Third Party & Independents Archives

Maybe we should export more jobs...really!

The economic news is pretty dire these days. Two major auto firms may basically cease to exist with a third one liable to request a government bailout. Unemployment has been in the double-digits and has therefore been higher than that in even the stressful seventies. And the expected loss of employment in Detroit may release thousands of new workers into an already slim job market and thus may also, through the loss of income taxes, deplete the car belt’s ability to meet its demand for welfare.

Of course, many people are blaming our country's exportation of jobs to Mexico, China India and wherenot, but in my opinion, those types might just be missing something. Quite frankly, this exportation just might have saved us from an actual depression and may be a part of our means out of our current problems.

The economic news is pretty dire these days. Two major auto firms may basically cease to exist with a third one liable to request a government bailout. Unemployment has been in the double-digits and has therefore been higher than that in even the stressful seventies. And the expected loss of employment in Detroit may release thousands of new workers into an already slim job market and thus may also, through the loss of income taxes, deplete the car belt's ability to meet its demand for welfare. Of course, many people are blaming our country's exportation of jobs to Mexico, China, India, and where not; but in my opinion, those types might just be missing something. Quite frankly, this exportation just might have saved us from an actual depression and may be a partial means out of our current problems.

This current, world-wide recession, according to at least some economists, is the result of globalization--the making of various components of an item in different countries for that thing's final completion in yet another. Per these money-mathematicians, a loss of demand for any finished item obviously lowers the demand for any of its constituent parts and thus leads to layoffs not only at the point of final construction but also at each step prior to it. Each country suffering from decreased employment, however, also has less demand for goods in general due to a loss of national income, leading to further shrinkages in employment in each of those countries. The resulting recession is just what we have now: something sudden, simultaneous and global.

As bad as that may sound, though, having a recession of equal magnitude that is sudden, simultaneous and localized would only be worse. Manufacturing every part for an item within our national borders would still mean the loss of those jobs needed to make those preliminary items. The jobs lost, however, would all be of American, and any further shrinkages in the economy resulting from any ensuing wave of job-loss would also be in the American economy. The result would, even from the start then, be vastly worse, as would the resulting spiral of unemployment and market decline.

Now America has, for better or worse, been sending jobs across borders and oceans since at least the eighties, basically donating our worst-paid factory and call-center positions to countries too poverty-stricken not to see them as glowing opportunities. And in the twenty years in question, we've had periods of real and general prosperity. Clearly then, sending even a large number of fairly crummy jobs to a foreign locale cannot, by itself, undermine our economy. It just might, however, save it from its current inactivity.

For one thing, by permitting businesses to make or provide goods and/or services more cheaply, it may well permit those businesses to grow and therefore to hire more workers than previously used for at least the steps of manufacture still conducted in the U.S., and may thus ultimately increase our rate of employment. To judge by the employment rate of the eighties thru today, this may well be the case. Secondly, by fostering foreign economies, it may in fact be increasing the global market segment able to afford America's wares and may therefore be increasing the demand for such things. To judge by the stats at a relevant website foreign demand for U.S. service for instance, has certainly grown considerably during the time period in question.

Americans may be concerned with our current trade deficit, but the exportation of jobs may have almost nothing to do with it. We are importing more than ever before, but a comparison of the figures at that website above, with another, reveals slightly over twenty percent of our imports to be in crude oil. Other raw materials, likewise unproduceable in the U.S., would obviously account for more of this deficit, and so much of this deficit would be the result of geographic luck rather than the movement of jobs across borders. Would the critics of globalization like to leave America's suppliers of raw materials without the means to buy our services? Not only would we be lacking valuable income from an outside source, but to get more money themselves, foreign business interests might just have to raise the price of the aforementioned raw materials. The result would be the worst of both worlds: rising prices without economic growth.

All in all then, globalization, at least this time out, may well have saved us from a crisis worse than our current one and may be part of future economic improvement. We may have a hard time remembering that in this exact economic climate, but then we may be comparing that cloudy climate only to our expectation of prosperity, not to anything likely under current circumstance. Unfortunately, to judge realistically, we may well have to compare horrors to horrors, and oddly, we may well see this one, at the very least, as manageable.

Posted by John Comerford at July 4, 2009 4:28 PM
Comments
Comment #284015

John,
Without job creation and real rising wages within the US, it would be impossible to prevent the current asset deflation. Allowing globalization and a free market solution to occur would mean ensuring Chinese, Indian, and EU economic dominance. The free market works. It will provide an effecient solution. Unfortunatley, it will not be a solution that preserves the higher standard of living enjoyed in the US.

Only the federal government is large enough to implement a conscious solution that preserves that standard. Job creation programs, massive investments in infrastucture by the federal government, encouragement of unions, and repeal of ‘right to work’ laws are vital to restoring the health of the US.

That doesn’t mean there have to be tariffs. It does mean everything possible needs to be done to ensure manufacturing rebounds within the US.

If corportions contintue to outsource and base headquarters abroad, then the top 51% of the management and Board of Directors should be required to live abroad, and pay taxes abroad. The great thing about capitalism is that so many people in this country are willing to take the place of those who want to pursue outsouring and offshoring.

No free rides!

Posted by: phx8 at July 5, 2009 7:46 PM
Comment #284023
This current, world-wide recession, according to at least some economists, is the result of globalization-

Funny, this is news to me, which economists are you refering to?

Posted by: gergle at July 6, 2009 12:10 AM
Comment #284030

Why America could export every job overseas I do not see how 300 million jobs are going to help the 6 billion plus in the world. No, old enough to remember why the Leaders of America wanted to export some of the jobs across the two ponds I wonder what will happen when the Leaders and Citizens of those nations realize that they no longer have any resources to build the goods and products wanted by the American Consumer.

Yes, even China will run out of resources in the 21st Century if their leaders keep the same policies in place over the next 50-100 years. And why no economist can or will expose how the lose of resources will effect future generations, I am thankful that Americas’ Elders of the 70’s realized that by America producing all the Goods and Products of the World 30 years ago had to change. For just like oil, copper, trees, and everything else used by corporations are limited in their raw from. What will the global economy look like when the price of TP is a $100 per roll.

Yes, America would already be out of oil today if our Democratic and Republican Leaders did not strike a deal some 30 years ago. And though I cannot say that is a bad thing. Taking into consideration those citizens who have mde a living from the industry I have to wonder what the unemployment rate would be today if the money spent aboard in search for Black Gold would have been invested in creating the Renewable Energy known to “We the People” 30 years ago.

No, exporting Americas’ Industry around the World has been a double edge sword. For why many citizens have lost jobs and had to retrained into the Service Sector, those lucky enough to have been taught how to take advantage of the global growth have failed to realize that making America a Service based Economy is not the same as making America a Service based Society.

Posted by: Henry Schlatman at July 6, 2009 2:27 AM
Comment #284034
Only the federal government is large enough to implement a conscious solution that preserves that standard. Job creation programs, massive investments in infrastucture by the federal government, encouragement of unions, and repeal of ‘right to work’ laws are vital to restoring the health of the US.

How’s that working so far?

It does mean everything possible needs to be done to ensure manufacturing rebounds within the US.

Everything possible. There you go, the justification for the further removal of individual rights from the American Citizen.

RIP USA

Posted by: rhinehold at July 6, 2009 9:57 AM
Comment #284035

BTW, massive investments in infrastructure you say. Like? Perhaps you could give some examples (other than our ‘crumbling bridges’ which is a tired old dubunked canard).

Posted by: rhinehold at July 6, 2009 10:00 AM
Comment #284052

SO let me get this straight John, it is a blessing to have had all these higher paying manufacturing jobs leaving the country this past 30 years in return for a stagnating wage for those that earn a wage in this country. It is also a good thing that the lost jobs were spread around the globe so that other countries could share in the recession with us. Is that what you are saying?

Good for who?

Wouldn’t it have been a better scenario to have higher paying jobs in this country so the people could afford to buy the goods produced in this country and work our way out of a milder recession in a shorter time? That seemed to work just fine pre-globalization.

Although the exporting of services has grown as you stated so has the importing of services according to the spreadsheet you linked to. In fact it seems for every 1 service dollar we export we import 2.8 or so using the 2008 figures and assuming I am reading it right. Why should we be impressed with that?

Posted by: j2t2 at July 6, 2009 2:54 PM
Comment #284063

gergle, Ben Bernanke is one of those economists. Paul Voelker is another. Globalization is nothing more than the interdependence of domestic economies upon foreign trade and investments. The interdependence of multiple specializations to obtain the resources to create and deliver finished goods and services is as old as the invention of currency.

With the rise of population numbers, and therefore aggregate demand exceeding that of any one nation’s suppliers to provide for its own consumers, at a competitive and efficient price, globalization of markets is an inevitable outcome of the world’s population growth and aggregate demand exceeding any nation’s supplier capacity.

This interdependence of markets leads directly to shared global recession, as well as shared global prosperity, depending on the particular temporal context of the global marketplace. A fall off in aggregate demand in the U.S. seriously contracts exports from China, and impacts jobs and real wages for the Chinese.

Your comment above reflects a lack of reading of economists writings and speeches, nothing more. They speak to these global exigencies frequently these days.

Posted by: David R. Remer at July 6, 2009 4:21 PM
Comment #284086

First employment has not grown in the US since 2000. Since our population is growing wages must fall because we are closing industries and moving them to other countries. The standard line is re-train the empolyees or blame them to being ignorant. If it is employee skills why do the business move to low skill low wage markets that provide goverment support to manufactures? All of the other countries on earth would like to employ their citizens only the US would like to reduce its manufacturing base. If we negociate trade agreements under the same assumption that we have for the last thirty years the US must fail over time. If our government chooses to lose, private industry can’t win. The idea that we can convert to a service economy has already proven false. A good example of the service economy is the fraudulent “services” our banking, investment and insurance industries have been providing. No real products were being produced.

Posted by: Pa tMurphy at July 6, 2009 9:18 PM
Comment #284101

I think both the Democrats and Republicans need to look at what type of jobs will Amerca need in the Short and Long Term to become an Energy Independent Nation and Society. For why the technology exists to use Bio-Mass Material and Wind to greatly expand the resources of Americas’ Civil, Political, and Religious Leaders, I do not see the Skilled and Unskilled Labor and Management Workforce in America and Humanity to meet the challanges faced by the Children of the 21st Century. Do you?

Posted by: Henry Schlatman at July 7, 2009 5:40 AM
Comment #284109

But David the current mini depression we are in was not caused by globalization it was due to capitalism run amok just as the cause of the great depression was due to rampant speculation the overheated housing market, the credit crunch and of course the leveraging tools used by the “to big to fail” institutions were the reason this recession has turned so bad. The high level of unemployment and the non existent recovery in the job market we are currently experiencing may be the result of globalization but I don’t see that globalization is the root cause of the mini depression we are now in.

Posted by: j2t2 at July 7, 2009 9:19 AM
Comment #284150

J2t2,
Why many factors have been affected by what you call a mini depression, the fact that Global Demand for Oil sparked a race that could not be sustained by the Industrial Countries of the World given the Limited Resources of the Consumers stills keep the idea of the Market recovering and thus the creation of jobs that will lead to long term growth.

For why I agree that certain institutions like banks, energy companies, and others (i.e. The Establishment) must be protected at all cost. Seeing that over 50 banks and countless other corporations have been left to fall (even if under controlled conditions) should show the Loyal Opposition that Nothing is to big to fail. For I just don’t think the World is ready for a complete breakdown of society like some of the extreme elements would like to see happen exspecially since that would have played directly into the hands of Americas’ Enemies.

Posted by: Henry Schlatman at July 7, 2009 10:14 PM
Comment #284199


The true culprits are the politicians of the Democratic Party who broke faith with the New Deal and Progressive legislation designed to prevent the kind of economic greed that has caused our current economic breakdown. They sold their souls to their corporate masters and they are still doing it.

Posted by: jlw at July 8, 2009 10:50 AM
Comment #284210

jlw,

Comedy gold! Keep them coming.

Posted by: rhinehold at July 8, 2009 1:00 PM
Comment #284220

If you were paying attention you would realize that the “too big to fail” was created by governement non enforcement of anti-trust laws and the repeal of banking laws put in place to prevent system failure. Citi was allowed to buy out business to grow itself into a ‘too big to fail’. These banks are “Too Big Too be Legal”. The sentors collected a ton of money to make these changes. The problems were cuased by the big instutions they were not the victims. The lack of enforcement of anti-trust laws has been occuring in all US business. This has resulted in the consolidation of power into a very small group of CEOs and senators in the US.

Posted by: Pat Murphy at July 8, 2009 3:46 PM
Comment #284224

Rhinehold what do you find so funny?

Pat I don’t disgaree with you but I see government working at the request of the “to big to fail” corporations to do away with or choose not to enforce the laws you mention. It is not right but when we have allowed bribery as free speech it is what we get.

In theory the invisible hand of the free market should have kept these companies from getting to big. Unfortunately that has not been the case at any time in our history. Blaming government for not having laws in place to prevent the big financial institutions from destroying the economy seems to me to let those that committed the excesses off the hook for committing the excesses. Was any of these companies forced into anything by the government that would have caused them to damage the economy so?

While the government is complacent in the problem it is the “to big to fail” corporations that have not exercised proper restraint and have lobbied our representatives to undo the laws put into place after the great depression to keep companies from becoming “to big to fail”.

Posted by: j2t2 at July 8, 2009 4:12 PM
Comment #284227

Why would the “to big to fail” corpation show restraint? The CEOs are getting very rich by controlling their own compensation and taking big risk with companies they don’t own but issues themselves stock in. The CEOs have no downside if they fail they get a big payout to resign.

Posted by: Pat Murphy at July 8, 2009 4:22 PM
Comment #284231

They wouldn’t Pat as history has shown us time and time again. That is why strict regulation is necessary, why political bribery as free speech doesn’t work to the good of the country and the people of this country, why “free market” is not free market and why conservative ideology has failed us. Yet as long as we continue along the “free market” path we will continue to be subjected to the abuses we have witnessed once again. But to blame government as a whole for the problem instead of the perps only serves to prolong the agony,IMHO.

Posted by: j2t2 at July 8, 2009 6:00 PM
Comment #284233

j2k2
You are suggesting that the current CEOs are going to stop looting the country out of the goodness of their hearts? Have you ever personally talked with a CEO? Without governement prosecution or changes to the existing laws what are you saying will motivate change? Who but the governement has failed to enforce the law?

Posted by: Pat Murphy at July 8, 2009 7:04 PM
Comment #284258

No Pat I’m saying the theory of the free market says CEO’s listen to consumers/customers and make the appropriate changes. I am also sayng it is nonsense to believe this actual works on any scale. Yet we continue to hear from most politicians on advice from Wall street and others that we need to follow “free market” policies in order to be a prosperous nation.

I am also saying the government is complacent in the globalization activities that make the laws moot in many cases but it is the corporations themselves that have paid for the representatives of our government as well as the enforcement wing of the government that must be held accountable.

I am also suggesting that by blaming only the government for this we forget what the real problem is, those that caused the problem. So once again I ask you what did the government force AIG, the Banks and the Mortgage companies to do that caused the most recent financial meltdown of our economy?

Posted by: j2t2 at July 9, 2009 10:29 AM
Comment #284263

They were forced to take on risky debt from refis that were brought about by artificially lowe interest rates created by the Fed (an NGO granted monopolistic power).

None of any of that is a tennet of a free market. Once the market is broken by government, there is no way that free market policies can work.

Posted by: Rhinehold at July 9, 2009 10:56 AM
Comment #284270

And NGO means non governmental organization, right? The Federal Reserve members are not democratically elected representatives of the people Rhinehold. They are a bunch of banks with little government oversight and control. I further disagree that “at a point of a gun(aapoag)” force was used to talk the speculators into taking advantage of the low rates and that aapoag force was used to package mortgages for resell, in fact if memory serves it was an unregulated market, a free market if you will which only furthers my point about free market theory.

Rhinehold the free market has failed through out history, when it was actually free. Why would any nation with any intelligence subject themselves to such a system, as a “free market” when it has no history of success? What passes for “free market” the past 30 years is no free market.

Posted by: j2t2 at July 9, 2009 12:39 PM
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