More on Trade policies
In the chapter “The Exorbitant Cost of Free Trade” in Lou Dobbs’ book “War On the Middle Class”, he goes into some of the details of what’s at stake. He writes: “The Economic Policy Institute estimates that 99 percent of our trade deficit is a result of having to buy goods and services that are no longer maufactured in the United States.” The result is the US “. . . is being bankrupted by a nearly $9 trillion national debt and an almost $5 trillion trade debt.” Both G. W. Bush and Bill Clinton are to blame as well as “ . . . the Republicans and Democrats in Congress who have ceded their constitutional responsibility to formulate trade agreements by granting the president so-called fast-track authority, which gives him absolute control over the negotiations of these pacts . . . Our free trade agreements have been so one-sided and so unfair to American workers that you would be forgiven for believing that the U.S. trade representatives simply forgot to show up for the negotiations.” (page 93)
The end result of the unfavorable trade policies the US has agreed to during the past few years will be a middle class with no or a low-paying job, little or no extra money for health care, education, real estate taxes, savings, etc. Is that what the US Congress and the administration are trying to accomplish? It looks like it.
You will be able to buy good, low cost imported tvs, appliances, clothing, furniture, and lots of other physical products (A nice Chinese sedan anyone--real cheap?) but you may not be able to afford the services that can only be supplied by local Americans (or illegal immigrants). Doctors, nurses, teachers, lawyers, gardeners, car repair mechanics, etc. expect to be paid at American wage rates, not Chinese. In other words, a car may be manufactured at Chinese wage rates but it has to be maintained at American wage rates. At present we are outsourcing the jobs of computer programmers, engineers, medical technicians, accountants, etc., and many, many production activities. Are all these good-paying jobs supposed to be replaced by lower-paying service jobs? If not, where are all the new high-paying jobs? Some US companies, using advanced production methods, have been able to compete with the low, low labor costs of China and India, but many others have not been able to. But the ones who are able to compete use far fewer workers than formerly. Actually, many standardized products can be made with automatic production methods, so this is an ongoing problem even if outsourcing was not making it a lot worse and bringing it on a lot faster.
Actually, so far as outsourcing is concerned, it seems that the boards of directors of many American companies have not been very efficient. Many American CEOs, CFOs, etc. now make an average of several million dollars per year. Many of these positions could probably be outsourced to China or India for one tenth or so of the present cost. How much activity of this sort has there been? I don’t know but I suspect-- “not much”.
posted by georgex5 @ 9:01 AM
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