It Isn’t a Zero-Sum Game

Robert Reich, former Secretary of Labor under Clinton, now teaches at the University of California at Berkeley.
If we define the world's economic leader as the country with the biggest gross domestic product, China is on the way to claiming that prize. China has over a billion people, and its middle class is growing quickly. But we shouldn't see this as a problem. The global economy isn't a zero-sum game where one country gains only if another other loses. As China grows, it will become an even larger market for our goods and services. It's also likely to be a continuing source of capital for us, buying our government bonds and holding reserves of our currency.

Although we've lost manufacturing jobs, this is partly a result of success. About half of those jobs have been lost to new technology, robots and computer-controlled machine tools, which have replaced old-fashioned assembly lines, dramatically reducing the need for workers. In 1900, more than a third of Americans worked on farms; now, fewer than 5 percent do. The manufacturing sector is following this historical pattern.

Meanwhile, we still lead in building intellectual property-products and services connected with the Internet, computer software, biotech, entertainment, marketing, and finance.

The increasing signs of anti-globalism sentiment are unsurprising given that the typical American got nothing out of the last economic expansion. Adjusted for inflation, the median wage is lower than it was in 2000, and jobs are less secure. Americans want to cast blame, and unfortunately, it's always easiest to blame foreigners-the people who trade with us, and migrate to this country. This could be a large problem in the future. When isolationism last flourished here in the 1930s, it hurt the economy, and if it comes to dominate our thinking, it will hurt us again.

M. Kathryn Eickoff, former chief economist of The Office of Management and Budget under President Reagan
Have you or someone you know closed a business, become unemployed or permanently lost a good job? Is your company downsizing, outsourcing, or moving your position overseas? Are you cutting back on your spending because of inflation and higher credit card charges?

You may have heard that  globalization, greedy multinationals or illegal aliens are the cause of our problems. In fact, the opposite is true. Globalization means freer markets and more political freedom worldwide; multinationals are businesses, large or small, that have operations in more than one country; and illegal aliens are people who want a better life so much that they are willing literally to risk everything for a chance at the worst jobs our economy offers. All three are major contributors to our prosperity, productivity and standard of living.

With communism and socialism as examples of disastrous economic policies, the world is rushing to embrace capitalism, although not necessarily consistently; only the U.S. wants to run the other way. People in countries around the world know how much better off they are now than a decade ago. However, there are those among us-politicians, union leaders, and government-fed businesses and others, who whine about the good old days. As Washington's economic dictator says in Ayn Rand's far-sighted novel Atlas Shrugged, "We've got to stand still. We've got to make those bastards stand still!"

Well you can't make the brightest and the best, the most conscientious and most productive stand still without destroying the economy. To raise taxes and tariffs, close our borders, and return to isolationism means a return to the "beggar-your-neighbor" policies of 1930 and the Smoot-Hawley tariffs that led to the Great Depression and World War II.

Wilbur Ross, billionaire investor and past director of the Turnaround Management Institute
U.S. trade and currency policies stimulated world growth but caused huge trade deficits in the United States and inflation in commodity prices. Developing economies use more oil and metal per dollar of Gross Domestic Product than more mature ones, so as these economies grew, commodity prices soared.  Meanwhile, their rising standards of living and population growth created extra demand for foods. The immediate way to slow emerging country growth is to increase our exports and minimize our imports by pushing the dollar lower..