I am a little behind in reading The Nation but William Greider’s November 4, 2010 article “The End of Free-Trade Globalization” was excellent and I recommend everyone make the effort to delve into the heady language of international free market economics. Here is the link: http://www.thenation.com/article/155848/end-free-trade-globalization
This is not “news” for anyone who has been paying even slight attention over the past 30 years but international “free” trade was a bad idea with only one ending. Sadly we are living the ending right now, watching the erosion of the American middle class and the United States as a global economic powerhouse. We are tapped out-literally. Out of work, drowning in personal debt, buying that new “made in China” television is probably not high on our collective Christmas list. Those of us lucky enough to have jobs are thinking about saving, whether it is a mattress or sock (may as well since putting money into the banks is a waste of –well, money and feeds the monster, adding insult to injury.)
But I digress. William Greider has identified some clear causes of our current predicament and has also pointed to necessary actions to pull us back from the brink of a global depression. International free trade got us into this pickle. Follow the money. If international companies like GE and Intel are free to take production to the cheapest labor country, for example – China, and market those products back to the US with no penalty, it doesn’t take a rocket scientist to see that eventually there won’t be enough people left in the US with jobs that pay enough to afford those products. Free trade cheer leaders like Thomas Friedman seem to believe that the US has some kind of techno-magic wand that can create new jobs on demand. But China has sucked the technological genie out of our great international corporations who had to sell their souls to the Chinese to get manufacturing access to cheap labor. They now hold the technological advantage while the corrosive rhetoric of conservative politicians (read all Republicans and many Dems) is rapidly destroying public education and other social programs that support our children and our future.
William Greider points out that this is a global problem that requires global solutions but other countries who all have trade surpluses with the US are not going to be the ones to take economic hits unless the US moves first. He even quotes former Intel CEO Andrew Grove, who urges the government to impose taxes on products made with off-shore labor and “use the money to help other US companies scale up production at home,” ie create jobs. “If the result is a trade war, treat it like other wars—fight to win,” Grove says.
Greider also points out that US international companies have had a free ride not enjoyed by companies anywhere else in the world. “They harvest public money as subsidies and investment capital, they are protected by US armed forces and diplomacy, and they are rescued when they get into trouble. It is a one-way relationship…” He points out that the US must start treating these companies like any other business would, through imposing contracts for subsidies that have enforceable requirements for national production and national loyalty. The US should also impose social/environmental taxes on products made in other countries that do not have social justice and environmental protection built into their production processes. These measures would result in higher costs here at home but they might also provide the jobs that would allow Americans to purchase those products.
I do not pretend to think that these ideas, in and of themselves, are some sort of magic elixir that will turn the country around. There are questions that Mr. Greider does not address, such as what about that big debt load we have with China – will they try to hold the US hostage because we are so deep in debt to them? Part of me feels that every country and every international company knows that Grieder’s basic scenario is right. There is no easy way out of this unless all countries work together to rebuild the US middle class. Otherwise, there will be no one to buy that fancy TV. The only way out of this mess is through leadership from the US government. But so far, it does not look promising.
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