Walking barefoot is good for you.
Posted on 05/25/2003 1:23:39 AM PDT by sarcasm
We're in a modest economic recovery, one that is still fragile. And this recovery is not creating jobs. I'm far more concerned about the jobless nature of this recovery than the level of interest rates or market levels.
Government and corporate policies are sending more jobs, capital and American know-how overseas to produce goods and services more cheaply. The proof is in the numbers: The U.S. account deficit, the broadest measure of transactions with other nations, swelled to $503 billion in 2002.
That's not the way it was supposed to work. Increased global trade was supposed to lead to better jobs and higher standards of living by opening markets around the world for U.S. goods. Now some people, myself included, are rethinking the belief that free trade benefits all nations.
According to the Economic Policy Institute, rising trade deficits cost 3 million jobs in the U.S. between 1994 and 2000. And a report by Forrester Research predicts that nearly 500,000 tech jobs will be moved overseas by 2015.
We're also exporting capital. Companies like Motorola have invested billions in China - the country with the largest U.S. trade imbalance with the U.S.
Another problem resulting from America's trade imbalance: Intellectual capital is being shipped overseas - in some cases, raising national security concerns.
So what's gone wrong? Alan Tonelson, author of "Race to the Bottom," says unequivocally that corporate America is largely to blame. "They sold America a bill of goods during the 1990s, because they said that all of these new trade agreements ... were going to boost exports from their American factories. And what they've done is they've used these trade agreements to send production abroad."
Controlling costs
Of course, American business needs to look for ways to control their costs. And consumers are often driven in their purchases by prices.
But it's not just corporate America that needs to adjust to the new global marketplace. Federal and local policymakers need to recalibrate as well.
David Huether, chief economist at the National Association of Manufacturers, says policymakers need to ensure that the regulatory environment is conducive to maintaining our competitive edge.
"To make domestic manufacturers more competitive," he says, "we have to make sure that there aren't future increases in regulation that would push up costs here."
He adds that the federal government should promote trade adjustment assistance to help displaced workers find new employment.
We also need legislation that encourages companies to keep jobs here.
"The only way we can get in on this game is to ... make penalties for those who manufacture overseas and benefits for those who manufacture in the United States," Sen. Fritz Hollings (D-S.C.) told me. "I have a bill to keep the jobs in this country. It's going to be an uphill fight because we've got to really change the culture."
Changing the culture won't be easy: The middle class has little representation in Washington, the multinationals have little incentive to produce here at home, and working men and women in this country are watching their paychecks shrink in response to the competition of lower-paid foreign workers.
Trade barriers
Huether says that policymakers also need to lower barriers to trade overseas.
"Our tariff rates on industrial goods average less than 2%," he says. "The rest of the world, particularly developing Asia, is a lot higher - in the area of around 10%."
On the corporate side, Huether says businesses need to invest in their employees.
"The way that manufacturers compete is through their very high productivity, and one of the ways to do that is ... by maintaining a very able and trained work force," says Huether.
There's no easy corporate or government policy solution to America's export problem. It's time for corporate leaders and policymakers to heighten their efforts to keep American jobs from going overseas.
Check out my posts above.
BUMP!!!
The people who think as you described above are open ended traders/economists. Its absolutely stupid.
Some fields are much more level than others.
You have offered no model. Give me a model. Illustrate what it is you propose. You have seen my posts. You know already that I am not at a loss for words or paragraphs when it comes to trying to spell out what I mean. I ask you for the same indulgence.
Give me something to nail down... What if "3rd worlders" as you call them, refuse to raise wages in factories? What then? We'll get to tariffs when you answer that. If a third worlder agrees to certain wages per hour what right have you to interfere in that contract?
I understand just as well as you do why you are reluctant to do so.
What right do you as a consumer or worker have to my capital?
I'm really interested to know.
Walking barefoot is good for you.
Interesting.
Does the steel have a strategic/security importance or not any more?
It depends on the local standards of what is luxury and what is a necessity. In America Rolls Royce is a luxury but shoes are necessity. In some Asian countries people still go barefoot.
I note you have not questioned my use of the term "walkingman" in reference to yourself. Why is that? How many iterations have you enjoyed at Free Republic? I ask out of curiosity. I have only ever found it necessary to post under one nom de plume.
You exist here at the leisure of others. You have openly admitted to inventing new screen names in order to post after being banned. Your posts have a distinctly Marxist bent. Can you think of any reason why I should not bust you out?
I sympatise with your general argument, but to be fair, we the Westerners were not less selfish and vicious as well as our rulers. Review the history.
Hitler was a Westerner, Indians and Tasmanians were exterminated by Westerners. The most intense Chinese contact with the "benevolent" West was the Opium War by which mass drug trade was forced on China. Etc, etc ...
After we do that we should as a nation increase the overall corporate tax rate for those companies who operate outside of the FTAs for their core operations.
Raise their taxes in one stroke and lower taxes on those within the network in another.
That would mean companies who pour money into China will have a 45% corporate tax rate and ones operating in Mexico will have a 15% tax rate. That kind of policy will actually create marketshare for US companies as well as serve as a strong US foreign policy tool.
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