As U.S. income stagnates, Democrats reject free trade

[rodeodance]

Source: McClatchy Newspapers




As U.S. income stagnates, Democrats reject free trade
By Kevin G. Hall | McClatchy Newspapers

* Posted on Wed, August 1, 2007


WASHINGTON — The Democratic-led Congress won’t give President Bush the special authority he needs to negotiate future free-trade deals. The Senate is moving on retaliatory trade legislation against China. The House of Representatives won’t approve deals with three small neighboring Latin American countries. Global trade talks are near collapse.

Washington's mood on free trade hasn’t been this negative in at least two decades, and a pullback is evident. Whether this becomes a full-blown return to protectionism remains to be seen. But for now Americans, and the politicians they elect to represent them, are in no mood to expand international trade.

“For decades we took for granted that everyone agreed with us economists that free trade is good, protectionism is bad. Somewhere along the way, that stopped being the conventional wisdom,” acknowledged U.S. Trade Representative Susan Schwab, in an interview with McClatchy Newspapers. “And whereas the default vote on a trade bill in Congress used to be a ‘yes’ vote, the default vote on a trade bill now in Congress is a ‘no’ vote.” Why? Because lots of people are no longer convinced that a rising tide of trade lifts all boats — and there's evidence to back them up.

For three decades, the richest 10 percent of Americans have been growing even richer much faster than everyone else. Over the past five years, real wages for all the rest of American workers have been almost flat. Many blame globalization........

Read more: http://www.mcclatchydc.com/226/story/18562.html

[Warpy]

1. It's about bloody time!

The dogma of free trade has been the dogma of both parties back as far as Truman.

Free trade without fair trade is killing the people who live in this country.

[mzmolly]

5. Indeed.

Agreed.

[Bassic]

19. Along with the people who live in underdevelopped countries.

Thanks to the policies of the IMF, in any event.

[Sen. Walter Sobchak]

2. Now is a very bad time to be protectionist,

With the US dollar on the skids American exports are all of the sudden deeply discounted on the world market making US manufactured goods very attractive on the world market. It also makes US manufactured goods more attractive in the US because the international buying power of the US dollar is depressed.

With US exports more attractive now than at any time in recent memory, trade measures that will result in trade retaliation against the newly competitive US exports are stupid.

Look no further than Boeing - their new planes might be cool, but the weakness of the US dollar is making Boeing jets more affordable than those made by Airbus who prices their planes in dollars, but opperates in Euros.

If you look at Canada over the past 30 years their economic base was built strongly on a discounted Canadian dollar - like Canada the US has significant domestic resources priced in local dollars, so foreigners (including the US) could go shopping in Canada with a currency worth much more than the Canadian dollar. And we are no worse off for that because there are few raw resources that are not available in the US in US dollars.

Now the tables are turned, and while the weakness of the US dollar might sting if your fond of foreign travel and foreign luxury goods. The weakness of the US dollar puts us in the same position as Canada who built a strong and modern export economy on the base of a weak currency.

Given the weakness of the US dollar makes US exports far more competitive and encourages US manufacturing - it would be really stupid to go around starting trade wars that will cut off US access to foreign markets when the weak US dollar can make US exports more competitive than they have been in a generation.

And this isn't crazy freeper talk, this is the position put forward by Robert Reich, Good Clinton's secretary of labor.

[rabidchickens]

3. Yes there is some truth to that

I think trade is fine, Im just considered about stuff we IMPORT we need to pursue FAIR trade to stop the "race to the bottom" among 3rd world producers.

[Sen. Walter Sobchak]

4. The Bush Peso will take care of that,

The US isn't going to suffer for not getting plastic utensil manufacturing back, but a weak US dollar will make higher end value-added manufacturing in the US much more attractive. Manufacturing in Korea and Japan will get too expensive.

Likewise it will encourage foreign corporations to manufacture in the United States, look at the giant facility being built by Thyssen Krupp for example. They can manufacture in the US in US dollars and then sell in Euros. Everyone wins.

If we lock ourselves out of the world economy, those oppertunities will be lost to us.

[Robbien]

8. Such hyperbole

"if we lock ourselves out of the world economy"

Bull. We have FTAs with many countries. Not adding three new small FTAs is no way "locking ourselves out of the world economy".

Bush only lost his fast track to FTA's. No way should anyone give Bush the right to fast track anything.

[rabidchickens]

22. he isnt attacking the stopping of fast track

I think hes just attacking neo-protectionism

[thunder rising]

6. Ms India Caucus' secretary of labor

You mean that one? This is the reason that HRC will not win if I can help it.

Fair trade is fair trade. One thing about these policies is that the rich get paid first and the rest of us wait for the future to see if the theory works out. BTW: Boeing can export whatever they want and since most of the plane parts are now offshored the balance is hardly affected.

[Virginian]

7. And she wants to INCREASE the number of H-1b visas!!!!

IT professionals in this country are already mostly foreign born. This was one of our best paying middle class carreers. Now, it is difficult to compete with the employment agencies pushing the Indian workers. There is no shortage of American IT workers. That is fiction started in the lead up to Y2K. There is a shortage of jobs for American IT workers, so fewer students are going into that field.

One day we will need home grown IT professionals with security clearances and won't be able to find any because the only people in IT are from south Asia.

[HughBeaumont]

10. It amazes me that politicians say "we need more encouragement for students to take math & science!"

Uh, that's nice and all, but somehow I doubt American kids are going to go into a field that they'll be instantly priced OUT of upon graduation. You gotta have the jobs, people; they're not going to take on a difficult and time-consuming area of study only to find the country favors foreign-born inshored Visa'd workers or setting up their R&D overseas.

If there's no ROI, you can forget about technological careers flourishing in this country. There also has to be some inkling where these supposed "21st Century Jobs" (© 2001, Republican Party. All rights not reserved) are going to come from and some guarantee they won't be following their predecessors offshore.

Oh wait, they already ARE.

http://timesofindia.indiatimes.com/articleshow/999932.cms

[rabidchickens]

23. Since when are liberals becoming anti-immigration protectionist

These indians are great for our economy, the highest per population contributors to the economy, the richest group in the country, and a quite liberal-leaning voting bloc.

Having educated indians in this country is fine by me.

[fasttense]

16. Since US exports are very, very few

the lower dollar will only help a few corporations. Since most of what the average middle class consumer buys is imported, huge increases in inflation are on the way. We have abandoned and destroyed most of our manufacturing infrastructure and converted our farmlands. It will take many, many years to replace that infrastructure and in the mean time, we have inflation to deal with.

But what is really dragging this economy down is the high cost of basic needs like housing, food, gas, and education. A weak dollar will do nothing to help the middle class. The dollar has not been this cheap since the 80s. If you remember the 80s, the unemployment rate reached a high of 10.8 (what the government admitted to anyway) and inflation was at times as high as 13.58 (if we can trust the government numbers). A cheap dollar does not sound so good to me, despite what the powers that be are chanting.

[pokercat999]

21. Fair or Free trade. Hold our trading partners to ALL

our standards. Wait that won't work our Lords and Masters (the corp CEO's) might have to live on the chump change of only 200 times their average workers wage. Couldn't have that could we.

How about SELECT trade, only trade with those countries that will fully comply with all of our laws governing environment, workplace and workers.

[HughBeaumont]

9. Can I get a big fat DUH from the congregation?

For three decades, the richest 10 percent of Americans have been growing even richer much faster than everyone else. Over the past five years, real wages for all the rest of American workers have been almost flat. Many blame globalization.

I've been saying this since the slowly-growing wave of white-collar grad-level job offshoring started during the mid-90s and flourished a hundred-fold during the Failure Fuhrer's corporate-enabling reign.

MAN. Offshoring and other assorted unbridled corporatist free-trade practices help NO ONE but the wealthy and only the biggest zero-sum-economy favoring jackass will yip all day that it doesn't (sadly, offshoring actually has defenders on this board. SAD). The current free-trade debacles are nothing but an engineered race to the bottom for workers of all nations involved. Destroying one middle class to prop up another will never equate to any kind of fairness, and should NOT be considered sound economic policy.

Rah rah about low prices all you want; all you're doing is cheering on what Paul Krugman referred to as a "Tchotchke economy". That's where the prices on toys (Tchotchkes) such as DVDs, phones, computers, appliances and other devices like that are as cheap as they are low quality, yet the prices on necessities (utilities, homes, education, health care, social services) grow in cost to the point where they end up being insurmountable to the average consumer.

In 1970, the average home price was only twice that of an average family income. In 2007, that average house is now 4-10 times the family income, which has moved a pittance in real dollars since 1970. That's not even counting the fact that we work longer hours on average than our 70s counterparts, due to the fact that most of us are two-income families (often without a choice in the matter, since no amount of budgeting will result in affordability). The same can probably be said of education and health care as well, for those not lucky enough to have an employer provide those benefits. Even still, you don't really have a choice of what you want to study and health care takes a substantial chunk of your weekly pay no matter what.

[Judi Lynn]

11. So glad to see this article. Long time in coming. Thanks.

:kick: :kick: :kick:

[dmosh42]

12. They never mention the effect on our education system....

All our kids that are borrowing for their future, to get through colleges, will be left high and dry as many of our skilled science and engineering jobs go overseas, following the other jobs, to slave labor countries.

[Vidar]

13. Damn, they actually did something right.

[1776Forever]

14. Middle Class Cease! The jobs going over seas & replaced here by 2015 - Moyer's Journal Facts

Bill Moyers journal has the numbers:

http://www.pbs.org/now/politics/jobflight.html

Overview

The numbers are startling: 3.3 million jobs in less than 15 years. That's the number of U.S. jobs expected to be lost overseas by 2015 according to a recent report by Forrester Research. But the sheer size of the exodus isn't what's worrying analysts the most — it's the type of jobs. Some critics are worried that this time it's the corporate main office is getting ready to shut down and head out of the country, packing up cubicles and all. As reported on NOW, a new wave of jobs are leaving U.S. shores: software development, customer service, accounting, back-office support, product development and other white collar endeavors.

Projected Number of U.S. Jobs to Move Overseas

Management: Number of jobs moving overseas by 2015: 288,281

Business: Number of jobs moving overseas by 2015: 348,028

Computer: Number of jobs moving overseas by 2015: 472,632

Architecture: Number of jobs moving overseas by 2015: 184,347

Life sciences: Number of jobs moving overseas by 2015: 36,770

Legal: Number of jobs moving overseas by 2015: 76,642

Art, design: Number of jobs moving overseas by 2015: 29,564

Sales: Number of jobs moving overseas by 2015: 226,564

Office: Number of jobs moving overseas by 2015: 1,659,310

Source: Forrester Research, Inc. November, 2002

.............................................

As foreclosures mount, more people are considering bankruptcy

by Annie Baxter, Minnesota Public Radio
June 18, 2007

http://minnesota.publicradio.org/display/web/2007/06/15/foreclosure1/

The skyrocketing rate of foreclosures both in Minnesota and around the country is putting many people in desperate situations. As homeowners lose their homes or scramble to avoid foreclosure, more people are looking at bankruptcy as a strategy to stay in their houses.

Bankruptcy is a long shot. A lot of people are ending up in the double bind of foreclosure and bankruptcy.

........................................

http://www.consumeraffairs.com/news04/2007/07/foreclosure_rate.html

Foreclosures Up 55% In First Half Of 2007
Nevada, Colorado, California Have Highest Rates
July 31, 2007

Living in a Bubble?

The damage caused by the subprime implosion is highlighted in foreclosure statistics for the first half of 2007. Foreclosure actions surged 55 percent in the first half of the year, according to RealtyTrac, an online marketplace for foreclosure properties.

The company shows a total of 925,986 foreclosure filings — default notices, auction sale notices and bank repossessions — on 573,397 properties nationwide during the first six months of the year. That’s one foreclosure filing for every 134 U.S. households for the first half of the year.

[Greyhound]

15. Wow, it only took them 15 years to "report" this, and even then the numbers are

terribly skewed to ameliorate the reality.

We've been living this nightmare since the mid/late 90's. I am currently working a McJob at about 25% of my salary in 2001 and am lucky to have even that, since I make almost 50% above the "standard" rate around here. Two college educated former professionals that cannot afford rent on a dump in a crappy neighborhood, because we had the audacity to get beyond 40.

[krkaufman]

17. It's not bloody rocket science, Susan.

The wealthy have been using "globalization" as a workaround to the labor and environmental safeguards fought for over the previous century, resulting in a shift back towards the robber baron era -- where the rich get richer, the middle class shrinks, and the increasing underclass are forced to take whatever work they can find.

Forgive me for failing to ignore the obvious lessons of history.

[OhioChick]

18. K&R

:kick:

[CANDO]

20. Free trade vs protectionism

False choice. There are many variables in between. How about sensible tariffs to protect critical industries? This also covers many national security concerns. Most of our military weaponry is multi-nationally produced. Why not ensure domestic capabilities?

[rabidchickens]

24. well stated