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Comment by cudgy | Hacker News Reader

This article is completely hypocritical to be coming from Tom Friedman. He has been one of the primary cheerleaders for globalism which has been a major driver of corporations gaining more favor from the government. This favor has been in the many forms including favorable trade deals (to China and the companies that manufacture there), ignoring the environmental impact of manufacturing in China which hurts all people especially the citizens of China, lax immigration enforcement (which led to more competition for the workers and cheaper labor for the companies), and ultra low interest rates that make it difficult for people to save money without buying overpriced assets and accepting extended risk.

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International trade agreements, taxation of corporations and interest rates are all distinct issues. Trade agreements are not the reason Amazon and Google aren't paying taxes, and neither are the current interest rates.

I disagree that they are distinct issues. Ultra low interest rates inflating their market cap gives them access to capital and in turn power to lobby for favorable tax policies, trade policies etc.

Of course it all happens in the same economy, so the outcome of a can affect b. But if something develops into a problem for society, it should be acted on directly, which is possible for all the points at hand here:

* If uber-profitable companies abuse their wealth for lobbying, then stop allowing these kinds of lobbying. The current system with PACs an Super PACs and so on is unique to the US, it essentially is a societal decision to have a system like that.

* If FAANG companies are very profitable (see p/e ratios) but don't pay taxes, then fix tax law.

* If money is cheap because there is no demand for it to invest into new businesses etc., then raise minimum wages and invest into infrastructure at federal and state level, to induce demand. Remember that low interest rates mean companies have no need to borrow money. This is a common misconception, but low interest rates are a consequence of the current economical climate, not its cause - if money were in demand interest rates wouldn't be so low, see https://en.wikipedia.org/wiki/Natural_rate_of_interest )

* if employers employ illegal immigrants to do tax fraud, then enforce the tax law. The tax fraud part has nothing to do with the immigration, small business tax fraud works perfectly fine with exclusively Americans employed in the company.

> This article is completely hypocritical to be coming from Tom Friedman. He has been one of the primary cheerleaders for globalism which has been a major driver of corporations gaining more favor from the government.

If that's so, doesn't the defection to an opposing camp make his message even here more credible?

Yes? So "yay" for small victories.

Mea culpas are more convincing when there's some kind of contrition. An intellectually honest person would at least nod towards having a change of heart, updated opinions.

Shoutouts to Liberal (neoliberal?) economists like Ruchir Sharma is progress. Of course, I hope Friedman ventures outside of the Mises vs Keynes food fight. I find Raj Chetty and David Graeber interesting, for instance.

Edit:

Oops. Looks like a "contrarian" economist Sharma is something like a deficit hawk. I regret my suspension of disbelief.

The Rescues Ruin Capitalism [2020/06/24] https://www.wsj.com/articles/the-rescues-ruining-capitalism-...

No. It just means that he shifts with the wind. Trump pulled the ugly band-aid off the China problem and now even the Dems and some Republicans have realized the mess that economists like Friedman got the US into.

> Trump pulled the ugly band-aid off the China problem and now even the Dems and some Republicans have realized the mess that economists like Friedman got the US into.

Are you kinda also thinking of Milton Friedman? Thomas Friedman isn't actually an economist.

> If that's so, doesn't the defection to an opposing camp make his message even here more credible?

All you really need to judge a Tom Friedman article is the "Opinion columnist" badge by his name.

What does he produce? He produces opinion. By what metric are his opinion pieces judged? Engagement.

Tom Friedman - and for that matter, most other opinion columnists (excepting those who are practicing domain experts who occasionally write about those specific subjects) - isn't paid to be right. He can be wrong over, and over, and over again. If the orthodoxy of the group who employs him changes (hey, look who's buying NYT subscriptions these days...) he can be wrong in novel ways. He doesn't have to "show his work." He never suffers any consequences.

He might have re-evaluated things! He might even be right - because hey, a stopped clock is right twice a day! But knowing what his job is and how he's performed in the past, it should be apparent that there's no particular reason one should believe him over, say, a random commenter on HackerNews such as myself. He has no incentive, credentials, or history that suggest a reader could usefully appeal to his authority.

> lax immigration enforcement (which led to more competition for the workers and cheaper labor for the companies)

Please explain how you know this. Was there ever any bottom at all for the cost of low-skilled labor?

More people means more workers, generally, I accept that. But more people also means more consumption, generally. And that requires more labor. Surely you don't think that normal population growth implies cheaper labor, right?

Do you think it is just a coincidence that wages stopped rising when they ramped up low skill immigration in the 70's? When you increase one class of people without increasing the other then simple economics says that said class will get less valued and see wage stagnation/reduction, which is exactly what history says happened.

https://www.pewresearch.org/hispanic/wp-content/uploads/site...

Where I live low skilled labor is paid well simply because otherwise you wont find anyone who wants to do the job. That is how it should work, educate everyone and there will be a shortage of low skill labor driving up their wages.

A lot of things happened in the early 70s:

- Many overseas markets opened to more outsourcing. Nixon "going to China" was one of the big ones.

- The rest of the world had pretty much fully recovered from WWII and started being more competitive with US manufacturing.

- The collapse of Bretton Woods and the removal of the gold peg for the US dollar freed central banks to pursue aggressive monetary policy.

- Automation really took off in the 1970s, and the computer revolution really got going.

- Women entered the work force in large numbers. In case anyone misreads: I am not against this. I'm just pointing out the supply and demand effects.

- Unions started declining for numerous reasons including the rise of anti-union politics and corruption in unions themselves.

- Increased racial equality is another thing I'm not against, but I am forced to point out that it increases the supply of labor in many labor markets that had been at least partly closed to non-whites.

- Finally, more immigration is definitely on the list too.

... there's a lot more, but those are the big ones. Almost everything I listed is deflationary to labor prices. So many things hit in the 70s it's like the floor dropped out. It's amazing US labor has managed to hang on at all.

Thanks, that’s is a really comprehensive list, as always there is very rarely a single reason for such large scale changes like wage stagnation.

Imo wage stagnation in the US seems to be far more attributable to deregulation, decline of unions and pressure from public companies to constantly cut costs to justify rising stock prices.

I am not exactly sure when it started, but if the topic is immigration impact on stagnating wages, I believe unless I am mistaken that the US-Mexico border was in fact a lot more open up to the 50’s, at least for cheap seasonal agricultural workers, until an ex marine general took over immigration enforcement sometime in the 60’s (or maybe 70’s?) with the perverse effect of forcing more seasonal immigrants to stay rather than risk going back home and not being able to come back.

Is it not obvious that that H1B program has been abused for years to suppress engineering wages?

Didn't Trump suspend H1-B visas? Does Biden have a plan for the program?

Seems obvious that millions of people that aren’t “supposed” to be in the labor force with a high concentration in low wage jobs would have a negative impact on said wages for those jobs. Sure there are benefits from the purchases from these workers, but there are significant costs like displaced workers on unemployment and other aid, costs for healthcare, good businesses in these industries that are unable to compete against companies that avail themselves of the cheap labor close down along with the better paying jobs, financial and social impacts on certain communities (mostly poor ones) that must deal with the inundation of people that do not speak English and are largely not tied to the community (at least initially).

However, the wealthy love this policy. Cheaper labor to build their homes, mow their lawns, clean their homes, and staff their low skill employment needs both at home and their businesses.

> This article is completely hypocritical to be coming from Tom Friedman.

True, but I would say better late than never.

that probably makes him qualified to understand the problem he helped create

Does this logic apply to software? When someone creates a giant slow insecure spaghetti monster piece of code do you rush out and hire them as a consultant to fix it?

Are they not the last person that should do that job given that they are the only ones that have proven that that they cannot?

That depends on what they've learned from the experience.

you mean visual studio ? lol

He didn’t understand the problem he created, so why should we expect him to understand his new position?

Friedman has been irrelevant for about 10+ years now. He, Carl Bernstein and Paul Krugman are characatures of their former selves. I guess the statement is true for the new York times overall, as they have become a lifestyle magazine, of sorts.

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