(Blinder 2) More on the anti-globalization trend.
- From: Straydog <asd@xxxxxxxxx>
- Date: Fri, 30 Mar 2007 08:58:21 -0400
I just posted excerpts from a recent WSJ article on Alan Blinder who now thinks globalization isn't working.
A followup article just appeared (WSJ, March 29, page A6: "As Globalization's Benefits Grow, So Do Its Skeptics" by David Wessel).
The value of this article is in its historical perspective.
This is a quote of most of the article:
"For the past few years, the world economy has been growing faster than it has for decades, and that growth has been spread across the globe. Yet accompanying this prosperity is mounting skepticism about globalization--the unfettered flow of goods, services, people, and money across borders. The current round of world trade talks is stalled, and the Democratic Congress is toughening its conditions for blessing Bush-backed trade pacts with Panama, Peru and Columbia...."
"Free trade has never been popular. Dwight Eisenhower struggled to restrain the protectionist wing of the Republican Party during the 1950s. But why such resistance to free trade now, particularly in the USA? After all, the American economy has been growing for more than five years, and the unemployment rate is a comfortably low (unless you're out of work) 4.5%."
"Partisan politics plays a role, of course. Some Democrats figure if President Bush is for something, they're against it. But that's a small part of the story. Elected politicians, even some Republicans, see widespread voter angst, much of it well-founded, about the unsettling pace of globalization and technological change."
***
"Free trade in decades past wasn't sold so much on the economics but as a way to acheive a foreign-policy end [for you young folks this was all part of the old grand plan to contain the Soviet Union and communism which largely powered down at the end of the 1980s. For the record, Moscow also courted trade arrangements with its republics and sattelite countries, too]. After all, the economics of trade have always been a hard
sell [I have no idea where he gets this because trade has been around, more
than most people might realize, for the last 200 years. Its in the books].
Even its most fervent admirers concede trade creates winners and losers.
[FDR]'s secretary of state, Cordell Hull, led the pre-World War II effort
to lower tariffs because he believed trade led to peace. After World War
II, the European Union was created to avoid another war between France and
Germany, and the U.S. pursued trade deals to win the Cold War. And, while
President Bill Clinton talked loudly about the jobs the [NAFTA] would create,
his Treasury secretary, Lloyd Bentsen, saw the trade pact as a way to assure
a pro-U.S. regime in Mexico."
"'Today,' says Douglas Irwin, a Dartmouth College trade historian, 'there is no major foreign-policy reason to be for trade.' For some reason, few in the U.S. see trade with China as a foreign-policy tool to influence that rising power...."
"Changes in the global economy aren't making the case for trade any easier. A recent [WSJ]/NBC News poll found only 35% of those with a four-year college degree believe 'that the U.S. is benefitting from the global economy.' And, these people are more likely to be winners."
"For the first time in generations, says Lawrence Summers, the former Treasury secretary, the U.S. is trading on a huge scale with places where wages are 20% or less of American wages. 'Weve never had that before onas large a scale,' he says. That's unsettling. .... That's good for the Chinese, good for the American worker who sells to China, not so good for the American whose job can be done in China."
"While economists argue whether technology [etc] are most to blame for the widening gap between economic winners and losers, the public has no doubt." ...."We have [says Irwin] a widening inequality, a widening trade deficit and trade is a greater percentage of the economy...."
"The issue, in this light, isn't whether trade makes the world as a whole richer. It does. The issue is the distribution of those gains. If American workers sense they are at risk of being losers--even if those fears are overstated or ignore the benefitss they get from imports as consumers--the political consensus for encouraging further globalization will evaporate."
.
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