of us to pick up the tab.
Get over it already. Manufacturing is dead here. Learn programming, networks, satellites, copmputer aided design, engineering, etc. They need to study mathematics and science not "It's normal to have two dads". If as you say, they are not intellectually suited for this and are better at trade skills there are all kinds of things in metal working, construction, air conditioning and duct work, landscaping, roofing, plumbing, road building, tarnsportation, truck driving, etc that pay just as well or better than manufacturing today.
Well, hundreds of thousands of people DID learn programming, CAD, engineering...and their jobs are being sent to India (or we are importing their replacements). The latter jobs are being overtaken by illegal immigrants. Don't believe me? I live in IOWA; landscaping, roofing, and most framing is already being done by Mexicans.
The candle is burning from both ends. Fortunately, the generation up and coming (Gen-X), is FAR more intelligent than you think. Plus, they all became computer whizzes...only to see their jobs taken away. We've a score to settle; wouldn't count on SS or Medicare if I were you.
That's an interesting take on it, but I'll need some time to absorb and review.
My knee-jerk however is that it is all about more that merely labor rates. I think this is an oversimplification of real serious issues with doing business in the U.S.
A U.S. corporation that outsources to an overseas employee base is, IMHO, doing so for reasons beyond mere labor rates. The U.S. is chasing firms overseas with a myriad of regulations over and above just the labor cost of the employee.
Some corporations are now finding out in a painful way that outsourcing overseas isn't the fix they thought it was. Dell Computer, for example, is already bringing much of its server support back to the U.S. from India, after finding out that the support they were buying was not up to their quality expectations. It is quite likely that they will also terminate the ordinary desktop support that they've moved over to India as well. In the long run... it's turning out that the outsourced support just isn't working. They will undo it, because their "profit" will depend on it.
"Over 5000, in a country of 250 million. Nice try."
Right,like 250 million manufacturing jobs will be created.
"..is that not everyone has the intellectual capacity to become wealthy."
Wealth accumulation is definitely not based on intellingence. If they can save 50 dollars a month consistently, yes they can.
As for the rest, we will never see the issue the same. If you have solutions by all means, work to implement them.
It's because we're using the English Sytem of Political Economy (i.e., "free trade") rather than the American System as established by Alexander Hamilton, Abraham Lincoln, Henry Carey and Friedrich List...that our economy is going down the tubes. All of the major banking houses are currently bankrupt (witness the continued consolidation and buying-up of the banks), as is the Federal Reserve System, which ought not to exist in the first place (see Article 1, Section 8: "The Congress shall have Power To...coin Money, regulate the Value thereof...."
Take my neighbors for instance. They are about 60 years old - both retired. They own two homes, and some rental property - all mortgaged to the hilt. On their home near me, they have a first and second mortgage, plus an "equity line of credit" which is up to the max to finance their lavish lifestyle.
They fly all over the world (He's sooooo proud of his "Medallion Level" status), take ocean cruises, buy expensive toys, etc.
The wife just went out and bought a new car on credit. Sheesh, at age 60, shouldn't you be able to live within your means?
Oh yes, my neighbor let it slip how much he had to pay in federal income taxes last year. It was more than my wife and I together earned for the whole year.
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