--title--
| Next | Previous | Random | Ring Hub |
Uncensored Opinions: Globalization and its Contribution to America’s Economic Catastrophe

Tuesday, December 30, 2008

Globalization and its Contribution to America’s Economic Catastrophe

The promoters of Globalization, in their headlong and single-minded lust for profit, have exhibited one major flaw, a complete ignorance of the basic economic principles underlying capitalism. While marginally lowering prices on products by replacing decently-paid western workers with third world workers at exploitative wages, they have killed the proverbial “goose that laid the golden egg.” The displaced workers, those middle income western wage earners, were the backbone of world consumption. The exploited workers could not buy the products which they created. Now, as his wages are being increasingly undermined by product outsourcing and tariff policies (NAFTA, CAFTA), the previously middle class wage earner is gradually becoming unable to keep up the consumption necessary to support production. Only the rich, beneficiaries of the increased profits generated by these policies, can afford these products. They have the gold but the goose has been cooked. This article explains the phony “principles” supporting Globalization, the reasons for its “success”, and the danger that it represents.

Practically all well-known U.S. economists and policymakers have supported Globalization as if it were the Holy Grail, resulting finally in our current international economic crisis. There were two well-publicized reasons proposed to justify Globalization, and one (secret and undisclosed) which was the real reason for their wholehearted and sycophantic support. One of the former was the concept that free trade under Globalization would end trade competition among nations leading to world peace. The other was based upon an ideological concept derived from one of Ricardo’s economic theories called the Law of Comparative Advantage. This “law” was predicated upon the idea that the world as a whole would benefit when each country produced only those goods that it was most efficient in producing and leaving to other countries those products they excelled in. Both of these concepts have been proven unworkable in actual practice, but the economists and politicians have not given up on them regardless, mainly because they really were only pretexts for Globalization and whether they worked or not was immaterial. Why let reality stand in the way of a good story? The third and real reason that these "professionals" endorsed Globalization was that it was profitable for them to do so. Few writers or economists can propose anything contrary to the interests of the politically connected and be published or promoted. Only writers of inordinate prestige and integrity, such as Naomi Klein and Paul Krugman, can afford to take the risk. Naomi’s The Shock Doctrine: The Rise of Disaster Capitalism and Paul’s The Conscience of a Liberal are among the few books which dare to disclose the truth about the U.S. government’s unfair and damaging policies and practices. Conversely, the way to riches is by puffing lazy and incompetent “elites” and touting any program financially rewarding to them. Most honest economists, columnist or reporter will eventually end up poverty-stricken under these circumstances.

In dealing with the premise that world peace would be assured under free trade and Globalization, there is a claim that World War II was caused by excessive tariffs among the combatants causing a lessening of trade and friction between them. In reality, the war in Europe was contested between countries which had considerable friendly trade prior to the war. Germany and Great Britain were major trading partners. In the case of the Pacific conflict, it was not tariffs but an embargo against the Japanese established in response to their aggression against China. Tariffs took no part in the conflict. Imperialism was the culprit in the Pacific as well as in the European conflict. Today, thanks to an economic imperialism over third world countries resulting from policies forced upon them by the IMF (as directed by the U.S.), no country need attack the resource rich countries fought over in the past. For the most part, their assets are already owned by the multinationals, in the interests of the world’s shareholders. Economic Imperialism under Globalization is no less offensive and improper as Imperialism by force.

Another convenient claim, the concept that tariffs established by the U.S., the famous Smoot-Hawley in particular, were the basis of the economic collapse worldwide ultimately leading to the war, was also specious. The Fordney-McCumber Tariff (a Republican tariff) was passed in 1922 and had been in effect without problems for 7 years before the stock market’s collapse. Smoot-Hawley was just the last of a series of high-tariff law in the U.S., simply a continuation of U.S. trade policies prevalent throughout the history of the U.S. and primarily responsible for our great economic successes.

Many countries will be peace loving and friendly to the west as long as they are doing well economically. If not, they can be expected to revert to “uncooperative” competition and to acts offensive to competitor governments. What is happening in Russia today is an example. Public dissatisfaction caused by poor government policies and corruption, but blamed upon the U.S., has resulted in “unfriendly” acts by the current government. The gap between "have" and "have nots" worldwide, regardless of the causes, will tend to cause instability and aggression in many countries. The idea that Globalization will miraculously change this is pure fantasy.

The concept that the entire world will benefit from “free trade”, as derived from Ricardo’s laws, had been soundly refuted prior to the current world economic meltdown. Alan Greenspan in his paean to Globalization, greed, and the Republican Party, The Age of Turbulence, cited “well-documented evidence that competitive markets over the decades have elevated standards of living for the vast majority of Americans and much of the rest of the world”. He apparently had never seen or heard of Detroit, Bethlehem, or any of the eastern cities ruined by the loss of entire industries (textiles, shoes, electronics, steel, autos, et.al.) which had been the direct result of Globalization prior to the current economic debacle. Certainly with the economies of the entire world in disarray he would not now be able to claim this improvement in the standard of living for practically anyone, anywhere.

Ricardo's Law of Comparative Advantage was based upon the concept that countries share production, with each concentrating on those products for which it had a relative advantage, and relinquishing to its trading partners those which they were best at. It was based upon a balanced trade with each country trading enough of its products to afford those of their trading partners. If this tradeoff was not observed, there was no problem in those days, There being little else to swap for, such as the shares of corporations, government and corporate bonds, commercial properties, and “bundled” assets (such as REITs) which are currently available, the balancing factor was invariably money. The country experiencing a sustained trade imbalance would quickly run out of money, and the trade imbalance would automatically disappear (simultaneously bankrupting the country involved). Ricardo did not even contemplate that happening in his day. No government would survive if it allowed it to happen. Trade had to be based on comparative advantage, not absolute advantage, with a balanced (equal) trade between all countries. Each had its own specialties which their trading partners had to respect. An unfortunate result of this needed “reciprocity” was the forced opening of China to the opium trade by the British in the mid 19th century. Great Britain was running out of sterling having few products to sell to China in exchange for its silk, tea, spices, etc. If citizens of the U.S. had not possessed substantial non-monetary assets, accumulated throughout the history of the U.S., the U.S. money supply would have disappeared long ago, with a corresponding drop in the American citizens’ standard of living. Today, these assets are now being sacrificed for the benefit of foreign corporations, as the trade deficit problem remains unresolved.

In dealing with the “efficiency” issue supposedly leading to such great improvements in worldwide standards of living, much of what has been claimed, such as the actual across-the-board implementation of “free trade” and its purported benefits, is fallacious or distorted. The low cost of foreign goods is not due to fair competition based upon the productive capacity of individual workers, but strictly upon worldwide wage levels determined primarily by international exchange rates. These exchange rates have been consistently manipulated by foreign governments in order to make their tradable products more competitive, a practice called “beggaring thy neighbor” in the past. This practice is a direct and significant violation of “free trade”. Japan’s spectacular economic success over the past 50 years was based upon the establishment of an undervalued Yen (established by U.S. authorities) designed to reestablish it as a powerful U.S. ally in the East. China‘s devaluation of the Yuan in 1993-1994 and peg to the dollar was not contested by the U.S. government although it was obvious that it would allow China to gain (and hold) a long-term supremacy over the U.S. in most manufactures. That too was done to “pacify” China. As a side “benefit”, these devaluations were the principle initiating cause of the Asian financial crisis of 1997, ultimately resulting in drastic losses of assets by other Asian countries, and deterioration of their already exploitative wage rates. If giving up worldwide supremacy in manufacturing (and its associated world economic and political leadership) is the cost of gaining friends, the U.S. has made a splendid bargain. The folly of this policy will become painfully evident when China’s GDP (and consequent military strength) overtakes that of the U.S. (about 2028 according to recent studies).

The major consequence of Globalization and “free trade” will be a lowering of wage rates (and worker and environment standards) to an exploitative one worldwide. Exploitative wage rates are simply rates insufficient to provide workers a "living wage", one that will not compel them to force their children to work and sufficient to provide money for their education. In Asia almost all workers have been exploited because of massive unemployed or underemployed populations in these countries. Each country has been desperately trying to employ its citizens at whatever wage rates are offered, and foreign multinationals (exploiters) have taken advantage of this.

In the interest of fairness for all workers worldwide, “equalizing” tariffs should be imposed by all countries on all imported goods which the home country itself could produce. An “equalizing” duty should be levied on all internationally-traded manufactures at a level designed to compensate for differences in worker’s wages and benefits. Those citizens unsatisfied with the quality or price of products produced locally would be free to buy foreign-made products but would have to pay duties in cases of unfair wage rate differentials. If no substantial wage differentials existed, there would be no duties. An equalization of effective worldwide labor rates was, in fact, a major feature of the Fordney-McCumber Tariff Act.

The manufacturing advantage enjoyed by current low-wage countries would be eliminated as the leaders of these countries realized that they were contributing funds to foreign governments (in the form of duties) which would not be necessary if they arranged equitable wages and benefits for their own workers. For all countries, local competition should result in the hiring of the most competent workers but at wages appropriate to any worker worldwide. Any worker anywhere, working in good faith, deserves a living wage. Anything short of this should be recognized as obscene. In addition, innovation would increase because new products developed under local competition would augment products developed abroad. The resulting income policies, coupled with fair tax policies, should eventually provide wage levels appropriate for workers worldwide.

One other consideration need hardly be mentioned but has dire consequences. Under Globalization, it will be necessary to “homogenize” the economic policies and social practices of the entire trading world, a relinquishing of sovereignty in many areas of government and society. It will require social-welfare oriented countries and conservative capitalistic ones to find common economic ground; religious and ethnic groups to agree on social policies contrary to long-held beliefs and traditions. To accomplish this will prove to be not only illusory but dangerous. How would the U.S. be better off by adopting those “international” wage policies which have left workers in the rest of the world poverty-stricken and unhealthy?

Globalization is 100 percent baloney. Globaloney, a term coined by Claire Booth Luce more than 60 years ago when it was first proposed, was baloney then, and is baloney now, only packaged in a different wrapper. Each country must be able to choose and support its own culture and be free to independently choose its own interests, pursuits, and way of life. Universal decent and fair trade practices will permit this independence and will do it without sacrificing these sovereign rights. If the U.S. government fails to face up to the consequences of its current policies of “free trade” under Globalization, we can all kiss off the “American way of life” that we have created and been so proud of.

9 Comments:

At 10:37 PM, Anonymous Anonymous said...

[url=http://www.waronyou.com]War On You: News without Corporate Views[/url]
[url=http://mintdollar.com]MINT DOLLAR - Home Of Paper Money[/url]
[url=http://nflaccess.info]NFL Access: Sport News,Videos,Blogs[/url]
[url=http://motorcycletrader.info]Motorcycle Trader: Sell,Buy Bikes[/url]
[url=http://mrmusicworld.com]Screw Myspace: Sell Music Here[/url]
[url=http://1800blingbling.info]Fashion, News, Music[/url]
[url=http://seotricksguide.info]SEO TRICKS GUIDE: DESIGN,BUILD,PROMOTE[/url]



[url=http://ronpaulforum.info]Ron Paul Forum; liberty,Freedom,Election 2008[/url]
[url=http://waronyou.com/forums]Conspiracy Theories, 911 Truth Forum[/url]
[url=http://vidzking.com]Video Kings:Share Videos[/url]
[url=http://mrmusicworld.com/forums]Music World Forums: Global Promoter[/url]
[url=http://votetags.info]Vote Corruption,Rigging,Tracking[/url]
[url=http://MIAMIEVENTPRO.com]MIAMI EVENT PRO.[/url]
[url=http://RETROGRESSING.COM] Liberal News Blog[/url]
[url=http://nflaccess.info/forums]NFL Football Forums[/url]
[url=http://drsuperbowl.com]Superbowl 2009 News Nfl[/url]
[url=http://erectileproblems.info]Erictile Problems Solutions[/url]
[url=http://musicstocking.com]Music Stocking: Top MP3 Downloads[/url]
[url=http://videomusicproduction.com]Video Music Production and Sales[/url]

[url=http://waronyou.blogspot.com]Conspiracy Theories blog[/url]
[url=http://war-info.blogspot.com]War Info News blog[/url]
[url=http://shockdoctrine.blogspot.com]Shock Doctrine 911 False Flag blog[/url]
[url=http://thelastmovement.blogspot.com]Liberal blog: US NEWS[/url]
[url=http://blog4paul.blogspot.com]blog 4 Ron Paul 2008[/url]
[url=http://gold-report.blogspot.com]Gold Report: Silver Bullion News[/url]
[url=http://msm-disinfo.blogspot.com]Dis Info MsM blog[/url]
[url=http://endtime-countdown.blogspot.com]END TIMES COUNTDOWN 2012[/url]
[url=http://amero-dollar.blogspot.com] Amero Currency blog[/url]
[url=http://truth-network.blogspot.com]Truth Network News[/url]
[url=http://911truthnews.blogspot.com] 911 TRUTH NEWS[/url]
[url=http://terrorcell.blogspot.com][War On Terror[/url]
[url=http://hard-timez.blogspot.com]Hard Economic Times[/url]
[url=http://survival-man.blogspot.com]Survival Blog[/url]
[url=http://guns-and-butter.blogspot.com]Guns, Food, Healthcare[/url]

[url=http://realrapnewz.blogspot.com]Real Rap News Blog[/url]
[url=http://thehypereport.blogspot.com] Unsigned Rapper Music Blog[/url]
[url=http://get-gwap.blogspot.com]Get Gwap music[/url]
[url=http://trillmusic.blogspot.com]Trill Ass Music[/url]
[url=http://hiphop-music-blog.blogspot.com]Hip Hop Music Blog[/url]
[url=http://guccigrillz.blogspot.com] Gucci Fashin music Grills[/url]
[url=http://westcide.blogspot.com]West Coast music Blog[/url]
[url=http://music-industry-blogs.blogspot.com]Music Industry Tips[/url]
[url=http://donkryders.blogspot.com]Donk Classic Cars Blog[/url]
[url=http://nfl-access.blogspot.com]NFL ACCESS BLO[/url]
[url=http://boxinginsider.blogspot.com][/url]
[url=http://fightnet.blogspot.com] MMA BLOG[/url]
[url=http://beyond-xtreme.blogspot.com]ATV,DIRTBIKES,OUTDOORS[/url]
[url=http://seo-tricks-guide.blogspot.com]SEO TRICKS BLOG[/url]

 
At 6:21 PM, Anonymous Anonymous said...

OK, I read through this & found it interesting. I've seen local industry disappear, and have been aware that certain labor unions promote arcane & inefficient shop rules that cripple production and reduce quality. Nevertheless, it is also true that financeers moving jobs abroad have done little to improve the lives of hard-working people in other countries. So because of stubborn greed everyone gets poorer. I see little evidence that human beings are rational and capable of considering the "big picture." Who is genuinely working to make the world a better place?

 
At 5:40 PM, Anonymous Anonymous said...

Conceit is the quicksand of success.

1nKlj http://www.cheapuggbootsan.com/
cLja http://www.michaelkorsoutletez.com/
tLfd http://www.cheapfashionshoesam.com/
8zLxr http://www.burberryoutletxi.com/
1uRxa http://www.nflnikejerseysshopxs.com/
1sUne http://www.coachfactoryoutlesa.com/
0vMdp 1sFyf 8fZzn 8kNyu 8hNvf 5pRcx 5fOkd 3rMzq 8rGzv

 
At 6:37 PM, Blogger oakleyses said...

jordan pas cher, chanel handbags, nike outlet, michael kors pas cher, kate spade outlet, replica watches, longchamp pas cher, nike free, jordan shoes, christian louboutin shoes, nike free run, louis vuitton outlet, oakley sunglasses, ray ban sunglasses, polo ralph lauren, ugg boots, christian louboutin uk, air max, louis vuitton outlet, ugg boots, tiffany jewelry, polo ralph lauren outlet online, burberry pas cher, prada outlet, nike air max, gucci handbags, sac longchamp pas cher, ray ban sunglasses, louboutin pas cher, louis vuitton, uggs on sale, tiffany and co, oakley sunglasses, louis vuitton outlet, ray ban sunglasses, longchamp outlet, louis vuitton, longchamp outlet, replica watches, nike roshe, polo outlet, oakley sunglasses, cheap oakley sunglasses, oakley sunglasses wholesale, christian louboutin, christian louboutin outlet, tory burch outlet

 
At 6:41 PM, Blogger oakleyses said...

lululemon canada, nike air max, burberry outlet, oakley pas cher, burberry handbags, coach outlet store online, kate spade, michael kors outlet, michael kors, nike air force, true religion jeans, true religion outlet, michael kors, polo lacoste, nike tn, new balance, abercrombie and fitch uk, michael kors outlet, uggs outlet, michael kors outlet, ralph lauren uk, michael kors outlet online, replica handbags, coach outlet, true religion outlet, coach purses, nike free uk, sac vanessa bruno, mulberry uk, michael kors outlet online, michael kors outlet online, michael kors outlet online, north face, uggs outlet, converse pas cher, hogan outlet, nike air max uk, hollister pas cher, sac hermes, nike roshe run uk, hollister uk, nike air max uk, true religion outlet, timberland pas cher, vans pas cher, ray ban pas cher, guess pas cher, ray ban uk

 
At 6:45 PM, Blogger oakleyses said...

ipad cases, beats by dre, iphone 6 cases, ferragamo shoes, wedding dresses, hollister clothing, p90x workout, instyler, asics running shoes, nike huaraches, hermes belt, north face outlet, s6 case, babyliss, nfl jerseys, hollister, iphone 6 plus cases, insanity workout, ralph lauren, iphone cases, iphone 6s plus cases, bottega veneta, new balance shoes, longchamp uk, iphone 6s cases, giuseppe zanotti outlet, nike roshe run, mont blanc pens, herve leger, oakley, lululemon, timberland boots, nike air max, iphone 5s cases, ghd hair, valentino shoes, louboutin, nike trainers uk, celine handbags, north face outlet, baseball bats, vans outlet, abercrombie and fitch, chi flat iron, soccer jerseys, mac cosmetics, mcm handbags, soccer shoes, jimmy choo outlet, reebok outlet

 
At 6:52 PM, Blogger oakleyses said...

supra shoes, marc jacobs, canada goose, converse outlet, toms shoes, ugg uk, ugg pas cher, canada goose outlet, canada goose, nike air max, louis vuitton, karen millen uk, doudoune moncler, converse, louis vuitton, vans, gucci, montre pas cher, moncler outlet, canada goose uk, canada goose outlet, moncler, pandora jewelry, barbour uk, moncler outlet, juicy couture outlet, louis vuitton, canada goose, pandora uk, coach outlet, swarovski crystal, ugg,uggs,uggs canada, juicy couture outlet, links of london, louis vuitton, louis vuitton, hollister, swarovski, canada goose outlet, ray ban, moncler, ugg, barbour, ugg,ugg australia,ugg italia, replica watches, pandora charms, moncler uk, pandora jewelry, wedding dresses, canada goose jackets, hollister, lancel

 
At 8:26 PM, Anonymous Anonymous said...

My name is Fajar. I live in Bedono in Central Java I was in a very chronic financial issue and terminal health situation some few weeks back. After all my search for assistance from friends and neighbors proved abortive, I feel there was no one who truly cares. I became so exhausted due to lack of funds to expand my business and my 2 kids aged 5 and 8 were also not good looking due to lack of proper care as a result of finance. One faithful morning I saw an old time friend of my late husband and I told him all I have been going through and he said the only way he could help was to direct me to a good loan officer in USA that also helped him, He explained to me on how he was financially down and how he got boosted by this loan officer ( Mr Pedro who grant him 7,000,000.00 USD loan at an affordable rate of 2% rate . He further assured me that they were the only legit loan firm he found online. He gave me their email & That was how I applied and was also granted a loan and my life changed for the good. CONTACT THE ONLY GENUINE LENDER Mr Pedro VIA Email / Whatsapp +18632310632 pedroloanss@gmail.com to resolve your financial mess.

 
At 7:44 AM, Blogger Nazgul William said...

GREAT TESTIMONY HOW I GOT MY LOAN I have a very important message to share with everyone that is in need of a loan from a genuine lender. I'm happy to share this note with everyone after what myself and my wife went through in the hands of some pathetic hoodlums claiming to offer some sort of loans. It's very difficult to get a genuine lender and thanks to Best Loan lender who helped me with the loan, Contact them if you are in need of a loan and come back to thank me later. I promise you they will not disappoint you. contact Email:- (pedroloanss@gmail.com Whatsapp +18632310632) Thanks.
Nazgul William.....

 

Post a Comment

<< Home