Tag: Globalization

The Elephant In The Room

First I guess I need to say something about the recall election in Wisconsin……(pause….duration unimportant)…….screw it!  If you got the cash, you got the power……the political golden rule….if you have the gold, you rule…….the best government money can buy……the political template has been cast…..enough!

I spend a lot of time watching the rest of the world and have been interested in the doings within the EU……we all know the problems in Greece….I mean it has been used as a political prop for almost a year…..we have all seen the protests, some violent, some not so much….but do you really know what is causing all the dissension?

Let me help…..first, these troubled countries have made some really bad decisions in the past and the IMF is demanding some concessions from the countries that need a bailout….and by the way these bailouts that are being forced on the countries is coercion to keep the EU together….does not appear that it has anything to do with the quality of life of the people…..

IMF is demanding a list of conditions that must be met to qualify for a bailout…..these demands are as follows……1–guarantee fiscal discipline and curb budget deficits….2–Reduction in public spending….3–Tax reform……4–Financial liberalization….5–Competitive exchange rates…..6–Trade liberalization, eliminating of import licensing and a reduction in tariffs…..7–Promotion of direct foreign investment……8–Privatization of public enterprises…..9–Deregulation of the economy……and 10–Protection of property rights.

There you have it….the demands that must be met before assistance is offered……now take a moment and read over the conditions and then explain where any of that will benefit the population of a country…..it does give business a huge leg up on profits and control…..

One more thing……read the list again……now re-read it!  Does not parts of the list sound a lot like the Ryan budget?  Once again….it will do little to nothing for the average Joe trying to earn a living, instead gives business all the leverage and all the power.

Bill Clinton, a person I do not particularly care for, had a great line in a recent speech……for decades the GOP have been demonizing Europe and now their plans will bring the US into a European state of mind….austerity, unemployment……(I paraphrase)…..now look at what European plans are doing to the population of any given country……is that what you want for your country?

At what point do the American people start worrying about what is ahead of them and stop worrying about which low life wins the next election?

How About An Industrial Policy?

The US has a policy for everything, drugs, terror, on and on, but we seem to have missed the boat on a substantial industrial policy.

Let usa look at some of the things happening in our country today according to Harry Tarq in “Dairy Of A Heartland Radical”:

-For most workers, including the college educated, real wages today are lower than they were in the 1970s.

-Rates of unemployment have grown over the years, doubling between 1999 and 2009. Unemployment rates are a third higher for African Americans and Latinos.

-There has been a sea change in employment as manufacturing labor has dipped below 15 percent of the work force. The sectors with most employment growth include health care, fast food, hotel work, and transportation. Generally higher paying manufacturing work is being replaced by low wage service labor.

-During the last forty years most manufacturing jobs have been transferred to other countries where wages are low, the right to form unions is limited, and costs for health and retirement benefits are minimum.

-There has been a qualitative shift in investment to financial speculation and away from manufacturing.

-Meanwhile, worker productivity in the United States has increased.

One kind of industrial policy that would be appropriate for the twenty-first century is the green jobs agenda. This approach would combine our massive environmental and job needs. To use an historical analogy, to save the lives of millions of Americans, a New Deal green jobs agenda must become part of our future.

Our industrial base is shrinking daily…..and we do not seem to have a grasp on how to get it up and running again.  Our manufacturing has taken a backseat to financial poker game and we, the people, are losing everything because the economic theives are “all in”  with our future.

Many analyst say the the use of “green technology” is the way of the future and that if handled properly could re-invent our industrial base.

Green jobs could be a saving grace, but I am not too optimistic on that for the future…..why?……right now they are en vogue, but will that continue when a new admin takes the reins in Washington?  Many good programs have died at the hands of well intended administrations, i.e.  energy policies of Carter….if they had been followed it is possible that we would not be addressing some of the global warming issues we face today….

Globalization

Globalization: Truth Not Spoken

This election cycle there is a lot said and a lot used about free trade and globalization in the campaigns. The region known as the Rust Belt is the area hit the hardest by free trade agreements. This area includes Pennsylvania, Ohio, and any place that has lost manufacturing jobs because of agreements like NAFTA. Each of the candidates has their own little world which they preach from on the benefits of globalization and free trade. The truth is more disastrous that any of them want to admit. And actually, some of them go as far to make each of their proposals sound like the answer to the economic woes of the people.

The Democratic Leadership Council’s economist, Rose has said, “The growth in trade and technology over the past three decades has generated meaningful employment growth for the middle class. As a general rule, middle-class jobs are not disappearing.” Unfortunately not everyone agrees with this analysis. A report by the Economic Policy Institute found the following:

• In 2006, the impact of trade flows increased the inequality of earnings by roughly 7%, with the resulting loss to a representative household (two earners making the median wage and working the average amount of (household) hours each year) reaching more than $2,000. This amount rivals the entire annual federal income tax bill paid by this household.

• Over the next 10-20 years, if some prominent forecasts of the reach of service-sector offshoring hold true, and, if current patterns of trade roughly characterize this offshoring, then globalization could essentially erase all wage gains made since 1979 by workers without a four-year college degree.

An important caveat, however, notes that even as globalization raises national income, it can still reduce the incomes of most workers. Global integration has at least two potential impacts on American wages. First, workers employed in industries directly in competition with low-cost imports from abroad can expect to see immediate job dislocation and/or downward wage pressures. Second, as relative prices change across industries, the return to factors of production, including different kinds of labor inputs, can be expected to change as well.

As the campaigns for the presidency move on, we are constantly bombarded with the benefits of the world economy, in this case globalization. But as with anything when politics is involved facts and figures are used to influence and inspire voters. But there is a basic axiom of economic theory is all too often ignored, or, even actively hidden. For example, Bradford, Greico, and Hufbauer (2005), in what they bill as a comprehensive accounting of the gains and losses attributable to trade liberalization, count only the costs of direct displacement by imports as a debit in the balance sheet of globalization, and do not even acknowledge the possibility of permanent wage losses through a broader labor market. Failing to count the largest cost of globalization is, of course, an excellent way to make the cost/benefit analysis of integration come out well to those favoring the status quo.

If one has a finger in speculation then globalization is a profitable endeavor. But if one is a worker then globalization spells only one thing—unemployment and/or low wages.

Let’s End The Illusion Now!

Neo-liberalism specialized in selling an illusion, namely that the unfettered functioning of markets, both commodity markets and financial markets, constituted the best economic arrangement for a society. This illusion had been buried in the 1930s, by the experience of the Great Depression, and by the theoretical endeavors of John Maynard Keynes, a British Liberal and Michael Kalecki, a Polish Marxist. But it was resurrected to serve a specific purpose. This resurrection had nothing to do with any theoretical demonstration of the invalidity of the Keynes-Kalecki propositions. True, the Keynesian prescription for the rescuing of capitalism had turned out to have been problematical, as indeed one would expect with any Liberal panacea for capitalism; but this is not the same as saying that the Keynesian analysis of the ills of capitalism had been proved wrong. The resurrection therefore was a theoretical sleight-of-hand.

Behind this resurrection were financial interests, re-acquiring hegemony in a new incarnation, after the setbacks faced by them during the Depression, war and immediate post-war years. Keynes had called for the “euthanasia of the rentier” and the “socialization of investment.” In his view the basic fault of the market mechanism was that it could not distinguish between “enterprise” and “speculation”, so that the unfettered functioning of markets made the livelihood of the common people dependent on the whims of a bunch of speculators. Capitalism, whose survival he had wanted, could not, in his view, survive if this grievous fault was not rectified through the institutionalization of State intervention in crucial spheres relating to its functioning. Resurgent finance capital, in its new “globalized” garb, starting from the late sixties, took its revenge on Keynes, and decided to put the clock back. It “sold,” or imposed through agencies like the IMF and the World Bank, its free market ideology all around the globe. While Keynes had wanted finance to remain national, so that nation-States could have the autonomy to pursue employment-promoting policies, “globalized” finance forced nation-States to open their doors to its unfettered movements, and justified it by invoking the illusion of an efficient free market.

Is “Voodoo Economics” fianlly dead?