Economists Are Destroying America
Economists, politicians, and executives from both parties have promised American families that “free” trade policies like NAFTA, CAFTA, and WTO/CHINA would accomplish three things:
• Increase wages
• Create trade surpluses (for the US)
• Reduce illegal immigration
Well, their trade policies have been in effect for about 15 years. Let’s review the results:
• Declining real wages for 80% of working Americans (while healthcare, education, and childcare costs skyrocket)
• A record-high 46 million Americans who don’t have health insurance (due in part to declining wages and benefits)
• Illegal immigration out of control
• Soaring trade deficits, much with countries that use slave and child labor
• Personal and national debt both out-of-control
• Global environments threatened by lax trade deal enforcement
Economists Keep Advocating Policies That Aren’t Working
Upon seeing incontrovertible evidence of these negative trade agreement results, economists continue with Pollyannish blather. Some say, “Cheer up! GDP is up and the stock market’s doing fine.” Others say, “Be patient. Stay the course. Free trade will raise all ships.”
Even those economists who acknowledge problems with trade agreements offer us only half-measures—adjusting exchange rates, improving safety nets, and providing better job retraining. None of these will close the wage gap in America—and economists know it.
Why Aren’t American Economists Shouting From Street Corners?
America needs trade deals that support American families and businesses in terms of wage, environmental, and intellectual property abuses. Why aren’t economists demanding renegotiation of our trade deals? There are three primary reasons:
• Economists are too beholden to corporations and special interests that provide them with research grants.
• Economists believe—but refuse to admit—that sacrificing the American middle class is necessary and appropriate to generate gains in third world economies.
• Economists refuse to admit they make mistakes.
Economic Ambulance Chasers
Now more than ever, Americans need their economists to speak truth and stand up to their big business clients. Instead, economists sound like lawyers caught chasing ambulances: they claim they’re “doing it for our benefit”.
October 25th, 2006 at 2:37 pm
Well, it’s not all economists. Paul Krugman has been against a lot of this stuff.
October 25th, 2006 at 2:50 pm
caroline,
Krugman worked on an advisory board for Enron throughout most of 1999, being paid $37,500 [2] for attending two board meetings, before New York Times rules required him to resign when he took a job as a columnist. This became a source of controversy when the story of the Enron scandal broke, with critics accusing him of having a conflict of interest and the job of having been a bribe to control media coverage, charges he vehemently denies. He also notes that in columns written before and after the scandal, he disclosed his past Enron relationship when he wrote about the company
October 25th, 2006 at 2:57 pm
Well, those critics look like they are grabbing at straws. The real media culprits are the analysts at the WSJ who were recommending ENRON as a smart buy.
October 25th, 2006 at 3:05 pm
caroline
The critic was the New York Times his boss.
October 25th, 2006 at 4:18 pm
These meetings were not about Enron business, nor were they about policy in areas closely related to Enron business; basically they were seminars on world affairs. From my point of view this was much like a paid speaking engagement, of the kind that is common for academic economists, at least those who work on issues that bear on matters of business interest, like the state of the world economy. The only difference was that in effect I had agreed to deliver several talks, and join in an extended discussion of other peoples’ talks.
At the one meeting I attended, I talked about the Asian financial crisis, then still in full swing.
John, he didn’t advise Enron as you implied. He was INVITED to speak on the Asian financial crises. You just lifted the bare minimum that doesn’t anywhere near tell the whole story.
October 25th, 2006 at 4:21 pm
caroline
Show me an article anti - Enron from Krugman.
October 25th, 2006 at 4:27 pm
Alot of these economists get lost in their rabbit holes. Most of the free trade arguments don’t factor in the free flow of people when there’s porous borders for example. And there’s plenty of basic economics that preaches against “privatizing” utilities.
October 25th, 2006 at 4:29 pm
Bill
Why would they bother with the real world?
October 25th, 2006 at 5:06 pm
it can’t fit on an x/y graph.
October 25th, 2006 at 5:30 pm
Some of the economists can’t reconcile macro with micro and that’s a problem.
October 25th, 2006 at 5:30 pm
I just got an e-mail from an economist and he called me a name I cannot put on the site.
I e-mailed him back and told him he was free to express what I got wrong.
He said he did not want to get into it!
WHY do you think the PHD economist could not supply an answer to this post?
October 25th, 2006 at 5:32 pm
caroline,
I think all economist should have to work at Walmart for a year and see if they can feed their family. What do you think?
October 25th, 2006 at 9:06 pm
John
People in the real world irritate them. So just stop, OK?
October 25th, 2006 at 11:24 pm
Why do think that Housing an a
slipping of the economy are not
being discussed this month
October 25th, 2006 at 11:52 pm
John- I saw your post on Iraq
an found your critical thinking
an remarks a very good read. I
won’t mention where I saw it.
thanks for giving those
readers something new to chew on. David
October 26th, 2006 at 4:34 am
Hallo,
I am an economist in macroeconomics in Germany and I think that you are right, JohnKonop.
Marc
October 26th, 2006 at 5:46 am
David,
David thank you,what is your view on the war?
October 26th, 2006 at 5:46 am
Marc,
Is Germany having the same problems?
October 26th, 2006 at 6:02 am
David Buell
The housing market was driven by interst only and arm loans that put people in homes they could not afford. When housing went values went flat, the ATM machine got put out of business. And the new payment came in, which with flat wages they did not have the money.
Americans have been using their homes as ATM machines via refinancing to offset their flat to falling wages. Close to one third of consumer spending is refinancing of homes. That is why the saving rate drop is now below 1% while home ownership is it an all time high.
I told people in public over a year ago consumer spending would drop due to housing and falling to flat wages. I was told by a leading economist that I sound like a doom and gloom Paul Craig Roberts’s type.
And now the media is wondering why Americans are not happy with the economy. I ask a leading economist why not measure the economy by wage growth instead of GOP?
I got insults and no answers.
October 26th, 2006 at 6:04 am
DAVID, Marc, David Buell
BTW Welcome to the site!
October 26th, 2006 at 6:19 am
The problems in Germany are worse. Influential economists preach politics, which destroy the German economy and the structure of the German society: storng wage cutting for less qualified people, privatisation or cutbacks in the public social security system, open and liberal markets in every corner of the country, thumbscrews for long-term unemployed, etc… Often, these politics are beneficial for big cooperations or for the financial sector but not for German people or Germany at whole.
I belive that German economists are destroying our country without realizing this disaster, and the situation in Germany is worse than in USA, because there is nobody, who shows a different way to go. Everybody is liberal and the mass media covers this disaster.
I am hopeless
Marc
October 26th, 2006 at 6:43 am
Marc,
The reason I ran for office and started this blog was to help inform Americans about the trend.
Why do you think German and American economist are silent?
October 26th, 2006 at 7:08 am
I am not sure. On the one hand, many young economists (professors between 35 and 45 years old) are brainwashed by their education in university and in post graduated programs. They simply think that this policy is the only possibility. Usually these people do not care about ethics in the topic of economic. But, and that is the important point, I am convinced that this policy is wheter ethically and economically right.
On the other hand, some clever economists in Germany may see through the hole topic. But they are rare and maybe corrput in such a way that they benefit from the system.
In general, it is simply impossible to break this system at the moment. We are confronted with an alliance of mass media, science and politics. For example, I think that my chief (a well-known professor in germany, but not mainstream) is afraid of this allince, since his reputation could be destroyed immediately.
Finally, I think we have to wait for the right moment in order to mobilize normal people against this politics.
Marc
October 26th, 2006 at 7:54 am
There’s a big supply of economists and limited demand. And there’s a net flow of charts and graphs toward the cash flow which is trickling down from the big banks thru the think tanks all over the people.
October 26th, 2006 at 8:01 am
Bill
LOL
October 26th, 2006 at 10:07 am
Bill,
If we cut critical thinking, an un-necessary academic regulation, it will increase demand side prominence for traditional economic education.
A short run ancillary benefit will be market conflict better known as competition.
Through academic competition, if we create more non-academic economists, we can manipulate long term demand for two color flow chart geeks with primary market educations.
This proposal is dependent upon the Laffer curve where supply is increased with a decrease in quality driving an increase in demand for someone that knows WTF I’m talking about.
October 26th, 2006 at 10:42 am
Mad Dog
You sound like an Economist?
Why do you think economist are not talking about the failed trade deals?
October 26th, 2006 at 11:42 am
It’s always about the “future” with these folks. And the realists are living in the past.
October 26th, 2006 at 1:09 pm
Mad Dog
Could I see a chart?
October 26th, 2006 at 1:14 pm
I need a good laffer.
October 26th, 2006 at 5:05 pm
This was from Bob!
Abolish Tenure for Econ Professors
Among the worst offenders and biggest hypocrites are tenured professors of economics who have lifetime job security.
They sit in their ivory towers and advocate the idea that everyone else’s job should be subject to market forces, globalization, outsourcing, and insecurity.
But what hypocrites they are! You’ll notice that many econ and business school professors have tenure (which means lifetime job security) and are not willing to subject themselves to the same economic forces they advocate for everyone else.
October 26th, 2006 at 7:43 pm
The premises of the article is that free trade agreements are responsible for declining real wages, a lack of health insurance, illegal immigration (how’s that?), soaring trade deficits, personal and national debts being out of control and global warming.
Whew! Did I miss anything? For one policy to be the root and sole cause of such a long list of woes is mind boggling.
Massive tax cuts to the wealthy and record-setting pork barrel politics, for example, cannot be blamed on the drunken sailor-like behavior of the Republican’t controlled fiscal purse process.
It wasn’t those nice GOPers after all, it was trade!
Reducing the cost of daily purchases for all families in America is the reason why personal savings is at an all-time low. Hmmm.
If Americans had to pay more for their clothes, toys, sporting goods, cars, appliances and thousands of other things, this argument goes, we would save more.
Bull cookies, to quote Col. Potter.
Import barriers are nothing more than a tax on the poor. The poorer you are, the more likely you are to shop at Wal-Mart, Target or similar stores where cheap imports are sold in vast quantities. The poorer you are, the more important it is that the saucepan is $4.95 rather than $24.95.
America has 10 million people working in manufacturing production jobs, exactly 1/30th of the number of consumers benefiting from lower priced goods. Putting an import tax on foreign products (often made by American companies, particularly in China * ) that penalized the poorest portion of the 29/30ths is simply wrong.
Given the heavy pressure on producers of products sold in America to treat their workers and the environment better than their foreign counter-parts, it is even more bizarre to suggest that trade contributes more to global environmental damage than preventing trade.
(* 58% of China’s exports are made in foreign-invested factories.)
October 26th, 2006 at 10:22 pm
David O’Rear
So you’re against continually insourcing cheap labor then since you’re a champion of the poor?
October 26th, 2006 at 10:27 pm
Bill,
Let’s see . . . reducing costs (prices) helps the poor. OK, I’m in favor.
By the way, did you know that American makes more from insourcing business services than it spends on oursourcing?
As for insourcing labor, I don’t think that was mentioned in the original article.
October 26th, 2006 at 11:28 pm
So where do you stand on illegal immigration?
WARNING: ENTERING THE REAL WORLD
October 27th, 2006 at 2:16 am
David
Welcome to the web site.
First trade deals like NAFTA where sold to us by Al Gore and Republicans.
If you do not mind can we take a step back and look at the trade deals.
Do you favor child and slave labor? Democrats like Obama voted for the Oman trade deal knowing from the State department that human trafficking is common with labor use in that Country. Do you think that helps lower the tension in the Middle East? Why did we not negotiate basic labor conditions in the trade deal?
I can say the same for environmental standards. China and Mexico are a virtual wasteland of pollution that all of us are paying the price. Should we not have any environmental standards in trade deals?
Intellectual Property is the key asset for most business. How do we get ahead if China steals it 90% of the time according to the Hyde report.
We have put American worker in a competition with illegal immigrants and cheap overseas labor with no rules. And you wonder why wages are falling?
The German economist is a brave soul for his comments. The reason I wrote this essay to motivate economist to stand up and stop giving the good house keeping seal of approval to a system that is not working.
October 27th, 2006 at 4:15 am
David,
BTW, any savings by slave labor products have been eating up by declining to flat wages.If you did a study in the heartland you and I know how bad the numbers would look.
YOU CANNOT BUY MORE THAN YOU SELL(IE TRADE DEBT).This formula is killing our Middle Class.We have lost 40% of our Manufactoring since we passsed this failed trade policy.
Face it both Parties sold out to Big Business! And economist gave then the numbers to spin durring the debate.
The cornerstone of Al Gore’s debate with Ross Perot was that we would see trade surplusses, wage growth and decrease illegal immigration. In baseball we would call that a strike out!
By Robert Gavin, Globe Staff | October 10, 2006
Massachusetts workers are producing more than ever, and doing it more efficiently, but their earnings have barely budged since the end of the Dukakis administration, a Northeastern University study concludes.
The study, by Northeastern’s Center for Labor Market Studies, found the state’s median annual earnings, adjusted for inflation, have risen just $546 — 1.2 percent — since 1989. Meanwhile, productivity, or the amount produced by a worker in the same amount of time, soared nearly 50 percent in that period.
In other words, the typical employee is working harder, faster, and smarter, but getting few of the benefits, said Andrew Sum, the center’s director and study’s lead author. Historically, higher productivity has led to higher earnings after inflation. But globalization and other economic forces are breaking the link between productivity and wages, redistributing gains to consumers, corporations, and the richest workers.
For example, corporate profits are grabbing a bigger share of the nearly $300 billion realized from the production of goods and services in the state’s private sector, according to the center’s analysis of the most recent Commerce Department data. From 2001 to 2004, the share going to profits rose to 34 percent from 32 percent. The share going to employee compensation fell to less than 60 percent from more than 62 percent.
“Despite productivity gains, workers have nothing to show for it in their pockets,” Sum said. “The average worker is just treading water.”
October 27th, 2006 at 5:11 am
Mr Konop,
Yeah, I always did like Al Gore. Pity his presidency was stolen from us all. I seem to recall that the economy did extremely well when he was VP.
Child and slave labor are not the same thing. I’ve been in factories with child labor, and while I do not condone it, the alternative is NOT going to school.
It is working at something else: begging, theft, prostitution or worse.
Free trade does not encourage either child or slave labor.
Middle East tensions are not my area of expertise. I’m an Asia-hand.
Why are labor conditions not negotiated in trade deals? Because they are TRADE deals. Trade is too important to be saddled with unrelated baggage.
Work on a World Labor Organization, and I’ll support you. But, don’t tie it to trade. The poor cannot afford to soothe rich consciences.
Ditto for environmental standards, although I am much more willing to push for recycling and emissions controls. But, linked to trade? No.
How about increasing the tax on gasoline, so that America pays the average $6/gallon that the rest of us pay?
By the way, what gives America the right to dictate these standards? Why are our standards sacrosanct, and Finland’s or Sweden’s are not?
Competition: Where we put Americans at an unfair competitive advantage is in being the only developed nation that taxes our citizens living abroad. Oh, and in May this year – under the so-called “Tax Increase Prevention and Reconciliation Act” – taxes on Americans abroad soared. That directly hurts America’s ability to compete in the world.
Best regards,
David O’Rear
PS Lest there be any doubt, I am an American citizen and an officer in my local Democrats Abroad (Hong Kong) chapter.
October 27th, 2006 at 5:20 am
David
Jonathan Tasini is president of the Economic Future Group.
For the past 20 years, we’ve been barraged by a relentless mantra: Education is the magic bullet to survive in the global economy. Virtually every politician, armed with rhetoric from academics, tells American workers that, essentially, they are too dumb to make it in the “New Economy.” Save yourself, they exhort—go back to school. Prepare yourself—get an advanced degree. But this is utter nonsense.
Let’s talk about the real world. Today’s global economy is about one thing: labor costs. If a company can move to China to employ workers making 35 cents an hour—whoosh, they are gone from America. High-tech jobs have been moving offshore for years, first to places like Ireland, and now to India. The world is awash in highly skilled, highly educated and cheap workers.
The hard fact is that in virtually every industry, foreign workers across the globe are increasingly as skilled and productive as American workers. India, for example, has a highly trained, highly skilled workforce capable of pumping out new software, industrial design and other new technological innovations. In India, the starting salary of a software engineer is about $5,000, and senior engineers make $15,000; the country has at least half a million information technology professionals eager to work for wages that are a fraction of the going rate here.
I posted this article because we now see conservative Republicans like Walter Jones, Tom Tancredo, Lou Dobbs now agreeing with liberals like Mr.Tasini. The only common ground I see between the groups is they are not tainted by the lobbyist repersenting big business interest over the American families and small businesses.
Can America blue collar workers compete with 35 cents an hour employees? Can America High Tec workers compete with engineers making $5000 a year? Do you think this is why we have a trade debt in High Tec to manufacturing?
October 27th, 2006 at 6:00 am
Dave,
One of my readers posted this on the Kos. You may want to read what your base thought about your economic policy.
Do you agree that economists are destroying America?
Yes, economists should be required to work a Walmart for 1 year to graduate.
87%
No, economists are doing the right thing by promoting these trade deals.
5%
Who cares about America, they’re doing the right thing for the global economy.
7%
October 27th, 2006 at 9:07 am
[…] John Konop thinks so. It’s mostly protectionist rhetoric that doesn’t even warrant a reponse. However, you have to love when the conclusion to such a post begins: Now more than ever, Americans need their economists . . . […]
October 27th, 2006 at 9:15 am
Are Economist…,
Welcome to the site.
Do you think the trade deals are working with soaring trade debt and falling wages?
October 27th, 2006 at 3:10 pm
Some of us are trying to counter the type economic thinking that seems too focused on what’s good for Wall Street. But our voices are not often listened to by mainstream media. So, on balance I tend to agree, or to at least think that economists as a group may be doing more harm than good. That is why I joined ranks with radicals like the Ecological Economics community (see this blog — hyperlinked under my name here) and the Post-Austistic Economics Network
Still, I do very much enjoy reading economics, and like Robert Heilbroner marvel at “the lives, times, and ideas of the great econimc thinkers” — adding Heilbroner’s name to the list. But I also keep Joan Robinson’s sage advice on my wall:
The purpose of studying economics is not to acquire a set of ready-made answers to economic questions, but to learn how to avoid being deceived by economists.
October 27th, 2006 at 3:15 pm
Dave
Welcome to the site.
I have a question, why not measure real wage growth and saving rate as a measurement of health of the economy instead of GDP.
October 27th, 2006 at 5:52 pm
This “think tanker” didn’t answer my question re: how does he stand on illegal immigration. And the EC was formed to compete with the U.S. NOT North America. We’ve got plenty of economies of scale in the U.S. to accomplish anything. The biggest advantage we have is 1 primary language. The reality of the EC is it has become a bureaucratic nightmare with virtually no external border security. I think the idea of combining to compete is ridiculous. Switzerland hasn’t fallen into this trap and they have one of the highest standards of living in the world.
October 27th, 2006 at 6:39 pm
http://www.feasta.org/documents/feastareview/whelan.htm
October 27th, 2006 at 6:50 pm
Actually I like this one much better…
http://www.fff.org/freedom/fd0203g.asp
October 27th, 2006 at 7:58 pm
Bill,
That is a great post!! THANKS
October 27th, 2006 at 8:12 pm
I have to agree with Dave Iverson. If we think about it, consumers are the largest (100%) interest group in America. Much bigger than political parties or religions, 30 times larger than manufacturers, 10 times larger than Californians (of which I am one) and don’t even try to measure the difference with Wall St.
Here’s a straight forward way to take a first look – nothing more, not a cure-all – at a policy issue and see what makes sense:
“Does it help, hurt or not affect consumers?”
For the most part, environmental and safety issues will fail this test. It isn’t perfect. But, on a very wide range of economic issues, it makes sense.
Try it.
By the way, has anyone done a statistical regression analysis of the number of Dave and David’s here?
* * *
Bill,
The EC (I assume you mean European Economic Community, usually known as EEC) was formed as an economic bulwark against the Soviet Union and its economic grouping, COMECON. Aside from giving our whole-hearted support to the idea of breaking down barriers to trade among nations, North America (i.e., the US) wasn’t terribly involved.
October 27th, 2006 at 8:17 pm
Dave O,
I will ask you the same question, why not measure real wage growth and saving rate as a measurement of health of the economy instead of GDP.
October 27th, 2006 at 10:12 pm
David O’Rear
Looks like we’re both wrong. First it was the EEC, then the EC and now the EU. http://en.wikipedia.org/wiki/Eu
And I don’t think anybody needed an economic bulwark against the Soviets. Military yes.
And North America includes everything north of South America. The reason I make the distinction is there’s currently a hot topic which we call the North American Union or NAU.
October 28th, 2006 at 11:45 pm
Mr Konop,
There are serious flaws with the 1930s national accounts system for measuring the economy. Back then, agriculture, mining, manufacturing, construction and utilities pretty much covered it. What wasn’t covered was lumped under “other” — services –which is now the largest part of the economy. Serious flaws.
Real wage growth = rising production costs
Savings rate = the opposite of investment.
Real wages (cost of production) rises, savings rate rises (i.e., investment falls). Yep, I can see that as being a negative economic indicator, but aren’t most measurements meant to be positive?
Bill,
COMECON was established in 1949 and while it may not have been a threat to Western Europe, it did present a unified economic front. Finland and Mexico at one time had a cooperative agreement with COMECON, so it wasn’t wholly toothless.
October 29th, 2006 at 8:06 am
David O
Real wage growth would not equal rising production cost if we did not have child and slave labor.
If you stop slave and child labor a business would invest in technology which would mean fewer employees but higher skilled workers.
This would lower the need for cheap labor. Western Countries are importing poverty and social cost is rising faster than the growth they give the economy.
You can see by looking at the average amount of taxes paid per worker is dropping.
I made my money turning around failed companies from MBA”S.
Most failing businesses talk about market share not profits.
We clean up guys have a simple concept; you cannot make up a failing business model in volume.
BTW Adam Smith did talk about JUSTICE in his book Wealth of Nations.
One more thing anyone in the money business you track debt to equity not investment.
If debt to equity is out of whack you got a problem.
Once again more is not necessarily better.
October 29th, 2006 at 8:22 am
David O’Rear
Yes you’re right. There has always been a desire in the “free world” to open up borders and fight communism or anything else with free trade. Not a problem until the “free traders” start to become the big guys on the block. And Economists may not be the problem. But we shouldn’t ignore the political scientists, constitutional scholars, historians, sociologists, environmentalists, ect… when free trade starts to cause disruptions.
October 29th, 2006 at 8:32 am
Ironically, Smith’s epic work The Wealth of Nations, which was first published in 1776, presents a radical condemnation of business monopolies sustained and protected by the state. Adam Smith’s ideal was a market comprised solely of small buyers and sellers. He showed how the workings of such a market would tend toward a price that provides a fair return to land, labor, and capital, produce a satisfactory outcome for both buyers and sellers, and result in an optimal outcome for society in terms of the allocation of its resources. He made clear, however, that this outcome can result only when no buyer or seller is sufficiently large to influence the market price—a point many who invoke his name prefer not to mention. Such a market implicitly assumes a significant degree of equality in the distribution of economic power—another widely neglected point.
Indeed, Smith was almost fanatical in his opposition to any kind of monopoly power, which he defined as the power of a seller to maintain a price for an indefinite time above its natural price. Indeed, he asserted that trade secrets confer a monopoly advantage and are contrary to the principles of a free market. He would surely have strongly opposed current efforts by market libertarians to strengthen corporate monopoly control of intellectual property rights through the General Agreement on Tariffs and Trade (GATT). The idea that a major corporation might have exclusive control over a lifesaving drug or device and thereby be able to charge whatever the market will bear would have been anathema to him.
Furthermore, Smith did not advocate a market system based on unrestrained greed. He was talking about small farmers and artisans trying to get the best price for their products to provide for themselves and their families. That is self-interest—but it is not greed. Greed is a high paid corporate executive firing 10,000 employees and then rewarding himself with a multimillion dollar bonus for having saved the company so much money. Greed is what the economic system being constructed by the corporate libertarians encourages and rewards.
Smith had a strong dislike for both governments and corporations. He viewed government primarily as instruments for extracting taxes to subsidize elites and for intervening in the market to protect monopoly. In his words, “Civil government, so far as it is instituted for the security of property, is in reality instituted for the defence of the rich against the poor, or of those who have some property against those who have none at all.” Smith made no mention of government intervention to set and enforce minimum social, health, worker safety, and environmental standards in the common interest—to protect the poor against the rich. We can imagine that given the experience of his day the possibility never occurred to him.
http://deoxy.org/korten_betrayal.htm
October 29th, 2006 at 8:39 pm
Mr Konop,
Reality check time: the reason real wages are not rising as fast in the USA has nothing to do with child labor in Bangladesh or slave labor in San Quentin. Nothing.
The output of those producers are simply too tiny to have that sort of impact. You’re either not thinking it through, or getting bad advice.
If you stop child labor in Bangladesh, the factory owners will not invest anything in “technology”. Rather, they will move somewhere else or break the law. Either way, the kids lose.
A strategy favoring fewer employees and higher skilled workers is a recipe for financial ruin for most of the underdeveloped world. Capital is very expensive, whereas labor is cheap.
“This would lower the need for cheap labor. Western Countries are importing poverty and social cost is rising faster than the growth they give the economy.”
Funny, last time I looked the US economy had just had the best 15 years in … history.
Debt:equity works for companies. For countries, debt isn’t compared to static “equity” but to the flow to pay the interest and principle.
Bill,
Post Cold War, chalk up one for trade. When the free traders became the big guys on the block, the other side vanished.
See, we told them to stop being communists and learn a bit of capitalism. They did. We told them to stop blocking trade and liberalize their internal economies. They did. We told them to give up on trying to keep MNCs out and let the trade and investment flow. They did.
They did everything we (Washington Consensus) told them to do. They did it so well, that now we are trying to change the rules of the game.
Those rules were established by the rich in the 1940s and 1950s. They were rigged in favor of the rich, and they worked.
Now, they are working for ANYONE that tries to follow them. As a result, the rich are trying to change the rules into something that better favors the rich.
Play nice. If you insist on taking your ball and going home when the score goes against you, then no one is going to want to play with you any more.
.
October 29th, 2006 at 9:04 pm
Dave,
Lets take one point at a time.
You are saying that if we required livable wages, enviormental standards….in trade deals that we would not see an increase in wages.
Would not the people in Countries like Oman like us for raising the bar and not lowering it.
You sound like the businessman from the south before our own civil war. BTW, post civil war our economy did ok without slaves.
October 29th, 2006 at 10:17 pm
David
I think they had plenty of free trade on their side too with COMECON unless you know of some trade barriers within this system I don’t know about. But a couple of things they had outside the Communist bloc in greater amounts were national sovereignty and freedom as in free enterprise. These 2 things are getting smothered by the bureaucrats and “free traders” of the EU right now.
October 30th, 2006 at 9:43 am
While I agree that some economics issues are not so easy to understand or even to evaluate properly (Free trade and wages,Trade Growth and fiscal deficits),I do not think that is a good argument to doubt about the integrity of economist.Let me details this point further:
Markets forces are not the results of economists preferences,but the outcome of the fundamentals underlying the economy . Investors make theirs economic decisions based on the infomation available for all concerning growth,employment, consumption such they can shape theirs own expectations.-
Economist do make mistakes, like any professional dealing with probabilities.It is true that when you mix your beliefs with your personal evaluation of any economic subject ,is more difficult to assume those mistakes,but does not means that if they occur none economist will care to fix it up.Most of the disagremnent among economicst are related to correct other´s economist mistakes.An historical exmaple might help to understand the point.Keynes was wrong when he assumed, that Government was the solution to get a more stable economic cycle,He could not forecast the inflationary impact of such government actions.It was not Keynes followers ready to make the correction ,but others economist interested about price stability.-
October 30th, 2006 at 9:59 am
ewulf,
Welcome to the site.
What do you think about this exchange i had with an economist?
This question came from me.
Why do you think German and American economist are silent?
Marc Says:
October 26th, 2006 at 7:08 am e
I am not sure. On the one hand, many young economists (professors between 35 and 45 years old) are brainwashed by their education in university and in post graduated programs. They simply think that this policy is the only possibility. Usually these people do not care about ethics in the topic of economic. But, and that is the important point, I am convinced that this policy is wheter ethically and economically right.
On the other hand, some clever economists in Germany may see through the hole topic. But they are rare and maybe corrput in such a way that they benefit from the system.
In general, it is simply impossible to break this system at the moment. We are confronted with an alliance of mass media, science and politics. For example, I think that my chief (a well-known professor in germany, but not mainstream) is afraid of this allince, since his reputation could be destroyed immediately.
Finally, I think we have to wait for the right moment in order to mobilize normal people against this politics.
Marc
October 30th, 2006 at 2:57 pm
First of all,I do not think that american and german economist are silent.Check the following web page out:
http://www.rgemonitor.com
http://www.dw-world.de
Both web pages ,offer the opportunity to be on line with current economics issues.
On the other hand , some economist prefer to discuss such issues ,in the quiet atmosphere of academic seminar without the attention of global media.
I do not think economist as a whole, believe this the only alternative,but it is the one which represent in a better way the current forces of technology progress,capital mobility,consumers preferences and above all private firms searching for higher profits,therefore higher growth. A different matter, is the issue of assuring every one the proper benefits of such growth oriented focus.It is my opinion that there is a missing variable in the equation,mainly the capacity of the State of supporting labor to adjust to the new skills requirements.This means a different kind of public labor policies.The new labor policy, should emphasize training on a variety of topics such as virtual team, computer skills,team working , comunication skills and the like.
Economist like to disagree,but nowdays there is a key consensus among them, This is that free global markets is a better choice than protectionism,a more active state in the economy or more regulations.The mainstream of economist is working on new answer,to the current challenges .-
October 30th, 2006 at 4:26 pm
ewulf
BTW thank you for the links.
Your argument about the choice between protectionism and bad trade deals that promote salve labor is a false premise. Many of us are for free trade, but the slave trade is not FREE or JUST.
Be requiring basic labor, environmental and working standards are human rights not PROTECTIONISM.
As far as more education I suggest you read this.
Workers Of The Real World
October 27th, 2006 by JohnKonop
Jonathan Tasini is president of the Economic Future Group.
For the past 20 years, we’ve been barraged by a relentless mantra: Education is the magic bullet to survive in the global economy. Virtually every politician, armed with rhetoric from academics, tells American workers that, essentially, they are too dumb to make it in the “New Economy.” Save yourself, they exhort—go back to school. Prepare yourself—get an advanced degree. But this is utter nonsense.
Let’s talk about the real world. Today’s global economy is about one thing: labor costs. If a company can move to China to employ workers making 35 cents an hour—whoosh, they are gone from America. High-tech jobs have been moving offshore for years, first to places like Ireland, and now to India. The world is awash in highly skilled, highly educated and cheap workers.
The hard fact is that in virtually every industry, foreign workers across the globe are increasingly as skilled and productive as American workers. India, for example, has a highly trained, highly skilled workforce capable of pumping out new software, industrial design and other new technological innovations. In India, the starting salary of a software engineer is about $5,000, and senior engineers make $15,000; the country has at least half a million information technology professionals eager to work for wages that are a fraction of the going rate here.
I posted this article because we now see conservative Republicans like Walter Jones, Tom Tancredo, Lou Dobbs agreeing with Democrats like Mr.Tasini. The only common ground I see between the groups is they are not tainted by the lobbyist repersenting big business interest over the American families and small businesses.
Can America blue collar workers compete with 35 cents an hour employees? Can America high tech workers compete with engineers making $5000 a year? Is this is why we have a trade deficit in high tech to manufacturing?
October 30th, 2006 at 6:57 pm
I truely don’t think all the costs of globalization to a society are factored in. In this case the macro view is often taken from the global perspective. the NAU for example is promoted to benefit North America, Not the U.S. Most of these economists if you catch them off guard will admit national borders and different currencies are simply hinderances to commerce.
October 30th, 2006 at 8:22 pm
“You are saying that if we required livable wages, enviormental standards….in trade deals that we would not see an increase in wages.”
That’s right. Besides, there are good reasons to suspect the overall view of falling real wages (see below).
“Would not the people in Countries like Oman like us for raising the bar and not lowering it.”
If Oman gets the jobs that can no longer be done in Mexico, they might like it. If Congo gets the jobs that can no longer be done in Oman, they might not.
“You sound like the businessman from the south before our own civil war. BTW, post civil war our economy did ok without slaves.”
Actually, I’m an economist from Southern California via UC Berkeley. And, I never gave any hint that slavery was OK or a positive economic factor. Please don’t put offensive words in my mouth!
“Economist do make mistakes, like any professional dealing with probabilities.”
The difference is that every one who regularly reads a newspaper thinks he or she is qualified to opine on economics. Given that the vast majority of newspaper writers commenting on economics haven’t a clue about the subject or the data, this leads to a lot of misleading “conventional wisdom”.
For example,
Average year-to-date (mostly Jan-Sept, and I hope the formatting works)
_ _ _ _ _ _ _ _ _ _ 1996 _ _ _ _ 2006 _ _ _ _ _ % change
Population _ _ _ 269.3 mn _ _ 298.9 mn _ _ _ +11.0%
Employment _ _ 119.3 mn _ _135.1 mn _ _ _ +13.2%
Weekly wages _ $410.09 _ _ _ $562.76 _ _ _ _ +37.2%
Hourly wages _ _$12.68 _ _ _ $16.78 _ _ _ _ +32.3%
Inflation _ _ _ _ 156.26 _ _ _ _ 210.41 _ _ _ _ +28.9%
Source: Bureau of Labor Statistics, Federal Reserve Board.
Real private wages up 8.3%, real manufacturing wages up 3.4%.
(employment = private sector; weekly wages = private sector; hourly wages = manufacturing production workers; inflation = consumer prices index, seasonally adjusted.)
And,
“Keynes was wrong when he assumed, that Government was the solution to get a more stable economic cycle,He could not forecast the inflationary impact of such government actions.It was not Keynes followers ready to make the correction ,but others economist interested about price stability.-”
and,
“Usually these people do not care about ethics in the topic of economic.”
That’s the sort of thing economists have to deal with: half understood views based on faulty data but so firmly held that the professionals are ridiculed under headlines such as “Economists Are Destroying America”
But, that’s not the worst of it. The worst of it is the attitude among Americans that jobs, incomes and a future are all of great value only if they are in America. The third world gets no consideration at all when it comes to the mythical falling US real wages. For example, see the above post “Workers Of The Real World”. Is that Chinese worker not part of the real world, or is she simply irrelevant when it comes to rising standards of living?
October 30th, 2006 at 8:24 pm
Sorry, the critical point on real wages, in the table above, got lost:
Real private wages up 8.3%, real manufacturing wages up 3.4%.
October 30th, 2006 at 9:00 pm
Dave O,
From Krugman
2. Trade Deficit. We finance our deficit by borrowing. This cannot go on indefinitely. Stein’s law – re: Herbert Stein – “if something cannot go on forever it will stop.” If this happens then any kind of scenario will have to involve a substantial fall in the dollar. And the markets are not taking this into account. Inflation adjusted bond rates seem incorrectly priced, compared to the EU or Japan. Some bonds are being bought by foreign based banks for non-market reasons. But many are not. So the market, if it took the dollar decline into account, would price this in. There will be a Wily Coyote moment. When? I would have said the answer was two years ago, so I’ve been wrong before. But it will happen at some point.
October 30th, 2006 at 9:25 pm
Dave O
NAFTA’s cautionary tale
Recent history suggests CAFTA could lead to further U.S. job displacement1
by Robert E. Scott and David Ratner
The rise in the U.S. trade deficit with Canada and Mexico through 2004 has caused the displacement of production that supported 1,015,291 U.S. jobs since the North American Free Trade Agreement (NAFTA) was signed in 1993. Jobs were displaced in every state and major industry in the United States. Two thirds of those lost jobs were in manufacturing industries. The proposed Dominican Republic-Central American Free Trade Agreement (DR-CAFTA) duplicates the most important elements of NAFTA, and it will only worsen conditions for workers in the United States and throughout the hemisphere (Faux, Campbell, Salas, and Scott 2001). Since NAFTA took effect, the growth of exports supported approximately 1 million U.S. jobs, but the growth of imports displaced domestic production that would have supported 2 million jobs. Consequently, the growth of the U.S. trade deficit with Mexico and Canada caused a net decline in U.S. production that would have supported about 1 million U.S. jobs.
Before adopting an agreement such as DR-CAFTA, it is important to understand the following about NAFTA’s effect on U.S. jobs:
The 1 million job opportunities lost nationwide are distributed among all 50 states and the District of Columbia. Those affected most in terms of total jobs displaced include: California (-123,995), Texas (-72,257), Michigan (-63,148), New York (-51,582), Ohio (-49,886), Illinois ( -47,701), Pennsylvania ( -44,173), Florida (-39,987), Indiana (-35,157), North Carolina ( -34,150), and Georgia (-30,464) (see Appendix Table A-1).
The 10 hardest-hit states, as a share of total state employment, are: Michigan (-63,148, -1.44%), Indiana (-35,157, -1.19%), Mississippi (-11,630, -1.03%), Tennessee (-25,588, -0.94%), Ohio (-49,886, -0.92%), Rhode Island (-4,482, -0.91%), Wisconsin (-25,403, -0.90%), Arkansas (-10,321, -0.89%), North Carolina (-34,150, -0.89%), and New Hampshire (-5,502, -0.87%) (see Appendix Table A-2).
NAFTA is a free trade and investment agreement that provided investors with a unique set of guarantees designed to stimulate foreign direct investment and the movement of factories within the hemisphere, especially from the United States to Canada and Mexico. No protections were contained in the core of the agreement to maintain labor or environmental standards. As a result, NAFTA tilted the economic playing field in favor of investors and against workers and the environment, causing a hemispheric “race to the bottom” in wages and environmental quality.
NAFTA has also failed to deliver on its promised benefits to the poorest citizens of the hemisphere, many of them living in Mexico. Real wages of Mexican manufacturing workers have fallen despite a decade of strong GDP growth (Salas 2001). There have been substantial increases in informal sector work such as street vending and unpaid family work in stores and restaurants. One major study has concluded that “NAFTA has not helped the Mexican economy keep pace with the growing demand for jobs…The agricultural sector, where almost a fifth of Mexicans still work, has lost 1.3 million jobs” (Audley, Papademetriou, Polaski, and Vaughan 2003, 5-6).
These experiences raise serious questions about the likely economic impact of the proposed DR-CAFTA agreement on the economies of the United States, and equally important, its neighbors in the Dominican Republic and Central America.
False promises
Proponents of new trade agreements that build on NAFTA, such as the proposed Free Trade Agreement of the Americas (FTAA), have frequently claimed that such deals create jobs and raise incomes in the United States. Similar claims are being made for CAFTA. For example, the Office of the U.S. Trade Representative has cited “estimates that CAFTA could expand U.S. farm exports by $1.5 billion….[and that] manufacturers would also benefit.” They also claim that the agreement will support “U.S. exports and jobs” (USTR 2005). These statements echo claims that were made by the administration and many economists more than a decade ago when NAFTA was first proposed. The USTR’s office claimed in 1993 that “with NAFTA we anticipate 200,000 more export-related jobs by 1995″ and that “wages of U.S. workers in jobs related to exports to Mexico are 12% higher than the national average” (USTR 1993, emphasis in the original).
http://controlcongress.com/uncategorized/economists-are-destroying-america#comments
October 30th, 2006 at 9:29 pm
Dave O
I am from Ohio I did not need to argue the data I will introduce you to the victims. I will show you the factories that are now OTB.
The last 15 years, Wall Street did well, but the average family got left behind.
October 30th, 2006 at 9:58 pm
RE: NAFTA jobs, perhaps I should have added another line to the table, pointing out that 44.3% of Americans had jobs in 1996, as compared to 45.2% this year. And, higher real wages.
RE: Wall St did well, families didn’t – Average private consumption expenditure per person:
1996 _ _ $19,520
2006 _ _ $30,850
Real percent change per person: +29.2%
After inflation.
October 31st, 2006 at 6:40 am
David O
Do you think real wages are up 29% since 1996?
You should talk too middle mangers and working class people.
October 31st, 2006 at 12:08 pm
Mr O’Rear
In all due respect your numbers are hogwash. Mr. Konop gets it and you do not.
October 31st, 2006 at 7:30 pm
Mr Konop and Jeff,
When the preconceived notions don’t match the data, there are two possibilities: the data are wrong, or the preconceived notions are wrong.
I’m an economist. If this were about China or India, I’d suspect the data. The US Census Bureau, the Bureau of Economic Analysis, the Bureau of Labor Statistics and Federal Reserve Board, however, get a bit more respect from me.
If you don’t like the data, go out and get some of your own.
.
October 31st, 2006 at 8:49 pm
David O
Let me tell you how it works in the real world. You guys pass a slave trade deals with Mexico, China…… And then you tell us we are racist if we complain about letting illegal immigrants pour into our Country. BTW the illegals came here because they did not like the sweatshops we built via U.S. tax dollars (import/export bank).
Executives drive value by driving down wages via overseas slave labor or 1099 sub contracting to illegal immigrants. The executives then pay themselves big bonus by stepping on middle class wages.
The executives then buy politicians and economist too tell us that it is all working out fine. And we call the executives, politicians and economist on the carpet they tell us it could be worse. Am I missing anything?
FROM NPR
Morning Edition, October 31, 2006 • Not all Americans have benefited equally from the strength of the U.S. economy over the past decade. The chief executives of United Healthcare and the New York Stock Exchange, for instance, did a lot better than most — and have been in the headlines as a result. Steve Inskeep discusses income disparity with David Wessel, deputy Washington bureau chief for The Wall Street Journal.
Last year, the average CEO made about 370 times what the average worker did, Wessel notes. Other winners include hedge-fund managers, baseball players and rock stars.
Meanwhile, the median worker’s pay has barely kept up with inflation, Wessel says. The biggest losers in the income race include people who are unskilled or those who didn’t complete high school, he says.
“There’s a big pool, a big supply of workers, who don’t have the skills that are now required to get a middle-class wage in our economy,” Wessel says.
Low-skilled workers are facing competition from immigrants, imports and outsourced jobs in places like India and China, “or you may, in fact, have a job that’s about to be automated out of existence,” Wessel says. “And all these things have reduced the demand for your labor. And as we know, when demand goes down, so do wages.”
October 31st, 2006 at 9:30 pm
Mr Konop,
It saddens me to see the discussion deteriorate to this level. If you can’t argue based on the facts, reconsider your position.
I live in the real WORLD. Do you?
“You guys” ? I work for a local non-profit NGO, not a Washington lobbying firm.
“Slave trade deals” ? Total nonsense. There is no deal involving slaves at all, never was and in my opinion never will be. Utter malarkey, and you know it.
[Fact: foreign investors pay more, pollute less and treat their workers better than local investors.]
“Racist” ? I never mentioned it at all. I simply pointed out that the arguments put forth above are all based on “what’s good for American workers is all that counts, and the rest of the world doesn’t matter.” If you think the fact that I mentioned a Chinese worker is racist, that’s your problem.
“US tax dollars building sweatshops” ? Never heard of such a thing. References, please.
Here’s what you’ve been missing in this entire discussion: The structure of the world economy.
Did you notice that the fastest increase in standards of living (by any measure), for the most people – either as a share of the population or in absolute billions – at any time in human history just happened to occur during the great deregulation of trade?
Infant mortality. Caloric intake. Education. Access to clean water and community sewage disposal. Healthcare. Employment. Infrastructure. Taxation. Democracy. Pensions. Longevity.
Real world stuff.
Pick your measure. Compare post-WWII Bretton Woods global economic structures – the very ones you seem to be trying to dismantle – with anything else in the history of mankind.
Bottom line: The non-American part of the world simply cannot afford for you to tinker with the only system that has made a real difference in the lives of the majority of the world’s people.
If you succeed, they die earlier. They earn less and they learn less.
I’m not willing to do that for the sake of people who can’t control their credit cards, think $3 a gallon for gasoline is expensive and barely even bother to vote.
Call me a racist if you must, but be very careful that you understand exactly why you think of me in those terms.
Then, look in the mirror.
.
October 31st, 2006 at 9:31 pm
Just in case anyone missed it, I’ll say it again:
The fastest increase in standards of living (by any measure), for the most people – either as a share of the population or in absolute billions – at any time in human history just happened to occur during the great deregulation of trade.
Refute it, or reconsider your position.
October 31st, 2006 at 10:16 pm
David
It’s not that nobody believes you but a few things. John Konop is right (or you’re both right) about the credit card factor at the micro and macro levels. How do you factor that out?
October 31st, 2006 at 10:36 pm
Bill,
RE: credit cards — I’m not sure I understand what you mean by “factor that out”.
October 31st, 2006 at 10:50 pm
And I’ll be the first to call some Americans beyond stupid–the ones who get an ARM and a McMansion, 2.5 kids and a $40k set of wheels –and living paycheck to paycheck. It’s because we’re told to spend spend spend. We’re all consumers doncha know. At least that’s what the economists tell us.
October 31st, 2006 at 11:33 pm
Well on the Macro level I meant the National debt, foreign accounts deficit, ect…
On the personal level savaings habits are irresponsible but also how much of this credit card spending is fueling the economy?
November 1st, 2006 at 6:14 am
David O
Please tell me how I am wrong about companies making money using slave labor?
Anti-WTO Chicago Rally Report
http://www.labornet.org/news/120499/02.html
“Under WTO rules, countries are not allowed to treat imports differently based on how they are produced — we can’t bar imports made by child labor, slave labor, or by labor that is extremely low paid and that works under intolerable conditions,”
Talbott continued. “Imports made under these unhealthy conditions must not be allowed into our markets to compete with U.S. products made by workers with good jobs in plants regulated by labor, health and safety laws because this unfair competition drives down wages and causes factories to ship production out of the U.S. to Mexico, Indonesia, China and other countries where labor and environmental laws either don’t exist or are not enforced.”
Talbott denounced “Zenith, Xerox, Inland Steel and scores of other companies” for closing their facilities in Illinois and moving production overseas and complained that “other companies have threatened to move plants to other countries as a ploy to force workers to accept low wages and lesser benefits.” “We think it’s time to stop this mad race to the bottom,” Talbott declared, insisting that workers, consumers, environmental groups and human rights organizations must participate in the formulation and enforcement of rules and regulations for the conduct of all participants in the global economy.
Talbott concluded, “We demand that the WTO refrain from further negotiations until strong enforceable labor, environmental and human rights regulations are written into the core language of each and every trade agreement.”
November 1st, 2006 at 6:18 am
David O
This source is from your Party.
‘Competition’ with China is Killing U.S.
By Matt Taibbi, RollingStone.com. Posted October 3, 2006.
America doesn’t need to try harder. China needs to stop using slave labor. If you see things any other way, you’ve probably got a factory in the Suzhou industrial park. Or you’re taking money from someone who does.
http://www.alternet.org/columnists/story/42528/?comments=view&cID=255177&pID=246038
November 1st, 2006 at 10:42 am
John K. asks “why not measure real wage growth and saving rate as a measurement of health of the economy instead of GDP.”
I agree. Why Not? Here a link to posts on my website, under a category titled “employment.”
http://forestpolicy.typepad.com/economics/employment/index.html
If you visit my site, you’ll note no link for “GDP.” There is a reason for it. I too have read and enjoyed works by David Korton and William Grieder and many others decrying the vices of aggergate index numbers like “GDP,” “PNV,” etc.
See too the collective writings undder the banner “ecological economics”. Here’s our blog on that.
http://forestpolicy.typepad.com/ecoecon/
There is a long-standing critique of GDP in the ecological economics literature. In short, one main failing of GDP is that the index doesn’t bother to separate out dollar flows that come from “destructive endeavors” like war from dollar flows that come from constructive endeavors. GDP also largely ignores environmental costs.
November 1st, 2006 at 12:02 pm
Dave Iverson
You have my vote to be the KING economist. I would vote for a law all economist must talk too you first!!!!
KEEP UP THE GREAT WORK!!!!
November 1st, 2006 at 7:53 pm
Bill,
Well, we finally agree on something: we’re all consumers. So, can we now put away the consumer-bashing anti-import policy suggestions? Please? Seriously, the less money you and your family have, the more you need cheaper imports, right?
How important is over consumption to the economy? Since 2003, 39.4% of all economic growth has come from services. Not imports. Of that, 17.7%, nearly half, is medical care.
Balance that against investment, preparing for the future. 17.7% contribution from medical care vs. . . . a mere 16.0% for all capital investment.
Mr Konop,
There’s a difference between WTO rules and reality. The rules may say it is OK to import slave-made goods, but that doesn’t mean that it is actually happening. Imagine the outrage if Nike or Dell were discovered to have ordered product from factories using slave labor.
I notice that nowhere in the article you quote does Ms (Mr?) Talbott actually say that a single product made by slave labor has legally entered the US.
Not once, and for a very good reason: it is a myth.
RE: the source is from your party, the sad truth is that my party makes policy mistakes. So does Matt Taibbi when he says that it isn’t possible to disagree with his point of view unless one has a financial vested interest in the other view.
Very sad that open debate is no longer tolerated in that magazine.
If I promise to visit Dave Iverson’s blog can I still post some comments here, or is the alternative view not allowed any longer?
.
November 1st, 2006 at 9:27 pm
David O
I appreciate you posting on my blog. My site is open to all views having a chance to debate. As I said I would even let you put up articles with your opinion. The offer is still open.
November 1st, 2006 at 9:32 pm
David O
China: Two-track policy: Open markets + political reforms
Dole criticized the Administration for treating China as a “strategic partner” despite human rights violations and its development of advanced weapons systems that, she said, could threaten the US. China “imprisons and persecutes dissidents and religious believers,” she said. “It employs prison labor. It steals our nuclear and other military secrets.” It was not clear how her “two-track policy” to promote open markets and political reforms in China would differ from current goals in Washington.
Source: New York Times, Diana Jean Schemo, p. A21 Sep 28, 1999
China: Expand trade, but linked to human rights
Dole said she supported expanding business with China while linking it to improving human rights in that country. “I think you can actually have a separate track where you actually move forward to expand trade in China,” she said.
Source: Kevin Landrigan, Nashua Telegraph Aug 22, 1999
November 1st, 2006 at 9:36 pm
David O
Corporations Working Hard to Keep Chinese Slave Labor
Jonathan Tasini
For a long time, I have argued that our problem with China is not really the difference in currency values nor, on its face, the trade deficit. At heart, the real issue is the truly abysmal working conditions faced by millions of Chinese workers–working conditions that are the reason corporations love China and love moving production overseas.
And, now, I see corporations agree. Many of the largest corporations–many of whom contribute significant amounts of money to the Republican and Democratic parties and their candidates–are doing everything possible to keep their slave wage heaven in China. Check it out: this is one of the most important economic issues facing our country.
Since the spring, there has been a debate within China–ignored by the mainstream media in the U.S. and much of the world–about a new labor law in China. I want to say, upfront, that one has to view labor laws in China with a bit of skepticism since we are still talking about laws overseen by an authoritarian regime that carefully calibrates what is permissible or not.
http://www.infoshop.org/inews/article.php?story=20061020061009799
November 1st, 2006 at 9:57 pm
Mr Konop,
Thanks for reinforcing my perception that this is a tolerant place.
US China policy: What gives us the right to tell them how to run their country? More important, why should they listen to us when we can’t even manage fair and honest elections in our own country? When we invade without cause another sovereign nation (Iraq) and give up on pursuing terrorists where they are known to be (Saudi Arabia, Afghanistan and Pakistan)?
Jonathan Tasini . . . Infoshop . . . “radical journalists, writers, columnists, and artists.” . . . those are your preferred sources?
Try John Kamm at Duihua: http://www.duihua.org/ where actually getting things done is the emphasis of China policy.
John has a lot of experience working in China, with the Chinese. He knows how to address human rights issues, effectively. He gets people released from jail, without ruining their economy or ours.
November 2nd, 2006 at 7:03 am
David O
Preface - Made In China.
Fateful decisions made by China’s leaders, limiting births to mostly males and forbidding farmers to tap shrinking reservoirs diverted to smog-choked cities could lead to internal strife and foreign conquest as this economic powerhouse reaches the limits of explosive growth. But US consumers continue to fund China’s military modernization, even as they erode their own economy and employment at home. Even worse, Wal-Mart shoppers are supporting forced labor camps where the healthiest inmates are executed for “organ harvesting”. Wal-Mart also buys heavily from slave labor manufacturing zones, where women workers are typically paid 3 cents an hour or less for 70 to 90-hour work weeks. See smuggled photos here. And please don’t buy any products “Made In China”.
http://www.willthomas.net/Convergence/Weekly/China.htm
November 2nd, 2006 at 7:06 am
David O
This is what I said about the war.
A Conservative Plan for Iraq
Anyone who questions the lack of a realistic and comprehensive Iraq strategy is labeled a friend of fascism by the Republican leadership. House Majority Leader John Boehner (R-OH) recently said, “I wonder if [Democrats] are more interested in protecting the terrorists than protecting the American people.” Republicans are paralyzed with the fear of being thought ineffective on national security and the war.
Meanwhile, the Democratic leadership cannot seem to accept that—regardless of how we got there—we are in Iraq. They have not made a convincing case that an arbitrary phased or date-certain troop withdrawal is in the best long-term interest of the United States. Rather, they seem to think that withdrawal will undo the decision to have gone to war. Rubbing President Bush’s nose in Iraq’s difficulties is also a priority.
This political food fight is stifling the desperately needed public discussion about a meaningful resolution to the fire fight. Most Americans know Iraq is going badly. And they know the best path lies somewhere between “stay the course” and “get out now”.
Some Truths
1) Iraq is having a civil war between the Sunnis and Shiites. The Kurds will certainly join, if attacked. It may not look like a civil war, because they don’t have tanks, helicopters, and infantry; but they are fighting with what they have.
2) Vast oil revenues are a significant factor behind the fighting. Yes, there are religious and cultural differences—but concerns about how the oil revenue will be split among the three groups make the problem worse.
3) Most Iraqis support partitioning Iraq into Shiite, Sunni, and Kurdish regions. (Their current arrangement resulted from a pen stroke during the British occupation, not some organic alignment.)
4) Most citizens of the Middle East who support groups that kill and terrorize civilians—such as Hezbollah, Hamas, or al Qaeda—in part because of their aggressive stance against Israel and the United States, but also because they provide much needed social services, such as building schools.
5) Both Republican and Democratic administrations have spent decades doing business with the tyrants who run the Middle East in exchange for oil and cheap labor. This has been the one of the rallying calls of Bin Laden and Hezbollah—that we support tyrants who abuse people for profits. In fact, our latest trade deals with Oman and Jordan actually promote child and slave labor; it’s so bad the State Department had to issue warnings about rampant child trafficking in those countries.
6) Iran is using the instability in Iraq to enhance its political stature in the region. Leaving Iraq without a government that can stand up to Iran would be very destabilizing to the region and the world.
From the U.S. perspective, this is all mostly about energy. As things stand, a serious oil supply disruption would devastate our economy, threaten our security, and jeopardize our ability to provide for our children.
New Directions
Success in Iraq and the Middle East in general requires us to work in three areas simultaneously: (1) fostering a more stable Middle East region, including Iraq, (2) pursuing alternative sources of oil, and (3) developing alternatives to oil. To these ends we must:
1) Insure that the oil revenues are fairly and transparently split among all three groups: Shiite, Sunni, and Kurds based on population.
2) Allow each group to have a much stronger role in self government by creating three virtually-autonomous regions. Forcing a united Iraq down their throats is not working. Our military would then be there in support a solution that people want, rather than one they are resisting.
3) Become a genuine force for positive change, thus denying extremist groups much of their leverage. Driving a fair two-state solution to the Israeli/Palestinian problem should be our first priority. We should also engage in projects that both help the average Middle Easterner and Americans, such as supporting schools that are an alternative to the ones that teach hate and recruit terrorists. We should also stop participating in trade deals that promote child and slave labor by insisting on deals that include livable wages and basic labor rights.
4) Declare a Marshal Plan to end our Middle Eastern energy dependency with a compromise between exploring for new sources, reducing consumption, and developing of alternative energies. For example, we should re-establish normal relations with Cuba so we can beat China to Cuba’s off-shore oil. We should also redirect existing tax breaks for Big Oil into loan guarantees for alternative energy companies.
Once we no longer need so much oil from the Middle East, we can begin winning over its people by using our oil purchases to reward positive and peaceful behavior from their leaders. This would ultimately reduce tensions and encourage prosperity in the region.
We will have to live with the threat of Islamic radical terrorism forever; but these solutions are a start to reducing the threat. Both parties have to put politics aside and put together an honest and reasonable plan that the American understand.
November 2nd, 2006 at 8:14 pm
Mr Konop,
“Made in China” . . . by MNCs. Here’s the most critical statistic related to China’s global trade: 58%.
58% of China’s exports are made by foreign-invested companies.
I’m not sure where to start on the other bits you posted. China’s one-child policy is bad? Farmers restricted to using up reservoirs on water-intensive farming is bad?
Internal strife – always a possibility in China. But, undefined it doesn’t mean much.
Foreign conquest – not in my life time. Very indicative of the author’s ignorance.
US consumers funding military expansion – more deep ignorance. See 58% above.
China eroding the US economy and jobs – deeper and deeper ignorance.
Wal-Mart shoppers supporting organ-harvesting forced labor – deliberately malicious lies.
I know Wal-Mart’s sourcing people in Hong Kong and China. They have very strict standards, because (like Nike) they are too high profile to afford the utterly stupid risk of buying something without regard to its origins. This one is a bald-faced lie, nothing more.
Women making 3 cents an hour –pure fiction.
* * *
Iraq: “Stay the course” is fine as long as you’re not driving off a cliff. We are.
It is time for new leaders. The Dubious Administration is proving to be both evil and incompetent.
“Meanwhile, the Democratic leadership cannot seem to accept that—regardless of how we got there—we are in Iraq.”
We aren’t stupid. We know Rove & Co are diverting attention away from WHY we are in Iraq by attacking our concerns about what we’re going to do next.
We aren’t stupid. Your party got America into this mess and now you are desperate to spread the blame as wide as possible. Sorry, we aren’t THAT stupid.
“Rubbing President Bush’s nose in Iraq’s difficulties is also a priority.”
If you have a better candidate to take responsibility for what has happened in the last five years, bring him or her out in the open.
George Dubious is responsible for America’s first unprovoked invasion of a sovereign foreign nation, period.
Some Truths
1) Iraq is having a civil war between the Sunnis and Shiites because the US invaded without provocation or cause.
2) Vast oil revenues are a significant factor behind the fighting. Just ask Dick Cheney and his buddies at Halliburton. We didn’t invade Burma, did we?
3) Both Republican and Democratic administrations have spent decades doing business with the tyrants who run the Middle East. However, we can’t find a photo of Harold Brown, Les Aspin, Bill Perry or William Cohen with Saddam Hussein. You’ll have to trust us that Dick Cheney wasn’t alone.
4) Iran is using the instability in Iraq to enhance its political stature in the region. If the US hadn’t started a totally unnecessary war of aggression, this would not be happening.
5) From the U.S. perspective, this is all mostly about energy. The Dubious Administration lied to us about it being about 9-11, about Saddam being a nasty guy or about bringing democracy to the region. It was just oil, nothing important.
6) Success in Iraq and the Middle East starts with admitting we were completely wrong. Bush, Cheney, Rumsfeld, Rove and Rice get jailed for crimes against humanity.
.
November 3rd, 2006 at 8:28 am
David,
Why will your Party not put out a frame work for a plan in Iraq?
Any expert will tell you if we do not face the issues I talk about we will be back in Iraq.
You want to focus on issues you cannot fix. Why not focus on solutions.Why not tell me how I am wrong about my suggestions.
I made my money fixing failed business ideas or companies. You learn fast focus on the solution not the politics.
November 3rd, 2006 at 8:55 pm
My framework for fixing Iraq:
=> Hold responsible those who got us into this mess in the first place.
=> Ensure that they are never, ever able to do it again.
This is what we can fix, if we have the integrity to respect our constitution.
America is not a failed business. We have a responsiblity to punish the guilty.
* * *
Now, as for your ideas –
Splitting oil revenues is not our right. That is the right of the sovereign nation of Iraq and we have no right to plunder their wealth or to say how it should be used. In fact, we should ban American oil companies from any commercial activities in Iraq for 10 or 20 years, just to reassure the people that (post-Dubious) we do not condone invasions-for-oil. (Why is it that Republican’t solutions always start with oil?)
Dividing the nation, again, is neither our right nor our responsibility. What gives us the right to say that this piece of territory should be handed over to that group, and vice versa? You’d almost think these suggestions were coming from a conqueror!
Becoming a genuine force for positive changes means we have to have – MUST have – credibility. We have none now, and will not have any until and unless we reverse the horrific damage this administration has done to our reputation, our nation, our economy and our constitution.
“Solving” the Israeli-Palestinian issue . . . my goodness . . . a bit arrogant, no? Thousands of years of tribal warfare to be “solved” – by us ! – in a matter of a few months or years!
Marshal Plan for energy independence. I must say that your solution for winning over the hearts and minds of the people of the Middle East – by making a supreme effort to impoverish them through reducing our own oil consumption – is . . . unique. First we stop using Mid East oil, then once we’ve broken their backs they’ll love us. That’s when we reverse course and go back to the old ways. Unique, that’s all I can say.
Try conservation.
Cuba . . . nothing, not a single word about what is right. Just oil. How sad.
November 3rd, 2006 at 10:12 pm
Dave O
The solution was based on a combination of Thomas Freidman, Joe Biden, Pat Buchanan, Chuck Hagel, John Warner, Professor Papa and military experts like Bare. I also have read numerous others, sorry I did not have to mention them all.
Your knowledge of the Middle East is weak from your answer. I would recommend you Bruit to Baghdad by Freidman to understand the area better. You would stop giving me Democrat talking points.
One every military expert pointed out if the oil revenue does not get spilt up right there will be no peace. BTW Biden was the first I heard talk about this issue. That is why many of us knew the constitution was a joke without the money part figured out.
Next, the Sunnis Shiites have hated each other longer then we have been a Country. Your solution would be like asking Israel and Palestine to have a one State solution instead of two.
I will get into more with you but you should digest this first. I am not talking to use as a Republican. I am talking to use as an American and parent. See lets get past talking points.
You should realize I may be more conservative than you, but I am no political hack.
Thanks JK
November 8th, 2006 at 7:21 pm
David,
I’m not sure I understand your numbers or your argument.
I’m Mike Parker
You can email me at
michaelwparker@gmail.com
I’m interested in learning about your point of view. Just don’t expect me to agree! I might. I might not.
I just think any real discussion is now impossible on this thread between us.
I’m sorry I missed out.
Mike
November 12th, 2006 at 9:07 pm
• Economists are too beholden to corporations and special interests that provide them with research grants.
• Economists b