Is this another way of saying that you figured out that trickle down economics might have consequences after its obvious failure and that you and your investment banking brethren are: a. Doing a mea culpa b. Hoping that we will turn the other cheek now that you have made your millions and decided throwing a bone to the unwashed masses is better than being chased with pitchforks Or c. Are you along with Krugman and Summers angling for a cabinet position? Sorry Stevie I agree with everything you say but it has a hollow ring coming from someone with your history at Lazard, Lehman and Quadrangle.
22
For those in the bubble: if you don't like Donald Trump and Ted Cruz, you'd better help out those left behind or there will be worse still in short order. Mr. Rattner, those at Peterson who want to let them eat cake will soon see pitchforks outside their shiny headquarters.
16
In 1989, Michael Moore made his classic Roger & Me wherin he predicted the downfall of his hometown, Flint, if GM moved the jobs to Mexico. He was attacked for being cynical, nasty, liberal and worse.
Whatever you think of Moore, he was obviously dead wrong. Today, Flint is a healthy, thriving metropolis and those good paying auto jobs aren't even missed.
Whatever you think of Moore, he was obviously dead wrong. Today, Flint is a healthy, thriving metropolis and those good paying auto jobs aren't even missed.
29
I would point out to Adam Posen that currently the leading candidates in both parties, Trump, Cruz, Sanders, & Clinton, have come out against the TPP. The donor class & a few places on the West Coast may still be for trade agreements like the TPP, but the lack of shared prosperity since 1999 & China's admission the WTO has made trade agreements politically toxic.
15
Thank you, Mr. Rattner. Thank you.
2
What goes around, comes around. Count on it.
3
Maybe Mr. Perot cautioned about the great sucking sound because he was well versed in the writings of Mr. Engels, Mr. Smith, and Mr. Marx.
6
The more American policy makers listen to the Peterson Institute the poorer Americans have become.
The Peterson Institute is a leader in the War on the Middle Class* using Globalization to knock down American wages!
Globalization makes Americans poorer and killed the middle class-it's that simple.
Most Americans are worse off now that they were in the 1990's-thanks Peterson Institute and their Globalization!
Americans listened to the Peterson Institute and we got the 2008 Financial Crisis and outsourced our middle class jobs-Thanks AGAIN Peterson Institute!
Remember the Peterson Institute wants to get rid of Social security and Medicare so we can give more tax breaks to Pete Peterson and his billionaire friends-redistribution from the 99% to the 1%.
Even Republicans like Trump have pointed this out!
This Peterson Institute's policies will sink most Americans into poverty in their old age to give tax breaks to Pete Peterson and his Billionaire buddies to outsource your job using Globalization!
The Peterson Institute has already done it! Now they want MORE!
After all this economic damage why does anyone listen to the Peterson Institute?
http://www.huffingtonpost.com/2015/01/20/middle-class-charts_n_6507506.html
The Peterson Institute is a leader in the War on the Middle Class* using Globalization to knock down American wages!
Globalization makes Americans poorer and killed the middle class-it's that simple.
Most Americans are worse off now that they were in the 1990's-thanks Peterson Institute and their Globalization!
Americans listened to the Peterson Institute and we got the 2008 Financial Crisis and outsourced our middle class jobs-Thanks AGAIN Peterson Institute!
Remember the Peterson Institute wants to get rid of Social security and Medicare so we can give more tax breaks to Pete Peterson and his billionaire friends-redistribution from the 99% to the 1%.
Even Republicans like Trump have pointed this out!
This Peterson Institute's policies will sink most Americans into poverty in their old age to give tax breaks to Pete Peterson and his Billionaire buddies to outsource your job using Globalization!
The Peterson Institute has already done it! Now they want MORE!
After all this economic damage why does anyone listen to the Peterson Institute?
http://www.huffingtonpost.com/2015/01/20/middle-class-charts_n_6507506.html
15
The problem with being old is having people younger than yourself telling you how things were before they born and how wonderful it was then. NOT!
I'm 71. Life was not peachy back in '50's, 60. 70's you name it. It was and always will be the same, only with new problems replacing the old ones.
The only difference today is that instead of complaining to your neighbor or writing a letter to the editor of your newspaper, you can post a comment here and whine with all your pet theories.
Just like I'm doing.
I'm 71. Life was not peachy back in '50's, 60. 70's you name it. It was and always will be the same, only with new problems replacing the old ones.
The only difference today is that instead of complaining to your neighbor or writing a letter to the editor of your newspaper, you can post a comment here and whine with all your pet theories.
Just like I'm doing.
13
Whatever Uncle Tony S. tells them it is?
All nations should return to basic economic principles and realize/understand that privately held national wealth and non-government jobs are only made, created, and/or acquired when the greedy members of a family or the greedy citizen businessmen of a nation, state, city, island, tribe, school district, hospital district, etc., perform one or more of the following tasks:
1. Plant, grow, and/or harvest something of commercial value from the earth;
2. Extract something of commercial value from the earth;
3. Manufacture something of commercial value that is consumable;
4. Construct a building that is permanently useful for rental income;
5. Tourism income from foreign tourists;
6. Provide services (professional licensed services such as doctors, lawyers, architects, engineers, land surveyors, and certified public accountants, etc., and also licensed tradesmen services such as plumbers, electricians, auto mechanics, aircraft and power plant mechanics, HVAC mechanics, barbers, real estate agents, and other licensed trades);
7. Collect payment for patent and copyright uses;
8. Buy things from foreigners in foreign nations, transport them to another other foreign nation, and then sell them to that other foreign nation at a profit;
And when their citizen businessmen trade, sell, or rent these items and/or services to parties outside of their family or nation in return for a net transfer of gold into their own family or nation it is enriched and accumulates taxable wealth.
1. Plant, grow, and/or harvest something of commercial value from the earth;
2. Extract something of commercial value from the earth;
3. Manufacture something of commercial value that is consumable;
4. Construct a building that is permanently useful for rental income;
5. Tourism income from foreign tourists;
6. Provide services (professional licensed services such as doctors, lawyers, architects, engineers, land surveyors, and certified public accountants, etc., and also licensed tradesmen services such as plumbers, electricians, auto mechanics, aircraft and power plant mechanics, HVAC mechanics, barbers, real estate agents, and other licensed trades);
7. Collect payment for patent and copyright uses;
8. Buy things from foreigners in foreign nations, transport them to another other foreign nation, and then sell them to that other foreign nation at a profit;
And when their citizen businessmen trade, sell, or rent these items and/or services to parties outside of their family or nation in return for a net transfer of gold into their own family or nation it is enriched and accumulates taxable wealth.
5
Thank you for pointing out this moral imperative.
Go, Bernie!
Go, Bernie!
7
How exactly is the mass importation of cheap, unskilled and undocumented labor from the developing world (as well as China) help American citizens compete for jobs and negotiate for wages?
30
Why didn't anyone ask Hillary last night about her husband's giving away American manufacturing job by signing Nafta? Rattner says that the consequences of the first trade agreement in the 90's is manifesting itself as the underclass created by Clinton is lashing out in the form of Trump.
19
The Peterson Institute and its fellow travelers are ushering in a reversal of their policies through their short-sightedness and greed. Lets hope for all us it happens peacefully. Though given the historical record, that would seem an unlikely outcome.
5
P.S. I meant "truly universal healthcar" not "truly universal education."
Gee, Mr. Rattner, its real nice of you to be concerned about "the People". Tax redistribution, real good idea. I think Prof. Piketty would agree there. The problem is, and always was, that we the people have no control over our economic lives. We are always a burden. We make too much money. Our pensions and social security are too high. We make unreasonable demands for health insurance, time off and other benefits. Many of us will give up benefits for what we consider to be more security. But, there is always someone, somewhere who will work for less and give up more. That's the way the system works and will continue to work. There's no going back. You wouldn't have it any other way.
Until we the people are able to control our own economic lives, and not you or Mr. Peterson, we will continue to be the losers you describe, tax redistribution not withstanding. And even if we can't fully understand or articulate this, people know and that's why they don't vote in great numbers. And, when allowed some small input into the "process" they go for the likes of Trump, Cruz and Sanders. But that's just posturing. None of those guys will be president and you know it.
Until we the people are able to control our own economic lives, and not you or Mr. Peterson, we will continue to be the losers you describe, tax redistribution not withstanding. And even if we can't fully understand or articulate this, people know and that's why they don't vote in great numbers. And, when allowed some small input into the "process" they go for the likes of Trump, Cruz and Sanders. But that's just posturing. None of those guys will be president and you know it.
3
Love the jobs-to-welfare-and-underemployment program your globalization buddies came up with over the last 30 years, Steve.
Rather than ineffective programs like more retraining funds for jobs that don't exist, especially for older Americans, we have to renegotiate many of those bad trade pacts.
Access to our enormous markets shouldn't have come at the expense of our jobs. We had the bulk of the leverage in these deals and we gave it away for a quick buck and a kick in the teeth to the middle class.
Rather than ineffective programs like more retraining funds for jobs that don't exist, especially for older Americans, we have to renegotiate many of those bad trade pacts.
Access to our enormous markets shouldn't have come at the expense of our jobs. We had the bulk of the leverage in these deals and we gave it away for a quick buck and a kick in the teeth to the middle class.
7
Expenses that cause lots of trouble and disappointment include, college education for children, good reliable health care, child care for working mothers who make low salaries, paid leave to have children. These are big expenses and many , no matter how hard they work cannot make it. If the corporations, making billions , were to be charged reasonable, previous taxes (40% ) and the very wealthy reasonable progressive taxes based on our pre 1980 history, all of these could be available and take a great load off the middle class. It would give us a better country.
4
It is also a moral question when tens of thousands of workers die in unsafe working conditions or the result of environmental degradation as multinationals race to the bottom regarding work safety & environmental regulations in order to maximize profits. This is also one of the results of globalization.
5
It's deeply frustrating that these points were only acknowledged after the damage was done. If only the US economy were a living being, we could say that increasing its output was a moral good. But instead some people got much, much richer, some people got much poorer, and that is apparently an "incontrovertible" benefit to our nation. I beg to differ, since that's all anyone who differed can do now... beg.
7
Trade is 'good' in neo-classical economics for no other reason than that it is 'pareto optimal', meaning that the gainers could compensate the losers.
Stolper-Samuelson tells us that there are always losers. Neo-classical economics tells us that income distribution doesn't matter. Modern macro-economics is learning that this is not the case. Marx has always told us that this is not the case, that the laissez-faire system will development a dynamic that will break the society on which the economy is based.
Stolper-Samuelson tells us that there are always losers. Neo-classical economics tells us that income distribution doesn't matter. Modern macro-economics is learning that this is not the case. Marx has always told us that this is not the case, that the laissez-faire system will development a dynamic that will break the society on which the economy is based.
1
Bernienomics will lower our living standards to make us all equal. If that means we live in African poverty, fine.
1
Why do we even bother to call these trade agreements, when it has absolutely nothing to do with trade? This, like the upcoming TPPA is all about getting human capital at the lowest wages possible. This, in itself, might not be so bad, but the problem is that, it imposes debt on those who are underpaid. But hey, debt is good for the uber wealthy. You can make a handsome profit via interest rates. You gotta love the United Stats of Corporation!
9
Thanks for a long overdue look at the dark side of these trade deals. I have personally watched/lived the dismantling of our electronics industry for 40 years. Gone are millions of jobs that not only provided a decent wage but through mentoring and on-the-job training increased the problem solving skills of our workers. Now, the mindless, dead-end service jobs remaining allow little growth and no prospects for lower wage. The myth of lifting millions out of poverty by moving a peasant from a rice paddy to a dorm with suicide nets only to toil 12 hours a day for tea & biscuits and a few dollars is a favorite of the capitalists. From slave labor in the shrimp industry to burning/crushing in the garment factories, labor exploitation has given capitalism a bad name across the globe driving ever more to seek something better, often in religious extremism. The titans of industry better tread carefully and tone it way down or they will see a backlash no one wants.
17
In addition to the enormous labor arbitrage highlighted by Mr. Rattner's piece, these free trade agreements and globalization in general has enabled enormous environmental arbitrage -- move manufacturing operations to the country with the most lax environmental laws and regulation. The 1% will not be able to escape this one - as Chris Matthews noted in closing his show one last week climate change must be the transcendent issue - where else are we all going to live other than this planet???
7
Call it a redistribution tax or call it a tax on excess corporate profits: deriving from goods manufactured in slave wage countries and imported back into the US by the same corporations who channeled the money to contractors who paid the wages of said "slaves". The Peterson crowd and their benefactors have relied on our country's military and political capital to negotiate treaties that allowed them to extract enormous wealth while causing severe harm - a tax is the least obligation.
10
As a start, we might look at how to reduce the number of those "left behind". A good start might be to deport the 12 to 20 million illegal aliens already in the US and sharply reduce the number of immigrants and refugees allowed to enter. It might also be a good idea to implement programs encouraging people to not have children that they can not afford.
15
Why focus on Trump? Sanders offers a vision of how to deal with industry modernization without the need for fences, fear and immigrant vilification: through a modernized social safety net – free childcare, free college education, truly universal education and, yes, redistribution of wealth from the top two-tenths of one percent back to the common good. It's not a pie-in the-sky utopia but something along the lines of Merkel's Germany, where I lived for two years. People need to get over the "s-word" and listen to what Sanders is actually proposing. It's a failure of our corporate press and campaign finance system that appear to have made this impossible from the start. What can I say? "The fire next time"? Something must change.
12
I'm sorry, but can well-to-do elitists please stop telling me that globalization has helped my way of life.
I can't thing of one single solitary iota of a thing that globalization has done to make my life better. Not one.
In fact, I can't think of one single solitary person who I've met that has ever said to me: "Gee, isn't globalization great?" Again, not one.
Of course, once again, I don't hang out with well-to-do elitists...
I can't thing of one single solitary iota of a thing that globalization has done to make my life better. Not one.
In fact, I can't think of one single solitary person who I've met that has ever said to me: "Gee, isn't globalization great?" Again, not one.
Of course, once again, I don't hang out with well-to-do elitists...
23
Good article, and spot on about all of the people in the room who were "winners," and who have no remotely "negative" skin in the game when it comes to globalization. Those people can afford to be cynical and blase about so many of our citizens who lose next to everything in the race to globalize. And the statement about "fetishization" of certain industries to be "Immoral." Tell that to the Germans, who consistently lead the world in the export of manufactured goods precisely because they made a "fetish" out of making cars, truck cranes, big factory presses, printing presses, etc. They do not export cheap goods like China--they export big ticket items, and their workers and their country are better off for it.
The Davos people in the piece can be like this because it seems they never get demoted or fired--unless it is a "sideways" one. Perhaps it would serve the discussion better if we had real workers and their representatives writing about these topics. Instead we always hear from the competing elites, and a Wall Street Guy, however well intentioned, makes our argument. That is one of the many reasons why people are angry about globalization.
And remember what Jung said: "Often the hands will find a solution that the intellect has struggled with in vain." Economists will never understand that statement, but those of us who make and build things know the power that work brings to the intellectual field. You might call it kind of a "fetish."
The Davos people in the piece can be like this because it seems they never get demoted or fired--unless it is a "sideways" one. Perhaps it would serve the discussion better if we had real workers and their representatives writing about these topics. Instead we always hear from the competing elites, and a Wall Street Guy, however well intentioned, makes our argument. That is one of the many reasons why people are angry about globalization.
And remember what Jung said: "Often the hands will find a solution that the intellect has struggled with in vain." Economists will never understand that statement, but those of us who make and build things know the power that work brings to the intellectual field. You might call it kind of a "fetish."
21
I don’t think you can fully escape the moral question surrounding the efficacy of globalization. Indeed, under globalizing national policies, the rich have gotten richer and that at the expense of the poor and middle class. Some might not want to use the term morality when discussing the disparate economic impacts of globalization, but you have to if you intend to live in a world inhabited by human beings. Who actually benefits when foreign countries are given unfettered access to American markets? American business. So what’s wrong with that? Nothing except for the fact that the uber wealthy run most large-scale businesses, businesses that maximize shareholder wealth at the expense of the working class.
11
In a nutshell, the globalization free trade argument follows a pattern:
American workers lead the world in global economic per capita wealth and growth. They can share their jobs to help low wage or unemployed people in developing countries. It is a good thing for American workers to give-up their jobs to help those disparate people in other countries to survive. And the good news, besides being a moral decision to end your lifestyle for the benefit of others less fortunate, "we" all will be better off because "we" will be able to buy goods and services cheaper than when "you" were still working for good wages to meet "your" higher standard of living costs in America. But don't be worried. "Some" Americans that own disproportionately significant business and investment assets will become richer. So its a "win-win" situation. "You" lose your jobs in exchange for moral benefit and "some" super-rich Americans increase their wealth making goods offshore in those poorer countries by low-income wage workers.
The end result is a wash: "your" loses are balanced by "some" rich-folks' increase in winnings. Who am I? Don't worry, trust "me".
American workers lead the world in global economic per capita wealth and growth. They can share their jobs to help low wage or unemployed people in developing countries. It is a good thing for American workers to give-up their jobs to help those disparate people in other countries to survive. And the good news, besides being a moral decision to end your lifestyle for the benefit of others less fortunate, "we" all will be better off because "we" will be able to buy goods and services cheaper than when "you" were still working for good wages to meet "your" higher standard of living costs in America. But don't be worried. "Some" Americans that own disproportionately significant business and investment assets will become richer. So its a "win-win" situation. "You" lose your jobs in exchange for moral benefit and "some" super-rich Americans increase their wealth making goods offshore in those poorer countries by low-income wage workers.
The end result is a wash: "your" loses are balanced by "some" rich-folks' increase in winnings. Who am I? Don't worry, trust "me".
24
I replaced some carpeting last week and had an interesting conversation with the installer, a guy who had been in the trade more than 20 years. He bemoaned the reality that there were no "kids" coming up behind him. "Everyone says you should go to college and that's great, but there's nobody encouraging kids to go into the trades. We need skills taught so we can eventually retire."
Education is not just technology and philosophy, there is a need for plumbers, tilers, electricians, carpet installers, everything in the building trade, both commercial and residential. These are not menial jobs; they require highly skilled workers.
The denigration of trade jobs is damaging to everyone. We need a skilled labor force to build into the next century. Technology may change, but you still need bathrooms and floors. Don't leave these professions (and they are professions) out of the desirability mix.
When we provide skill education and treat out trade workers with the respect they so very much deserve, we will see a jump in both employment and median income. We need people trained to do high quality work...in and out of manufacturing. That's what makes a country economically strong...not just people sitting behind desks.
http://wifelyperson.blogspot.com/
Education is not just technology and philosophy, there is a need for plumbers, tilers, electricians, carpet installers, everything in the building trade, both commercial and residential. These are not menial jobs; they require highly skilled workers.
The denigration of trade jobs is damaging to everyone. We need a skilled labor force to build into the next century. Technology may change, but you still need bathrooms and floors. Don't leave these professions (and they are professions) out of the desirability mix.
When we provide skill education and treat out trade workers with the respect they so very much deserve, we will see a jump in both employment and median income. We need people trained to do high quality work...in and out of manufacturing. That's what makes a country economically strong...not just people sitting behind desks.
http://wifelyperson.blogspot.com/
66
The problem is that industrial workers were exposed to competition, but service workers, including the highly skilled, were not. This is what exacerbated inequality.
Lawyers and doctors charge so much that most industrial workers can't pay for them without subsidies. This would change if more lawyers and doctors and high-IQ would-be lawyers and doctors were allowed to immigrate. And colleges could teach more cheaply if the accreditation cartels were torn down and replaced with something more performance-driven that would allow educated English-speakers from poorer parts of the world to set up their own institutions in the US, staff them, and provide lower-cost education. The medical and higher-education cartels must be smashed to provide justice for poorer Americans.
Lawyers and doctors charge so much that most industrial workers can't pay for them without subsidies. This would change if more lawyers and doctors and high-IQ would-be lawyers and doctors were allowed to immigrate. And colleges could teach more cheaply if the accreditation cartels were torn down and replaced with something more performance-driven that would allow educated English-speakers from poorer parts of the world to set up their own institutions in the US, staff them, and provide lower-cost education. The medical and higher-education cartels must be smashed to provide justice for poorer Americans.
4
If globalization results in unemployment, but a net increase in incomes & wealth, then it makes sense to tax those incomes to provide re-training for those displaced. One was to do this would be to transform our current unemployment insurance system, to a re-employment system that provides re-training, internship, work-study programs, partial salary subsidies and the like through companies that need workers. If no companies need these workers, at any price, then I guess I would conclude that globalization isn't actually creating wealth, it is just redistributing it from the US to elsewhere.
4
The basic problem is that we use our hard and soft power to make the world safe for capital, not for people or the environment.
As the world's biggest consumer market, we have had the power to shape the world economy, but we have used it to undermine workers and by extension, demand.
We could have made trade deals that were concentrated on raising the pay and living standards for those countries that wanted to do business here. We could have made trading with the U.S.contingent on protecting the environment, encouraging organized labor, and increasing wages and benefits for the world's workers. This world have led to higher living standards around the world, and greater demand for our exports.
Instead we have given global corporations nearly unlimited power to pollute and abuse workers, causing a downward spliral of governments competing to let transnationals run roughshod over our economies, workers, environment, and governments.
The result is a glut of capital and workers living on the edge of disaster.
The billionaires and their corporations take$ trillions in government handouts, then seeing the lack of demand from a workforce with falling pay, hide their money in offshore accounts waiting for the economy to come back.
The free market fetishists have created a world spiraling into the toilet, but they can't see beyond the next quarterly report.
Viva la Evolution.
As the world's biggest consumer market, we have had the power to shape the world economy, but we have used it to undermine workers and by extension, demand.
We could have made trade deals that were concentrated on raising the pay and living standards for those countries that wanted to do business here. We could have made trading with the U.S.contingent on protecting the environment, encouraging organized labor, and increasing wages and benefits for the world's workers. This world have led to higher living standards around the world, and greater demand for our exports.
Instead we have given global corporations nearly unlimited power to pollute and abuse workers, causing a downward spliral of governments competing to let transnationals run roughshod over our economies, workers, environment, and governments.
The result is a glut of capital and workers living on the edge of disaster.
The billionaires and their corporations take$ trillions in government handouts, then seeing the lack of demand from a workforce with falling pay, hide their money in offshore accounts waiting for the economy to come back.
The free market fetishists have created a world spiraling into the toilet, but they can't see beyond the next quarterly report.
Viva la Evolution.
2
I always find those arguing against free trade have not traveled much or, if they have, stayed inside the walls of some resort. The idea that Americans deserve jobs and opportunity to the exclusion of the rest of the world is very odd to me. There is talent and ambition across the human species regardless of the luck of being born within the 50 states of this country. The last quarter of the 20th century and the first part of this century has seen an unprecedented spread of knowledge, dissemination of information, opening of access to capital, and opening of markets. The result has been a massive outbreak of peace around the world. Looking at stats here: http://ourworldindata.org/data/war-peace/war-and-peace-after-1945/ you can see that since the turn of this century, we have seen death from war drop by an enormous factor. Free trade drives global peace as much as it drives regional employment changes.
5
Our duty to the people that globalization leaves behind:
1. End Crony Capitalism - prevent politicians from blessing their favorite 1%'ers with cash
2. End the inflationary binge of the Federal Reserve
3. End the minimum wage
4. End enforcement of the EPA's arbitrary rules and let it remain as an advisory group (or end it)
5. End enforcement of the CPSC's arbitrary rules and let it remain as an advisory group (or end it)
6. End corporate and other lobbying by ending politicians' ability to spend taxpayers' money
7. End taxpayer-funded student loans (except for veterans, who receive them as a benefit for service)
8. Lower the tax rate on all income, or add taxes to municipal bonds and T-bills.
Essentially, when the government isn't allowed to waste money, and when the rich find it more profitable (and less taxing) to invest their money into businesses, then there will be more businesses and more jobs. America is phenomenal at coming up with a plethora of crazy ideas that become outrageously profitable - but government interference in the marketplace crushes that phenomenon. Make it stop.
1. End Crony Capitalism - prevent politicians from blessing their favorite 1%'ers with cash
2. End the inflationary binge of the Federal Reserve
3. End the minimum wage
4. End enforcement of the EPA's arbitrary rules and let it remain as an advisory group (or end it)
5. End enforcement of the CPSC's arbitrary rules and let it remain as an advisory group (or end it)
6. End corporate and other lobbying by ending politicians' ability to spend taxpayers' money
7. End taxpayer-funded student loans (except for veterans, who receive them as a benefit for service)
8. Lower the tax rate on all income, or add taxes to municipal bonds and T-bills.
Essentially, when the government isn't allowed to waste money, and when the rich find it more profitable (and less taxing) to invest their money into businesses, then there will be more businesses and more jobs. America is phenomenal at coming up with a plethora of crazy ideas that become outrageously profitable - but government interference in the marketplace crushes that phenomenon. Make it stop.
2
The real problem is using growth and GDP as a measurement of economic health. Value creation that started with the Industrial Revolution is largely over. See Paul Krugman's review of "The Rise and Fall of American Growth" by Robert J. Gordon. The planet can't withstand much more growth, especially American style growth of the last hundred years. The American consumer, lacking wages, has used credit since the 1970's to consume to shameful levels, all the while getting more in debt and needing to work more and more hours for less and less money.
People are beginning to realize that the American dream costs too much. Why work 60 or more hours a week paying off debt for stuff that will mostly depreciate in value? The trap of consumption-production-growth is not a result of adding value in the classical sense, especially when you consider the high cost of living due to monopoly rents and economic rents due financialization. GDP and growth are just measurements of rentier wealth, not the economic health of society.
People are beginning to realize that the American dream costs too much. Why work 60 or more hours a week paying off debt for stuff that will mostly depreciate in value? The trap of consumption-production-growth is not a result of adding value in the classical sense, especially when you consider the high cost of living due to monopoly rents and economic rents due financialization. GDP and growth are just measurements of rentier wealth, not the economic health of society.
4
At this stage, "free trade" is virtually a theological concept, which is why it engenders such hostility when one dares challenge its tenants. How dare one challenge received wisdom?
It actually does me little good to buy a cheap Chinese-made flat screen TV if my neighbors are unable to earn enough to find good work & pay taxes and if my town is lacking in funds to fix the roads.
There is a premium that must be paid for a premium community. But those who can buy their way into gated enclaves don't really care.
It actually does me little good to buy a cheap Chinese-made flat screen TV if my neighbors are unable to earn enough to find good work & pay taxes and if my town is lacking in funds to fix the roads.
There is a premium that must be paid for a premium community. But those who can buy their way into gated enclaves don't really care.
16
"...Neither their jobs nor their wages were in jeopardy...". Not yet, anyway. People who specialize in information technology - selling their intellectual wares - know that those jobs are being outsourced too.
11
If people want to know why Trump has a real chance of winning the presidency, read this article.
Both Trump and Sanders tout the plight of those left behind, but Sanders is too politically correct to call out the problem for what it is. He'd rather coddle illegals and the concept of open borders. That is a losing position. If you want to know how real laypeople feel, those blue collars who may not have formal education but who used to be able to make a living, turn on Washington Journal on C-Span one day. You will hear people from ALL walks of life, from EVERY end of the political spectrum, of VARIOUS races say the same thing: illegal immigration adversely and directly affected my livelihood.
I'm honestly surprised but pleasantly so, that the NYT finally printed an honest column about this. Kudos.
Both Trump and Sanders tout the plight of those left behind, but Sanders is too politically correct to call out the problem for what it is. He'd rather coddle illegals and the concept of open borders. That is a losing position. If you want to know how real laypeople feel, those blue collars who may not have formal education but who used to be able to make a living, turn on Washington Journal on C-Span one day. You will hear people from ALL walks of life, from EVERY end of the political spectrum, of VARIOUS races say the same thing: illegal immigration adversely and directly affected my livelihood.
I'm honestly surprised but pleasantly so, that the NYT finally printed an honest column about this. Kudos.
16
When a corporation moves its operation to another country, it spends money and pays taxes there. It hires people there, who spend money and pay taxes there. They work for much less money than they would here and so undercut our wages more.
When an immigrant takes a job here, both the business and the employee spend money and pay taxes here.
So why do so many people think it is good to let global corporations move capital anywhere, while humans are locked behind borders. Because the corporate owned media keeps blaming immigrants for the decisions of global corporations.
Corporations like illegal immigrants because they can pay them less than minimum wage with no benefits or labor controls.
Building a wall wouldn't be nearly effective as prosecuting companies that hire undocumented workers, but theses companies are politically connected so it rarely happens.
You have more in common with workers from other countries than you do with global billionaires our their corporations, so stop scapegoating the poor, weak, and desperate, and put the blame on the .1% which makes the decisions as they take the revolving door between government and big business.
When an immigrant takes a job here, both the business and the employee spend money and pay taxes here.
So why do so many people think it is good to let global corporations move capital anywhere, while humans are locked behind borders. Because the corporate owned media keeps blaming immigrants for the decisions of global corporations.
Corporations like illegal immigrants because they can pay them less than minimum wage with no benefits or labor controls.
Building a wall wouldn't be nearly effective as prosecuting companies that hire undocumented workers, but theses companies are politically connected so it rarely happens.
You have more in common with workers from other countries than you do with global billionaires our their corporations, so stop scapegoating the poor, weak, and desperate, and put the blame on the .1% which makes the decisions as they take the revolving door between government and big business.
5
H. Ross Perot was right.
Perhaps someone should ask him how the United States can correct the error and reverse that "sucking sound" and bring jobs TO America?
Perhaps someone should ask him how the United States can correct the error and reverse that "sucking sound" and bring jobs TO America?
17
Professor Reich was the US Secretary of Labor when NAFTA, the very first US government FTA with a third world nation, was unilaterally signed into law by President Clinton within a year after his election. NAFTA removed those import tariffs on products from Mexico, so all of the higher paying US manufacturing STEM jobs possible were "Sucked off to Mexico" just like Ross Perot forecasted!
The US Jobs flipping hamburgers, cleaning toilets, and selling insurance stayed in the USA because there is not much of any way to relocate those jobs to third world nations.
Maybe the USA should become re-industrialized and make widgets, and then maybe the US businesses could make and then sell enough widgets to others outside of the USA so that the US businesses can accumulate enough profit and taxable wealth to enable the US Government confiscate some of that wealth to pay for US government services and activities without the US government continuously borrowing more and more money!
The US Jobs flipping hamburgers, cleaning toilets, and selling insurance stayed in the USA because there is not much of any way to relocate those jobs to third world nations.
Maybe the USA should become re-industrialized and make widgets, and then maybe the US businesses could make and then sell enough widgets to others outside of the USA so that the US businesses can accumulate enough profit and taxable wealth to enable the US Government confiscate some of that wealth to pay for US government services and activities without the US government continuously borrowing more and more money!
3
Bravo, Mr. Rattner ! Some of us "hear" you.
3
What’s Our Duty to the People Globalization Leaves Behind? Sell them stuff!
3
If you think that all of the existing Free Trade Agreements (FTAs), Most Favored Nation (MFNs) trade statuses, and Permanent Normal Trade Relation (PNTRs) trade statuses with third world nations (for unknown reasons) that Presidents Clinton, Bush and Obama granted to third world nations were destructive for US middle class wages and manufacturing employment, relocating middle class US jobs to foreign nations, and LOWERING THE MIDDLE CLASS PAY scale, and eliminated benefits for middle class US workers, then you had better hold onto YOUR HAT for when President Obama's PPT Pacific Rim Treaty to comes into effect to relocate middle class US jobs to third world nations on an unlimited multi-nation WHOLESALE every possible product basis!
President Obama’s TPP (or TPA) will be like President Clinton’s NAFTA for Mexico and his PNTR for Communist China, except on a much larger almost WORLDWIDE scope!
President Obama’s TPP (or TPA) will be like President Clinton’s NAFTA for Mexico and his PNTR for Communist China, except on a much larger almost WORLDWIDE scope!
10
Here's what I've seen happen since the late 1960s. American car manufacturers decided that Americans didn't want small cars or, if they did, they wanted them to be cheap tin cans. Then they insisted that Japan build cars here to narrow the difference and tried to blame unions and the American workers for American car manufacturers bad decisions. I had a Chevette. After my horrible experience with that car I never purchased an car made by any of the Big Three. It had nothing to do with the unions or the workers. It had everything to do with a clueless senior management class.
I could go on but that's a big enough example.
I could go on but that's a big enough example.
11
Finland, my other Nordic country, is taking this first step:
This quotation is from qz.com (URL below):*
"The Finnish government is getting serious about the idea of a national basic income. It has commissioned KELA, the national social insurance provider, to study the concept, calculate the costs, and run an experiment in 2017 to judge the feasibility of rolling it out across the country. If, eventually, the government were to approve of such a plan, Finland could scrap all existing benefits and instead hand out a monthly stipend to everyone. According to some reports, the monthly payment could be €800 ($870)."
http://qz.com/566702/finland-plans-to-give-every-citizen-a-basic-income-...
After comment review allowed two readers to direct sharp personal attacks at me yesterday 25 JAN in connection with a comment where I was simply presenting the view of an established researcher I understand that I must state explicitly the following. The above quotation is presented to stimulate discussion. The proposal is one that is to be studied. Similar proposals have been discussed in Sweden but as yet no comparable action has been proposed. BBC World In The Balance ended on 24 JAN with a statement by one of the particpants that by 2020 all parties in the USA will be proposing something similar.
Only-NeverInSweden.blogspot.com
Dual citizen-USA-SE
This quotation is from qz.com (URL below):*
"The Finnish government is getting serious about the idea of a national basic income. It has commissioned KELA, the national social insurance provider, to study the concept, calculate the costs, and run an experiment in 2017 to judge the feasibility of rolling it out across the country. If, eventually, the government were to approve of such a plan, Finland could scrap all existing benefits and instead hand out a monthly stipend to everyone. According to some reports, the monthly payment could be €800 ($870)."
http://qz.com/566702/finland-plans-to-give-every-citizen-a-basic-income-...
After comment review allowed two readers to direct sharp personal attacks at me yesterday 25 JAN in connection with a comment where I was simply presenting the view of an established researcher I understand that I must state explicitly the following. The above quotation is presented to stimulate discussion. The proposal is one that is to be studied. Similar proposals have been discussed in Sweden but as yet no comparable action has been proposed. BBC World In The Balance ended on 24 JAN with a statement by one of the particpants that by 2020 all parties in the USA will be proposing something similar.
Only-NeverInSweden.blogspot.com
Dual citizen-USA-SE
2
Right, throw the plebs some spiked bread crumbs, before the pitchfork mobs descend on Wall St.
The Don is doing us a service with his sideshow, driving the panicky parasites out of their penthouses to shower tranquilizers on us.
Boy, Bernie, do we need you now.
The Don is doing us a service with his sideshow, driving the panicky parasites out of their penthouses to shower tranquilizers on us.
Boy, Bernie, do we need you now.
5
globalisation was, after religion, th biggest scam ever perpetrated on humanity
all that happened was th corporations relocated to cheap labor-land and you lost all your jobs and factorizes
a success for th corporations, a failure for th rest of you
all that happened was th corporations relocated to cheap labor-land and you lost all your jobs and factorizes
a success for th corporations, a failure for th rest of you
3
If you were a factory worker in Ohio making $23 an hour and you got laid off at age fifty and had to take a $9 an hour job, you are morally contemptible. It has been this way for a long time. Neither party cares, really.
17
I guess stating the obvious deserves some credit, personally though Mr. Rattler is being disingenuous. Other than the main stream media (NYT) ignoring what has transpired the last 40 years there have been many books the last few years destroying the 1% 'think Tank' consensus about FTA's: disaster! And the cheeky article by Mr. Rattner letting us sneak a peak at the Perterson Power Play book is more the finger than compassion.
1
I'd say Steven that you ought to get out more often and research the number of high tech "intellectual" jobs that have been lost to foreign workers. That cool breeze drifting towards you most likely will just go in one ear and out the other.
10
Sometimes I wonder if the columnists and reporters at the NY Times even bother to read the rest of their own paper. If they did, once in a while, they might gain some insight into why the election is currently unfolding the way it is.
As Robert Reich pointed out in his blog yesterday, if you like the system the way it is, Hillary Clinton is your candidate (or if you don't mind a dictator, it would be Trump).
But if you want the system we should have, Bernie Sanders is your man.
Get out and vote for the future, not business as usual.
As Robert Reich pointed out in his blog yesterday, if you like the system the way it is, Hillary Clinton is your candidate (or if you don't mind a dictator, it would be Trump).
But if you want the system we should have, Bernie Sanders is your man.
Get out and vote for the future, not business as usual.
9
Not all jobs are created equal even jobs that provide equal pay are not necessarily equal. There are many factors to weigh in the quality of a job.
These jobs are the cornerstone to communities and not everyone want to make their living at a desk. The people labeled derogatorily and stereotyped as angry white voters represent a lot of these people. The article talks about massive redistribution an a panacea. This will not fix the fact that there is nothing rewarding for these people to do. Imagine waking up everyday void of purpose and feeling powerless to change it unable to serve as a provider for your family and a role model for your children. Economists like to point to the move from the farm to industrialization to and point to how few people work on farms today and how this is just another transition. This is a poor analogy to what is happening now. See farming is just another form of manufacturing loss of farming jobs was replaced by new manufacturing jobs. Farming was just one of the first types of manufacturing to be automated. Manufacturing involves creation of tangible value through anther part of our nature, physical work. It does not require one to have an advanced intellectual education which is not attainable or even desirable for many. Losing these jobs is not just about lost income. Its about losing a purpose, losing pride and losing community. There is no replacement for this part of the economy. It needs to exist.
These jobs are the cornerstone to communities and not everyone want to make their living at a desk. The people labeled derogatorily and stereotyped as angry white voters represent a lot of these people. The article talks about massive redistribution an a panacea. This will not fix the fact that there is nothing rewarding for these people to do. Imagine waking up everyday void of purpose and feeling powerless to change it unable to serve as a provider for your family and a role model for your children. Economists like to point to the move from the farm to industrialization to and point to how few people work on farms today and how this is just another transition. This is a poor analogy to what is happening now. See farming is just another form of manufacturing loss of farming jobs was replaced by new manufacturing jobs. Farming was just one of the first types of manufacturing to be automated. Manufacturing involves creation of tangible value through anther part of our nature, physical work. It does not require one to have an advanced intellectual education which is not attainable or even desirable for many. Losing these jobs is not just about lost income. Its about losing a purpose, losing pride and losing community. There is no replacement for this part of the economy. It needs to exist.
6
Global taxation should be part of the solution. It is already being discussed by the IMF.
4
While it's fine to propose fair taxation to remedy income inequality, it has zero chance of succeeding if the likes of Trump (or any Republican) is elected. These guys and gals represent *only* the interests of those who won big from our "free" trade deals: the One-Percent. (Trade isn't free, by the way. It is heavily rigged in favor of large corporations.)
And, let's be truthful, pro-establishment Democrats, like Hillary and Barack, are never going to tax the rich, either. Why? Because, just like Republicans, they have traded their souls for campaign donations.
No, the only chance for change is if we pass a constitutional amendment to reform campaign financing.
Oh, and elect a president that hasn't been bought and paid for by BIG monied interests.
Feel the Bern. Sanders 2016.
And, let's be truthful, pro-establishment Democrats, like Hillary and Barack, are never going to tax the rich, either. Why? Because, just like Republicans, they have traded their souls for campaign donations.
No, the only chance for change is if we pass a constitutional amendment to reform campaign financing.
Oh, and elect a president that hasn't been bought and paid for by BIG monied interests.
Feel the Bern. Sanders 2016.
7
Hurray for Steve Rattner. Globalization has killed our manufacturing base in America. Add to that labor displacement by technology and a tax code that favors capital over labor (labor and benefits are expensed as incurred while capital is expensed over time as depreciation providing cash flow) and human labor in the United States faces wage deflation of unprecedented size and duration.
Serious thought needs to be given to how to combat these trends over both the short and long terms. This might mean changing the tax code to allow depreciation of worker training and education costs and to require immediate expensing of technology costs to level the playing field between labor and capital. Another solution would be to embrace and favor cooperative entities versus corporations. This would help to flatten compensation across classes and help to reverse the corporatization of America. Providing universal health care through a single payer system would remove many workers barriers to be self-employed and would enable workers to maintain a good quality of life at lower wages.
There are many and varied solutions to these problems. It will take strong political leadership, engagement by all Americans, and a clear focus to solve the problem of global pauperization of the American worker.
Serious thought needs to be given to how to combat these trends over both the short and long terms. This might mean changing the tax code to allow depreciation of worker training and education costs and to require immediate expensing of technology costs to level the playing field between labor and capital. Another solution would be to embrace and favor cooperative entities versus corporations. This would help to flatten compensation across classes and help to reverse the corporatization of America. Providing universal health care through a single payer system would remove many workers barriers to be self-employed and would enable workers to maintain a good quality of life at lower wages.
There are many and varied solutions to these problems. It will take strong political leadership, engagement by all Americans, and a clear focus to solve the problem of global pauperization of the American worker.
3
Let's abandon the moral question of globalization's losers and look at the issue from a purely societal management perspective.
People who lose their jobs long-term are bad for society. They turn to drugs and other destructive behaviors that makes them a drain on the system at best, and a drain on others at worse. Unemployed people who lack a safety net are even worse. They sell the drugs that ruin lives or commit robberies or other thefts to keep up their need to eat, at the very least.
Communities without jobs or hope are worst of all. They reject the system wholesale and we end up with more Bundys and more acts of treason disguised as protest.
This is not about keeping the poor and barely-middle-class quiet.
This is about keeping the most well-armed nation in the world from engaging in violent revolution.
If the moneyed classes want a hand in shaping an order that will emerge from the frustration, the anger, the genie that cannot go back in the bottle, they should seriously consider supporting a universal guaranteed income. They could calculate a minimum cost of complacency - food, housing, internet-enabled entertainment - and ensure these are provided to all of the populace, in return for an accepted dominance of society's finance, politics, and just about everything else.
What are the alternatives? Election reform that returns power to the people, Chinese-style fascism that suppresses all dissent, or the people rise up and, for a while, everybody suffers.
People who lose their jobs long-term are bad for society. They turn to drugs and other destructive behaviors that makes them a drain on the system at best, and a drain on others at worse. Unemployed people who lack a safety net are even worse. They sell the drugs that ruin lives or commit robberies or other thefts to keep up their need to eat, at the very least.
Communities without jobs or hope are worst of all. They reject the system wholesale and we end up with more Bundys and more acts of treason disguised as protest.
This is not about keeping the poor and barely-middle-class quiet.
This is about keeping the most well-armed nation in the world from engaging in violent revolution.
If the moneyed classes want a hand in shaping an order that will emerge from the frustration, the anger, the genie that cannot go back in the bottle, they should seriously consider supporting a universal guaranteed income. They could calculate a minimum cost of complacency - food, housing, internet-enabled entertainment - and ensure these are provided to all of the populace, in return for an accepted dominance of society's finance, politics, and just about everything else.
What are the alternatives? Election reform that returns power to the people, Chinese-style fascism that suppresses all dissent, or the people rise up and, for a while, everybody suffers.
12
Nikko. Excellent post. The economy is changing due to continued evolution of technology and its ability to replace human labor. As a result, universal guaranteed income (or a negative income tax - file a return and either pay what you owe or get paid if you don't have a job, or some similar redistribution program) is going to be essential.
Globalization, per se, is not the problem. It accelerates the problem of job loss in the West and, for now, alleviates problems in developing countries with job creation. Given that globalization can not be stopped, we should try to influence it. For example, use trade agreements to expand worker rights abroad as well as environmental responsibility.
At home, we need a much better safety net for all workers, more job training, more investment in public infrastructure, and in particular most innovation in figuring out what kinds of new jobs, that don't even exist today, might be possible.
Globalization, per se, is not the problem. It accelerates the problem of job loss in the West and, for now, alleviates problems in developing countries with job creation. Given that globalization can not be stopped, we should try to influence it. For example, use trade agreements to expand worker rights abroad as well as environmental responsibility.
At home, we need a much better safety net for all workers, more job training, more investment in public infrastructure, and in particular most innovation in figuring out what kinds of new jobs, that don't even exist today, might be possible.
1
Chasing cheap labor is not the same thing as seeking natural competitive advantages that Adam Smith describes in The Wealth of Nation. It is merely a short term profit/more profit decision that benefits only a small minority of the world's population, corporate shareholders.
8
Then why did the US government create all of those Free Trade Agreements that economically required US businesses to relocate their Jobs to foreign nations?
Do you think that maybe the foreign product manufacturers that export consumer products to the USA might have paid professional US lobbyists to spend hundreds of thousands of US dollars on wine, food, women, song, pre-paid vacations in Spain, cash, pre-paid sexual services, corporate jobs for the (otherwise unemployable) children/wives/girlfriends of enough of the US senators and US congressmen (and their congressional aides who actually control the members of congress) plus campaign contributions to influence/entice (bribe) enough of our Republican and Democratic US presidents, congressmen, and senators for the past 20 years to create all of that "Free Trade Agreement" legislation that allowed, caused, and economically required our businesses to take advantage of the lower labor costs, lower electrical energy costs, lower business taxes, lower payroll taxes to pay for health care costs, lower unemployment insurance costs, lower environmental manufacturing costs and other anti-business costs that are not required in various foreign countries with fewer anti-business laws than are/were applicable to businesses in the USA?
Do you think that maybe the foreign product manufacturers that export consumer products to the USA might have paid professional US lobbyists to spend hundreds of thousands of US dollars on wine, food, women, song, pre-paid vacations in Spain, cash, pre-paid sexual services, corporate jobs for the (otherwise unemployable) children/wives/girlfriends of enough of the US senators and US congressmen (and their congressional aides who actually control the members of congress) plus campaign contributions to influence/entice (bribe) enough of our Republican and Democratic US presidents, congressmen, and senators for the past 20 years to create all of that "Free Trade Agreement" legislation that allowed, caused, and economically required our businesses to take advantage of the lower labor costs, lower electrical energy costs, lower business taxes, lower payroll taxes to pay for health care costs, lower unemployment insurance costs, lower environmental manufacturing costs and other anti-business costs that are not required in various foreign countries with fewer anti-business laws than are/were applicable to businesses in the USA?
2
"Globalization has benefited ..... the United States". No it hasn't -- if the United States means a typical American citizen. Globalization has benefited the bipartisan elite, people like Mr. Rattner. Even though Mr. Rattner presents some of the evidence against globalization, his pocketbook and his ideology(free-trade dogma worshipped by bought-and-paid for economists) preclude his coming to the conclusion that globalization has failed average Americans. The only thing I remember seeing in this paper that honestly presents the results of globalization for typical Americans is Paul Theroux's
The Hypocrisy of Helping the Poor its reader comments
The Hypocrisy of Helping the Poor its reader comments
5
In a rigged democracy™ 'populism' (concerns for ordinary people) is a bad word.
One of my favorite quotes:
"It is difficult to get a man to understand something, when his salary depends upon his not understanding it." -Sinclair
One of my favorite quotes:
"It is difficult to get a man to understand something, when his salary depends upon his not understanding it." -Sinclair
5
The compassion of Rattner's audience is overwhelming. Why should they care, they're not impacted by this issue. You can bet if they were, cries for help would be heard across the land.
5
Thanks for acknowledging the "losers" of globalization. Hopefully the democrats who claim to support working people will stop pushing these disastrous deals (NAFTA, WTO, TPP, etc.) for the benefit of their corporate sponsors (sorry I meant to say "campaign contributors"). We really need at least one more major party in this country in the long run. In the short run we should elect Bernie Sanders.
8
Free trade has been a scam the rich have been pushing for years. Their dream is realized: to pit the global labor pool against each other in ever declining wages. They've won.
5
It’s not only morally wrong to take from hardworking Americans and give it to those who sit on their couches all day, but it will also end badly politically, as the ascendant candidacy of Donald J. Trump directly following Barack H. Obama's presidency illustrates.
1
"...we need to be sensitive to the losers and try to help. "
Yeah - thanks for that bon mot.
Now that the heavy lifting is done - I guess we can move right along to explicit policy ideas.
Yeah - thanks for that bon mot.
Now that the heavy lifting is done - I guess we can move right along to explicit policy ideas.
2
"As I looked out at my audience, I realized that the room was filled with winners — folks who, from all appearances, earned their livings from intellectual labor. Neither their jobs nor their wages were in jeopardy as countries ranging from Vietnam to Colombia became more competitive with us."
Just you wait Mr. Rattner, just you wait. I dare say your column will be written by an AI program in the future. Find out about H-1B visas. Investigate the technical possibilities of offshoring nearly all intellectual jobs (among which I do not really include superficial "opinion making") to be closer the industries they support, which have already left. For one thing, would you rather discuss a software change enabling a new production efficiency with someone who speaks your own language, or not?
In short, "as you look around" is not a substitute for penetrating insight into where things are headed.
Just you wait Mr. Rattner, just you wait. I dare say your column will be written by an AI program in the future. Find out about H-1B visas. Investigate the technical possibilities of offshoring nearly all intellectual jobs (among which I do not really include superficial "opinion making") to be closer the industries they support, which have already left. For one thing, would you rather discuss a software change enabling a new production efficiency with someone who speaks your own language, or not?
In short, "as you look around" is not a substitute for penetrating insight into where things are headed.
5
We need to think about how capitalism will work once there is no work for the majority of the population, that day will surely come. And to remember the Constitution itself does not ordain capitalism.
1
If any foreign manufacturer wants to sell in the U.S. market the mandate should be that the product be made in the U.S. This started under Reagan (gasp) and the Japanese took it seriously for awhile. That is why Honda is in Ohio, Toyota in Kentucky and Nissan is in Tennessee. Then the U.S.-based automakers howled over tax breaks that went to their competitors in non-union plants. The answer: NAFTA. Lots of cheap hands in Mexico. Workers can't buy new cars on $7 jobs. So the Japanese, Koreans, and others are in Mexico. Why is Germany a top exporter with national health all the rest? The winners here just want it all without paying their fair share in taxes.
We need job training for kids and bring back the stuff we used to make. This is loss of ordinary jobs for ordinary people is a bigger threat to the U.S. and ISIS.
We need job training for kids and bring back the stuff we used to make. This is loss of ordinary jobs for ordinary people is a bigger threat to the U.S. and ISIS.
1
We are building a nation where you are either born rich or become a successful entrepreneur. Otherwise your means of livelihood has an expiration date and you should contemplate leaving the USA for a work/job oriented country.
Mr. Ratner is right about the rise of Donald Trump. Those who have not found a reason or means to emigrate to a job/work country are now in The Donald camp.
Mr. Ratner is right about the rise of Donald Trump. Those who have not found a reason or means to emigrate to a job/work country are now in The Donald camp.
3
The system we have created rewards capital and punishes work.
It's upside down. Companies do everything in their power to reduce their US payrolls, to shift the work to contractors, to get rid of skilled and experienced employees and managers.
The true driving force behind our capitalism is not the quest for efficiency or return on invested capital. It's simply power - the extraordinary influence given to activist shareholders and a small group of top executives who have gamed the corporate governance system to their advantage.
It's upside down. Companies do everything in their power to reduce their US payrolls, to shift the work to contractors, to get rid of skilled and experienced employees and managers.
The true driving force behind our capitalism is not the quest for efficiency or return on invested capital. It's simply power - the extraordinary influence given to activist shareholders and a small group of top executives who have gamed the corporate governance system to their advantage.
6
I suppose your perception of whether or not globalization has helped the world depends on what you define that "help" to be.
As I see it it has been an unmitigated disaster for the USA in every way. Ot has harmed every level of our society so badly that we are now nearly a third world nation in most parts of the country outside large well off metro areas.
The only way it can be defined as a success is if we only take into account those whom have made money from it. At a guess I'd say that number of people is well below 100K, which is to say insignificant in a sea of 300M+.
As I see it it has been an unmitigated disaster for the USA in every way. Ot has harmed every level of our society so badly that we are now nearly a third world nation in most parts of the country outside large well off metro areas.
The only way it can be defined as a success is if we only take into account those whom have made money from it. At a guess I'd say that number of people is well below 100K, which is to say insignificant in a sea of 300M+.
6
It is not either globalization or technology that creates this dire circumstance for workers. It is both. It is easier to claim that it is technology for that can be made to seem less human. Globalization on the other hand is a direct decision by corporate people who only consider profits. In some ways this double barreled whammy are two sides of the same coin, an attack on workers.
But who are we making these products for? And who will buy them as wages and income crash? These articles are written by the.01 percent so moralizing the issue means nothing. We need solid efforts by the federal government to address income disparity on all levels, but don't hold your breath as that same government is in the pocket of theprofiteers that create the problem.
But who are we making these products for? And who will buy them as wages and income crash? These articles are written by the.01 percent so moralizing the issue means nothing. We need solid efforts by the federal government to address income disparity on all levels, but don't hold your breath as that same government is in the pocket of theprofiteers that create the problem.
3
The same political culture that sends our jobs overseas, is the one that uses a privately financed big money election campaign system. That’s how both wealth and political power gets more concentrated in the hands of the few. Office holders depend on big money to run and hold office. Pres Jimmy Carter called that oligarchy. Maybe the US is becoming like a colonial country, colonized by its own corporations.
As the profits pile up, they direct our govt policies even more, until the majority of citizens has little input to govt policy. It’s a vicious cycle, removing democracy as we line up to vote for nominees set up for us to choose from.
We need an article now on what other advanced countries do to balance their economies, and protect their citizens from the effects of globalization---less off shoring of mfg jobs, and more acceptance of unions to start, and then how they finance elections.
Here it's impossible under our private financing of campaigns.
Can we start talking Citizens United, Mr. Rattner?
Citizens United is creating a disunited states of political division and economic disparities. All works together with globalization.
Why isn’t their a regular NYT columnist talking about this?
As the profits pile up, they direct our govt policies even more, until the majority of citizens has little input to govt policy. It’s a vicious cycle, removing democracy as we line up to vote for nominees set up for us to choose from.
We need an article now on what other advanced countries do to balance their economies, and protect their citizens from the effects of globalization---less off shoring of mfg jobs, and more acceptance of unions to start, and then how they finance elections.
Here it's impossible under our private financing of campaigns.
Can we start talking Citizens United, Mr. Rattner?
Citizens United is creating a disunited states of political division and economic disparities. All works together with globalization.
Why isn’t their a regular NYT columnist talking about this?
4
Citizens United is only one of many supreme court decision based on some law clerk inserting a clause into a decision over a hundred years ago that made corporations persons under the 14th amendment (which was written to make former slaves into citizens).
The supreme court has been giving corporations (even those based in other countries) more rights than humans with fewer responsibilities. (Notice that corporations cannot serve on a jury, get drafted, or go to jail, and their officers are rarely held responsible for their actions even when they crash the world economy.)
We must pass an amendment to the constitution:
"Corporations are not People and Money is not Speech."
Overturning Citizens United is not enough, the justices will find other ways to empower these paper persons to make government policy.
Those of us who are against centralized decision making should be most for this amendment.
1% of the world's population now has as much wealth and far more power than the poor half of the planet. They control the biggest corporations and most governments. Power has never been more centralized. They pick winners (themselves) and losers (everyone else) and are not creating jobs, but destroying the world economy.
There is already a movement to get this done, and hundreds of states, towns and other localities have endorsed this or. similar language. But everyone who believes in democracy must support this effort.
The supreme court has been giving corporations (even those based in other countries) more rights than humans with fewer responsibilities. (Notice that corporations cannot serve on a jury, get drafted, or go to jail, and their officers are rarely held responsible for their actions even when they crash the world economy.)
We must pass an amendment to the constitution:
"Corporations are not People and Money is not Speech."
Overturning Citizens United is not enough, the justices will find other ways to empower these paper persons to make government policy.
Those of us who are against centralized decision making should be most for this amendment.
1% of the world's population now has as much wealth and far more power than the poor half of the planet. They control the biggest corporations and most governments. Power has never been more centralized. They pick winners (themselves) and losers (everyone else) and are not creating jobs, but destroying the world economy.
There is already a movement to get this done, and hundreds of states, towns and other localities have endorsed this or. similar language. But everyone who believes in democracy must support this effort.
3
The number that sticks in my craw is that Financial Services was up +10.7 %. Do we really need all those bankers and stockbrokers?
4
We often hear about fixing the infrastructure in our country. This would be a great beginning to address the problem of job creation and working wages not to mention the tremendous need for it. Politicians are so taken up with being the runners for their corporate supporters that projects and funding that would help address the problem of what to do with those left behind sit on the back burner. We have many bright, creative people in this country. It is not a problem of how to create jobs, not just for the sake of creating jobs, but creating jobs that would help all of us, help improve the quality of life in this country. There is not the will to do so as long the people making decisions have their pockets lined by the very people interested in padding their own pockets as well and who can make much more money by having their operations overseas. Do corporations owe anything to the American people? Are they morally obligated to help those left behind? This is a personal belief that can't be legislated; however, we can legislate making the rules of the game more fair so the game is not tipped in favor of those at the top. To do so could create opportunity for those left behind.
6
American cars keep losing market share because consumers know the cars are going to give them problems and eventually they will be stuck with a lemon. One of the first cars I owned was a Ford Taurus that was prone to rusting motor mounts. Ford Motor delayed as long as it could to order a recall (9 years after my car delivery). By that time I had already paid to fix the car and it had died so I no longer had the title to the car so I could not claim the repair cost back from Ford. After that experience, I have not purchased an automobile manufactured by the Detroit Big 3. There are millions of customers like me that Detroit has lost for ever. The recent recall problems of GM and Chrysler, tell me my hunch in avoiding them is correct. When a company hides or delays recalls, you can be sure you will be stuck with big bills on a lot of other items too which do not rise to the level of a recall but will still be significant costs to the consumer. After their bankruptcy rescue, GM and Chrysler are back to peddling their clunkers with subprime loans and beating wall street expectations every quarter and chasing the next fad like the SUV, Pickup or the Hummer. During the next downturn all these subprime cars will be back on the dealer lots worth pennies on the dollar asking for another taxpayer rescue. Both Management and Labor are equally responsible for this loss in trust. Bankers like Steve Rattner do not understand that once you lose a customer, you lose them for life!
4
There are winners and losers in the global marketplace. Detroit is a loser because they never learnt to build a quality car. They try to sell their cars based on financing, the latest fads, dealership hard sell, deal of the month, anything but the car itself. The buyers who buy Detroit's subprime cars know that bankers like Steve Rattner and the taxpayer will be stuck fixing the cars when they are repossessed in the next downturn so they don't care about the quality. The real customers, who pay for cars out of their income and savings abandoned Detroit long ago. You can blame globalization but the real blame should be on the myopic management which lives quarter to quarter and the myopic trade unions who think their members are their only customers.
2
This is relatively old news to the vastly wealthy who financially secure their and their families futures in this transitional time and for generations to come, leaving working people behind, and democracy, which is becoming obsolete due to globalization, robotics, and techno-investing tools allowing the wealthiest to dominate investment markets. The wealthiest hoard money equaling trillions of dollars, while leaving distribution, redistribution of resources less and less possible. Again, one of the numerous reasons that I am voting for Sanders.
5
Democracy is more important than ever. Time to create one.
2
The solution is not so difficult were we politically willing. We could simply couple free trade policy with an expanded safety net for workers who lose their jobs. You lose your job to outsourcing, you get full unemployment benefits + job training and placement services. Who pays? Everybody, but you can also penalize companies who outsource. The most troubling aspect of the TPP debate last year was this idea that "free trade is good for us" and we shouldn't expect any political trade off for our support of it.
58
Free trade means free for multi-nationals to offshore jobs to the cheapest provider, with no regulations. It's free for them, not free for you and me, as we supplement these blood suckers with our tax dollars, and then to add insult to injury, we have to pay for the produce we've supplemented! Where's the sustained outrage for both the multi-nationals AND the politicians who serve them?
2
The better wage comparison would have been to compare the costs in the auto industry rather than overall manufacturing.
OTA reports predicted this back in the late 1980s. And the issue is not either / or. Both globalization (outsourcing, H1Bs, low wage in-migration, influx of foreign students) and automation, including tellers as well as robotics and machine tools, lawyers, analysts, and soon, nurses, doctors, wait staff and all manner of drivers. No labor anywhere has safe jobs. Monopoly is nearing the end game where a few owners of capital have all the properties on the board.
3
This conversation needed to happen years (and years) ago. Starting it now is better than nothing, but the masses want these problems Fixed Now, and a Return To America's Greatness--whatever that's supposed to look like in 2016--no matter how big the delusion or how bad the effects.
2
“Last point,” I said to the 100 or so guests: Average manufacturing compensation costs (includes wages and benefits) in the United States in 2012 were $35.67 per hour; in Mexico, they were $6.36 per hour. “And American auto executives will tell you that the productivity they get in Mexico is at least as good as what they get in the United States.”
But the quality of the work is often shoddy. I realize this is only anecdotal but I had brake work done on two separate Fords a few years apart. When the brakes were made in Canada or the US, the pads fit like a glove. When they were made in Mexico, the mechanic had to order eight sets to get four that weren't sloppy. Ford didn't care because until somebody gets killed sues they're saving money. And, if the lawyers get involved, well that's what they're there for. The trouble is that corporate responsibility has largely disappeared: they don't care about their products, they don't care about their customers, they only care if it affects the rich people on the board of directors and their larger shareholders (other rich people).
The rest of us are schlemiels.
But the quality of the work is often shoddy. I realize this is only anecdotal but I had brake work done on two separate Fords a few years apart. When the brakes were made in Canada or the US, the pads fit like a glove. When they were made in Mexico, the mechanic had to order eight sets to get four that weren't sloppy. Ford didn't care because until somebody gets killed sues they're saving money. And, if the lawyers get involved, well that's what they're there for. The trouble is that corporate responsibility has largely disappeared: they don't care about their products, they don't care about their customers, they only care if it affects the rich people on the board of directors and their larger shareholders (other rich people).
The rest of us are schlemiels.
13
Isn't it obvious? Those of us who are left out of the "global economy" for whatever reason - skills no longer needed after decades of honing, age 50+ women just because of age (and what's the point of post-menopausal women anyway), those unfortunate ones who can't afford expensive colleges, etc - are supposed to crawl away and die. No social safety net for you, crappy medical benefits after you've spent down all your savings before going on welfare, poisoned water and food. All these actions send the message that we should just go away and die, as soon as possible please.
15
Mr. Rattner, like so many others, misidentifies the problem as NAFTA when the actual problem was the betrayal of the spirit of NAFTA before the ink was dry. How? By leapfrogging Mexican maquiladoras and sending jobs to China instead.
If even a small portion of the US corporate FDI(foregin direct investment) into China had gone to contiguous countries like Mexico we wouldn't have seen nearly the influx of undocumented workers into this country.
Neither the Peterson Institute, the Brookings Institution, nor Mr. Rattner want talk about that because they were extremely "rah rah" about "engagement" policy with China in real time.
If even a small portion of the US corporate FDI(foregin direct investment) into China had gone to contiguous countries like Mexico we wouldn't have seen nearly the influx of undocumented workers into this country.
Neither the Peterson Institute, the Brookings Institution, nor Mr. Rattner want talk about that because they were extremely "rah rah" about "engagement" policy with China in real time.
6
Tax inversion, and global labor arbitrage. Maybe there is no stopping the animal nature of our species. The Romans couldn't do it, the Vatican couldn't do it. The closest we have gotten is democratic Scandinavia. Greed may be too close to the base of our wiring. Haves and Have-nots have been the two sides of wars for all our history. We are at a cross roads perhaps. Or perhaps not...
http://www.usatoday.com/story/money/2016/01/25/johnson-controls-tyco-int...
http://www.usatoday.com/story/money/2016/01/25/johnson-controls-tyco-int...
1
You can now say it is not good for jobs to leave the U.S. That is a start. Next, can we say it is not good either for workers to be brought into this country illegally or by evasion of the law?
4
Massive outsourcing is the root cause of our problems. It has only one goal to level all countries so they all look the same. Poor and hungry Including the USA.
3
It is not animal that when a benefit is accrued it only goes to the leader of the pack. It is obvious that this would make a very weak wolf pack, for example.
So explain to me why, in a human pack, it works differently. If a new production method is introduced, the company and the stock holders all benefit, but the workers do not. The workers don't get shorter work weeks, or better health care, or longer vacations or earlier retirement. They get fired.
Seems like it makes a weak wolf pack. So, if america is weak, it is because the leaders are not doing their job and supporting the pack. They are taking all of the benefits to themselves.
So explain to me why, in a human pack, it works differently. If a new production method is introduced, the company and the stock holders all benefit, but the workers do not. The workers don't get shorter work weeks, or better health care, or longer vacations or earlier retirement. They get fired.
Seems like it makes a weak wolf pack. So, if america is weak, it is because the leaders are not doing their job and supporting the pack. They are taking all of the benefits to themselves.
9
I am a liberal (maybe even a democratic socialist) because it is more efficient and frugal.
It is cheaper to help a young person get educated, help them with rent and groceries, and give them a decent paying job than it is to house them in prison.
It is also far more moral and decent.
The incident in Flint, MI is a perfect example of the right wing effort to save a couple of bucks in the short term resulting in massive amounts of money being spent to fix the problem their short sightedness caused in the first place.
We have been trying for the last 35 years, while bowing down to the tinkle down effects of Reagan's supply side economic fantasy, to run this huge enterprise of a Nation on the cheap. It just can't be done.
It is cheaper to help a young person get educated, help them with rent and groceries, and give them a decent paying job than it is to house them in prison.
It is also far more moral and decent.
The incident in Flint, MI is a perfect example of the right wing effort to save a couple of bucks in the short term resulting in massive amounts of money being spent to fix the problem their short sightedness caused in the first place.
We have been trying for the last 35 years, while bowing down to the tinkle down effects of Reagan's supply side economic fantasy, to run this huge enterprise of a Nation on the cheap. It just can't be done.
11
There are many people in every population - whether it be a nation, a state, a metropolitan area - who can do little more than put a square peg in a square hole. And they can do it over and over without getting bored. The US needs jobs like this because there are people like this, and humans need a means to provide shelter, food, and medical care for themselves. We live in an industrialized economy which means that people need money to buy those things. The money needs to come from some where. We should have industries that involve putting square pegs in square holes so that all may provide for themselves, and have the freedom to spend the money earned as they see fit.
3
Does anyone remember the French Revolution, what happened in Russia in 1917, Mao's takeover of China, etc.? These were reactions to the extremes in income distribution and the lack of opportunity for those born to the wrong parents. The results of these, and other revolutions, did not always have a good effect for anyone especially the very, very rich who hoarded their money. In some cases these revolutions made way for even more corruption and death. Is this what our elite financial and CEO classes want in this country? If not maybe they'd better think about how they go about enriching themselves and their corporations.
2
Yes, that is what "they" want.
The more corruption in a society the more money can be extracted from it. This is why nearly all "former" colonies in Africa and Asia have corrupt governments and the social systems in their society cannot ever seem to make it stable even though the people met in person appear to be perfectly normal and intelligent enough to run the country well.
Their society has been corrupted by the infliuenc of money in a starkly have and have not society.
Equity is the answer and enforced Fairness in business is how that is established and maintained. This is why the GOP since reagan harps so hard on regulation. You can;t have a corrupt society if it is well regulated and fairness is enforced.
The more corruption in a society the more money can be extracted from it. This is why nearly all "former" colonies in Africa and Asia have corrupt governments and the social systems in their society cannot ever seem to make it stable even though the people met in person appear to be perfectly normal and intelligent enough to run the country well.
Their society has been corrupted by the infliuenc of money in a starkly have and have not society.
Equity is the answer and enforced Fairness in business is how that is established and maintained. This is why the GOP since reagan harps so hard on regulation. You can;t have a corrupt society if it is well regulated and fairness is enforced.
2
Thank you, thank you, thank you. Pairing redistribution with free trade is the obvious solution to any free trade debate, but it never seems to be discussed. If free trade creates wealth, then it should be pursued. But if that new wealth benefits only a few people to the detriment of many, then of course there should be some kind of compensation (through redistribution) to those who suffer from it. The question should not be whether or not to have free trade, but how we should share its benefits and burdens.
53
Instead of a tax redistribution, how about just not utilizing free trade accords?
The reality is that they only help the wealthy and there is no denying that.
If there was no free trade, there would be plenty of jobs. Simple as that.
The reality is that they only help the wealthy and there is no denying that.
If there was no free trade, there would be plenty of jobs. Simple as that.
2
What happens when the problem is looked at through the other
end of the telescope, so to speak? Of all the ways an American
can descend into poverty through lack of employment, what is
so special about the loss of his job to someone overseas?
A few generations ago, the textile industry saw a huge flow
of jobs from pricey New England to the cheaper South. Is the
problem any different when the gradient is across the
national border instead of state borders?
end of the telescope, so to speak? Of all the ways an American
can descend into poverty through lack of employment, what is
so special about the loss of his job to someone overseas?
A few generations ago, the textile industry saw a huge flow
of jobs from pricey New England to the cheaper South. Is the
problem any different when the gradient is across the
national border instead of state borders?
2
The economist's mantra, that globalization is good, is nothing but snake oil. Yes, it helps the rich get richer faster, but its benefits to the rest of us are illusory. It has cost the US huge job losses, and has deluged the local Walmart with cheap, poorly built Chinese products that last a week. Global companies transcend governments pitting one country against the other like cities competing for a football team. Economics is truly the dismal science practiced by people inhabiting ivory towers.
6
Tell me how a company in Canada can sue the US Government (we the people/taxpayers) for not allowing Keystone Pipeline? Many other suits brought forth against governments by corporations.
When these trade agreements are written for corporations who have become so all powerful, greedy and more money than most governments, then these trade agreements should not exist.
When these trade agreements are written for corporations who have become so all powerful, greedy and more money than most governments, then these trade agreements should not exist.
3
Gloalization is not going away. It will become more robust. We are in an era where economies and governments are changing. These times are tough and will continue to be so for the middle aged man who got such high wages from relatively low skill manufacturing jobs. There is not much hope for these peoples future, but for the young there is. Get skilled and educated in computer, engineering, scientific and service technologies. This is where the jobs of the future will be.
3
No those are the jobs for H1B visa holders.
7
Not everyone has the natural ability for those jobs. It's just a fact. Some people are good with their hands. What do we do with them? Have them flip burgers?
3
When you think about it, taxing the rich isn't a solution to the problem. It's a postponement of a solution to the real problem. A tiny minority controls the bulk of capital, makes all the decisions about business and the economy, and sets the rules for what affects masses of people. We have political democracy because we knew that was garbage. We should economic democracy because the same is true.
I read the article. Did I miss something? What IS our duty to the people globalization left behind, i.e. blue collar American workers who's jobs went to poorer people who work for less? The article doesn't offer any solutions. Can they have their good jobs back? Probably not. So, then what-- charity? There's really no good solution. It's very sad. People's lives have been ruined so that the heads of major corporations can prosper.
9
Trade taxation formulas need to be based on equivalency of the exporting country's labor and environmental regulations. If the exporter doesn't pay overtime, regulate emissions or provide workers equivalent benefits the imported good need to be taxed to compensate. Safety standards also need to be measured and equivalency demanded in lieu of taxation. If these factors are built into the pacific trade agreement, let it proceed. The US has sacrificed more than its fair share to raise the worlds wages, it's time for the world to raise its standards. It's also time for the profiteers to pay up for all the things that we need to regroup and grow again.
1
I'm not ready to agree that "globalization incontrovertibly has benefited. . . the United States" because we have "added purchasing power" to buy cheap imported goods. There are an untested assumption and an unexplored choice buried in that statement.
The untested assumption is that the ability to buy cheap stuff at "Store W" and "Store T" and their ilk is an unalloyed good that automatically outweighs any effects that it might have on the economy, on people, on the environment and so on. It's a classic case of externalities. Cheap imported toys, shoes, etc. are putting people out of work and pushing them into lower wage jobs. If income inequality is increasing, as it has been, that added purchasing power is benefiting the few, not the many.
The unexplored choice is that the American worker, the American voter and the American small shareholder (like many of us trying to save for retirement) aren't being asked whether this is the world we want. In fact we have denialists saying there are no alternatives. Is that true? Especially as the US approaches energy independence. Could we take a clean sheet of paper and sketch out a largely self sufficient US economy in which toys and coffee pots might cost a little more and all of us would have a bit less stuff, but we'd also be better off overall? It might take more top-down mandates that we can stomach to implement the full vision, but we first have to see it to be able to decide how far in that direction to go.
The untested assumption is that the ability to buy cheap stuff at "Store W" and "Store T" and their ilk is an unalloyed good that automatically outweighs any effects that it might have on the economy, on people, on the environment and so on. It's a classic case of externalities. Cheap imported toys, shoes, etc. are putting people out of work and pushing them into lower wage jobs. If income inequality is increasing, as it has been, that added purchasing power is benefiting the few, not the many.
The unexplored choice is that the American worker, the American voter and the American small shareholder (like many of us trying to save for retirement) aren't being asked whether this is the world we want. In fact we have denialists saying there are no alternatives. Is that true? Especially as the US approaches energy independence. Could we take a clean sheet of paper and sketch out a largely self sufficient US economy in which toys and coffee pots might cost a little more and all of us would have a bit less stuff, but we'd also be better off overall? It might take more top-down mandates that we can stomach to implement the full vision, but we first have to see it to be able to decide how far in that direction to go.
5
Mr. Rattner, do you actually think that money is the source of our wealth and our civilization, that the corporations and big investors make the world economy run, and that everyone else on the planet are takers and parasites who we have a moral obligation to manage humanely? What is our duty to the people left behind by globalized trade? Nothing. The load sucking sound of our infrastructure and the disappearance of the mass market for all those cheap goods produced by all the great globalized manufacturing will bring the fun to an end. It's true that the kind of profits that business is reaping from the global trade strategy are huge but the people who buy all those goods are not getting any richer, if anything they are falling behind with stagnant incomes as the cost of everything climbs. What is going to happen is that if China and India finally are able to provide a large enough middle class to replace that which has been provided by the U.S. to consume all the new goods from the global economy, the businesses will continue to profit but no longer from the U.S. When that happens, the infrastructure and the modern way of life in the U.S. will become completely unaffordable, and the rich guys will live in gated and moated communities surrounded by a third world country with dirty roads, wells, and subsistence farming.
3
The fatal flaw of the author and of some of the commentators is the presumption that there is a moral obligation here. There is no such obligation. When disaster strikes, be it an earthquake, flood, or bomb, there is no obligation to help those affected. That is why it is so utterly amazing to witness the reaction in our communities. We normally DO see a substantial response by caring Americans to help those who have suffered in some way. However, what makes us proud and what makes those reactions truly magical is that they are not compulsory. They are 100% voluntary. Otherwise we wouldn't see what we see, and we wouldn't feel what we feel about those moments. We don't see people trudging out simply to fulfill their duty or moral obligations. We see people leaving their homes eager to help. I am the same. I help people out of empathy. As the saying goes, "If not for the grace of God, there go I." I feel a desire to help others; I do not feel an obligation.
Thus it is the same with unemployment. There is no moral obligation to look after those affected by globalization or technology. Does Uber really have a duty of care to look after taxi drivers around the world who will lose out due to its technology? I say no. Rather, it is incumbent upon all of us to keep pace with what is happening to the companies we work for, the industries we work in, and trends in the market. Each must know when it is time to "jump ship" and to sell one's labor to another buyer.
Thus it is the same with unemployment. There is no moral obligation to look after those affected by globalization or technology. Does Uber really have a duty of care to look after taxi drivers around the world who will lose out due to its technology? I say no. Rather, it is incumbent upon all of us to keep pace with what is happening to the companies we work for, the industries we work in, and trends in the market. Each must know when it is time to "jump ship" and to sell one's labor to another buyer.
3
But workers are no longer needed. Living wage jobs have been replaced by part time temporary low wage jobs. Poverty continues to climb, as the middle class continues to shrink. We can expect more of the same. And this is good? For whom? For you?
The operative word here is "living." Living in America is becoming more and more precarious. There are not enough American jobs and communities are dying. Many people are just doing without; or performing several jobs simultaneously; or being paid inadequately for parttime work, or dreading being let go-- it is happening at the New York Times, banks, and in every other industry. The squeeze is continuous and unidirectional--if American leaders don't change course soon, most Americans are going to be fully convinced that life here is uncertain and unfair. A peaceful country cannot continue if most citizens feel that way.
13
What you - not I, as I'm not part of your ultra-rich crowd - owe the American people is 20+ million good-paying middle class jobs and a hundred thousand factories that were moved primarily to China.
We need to bring those factories and those jobs back to America if we are to have any real hope for America not becoming a third-world nation. There are ways to could start to reverse the hollowing-out of America:
1 - preference should be given to American-made goods at all levels of spending by the American government and military. We must buy American-made, for national security if for nothing else.
2 - tariffs should be re-installed as a protective device. Yes, I mean the tariffs that the multinational corporations dread so much but that virtually every other country usea to protect their own fragile industries. Begin with steel to bring back our once-strong steel industry, and move all the way to fabrics, another destroyed American powerhouse.
3 - if necessary, leave the World Trade Organization. China ignores it in any case, pleading that they're a developing nation at the same time that they have the hottest and outside of financial services, largest manufacturing economy in the world. Level the "playing field."
4 - invest in bringing our battered crumbling infrastructure up to world-class standards. Roads, bridges, electrical grid, internet, airports, high-speed trains, water resources.
Then we'll have a chance at restoring America.
We need to bring those factories and those jobs back to America if we are to have any real hope for America not becoming a third-world nation. There are ways to could start to reverse the hollowing-out of America:
1 - preference should be given to American-made goods at all levels of spending by the American government and military. We must buy American-made, for national security if for nothing else.
2 - tariffs should be re-installed as a protective device. Yes, I mean the tariffs that the multinational corporations dread so much but that virtually every other country usea to protect their own fragile industries. Begin with steel to bring back our once-strong steel industry, and move all the way to fabrics, another destroyed American powerhouse.
3 - if necessary, leave the World Trade Organization. China ignores it in any case, pleading that they're a developing nation at the same time that they have the hottest and outside of financial services, largest manufacturing economy in the world. Level the "playing field."
4 - invest in bringing our battered crumbling infrastructure up to world-class standards. Roads, bridges, electrical grid, internet, airports, high-speed trains, water resources.
Then we'll have a chance at restoring America.
11
" invest in bringing our battered crumbling infrastructure up to world-class standards. Roads, bridges, electrical grid, internet, airports, high-speed trains, water resources."
This might be possible if the democrats would drop their demands that all infrastructure work be done by union workers who would then kickback most of their union dues (an estimated 5+% of all infrastructure funding) to the democrats. The GOP would be stupid to allow such an arrangement that puts money in the pockets of their rivals.
Perhaps as a compromise, states with right to work laws could use non-union labor for infrastructure repairs and those without such laws could require only union workers. When all the work was done, it would be interesting to compare the quality and cost effectiveness of union and non-union workers.
This might be possible if the democrats would drop their demands that all infrastructure work be done by union workers who would then kickback most of their union dues (an estimated 5+% of all infrastructure funding) to the democrats. The GOP would be stupid to allow such an arrangement that puts money in the pockets of their rivals.
Perhaps as a compromise, states with right to work laws could use non-union labor for infrastructure repairs and those without such laws could require only union workers. When all the work was done, it would be interesting to compare the quality and cost effectiveness of union and non-union workers.
3
Good post Porter. We used tariffs in the past to help fledgling industries get strong. We also have to find a way to punish the corporations going to other countries to avoid taxes. We need a way to keep them out of our markets.
1
It took 164 comments but you finally played the "union card". Highway costs in NJ are over 4 times that of New York (which is less than Florida, a "right to work" state) and 12 times the national average. Please don't bring the NJ corruption and mismanagement problems into a conversation on outsourcing American jobs.
2
"[globalized] trade permits Americans to buy goods at lower prices; the added purchasing power helps our economy expand faster."
The unmentioned assumption is that the consumers are maintaining or increasing their incomes to retain that purchasing power which can be directed to help our economy expand faster. The reality is that because too much of the new wealth is not getting back into our domestic economy people's incomes have not increased in a dozen years and those who lost good paying jobs have not been able to replace them.
My grandfather used to say that if you do not need it, you do not save anything by buying it. One could also assume that if the result of lower priced goods is having one's income reduced at least as much as the savings on the goods, one is not going to have additional money to be able to buy other things from the cost savings.
The unmentioned assumption is that the consumers are maintaining or increasing their incomes to retain that purchasing power which can be directed to help our economy expand faster. The reality is that because too much of the new wealth is not getting back into our domestic economy people's incomes have not increased in a dozen years and those who lost good paying jobs have not been able to replace them.
My grandfather used to say that if you do not need it, you do not save anything by buying it. One could also assume that if the result of lower priced goods is having one's income reduced at least as much as the savings on the goods, one is not going to have additional money to be able to buy other things from the cost savings.
8
"globalization incontrovertibly has benefited not only the world but also the United States"
If only we had exerted our considerable influence to make globalization a force for good; economically, socially, environmentally, and politically. We blew an opportunity with the greatest combination of carrot and stick that we have (had). Instead we let greed trump all other considerations, including national security.
If only we had exerted our considerable influence to make globalization a force for good; economically, socially, environmentally, and politically. We blew an opportunity with the greatest combination of carrot and stick that we have (had). Instead we let greed trump all other considerations, including national security.
5
How can globalization--which is devastating America's middle class, left millions in our former blue collar class not only jobless but homeless, and (via austerity policies) destroying desperately needed social services--be considered a success by anyone but the 1%?
Once the average American's money has finished draining into the 1%'s pockets, who will still be buying those much-vaunted inexpensive consumer goods?
Some folks explain that the new group of consumers will be in other countries, where wages might creep up from 50 centers a day to, perhaps, 2 or 3 dollars. Should America celebrate by continuing to hand out special tax breaks to corporations and billionaires?
Once the average American's money has finished draining into the 1%'s pockets, who will still be buying those much-vaunted inexpensive consumer goods?
Some folks explain that the new group of consumers will be in other countries, where wages might creep up from 50 centers a day to, perhaps, 2 or 3 dollars. Should America celebrate by continuing to hand out special tax breaks to corporations and billionaires?
1
The fact that they wouldn't let you talk says a lot. People bemoan the rise of Trump and Sanders but these policies have led to this. When college students graduate they aren't guaranteed a job. I have three children in their twenties. All have had to go back to school because of limited job opportunities. My daughter who was a straight A student and majored in Communications works at a few part time graphic design jobs and waitresses to make extra money. She is going back to school for nursing. Another son had a similar experience and only found part time jobs with no benefits. He also went back to school. I can give you dozens of stories about their friends who went to good schools and are underemployed. The trade deals have caused good jobs to leave this country. H-1b visas have led to qualified American workers being laid off or forced to work at part time jobs. The people responsible for this have no loyalty to this country and the hard working middle and working classes who have made this country great. Their greed and disdain for for this country is evident.
117
Connecting the dots - one would have to permit that shifting auto employment to Mexico causes One problem in the USA, but solves another - those employed Mexicans won't need to cross the border.
We are still a rich country. We need to reduce outlandish defense spending and use the money to grant the non working poor a much better safety net, one that actually pays the rent.
1
Spot on. What we have lost is the middle and working classes' ability to trade their work for cash from the top of the economic ladder and to climb that same ladder. We need a different model for sharing the national wealth and your tax structure is the primary vehicle. But it won't last the first verbal broadside of: "redistribution!" We are doomed to the coming consequences.
3
There is another factor in lost factory jobs, one rarely discussed. Looking back to the WWII years, the U.S. == because of its huge factory base -- was able to supply itself and its allies with manufactured goods. That was even with the Asian and Central European sources cut off. That is why our side won.
9
Without government assistance workers displaced by the free-market will face a choice: starvation or revolution. This will be an interesting century.
5
At least he talks about the Mexican auto industry, but it should be noted that Vietnam and Colombia are NOT part of the North American Free Trade Agreement. Any jobs that went to Vietnam and Colombia, as well as any other country that is not Canada and Mexico, were NOT the result or in any way related to the North American Free Trade Agreement. If anything, NAFTA has raised working standards in Mexico, and if we are to have any influence over working and environmental conditions in other countries, it can only be done if we communicate with those other countries, by, for example, signing a treaty.
2
Globalization definitely does create its winners and losers. The biggest winners are not the consumers but the senior management of these firms who receive huge bonuses when profit rises. The losers are not limited to blue collar factory workers either. Gone with those manufacturing jobs are the many engineering jobs, we no longer have the needs for so many industrial, mechanical, chemical, computer, electrical engineers, as well as jobs like supply chain management specialists. We are losing our engineering edge to Asia.
In addition, globalization is increasingly eating into white collar workers lunch. Thanks to Indian outsourcing firms and the H1b visa scheme, more and more American workers in white collar jobs are being replaced by cheaper Indian workers imported from India through outsourcing. Entire IT departments are now disappearing, replaced by imported Indian workers, like the story profiled by the NYT yesterday about the lawsuit at Disney. The backoffice functions that are outsourced are not just limited to IT either, accounting is also increasingly being outsourced.
So not only are we losing manufacturing and engineering jobs to globalization, we are increasingly losing white collar jobs to globalization. Meanwhile, farm, service, restaurant and construction jobs are increasingly going to illegal immigrants. Then we wonder why white American suicide rate and drug addiction rates are at an all time high.
In addition, globalization is increasingly eating into white collar workers lunch. Thanks to Indian outsourcing firms and the H1b visa scheme, more and more American workers in white collar jobs are being replaced by cheaper Indian workers imported from India through outsourcing. Entire IT departments are now disappearing, replaced by imported Indian workers, like the story profiled by the NYT yesterday about the lawsuit at Disney. The backoffice functions that are outsourced are not just limited to IT either, accounting is also increasingly being outsourced.
So not only are we losing manufacturing and engineering jobs to globalization, we are increasingly losing white collar jobs to globalization. Meanwhile, farm, service, restaurant and construction jobs are increasingly going to illegal immigrants. Then we wonder why white American suicide rate and drug addiction rates are at an all time high.
12
I think its silly to expect a corporation or business to act morally for society. Corporations are godless soul-less money making machines. Place the whatever rules you need to upon them and they will play within that framework to optimize making money in the short term. It would be easier to teach a pig to read then enforce some sort of corporate morality requirements in business. And by the way, when you hear a corporation start to advertise that they are the good moral corporation, start looking for where the bodies are buried!
3
Yes, people buy cheaper goods because they have lost their jobs and their incomes. The problem with trade theory is that it starts with a simple micro-economic notion, that specialization in relatively higher productivity/value production will lead to higher GDP, a macroeconomic conclusion. It conveniently forgets the other micro-economic notion, that people in lower productivity/value production will become unemployed.
Now, when I took Econ. 101 in 1959, the Chicago Ph.D. assured the class that the low-wage foreign worker argument against free trade was false because the productivity differential outweighed the wage differential. This is no longer true. Moreover, we were assured that people losing their jobs would be rehired in those sectors that lost due to trade would readily find jobs in others that had gained. This might have been partially true at a time when skills were more readily transferable between occupations, but this is not true today. (We were also told that people who lost jobs due to automation would get jobs producing machines that replaced them.)
The "UPSHOT" is that the stuff produced by the Peterson Institute, among other "think tanks," is not based on something called "economic science," if such a thing exists, but is nothing more than ideology in the service of political action that favours certain economic groups. Astrology also has all the trappings of "science," but it is still astrology. Adam Posen's reliance on name calling proves the point.
Now, when I took Econ. 101 in 1959, the Chicago Ph.D. assured the class that the low-wage foreign worker argument against free trade was false because the productivity differential outweighed the wage differential. This is no longer true. Moreover, we were assured that people losing their jobs would be rehired in those sectors that lost due to trade would readily find jobs in others that had gained. This might have been partially true at a time when skills were more readily transferable between occupations, but this is not true today. (We were also told that people who lost jobs due to automation would get jobs producing machines that replaced them.)
The "UPSHOT" is that the stuff produced by the Peterson Institute, among other "think tanks," is not based on something called "economic science," if such a thing exists, but is nothing more than ideology in the service of political action that favours certain economic groups. Astrology also has all the trappings of "science," but it is still astrology. Adam Posen's reliance on name calling proves the point.
9
Based on these facts, it's not a difficult argument to make that globalization's economic "good" may well be outweighed by the societal "bad". If the result is increasing inequality, concentrated power in corporations, demeaning of labor through lost jobs and low wages, then it's hard to see how some dry economic efficiency is a good result. If it contributes to the rise of the Donald Trump and Ted Cruz's of the world, we are playing with fire. Going along with a race to the bottom as we worship corporate profit will lead us to a place we do not want to be, at least if you are not in the .1%.
9
And of course just yesterday we read in this paper that the Peterson Institute for International Economics, which the writer visited, put out a report praising the TPP, the Trans-Pacific Partnership treaty that President Obama and his corporate friends are trying to push through. Perhaps a final "thank you" to the oligarchs from the President who of course slipped him millions of dollars while running in 2008 and 2012. Either he owes them, or he is deluded and confused.
Many agree with Mr. Rattner, that globalization has been a vast disaster, helping the middle class down the ladder every since Regan and subsequent presidents (including the deluded Clinton with his NAFTA) gave us.
TPP must be stopped and this article gives you not only the facts, but the rational, critically thought-out moral imperative for doing it.
Many agree with Mr. Rattner, that globalization has been a vast disaster, helping the middle class down the ladder every since Regan and subsequent presidents (including the deluded Clinton with his NAFTA) gave us.
TPP must be stopped and this article gives you not only the facts, but the rational, critically thought-out moral imperative for doing it.
11
Machines and software will continue to take over more and more work now done by humans. The excess worker phenomenon will get worse. It is dangerous.
The parallel problem that squeezes middle-America is that skill sets become obsolete so quickly. This is true for the workplace and personal life. Imagine wrestling with the every-day if you don’t know how to use the web, a smartphone or navigate an 800 help-line. These are essential life-skills that didn’t even exist just 20 years ago.
Solution to both challenges: Send everybody back to school for a year once every 10 years. Make a skill refresher, a sabbatical, part of everyone’s timeline. And yes, make it taxpayer funded, including a paycheck during the period out of the workforce.
Removing every worker from the force for one year out of every ten would reduce the labor surplus substantially and materially reduce the possibility of social unrest. At the same time it would align skills with the technology of the time.
The economy has to have consumers. Without people with paychecks the system collapses. Without people with updated skills it stagnates. The great new ideas don’t come to fruition.
The parallel problem that squeezes middle-America is that skill sets become obsolete so quickly. This is true for the workplace and personal life. Imagine wrestling with the every-day if you don’t know how to use the web, a smartphone or navigate an 800 help-line. These are essential life-skills that didn’t even exist just 20 years ago.
Solution to both challenges: Send everybody back to school for a year once every 10 years. Make a skill refresher, a sabbatical, part of everyone’s timeline. And yes, make it taxpayer funded, including a paycheck during the period out of the workforce.
Removing every worker from the force for one year out of every ten would reduce the labor surplus substantially and materially reduce the possibility of social unrest. At the same time it would align skills with the technology of the time.
The economy has to have consumers. Without people with paychecks the system collapses. Without people with updated skills it stagnates. The great new ideas don’t come to fruition.
This is not some theoretical exercise, with sunny talk about "retraining," the need for a "mobile workforce," etc. A very large reason for the slow pace of the American recovery is due to people who have lost their jobs and can't find a comparable job. Many of these people have taken low wage jobs in the service sector, therefore $ Billions of previous spending is no longer happening because they can't afford it on their new salary. The employment numbers look good, but the spending is not there to back up these rosy numbers.
There is another crisis just over the horizon. I suspect that many of the displaced workers have tapped their retirement in order to get through their unemployment period. Their new jobs do not provide a retirement program or nothing close to what they have drained. I suspect we are going to see two things happen:
People working longer because they cannot afford to retire.
A large increase in elderly poverty as those who must retire, out live their retirement funds.
We are not talking about just a moral crusade for those left behind. We are talking about a huge liability for our economy. If this comes to pass, we will have reduced employment opportunities for young people, a continued slower pace in our economy and a large number of people demanding social services, that we pay for, because they are old and poor. We don't have a lot of time, we need to be thinking about solutions now.
There is another crisis just over the horizon. I suspect that many of the displaced workers have tapped their retirement in order to get through their unemployment period. Their new jobs do not provide a retirement program or nothing close to what they have drained. I suspect we are going to see two things happen:
People working longer because they cannot afford to retire.
A large increase in elderly poverty as those who must retire, out live their retirement funds.
We are not talking about just a moral crusade for those left behind. We are talking about a huge liability for our economy. If this comes to pass, we will have reduced employment opportunities for young people, a continued slower pace in our economy and a large number of people demanding social services, that we pay for, because they are old and poor. We don't have a lot of time, we need to be thinking about solutions now.
17
There is something way bigger that is decimating lower skill jobs. It is automation. We make twice as much product now than we did 10 years ago with half the people. That makes us competitive and we can beat third party vendors but what happens to those people who's jobs have been eliminated. We have for the most part allowed attrition to take its course but what has not happened is we have not hired as many people as we would have before. Need to start thinking about what can people do when we do not need labor in factories? I think about what do people like to purchase and one item that leaps out is they like to purchase hand crafted items. We have an opportunity to teach people how to use their hands to build items that they can sell to their neighbors. This has a lot of benefits, it keeps people busy, it produces items that other people want to spend their money on, and it will increase people's artistic endeavors. Technology and science are good fields but not everyone is into that.
1
Manufacturing jobs streaming out; low wage trade workers illegally streaming in.
And yet political elites keep calling the people most effected 'xenophobes', 'nativists', 'bitter clingers'. Let's stop demonizing those protesting their own denigration first then tell me how tax redistribution brings jobs back to the United States.
We need real jobs with decent working and middle class wages in the United States not more money going into the hands of those who are married to political favoritism and oligarchy. That's feeding the beast.
And yet political elites keep calling the people most effected 'xenophobes', 'nativists', 'bitter clingers'. Let's stop demonizing those protesting their own denigration first then tell me how tax redistribution brings jobs back to the United States.
We need real jobs with decent working and middle class wages in the United States not more money going into the hands of those who are married to political favoritism and oligarchy. That's feeding the beast.
3
Oh, the irony...had this article been published one day sooner it would have coincided with the tenth anniversary of my hearing the worst news of my life: Your [auto] plant is closing. Six weeks later I heard the words "You have cancer" but of the two the plant closing has had a vastly more negative effect on my everyday life. It's been all downhill since then, despite the fact that I have earned four (yes, count 'em, four) degrees in the interim I am now making the less than I made in 1986. And that's in actual dollars per hour, not inflation-adjusted dollars.
Where was your concern for those adversely affected by the worship of globalism then, Mr. Rattner? As I recall, you weren't as concerned as you should have been with our fate during the debate over saving the auto industry. It's nice that you've finally started to see the light but don't expect those of us whose lives have been ruined to start dancing in the streets any time soon.
Where was your concern for those adversely affected by the worship of globalism then, Mr. Rattner? As I recall, you weren't as concerned as you should have been with our fate during the debate over saving the auto industry. It's nice that you've finally started to see the light but don't expect those of us whose lives have been ruined to start dancing in the streets any time soon.
99
I read with both interest and dismay the exhortation of AR Clayboy, below, that the American worker should "put down the weed", "stop whining", and become proficient in "math, science and economics".
We need to quit "whining" about "diversity/privilege/inequality". It takes amazing hubris to respond to an article about morality with comments so devoid of any.
I taught high school for a while, and saw directly the vast, unjustifiable effects of those same "moral" societal traits on the students - our future workforce. No, we should not whine about them, we should shout and take to the streets about them - and vote about them.
We need to have a discourse,now, about what we are going to do with all those people, not just in manufacturing, who are going displaced in the near future as employers "solve" their labor force "problems" through the miracle of technology - the retail and grocery clerks lost to scanners, the bank tellers to ATM's and the pickers to Orwellian looking field robots. Streets are coming out of the backs of machines fully formed and whole apartment units are being prefabbed and craned unto place.
Not everyone who now holds those jobs can become proficient in math, science and economics, and not every school they attend can prepare them in those fields. What are we going to do with all those people? No moral person or society can have that discussion - or arrive at an acceptable solution - without including the human, moral component.
We need to quit "whining" about "diversity/privilege/inequality". It takes amazing hubris to respond to an article about morality with comments so devoid of any.
I taught high school for a while, and saw directly the vast, unjustifiable effects of those same "moral" societal traits on the students - our future workforce. No, we should not whine about them, we should shout and take to the streets about them - and vote about them.
We need to have a discourse,now, about what we are going to do with all those people, not just in manufacturing, who are going displaced in the near future as employers "solve" their labor force "problems" through the miracle of technology - the retail and grocery clerks lost to scanners, the bank tellers to ATM's and the pickers to Orwellian looking field robots. Streets are coming out of the backs of machines fully formed and whole apartment units are being prefabbed and craned unto place.
Not everyone who now holds those jobs can become proficient in math, science and economics, and not every school they attend can prepare them in those fields. What are we going to do with all those people? No moral person or society can have that discussion - or arrive at an acceptable solution - without including the human, moral component.
134
I am in complete agreement with you. Do not believe what is being said about becoming proficient in math, science and economics; my son graduated from a top 20 undergraduate school this past May 2015 with a degree in Economics (minor in International & Financial Economics). He has applied to countless published jobs and networked until blue in the face...he has had NO success at any type of economics/financial/analyst jobs. Consider how disturbing this is given the average of $64,000 per year it cost for him to attend this school (including room, board, books, labs, etc.). Adding additional pressure is the new GIG economy which displaces proven experience and knowledge with wage-slave employment relationships (no benefits, cut-to-the-bone hourly pay) resulting in a worker race-to-the-bottom of compensation and lifestyle. This assumes that you can even get an hourly pay job opportunity (I've had one six-month paying job since June 2010; I have a BBA in MIS, MBA in Int'l Bus, Project Mgmt. Prof. and Six Sigma Black Belt). This should not be happening to us. Greed is driving our economy. Since NAFTA was established without federal labor regulations, companies have been free to pursue global labor arbitrage and the result is what we have today. Since we supposedly have a consumer-driven economy, what is going to be the end-game when consumers no longer consume?
3
Nancy, the problem is he's not paying attention to simple math: If everyone actually did become proficient in those subject areas, they would outnumber the jobs available and we'd still have the same problem. No now what's the answer?
1
Exactly right, Steven. This is the most important lesson learned from the implementation of globalization and the impact of automation. Any reasonable, comprehensive assessment that goes beyond the sellers' balances sheets reveals a huge deficit in the buyers' incomes and in the social balance sheets and public morality that tolerates these outcomes.
3
Ah, the Peterson crowd. Aren't they the think tank that came up with and sold the American public on the concept of shareholder primacy... that CEOs need to increase the bottom line no matter how it impacts their employees or their country? That notion leads the CEOs to find ways to race to the bottom on wages and benefits, to offshore headquarters to save on taxes, and to send manufacturing overseas where they don't have to deal with pesky environmental regulations. It also compels those same corporations to "invest" in candidates who will advocate smaller government and fewer regulations. Until we devise a means of punishing corporate irresponsibility we will see ever diminishing wages and ever increasing pollution to our waters and skies.
6
When I was in high school in the 1950's, our teachers told us that an economy was the system by which goods and services are produced and distributed. Rather simple. The economic system in the U.S. is lopsided. The system "by which" can be changed and corrected. It is time for the system to be adjusted to produce a more even distribution. Why not?
3
Please remember removing tariffs has allowed Corporate Inversions. If tariffs were in place (or able to quickly be imposed,) these "new" foreign companies would get squashed. We (largest consumer market) have ceded all of our power. Not properly collecting revenue has lowered what we can offer our population in infrastructure (roads, education) and increased tax liabilities against stagnant wages.
3
This article highlights a problem which is rampant, the narrowness of our vision. When we take a heads-down view of globalization, everything looks great. However, if we look up and look around, we can see the human jetsam which globalization has thrown aside as Mr. Rattner has pointed out here.
The same blindness affects our view of climate change, income inequality and many of the problems populating the pages of the news. Until we look up, look around and spend a minimum of 5-10% of our wealth on helping the planet, the less fortunate and the left behind, we are heading for disaster.
The same blindness affects our view of climate change, income inequality and many of the problems populating the pages of the news. Until we look up, look around and spend a minimum of 5-10% of our wealth on helping the planet, the less fortunate and the left behind, we are heading for disaster.
4
Most certainly, we need to help those left behind. But it is not as simple as Rattner suggests.
1. Globalization has huge benefit outside the West. It has lifted billions of non-white people out of poverty. On these pages, there is constant outcry against inequality. Does that concern end at our borders? Globalization is one big redistribution from the West to the East. Do non-white people deserve to join the global economy too? Or should they be kept dependent on foreign aid? If they do not develop, then we allow conditions to develop which lead to violent conflicts and we will end up paying in both treasure and lives.
2. Labor has constantly been made obsolete since the the dawn of the industrial revolution. Early on, 90% of the labor was in Agriculture, then the jobs went to manufacturing, then to services. Now to what? The new AI software products coming out today threaten to destroy a wide range knowledge jobs. Those jobs won't go overseas, they will disappear. Even China is investing heavily in automation now because they face demographic collapse. They are going to automate away the jobs they stole from us.
Both Peterson Institute and Rattner need to focus on how to expand middle class jobs in the US and everywhere else. It is an economic, political, national security, and moral imperative. They need to suggest what can be done about creating new style jobs, rather than argue whether globalization is good or bad for US workers.
1. Globalization has huge benefit outside the West. It has lifted billions of non-white people out of poverty. On these pages, there is constant outcry against inequality. Does that concern end at our borders? Globalization is one big redistribution from the West to the East. Do non-white people deserve to join the global economy too? Or should they be kept dependent on foreign aid? If they do not develop, then we allow conditions to develop which lead to violent conflicts and we will end up paying in both treasure and lives.
2. Labor has constantly been made obsolete since the the dawn of the industrial revolution. Early on, 90% of the labor was in Agriculture, then the jobs went to manufacturing, then to services. Now to what? The new AI software products coming out today threaten to destroy a wide range knowledge jobs. Those jobs won't go overseas, they will disappear. Even China is investing heavily in automation now because they face demographic collapse. They are going to automate away the jobs they stole from us.
Both Peterson Institute and Rattner need to focus on how to expand middle class jobs in the US and everywhere else. It is an economic, political, national security, and moral imperative. They need to suggest what can be done about creating new style jobs, rather than argue whether globalization is good or bad for US workers.
3
Manufacturing creates real wealth, whether done by robots or actual people. (If robots do the work then taxes are used to keep the consumer consuming)By taking manufacturing overseas we become dependent on sending American wealth overseas and afterwards to the production owners.
The decline in manufacturing within the U.S.A. economic society drives down the wealth of the middle class, whom we depend to do the consuming capitalism requires (a demand-side society) to exist.
At some point, the middle class will defend itself against globalization or it will live similar to the countries where the jobs have gone.
The greatest influence on globalization: overpopulation. Eventually economic societies will need to close their doors to avoid making their citizens poor.
This would mean the poor countries would stay poor. Very much the survival of the fittest, a philosophy of the wealthy, just on a national scale rather than individual scale. Overpopulation will force the middle class to act like the wealthy in protecting their wealth.
Who gets to consume is the final issue.
The decline in manufacturing within the U.S.A. economic society drives down the wealth of the middle class, whom we depend to do the consuming capitalism requires (a demand-side society) to exist.
At some point, the middle class will defend itself against globalization or it will live similar to the countries where the jobs have gone.
The greatest influence on globalization: overpopulation. Eventually economic societies will need to close their doors to avoid making their citizens poor.
This would mean the poor countries would stay poor. Very much the survival of the fittest, a philosophy of the wealthy, just on a national scale rather than individual scale. Overpopulation will force the middle class to act like the wealthy in protecting their wealth.
Who gets to consume is the final issue.
4
Thank you Mr Rattner
It’s not just about America.
My intuition is that Free Trade as currently implemented is not good for the rest of the world either. Not if you put a price on the vast military expenditure needed to enforce some kind of stability in our “Free Trade World”. Not if you put a cost in dollars and human suffering on the endless war needed to maintain this system.
This system that extracts people's labor while returning a minimum to those people. Which isolates the profits and capital so created, and uses it for unproductive financial activity. This multinational system that uses tax-payer money to pay the protection costs it needs to survive.
Your chart notes the pay growth in “Financial Services”, a euphemism these days for casino banking. Military spending should also be in this chart, and should be listed as "Protection".
My sense is that countries need to practice re-investment and, yes, protectionism to some degree because they are the social units that are responsible for our preservation. Who else will do this?
Governments, created ideally by voters, (I know, fat chance) are the only way to enforce the balancing of costs of doing business with the profits business creates or extracts. I suspect even the Taliban, and the drug cartels take more care of the minions that go along with them, than multinational corporations do.
It’s not just about America.
My intuition is that Free Trade as currently implemented is not good for the rest of the world either. Not if you put a price on the vast military expenditure needed to enforce some kind of stability in our “Free Trade World”. Not if you put a cost in dollars and human suffering on the endless war needed to maintain this system.
This system that extracts people's labor while returning a minimum to those people. Which isolates the profits and capital so created, and uses it for unproductive financial activity. This multinational system that uses tax-payer money to pay the protection costs it needs to survive.
Your chart notes the pay growth in “Financial Services”, a euphemism these days for casino banking. Military spending should also be in this chart, and should be listed as "Protection".
My sense is that countries need to practice re-investment and, yes, protectionism to some degree because they are the social units that are responsible for our preservation. Who else will do this?
Governments, created ideally by voters, (I know, fat chance) are the only way to enforce the balancing of costs of doing business with the profits business creates or extracts. I suspect even the Taliban, and the drug cartels take more care of the minions that go along with them, than multinational corporations do.
2
Given the exponential growth of technology, automation, artificial intelligence and ultimately productivity per man hour, I wonder if capitalism is in the long term best interest of humanity. One could argue that stronger government could restrain the worse impulses of capitalism but given that government is completely under the control of plutocrats that seems less likely.
Whether we stay with capitalism or move to democratic socialism, I think there will be a day of reckoning because of unrestrained population growth. There are more people than access to affordable essential resources. There are people living today who will be more affected by the cost of water than the cost of oil. And, whether global warming is man-made or not, the fact is man has within in its power the ability to reverse global warming. Unfortunately, most people live for the moment, having little regard for their neighbors, let along future generations. The sad fact is today there are millions who are in a life and death struggle to survive at all.
The best possible socioeconomic model is a truly representative democracy, a strong central government, a vibrant capitalistic system that rewards entrepreneurial effort and productivity, and zero population growth. Yet, does anyone really believe that even one of these conditions can occur today?
Somehow we need to effectively deal with the fact that self-preservation is both mankind's greatest strength and greatest weakness.
Whether we stay with capitalism or move to democratic socialism, I think there will be a day of reckoning because of unrestrained population growth. There are more people than access to affordable essential resources. There are people living today who will be more affected by the cost of water than the cost of oil. And, whether global warming is man-made or not, the fact is man has within in its power the ability to reverse global warming. Unfortunately, most people live for the moment, having little regard for their neighbors, let along future generations. The sad fact is today there are millions who are in a life and death struggle to survive at all.
The best possible socioeconomic model is a truly representative democracy, a strong central government, a vibrant capitalistic system that rewards entrepreneurial effort and productivity, and zero population growth. Yet, does anyone really believe that even one of these conditions can occur today?
Somehow we need to effectively deal with the fact that self-preservation is both mankind's greatest strength and greatest weakness.
4
Agree with the premise, as Adam Smith himself was first a moral philosopher before Wealth of Nations became the foundation of western economic thought.
And Jeffrey Sachs would also agree, I'm sure, that if a nation gains from free trade, it has an obligation to ensure the maximum utility equilibrium is reached, and most likely the diminishing returns accruing to an extra dollar of wealth to a billionaire at the top of an unequal society has far less utility than redistributing half that dollar to those citizens that lost in the free trade game.
However, it's about global population growth and sustainability and major undercounted externalities lime climate change and factory farming as well.
Ultimately the 'growth' model is an anachronism, and we need a paradigm shift to a sustability model, with utilitarian ethics at the core for humanity to survive our Frankenstein monstrous egos.
And Jeffrey Sachs would also agree, I'm sure, that if a nation gains from free trade, it has an obligation to ensure the maximum utility equilibrium is reached, and most likely the diminishing returns accruing to an extra dollar of wealth to a billionaire at the top of an unequal society has far less utility than redistributing half that dollar to those citizens that lost in the free trade game.
However, it's about global population growth and sustainability and major undercounted externalities lime climate change and factory farming as well.
Ultimately the 'growth' model is an anachronism, and we need a paradigm shift to a sustability model, with utilitarian ethics at the core for humanity to survive our Frankenstein monstrous egos.
5
Thank you for your thoughtful article. It has long been obvious that there are winners and losers from globalization and, from immigration. Taxing the winners might have some appeal, but, although it may help on the financial end, it does not help with the ultimate problem which is that people need to work. It is a financial and dignity question. Thus, whatever we can do to increase job prospects is the key. Yet, we read how H1b is used in a way it was not designed for, to bring I people to displace Americans. Tax inversions cost jobs, yet Congress is incapable of looking at the issue.
12
Ok. If U.S. labor is made redundant by technology and globalization, then the profits derived from the resultant wealth transfer should be returned to those robbed of jobs by paying them a family supporting wage to: renovate every dilapidated school, failing bridge and cratering road to pristine condition; reconfigure a discordant energy grid; install solar panels on every rooftop; insulate every building; erect off shore and land based turbines wherever suitable wind power exists; shore up and harden flood prevention infrastructure to defend against climate instability; and, build a coast to coast of mass transit rail and call it the "National Railway Defense System" to give it the gravitas given to highways.
We don't need a temporary stimulus, but a bold economic restructuring that eliminates bias towards wealth concentration and fulfills the unrealized demand for life affirming and dignifying employment - a renewal economy for all.
We don't need a temporary stimulus, but a bold economic restructuring that eliminates bias towards wealth concentration and fulfills the unrealized demand for life affirming and dignifying employment - a renewal economy for all.
13
The notion that international trade benefits each country is based on another assumption that there is full employment within each country and there is mobility of resources within each country among different sectors. Both assumptions of course are wrong. The international trade game today is far beyond the classical idea of countries trading products in which they have a comparative advantage (for example U.S. wheat to Brazil in exchange for coffee), and is all out the multinational corporations exploiting any advantage to maximize their profits on which they pay little or no taxes. Today's trade policy serves corporations and not American people's interests. As even U.S. services are outsourced abroad, loss of good paying jobs owing to trade expands from goods to services.
7
It was thought by futurists that as technology and efficiency improved workers would have more free time because the increased productivity would result it shorter work days and work weeks and more freedom to enjoy life.
This could have happened but it didn't.
Any gains went to the company owners, to make more money these owners shipped jobs out of the country for cheaper labor and tax advantages. As reported, the rich got richer. The shame is that this distorts their world view and they feel because they're so special they don't have to play by the rules. They have enough money to buy any material things they need, the marginal utility of additional stuff goes down. The extra wealth simply allows them to brag that they have more money than their peers at dinner parties. They live in a world of the special them and the rest of us. It's a shame.
This could have happened but it didn't.
Any gains went to the company owners, to make more money these owners shipped jobs out of the country for cheaper labor and tax advantages. As reported, the rich got richer. The shame is that this distorts their world view and they feel because they're so special they don't have to play by the rules. They have enough money to buy any material things they need, the marginal utility of additional stuff goes down. The extra wealth simply allows them to brag that they have more money than their peers at dinner parties. They live in a world of the special them and the rest of us. It's a shame.
15
One wonders where corporate profits would be if it were not for the "spending money" infused into the economy by government programs for the under/unemployed. Welfare, food stamps, credits, and other subsidies paid for by taxes on those who remain working or by government debt are no more than a thinly veiled attempt to mitigate the problems created by outsourcing. Most Americans now own a smartphone (made overseas), whether they have a job, or not.
5
We have reached or surpassed a tipping point in the global economy that is not sustainable. It would seem all models for economic well being are based on perpetual growth. Like a Ponzi Scheme, that is not sustainable. We must adapt a scheme based on sustainability. We cannot continue to extract finite resources from our planet without thought of recycling. We cannot continue consuming fossil fuels at a rate that disrupts our climate until they become too scarce to be a source of energy. The population of the planet has also gone beyond the sustainability point. More people competing for finite resources and employment. If economies cannot provide meaningful employment for the existing population. Where will the expanding population work? Technology and automation are transforming much employment from brawn to brain power. Yet our technological progress is even challenging mental prowess. Sustainability must be our goal, not growth. Family planning must be a global priority along with the health of those born. Sadly the resources being wasted on human conflict could go a long way toward enhancing humanity's future. The clock is ticking ...
10
Which is more true?
"[globalized] trade permits Americans to buy goods at lower prices; the added purchasing power helps our economy expand faster."
or:
Globalized trade, capitalized upon by well-positioned companies, reduced wage costs, made profits soar, and richly rewarded CEOs, investment institutions, and shareholders. Prices did not fall in accordance with productivity or wage costs. Purchasing power became more and more dependent upon consumer debt. Economic growth became more fragmented and erratic, leaving more of the population excluded from its benefits.
"[globalized] trade permits Americans to buy goods at lower prices; the added purchasing power helps our economy expand faster."
or:
Globalized trade, capitalized upon by well-positioned companies, reduced wage costs, made profits soar, and richly rewarded CEOs, investment institutions, and shareholders. Prices did not fall in accordance with productivity or wage costs. Purchasing power became more and more dependent upon consumer debt. Economic growth became more fragmented and erratic, leaving more of the population excluded from its benefits.
55
Besides being excluded from economic growth, more of the population is also excluded from political power, from input to govt policy. We see power concentration at the top.
Then when a candidate comes along to buck this trend, he's treated as an eccentric outlier, worthy of little attention. The Dem's biggest fund raiser is the nominee to be, with few alternatives.
The strange situation in the US is that many voters think that big money sponsorship of their politicians is actually is a good thing--even as millions of jobs have been offshored. And our highest court equalizes big money with 1st Amendment Free Speech.
It all works together with globalized profits with little regulation. This is what our democracy looks like now. Those working to reverse Citizens United and save our democracy and economy, are hardly covered in the news media.
This happens if there are no laws in place to stop it, and no systems of public funding of elections with limits on private donations from the super rich.
We need comparisons to nations with public financing of elections, less offshoring of jobs and laws in place to protect their workers.
Then when a candidate comes along to buck this trend, he's treated as an eccentric outlier, worthy of little attention. The Dem's biggest fund raiser is the nominee to be, with few alternatives.
The strange situation in the US is that many voters think that big money sponsorship of their politicians is actually is a good thing--even as millions of jobs have been offshored. And our highest court equalizes big money with 1st Amendment Free Speech.
It all works together with globalized profits with little regulation. This is what our democracy looks like now. Those working to reverse Citizens United and save our democracy and economy, are hardly covered in the news media.
This happens if there are no laws in place to stop it, and no systems of public funding of elections with limits on private donations from the super rich.
We need comparisons to nations with public financing of elections, less offshoring of jobs and laws in place to protect their workers.
1
I'd say the first is 'theory' that is always being promulgated by Republicans, the 1% and the heads of multi-national corporations. The second is what actually has happened. And while some prices have inevitably been kept down, it doesn't matter. Overall flat wages and above average inflation in the price of things that actually matter (i.e. food, healthcare, rent, property taxes and a college education) has more than gutted any benefit of cheap clothes and electronics.
1
Mr. Rattner gets right to the point and should be applauded for speaking the truth. Many of the comments here focus on things like job retraining, educational incentives. Those suggestions fail to be a solution for the hundreds of thousands of people in their 50s and 60s living in communities that lose manufacturing. It is not very practical for a 50 year old with kids in high school, college or both to retrain for a job that may require them to move to another community. With many homes still under water, how does that person relocate to another possibly more expensive community to take a another job. I can also recall 20 years ago this same suggestion of job retraining which many people did to discover the "jobs," were not there or they lacked "enough" of the skills required.
What is needed is for American companies to make a commitment to stay "American," companies and do what it takes to compete and employ Americans and not export jobs overseas or next door to Mexico.
What is needed is for American companies to make a commitment to stay "American," companies and do what it takes to compete and employ Americans and not export jobs overseas or next door to Mexico.
95
Well said! It should be made illegal to ship our jobs overseas. If you are an American company, you must keep your jobs in America - that includes the headquarters so the companies have to pay taxes on their earnings and not set up headquarters overseas where they can protect their money from taxation.
I am sick of American companies looking out for only themselves and their shareholders! WE ARE ALL AMERICANS. It is high time the CEO's of American companies start behaving that way.
I am sick of American companies looking out for only themselves and their shareholders! WE ARE ALL AMERICANS. It is high time the CEO's of American companies start behaving that way.
3
Our government and tag along countries, have always trumpeted free trade for decades, which matured into globalization. By now it is clear, governments legislate trade agreements, the so called captains of all segments of the economy, take over handling the terms. Transistions legislated on economies, never consider what the changes will have on will call various groups. Greenspan used to preach, for every manufactucturing hourly job we shipped over seas, or to Mexico, we would create a high tech job. Of course it is also clear, to fuel a consumer driven economy like ours, goods have to be reasonably priced. That to me says it all. I then conclude the Democrats pursue the Social Democratic Welfare State Model, while complicate in a new trade deal TPP. Again captains of industry will manage the agreement to their benefit, with no regard for jobs, that is not a consdieration in their models. Imagine if Apple tried to make their gadgets in the US. Point is, few would be able to afford a I Phone, or Lap top.
3
In a consumer driven economy, goods can only be purchased by those who have jobs and incomes. The real point is the cost of building consumer goods (particularly electronics) here is so expensive is because we have lost (forfeited) the manufacturing culture, infrastructure ,as well as, the supply chain ecosystem required. Moreover, in a global crisis, we would not be able to produce an iPhone or laptop in this country at any price. I blame Democrats and Republicans for failure to enact fair tax and trade provisions to protect Americans.
2
Not really true -- various studies have shown that the cost of an iPhone or iPad or similar made in the US would be roughly $40 dollars more per unit at the customer level.
I would happily pay $40 more to know that my iMac was made in the USA by American workers -- and I'm a pretty cheap frugal person. $40 is not much vs. a $1200 computer or a $700 phone.
I am not comfortable knowing the iMac on which I am typing this (bought used off ebay for $700) was made in CHINA at some place like Foxconn, which is basically abusing workers like they were slaves and paying them pennies per hour (and driving many to suicide, hence the safety nets surrounding the factories!). But I have no choice. It's not like there are computers made here in the US that I could buy instead.
BTW: Obama missed an incredible opportunity, as POTUS, when the late Steve Jobs was still alive. I believe Jobs was well aware of both his mortality and his legacy, and the time to pressure him to bring Apple manufacturing was RIGHT THERE -- and as usual, Obama blew it ... OR was incapable of the vision necessary to see it.
Thanks, Obama!
I would happily pay $40 more to know that my iMac was made in the USA by American workers -- and I'm a pretty cheap frugal person. $40 is not much vs. a $1200 computer or a $700 phone.
I am not comfortable knowing the iMac on which I am typing this (bought used off ebay for $700) was made in CHINA at some place like Foxconn, which is basically abusing workers like they were slaves and paying them pennies per hour (and driving many to suicide, hence the safety nets surrounding the factories!). But I have no choice. It's not like there are computers made here in the US that I could buy instead.
BTW: Obama missed an incredible opportunity, as POTUS, when the late Steve Jobs was still alive. I believe Jobs was well aware of both his mortality and his legacy, and the time to pressure him to bring Apple manufacturing was RIGHT THERE -- and as usual, Obama blew it ... OR was incapable of the vision necessary to see it.
Thanks, Obama!
1
I disagree with your assessment. If the iPhone was manufactured in the US, Apple will still make a more than reasonable profit instead of a killing.
1
When someone writes that "globalization has been an incontrovertible success" I wish they would cite all the scholarly books by reputable economists (and not partisan think-tanks) that have thoroughly analyzed the impact in the United States. But they don't... hmmm. Yes, there is an economic theory that says free trade is good, but economies are complex and every theory has its assumptions in order to hold true. The free trade mantra gets repeated and repeated but it's hard to accept if you just look out at what's happened in the United States in the last thirty plus years. I'm not talking about whether or not it has been good for China.
The latest Pew research shows that the middle class has shrunk, with some folks moving up and some folks moving down. This is exactly what one would expect to see from the tax and trade policies of the last thirty years. Some winners from globalization, some losers, and the winners have been encouraged by politicians to feel no compunction at all to mitigate the damage to the losers. There should be no surprise that the political consensus for these policies is crumbling and it poses a real challenge to politicians: how to hold on to both the folks who moved up and the folks who slipped when both are the result of the same constellation of policies. We can't stop globalization but we ought to be doing more to stop the damage it's doing to us. So what if I can afford three cheap flat screens if my neighbor can't get a job?
The latest Pew research shows that the middle class has shrunk, with some folks moving up and some folks moving down. This is exactly what one would expect to see from the tax and trade policies of the last thirty years. Some winners from globalization, some losers, and the winners have been encouraged by politicians to feel no compunction at all to mitigate the damage to the losers. There should be no surprise that the political consensus for these policies is crumbling and it poses a real challenge to politicians: how to hold on to both the folks who moved up and the folks who slipped when both are the result of the same constellation of policies. We can't stop globalization but we ought to be doing more to stop the damage it's doing to us. So what if I can afford three cheap flat screens if my neighbor can't get a job?
19
It isn't amazing that those who have used the forces of globalization to make their own fortunes, to create their own efficient operations believe to to be force for net overall good. They just don't have the imagination to understand what "net good" means. So we get a Marie Antionette response: the peasants are starving, let them eat cake. Or in this instance, go to college.
The only argument I can make for an intense effort to place displaced workers is twofold. From the economic side, all those Maries benefit from a middle class who will buy their stuff. Businesses have been counting on that middle class being global, and not been too worried about the middle class at home.
Which brings us to the second argument. People who lose everything have nothing to lose. Riots, uprisings, social unrest, violence, revolution are the time tested results of taking away stability and security.
All those in the Think Tanks might want to start thinking about that.
The only argument I can make for an intense effort to place displaced workers is twofold. From the economic side, all those Maries benefit from a middle class who will buy their stuff. Businesses have been counting on that middle class being global, and not been too worried about the middle class at home.
Which brings us to the second argument. People who lose everything have nothing to lose. Riots, uprisings, social unrest, violence, revolution are the time tested results of taking away stability and security.
All those in the Think Tanks might want to start thinking about that.
28
Avoid a conventional tax redistribution, instead assign individual displaced workers to companies that benefit from free trade. These companies will subsidize and train the assigned workers until the workers find higher value employment either with the beneficiary company or with another.
Make the winners responsible for getting the losers back into a job that is competitive in the world of free trade. The retraining efforts will be more focused, effective and timely, and free trade will continue.
Make the winners responsible for getting the losers back into a job that is competitive in the world of free trade. The retraining efforts will be more focused, effective and timely, and free trade will continue.
38
Not mentioned here, but perhaps deserving of mention, are our high corporate tax rates. Perhaps many of our corporations would resume manufacturing here if our tax rates were more competitive with those of the countries to which these corporations are fleeing. Then perhaps a minimum wage high enough to support living with some dignity would be possible, perhaps tax revenues would be sufficient given higher incomes and rates of employment, and perhaps the overall economy would thrive.
Not exactly true. Although US corporations face a 39% corporate tax, among the highest in the world, their effective or actual tax rate is 12.6%, one of the lowest. Why doesn't Congress fix that? Because it is to their fund raising advantage to carve out special benefits for contributors.
4
Jan - you say that - but answer a simple question:
If - say Apple - wanted to repatriate some profits that resulted from sales overseas and that had already been taxed overseas
What tax rate would they pay?
And why are they paying additional tax on already taxed sales?
If - say Apple - wanted to repatriate some profits that resulted from sales overseas and that had already been taxed overseas
What tax rate would they pay?
And why are they paying additional tax on already taxed sales?
And there's the rub: how to sort out those who have legitimately been hurt by globalization and those who will claim an injury once- or twice-removed. Second, how long should compensation be awarded and in what form? For those who are 50+ and have seen their human capital gutted through free trade, perhaps the best solution is early retirement at a generous fraction of their previous earning power until they hit Social Security eligibility. For those under 50, generous re-education and relocation allowances would help the transition to a new job so they can contribute by producing goods or services and paying taxes. The worst solution is extended unemployment which freezes workers in place and discourages job searches until the benefit is about to expire.
5
Re-education hasn't worked either -- talk to some workers who have "retrained" 2-3 times -- moving from industry to office work, from manual labor to "high tech" -- and STILL find themselves 50 and unemployed.
How about really effective laws, with teeth in them, that forbid discrimination based on age?
How about really effective laws, with teeth in them, that forbid discrimination based on age?
2
Governing a nation's economic activity, permitting or barring the exportation of money & jobs, closing or opening borders, are inherently moral issues. To decide that giving cheap labor to the executives & stockholders is more important than having jobs for your citizens is a moral decision. Deciding that campaign contributions are more important than closing loopholes & taxing corporations is a moral decision. The notion that globalization or deregulation or any economic decisions do not have self-interested motivations and moral cosequences is propaganda. Compensating the losers for these decisions would, to the winners, defeat the purpose.
5
The so-called "free trade" deals championed by the Peterson Institute- which claims to be non-partisan while pushing the NeoLiberal Economics favored by it's namesake- have cost America dearly.
We were once the greatest creditor nation & now are the greatest debtor. We once had vibrant cities & towns filled with thriving economies that could support a wide variety of enterprise and a high quality of life, now replaced by dying, decaying cities and towns bereft of business, civic life, a large middle class and economic opportunity. We once had gleaming, well maintained infrastructure and now have decay, rot and outmoded monuments to disinvestment and deferred maintenance.
Take a look at these so-called "Free Trade" deals that are written in secret and shuttled through our Congress by "Trade Promotion Authority" or Fast Track. Done without discovery and a vigorous public debate by citizens, without amendment or proper hearings in Congress. The Public Comment period online for the Trans-Pacific Partnership- involving about 40% of the World's GDP- expired earlier this month and most Americans did not even know a window existed. The passage of each of these deals has killed jobs, increased our trade deficit and destroyed our economy.
Nowhere in any media outlet to include the New York Times have I seen an open debate on the TPP or links to how citizens could comment to the government. We need to get out of "free trade" and move to fair trade that will bring jobs back home.
We were once the greatest creditor nation & now are the greatest debtor. We once had vibrant cities & towns filled with thriving economies that could support a wide variety of enterprise and a high quality of life, now replaced by dying, decaying cities and towns bereft of business, civic life, a large middle class and economic opportunity. We once had gleaming, well maintained infrastructure and now have decay, rot and outmoded monuments to disinvestment and deferred maintenance.
Take a look at these so-called "Free Trade" deals that are written in secret and shuttled through our Congress by "Trade Promotion Authority" or Fast Track. Done without discovery and a vigorous public debate by citizens, without amendment or proper hearings in Congress. The Public Comment period online for the Trans-Pacific Partnership- involving about 40% of the World's GDP- expired earlier this month and most Americans did not even know a window existed. The passage of each of these deals has killed jobs, increased our trade deficit and destroyed our economy.
Nowhere in any media outlet to include the New York Times have I seen an open debate on the TPP or links to how citizens could comment to the government. We need to get out of "free trade" and move to fair trade that will bring jobs back home.
19
This is the opening of an epoch. I believe if I live another 25 years, there will be radically less employment in things we observe now in a way that was not seen until now in places like China, with people returning in the first generation to where they grew up in large numbers. Whether these places can provide a way for them to make a living where they left 20-30 years ago, then when those places could not, seems at least problematic. But in a post industrial world in which most of the families of citizens living in these countries have been there for multiple generations, there's no obvious place to go. And to say nothing of war, insurrection, and poverty driving mass migration today to the west, even as most Western nations are saying no or keep going to the next frontier.
Without redistribution and limits on accumulation, how is the future to look?
Without redistribution and limits on accumulation, how is the future to look?
41
We need fair trade, not free trade. The same rules that apply to companies working in the US should apply to those wishes to export goods into the US. Surely we don't want to buy a shirt for $5 cheaper that exploits children by working them in unsafe conditions. Surely we don't want to buy contaminated food products that are not properly inspected.
Trade can and should be an important spur to innovation; not a race to the bottom of wages and regulations.
Tax redistribution is only one part, the added revenues from the winners of this new economy should be used to reinvest in our country and in our people.
How can we succeed long term when our school test scores are among the bottom of the developed world? What is the cost in human capital from our high school drop out rates and addiction? How can we be competitive with decaying infrastructure?
Great article, we all ought to be discussing our economy, and not just for the short term.
Trade can and should be an important spur to innovation; not a race to the bottom of wages and regulations.
Tax redistribution is only one part, the added revenues from the winners of this new economy should be used to reinvest in our country and in our people.
How can we succeed long term when our school test scores are among the bottom of the developed world? What is the cost in human capital from our high school drop out rates and addiction? How can we be competitive with decaying infrastructure?
Great article, we all ought to be discussing our economy, and not just for the short term.
103
It's one thing to discuss something, and another to look at the actions of multi-nations. Decaying infrastructure, high school dropout rates and addiction? School test scores among the bottom of the developed world? Have you not noticed that we are not spending monies to improve things in these areas, as we are way too busy funneling the resources via corporate welfare, by way of substidies, tax breaks, unnecessary military expenditures, I mean, just how many bombs, fighter jets do we need?, etc., etc., etc., and now I'm beginning to sound like the King in the King and I. The idea is for things to go the way they are going. Only then can you justify underpaying the next generation, and you kill two birds with one stone: Keep 'em cheap, keep 'em dumb, that way, there's no worry of rebellion. Sad, that we've become a banana republic, literally, and with Citizens United, serfton here we come!
2
It's not just our people who get left behind because of globalization it is also the workers that multinationals hire in foreign countries who are subject to appalling work conditions. My daughter has co authored an entire chapter on worker treatment in China. Back home, instead of educating our kids with skills needed in the 21st century, our schools are still pushing old curriculum, using old methods in pedagogy, and much too much importance on sports. From kindergarten onwards kids and parents push competitive sports. I recently read an obituary of a young high school senior tragically killed in a car accident. Hugely popular girl, star athlete, played 5 sports made a name for the school. Each coach had a word of praise for her in superlatives. The last sentence read, "she was a good student too".
8
Sports play an outsized role in all education -- from elementary school and high school right into college.
If you went to Finland, which has the best public school system in the world -- I wonder if you would remotely as much emphasis on organized sports as we have.
And yet talk about changing this, and people (at all levels, from teachers and coaches to the Board of Education, parents, etc.) go ballistic.
If you went to Finland, which has the best public school system in the world -- I wonder if you would remotely as much emphasis on organized sports as we have.
And yet talk about changing this, and people (at all levels, from teachers and coaches to the Board of Education, parents, etc.) go ballistic.
5
When studying economics during my university years, I was always struck by its adherence to sterile mathematical application of its principles, completely divorced from any recognition of the human component. Humans were always considered to be another cog in the wheel of mathematical interpretation with regard to the flow of goods, money, and other economic resources. It should therefore come as no surprise to any of us that there is a total lack of any kind of recognition of a moral component to economic analysis. It is simply not part of the equation.
6
The basic argument is support of free trade is that the winners from free trade take a portion of the benefits and gives to the losers from free trade to compensate them for their lost welfare. The level to which this happens (the trade adjustment assistance program) is laughable. Congress' indifference is beyond callous.
Further, there is no contructive conversation in Congress about how to address the United States' narrowing technical advantage globally. The US may think that it is subject to competitive pressures, but just wait! As the technological gap continues to narrow, the US will begin to feel real competitive pressure.
When the services industries (the preserve of white collar professional workers) are subject to competitive pressure, will they begin to push Congress for new thinking on these issues?
Further, there is no contructive conversation in Congress about how to address the United States' narrowing technical advantage globally. The US may think that it is subject to competitive pressures, but just wait! As the technological gap continues to narrow, the US will begin to feel real competitive pressure.
When the services industries (the preserve of white collar professional workers) are subject to competitive pressure, will they begin to push Congress for new thinking on these issues?
3
Sanity possible in American politics--any politics really?
Politics can be summed up as the long course of humans toward not becoming murderers. In modern times most people feel themselves far from being murderers, but as politics gets more sophisticated and successful murder is just tamped down, becomes more indirect, is rationalized away, is kept out of sight--but we are all still murderers just the same.
We might not kill people outright but we often live and let die. Right wing movements press down on many people and drive the left out. The left does the opposite. And as for the vaunted center, it just presses down...quite a number of people seem to pay no matter in which direction the arrow of force moves.
Probably the biggest rationalization in American politics is the vaunted center which supports increased globalization, increased technology, robotics, etc. which presses down on many without skills and limited intelligence and just looks away as people despair and/or take to drugs, alcohol and suicide.
Again, the ideal of politics is to overcome humans being murderers, but we still are murderers. Again, we live and let many people just die. Probably politics will not solve the problem until society just admits as it progresses that there many types of people it just does not want, and instead of allowing them to be born and suffer society embarks on genetic science to not allow the unwanted to be born in the first place, thus limiting murder and guilt to minimum.
Politics can be summed up as the long course of humans toward not becoming murderers. In modern times most people feel themselves far from being murderers, but as politics gets more sophisticated and successful murder is just tamped down, becomes more indirect, is rationalized away, is kept out of sight--but we are all still murderers just the same.
We might not kill people outright but we often live and let die. Right wing movements press down on many people and drive the left out. The left does the opposite. And as for the vaunted center, it just presses down...quite a number of people seem to pay no matter in which direction the arrow of force moves.
Probably the biggest rationalization in American politics is the vaunted center which supports increased globalization, increased technology, robotics, etc. which presses down on many without skills and limited intelligence and just looks away as people despair and/or take to drugs, alcohol and suicide.
Again, the ideal of politics is to overcome humans being murderers, but we still are murderers. Again, we live and let many people just die. Probably politics will not solve the problem until society just admits as it progresses that there many types of people it just does not want, and instead of allowing them to be born and suffer society embarks on genetic science to not allow the unwanted to be born in the first place, thus limiting murder and guilt to minimum.
1
Can't argue with the perception that failing to address the problems of globalization's losers will cause problems down the road. I'm always wary, though, when someone repeatedly says "moral" without identifying the basis for their morality. The author's counterpart's statement that the "fetishization" of an industry is "immoral" seems particularly incomprehensible unless one's religion involves the worship of extreme wealth and it's liquidity, but one supposes that all sorts of things become skewed in such a rarified atmosphere. It seems simpler and less overwrought to just say that the success of societies can be measured according to their ability to promote the well-being of as many of their members as possible, and leave it at that. The talk of morality implies some sort of hidden messianism that many of us would prefer not to have guiding economic, social or political policy.
38
"It seems simpler and less overwrought to just say that the success of societies can be measured according to their ability to promote the well-being of as many of their members as possible, and leave it at that."
That sound like a moral statement; many an unequal society can be deemed successful by simply changing the criteria. Many a past civilization, deemed "successful" by any reasonable criteria, were built on slave labor, as is this one.
That sound like a moral statement; many an unequal society can be deemed successful by simply changing the criteria. Many a past civilization, deemed "successful" by any reasonable criteria, were built on slave labor, as is this one.
If it is not a sin, it is stupid to kill the goose that laid the golden egg.
1
As Richard Luettgen succinctly argues in his comment, the moral aspect of economic life -- and specifically times of rapid, even volatile, economic change -- need not be considered at anything higher than a merely pragmatic level. The number one thing the decision making class needs to admit (which the author recounts, can be like pulling teeth) is that not everything is the workers' fault, and not all changes can be adapted to.
Rapid economic change causes instabilities, which it is in the pragmatic interests of all stake holders to strategically and wisely "mitigate." This mitigation is not a reward to inertia, but is -- especially today, especially this time, I truly think -- rather a sane reaction to a truly changing world.
Labor is becoming obsolete in many ways. To deny that, to claim there is always new labor, and always new industry, is to deny the magnitude of what the human species is on the cusp of: a new era in which new ways of living are possible. We need to be wise about any new era, but we also need to be wise that the current economic era -- the industrial era, which is getting quite long in the tooth -- is not a static order of things that shall never change.
We need to embrace the rapid economic changes of today, and be smart about maintaining peace and justice in society. If we are in the middle of some economic paradigm shift, if we deny that fact we risk losing sight of those two ideals. And those two ideals are worth more than all the tea in China.
Rapid economic change causes instabilities, which it is in the pragmatic interests of all stake holders to strategically and wisely "mitigate." This mitigation is not a reward to inertia, but is -- especially today, especially this time, I truly think -- rather a sane reaction to a truly changing world.
Labor is becoming obsolete in many ways. To deny that, to claim there is always new labor, and always new industry, is to deny the magnitude of what the human species is on the cusp of: a new era in which new ways of living are possible. We need to be wise about any new era, but we also need to be wise that the current economic era -- the industrial era, which is getting quite long in the tooth -- is not a static order of things that shall never change.
We need to embrace the rapid economic changes of today, and be smart about maintaining peace and justice in society. If we are in the middle of some economic paradigm shift, if we deny that fact we risk losing sight of those two ideals. And those two ideals are worth more than all the tea in China.
5
In one of my two semesters as a Political Science undergrad I wrote a paper on technology/industrialization and society that holds up today reasonably well. The ideas don't fit well with a puritanical mindset because many of the suggestions require government involvement: a higher value placed on educators and care-givers, more compensation for down or in-between time for readjusting workers and perhaps learning to live with the fact that at any given time a sizable portion of the work force will simply not have "profitable" work, but finding socially productive endeavors for them that improve all of society. I postulated that the increase of productivity by fewer individuals could well afford that luxury. What a dreamer!
7
Better late than never to the game, Steve. I remember well all the rosy promises that the country was going to move to a higher level economy based on biotech, green energy and manufacturing innovation and train up workers for those higher paid jobs. Off loading all the old manufacturing jobs to China, Mexico, et all would be a win win. Obviously, we are behind the curve on that one and the theory of comparative advantage hasn't he exactly worked out. There is another argument, however, for still pursuing - with more moral and financial attention to the hopefully temporary ill affects on the American Middle Class - so-called Globalization. National Security. While it may be difficult to quantify. the national security benefits of boosting the economies through trade of China and Mexico especially are significant now and into the future. Viewing Globalization through that lens justifies its immediate negative impact here and also justifies doing much to balance out that with more support for those who are being harmed. We need to afford it and we can afford it.
1
Where is national security when we can no longer maintain our strength without the direct, immediate support of Chinese firms? That day is rapidly approaching if not already here. Once you lose the manufacturing, the intellectual jobs that support the manufacturing will follow as surely as night follows day.
3
Sorry Steve! The inevitable fact of economic life is human beings will compete for economic benefits, and competition will create winners and losers. The progressive impulse to redistribute the benefits of economic activity discourages desirable behavior and rewards poor performance.
Neither side of the American two-party system is being honest with voters. The left promises shield weak performers from economic reality with regulation and wealth redistribution, a prescription that simply slows growth. The Republicans are at least smart enough to know that we need growth, but stupidly believe they can create it with crony capitalism.
The real truth facing America is that globalization is an objective and accelerating reality. Americans need to face that reality, first by recognizing that we are in competition with other nations, and second by becoming much better competitors. Sitting around waiting for politicians to create highly compensated unskilled work is a losing strategy. Put down the weed, forget about Kim Kardashian, stop whining about diversity/privilege/inequality, and become competent in math, science and economics! Fix our schools. Repair our families. Make America into a winning team!
Rattner is right. Winners don't whine about globalization. Let's be winners!
Neither side of the American two-party system is being honest with voters. The left promises shield weak performers from economic reality with regulation and wealth redistribution, a prescription that simply slows growth. The Republicans are at least smart enough to know that we need growth, but stupidly believe they can create it with crony capitalism.
The real truth facing America is that globalization is an objective and accelerating reality. Americans need to face that reality, first by recognizing that we are in competition with other nations, and second by becoming much better competitors. Sitting around waiting for politicians to create highly compensated unskilled work is a losing strategy. Put down the weed, forget about Kim Kardashian, stop whining about diversity/privilege/inequality, and become competent in math, science and economics! Fix our schools. Repair our families. Make America into a winning team!
Rattner is right. Winners don't whine about globalization. Let's be winners!
4
Free trade is a good theory, and worked well for a century or so. But when Adam Smith and David Ricardo advocated free trade, it meant importing cheap raw materials and exporting manufactured goods. That was great for Britain and the US, not so much for places like India. In recent years, however, technology has allowed free trade to extend to human labor, exposing the employees in all developed countries--not just the US--to an unregulated international labor market in which our workers have to compete with people earning much less money and living in much less expensive countries. The impact is much broader than just on those who lose their jobs to offshoring., For every person unemployed because of that, there are many more whose compensation is paralyzed by the possibility that any raise will force the company to look abroad for its labor. I think this is the main reason for the stagnation of wages in developed countries, and I also think that unless the Democrats address the problem we run the risk of having a Republican demagogue as our next, and quite possibly last President.
7
How do we prevent globalization from leaving people behind? Remember. Before their lives were destroyed by a policy that clearly benefits a handful of people, long term, these people were functioning, employed, and prospering. It is a policy that has abandoned the responsibility of government to represent all of the people. How dare we implement any policy that systematically ruins the lives of millions on the pretext that more goods can be produced at a lower price, when the true cost is reflected in privation of workers unemployed. The entire globalization scheme has failed to care for the people of the globe. It should be put on hold until there are clear measures established to address those unemployed if manufacturing is exported that corresponds with their value as workers.
Capitalism cannot prosper without democracy. The Nazis learned this. The Chinese are learning this. Democracy is not rule by rich people, it is rule by all of the people. All of the people must be factored into any globalization scheme.
Capitalism cannot prosper without democracy. The Nazis learned this. The Chinese are learning this. Democracy is not rule by rich people, it is rule by all of the people. All of the people must be factored into any globalization scheme.
47
There are two drivers at work shaping our economic plight:
The information technology revolution which has reduced the cost of computation by a factor of a trillion over the past fifty years and made international communication virtually instantaneous and free. This enables the automation and outsourcing of labor.
The re-formation of monopolies which block competition, innovation and business formation.
Consider this microeconomic example:
McDonald's recently remotes some of the workers taking drive-through orders to South Dakota where there is a lower labor rate. With that change the total wages of the US and the globe were reduced.
Next they could move that remote to Asia. Then the employment and the wages of the US would be reduced further along with global wages.
Then they could replace that worker with a Siri-like computer function further reducing global wages and employment.
During this whole process the monopoly position of McDonald's would prevent any of these labor savings from being reflected in a lower cost of hamburgers. This is why since 1972 corporate profits have grown from 5% to 10% of GDP while wages have fallen from 50% to 40% of GDP.
The information technology revolution which has reduced the cost of computation by a factor of a trillion over the past fifty years and made international communication virtually instantaneous and free. This enables the automation and outsourcing of labor.
The re-formation of monopolies which block competition, innovation and business formation.
Consider this microeconomic example:
McDonald's recently remotes some of the workers taking drive-through orders to South Dakota where there is a lower labor rate. With that change the total wages of the US and the globe were reduced.
Next they could move that remote to Asia. Then the employment and the wages of the US would be reduced further along with global wages.
Then they could replace that worker with a Siri-like computer function further reducing global wages and employment.
During this whole process the monopoly position of McDonald's would prevent any of these labor savings from being reflected in a lower cost of hamburgers. This is why since 1972 corporate profits have grown from 5% to 10% of GDP while wages have fallen from 50% to 40% of GDP.
11
It's about time people started talking about this dilemma. I don't know if it's moral or just practical. Economic change creates winners and losers.
My family emigrated to the US in 1849 because changes in the agricultural economy made it impossible for them to live in Northumberland. They prospered in their new home, never getting rich but having a much more comfortable living. With that option available as an alternative, maybe it made sense to leave it up to people to take care of managing the changes by themselves.
Now, I wonder what alternatives are available to those who have lost in the creative destruction waged during the last generation. It's not just individuals; whole communities have been devastated. Flint is just one example of what's left when economic change wreaks its havoc. The dying villages of upstate NY are another. What can we do about it?
That ought to be the big question of this presidential election. Ideology won't answer that question. Neither, I suspect, will appeals to morality.
If Donald Trump is responding to the anguish of the losers, or people who fear they are losing, Bernie Sanders has called for something more positive: a collective response to a collective problem. Unfortunately, he's up against the ideology of personal responsibility and dedication to the belief that the invisible hand makes the best economic decisions.
My family emigrated to the US in 1849 because changes in the agricultural economy made it impossible for them to live in Northumberland. They prospered in their new home, never getting rich but having a much more comfortable living. With that option available as an alternative, maybe it made sense to leave it up to people to take care of managing the changes by themselves.
Now, I wonder what alternatives are available to those who have lost in the creative destruction waged during the last generation. It's not just individuals; whole communities have been devastated. Flint is just one example of what's left when economic change wreaks its havoc. The dying villages of upstate NY are another. What can we do about it?
That ought to be the big question of this presidential election. Ideology won't answer that question. Neither, I suspect, will appeals to morality.
If Donald Trump is responding to the anguish of the losers, or people who fear they are losing, Bernie Sanders has called for something more positive: a collective response to a collective problem. Unfortunately, he's up against the ideology of personal responsibility and dedication to the belief that the invisible hand makes the best economic decisions.
9
A lot of our problem is one-sided trade deals.
We negotiate an agreement with hundreds of pages of detailed requirements, and then we here in the US implement each on of them rigorously. The foreign countries? They laugh and do what they like. Come sue us in World Trade Court, our team of attorneys has thousands of pages of brief to file!
Every other country in the world, at the bottom, looks after its own interests. They do whatever it takes to make sure the manufacturing technology stays in their homeland. Illegal subsidies, state-sanctioned bribery and corruption, phony trade unions, threats of military force to customers who don't buy - you name it, they do it.
As for us, we're nice guys. And as nice guys, we finish last. This is what Donald Trump is tapping into - no more Mr Nice Guy. You foreign countries, you'll buy our products or we'll let the Chinese and the Russians eat you.
We negotiate an agreement with hundreds of pages of detailed requirements, and then we here in the US implement each on of them rigorously. The foreign countries? They laugh and do what they like. Come sue us in World Trade Court, our team of attorneys has thousands of pages of brief to file!
Every other country in the world, at the bottom, looks after its own interests. They do whatever it takes to make sure the manufacturing technology stays in their homeland. Illegal subsidies, state-sanctioned bribery and corruption, phony trade unions, threats of military force to customers who don't buy - you name it, they do it.
As for us, we're nice guys. And as nice guys, we finish last. This is what Donald Trump is tapping into - no more Mr Nice Guy. You foreign countries, you'll buy our products or we'll let the Chinese and the Russians eat you.
6
Not only the globalisation project has gone awry but proved socially and economically divisive across the world, creating vast disparities of income and wealth in societies. Not that globalisation is a bad idea or immoral in itself, but it turned out to be so as it was pushed hurriedly by the vested interests without ensuring a level-playing field for all the stakeholders and without putting into place a regulatory framework which could ensure the equitable terms of global engagement, hence the losers heavily outnumber the winners.
9
Human beings have been global through out history, from the time our ancestors walked from Africa and inhabited all continents. Throughout, all ancient civilizations thrived by interacting with each other, earning and exchanging ideas and goods. No bigger example than the old Silk route trade that spanned continents and connected people, at horse or camel pace. Now technology has outpaced all communications and interactions with digital technology, computerization and automation taking the place of human hands. The problem this time is we did not have a back up plan. For each worker job lost, we did not have any alternatives. Neither our social system nor safety net is fine tuned to prevent poverty, take care of those uninsured and provide income generating knowledge, skills and training. In the US, with republicans screaming less government and cutting back on essential yet costly social services, a disaster like Flint unfolded, not far from the big success of AutoAmerica.
31
Yes, globalisation has always been with us but the one pushed by the Washington consensus is different for being lopsided and discriminatory.
4
When republicans scream less government, they mean less monies spent on the regular people, so that it can be diverted to big corporations. History shows that for every republican president that screamed less government, they all created HUGE deficits. Haven't you noticed that we can always spend more on the military (those bases that have been secured in those states for certain Representatives), if we ever could stop fighting wars, what happens to all that money coming in? And that's just one thing.
1
The author's thesis is really quite simple, and very true. Without globalization, companies compete locally for, say, the lowest manufacturing cost. Because of a nation's internal economics - currency, cost of living, etc... - that range of competitiveness will be narrow. Go global, and open up that competition to nations where 7 year olds make sneakers for pennies a day, and the whole picture is skewed. A country like the US has no chance. Globalization basically arbitrages labor costs - so it's great for the company and shareholders. It may even be great for smaller developing nations. But it's certainly not great for the labor force that gets sidelined.
Right now, it's so much more correct to be concerned about poor people, marginalized minorities - and that is all good from a moral standpoint. But for this country to survive and prosper, we need a president and Congress united in reengineer an economy that favors our own people and ensures wealth flows equitably to create a vibrant, stable middle class once again. Throwing our fate to the winds of globalization without protection is clearly not the answer.
Right now, it's so much more correct to be concerned about poor people, marginalized minorities - and that is all good from a moral standpoint. But for this country to survive and prosper, we need a president and Congress united in reengineer an economy that favors our own people and ensures wealth flows equitably to create a vibrant, stable middle class once again. Throwing our fate to the winds of globalization without protection is clearly not the answer.
50
How can President Obama, or anyone else, think that any of the big or small US manufacturing businesses could ever economically justify creating and/or keeping any of the higher paying semi-skilled manufacturing jobs in the USA if they are hamstrung with high taxes, many times more expensive labor costs, electrical energy costs that is required to be generated in compliance with the EPA, health care payroll tax costs, unemployment payroll tax costs, social security and medical care payroll tax costs, environmental compliance manufacturing costs, fringe (holiday and vacation) benefit payroll costs, OSHA compliance payroll costs, union labor featherbed work rules, anti-business laws, and general anti-business attitudes that make manufacturing products in the USA many times more costly than manufacturing the same product in almost any other foreign country in accordance with the existing US Free Trade Agreements?
US businesses that are considering creating or keeping jobs in the USA also consider that while paying US citizens employed in the USA much higher pay scales, they must also evaluate and justify the additional costs of EPA compliance, the additional US labor payroll costs that the national healthcare, unemployment insurance, social security, and other federal government payroll taxes add on top of the direct costs of US labor payrolls when economically and financially justifying where to locate a new manufacturing facility.
US businesses that are considering creating or keeping jobs in the USA also consider that while paying US citizens employed in the USA much higher pay scales, they must also evaluate and justify the additional costs of EPA compliance, the additional US labor payroll costs that the national healthcare, unemployment insurance, social security, and other federal government payroll taxes add on top of the direct costs of US labor payrolls when economically and financially justifying where to locate a new manufacturing facility.
1
" Throwing our fate to the winds of globalization without protection is clearly not the answer.".....
It could not be said any better.
It could not be said any better.
In 1995, Paul Krugman published a model showing that trade with low wage countries, contrary to believes that it would lower the wages of those in the US, played only a minor role lowering American workers salary {1]
The paper convinced leading economists and provided economic analysis back up for politicians promoting international trade.
!3 years later, the Paul Krugman conceded that the standard model that he had rejected in 1995, i.e., that trade with low wage depresses wages in the US might well be correct [2].
His opening words were these: "This paper is the manifestation of a guilty conscience" ,
And it well should, given the damage his 1995 model had done.
But he offered no solution on how to help those left behind.
Time to get going.
[1} "Growing World Trade: Causes and Consequences”, Paul Krugman, Brookings Papers on Economic Activity 1:1995
[2] "Trade and Wages, Reconsidered" Brookings Papers on Economic Activity 103-54
The paper convinced leading economists and provided economic analysis back up for politicians promoting international trade.
!3 years later, the Paul Krugman conceded that the standard model that he had rejected in 1995, i.e., that trade with low wage depresses wages in the US might well be correct [2].
His opening words were these: "This paper is the manifestation of a guilty conscience" ,
And it well should, given the damage his 1995 model had done.
But he offered no solution on how to help those left behind.
Time to get going.
[1} "Growing World Trade: Causes and Consequences”, Paul Krugman, Brookings Papers on Economic Activity 1:1995
[2] "Trade and Wages, Reconsidered" Brookings Papers on Economic Activity 103-54
23
Globalization has greatly increased corporate profits. It has shifted wealth from workers to owners. Labor is a huge drag on profits, so owners seek the lowest cost labor or eliminate it altogether through automation. Globalization is the primary driving force in the race to the bottom that the unions have been warning about for decades. So what do we do? We destroy the unions.
As wealth has shifted from wages to ownership, what do we do? We reduce taxes on wealth from equities and profits and maintain high taxes on wages. This causes capital to flow into equities and away from wages.
Then we go even farther and eliminate taxes on ownership altogether (Kansas for example) which forces increases in sales and property taxes which further extracts wealth from workers and gives it to owners.
All of this has resulted in greatly concentrating wealth to the famed one percent.
As a solution, we now want to reduce taxes on the top end because their wealth is supposed to trickle down and make us all rich. How is that possible? After nearly 40 years of pursuing this fantasy, the desired result has never materialized.
Our duty is to us, our people. That means that taxes on the top end must go up. Taxes on ownership must go up, not down. The money generated must be reinvested in our society, not welfare. The entire nation must be rebuilt. Energy, transportation, water supply, vocational/technical schools, new industries. Instead, we do nothing and decline.
As wealth has shifted from wages to ownership, what do we do? We reduce taxes on wealth from equities and profits and maintain high taxes on wages. This causes capital to flow into equities and away from wages.
Then we go even farther and eliminate taxes on ownership altogether (Kansas for example) which forces increases in sales and property taxes which further extracts wealth from workers and gives it to owners.
All of this has resulted in greatly concentrating wealth to the famed one percent.
As a solution, we now want to reduce taxes on the top end because their wealth is supposed to trickle down and make us all rich. How is that possible? After nearly 40 years of pursuing this fantasy, the desired result has never materialized.
Our duty is to us, our people. That means that taxes on the top end must go up. Taxes on ownership must go up, not down. The money generated must be reinvested in our society, not welfare. The entire nation must be rebuilt. Energy, transportation, water supply, vocational/technical schools, new industries. Instead, we do nothing and decline.
134
Great post.
First let's pay well the jobs that aren't leaving because they because they can't be outsourced. Fast food comes to mind, but so does the rest of the food industry. Field workers and fruit pickers should earn a living wage. (We need to change our whole food system away from junk to quality, but that's a much larger argument.)
As the population of elderly grows there will be increasing demand for health care workers, especially in assistant services like home aids and nursing home workers. Unless we decide to ship our oldsters to Mexico or China, those jobs will stay here. Those workers deserve a good wage and those who are not "working" because they are taking care of a dependent older family member deserve compensation at the very least in Social Security schedules.
Unions may be part of the answer. Delivery services like UPS have grown because of online shopping. At least in my area UPS drivers are Teamsters and they're doing well.
Rather than complaining about the loss of jobs, let's make sure the one's left here are good jobs that former manufacturing workers will be proud to have because they pay well and are respected.
As the population of elderly grows there will be increasing demand for health care workers, especially in assistant services like home aids and nursing home workers. Unless we decide to ship our oldsters to Mexico or China, those jobs will stay here. Those workers deserve a good wage and those who are not "working" because they are taking care of a dependent older family member deserve compensation at the very least in Social Security schedules.
Unions may be part of the answer. Delivery services like UPS have grown because of online shopping. At least in my area UPS drivers are Teamsters and they're doing well.
Rather than complaining about the loss of jobs, let's make sure the one's left here are good jobs that former manufacturing workers will be proud to have because they pay well and are respected.
11
Many of the jobs you talk about are menial & unskilled (compared to skilled trade jobs that have been off-shored). How much can you pay a fruit picker? And only 1% of all Americans (and 1% of all illegal aliens) work in agriculture AT ALL. Agriculture is very efficient, and yes, it has been mechanized over the years. It is not that difficult imagining robotic fruit pickers.
I don't think agricultural workers should be exploited, but if you mean "$15 an hour plus benefits", you will be talking about making fruits & vegetables incredibly costly -- meaning that they are even LESS affordable to the average American, meaning they won't eat more of such healthy foods -- but eat more cheap processed "junk".
Home health aides? Again, this is unskilled work. These are not nurses, the way some people imagine. They are companions, or do basic housework, or personal care -- bathing or feeding the elderly. It can be very hard, trying work if you are caring for dementia patients. If you drastically increase pay, however -- what happens to the elderly? ALREADY TODAY, to hire a home health costs about $22 an hour (probably more in NYC and other costly areas). That is $500 a day, or $3500 a week, or $15,000 a month -- or $180,000 a year. I assure you that the money does NOT go to the worker, but most of it to the agencies who do the arrangements and book-keeping. It's actually a huge industry, but the workers are lucky to earn $10 an hour (often less).
Also: UPS is not unionized.
I don't think agricultural workers should be exploited, but if you mean "$15 an hour plus benefits", you will be talking about making fruits & vegetables incredibly costly -- meaning that they are even LESS affordable to the average American, meaning they won't eat more of such healthy foods -- but eat more cheap processed "junk".
Home health aides? Again, this is unskilled work. These are not nurses, the way some people imagine. They are companions, or do basic housework, or personal care -- bathing or feeding the elderly. It can be very hard, trying work if you are caring for dementia patients. If you drastically increase pay, however -- what happens to the elderly? ALREADY TODAY, to hire a home health costs about $22 an hour (probably more in NYC and other costly areas). That is $500 a day, or $3500 a week, or $15,000 a month -- or $180,000 a year. I assure you that the money does NOT go to the worker, but most of it to the agencies who do the arrangements and book-keeping. It's actually a huge industry, but the workers are lucky to earn $10 an hour (often less).
Also: UPS is not unionized.
3
GovTrack.us reveals several dozen trade assistance bills being considered 30 years ago, one of them co-sponsored by then Vice President Dan Quayle and Senator Ted Kennedy (D). The aim of the bills was to help states, communities, companies, plant and workers adapt to globalization.
Now that globalization has devastated the American middle class, it is hard to find any similar effort in Congress to help people and certainly no bipartisan effort with any chance of having wide impact.
Of course, the Congress no longer represents the people, but just the handful of wealthy donors whose only care about workers is keeping their wages low. The wealthy, and the people of China, India, Vietnam, etc are the clear winners of globalization.
If the pointy heads at the Peterson Institute want to update their economic perspective, they could start with http://raceagainstthemachine.com/ by MIT economists Erik Brynjolfsson and Andrew McAfee. But, as Ratner points out, the Peterson people are the winners, and have shown no interest in helping the losers.
Which is why Donald Trump is able to disrupt the Republican establishment and may well be the Republican candidate for President of the United States. They brought it on themselves.
Now that globalization has devastated the American middle class, it is hard to find any similar effort in Congress to help people and certainly no bipartisan effort with any chance of having wide impact.
Of course, the Congress no longer represents the people, but just the handful of wealthy donors whose only care about workers is keeping their wages low. The wealthy, and the people of China, India, Vietnam, etc are the clear winners of globalization.
If the pointy heads at the Peterson Institute want to update their economic perspective, they could start with http://raceagainstthemachine.com/ by MIT economists Erik Brynjolfsson and Andrew McAfee. But, as Ratner points out, the Peterson people are the winners, and have shown no interest in helping the losers.
Which is why Donald Trump is able to disrupt the Republican establishment and may well be the Republican candidate for President of the United States. They brought it on themselves.
76
Shorter Rattner: the plutocrats are worried about the rise of Donald Trump and are ready to distribute a few candies to the masses to keep them in line.
Will it be too little too late?
Will it be too little too late?
85
Interesting but in the end a bootless question. Those whom globalization benefits soon enough will be in precisely the same boat as those it leaves behind. This market vision of a world where labor is performed where it can be with optimal quality and reliability at optimal cost works fine so long as there is labor to apportion – fine except for its first-world middle-class devastation. Only if that market vision remains strategically valid does the question posed have meaning.
The real question should be “what’s our duty to those whose labor becomes obsolete, either transitionally by Globalization or strategically by automation?”
My own answer to that true question is “our duty is both substantial and inevitable”. If we do nothing to mitigate the effects of that transitional state, we will have no experience at keeping our populations from erupting with violence resulting in massive social destabilization when automation destroys enough work, which has been the basis of our consumer-based economies during modern times.
The “what” is an undefined solution, though: whatever the means become to assist those left behind or whose work is made obsolete by hardware and software, they will need to be unlike any economic framework we’ve ever known before.
The real question should be “what’s our duty to those whose labor becomes obsolete, either transitionally by Globalization or strategically by automation?”
My own answer to that true question is “our duty is both substantial and inevitable”. If we do nothing to mitigate the effects of that transitional state, we will have no experience at keeping our populations from erupting with violence resulting in massive social destabilization when automation destroys enough work, which has been the basis of our consumer-based economies during modern times.
The “what” is an undefined solution, though: whatever the means become to assist those left behind or whose work is made obsolete by hardware and software, they will need to be unlike any economic framework we’ve ever known before.
58
Or maybe, just maybe, we could stop importing labor every time wages start to rise, even just the slightest, when there are not enough jobs for tens of millions of low skilled, and even high skilled, American workers?
This oversupply cannot fixed by importing more and more labor, to the tune of one million workers every year, not including illegal aliens and the current 650,000 H1B visa STEM workers, whose numbers are increased annually by both political parties.
The law of supply and demand applies to labor as it does to goods, as everyone but Democrats, tenured college professors, economists, and New York Times editorialists seems to know. Their blinders are firmly on because they themselves are immune to the effects of 'globalization' (i.e. outsourcing or insourcing someone else's job).
This oversupply cannot fixed by importing more and more labor, to the tune of one million workers every year, not including illegal aliens and the current 650,000 H1B visa STEM workers, whose numbers are increased annually by both political parties.
The law of supply and demand applies to labor as it does to goods, as everyone but Democrats, tenured college professors, economists, and New York Times editorialists seems to know. Their blinders are firmly on because they themselves are immune to the effects of 'globalization' (i.e. outsourcing or insourcing someone else's job).
8
I'm not sure, if the jobs are not there, how a "huge tax redistribution" really helps anyone. It seems to me that major efforts to offer free or low cost re-training and/or educational opportunities would be far more productive. For older adults who have lost manufacturing jobs, maybe we accelerate their access to Social Security and Medicare while also helping them with possible job training (It can be harder for older workers to learn something new, but is also more difficult for them to get real, full-time employment).
17
"I'm not sure, if the jobs are not there, how a "huge tax redistribution" really helps anyone"
For liberal/progressives, higher taxes and more government are the answer to everything, but even the government loving NYTs has said on many occasions that "government is always inefficient and often corrupt" so how will even more inefficiency and corruption ever solve anything?
For liberal/progressives, higher taxes and more government are the answer to everything, but even the government loving NYTs has said on many occasions that "government is always inefficient and often corrupt" so how will even more inefficiency and corruption ever solve anything?
2
Retraining for what? More low wage jobs? The global economy has created some big winners. It wouldn't hurt them to pay more, or at least something in US taxes.
3
LOL, it is a total myth that "more training!" and "more college!" will solve that problem. Most displaced workers have tried this, over and over, with the result that more and more fields that were supposed to be open to new workers are now over-filled. And nobody in any field wants to hire workers over 50, no matter if they all have advanced degrees in "high tech".
Let me make it very simple, Anne-Marie: we now have far more people who NEED JOBS than we have jobs. It no longer takes as many workers to produce all the goods and services we need -- of course, off-shoring has ratcheted that up very dramatically -- but technology did a lot of it too. If a company can have one worker with a computer do the work that formerly took six people, you'd better believe that five people are now out of a job -- permanently.
Let me make it very simple, Anne-Marie: we now have far more people who NEED JOBS than we have jobs. It no longer takes as many workers to produce all the goods and services we need -- of course, off-shoring has ratcheted that up very dramatically -- but technology did a lot of it too. If a company can have one worker with a computer do the work that formerly took six people, you'd better believe that five people are now out of a job -- permanently.
9
This reminds me of something the great Bob Herbert might have written.
Not the same--but with the same sense of conscience and independence that marked his writing, and has been sadly missing from the Times for a while.
Bob opposed Nafta. He predicted the same things as Perot. The results that Rattner is pointing out here.
These are the same results usually studiously ignored by the NYT.
And the idea that we owe something to the losers in the "overall benefits" equation? Rare indeed these days. At least, rare in the media.
Bernie Sanders seems to think they're owed something, and millions appear to agree.
Not the same--but with the same sense of conscience and independence that marked his writing, and has been sadly missing from the Times for a while.
Bob opposed Nafta. He predicted the same things as Perot. The results that Rattner is pointing out here.
These are the same results usually studiously ignored by the NYT.
And the idea that we owe something to the losers in the "overall benefits" equation? Rare indeed these days. At least, rare in the media.
Bernie Sanders seems to think they're owed something, and millions appear to agree.
180
We who work to administer the disastrous Free Trade Agreements directly (I am employed by the Federal agency directly in charge of them) see clearly one thing. They benefit the multinational corporations who can easily shift production to follow the cheapest per-hour wages to enable those stock symbols to pay higher dividends. No concern for displacement in America has ever been shown, including the eventual erosion of Americans' buying power to enable the mindless purchase of these products produced ever more cheaply. The USA joined the World Trade Organisation and is now in thrall to its directives as far as trade is concerned, including the abolition in 2009 of our quota/visa regime that once governed the importation of Chinese apparel and textile products, that was our last leverage over China. No one in my own Federal agency at the top says anything against the FTAs, because they are all beholden to the multinationals who hire them whenever they leave the civil service.
285
Few states have been devastated as much as North Carolina has. Once we were one of the largest manufacturers of textiles and furniture. Drive through the small rundown towns and the annexed parts of Charlotte and you see streets full of small similarly built houses that were once the homes of the workers in the two industries. Look around and you'll see a big empty building or a group of buildings they worked in. The city of Kannapolis is the biggest. It was once the home of Cannon Mills. There was hardly a home linen that wasn't produced there.
There will always be people who are under-educated. At one time these plants were the places they could work. Now they've nowhere to go.
It is't just here in North Carolina. In Massachusetts it was the shoe industry.
Globalization and especially the FTAs destroyed opportunities for American workers. The glut of uneducated people from south of the border hasn't helped.
Surely the answer can't be to just give checks to these people for their whole lives to make up for the fact that there will never be jobs for them.
There will always be people who are under-educated. At one time these plants were the places they could work. Now they've nowhere to go.
It is't just here in North Carolina. In Massachusetts it was the shoe industry.
Globalization and especially the FTAs destroyed opportunities for American workers. The glut of uneducated people from south of the border hasn't helped.
Surely the answer can't be to just give checks to these people for their whole lives to make up for the fact that there will never be jobs for them.
8
The scholars in the Peterson Institute live in their own bubble. Although Econ 101 may promote globalization, economics is focused on maximizing efficiency and profits without regard to its effect on society.
When I was growing up in the 50s a plumber or a teacher could afford to buy a new house. Now it seems that an entry to the middle class requires a Masters in Engineering from MIT. Those stakes are way too high. Eventually the top 5% will need to live in a guarded, gated community to keep out the criminals.
In lieu of that future, I'll take Bernie Sander's solution any day.
When I was growing up in the 50s a plumber or a teacher could afford to buy a new house. Now it seems that an entry to the middle class requires a Masters in Engineering from MIT. Those stakes are way too high. Eventually the top 5% will need to live in a guarded, gated community to keep out the criminals.
In lieu of that future, I'll take Bernie Sander's solution any day.
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The people in today's middle-class have a political way to keep their income middle-class, usually without an increase in their productivity. This is called the Baumol Effect.
In fact teacher productivity, based on the idea one needs at least 2 years of college to have the same knowledge as the high school students of 50 years ago, has declined significantly (actually they are more of baby-sitters now and parents are horrified they might have their kids at home while a teacher strike takes place) yet teachers get paid more today. Starting salaries for NYC teachers is higher than the average household income.
50 years ago people could afford middle-class service providers. Now most people cannot afford the new middle-class workers. That's why today feels different to the average person.
In fact teacher productivity, based on the idea one needs at least 2 years of college to have the same knowledge as the high school students of 50 years ago, has declined significantly (actually they are more of baby-sitters now and parents are horrified they might have their kids at home while a teacher strike takes place) yet teachers get paid more today. Starting salaries for NYC teachers is higher than the average household income.
50 years ago people could afford middle-class service providers. Now most people cannot afford the new middle-class workers. That's why today feels different to the average person.
1
" Eventually the top 5% will need to live in a guarded, gated community to keep out the criminals"
You don't have to wait that long. The middle class today are providing their own security from the criminals with alarms and firearms. And gated communities have been here for decades. 45 years ago I worked on the little islands connected to Miami by causeways where the homes were connected to the front gate to verify that the owner was expecting the telephone company before I could drive on. I even got to go to Al Capone's home. He knew the need for security.
You don't have to wait that long. The middle class today are providing their own security from the criminals with alarms and firearms. And gated communities have been here for decades. 45 years ago I worked on the little islands connected to Miami by causeways where the homes were connected to the front gate to verify that the owner was expecting the telephone company before I could drive on. I even got to go to Al Capone's home. He knew the need for security.
2
Sadly, many of the upper income already live in guarded, gated communities and send their kids to private schools - effectively seceding from local governments.
7
>.
Bourgeois economicists never stop trying to cover their tracks and droppings.
"We are for Free Trade, because by Free Trade all economical laws, with their most astounding contradictions, will act upon a larger scale, upon the territory of the whole earth; and because from the uniting of all these contradictions in a single group, where they will stand face to face, will result the struggle which will itself eventuate in the emancipation of the [worker]."
Marx
Bourgeois economicists never stop trying to cover their tracks and droppings.
"We are for Free Trade, because by Free Trade all economical laws, with their most astounding contradictions, will act upon a larger scale, upon the territory of the whole earth; and because from the uniting of all these contradictions in a single group, where they will stand face to face, will result the struggle which will itself eventuate in the emancipation of the [worker]."
Marx
12
Thank you, Mr. Rattner, for exposing the complete lack of empathy for the victims of globalization in the halls of power and influence. It wouldn't surprise me if Mr. Rattner becomes a pariah among his peers for daring to write this column.
Let's take Adam Posen. I would like to take him for a drive, starting in New England and ending at the Mississippi. We would spend a little time at every community along the way that has been devastated by globalization, touring abandoned buildings, meeting people who just get by on government assistance, and reading the obituaries of heroin addicts in the local newspapers.
I would hope that Mr. Posen would rediscover his humanity as a result of this trip. However, I have I my doubts.
Let's take Adam Posen. I would like to take him for a drive, starting in New England and ending at the Mississippi. We would spend a little time at every community along the way that has been devastated by globalization, touring abandoned buildings, meeting people who just get by on government assistance, and reading the obituaries of heroin addicts in the local newspapers.
I would hope that Mr. Posen would rediscover his humanity as a result of this trip. However, I have I my doubts.
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I have my doubts, too, but that's a LOOONG drive. Let me suggest a shorter one: from Columbus, Ohio down due south to the Ohio River.
It is so depressing, it's all you can do not to weep openly while you drive. Town after town, bereft of any businesses except gas stations and dollar stores. There are people literally living in tar paper shacks. The lucky ones have a mobile home up on blocks. Oh -- and it's the EPICENTER of the meth lab industry.
You can do this drive in under 2 hours. It will completely change what you think about the economy. It changed me.
It is so depressing, it's all you can do not to weep openly while you drive. Town after town, bereft of any businesses except gas stations and dollar stores. There are people literally living in tar paper shacks. The lucky ones have a mobile home up on blocks. Oh -- and it's the EPICENTER of the meth lab industry.
You can do this drive in under 2 hours. It will completely change what you think about the economy. It changed me.
5
Greed junkie psychopaths do not have any humanity.
2
No, I think you should start the drive in Flint, Michigan and offer him a tall glass of water, too.
2
Yes, old style thinking was good trends/bad trends, good foods/bad foods, etc. It makes more sense to think of pros and cons, advantages and drawbacks.
4
Who is going to buy everything and support our consumer spending economic model when the vast amount of jobs are occupied by the 6.00 an hour crowd??? It is high time that the right wingers and the pro business types start thinking about this because it is here now, this is why the Fed is unable to raise interest rates off of 0 without having the economy grind to a halt. The vast majority no longer have purchasing power like they did in the past. People that don't make any money can't buy stuff.
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"Who is going to buy everything and support our consumer spending economic model"
More mansions, more car elevators for them, more multiples of cars at each home, more and bigger private planes (private 737 is popular now) more and bigger yachts, more servants, even private doctors, all of that is consumption.
They save too much, so rich people's consumption won't keep the economy going, but they can work around that with targeted stimulus.
We had all of those things in the 1890's through the 1920's. Even now, John Travola has a private airliner at his house and a private airstrip to fly it from. Trump has two high end helicopters, and his private airliner. We are setting new records for the size and number of yachts. Others want to do that. They just need to Bogart all of the money, and they can.
That is how they envision this.
More mansions, more car elevators for them, more multiples of cars at each home, more and bigger private planes (private 737 is popular now) more and bigger yachts, more servants, even private doctors, all of that is consumption.
They save too much, so rich people's consumption won't keep the economy going, but they can work around that with targeted stimulus.
We had all of those things in the 1890's through the 1920's. Even now, John Travola has a private airliner at his house and a private airstrip to fly it from. Trump has two high end helicopters, and his private airliner. We are setting new records for the size and number of yachts. Others want to do that. They just need to Bogart all of the money, and they can.
That is how they envision this.
7
But they don't think that way. That way requires thinking about others, the community, and the future of all. It requires thinking past the next quarter.
5
And so what if prices drift up a bit? Many Americans can't buy things at any price; and those of us who still have jobs certainly would like a middle ground between the cheaply-made throw-away clothing made in China and elsewhere- and the designer togs that are purchased largely by a small percentage of the country. I find it hard to believe that Americans can't complete at some reasonable wage that's above third-world countries'. All of the tax breaks should be going to those entrepreneurs and small businesses that are trying to revive 'Made in America,' while the too big to fail multi-national corporations should be prohibited from growing ever-larger. That is as anti-capitalsim as you can get.
6
Well-done, Steven, well-done. Can't think your column will start a movement towards a more common goal (humans first, corporations second), but I can dream.
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Thank you, Mr. Rattner. Better late than never. It has always been obvious to many of us: "free trade" has been a disaster for many more Americans than it has helped. So why is it still American policy? That's easy: because the rich got richer from globalization, and the rich control Congress and actually write the laws. Duh!
(By the way, if you had looked at changes in wages since the 1970s instead of since 2009, the claims made by "free trade" supporters would be shown to be totally false.)
Yes, a huge tax redistribution would help, but it would be better to combine it with an increase in tariffs, which would get to the source of the jobs and wages problems, plus bring in additional revenue. But then, some people would have to admit that they have been wrong about "free trade" for decades.
(By the way, if you had looked at changes in wages since the 1970s instead of since 2009, the claims made by "free trade" supporters would be shown to be totally false.)
Yes, a huge tax redistribution would help, but it would be better to combine it with an increase in tariffs, which would get to the source of the jobs and wages problems, plus bring in additional revenue. But then, some people would have to admit that they have been wrong about "free trade" for decades.
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"Wrong" or lying, all the way to the bank.
1
Yes, the steel workers of Cleveland and Pittsburgh in the 1970's were right--weakening the protections for American workers and American jobs was going to have negative consequences. I'm glad Bangladesh and Cambodia has more jobs but not if our country has to wither as a result. That is the direction we are in-- that is how Flint MI becomes expendable. Where does it stop?
4
So here I am as a retired American expat living in a country with 11% unemployment and the highest fertility rate of any country in Europe.
Having babies in France is like cult worship where everyone is expected to support large families and criticism of having children is social anathema.
The French live in a cultural bubble that ends at the border. Considering the chaos in the world, living in a bubble may not be a bad idea!
Having babies in France is like cult worship where everyone is expected to support large families and criticism of having children is social anathema.
The French live in a cultural bubble that ends at the border. Considering the chaos in the world, living in a bubble may not be a bad idea!
11
France has 11% unemployment despite the fact that he government refuses to allow businesses to lay off excess workers. Instead workers are hired as contract workers are hired for a set time and let go or re-contracted as needed to keep the government away from the employer's business.
A few years ago a tire plant was being prevented from laying people off despite large inefficiency, low productivity and profitability. An American prospect looking to buy it found the workers working 35 hours a week but being paid for 40 hours. When he asked why he was told by a union official, "It is the French way".
He bought the plant but only after tough negotiations not with the owners but the unions and the government for necessary changes.
A similar situation exists in Italy.
A few years ago a tire plant was being prevented from laying people off despite large inefficiency, low productivity and profitability. An American prospect looking to buy it found the workers working 35 hours a week but being paid for 40 hours. When he asked why he was told by a union official, "It is the French way".
He bought the plant but only after tough negotiations not with the owners but the unions and the government for necessary changes.
A similar situation exists in Italy.
4
NY Huguenot. .....French employers and unions are gradually eliminating these antiquated practices left over from past socialist governments....it is almost impossible to find an employer who will give a new employee a contract of any kind...those days are gone after existing contracted workers retire, quit, or die.
1
Vive la France. Vive la Bubble, long may it remain unpopped....
1
I'M ALL EARS Perhaps the most memorable utterance by Ross Perot. What does silence sound like? In the ghost towns created by the collapse of US manufacturing jobs. Like Flint, Michigan. My great fear is that the poisoning of Flint with documented knowledge by the administration of the State, is that others will follow. There's a TV series, How Things Are Made, that shows sophisticated factories in Canada. It looks to me like the workers there are few in number, toward the end of the production line, giving products a once over done by a human being. Do we really want to take steps to fix the moral decay that free trade has inflicted on workers here in the US? Extending public education to include 2 years of Community College tuition free.. But what do we do with the students who just can't cut college level material? What's going to help them? Even with neglect of the infrastructure, there are only so many jobs repairing roads and bridges. Time was when kids who were in the Vocational track left school at 14 to apprentice, then worked full time in the local factory, raising a family, being independent. Expanding the middle class. As remedy we need to restore the language in corporation charters to include the words such as, In order to better serve the community by producing goods and services, may lead to a more balanced view of the relations between labor and management. I hope the middle class can be restored. High wages make for lots of demand for product.
23
General Electric CEO Jeffrey Immelt once said that GE was like a barge that was moved to whatever country supported the best profitability. US manufacturers have no loyalty to the countries they're charter in.
Immelt was also the head of Obama' job creation committee. While in that position he oversaw the movement of GE's MRI and X-Ray machine manufacturing from the US to Europe. I guessed that Obama hadn't been specific enough that he meant job creation in the US. The committee only met once.
Immelt was also the head of Obama' job creation committee. While in that position he oversaw the movement of GE's MRI and X-Ray machine manufacturing from the US to Europe. I guessed that Obama hadn't been specific enough that he meant job creation in the US. The committee only met once.
14
These are not "those other people left behind" to whom we may owe something.
They are us. They are Americans. They are our nation. It is our workforce, our economy. We take care of our own because they are part of us.
"The economy" is not an abstract thing. It is all of the activity of all of us, all of what we do to live here together. We do the economy because it is the day to day operation of our lives and our country together.
They are not Other. They are us. If we leave them out, we cut off a part of our own economy, our own potential, our own national life.
We have an economy to live, all of us together, not just the ones who are doing best at the moment, the rest go off and starve.
They are us. They are Americans. They are our nation. It is our workforce, our economy. We take care of our own because they are part of us.
"The economy" is not an abstract thing. It is all of the activity of all of us, all of what we do to live here together. We do the economy because it is the day to day operation of our lives and our country together.
They are not Other. They are us. If we leave them out, we cut off a part of our own economy, our own potential, our own national life.
We have an economy to live, all of us together, not just the ones who are doing best at the moment, the rest go off and starve.
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@Mark: "We have an economy to live, all of us together, not just the ones who are doing best at the moment, the rest go off and starve."
Well said, sir. But, let's face it, these are precisely the attitudes and outlooks the American right has always opposed and, since St. Reagan, have stamped underfoot. Under the banner of "personal responsibility" they allow the oligarchs to go obscenely undertaxed and they let the poor rot. Both sides, you see, are personally responsible for their lots in life. It is "class warfare" for government to interfere.
The right has launched a successful campaign against what they call "collectivism." This is most obvious in their destruction of private unions. Now they have their sights on public unions and are likely to win there too. Non-union workers are mere grist for the globalization mill, ground up and spat out.
Finally, the right has been successful in exploiting racism and bigotry to divide the American underclass against itself. This is why people on Medicaid and Social Security can get worked up about their "hard earned dollars" going to lazy urban types (read "black") who live immoral lifestyles, take drugs, sire children out of wedlock, and are averse to work.
I agree with your sentiments 100%, but we have real work to do to fashion a counter grand-narrative to the rightist one that has dominated in this country since 1980 and has by now been internalized by millions of those who Mr. Rattner calls the "losers" in a global economy.
Well said, sir. But, let's face it, these are precisely the attitudes and outlooks the American right has always opposed and, since St. Reagan, have stamped underfoot. Under the banner of "personal responsibility" they allow the oligarchs to go obscenely undertaxed and they let the poor rot. Both sides, you see, are personally responsible for their lots in life. It is "class warfare" for government to interfere.
The right has launched a successful campaign against what they call "collectivism." This is most obvious in their destruction of private unions. Now they have their sights on public unions and are likely to win there too. Non-union workers are mere grist for the globalization mill, ground up and spat out.
Finally, the right has been successful in exploiting racism and bigotry to divide the American underclass against itself. This is why people on Medicaid and Social Security can get worked up about their "hard earned dollars" going to lazy urban types (read "black") who live immoral lifestyles, take drugs, sire children out of wedlock, and are averse to work.
I agree with your sentiments 100%, but we have real work to do to fashion a counter grand-narrative to the rightist one that has dominated in this country since 1980 and has by now been internalized by millions of those who Mr. Rattner calls the "losers" in a global economy.
13
"They are not Other. They are us."
That's the philosophy that animated the great Western European powers to establish social safety nets for all their citizens.
But those countries were largely homogeneous at the time. And their citizens knew that the person sleeping in a doorway could be a close relative or even themselves one day if their luck changed.
Not so here. America has a strong streak of nativism, of us-against-them, and group-against-group. And some of our citizens hardest hit by globalization are easily manipulated to blame the "Others" among us for their plight.
Sending 11 million undocumented people back where they came from is not going to bring good manufacturing jobs back to the US. At best it will only open up low-wage jobs, which are no solution to the larger problem of supporting a family with dignity.
Meanwhile the CEOs, boards, and stockholders of the multi-nationals laugh all the way to the bank. Something has to change.
Perhaps a heavy taxes on offshore profits and stiff penalties for corporate inversion would be a starting point. I don't see how legislation like this could pass this Congress, but we can only hope.
That's the philosophy that animated the great Western European powers to establish social safety nets for all their citizens.
But those countries were largely homogeneous at the time. And their citizens knew that the person sleeping in a doorway could be a close relative or even themselves one day if their luck changed.
Not so here. America has a strong streak of nativism, of us-against-them, and group-against-group. And some of our citizens hardest hit by globalization are easily manipulated to blame the "Others" among us for their plight.
Sending 11 million undocumented people back where they came from is not going to bring good manufacturing jobs back to the US. At best it will only open up low-wage jobs, which are no solution to the larger problem of supporting a family with dignity.
Meanwhile the CEOs, boards, and stockholders of the multi-nationals laugh all the way to the bank. Something has to change.
Perhaps a heavy taxes on offshore profits and stiff penalties for corporate inversion would be a starting point. I don't see how legislation like this could pass this Congress, but we can only hope.
8
I always enjoy your comments, Mark. I'd like to be able to say you belabor the obvious, but it's apparently not obvious to many, sort of like common sense is just not common.
The physical, vocational, environmental and social isolation of our lives now is the only way that I can see how people are so devoid of any humanness, how the lives of others are literally reduced to profit and loss statements - my profit, your loss.
The physical, vocational, environmental and social isolation of our lives now is the only way that I can see how people are so devoid of any humanness, how the lives of others are literally reduced to profit and loss statements - my profit, your loss.
4
This is shocking writing for the NYT. Schocking and true.
72
Steve, the defenders of globalization are believers in the free lunch.
They want to pay the lowest possible wages while refusing to pay a level of taxation necessary to support a European-style welfare state (to soften the pain for the losers of globalization); and they are also among the first to freak out or criticize when their unemployed or under-employed countrymen act out in uncomfortable ways.
We can tie your op-ed today to yesterday's Times editorial on how fatalities from drug abuse are now rising among Caucasians. Drug abuse and addiction, be it through the abuse of alcohol, prescription drugs, or illegal narcotics, naturally increases within communities where hopelessness is endemic. People will do whatever is necessary to dull the pain of hopelessness.
Both the Trump and Sanders campaigns are reflections of this growing sense of hopelessness. Now, inasmuch as Bernie is a democratic socialist, the Sanders phenomenon likely worries the Peterson Institute crowd a lot; but they really should be more worried about the Trump phenomenon, inasmuch as this movement could easily veer toward fascism - a development that would naturally incite revolutionary forces to oppose it. Let me suggest that it's never easy to conduct international commerce within a war zone.
And for what? So that a group of narcissistic, ivory tower globalists can go on pretending that there is a free lunch, at least for them - and that national economies are not delicate ecosystems?
They want to pay the lowest possible wages while refusing to pay a level of taxation necessary to support a European-style welfare state (to soften the pain for the losers of globalization); and they are also among the first to freak out or criticize when their unemployed or under-employed countrymen act out in uncomfortable ways.
We can tie your op-ed today to yesterday's Times editorial on how fatalities from drug abuse are now rising among Caucasians. Drug abuse and addiction, be it through the abuse of alcohol, prescription drugs, or illegal narcotics, naturally increases within communities where hopelessness is endemic. People will do whatever is necessary to dull the pain of hopelessness.
Both the Trump and Sanders campaigns are reflections of this growing sense of hopelessness. Now, inasmuch as Bernie is a democratic socialist, the Sanders phenomenon likely worries the Peterson Institute crowd a lot; but they really should be more worried about the Trump phenomenon, inasmuch as this movement could easily veer toward fascism - a development that would naturally incite revolutionary forces to oppose it. Let me suggest that it's never easy to conduct international commerce within a war zone.
And for what? So that a group of narcissistic, ivory tower globalists can go on pretending that there is a free lunch, at least for them - and that national economies are not delicate ecosystems?
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Two problems (at least) with your post: the extremely interesting Gina Kolada article on rising death rates among working class white people DID NOT IN ANY WAY attribute the deaths to depression or job loss. There is no evidence that those who died, did so because they had lost jobs. For all we know, they were suicidal because they hated their jobs. Or because due to high rates of things like unwed parenthood, dysfunctional families, lack of religion etc. My own guess is that is a combination of the acceptability of recreational drug use AND increased use of opioids for pain control. Opioid use has had very serious repercussions in this population. But to jump to the conclusion "they are all depressed enough to commit suicide by drug usage!" is making assumptions that are without a basis (at this point).
Second: the "answer" for European socialism (and for American lefty-liberalism) is that high taxes and a welfare state will COMPENSATE people for not having good jobs, and that they will be satisfied with a welfare check or living on "the dole" -- for a lifetime. I doubt you've talked to many people who have lost their jobs if you believe this! Jobs provide more than just a paycheck -- they provide a sense of dignity, purpose, satisfaction. European countries with large populations "on the dole" have many of the same social problems that we have, and the young people who are typically locked out of any hope of a career are just as miserable as Americans who can't find work.
Second: the "answer" for European socialism (and for American lefty-liberalism) is that high taxes and a welfare state will COMPENSATE people for not having good jobs, and that they will be satisfied with a welfare check or living on "the dole" -- for a lifetime. I doubt you've talked to many people who have lost their jobs if you believe this! Jobs provide more than just a paycheck -- they provide a sense of dignity, purpose, satisfaction. European countries with large populations "on the dole" have many of the same social problems that we have, and the young people who are typically locked out of any hope of a career are just as miserable as Americans who can't find work.
2