~ Archive for Globalization ~

Common Sense Bashing at the Wall Street Journal

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By Alan Tonelson Monday, November 27, 2006

Three cheers for the Wall Street Journal headline writer who has just given the nation a priceless lesson in mudslinging. It was bad enough for Journal readers to wake up the morning of November 16 to read that “China-Bashing Could Flourish Under Pelosi.” What was worse was just what this writer thought the new House Speaker-designate’s offenses actually were. According to the Journal, China-bashing apparently consists of denouncing as “butchers” rulers who order the killing of peaceful civilian protesters. But it also apparently consists of warning that China’s massive holdings of U.S. government debt could threaten American national security. And of deriding as “wishful thinking” Bush administration hopes that a government determined to support the likes of North Korea, Iran, and Sudan will become a “responsible stakeholder” in the international system. It even apparently consists of urging the White House to combat China’s predatory economic practices by using a World Trade Organization designed precisely to eliminate such abuses. At the least, Journal headline writers should adopt an equal opportunity approach to invective Henceforth, let them label all who decry the mass murder of civilians, as well as the repression of women and non-Moslems as “Al Qaeda-Bashers.” All critics of the Khartoum government’s policies of genocide in Dafur and elsewhere should be lumped together as “Sudan-Bashers.” What a shame, in fact, that this practice didn’t start decades earlier. Then The Journal could have treated us to such gems as “Nazi-Bashing Could Flourish Under Roosevelt.”

(Source: “China-Bashing Could Flourish Under Pelosi,” by Neil King Jr., The Wall Street Journal, November 16, 2006)

Real Wages Fail to Match a Rise in Productivity

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New York Times, August 28, 2006, By STEVEN GREENHOUSE and DAVID LEONHARDT
… The median hourly wage for American workers has declined 2 percent since 2003, after factoring in inflation. The drop has been especially notable, economists say, because productivity — the amount that an average worker produces in an hour and the basic wellspring of a nation’s living standards — has risen steadily over the same period.
As a result, wages and salaries now make up the lowest share of the nation’s gross domestic product since the government began recording the data in 1947, while corporate profits have climbed to their highest share since the 1960’s. … At the very top of the income spectrum, many workers have continued to receive raises that outpace inflation, and the gains have been large enough to keep average income and consumer spending rising…. Economists offer various reasons for the stagnation of wages. Although the economy continues to add jobs, global trade, immigration, layoffs and technology — as well as the insecurity caused by them — appear to have eroded workers’ bargaining power. Trade unions are much weaker than they once were, while the buying power of the minimum wage is at a 50-year low. And health care is far more expensive than it was a decade ago, causing companies to spend more on benefits at the expense of wages.

Together, these forces have caused a growing share of the economy to go to companies instead of workers’ paychecks. In the first quarter of 2006, wages and salaries represented 45 percent of gross domestic product, down from almost 50 percent in the first quarter of 2001 and a record 53.6 percent in the first quarter of 1970, according to the Commerce Department. Each percentage point now equals about $132 billion.

Total employee compensation — wages plus benefits — has fared a little better. Its share was briefly lower than its current level of 56.1 percent in the mid-1990’s and otherwise has not been so low since 1966. Over the last year, the value of employee benefits has risen only 3.4 percent, while inflation has exceeded 4 percent, according to the Labor Department.

… For most of the last century, wages and productivity — the key measure of the economy’s efficiency — have risen together, increasing rapidly through the 1950’s and 60’s and far more slowly in the 1970’s and 80’s. But in recent years, the productivity gains have continued while the pay increases have not kept up. Worker productivity rose 16.6 percent from 2000 to 2005, while total compensation for the median worker rose 7.2 percent, according to Labor Department statistics analyzed by the Economic Policy Institute, a liberal research group. Benefits accounted for most of the increase…. Average family income, adjusted for inflation, has continued to advance at a good clip, a fact Mr. Bush has cited when speaking about the economy. But these gains are a result mainly of increases at the top of the income spectrum that pull up the overall numbers. Even for workers at the 90th percentile of earners — making about $80,000 a year — inflation has outpaced their pay increases over the last three years, according to the Labor Department. “There are two economies out there,” Mr. Cook, the political analyst, said. “One has been just white hot, going great guns. Those are the people who have benefited from globalization, technology, greater productivity and higher corporate earnings. “And then there’s the working stiffs,’’ he added, “who just don’t feel like they’re getting ahead despite the fact that they’re working very hard. And there are a lot more people in that group than the other group.”

In 2004, the top 1 percent of earners — a group that includes many chief executives — received 11.2 percent of all wage income, up from 8.7 percent a decade earlier and less than 6 percent three decades ago, according to Emmanuel Saez and Thomas Piketty, economists who analyzed the tax data.

http://www.nytimes.com/2006/08/28/business/28wages.html?hp&ex=1156824000&en=eae4ab9ab2ce13d5&ei=5094&partner=homepage

The job numbers you really need to know

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By Paul Kaihla, Business 2.0 Magazine senior writer, August 22 2006

“The big news is the drop [in job creation] since the expansion of the 1990s,” says Scott Schuh, a senior economist and policy advisor at the Federal Reserve Bank of Boston. “Fundamental job creation has not really come back, and that’s a puzzle.”

Job creation hasn’t rebounded to its late-’90s peak, but the reported employment numbers still look okay. Why? Simply put, for the past few years, the economy hasn’t been destroying as many jobs, and there’s been a mild rebound in job creation. That adds up to reports of net job gains.

But that modest increase in job creation is more of a blip in an otherwise long-term slide, economic experts say.

One could argue that the data suggests jobs are becoming more stable in the U.S., says Jonathan Leonard, an economist at the University of California at Berkeley’s Haas School of Business. “When you have jobs that come and go quickly, you get very high creation and destruction rates,” says Leonard. “But there now seems to be less churn in the labor market.”

However, lower job creation is fundamentally a bearish signal of the U.S. economy’s health and international competitiveness. “A recovery that doesn’t generate as many jobs as last time around is troubling,” adds Leonard.

My own guess is that the decline in job creation will continue as bosses at big companies use fears of offshoring and mass layoffs to impose more and more work on existing staff. Memories of over-hiring and subsequent layoffs during the bursting of the bubble are still too fresh.

http://americaneconomicalert.org/news_item.asp?NID=2216918

American Exceptionalism

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By MICHAEL BARONE, WSJ, August 10, 2006; Page A8
… In 2004, pollster Scott Rasmussen asked two questions relating to American exceptionalism: Is this country generally fair and decent? Would the world be better off if more countries were more like America? About two-thirds of voters answered yes to both questions. About 80% of George W. Bush voters answered yes. John Kerry voters were split down the middle, with yeses outnumbering nos by small margins. That’s reminiscent of the story about the Teamster Union business agent who was in the hospital and received a bouquet of flowers with a note that read, “The executive board wishes you a speedy recovery by a vote of 9-6.” Not exactly a wholehearted endorsement…

http://online.wsj.com/article/SB115515847647431384.html?mod=opinion_main_commentaries

A Sage in Christendom

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By FOUAD AJAMI, Wall Street Journal, May 1, 2006; Page A14

For Bernard Lewis, there is something now of the closing of a circle. As a young man, he had been on His Majesty’s service during the Second World War, working for British intelligence between 1940 and 1945. The young medievalist had been pressed into modern government work, and that experience had given him his taste for contemporary political affairs. This new war is something of a return to his beginnings. For an immensely gregarious man of unfailing wit and personal optimism, a darkness runs through his view of the future of the Western democracies. “In 1940, we knew who we were, we knew who the enemy was, we knew the dangers and the issues,” he told me when I pressed him for a reading of the struggle against Islamic radicalism. “In our island, we knew we would prevail, that the Americans would be drawn into the fight. It is different today. We don’t know who we are, we don’t know the issues, and we still do not understand the nature of the enemy.”

The Road to Ruin Passes Through Beijing

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by William R. Hawkins    Wednesday, April 26, 2006
Blind adherence to free trade ideology led England to continue to follow policies that allowed her to be surpassed by Germany and the United States. In fact, but for American assistance, England would have been destroyed by Germany in the early 1940s. Today American leaders wear the same ideological blinders, which are allowing China to rise as an unchallenged economic, political, and military power. Unfortunately for America, there is no other world power standing in the wings ready to replicate her role in assisting England.

Hu? Our Strategic Partner. That’s Hu, by George!

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Nothing has changed in more than a year. Please search for “Hu Lost China?” on this blog.

The children were right.

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Return of America First?, by Patrick J. Buchanan, April 18, 2006

The children were right. The system doesn’t work…What the polls are saying is that neoconservatism has failed and we
wish to be rid of it, that Davos Republicanism has failed and we wish
to be rid of it, that the open-borders immigration policy of the Wall
Street Journal is idiotic and we wish to be rid of it.

Bush’s Fake China Trade Enforcement Policy

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“The Administration will…[continue] pressure on the Chinese
government to comply with its subsidy-related obligations under the WTO,
including making a full WTO subsidies notification….”
–Office of the U.S.
Trade Representative, February, 2006

# of years that China has been
obligated to submit to the WTO an annual notification of its subsidy policies:
5

# of such notifications China has submitted to the WTO:
0

current U.S. deadline for Chinese submission of such notifications:
none

The Fruits of NAFTA

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by Patrick J. Buchanan, March 10, 2006

…U.S.-Mexico
trade calls to mind the trade relationship between Betsy Ross’ America
and the England of the Industrial Revolution, with Mexico in the role
of England. Our exports to Mexico read like a ship’s manifest from
Bangladesh.

The
American people were had. NAFTA was never a trade deal. NAFTA was
always an enabling act – to enable U.S. corporations to dump their
American workers and move their factories to Mexico…

When one considers who finances the Republican Party, funds its candidates,
and hires its former congressmen, senators and Cabinet officers at six-
and seven-figure retainers to lobby, it is understandable that the GOP
went into the tank. But
why did the liberals, who paid the price of mandating all those
benefits for American workers and imposing all those regulations on
U.S. corporations, go along? That’s the mystery. About NAFTA there is
no mystery. There never really was.

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