Eh, I'm not so sure that cow's so sacred. Is free trade positive for the American economy? Yes, of course. It moves our country toward a richer, more intellectually-based economy, which should lead to greater quality of life for everyone: fewer shitty jobs building stuff, being hurt by industrial processes, working really really hard to make little money.
I guess I'm going to parrot you a bit here, because I agree with the rest of your point, but what's happening is the second part of that equation, the benefit for the workers and the individuals, is not being met. Our economy is flourishing, but workers who have been displaced are not being supported.
Our rich, rich economy should be able to either 1) train up people who were formerly doing the blue collar work to succeed in an intellectually based economy or 2) provide them with a standard of living given their inability to find good work (the standard income idea).
We are not even attempting to do either.
College costs a fucking shitload and social programs are drying up left and right. Our kids are getting dumber, relatively speaking, so they will be less competitive in a global workplace.
So no, that is not what I would consider a "net positive" as a net positive, in my mind, means that what's happening is good for most people. Clearly, it is not. We shouldn't make it a platitude, because then we don't get to say, "Free trade is clearly good, but if and only if..."
The real problem in the US is that costs are prohibitive, particularly with regards to education. Add to that crazy housing costs (SF/NYC/etc) as well as health care prices and you've got a recipe for disaster..
But in towns where parent's trade-exported jobs predominated, there's only pain without the benefit. Hence the resentment of the policy.
Which is good. People getting pissed off about that and making political choices based on that fact should be happening due to the fact that we haven't allocated the increased wealth due to trade around fairly.
... Honestly, we're essentially running knowledge/tech trickle-down economic policies now. In that if you aren't one of that class, then hopefully some of that wealth might get down to you... eventually...
This statement reveals one of the larger problems in US culture: using profitability as he primary (or only) metric when judging social, political, or cultural issues. One of the best descriptions of this problem was David Simon's talk[1] from a few years ago, which I highly recommend.
And that notion that capital is the metric, that profit is the metric by which
we're going to measure the health of our society is one of the fundamental
mistakes of the last 30 years. [...]
[...] the idea that the market is going to heed all of the human concerns
and still maximize profit is juvenile. It's a juvenile notion and it's still
being argued in my country passionately and we're going down the tubes. And it
terrifies me because I'm astonished at how comfortable we are in absolving
ourselves of what is basically a moral choice. Are we all in this together
or are we all not?
As a result of this myopia - combined with the gradual destruction of social safety nets - we are now starting to see what happens when people start to lose faith in society. This causes people to start looking for "someone else" to fix these problems. So now we see fascism rising to try to capture some of that unrest. This is going to turn violent a lot faster than most people expect if we allow the status quo to continue.
[1] https://www.youtube.com/watch?v=2ZOH9DgzTCs http://www.theguardian.com/world/2013/dec/08/david-simon-cap...
[2] The policies pushed by the big treaties are just as much about adding barriers-to-entry and removing regulation (often called "standardizing" or similar newspeak; the canonical example is credit card companies racing into Delaware to exploit the local laws and the "free (interstate) trade" of credit.
I agree that jobs involving manual labor and assembly have a higher risk of physical injury than desk jobs. But I don't agree that "building stuff" is categorically more shitty than, say, sitting in a cubicle farm trying to maximize the rate at which people click ads.
We've seen talks about CO2 emissions and the resistance of Asian countries against agreeing to a framework that puts the same restrictions in place for them as for the west. They clearly understand that a comparative lack of emission controls puts them at a competitive advantage.
Wage arbitrage is absolutely also a factor and the western world's working class absolutely have reason to resist that because they will not come out better off in that exchange.
The developed countries should be disproportionately paying the cost of pollution as they caused it in the first place.
I totally understand we need to stop, but it's a lot more complicated than you're presenting.
If you mean that Asian countries want a "growth spurt" by encouraging western corporations to build facilities where they can ignore modern pollution controls, then we are in agreement. But it's a beggar-thy-neighbor policy and one that hurts our entire planet and is abetted by free-trade agreements.
And has that increased the rate of new businesses being founded, decreased the price of borrowing for existing businesses, or been poured into rent-seeking asset bubbles in markets like real-estate?
It brings the standard of living up in export countries, lower costs in import countries, and stimulates other countries to get into the act.
Not all industries are viable long term. Just like milk delivery faded in many areas so will some textile jobs. There are plenty of examples of widgets being made in the US alone from companies very young. It all comes down to this, do you look only for the negative?
I do know one thing is true. Any candidate campaigning on trade sanctions or the like is a loser and will make us losers too
Yeah, just look at Trump trail in the polls.
At this point it's not economy, it's religion.
If you go down the road of easing all competitive displacements of human capital, the eventual result would be lifetime job guarantees, protected cartels and a stagnant society.
We already have protected cartels and a stagnant society -- for capital-owners!
[0]http://www.gallup.com/poll/182816/little-change-percentage-a...
And we know that prices won't go down. That's not why Wall Street pushes companies to relocate.
It doesn't have to be job guarantees, there can be solutions like wage insurance, free or subsidized retraining + relocation, and basic income.
I hear this idea of 'retraining' offered as the panacea to globalisation in every article promoting it. What exactly are we going to retrain these workers in? The referenced article made the statement that one of the fired worker's daughter has a degree, yet makes a third less.
Sometimes it is spouted that they'll retrain in IT, becoming those elusive software devs the big corps just can't seem to find. But this BS is not being swallowed much anymore - the easier IT and dev jobs have already been offshored, those that can't are filled with H1Bs from India. College grads in liberal arts fields can't even find shitty service jobs in most places outside the coasts. So what skills, exactly, are a former assembly line worker going to learn?
The problem is that we have more people that need to work than jobs available. The fact that we continue to export jobs, while more and more workers are replaced with machines, and allow uncontrolled immigration into the US leaves us with problems that won't be solved by some community college or wage insurance.
And the establishment still feigns surprise over Trump's massive rise...
Im also not convinced that this narritive is true. Other countries with free trade don't always see the same outcomes.
No company on Earth would ensure these types of workers, in the same vein as insurance companies didn't ensure people with expensive pre existing conditions until forced by the gov. If it's subsidized, then just call it what it is: another tax. Unfortunately, the government already runs a massive deficit, so not sure how it can be afforded...
"One would almost expect in this day in age of miraculous digital enhancements to everything we do, and the related improvements in the efficiency of production... That prices in the absence of [The Fed's] monetary exertions would fall, so I suppose that a little bit of inflation is itself an anomaly... One ought to have seen kind of a dividend for the working guy in the form of everyday lower prices."
The failure of improved trade and technology to be the rising tide that lifts all boats is not a failure of policy to redistribute, but rather a consequence of interventionary monetary policy. The even scarier thing is that these policies are enacted by an unelected government organization (the Fed) on behalf of the people (I'm sure the Fed thinks that what it is doing is good for all of us). The net result: Despite his agitation for Fed transparency, Bernie is so clueless about economics, that it's likely that he will listen to cheerleaders like Robert Reich who stump for lowering interest rates and make the upward redistribution of wealth worse - and Donald Trump - well who knows what the hell he will do.
If you don't believe that the fed stoking inflation is bad for the little guy, consider 1) if inflation weren't bad for the little guy, we wouldn't have to raise the minimum wage periodically, and 2) http://krugman.blogs.nytimes.com/2010/02/13/the-case-for-hig...
"When you have very low inflation, getting relative wages right would require that a significant number of workers take wage cuts. So having a somewhat higher inflation rate would lead to lower unemployment, not just temporarily, but on a sustained basis."
Read that carefully, and between the lines. One of the policy justifications for inflation is that it cheats the working class out of the value of their earnings, in the name of "employment".
Finally, consider the words of Keynes, who is one of the advocates of monetary intervention to control the animal spirits (although even he would go pale seeing the one-sidedeness of the interventions that we've been doing in the past 40 years):
"By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some. The sight of this arbitrary rearrangement of riches strikes not only at security, but at confidence in the equity of the existing distribution of wealth. Those to whom the system brings windfalls, beyond their deserts and even beyond their expectations or desires, become “profiteers,” who are the object of the hatred of the bourgeoisie, whom the inflationism has impoverished, not less than of the proletariat."
I think this is a perfect prediction of what has happened to our system of "capitalism".
For example, say A and B are factories that make very similar assemblies. Factory B adds some automation and reduces the prices they charge for the assemblies. The value of the labor provided to factory A has just gone down. If A can't afford automation, it may have to choose between reducing wages and ceasing those jobs altogether. Inflation lets it wait out the problem by not increasing wages until inflation has brought the market price for their assemblies back into line with the value provided by the labor.
If that's the case, what's the problem with "actually paying the laborer less"? Why play a passive-aggressive game where you pay them something less in real value?
Basically it's a cheat that lets the employer avoid having tough conversations with labor. It also has secondary effects, like putting the entire society on a moving treadmill, encouraging consumption and economic destruction, eroding the power of social safety nets and charities, etc. etc. etc.
How does that follow at all? Inflation means the value of money decreases, which means the price of things increase. The minimum wage is a price, so in order to keep it the same in real dollars it has to match inflation in nominal dollars.
> Read that carefully, and between the lines. One of the policy justifications for inflation is that it cheats the working class out of the value of their earnings, in the name of "employment".
You aren't being cheated out of anything. If tomorrow you're being paid the same amount but paying more for things and you don't like it, you can demand a raise or find another job. And if you can't do that, having some prices increase but not all prices is better for you than the alternative of taking a pay cut, because the pay cut reduces the amount of money you earn to pay for even the things that don't change in price, like a fixed rate mortgage payment.
Inflation is basically a tax on money. The people who pay it are the people who have money and the people who are owed money. You're trying to make the argument that future wages are money you'll be owed tomorrow and claim that inflation hurts the working class that way, but that is not the dominant effect, not least because most working class people do actually get cost of living increases.
To see which classes it affects, just look at who owes money and who's owed money.
[1] -- http://www.cnbc.com/2015/07/29/eight-in-10-americans-are-in-...
The open question is what the longer term effects of inflation will be: who benefits, and who loses, once the system again reaches equilibrium. But based on history, I think we can assume that low inflation works out well for those who already hold lots of capital.
Based on history, everything works out well for those who already hold lots of capital.
About the only exceptions are widespread economic destruction, violent revolutions, and that thing the transistor did to "those who already hold lots of capital" but invested it in the manufacture of typewriters and carbon paper.
And only the last one really helps the common people.
> If tomorrow you're being paid the same amount but paying more for things and you don't like it, you can demand a raise or find another job.
The "you can demand a raise or find another job" argument. true for both the inflation case where your nominal pay stays the same and the the case where your nominal pay is cut.
> And if you can't do that, having some prices increase but not all prices is better for you than the alternative of taking a pay cut, because the pay cut reduces the amount of money you earn to pay for even the things that don't change in price, like a fixed rate mortgage payment.
Most poor people don't have a 'fixed rate mortgage payment', so your model of american poverty and the factors that influence their economic standard is delusional. Americans living on the margins are very much more concerned about things like the cost of food and fuel than mortgage payments.
What conclusion did you expect to follow from that?
> Most poor people don't have a 'fixed rate mortgage payment', so your model of american poverty and the factors that influence their economic standard is delusional. Americans living on the margins are very much more concerned about things like the cost of food and fuel than mortgage payments.
Let's start with a fact. A significant majority of American families own a home. Of that group, the ones who don't have a mortgage payment are not the poorer ones.
But a mortgage payment was an example. What point are you even trying to make? That people who don't own a home have no loan payments whatsoever? The people who don't own a home would seem to be more likely to have a car loan or credit card debt.
>Congress should have borrowed a jillion dollars in 2008-9 and spent it anything with a positive multiplier.
Well, if that's not a recipe for corruption and redistributing wealth upwards what is? Do you suppose congress would have spent money on the poor? Who would have had the quickest access to that borrowed money?
In a recession, at the margin, all spending on remotely sane anything (infrastructure, for instance) is spending money on the poor.
You need to add : in the short term
or
change "is a" to "has been"