A solid case against free trade and globalism.
-Alan Tonelson and Kevin L. Kearns, Trading Away Productivity
[…] if offshoring has been driving much of our supposed productivity gains, then the case for complete free trade begins to erode. If often such policies simply increase corporate profits at the expense of American workers, with no gains in true productivity, then they don’t necessarily strengthen the national economy.
In this regard, the case for free trade as a stimulus for innovation weakens, too. Because productivity gains in part reflect job offshoring, not just the benefits of technology or better business practices, then the American economy has been much less innovative than widely assumed.
How can we actually increase innovation and real productivity? Manufacturing, long slighted by free-market extremists, needs to be promoted, not pushed offshore, since it has historically accounted for the bulk of research and development spending and employs the bulk of American science and technology workers — who in turn spur further innovation and real productivity.
Promoting manufacturing will require major changes in tax and trade policies that currently foster offshoring, including implementing provisions to punish currency manipulation by countries like China and help American producers harmed by discriminatory foreign value-added tax systems. It also means revitalizing government and corporate research and development, which has languished since its heyday in the 1960s.
Much of government policy and business strategy rides on false assumptions about innovation, and although the Obama administration acknowledges the problem, it has done nothing to correct it. With the economy still in need of government life support and the future of American manufacturing in doubt, relying on faulty productivity data is a formula for disaster.
Seems pretty obvious, doesn't it? Yet, most folks (certainly our leaders) don't think or talk about it.
Of course, something else no one talks about is the fact that the value of our money is tied to the value we create as workers. Outsourcing jobs not only harms innovation, as mentioned in the excerpt above, but also extracts value from our economy because US workers lose their jobs and therefore their ability to create value.
To be honest, though, I don't think Globalism is all bad but I do think that there's something to the phrase "all things in moderation."
Moderation is definitely NOT what we've got with orgs like the WTO and the IMF and the World Bank running the Globalism game. In fact, with them in charge we get extremist Globalism and there's nothing moderate about that.
If you've never heard of Globalism or the three orgs I mention above Google 'em.
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