SOME people and jobs lose to competition?!?
No US worker has any chance of competing with an Indian or Chinese worker who gets 1/6th or less of the US workewr's salary, and little or no benefits (while working under no safety or environmental regulations). To call this "competition" is false ... the US worker has no chance to compete, even if he/she was willing to accept compensation falling way below any poverty line the US has set.
Worse, in our arrogance, we tell ourselves "they'll only ship the low-end jobs oversees, saving the best and best-paying for us." Are the people who tell us this lying or actually deluded enough to believe this? Look at our graduate and PhD programs HERE IN THE US, right now! In all of the technical fields -- engineering, biochemistry, math, science -- what nationalities do you see represented the most? Asian! Now, I don't begrudge them this at all, but I want to smack the lairs and/or idiots who are arrogant enough to think that "natural US superiority will always save a privileged position for us."
The combination of hemorrhaging American jobs offshore, over-extended basement budget rates on Prime Rate to cover the fact we never really recovered from the last recession (except in the most technical sense), and vast tax deferments that masquerade as tax cuts has the US economy heading off a cliff and the Middle Class about to become seriously truncated.
We have, as predicted, sold them the rope by which to hang us.
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Goodbye, Free Trade; Hello, Mercantilism
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Two powerful forces had shaped it, notes Harvard political scientist Jeffry Frieden. First was the belief that protectionism worsened the Great Depression; the United States and its allies wanted to avoid a repetition of that tragedy. The second was the cold war; trade was seen as a way of combating communism by promoting the West's mutual prosperity. Both ideas bolstered political support for free trade. For years the global trading system flourished on the inertia of these impulses, which now have little practical relevance.
In a booming world economy, the resulting tensions have so far remained muted. China's discriminatory trade practices, for example, have excited angry rhetoric, but not much else. The Chinese have generally deflected protests by announcing large export orders at crucial moments. When European leaders recently visited, there was a placating order for 160 Airbus planes worth an estimated $15 billion.
But would a global economic slowdown change that, if other countries blamed Chinese exports for destroying their domestic jobs? Would import quotas or tariffs follow? Already China has turned from the world's largest steel importer to the largest exporter, says Lardy. In the United States, the present pattern of global trade is viewed with increasing hostility: U.S. deficits are seen as eroding industrial jobs while providing surplus countries with the dollars to buy large pieces of American firms.
The world economic order depends on a shared sense that the system benefits most nations. The more some countries pursue narrow advantage, the more others will follow suit. "What's the glue that holds all this together?" asks Frieden. "Is there a common agreement about cooperation that allows governments to give up something to maintain the international order?" It's an open question whether these conflicting forces—growing economic interdependence and rising nationalism—can coexist uneasily or are on a collision course.
© 2007
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