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Aug 22, 2011

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David Boyd

I don't disagree that the benefits have flowed largely to the super-rich, but those benefits have also flowed to the unskilled poor in other parts of the world as well as newly powerful countries. That part of the equation can't be ignored.

More importantly, the problem with the prescription is that it's simply transferring resources from one group, the super rich, to another, government bureaucrats. Without fundamental reform, who really believes that politicians and their minions are going to invest efficiently in human and infrastructure capital.

Ed Cone

What do you mean by fundamental reform?

MojoNixon

He means, "Unless there is a Republican in the White House." C'mon, Ed. Read between the lines.

Michelle Bachmann, with her superior knowledge of global geography and history, will save us all.

David Boyd

My bad. Now that I think about it, there is no reform that would make the political class invest efficiently.

polifrog
there is no reform that would make the political class invest efficiently.

And this is the human nature that makes the nationalized "saving for a rainy day" that Keynesian Theory is so known for the failure that it is.

Keynesian Theory is so invested in kitchen table finance that they forget that saving for the future (a thing that is possible on the individual level) can not be extrapolated to the political class.

sean coon

"but those benefits have also flowed to the unskilled poor in other parts of the world as well as newly powerful countries."

not that i don't believe they exist is some form or another, david, but aside from the just-above-slave labor wages paid to factory workers throughout asia, india and eastern europe, who exactly are the "unskilled poor" that have benefited from globalization?

skilled labor in the philippines (CSR) and india/eastern europe (technology) have definitely benefited from globalization (to name just a few places/industries) -- you could even include craftsmen selling their product online around the world -- but the unskilled labor force seems to be getting screwed no matter where globalization lands. american factory jobs disappear over the past 30 years and those once unionized jobs pop up oversees with 1/50th the wages, 12-16 hour days, zero medical benefits, etc. i guess that's better than being dead, but is that the standard of a beneficial situation?

Bill Yaner

".......who really believes that politicians and their minions are going to invest efficiently in human and infrastructure capital." I do, David - or at least I think they CAN because I've seen them do so, in this country and many others.

The gotcha word in your question, though, is "efficiently" because it invites so many examples of government inefficiency which we all can recite. I would argue, however, that when the quality of this nation's infrastructure ranks 23rd in the world thereby reducing our global competitiveness in attracting investment, there is a huge opportunity for putting Americans to work in public-private partnerships made possible through fiscal stimulus spending.

Compare that with the inefficiency of reducing a hedge fund manager's tax rate to 15% so the wealth created can be parked in a Swiss bank account.

David Boyd

I don't disagree, Sean, that those jobs aren't the ideal, but they must be better than what many of those folks have going, else there would be no one to fill the positions. I heard yesterday on some NPR program that the Chinese are set to buy 13 million cars this year. Certainly those folks are living at a higher standard than they were a decade ago.

Ed Cone

Good point, Bill - it's not just about efficiency, but about purpose and direction of the investments.

bubba

"Compare that with the inefficiency of reducing a hedge fund manager's tax rate to 15% so the wealth created can be parked in a Swiss bank account.:

Translation: "On the other hand, maybe she's just 'pleasingly plump.'"

(sigh)

Ed Cone

I think DB is right that globalization has lifted living standards in the parts of the world that now do things we used to do here.

The plan is that our workers will move up the value chain, but far too many are being left behind.

Globalization may work in historical time, but people are confined to limited lifespans (and even shorter working lives), making it, for many, a mixed blessing at best.

Bill Yaner

I know you're referring to Kim Kardashian, bubba, (a woman I know of only from supermarket check outs) but its meaning in the context of this thread eludes me totally.

bubba

".....but its meaning in the context of this thread eludes me totally."

The context was established yesterday, but I don't really expect you to understand.

Ed Cone

I didn't even get the Kardashian reference, BY, but having it explained still didn't help my case of Bob, Wha?

bubba

Reading certain "progressive" comments on this blog is sometimes a functional (and intellectual) equivalent to reading "Kim Kardashian is fat" arguments elsewhere.

Ed Cone

I've seen what appear to be the reanimated remains of Bruce Jenner on a television program that involves Kardashians. Horrifying stuff.

Andrew Brod

It's sometimes best just to let Bubs drool in his corner in peace. Today it's about Kim Kardashian; tomorrow it'll be about something else.

As for globalization, it's always presented challenges as well as benefits. Liberalizing markets isn't just a game of laissez faire; free markets require monitoring and, especially in our case, investment. One of our challenges has been to improve our education system, to ensure that we do indeed move up the value chain. We've been moving up for some time but we needed to do more. Then came the Second Depression (still trying the term on for size), and unfortunately, our response to it has been to defund education. Smart, right? So yeah, globalization is problematic when certain investments aren't made.

sean coon

generally speaking, i agree with you regarding a step up in quality of life, david. i mean, if people are unskilled and they're willing to be paid and treated like a PoS, they probably don't have many other options available to them.

along those lines, i remember a story a few years back on that same tax drain of a public radio station describing the plight of two chinese sibling who couldn't leave their factory job. they were literally slaves to their company. who knows if those siblings work in the auto industry or not, but i doubt they're the only story out there... as i'm sure there are folk around the world now eating upgraded premium slop, sleeping 4 hours a night and are very appreciative of their new lords employers.

anecdotal stories aside, the shift of corporate investment away from US & European unionized labor, which steadied a strong blue collar middle class, to state supported, unregulated work environments catering to ridiculously low wages and horrendous work conditions equates as a boon for industry and a huge hit to worker's rights (as well as the forgotten class that keeps our economy in good health).

believe it or not, i have nothing against industry making cheaper products and realizing an increased flow of capital. my problem is when those ends are met by means that both wipe out a large part of the middle class (globally) while setting back workers' rights 50 years.

Bill Yaner

I think back to the string of 12 suicides last year at the Chinese factory making products for Apple in considering this question of "a step up in quality of life". Or the many Mexican farmers who were driven out of business by our lavish subsidies to Big Ag for growing corn - thereby creating a wave of illegal immigration in desperate search of work.

Gotta go with Sean on this one. Those at the bottom get the old screw job globally. Thus it has always been, and will continue to be forever, amen.

bubba

"Today it's about Kim Kardashian; tomorrow it'll be about something else."

Note to Andykins: It's not about Kim Kardashian, dummy.

justcorbly

>>"...the problem with the prescription is that it's simply transferring resources from one group, the super rich, to another, government bureaucrats…"

As a former government bureaucrat, I want to know where my share of the take went.

Maybe Andrew can chime in on this, but I have long since given up on the notion that people make rational economic decisions, whether they are super rich or government hacks.

justcorbly

Globalization is the same process that made the U.S. a continental economic union, and the same process that is playing out in fits and starts today in Europe. If you figure that out, you have a chance to make some money. If you don't, or you think it is a Bad Thing, then you will be run over.

There is more reason today for the West to have a single economic policy than there was for the U.S. in 1789. People need to understand that emotional attachments to flags is as much in the way as, say, Jefferson's attachment to Virginia was in his lifetime.

sean coon

"People need to understand that emotional attachments to flags is as much in the way as, say, Jefferson's attachment to Virginia was in his lifetime."

go explain that to our neighbors in south carolina, georgia, alabama, etc. who can't stop rocking a defeated flag from 150 years ago.

Meno

While discussing the increased living standards of many Chinese I think we would be remiss if we failed to observe the horrendous degradation of their environment, incredible pollution, desertification creeping in on Beijing from the Gobi and the displacement of countless rural peasants for water infrastructure or actual diverting of rivers.

David Boyd

Sean, I think most people would agree that safe, healthy working conditions in jobs that support a worldwide middle class would be ideal. The question is how best to get on a path to that goal. I don't think central planning can do it because it stifles innovation and reduces incentives to work hard and take chances. If you go the European route, you end up with unsustainable spending and massive unemployment for the younger generation. If you go the Chinese route, you end up trampling individual rights along with the other problems noted by Meno.

I believe what we have to work towards is a system that installs government as a referee instead of as a general manager. Maintain as level a playing field as possible and allow folks to compete. Competition breeds innovation and efficiency. For example, I'm all for as much of a social safety net as we can afford, but I'd rather that net be through vouchers instead of government programs.

Ed asked above what I meant by fundamental reform. Obviously I was being facetious in my answer. But there are a few things I'd do immediately. #1 on the list is figure out how to remove the implicit government backing of companies in this country. If people make bad business decisions or the market changes, they must be allowed to fail. The 'too big to fail' argument (and thus privatizing profits while make losses public) is grotesque. #2 on the list is tax reform. Taxes need to be simple and straightforward. This will unlock huge efficiency and remove a source of power that is often misused by politicians and corporations to attack their enemies.

sean coon

i agree, david, though in order for government(s) to play the role of "referees" in a global market, first and foremost, there needs to be agreed upon and enforceable global "rules" in play. isn't that how refereeing works? so wouldn't such rules be perceived as the very same "regulations" that so many people -- particularly the foaming right -- innately despise? a vastly under-regulated global market, with all of its high risk industries, has proven to form the ills of what we're discussing now - from a deep recession triggered by junk financial products to pollution across entire continents to slave wages -- just as easily as it has propelled an academic project with a motto of "do no evil" into a position of changing the world for the better (and employing tens of thousands of people across the globe while doing it).

the invisible hand is nowhere near large enough, nor omnipresent or absolutely representative, to mitigate the intricacies of global competition and shenanigans (not that i believe that adam smith knew what the fuck he was talking about in the first place).

for the most part, i agree with companies living or dying on their own (my only reservation would be in cases of dire circumstances pertaining to national security, which i understand to be less than an explicit definition), as well as a simplified tax code, but then there are those darn rules that need to be defined in order to be ref'd by government(s)... and in order for meaningful change to occur on any level (particularly in our system), we need to simplify the election cycle and reform campaign financing to squeeze out the lobbyists who steer our "duly elected" politicians.

our entire system is a mess. even beyond the lobbyists, there seems to be too many lemmings on both the far right and far left of the general public who make it impossible to move forward in pragmatic fashion to make necessary, healthy changes with any degree of expediency. our political environment is like a yahoo! comment thread. toss in the political states of other countries and this all seems impossible to move forward on...

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