Talking Past Each Other

Jeff Faux writes:

Dodging the Question | TPMCafe: Brad DeLong brings us the startling news that there are a lot of poor people in China, that the Chinese rich are not as wealthy as Bill Gates, and that incomes are up since the cultural revolution. Wow! Stop the presses!

What does this have to do with my proposition that we need social protections in the rules of globalization? Nothing. It is a red herring to divert discussion away from the ways in which the globalizing economy creates an upward redistribution of income, wealth and political power--and to stop the conversation about how to change that...

Jeff and I are clearly talking past each other. I think we live in a world in which the tremendous wave of globalization over the past two decades has produced enormous benefits for those members of China's urban working class lucky enough to get jobs in export-oriented industry and for those ex-peasants who have managed to move to China's coastal cities.

Jeff, by contrast, thinks we live in a different world: one in which "class solidarity among [transnational] educated elites and global movers and shakers" leads to "a business partnership between Chinese commissars who provide the cheap labor and American and other transnationals who provide the technology and financing... whose lobbyists in Washington provided access to the US market" which "undercut[s] the bargaining position of labor virtually everywhere," "effectively excluding ordinary people." Thus little "of the sacrificing by the American working class through out-sourcing to China trickles down to the poor Chinese workers" where "wages have been stagnant for most manufacturing workers there for the last decade."

In Jeff's world, American policies to restrict the growth of world trade don't hurt anyone worth worrying about: those whose standard of living falls if trade volumes stop growing or are rolled back are the "90 percent of Chinese citizens with more than US$128.2 million [who] are the children of senior officials"; those "at the top [where] China is a place of immense wealth... commissars turned capitalists [who] ride around Shanghai in a different Rolls every day"; those "Davos... apparatchiks dictate the rules to trade negotiators and high-level international bureaucrats... the government-business revolving door.... Robert Zoellick, who was George W. Bush’s, [who] now works at Goldman-Sachs.... Bush’s treasury secretary Henry Paulson (who came from Goldman Sachs, which is heavily invested in China) [who] tells us we have to be patient. Clinton’s treasury secretary Robert Rubin (also from Goldman Sachs, and now at Citigroup, also invested in China) [who] agrees..."

I don't think we live in that world.

I think we live in a world in which Chinese peasants and workers have not the same but very different interests than American manufacturing workers, who have very different interests from Americans consumers who work outside of manufacturing. I think I am the one who is grounded in reality.

In general, we have a choice between policies. We can eliminate or sharply restrict trade with an odious regime--as we do with Cuba--in the hope that it will put pressure on it for reform. We can encourage the maximum possible trade with an odious regime--as we do with China--in the hope that the more economic, cultural, and political contact there is the more we strengthen the forces over there that we like. Which of these policies we follow will have impacts on domestic income distribution--but much smaller impacts than do our educational, social insurance, and tax policies which do much, much more to move wealth and opportunity down or up the American income distribution.

I tend to be on the side of free trade abroad and social democracy at home. But I am not sure that I am right. I am sure, however, that painting the issues as Davos plutocrats (and their water carriers) and commissars-turned-capitalists on one side and America's working people on the other doesn't move us forward at all.

Comments

[bigTom]

Brad, we have to acknowledge that an increasing (but still small number) of people are beginning to think like Jeff. Frankly it smacks me as some sort of crazy "conspiracy theory". Nevertheless it is true that the power brokers, and analysts all belong to the global privileged class. Any "conspiracy" in practice is likely to be a lot more subtle, showing up not in backroom deals, but in shared biases and values.
So if a policy helps global GDP, but has a clear side-effect of distributing wealth up the income scale, they are not going to be looking at the result with the same eyes as Lou Dobbs.

[Ponzi Q. Globalization]

"I think we live in a world in which Chinese peasants and workers have not the same but very different interests than American manufacturing workers, who have very different interests from Americans consumers who work outside of manufacturing."

Why not continue?

...who have very different interests than global movers and shakers; Chinese commissars who provide the cheap labor; Robert Zoellick who was Bush's trade rep and who now works at Goldman-Sachs, which is heavily invested in China; Bush’s treasury secretary Henry Paulson who was the CEO of Goldman Sachs; and Clinton’s treasury secretary Robert Rubin also from Goldman Sachs, who is now at Citigroup (also heavily invested in China).

The problem is that your list makes up 99 & 999/1000% of humanity while my additions and the like make up the rest. Yet the 1/1000% are the ones calling the shots. In whose favor do you think these shots are called?

"Which of these policies we follow will have impacts on domestic income distribution--but much smaller impacts than do our educational, social insurance, and tax policies which do much, much more to move wealth and opportunity down or up the American income distribution."

Is this true? I'm with Alan Blinder on this one. We ain't seen nothing yet.

"I am sure, however, that painting the issues as Davos plutocrats (and their water carriers) and commissars-turned-capitalists on one side and America's working people on the other doesn't move us forward at all."

Getting people to view things this way may be the only way to change things for the better. Rest assured that a plutocrat worth $700,000,000 like Hank Paulson doesn't view his interests and the interests of the average American worker as being on the same page. The agendas of everyone should be made clear to everyone. Make the fact that the agendas are in conflict clear to everyone.

[Steve]

My main disagreement with people opposed to free trade is they can't ever grasp the notion that some solutions to a problem can sometimes be worse than the original problem. Of course there are many serious global problems the world faces, but attempting to "out market" the market is impossible - you can't place the kinds of restrictions on globalization unilaterally in America without simply forcing companies to shift assets, technology, and investments into places with lower costs and barriers to trade.

The moment we make it more costly to do business in China (one of the consequences of restrictions on globalization), is the moment companies switch to Vietnam. The only possible solution I can see is if every nation in the world agreed to impose the same standards on all nations and companies, but even then it would create the same sort of black market problems and cartel issues that would hugely incentivize the developing world to cut a deal and make things cheaper by offering the only factor endowment they've got - cheap labor.

[denniS]

Two of my favorite words are mitigate and aggravate. There are so many ways they can be applied in every day life.

There are postive ways to mitigate globalization (which the Professor mentions broadly-- social democracy.) And, there are negative ways, which effectively aggravate social ills-- ie. sanctions.

But, if social democracy is off the table, because market fundamentalists own the airwaves and stifle debate, what then?

[anne]

Phooey. Think a little to the legacy of Franklin Roosevelt and understanding that economic policy could and should create a healthful fruitful labor market, and know that we can insure just that just now and have no need to find China or Brazil or South Africa anything than helpful to us as we are to them.

[anne]

http://www.nytimes.com/books/00/11/26/specials/schlesinger-hundred.html

April 10, 1983

The 'Hundred Days' of F.D.R.
By ARTHUR SCHLESINGER Jr.

Exactly half a century ago, the Republic plunged into the Hundred Days - that time of tumultuous change when a flood of legislation swept away venerable market practices and gave the American economic system a new contour.

In the frenzied weeks from March to June 1933, Franklin D. Roosevelt sent 15 messages to Congress and steered 15 major laws to enactment: among them, central planning for industry and for agriculture, new regulation for banking and for the securities exchanges, the Tennessee Valley Authority, the Civilian Conservation Corps and a national system of unemployment relief.

''At the end of February,'' Walter Lippmann wrote when the special session adjourned, ''we were a congeries of disorderly panic stricken mobs and factions. In the hundred days from March to June we became again an organized nation confident of our power to provide for our own security and to control our own destiny.''

The Hundred Days were only the start of a process that ended by transforming American society. Who can now imagine a day when America offered no Social Security, no unemployment compensation, no food stamps, no Federal guarantee of bank deposits, no Federal supervision of the stock market, no Federal protection for collective bargaining, no Federal standards for wages and hours, no Federal support for farm prices or rural electrification, no Federal refinancing for farm and home mortgages, no Federal commitment to high employment or to equal opportunity - in short, no Federal responsibility for Americans who found themselves, through no fault of their own, in economic or social distress?

These social changes have won general approval. Even the Reagan counterrevolution, for all its 19th-century laissez-faire and Social Darwinist passions, shrinks from abolishing the framework of social protection -the ''safety nets'' - created by the New Deal.

But what of the narrowly economic results? How effective was the New Deal in reducing unemployment, promoting economic growth and altering the distribution of income? And does the experience of half a century ago offer any guidance to the nation in its economic perplexities today?

The technique of the New Deal was improvisation and experiment. ''It is common sense to take a method and try it,'' F.D.R. said in the 1932 campaign: ''If it fails, admit it frankly and try another. But above all, try something.'' ...

[MarvyT]

Brad, you offer two choices: maximum trade or sharply curtailed trade. This is a much more complex issue than that. You and your colleges should be bright enough to figure out a way to promote free trade with a more orderly transition. The current free-for-all is unsustainable (except in textbooks). Americans are starting to rebel against globalization. Right now, the Chinese are and Indians are running export driven economies. These nations must develop their own markets and consumer cultures. If we shipped every job in the USA to China or India, they'd still be poor. It's not just manufacturing either. I had to take two large pay cuts the last few years I was a computer systems analyst. Indian companies were taking much of the business my employer depended on. Companies are using outsourcing and H-1bs to grind down the best paying jobs outside of management. In 10 years, computer programming went from a great career to permanent layoffs. If smart people like you can't come up with some answers soon, this will end ugly.

[Lewis Carroll]

Just to expand on what MarvyT said, and channel something Anne mentioned, we need to apply some FDR thinking to this question.

Yes, FDR thought that social democracy and the economic safety net were good in and of themselves. But he was also staring straight down the barrell of Eugene Debs, Norman Thomas and Robert LaFollette. He knew that capitalism needed saving *from itself*, lest the populace do something rash like jettison the market economy. (I don't know how seriously this possibility was taken at the time, although a biography of FDR I read some time ago implied he was seriously concerned about it).

Applying the same heuristic to the globalization issue, one can see that a failure to institute sufficient social democracy here, whereby the promised compensation of losers by winners comes to fruition, might result in the political hegemony of protectionism.

So while I agree with Brad about the virtues of free trade and social democracy, we need to address the real world question that denniS brought up earlier. Namely:

"But, if social democracy is off the table, because market fundamentalists own the airwaves and stifle debate, what then?"

Brad, some might call this *addressing the world we live in*, at least politically. ;)

[Bruce Wilder]

I don't find Brad's high-contrast black-and-white view all that confusing. I think it is obvious that we do, indeed, live in a world, in which elites can and do squeeze the common, working folk. A sizeable minority in the U.S. Senate recently voted to abolish the minimum wage! So, let's not even try to pretend that Jeff Faux is the one, who is living in a fantasy world.

Rents in today's world are mostly created and captured in distribution. The distribution gatekeepers get the big bucks from world trade, and wage earners are being squeezed and screwed. That's part of reality.

PART of reality.

Where Brad goes wrong is in attributing to Jeff Faux the view that all of the gains from trade go exclusively to the tiny elites. I don't think he's saying that at all. But, he is saying that oppressive elites have opportunities and they take them, and the details of trade agreements matter.

Enough with the Dr. Pangloss routine: plenty of people in China are getting screwed; plenty of people in the U.S. are getting screwed. And, we can do something about it.

Not by stopping trade, but by coming down out of the clouds, and acknowledging reality, and the implications of the details in trade agreements, to which lobbyists and bankers pay a lot of mostly unprincipled attention.

[remo williams]

I think the perspective changes once Brad starts to think like an economist and tell us that Chinese mke $8000 a year, ppp.

[dale]

The great advantage that Jeff has over Brad is in his insistance that we incorporate the political with the economic. Brad talks a bit of social democracy but doesn't seem to insist that liberalized trade regimes and social democracy MUST go together- as a system.

Jeff gets that point. None of this, let's do the trade thing and then wring our hands over the lack of strong redistribution and safety net. Jeff gets the political in political economy. I don't think Brad does quite get it.

Our trade regimes need to- from the get go- be social democratic, New Deal, liberal, whatever you choose to call it. But we can't do this piece-meal. It has to be a progressive international system of promoting social democracy and trade as a unified system.

[robotslave]

"But, if social democracy is off the table, because market fundamentalists own the airwaves and stifle debate, what then?"

That is a question that people who favor free trade have an answer to (loosely, "then you hope that the rising income of the general population will eventually weaken the oligarchy and lead to political reform"). You don't have to agree with this answer, of course, but it is at least an argument that people on that side of the debate are willing to advance.

By contrast, though I find people opposed to free trade are very willing to *ask* versions of this question, they do so only rhetorically. I can think of two implicit answers: 1) "then you give up. the people in power make the rules, and there's nothing you can do about it," or 2) "then the powerless masses must seize power by force." Most free traders I've met would laugh at the suggestion that they are militants (or, gasp, communists) so I haven't found anyone willing to give the second answer explicitly.

I have met a few defeatists who gave some version of the first (and then generally in bars), but that position seems to be unacceptable in internet free-trade arguments.

Now, I'm not the most creative person in the world, so there must be other possible or implied answers to this question. If you're opposed to free trade, please tell me: if social democracy is off the table, because market fundamentalists own the airwaves and stifle debate, what, non-rhetorically, then?

[ilsm]

"then the powerless masses must seize power by force."

Not to worry, this option is gone.

They would be the terrorists.

There are now laws to protect society from them. No habeus corpus!!

Want a plane ride to Gitmo or some other place?

[Dean Baker]

To throw my usual line into the mix, we do not have free trade. We have a system in which the party of Davos deliberately threw our manufacturing workers in competition with low-paid workers in China and elsewhere, while leaving our highly paid professionals largely protected. This was policy choice, not accident.

The party of Davos also made the decision to extract huge rents from the poor masses in China by imposing copyright and patent protections to benefit the likes of Bill Gates and Pfizer.

So, what we have is a transfer from the working class in the U.S. to the Chinese poor (they do benefit from the growth in manufacturing jobs) and a transfer from China as a whole to the Bill Gates and Pfizer.

I see no economic or moral argument as to why this pattern of trade is desirable. if we want to help the Chinese masses with free trade, why don't we start at the top? Let's have out professionals engage in free competition (tax the Chinese trained professionals that come here and send the money back to China) and scrap the copyright and patent protection rules for China.

Again, this is a win-win for everyone but the rich here. I'm still waiting to find an economist who will support free trade.

[Doug]

What I miss from Brad's view is a description of who is doing these things. Faux's list may be incomplete or wrong, but the "tremendous wave of globalization" did not just happen by itself. Without thinking about the agency involved, there's not a coherent way to think about the policies needed to get to the ends that both appear to desire.

[Matt]

One canard needs to be corrected. Manufacturing wages in China have not been stagnant for the past decade. They've been rising at about 9 percent a year in nominal terms, 6-7 percent in real terms. (If you doubt this, by implication, you think corporate profits in China have been growing by 40 percent a year, rather than the officially reported 30 percent.) Labor incomes have indeed been growing more slowly than overall GDP, but not that much more slowly. All the data, from many sources, concerning consumer purchasing power in China points to rapid, widespread growth.

[Will Phillips]

I have a non-economist question: when this debate comes up, incorporating worker and environmental protections is always seen as completely destroying whatever benefit globalization would have accrued to the workers of developing countries. However, as earlier posts about FDR and others have showed, the actual experience of incorporating those protections has not created economic disasters.

Now, America in 1933 and China today are very different situations, so I don't expect things to be identical. But I am reminded of recent developments in thinking about the minimum wage--economists were nearly unanimous in their thinking that such legislation was bad, because all their theoretical models showed it to be so. However, once someone attempted to show that empirically, the reality was shown to be much more complex, and the theory was, to a large extent, not borne out.

Our theories tell us that regulation inhibits economic growth, but has that happened in reality? Wouldn't the kind of considerations that most of us want--incorporating elements of social democracy into the trade agreements themselves--help to create the kinds of internal markets that would help correct current imbalances? Has anyone actually studied how this might work in the real world, or has it simply never been tried?

[Lewis Carroll]

Robotslave,

Like Brad, I'm in favor of both free trade and social democracy, but my point, as reiterated by others here, is that if one has powerful promoters and the other lacks a real political voice, it is easy to see why we've gotten the one without the other.

And my point about FDR was not to imply the possibility of a VIOLENT backlash, merely a political one. Because if the distribution of benefits gets distorted enough without the benefit of a social safety net, people might retreat to the protectionist position via VOTING, rather than taking to the streets with pitchforks. The net effect, at least as concerns political economy, is just as deleterious IMO.

[anne]

Again, turn to the 1920s when Republicans found no problem in domestic economic structure, no matter the evident gathering recession turned to depression, but found problems internationally. Franklin Roosevelt knew no modern economics but knew where agricultural-mining struggles began and unban struggles took hold. The need was to experiment domestically while encouraging renewed international trade relations.

Think then of domestic economic vitality and competitiveness, and notice the astonishing difficulty of gaining a mere minimum wage increase and relative ease of gaining what should be wholly unnecessay work visas for computer scientists.

[Robert Waldmann]

I think that you and Faux are not quite talking past each other. He makes claims which can be confronted with reality "wages have been stagnant for most manufacturing workers there for the last decade." and "little "of the sacrificing by the American working class through out-sourcing to China trickles down to the poor Chinese workers" and "he ways in which the globalizing economy creates an upward redistribution of income, wealth "

All of these assertions are assertions about what has happened to non rich Chinese. Faux is speaking your language. He is, in particular, saying things which are demonstrably false. You won't convince him, but continued debate with him is fruitful, since any sensible person can tell by now that he has no valid response to your question (do you want to keep Chinese poor ?) and has to invent an altnernative universe to pretend he is not advocating that.

more thoughts at my blog.

[James Galbraith]

Brad thinks that increasing trade with China will help bring on political changes there. For a reality-based economist, this is a remarkably faith-based argument.

Jeff thinks that imposing social protections will reduce China's ability to export to the United States. This claim is harder to judge without knowing exactly the content of those protections. Prohibiting imports based on child labor and prison labor is, or ought to be, totally uncontroversial, but would have no effect -- zero -- on China's exports. (Indeed, we already have an MOU with China banning exports using prison labor, since the early 1990s.)

What you both share is a huge overestimate of the importance of the export industries to China. Brad thinks they are the source of rising Chinese real wages; Jeff thinks they are the source of Chinese plutocratic wealth. Clearly neither of you spends a lot of time in China.

China's exports do pay the import bills. And Chinese real wages are rising -- in manufacturing, but also in every other sector. And there is certainly a new class of very wealthy people, as well as a huge urban middle class.

But the rising real wage in China is due to local production for local use, financed mainly by local saving, and combined with a vast boom in infrastructure and housing.

China's accumulation of reserves is, mainly, a phenomenon of capital movement, not trade, as the economist Fan Gang has recently shown. It can also be argued that a large part of the recent rise in China's exports, mentioned in a comment, is the result of transfer pricing (overinvoicing of exports reported to the Chinese authorities). Both are happening on a vast scale, in order to move money into China and take advantage of the stock bubble, the real estate boom, and the expected appreciation of the RMB. This is why the fall in the Shanghai stock market this week had international repercussions.

Finally, let me ask: does China really need the political changes that Brad (and no doubt also Jeff) would like to see? In my view, Westerners ought to leave that question to the Chinese. They are perfectly capable of working it through for themselves. In my experience, whatever their private view of their own government, Chinese don't appreciate having the American political model waved in their faces.

JG

[Barry]

Robert, very few people have a sensible answer to "do you want to keep Chinese poor ?".

Just as you have no sensible answer for my question: why do you seek the impoverishment of the majority of Americans?

I'd appreciate it if both you and Brad would stop asking such 'questions'. Those questions are more suited to AEI and TCS liars.

[Barry]

Robotslave, you seem to feel that having a glib answer, no matter how bad, is better than having an answer reflecting actual reality and uncertainty.

[Tim]

"I am sure, however, that painting the issues as Davos plutocrats (and their water carriers) and commissars-turned-capitalists on one side and America's working people on the other doesn't move us forward at all."

Certainly makes the water-carriers' jobs harder.

[anne]

James Galbraith:

"What you both share is a huge overestimate of the importance of the export industries to China. Brad thinks they are the source of rising Chinese real wages; Jeff thinks they are the source of Chinese plutocratic wealth. Clearly neither of you spends a lot of time in China.

'China's exports do pay the import bills. And Chinese real wages are rising -- in manufacturing, but also in every other sector. And there is certainly a new class of very wealthy people, as well as a huge urban middle class."

Yes and no; Brad DeLong understood years ago the astonishing hopefilled transformation of China to a middle class China. I suspected this, but development economists so denied the possibility that I wondered at what I found. The path however is far more profound than accounted for by trade and therein is a lesson extending properly far beyond China.

[Randolph Fritz]

"does China really need the political changes that Brad (and no doubt also Jeff) would like to see? In my view, Westerners ought to leave that question to the Chinese. They are perfectly capable of working it through for themselves."

"There is not a man beneath the canopy of heaven who does not know that slavery is wrong for him."

Yeah, we worked it through. Invented modern warfare in the process, too. Let me suggest that the Chinese might wish to seek gentler ways and that uncompassion towards the Chinese in their quest is likely to lead to Chinese uncompassion towards the USA. Like, with missiles.

As to the main subject of the post, I do not have time now. Let me suggest, however, Chinese and US manufacturing workers, and even US consumers who do not work in the manufacturing sector, all have a common interest in regular meals, healthy children, enough wealth to have fun, and so on. Really, Brad.

[LibertyGuard]

What is find confusing is the demand from our side that countries we trade with establish all sorts of standards to "equate" the playing field.
a) By the time they develop say, an OSHA, and uncorruptible agents that will monitor such an OSHA plan, and all the supporting infrastructure required that will make that relevant and viable to their environment, they would have become a developed economy (say 50-80 years down the road) and no longer be looking to compete with us on writing commoditized code, they will be ready to plant satellites on the moon...
b) the same proponents of such schemes will argue vehemently against any government mandated minimum wage or consumer bill of rights or EPA stds or any such initiative to clean up our act on the domestic front - let the market decide they bleat..markets are all powerful and sacred! how come, markets are sacred and big giant Microsofts and Verizons and Blue Cross/Blue Shields all get to compete on the same playing field as the little guys - the lobbying, the tax breaks, SEC favors, the monopoly and anti-trust exceptions are all the equivalent of unfair domestic playing fields favoring the big guys..
Not sure what the fair story is anymore.

[save_the_rustbelt]

Take a look at the recent Wall Street bonuses, CEO compensation and a number of other factors and you have to give Jeff some cred.

I don't think there is a "high counsel" of conspirators plotting this out, but I do know that the wealthy control politicians and access to politicians, at least in the US.

[Ponzi Q. Globalization]

"I don't think there is a "high counsel" of conspirators plotting this out, but I do know that the wealthy control politicians and access to politicians, at least in the US."

Control of politicians means nothing because we in American let the free market and free trade rule. And politicians have no control over the free market and free trade. So let the wealthy buy their politicians. It's a very poor investment in our free market and free trade economy. Free. Freedom.

On a related note, let me just say that it's good to be an economist in a free economy. You can ignore human power structures completely and this makes for elegant models that can be easily analyzed. This is one of the reasons economists want the world to have a free economy. Then they can use their models everywhere.

[josh bivens]

a quick note - arguing that it's only US manufacturing workers harmed by trade isn't right - landscapers may not lose their jobs to imports, but, they do end up competing for jobs with laid-off apparel workers.

in short, all workers who "look like" (in terms of education/skills/credentials) those displaced by trade have their wages reduced.

this isn't a quibble - the vast majority of trade's losses come outside the manufacturing sector, and, they're a lot larger than this formulation would have you think.

josh bivens

[Matt]

The U.S. collects two taxes for dollar usage. A fixed 3% inflation mandated by our central bankers, and an additional 3% import tax from China and some other trading partners who run dollar surpluses.

Why does the Chinese command banking system pay an additional dollar tax? Simply to cover the cost of the forward projection of the new world order, which depends heavily on actions by the U.S. government. In return for the tax China gets peace between Taiwan and the hardliners, Japan is kept in check militarily, peace remains on the Korean peninsula, security for the oil trade, and Russia is kept out of China's backyard.

Small price to pay.

The 3% central bank tax we all pay is due to our, US citizens', incompetance in managing our domestic government.

The real problem with the "rich commissars" is that they have secret ways to avoid the 3% new world order tax, but neither US workers nor Chinese workers can avoid that tax.

The problem for the U.S. is that our major export to China seems to be government services, and that is not too exciting.

[dale]

LibertyGuard,
Why couldn't and shouldn't our trade agreements include helping developing nations build the groundwork for regulatory agencies? I think that would be a wonderful and very practical thing to do.

If experience counts for anything, and if the old saw about re-inventing the wheel carries any meaning, we should be doing whatever we can to channel the developing countries into a social democratic path- right from the get go. That should be an integral part of any international order.

[dale]

I could answer my own question. Why couldn't trade deals help developing nations create regulatory and social democractic institutions? I fear the answer is that- for most neo-liberals- the point really is primarily about cheap labor.

[mdr]

Brad, you've made it clear that you don't like to think in terms of global class warfare. But you haven't made it clear that there is no such thing.

It may be that your preference for a sunnier view of things, no doubt made easier by a comfortable and secure life, is at odds with reality. True, the Marxist language of class struggle looks a little silly these days -- after all, we won the cold war, right? Hooray for the capitalists! The only problem is that both in the US and in China the divide between rich and poor continues to grow, and the struggle over the basic conditions of life -- in terms of wages (which are falling in the US for the majority of workers), public education (which gets weaker every year for the majority of the population as tax money is redirected toward war profits and debt service), worker protection (let the federal government 'help' you form a union) and public health (no insurance for you, Mr and Mrs Working Poor America, a mere 25% of the population!) -- goes on, with clear victories year after year for the social forces of capital.

Maybe it isn't a class war. But until you provide a better term along with a more convincing intpretation, I think Jeff Faux's reading of the situation, however gloomy, wins the debate.

[anne]

While I am completely in sympathy to a re-direction of fiscal policy to deal with needs from education to health care to the environment, I do not know what to make of this sort of comment "public education (which gets weaker every year for the majority of the population as tax money is redirected toward war profits and debt service)." Though I wish more spending for education, I do not in any way know that public education is weakening for the majority of the population, let alone why our international economic relations might be weakening public education.

We could well look to strengthening schooling from early childhood on with resources for poorer communities. We could add to resources for education of the gifted, or for science and arts education, and on. Summer enrichment could be exciting. We could begin a federal-state revenue sharing for dramatic lowering of tuitions at public college-universities.

[robotslave]

Lewis Carrol:

"people might retreat to the protectionist position via VOTING"

As devil's advocate, I would ask: but what of societies without VOTING, or elections in which there are no viable protectionist candidates, perhaps due in part to that free-trade-favoring corporate ownership of the media?

Barry:

"Robotslave, you seem to feel that having a glib answer, no matter how bad, is better than having an answer reflecting actual reality and uncertainty."

You misread me. I feel that having a glib answer is better than refusing to give any answer at all, glib or complex. What's *your* answer to the question, Barry?

[andres]

I'm with James Galbraith on this one for the most part. However, I would like to add the following bit of wisdom. Namely, never trust policy analysts who talk in terms of binary choices, dear grasshopper. To wit:

"In general, we have a choice between policies. We can eliminate or sharply restrict trade with an odious regime--as we do with Cuba--in the hope that it will put pressure on it for reform. We can encourage the maximum possible trade with an odious regime--as we do with China--in the hope that the more economic, cultural, and political contact there is the more we strengthen the forces over there that we like."

This is a false dichotomy. One can believe in the benefits of (mostly) free trade without having to accept the hugely disadvantageous effects that manufacturing import dependency creates for low-skill US workers. ie social democracy can counteract the negative effects of trade. Think of expanding the EITC, unemployment insurance, universal single-payer health care, greater funding for public schools, and yes, subsidies for domestic manufacturing industries, though that does border on trade policies.

And all of this can be financed by taking away corporate control of the budget process and by raising the effective corporate profit tax rate while increasing tax breaks to US firms that rely on domestic as opposed to imported production. This would address Jeff Faux's concerns without _directly_ interfering with trade. Would this indirect intervention seriously affect China? I don't think so, given that an increasing portion of its output is internally-consumed and that an increasing portion is no longer unskilled labor-intensive.

Although Brad isn't one of them, I have a serious grudge with economists who harp endlessly on the virtues of free trade, even if one ignores the hypocrisy of promoting free trade while ignoring the subsidy of export capitalists that occur whenever exports are produced with mistreated labor. The same economists who dwell on the virtues of free trade are mostly silent when it comes to the importance of having government policies that guarantee equality of opportunity as well as adequate compensation to labor at home.

[Mandos]

And a pony!

[DRR]

Mr. DeLong, Jeff Faux has posted again in response to Mark Schmitt asking if Jeff really means what he says. He seems to be going after NAFTA pretty hard. Since that's a matter you have some expertise in, perhaps you could respond to his contentions about the deals primary motivations being screwing teh worker and serving teh almighty corporation.

[COR]

Jeff is combing politics and economics. Correct. But his politics is the very simple form of realist view which sees the world in a zero-sum game and leads to conflict and crisis like that of the interwar period.

The current problem is still one of "Who Adjust", facing a new stage during globalization. The fair and best way is for everyone to adjust. For China, it should significantly adjust its own economic structure--to develop its own market and raise the level of income there, and to have a more flexible exchange rate. For the United States, it should significantly adjust its social protection net--to improve its medical and social insurance system, and to greatly improve its current educational system. These adjustments are in the interest of both countries, either long-term or short-term. And for them to take place in an orderly form, contrary to Jeff's implication, the two have to coordinate and cooperate more closely, rather than keeping with tai chi game or even karate.

[Movie Guy]

I have followed Jeff Faux's main posts on this subject at TPM Cafe since the beginning of this multiple part exchange.

The discussion began with this post by Jeff Faux:

Confronting Davos: The Class Politics of Global Governance
http://coffeehouse.tpmcafe.com/blog/coffeehouse/2007/feb/26/confronting_davos_the_class_politics_of_global_governance
By Jeff Faux
Feb 26, 2007 -- 09:59 AM

For those who haven't kept up with the exchange, including input from others besides Brad DeLong, perhaps these reference links will help:

Jeff Faux's posts: http://coffeehouse.tpmcafe.com/user/10592/recent

DeLong's posts: http://www.tpmcafe.com/user/2796/recent

----

It's my judgment that Jeff Faux's original commentary is the most important post in the exchange. As far as I have determined, Brad nor any of the other main posters who responded have addressed all of the principal recommendations that Jeff raised in the original and subsequent posts. I find that rather odd, considering that he opened the discussion. And he made the recommendations.

Jeff Faux, of course, is echoing the viewpoints of a number of us who have addressed these issues for the past few years. It is good to note that someone has taken a position in a main post other than the normal pro-globalization-at-all-costs religious mantra.

The time for a reality check was years overdue.

[anne]

Jeff Faux has simply written a series of empty comments complaining about "globalization" without even bothering to explain what the term might actually mean. Were China not the complaint the complaint would be Kenya, but China is more successful and the complaining goes further than with Kenya. The idea domestic policy really can be used to strengthen the competitiveness of American workers, to afford more security, is forgotten.

Here we have an analyst who is supposedly a Democrat but who has conveniently adopted a mild Republican hopelessness about what the New Deal might mean. Phooey.

[Ponzi Q. Globalization]

"Were China not the complaint the complaint would be Kenya, but China is more successful and the complaining goes further than with Kenya. The idea domestic policy really can be used to strengthen the competitiveness of American workers, to afford more security, is forgotten."

anne,

You're right. The main problem is not that China is run by an odious regime, but that China is successful. The talk about the poor in China is a distraction.

Of course, all things being equal, most Americans would wish the best for the poor in China. But how many Americans are willing to have their families descend into poverty to help them?

What you want is to have American corporations continue to invest in what you have stated is 'the competition' while the American taxpayer would invest in his or her compatriots. Why the cross purposes? If these corporations are American then let them invest here. At least to some degree (unlike Brad and like andres, I don't buy into the all or nothing dichotomy). Otherwise, I don't give a damn whether these 'American' companies make a profit or not. There are more Americans who live off of their labor then Americans who live off of their investments. Why have a trade policy that favors the latter at the expense of the former?

The problem isn't just China. The problem is the effective creation of a single global labor pool in many areas without the concurrent creation of a single global set of labor rules and regulations plus the fact that there are vast differences in living standards and such things as environmental controls around the world.

You want to 'strengthen the competitiveness of American workers'. The only way I see this happening under the current system is for the American worker to live more like the rest of the world. Look around the globe. Is this what you want?

Ponzi

[anne]

Agreed completely; as an object of monetary policy should be to stimulate employment, so fiscal policy should be employment oriented, so structural legislation should be employment oriented. Push for this continually, which is a reason I want union organization to be simplified and unions properly protected by a labor department different than presently.

Employment subsidies as in Europe, Australia, Japan, from health care to investment-employment credits, and on, should be used. Infrastructure development should be planned with employment stimulation and greenness always in mind. Work visas should be much limited or reciprocation asked. Public college-university education needs to be far less costly.

Think New Deal. Think what Franklin Roosevelt was able to do in resolving the dust bowl tragedy, and think of employment to continually green America.

[anne]

Brad DeLong understands completely that we have not even been able to gain proper minimum wage bill yet, but he understands and I understand that we can be domestically labor friendly and be continually pushing internationally for the same. China can build, India, South Africa, Brazil, and we can build along. We must.

[anne]

Brad DeLong early understood the optimism with which we can view China as a development partner, which with proper domestic labor protection and support China becomes for us.

Arthur Schlesinger wrote in the 1950s that there was a determined effort to dismiss what was accomplished by the New Deal and the New Deal legacy. Renew then our understanding of our legacy.

[anne]

http://www.nytimes.com/books/00/11/26/specials/schlesinger-crisis1957.html

March 3, 1957

After the Decline and Fall, the Promise of a New Day
By HENRY STEELE COMMAGER

THE CRISIS OF THE OLD ORDER, 1919-1933
Vol. I of "The Age of Roosevelt."
By Arthur M. Schlesinger Jr.

It is a quarter of a century now since Franklin Roosevelt promised a new deal to the American people, and a whole generation has come to maturity that knew nothing of the excitement of that promise an its fulfillment. But Roosevelt is still very much with us; his name is still an incitement; the meaning of his career is still hotly debated. There is no assurance that time will change this; after all, the historical role of Theodore Roosevelt and Wilson and, for that matter, of Jefferson and Jackson, is still hotly debated.

A quarter of a century, however, is time enough to dispel some of the myths that have accumulated around the crisis of the early Thirties and the emergence of the New Deal. There is, for example, the myth that world conditions rather than domestic errors and extravagances were entirely responsible for the depression. There is the myth that the depression was already over, as a consequence of the ministrations of the Hoover Administration, and that it was the loss of confidence resulting from the election of Roosevelt that gave it new life. There is the myth that the roots of what was good in the New Deal were in the Hoover Administration - that Hoover had actually inaugurated the era of government responsibility for the health of the economy and the society. There is the contrasting myth (for myths do not require inner consistency) that the New Deal was alien in origins and in philosophy; that - as Mr. Hoover put it - its philosophy was "the same philosophy of government which has poisoned all Europe: the fumes of the witches' cauldron which boiled in Russia."

Arthur Schlesinger Jr. devotes a substantial part of the first book of his projected four volume "Age of Roosevelt" to dispelling these myths. This involves an inquiry into the origins of the New Deal practices and principles, an investigation of conditions - chiefly economic - in the Twenties and a thorough re-evaluation of the Hoover Administration....

[anne]

Imagine, it is as though those who would slash at Brad DeLong in the supposed name of workers have forgotten Franklin Roosevelt. Well, we must remind them.

[Mandos]

And I have to say again: And a pony!

When you come up with a global Eugene Debs, we can talk. The only means we have otherwise is to work to minimize the profits of the wealthy.

[Mandos]

Also FDR was using a stopgap measure to avoid what I understand he felt was a real threat to capitalism. He was saving this very system from itself. So for those of us who aren't so obsessed with the idea that this system needs saving: why should we remember him?

[Randolph Fritz]

Prof Delong, what makes you think a suboptimal outcome is impossible, or even unlikely? One where China, the USA, and much of the rest of the world end up overall poor, or at least with a class system that leaves the vast majority of the world's people poor? Given that many leaders of the USA and of China seem to want that, what will prevent it?

The more I think about Mr. Galbraith's remarks, the more disgusted I am getting. When did "liberal" become "supporter of forced labor?"

[anne]

Because Brad DeLong and James Galbraith understand historical and contemporary political economics, duh. Because Brad DeLong and James Galbraith understand how to think beyond stereotyping, duh. Because Brad DeLong and James Galbraith understand what it is to learn, duh.

How about thinking beyond fear-mongering stereotypes, duh?

[anne]

Beyond Brad DeLong however, there is no more determined boldly creative supporter of workers than James Galbraith, duh. The New Deal was a stop-gap that has been stopping gaps for 70 years beyond the idiocy that would deny and attack, duh.

[anne]

http://www.nytimes.com/books/00/11/26/specials/schlesinger-age2.html

January 4, 1959

Two Years That Shaped Our Lives
By HENRY STEELE COMMAGER

THE COMING OF THE NEW DEAL
Vol. II of "The Age of Roosevelt."
By Arthur M. Schlesinger Jr.

Here, following swiftly after the first, is the second volume of Arthur M. Schlesinger Jr.'s history of the Age of Roosevelt. Spacious and monumental in form, scholarly and authoritative in character, spirited and affluent in style, it promises to be one of the major works in American historical literature.

This volume covers only the first two years of the Roosevelt Administration, and not even the whole of them, for foreign affairs are reserved for later treatment. But what anni mirabiles they were! Those who lived through them can still recall the electric excitement, the surging vitality, the mounting hope, the exhilaration that came over the American people after years of futility and frustration. It was, said Rexford Tugwell, "a time of rebirth, after a dark age."

These two years fixed the pattern of American politics down to our own time. There was, to be sure, no break in the continuity of history; the New Deal had roots in the past, as had Roosevelt himself. But the New Deal was, too, a distinct epoch-as distinct, surely, as the Jacksonian or the Progressive eras, the two earlier periods with which it is most closely connected. We can see its significance now better than we could at the time: it ushered in the welfare state; it repudiated laissez-faire; it marked the rise of labor to a position of equality with industry and capital in our economy; it shifted the center of gravity from state to nation, and -less clearly-from legislative to executive authority; it coincided with (rather than caused) the emergence of the United States as a dominant world power.

IT is instructive, in this connection, to put down the things we now take for granted, but did not take for granted even a generation ago: the responsibility of government to regulate the economy, to support agriculture, to provide for job security and social security; the right of workingmen to organize in unions of their own choosing; the prohibition of child labor; the development of hydroelectric power under government auspices; the guarantee of bank deposits; the regulation of securities; slum clearance; Federal aid to public health and education. These and many other things are now the common sense of the matter. But they were not the common sense of the matter in March, 1933; to a great many Americans, then, they were alien and pernicious and they spelled ruin and death....

[anne]

Imagine, suddenly history is become dangerous for those who would invent history. Notice possibly what a small bold union was just able to do in bettering wages and gaining benefits and work conditions for janitors in Houston, Texas for all the unfriendliness to unions. Imagine friendliness, then.

[Randolph Fritz]

Anne, saying that Delong & Galbraith know more economics than me is perfectly reasonable. But, you know, people who know more economics that me have been wrong before. We have NAFTA as a fine example of how trade economists can go wrong--you won't find many rural or urban Mexicans who believe that NAFTA was good for them; the country may on average be wealthier (I wonder if the statistics are accurate)--but the savings of the urban middle class was wiped out, many rural subsistence farmers have become the rural poor creating a vast refugee problem, and some decent-paying US jobs have been shipped to Mexico, where they barely pay subsistence wages.

And no defense of China's tyrannical government--which it still is, despite all attempts to dress it up--and the class system that is part of it wins any sympathy from me.

[Ponzi Q. Globalization]

An increase in the global labor arbitrage is not going to be be good for American workers.

On average, the American worker lives better now than the rest of the world. Especially, cheap labor nations like China and India. America makes up 5% of the world's population. Americans are not smarter and have no more potential than the people in the rest of the world. Americans are no more harder working than the rest of the world. America has rules regulating how workers can be treated. America has tougher environmental laws then the cheap labor nations. The labor and environmental laws are both backed up by a strong legal system that is less corrupt then that of the cheap labor nations. This all puts American labor at a disadvantage. Is this not clear to see?

If a type of production becomes independent of location, then I don't think that production will be done in America. America is just too damned expensive. And in this neoliberal globalizationized system that's all that matters.

First American neoliberal economists eff up the Russian, Latin American, Thai, and many other economies. Now we are realizing that it's our turn to be eff'd up by their pretty models that reflect not reality but their dreams and wishes.

When have these economists ever been right? Economics is not a science and economists can't predict worth caca. Listen to them but don't follow them blindly. Just say no.

In their hubris, neoliberal economists have really dug us into a hole. Extracting ourselves from this hole will be painful, but less so then staying.

[wjd123]

Would the economic heritage our forefathers fought for be considered part of our social democracy. The right of assemblage, the right to form unions, the forty hour work week, a minimum wage, safety in the workplace, and an environment that isn't used as a waste dump, all part of our heritage. Are these to be sacrificed on the altar of free trade for the good of the global economy?

I think not. These are our interests that need protected. China's interests are their problem. Protecting our economic morality, the rules and regulations guiding our economy, is in our interests. It becomes a problem with the spread of economic anarchism fostered by free trade. Companies can by pass our rules and regulations without fear of tariffs being reimposed. The sanctions that come with transgressions against our economic morality are left for those to face who don't move.

It is my contention that the weakening of this morality is primarily responsible for the growing gap between our haves and have-nots. This part of the political economy can't be protected when the cost to business generated by rules and regulations can be bypassed by moving production facilities or jobs from one country to another. And companies will have a legitimate excuse for doing so, that they have to compete globally.

There are in the world two distinct ways of doing free trade. The EU way where standards are protected and the NAFTA way where they are not. What is unique about the EU is its realism--at least until recently with its admittance of so many Eastern European countries. The EU knows that ought to obey our rules implies can obey our rules. An EU threshold for complience could not be met by countries like Mexico. A different threshold by a different international organization is a possibility but not the EU's.

So it seems to me that if we want to protect our economic morality we should reserve free trade to countries that can comply with it. That would mean that Canada and the United States would practice free trade, but trade with Mexico would be subject to the scrutiny of its affect on our economic morality.

Once Mexico can comply with some part of it more trade will come their way. And since most of our economic morality favors the have-nots, there should be more economic equality as the have-nots gain power under the law--a side effect of protecting our own interests.

DeLong rightly believes that this would slow down economic growth. However, the question is how to distribute growth more equitably. I don't think that can be done without protecting economic morality. Without it, economic rights are weakened or destroyed and more power accrues to the haves.

The question becomes should the economic sphere become a sphere sui generis unaffected by the moral sphere or not? DeLong is betting against the past. Not a very realistic thing to do.

[Movie Guy]

anne - "Jeff Faux has simply written a series of empty comments complaining about "globalization" without even bothering to explain what the term might actually mean. Were China not the complaint the complaint would be Kenya, but China is more successful and the complaining goes further than with Kenya. The idea domestic policy really can be used to strengthen the competitiveness of American workers, to afford more security, is forgotten. Here we have an analyst who is supposedly a Democrat but who has conveniently adopted a mild Republican hopelessness about what the New Deal might mean. Phooey."

This a baseless allegation. Faux referenced one of his books and a couple of his papers during his TPM Cafe discussion.

Moreover, China was not Faux's primary focus in his first commentary post. Instead, he was focused on the global trade role of the Party of Davos - as he explained in some detail.

It is obvious that you did not read the entire exchange with any appreciation for the concerns and recommendations that Jeff Faux put forth. Otherwise, you would not have made the false allegations and steered the DeLong blog comment discussion is so many different useless directions from the subject at hand. No one made such bogus allegations to my knowledge on the related TPM Caft posts.

During the TPM Cafe exchange, DeLong mentioned very few if any of the issues that you subsequently posted on this thread. Galbraith was not a TPM participant.

You have invented discussions that did not occur. As such, you are misrepresenting what was actually discussed by Jeff Faux and other participants at TPM Cafe.

As explained previously, DeLong nor the other principals involved in the TPM discussion adequately addressed Jeff Faux's recommendations...and those recommendation had to do with North America, not China.

[anne]

Randolph, we would be close on an argument about the selective weakness of NAFTA as negotiated for Mexico and to a considerably lesser extent for America. What has been essential for Mexico is increasingly sophisticated education, agricultural subsidies for smaller farmers and technology transfer in return for investment opportunities as China has negotiated.

[anne]

As for steering, especially for steering in useless directions, which are after all useless and, possibly, even wrong directions, that is precisely why I never ever ask directions; so do not bother offering your directions, because I prefer mine. Say what?

[anne]

http://www.nytimes.com/2007/03/02/opinion/02fri4.html?ex=1330491600&en=ae7a16a97dfc1804&ei=5090&partner=rssuserland&emc=rss

March 2, 2007

A Historian's Valedictory
By ROBERT B. SEMPLE Jr.

Arthur Schlesinger Jr. could be blunt. The worst he would say about George W. Bush in the early going was that he was "an amiable mediocrity." But it did not take long for President Bush to fall close to the very bottom of Mr. Schlesinger's not inconsiderable list of bad presidents — in large part because he had committed the one mistake that a great historian could not abide, which was to wantonly ignore the experience of history.

Mr. Schlesinger...had grown frail and bent, so in December a lunch in New York was organized in his honor. The room was thick with tributes to his monumental works on the New Deal, his Bancroft and Pulitzer Prizes (one, for "The Age of Jackson," awarded at the ripe old age of 27), and his service in the Kennedy administration.

All this, though, was a mere prelude to Mr. Schlesinger's own brief reflections, as he put it, on the "relevance of history. " His first point was that historians themselves are prisoners of their own experience, committed "to a doomed enterprise — the quest for an unattainable objectivity." It was a disarming way of acknowledging the critics who had suggested that he, at times, had shaped history to fit his own liberal agenda. It was also a summons to other historians to be willing to concede error and revisit the past.

But a far more grievous failing, he said, is to ignore history altogether, especially in a nation that has so often demonstrated imperial appetites. "History is the best antidote to delusions of omnipotence and omniscience, " he said, forcing us "to a recognition of the fact, so often and so sadly displayed, that the future outwits all our certitudes."

Is there a better description of the arrogance that has led to our current predicament? Mr. Schlesinger did not mention anyone by name, partly because it was unnecessary, but also because Mr. Bush was hardly alone in his indifference to the ironies of history.

[Movie Guy]

anne,

I offered no directions.

I simply posted out the false allegations that you made against Jeff Faux.

[Movie Guy]

anne,

I simply pointed out the false allegations that you made against Jeff Faux.

[anne]

Bippidy, boppity, boo; and I could care less because I enjoy allegating, I think the reason is the teeth actually; allegators have lots and lots of teeth which they keep shiny as, well, teeth, and I always notice the shine while allegating.

[anne]

http://www.nytimes.com/2004/10/26/science/26croc.html?ex=1256443200&en=c194455917eeb25c&ei=5090&partner=rssuserland

October 26, 2004

Not Just Another Pretty Face
By NATALIE ANGIER

WASHINGTON - To the casual observer, an adult alligator afloat in an algae-dappled pond, its six-foot body motionless save for the sporadic darting of its devilish amber eyes, might conjure up any number of images, none of them fuzzy-wuzzy. A souvenir dinosaur. A log with teeth. A handbag waiting to happen.

For Dr. Daphne Soares, however, a neuroscientist at the University of Maryland, an alligator looks like nothing so much as a big, amphibious and grievously misunderstood kitten. Sure, it sports thick scales and bulging bony knobs called osteoderms rather than fur, and 80 teeth to the house cat's 30, and a tail that, as Dr. Soares learned from personal experience, can dislocate your jaw with a single whack.

But just look at the chubby belly, the splayed legs, the sunny smile that never sets! "Oh, you are so cute, so adorable, I wish I could just pick you up and give you a hug!" Dr. Soares cooed to the alligators that obligingly posed for her at the National Zoo here on a recent weekday afternoon....

[Beware - allegators allegating.]

[Randolph Fritz]

"What has been essential for Mexico is increasingly sophisticated education, agricultural subsidies for smaller farmers and technology transfer in return for investment opportunities as China has negotiated."

Mexico would have to have an honest legal system, as well; I know a Mexican business consultant who will consistently advise against setting up business in Mexico, because of pervasive corruption. The Mexican legal system has been corrupt since La Conquista. But, you see, it's to the advantage of the existing ruling class--a fairly well-defined group in Mexico--to have such a problem; they're the only ones who can get the demands for mordida ("bites") down far enough to run businesses. Which, come to think of it, is probably why the Mexican federal government has not protested subsidized agricultural exports--they don't have a common interest with rural Mexicans.

(More on China, next.)

[anne]

Understood; but that is just what political-economic diplomacy needs to be continually working on; and please continue.

[anne]

http://www.nytimes.com/2005/04/09/international/americas/09mexico.html?ex=1270699200&en=002dab476b252724&ei=5090&partner=rssuserland

April 9, 2005

At 15, Dreaming Big Dreams: Oh, to Be a Scholar
By TIM WEINER

MEXICALI, Mexico

ALICIA ÁLVAREZ lives two miles from the American border and light-years from the American dream.

Growing up in Mexicali has made her a realist at 15. She has no taste for romances and soap operas. Harry Potter stories and a horror movie at the mall are as far away as fictions take her from her city's heat and dust.

Alicia has a fierce intelligence, and it fires her only soaring ambition: to get a decent education, schooling that could lift her up and out of her surroundings into a better life. It looks to her as likely as a trip to Mars.

"It seems impossible," Alicia said with a shy, distant gaze. She has started high school, having proved herself one of the brightest girls in her city, a straight-A student with an exceptional aptitude for math.

"My family has no money for college," she said. "I probably will never get to a university, though I would love to.

"My education has been hard. My teachers are trained in teaching, not in math and science. It's a struggle for them to teach me what I need to be taught. To learn what I want to know. And I want to know so much."

She finds herself, like her country, poised with one foot in the door of opportunity and one stuck in the poverty and powerlessness of the past. But with her fine mind, the idea of having a better life than one's parents, while distant, is still a shimmering possibility.

Her father, David Osuna, 46, works part time selling used cars. He has good weeks and bad weeks. Her mother, Alicia Álvarez, 48, keeps house. They have provided their children with the basics of life: food, clothes, shelter. Their slender, dutiful, deep-thinking daughter is a bit of a mystery to them.

Alicia's brothers, David, 21, and Luis, 16, are in awe of her intelligence, respectful, sometimes distant. David is the one in whom she sometimes confides her dreams....

[Ponzi Q. Globalization]

"Because Brad DeLong and James Galbraith understand historical and contemporary political economics, duh. Because Brad DeLong and James Galbraith understand how to think beyond stereotyping, duh. Because Brad DeLong and James Galbraith understand what it is to learn, duh.

How about thinking beyond fear-mongering stereotypes, duh?"

"Bippidy, boppity, boo; and I could care less because I enjoy allegating, I think the reason is the teeth actually; allegators have lots and lots of teeth which they keep shiny as, well, teeth, and I always notice the shine while allegating."

What is it about the trade issue that makes otherwise smart and nice people become complete idiotic a-holes?

DeLong calls Faux a racist/xenophobe and now anne is engaging in childish 'duhs' and 'bippidy boppidy'.

The rot in the neoliberal framework is showing and it's scaring the crap out of it's acolytes.

What new faith will they turn to and insist is the one true and universal one? If all goes well they will eschew overarching ideology totally and get back to the humble and useful business of trying to explain how a bit of the world actually works.

[dale]

"Here we have an analyst who is supposedly a Democrat but who has conveniently adopted a mild Republican hopelessness about what the New Deal might mean. Phooey."

I couldn't disagree more Anne. To me, in this conversation, Jeff represents the New Deal legacy much more than does Brad. Jeff asks that we always consider the political needs of ordinary people in our trade-development regimes. Brad tends to say let's do the trade agreement and worry about the political-redistribution consequences afterwards. Which typically means not at all.

Brad falls into Adam's Fallacy here. Jeff is doing his best to avoid it.

[dale]

Brad says "I tend to be on the side of free trade abroad and social democracy at home."

That seems to me to be part of our problem. The compartmentalization of trade and social democratic politics. If we are on the side of ordinary folks in the developing world- and on the side of ordinary folks in the USA- then why not build a movement for a social democratic international development regime?

I know- that's difficult. But that is what's needed. Doing the "free" trade thing in isolation from the social democratic thing is highly problematic. And it creates unnecessary divisions between folks who are truley in favor of lifting up the world's poor while at the same time sustaining and enhancing the broad based economic proserity that has only been but a fleeting moment in our own history.

[anne]

No; the claims made by Jeff Faux are stereotypical and spurious and do not begin to look to Brad DeLong's response as to amelioration. I am not the least impressed with crying "China" and offering no evidence that we in fact could have economic policy that is other than Republican conceived and would contribute to the problems of workers were there never a China.

[Lewis Carroll]

Robotslave,

That is a good point, and my answer, which I know you won't like is, I don't know. Although after a while, even those spoon-fed the myths propagated by those in power realize that what is dripping down on them is not rain. Or at least I would hope...

[dale]

I'm confused anne. Try to distingusih between the xenophobic Buchanan-Dobbs types and the principled social democratic critics of our current trade regimes.

The left, New Deal sorts of criticisms of our current trade deals usually take the form of pointing out that these are indeed "Republican" type arrangements- more interested in an international pool of cheap, unprotected labor than in building a just and sustainable international development system. That our current trade regimes actually tend to undermine our New Deal domestic legacy.

Jeff is all about amelioration. Brad says he is- but in practice seems less so than Jeff. I don't get that you don't get that. Like I said, I'm confused.

[Movie Guy]

anne - "No; the claims made by Jeff Faux are stereotypical and spurious and do not begin to look to Brad DeLong's response as to amelioration. I am not the least impressed with crying "China" and offering no evidence that we in fact could have economic policy that is other than Republican conceived and would contribute to the problems of workers were there never a China."

Again, just another revisionist presentation of what Jeff Faux stated beginning in his first post.

There is no end to your dishonesty.

[anne]

Blippity, bloppity, bloo, and imagine how intimidated I am. "China," they yell, and yell they do, and we must all think China and begin to tear off our clothes and run about yelling China too. Gimme a "C," and an "H" and an "I" and an "N" and we'll find an "A" too. Wooooo, wooooo.

[anne]

Imagine the strangeness; we are in the midst of a needless tragic $2 trillion war and occupation of Iraq, $14 billion a month spent directly on Iraq, but the idea that we might otherwise build America is too difficult to grasp; just too difficult.

Gimme a "C," and an "H," an "I" and an "N," and I find you an "A" too; really. [Cheer by Prada.]

[anne]

http://www.nytimes.com/2007/03/03/opinion/l03health.html

Keeping Kids Healthy

To the Editor:

“Child Health Care Splits White House and States”:

As a registered nurse committed to promoting the health and well-being of children and families, I was deeply disappointed to read that President Bush will seek to restrict eligibility and financing for the Children’s Health Insurance Program.

Shame on you, Mr. President! How will children with no access to health care grow up to be productive citizens? Just when state governments have relied on federal money to successfully provide health coverage for children and in some cases their parents, the federal government is now ready to abandon them.

To blame states for faulty management of their Children’s Health Insurance Program is to ignore where the blame and accountability belong.

This administration wants our children to fight its war but refuses to ensure their health or keep them disease-free with appropriate immunizations. How will they grow into healthy adults and protect our freedoms?

Stop and think, Mr. President, for the sake of our children!

Donna M. Nickitas
New York, Feb. 27, 2007

[anne]

Imagine the strangeness, $14 billion a month for Iraq but for the health of a child, well, what is the health of a child worth anyway? Now think back to blaming "China," and be comforted. Strangeness.

[Ponzi Q. Globalization]

"Imagine the strangeness, $14 billion a month for Iraq but for the health of a child, well, what is the health of a child worth anyway? Now think back to blaming "China," and be comforted. Strangeness."

Imagine the strangeness in thinking that another person cannot simultaneously believe that the war in Iraq is a waste of money that could better be spent elsewhere and that neoliberal globalization isn't the best of all possible systems.

You and others really underestimate those that disagree with you on this issue. We're not all anti-traders, xenophobes, racists, conspiracy theorists, and fools. It may confort you to believe this but, like the wonderfulness and inevitability of a neoliberal-globalizationized world, it isn't true.

[anne]

Enough; I am not in the least displeased with your argument and have no idea why you are defensive for my comments were never directed at your passionate concerns which are completely sensible even if I take a different tack. The defensive adjectives you rightfully worry about would never have entered my mind. Argue away, for you argue well.

[anne]

Actually, I do not recall an instance of thinking you were arguing unfairly and do hope I never gave that impression. The original argument Brad DeLong responded to however was I thought and think unfairly and foolishly made even though important.

[anne]

When we have Jeff Faux telling us that problems faced by American workers are found in China or South Africa or Brazil, and never bothering to ask why it is the we do not even have a proper minimum wage law, let alone why a bill designed to make union organizing fairer has no chance of becoming law, there is a simple deception.

The problem is surely not Brad DeLong's defense of international trade relations that have continually enriched us are enriching countries that have finally after a terrible century begun to develop in ways that are changing the lives of hundreds of millions of people in wonderful ways.

[anne]

http://www.nytimes.com/2007/02/23/us/23labor.html

February 23, 2007

Labor Seeks Boost From Pro-Union Measure
By STEVEN GREENHOUSE

WASHINGTON — Organized labor is fighting for a pro-union bill as if its life depended on it.

Some labor experts say the union movement's ability to reverse its slide could in fact hinge on its winning passage of the bill, which would make it easier for workers to join unions.

The United States Chamber of Commerce, the National Retail Federation and more than a dozen other business groups are mounting a fierce campaign to stop the bill, inundating Congress with more than 10,000 e-mail messages and letters. At the same time, labor unions are sponsoring demonstrations, conferences and meetings in 99 cities this month to push for the legislation. The two sides have also squared off with newspaper advertisements.

"The business community thinks the labor movement is at death's door, and they want to make sure they keep this bill from passing," said Charles Craver, a professor of labor law at George Washington University. "If it passes, it will give labor a big boost."

Labor unions represent only 7.4 percent of the nation's private-sector workers, down from 35 percent in the 1950s. That helps explain why labor's campaign for the bill, the Employee Free Choice Act, represents its biggest legislative push in 30 years.

Legislative aides say they expect the bill to be approved next Thursday in the House, where it has 234 sponsors, including seven Republicans.

Business lobbyists voice confidence that they can block the bill in the Senate, where opponents say a filibuster is likely. Vice President Dick Cheney said last week that President Bush would veto the bill.

"It's a huge issue," said Randel Johnson, vice president for labor policy at the United States Chamber of Commerce. "We've targeted this as our No. 1 or No. 2 priority to defeat."

The bill would give employees at a workplace the right to unionize as soon as a majority sign cards saying they want a union, a process known as a card check or majority signup. Under current law, employers can insist on a secret-ballot election to determine whether a majority of employees favors a union.

Last summer Unite Here, the union representing apparel, hotel and laundry workers, used a card check to organize 300 housekeepers and other workers at the Marriott Downtown Los Angeles. Unite Here's previous efforts to organize the hotel's workers through a secret-ballot election faltered in the late 1980s and in the 1990s in the face of an aggressive management campaign.

"It didn't take very long for us to get 70 percent of the workers to sign cards saying they wanted a union," said Bruce Raynor, Unite Here's president.

With card checks, unions can often win unionization drives in two to four weeks.

With secret-ballot elections, unionization efforts can drag on for months, often delayed by litigation. Unions also say that many corporations break the law during election campaigns by firing, intimidating and spying on union supporters.

"Secret-ballot elections often occur in an environment that is so poisoned by the anti-union campaign that they can't possibly be considered a free choice," said Bill Samuel, the A.F.L.-C.I.O.'s legislative director.

Mr. Samuel pointed to a National Labor Relations Board report that 31,358 workers received back pay in 2005 after their employers were accused of illegally retaliating against them for supporting a union.

Business lobbyists say the Employee Free Choice Act is antidemocratic and would deprive workers of their right to a secret ballot. They say union organizers will bully workers into signing pro-union cards....

[anne]

http://www.latimes.com/news/opinion/commentary/la-op-chait4mar04,0,4468384,print.column

March 4, 2007

Why So Threatened by a Union Card? A measure to aid membership drives faces daunting opposition.
By Jonathan Chait - Los Angeles Times

CONGRESS IS debating a measure to change the way workers can form a union. Instead of holding a secret-ballot election, a union could be formed if a majority of employees sign a card indicating they want a union. The House passed the bill Thursday. However, the Senate will probably filibuster it, and if that somehow fails to happen, President Bush will certainly veto it. But it shows, despite conservative bluster about Big Union goons, just how modest the contemporary labor agenda is.

The conservative objections to a "card-check" plan certainly have some merit. In an ideal world, workers would decide whether to form a union by holding a free secret-ballot election. The workers would be able to listen to arguments from both sides, consider their choice and vote entirely on the merits of the arguments put forward.

The problem is that, in the real world, union elections bear little resemblance to this happy picture. Companies that face organizing drives have an enormous amount of control over the elections. They can hold mandatory meetings and barrage employees with anti-union propaganda. (Employees, obviously, can't call a halt to work for a mandatory pro-union propaganda session.) They can predict that a union will result in the shop closing and everybody losing their jobs.

And that's just the legal part.

On top of that, they can do all sorts of illegal things: fire workers involved in organizing, actually threaten to close the shop if a union forms and so on. Enforcement of these violations tends to be spotty and lax. Generally, it takes years for illegal union-busting firms to face any penalties and, even then, whatever fine they pay is often well worth the price of maintaining their bargaining power over the employees.

In theory, it might be possible to create enough regulations with enough enforcement to ensure fair secret-ballot union elections. In reality, it's never going to happen. Hence, the card-check proposal, which would allow workers to organize on their own terms.

The fear raised by business groups is that letting pro-union workers approach their fellow employees with a card would amount to intimidation....

[anne]

So much then for paying the slightest attention to history, to respecting workers, to honoring our New Deal legacy that built America's middle class. There are the problems we confront, and they are our problems to solve.

[Ponzi Q. Globalization]

"Enough; ..."

http://delong.typepad.com/sdj/2007/03/talking_past_ea.html#comment-62142570

http://delong.typepad.com/sdj/2007/03/talking_past_ea.html#comment-62142940

OK, this trade topic seems to make everyone a little huffy. And thanks for the compliments. That was very chivalrous of you.

[Movie Guy]

It appears that Jeff Faux has made his final post since initiating the exchange at TPM Cafe on 26 February.

Here's the record of main posts:

Jeff Faux - Feb 26, 2007 -- 09:59 AM
Greg Anrig, Jr. - Feb 26, 2007 -- 02:24 PM
Ernest Wilson - Feb 27, 2007 -- 12:46 AM
Brad DeLong - Feb 27, 2007 -- 01:03 AM
Jeff Faux - Feb 27, 2007 -- 11:16 AM
Nathan Newman - Feb 27, 2007 -- 01:17 PM
Jeff Faux - Feb 27, 2007 -- 12:03 PM
Brad DeLong - Feb 27, 2007 -- 06:09 PM
Jeff Faux - Feb 28, 2007 -- 10:07 AM
Jeff Faux - Feb 28, 2007 -- 01:11 PM
Josh Bivens - Feb 28, 2007 -- 03:31 PM
Brad DeLong - Feb 28, 2007 -- 11:51 PM
Jeff Faux - Mar 1, 2007 -- 01:38 PM
Brad DeLong - Mar 1, 2007 -- 08:11 PM
Jo-Ann Mort - Mar 1, 2007 -- 10:45 PM
Jeff Faux - Mar 2, 2007 -- 02:32 PM
Mark Schmitt - Mar 2, 2007 -- 05:34 PM
Jeff Faux - Mar 2, 2007 -- 10:22 PM
Mark Schmitt - Mar 2, 2007 -- 11:45 PM
Jeff Faux - Mar 3, 2007 -- 04:52 PM

This link will help anyone find all of the posts:

Jeff Faux's posts: http://coffeehouse.tpmcafe.com/user/10592/recent

----

Contray to some of the remarks posted on this comment thread, Jeff Faux explained his principal issue of his first and 8 subsequent posts:

Jeff Faux's central point -- "But as many of you got, neither competitiveness nor trade policy was my central point. It was that globalizing “American” businesses are disconnecting from the future of the US economy – defined as the people who work here. Given that big business is by far the major influence on Washington policymakers, it’s no surprise that national policies have systematically undercut the bargaining position of labor – and the social contract in general. Its also no surprise that the US Government, the world’s most influential, under Democrats as well as Republicans, has led the way in organizing the “constitution” of the global economy to protect capital and leave labor and non-market social interests to the mercies of a 19th century dog-eat-dog market system."

"Seems to me the questions are:
1.Is my assertion true?

2. If true, does it matter?

3. If it matters, how do we deal with this? (“We” as both Americans and citizens in this globalizing society.)"

"The world has obviously changed. And one of the changes that have escaped us is the disconnection between “our” companies and “our country.”

"This is not about trade, as I tried to point out. It’s about the rules for an integrating world economy. Why is it that so many liberals, who agree that social regulations are essential for a well-functioning domestic economy, support a global economy without them?"

----

I could post many of his quotes, but I recommend that others read all of the exchange posts and draw their own conclusions instead of relying on any remarks that I or anyone may share. Some of what has been posted by one commenter is off-the-wall nonsense that intentionally distorts Jeff's message, character, and professional background and achievements.

Good luck with your reading.

Have a good day.

[dale]

Brad said: "I am sure, however, that painting the issues as Davos plutocrats (and their water carriers) and commissars-turned-capitalists on one side..."

looking at the world through the lens of social dominance theory would make that sort of cross cultural class alliance seem much more plausible. When social dominants from different societies come together to intentionally produce an international order, is it so odd to think they may bring their respective place in their social hierarchies to bear in their decision making?

Wouldn't it be odd if they did not? What countervailing influences are there in these meetings to prevent that from happening?

When priviledged people from different societies come together to create a world order-- what keeps them from recreating their priviledged status on the larger world scale? Especially if they see their priviledge as natural, right and legitimate?

[anne]

Dale; there is every reason to understand a trade and capital flow system tending to be gradually structured to the dictates of the most influential business leaders, but, as I have argued, there is every reason balance against business owners can be introduced and sustained. That means looking to domestic economic stuctures and programs to foster balance. There is the need.

[anne]

What I have tried to argue is against making "globalization," a sort of ghostly idea, the problem, but rather looking to balance. Neither Ponzi nor Dale are arguing against trade and investment balances that Brad DeLong would readily accede to. Then, look to the nature of balance rather than looking to argue against international relations as self-defeating.

[anne]

When I raised the matter of spending $14 billion a month on Iraq rather than, say, health care or dramatic public college-university tuition reductions, I was not being unfair in the issue or even making a moral argument. I was asking, what sort of fiscal policy do we have and want?

The proposed defense budget for 2008 asks $622 billion. The spending for Iraq will be added, but so will spending from the Energy Department of, say, $15 billion for our nuclear weapons program. Keep on adding the supplementals to defense, then ask whether the New Deal legacy is of no account. What could a Franklin Roosevelt accomplish for workers?

http://www.nytimes.com/2005/04/18/opinion/18herbert.html?ex=1271476800&en=9f23787f95925a8f&ei=5090&partner=rssuserland&emc=rss

April 18, 2005

A Radical in the White House
By BOB HERBERT

Last week - April 12, to be exact - was the 60th anniversary of the death of Franklin Delano Roosevelt. "I have a terrific headache," he said, before collapsing at the Little White House in Warm Springs, Ga. He died of a massive cerebral hemorrhage on the 83rd day of his fourth term as president. His hold on the nation was such that most Americans, stunned by the announcement of his death that spring afternoon, reacted as though they had lost a close relative.

That more wasn't made of this anniversary is not just a matter of time; it's a measure of the distance the U.S. has traveled from the egalitarian ideals championed by F.D.R. His goal was "to make a country in which no one is left out." That kind of thinking has long since been consigned to the political dumpster. We're now in the age of Bush, Cheney and DeLay, small men committed to the concentration of big bucks in the hands of the fortunate few.

To get a sense of just how radical Roosevelt was (compared with the politics of today), consider the State of the Union address he delivered from the White House on Jan. 11, 1944. He was already in declining health and, suffering from a cold, he gave the speech over the radio in the form of a fireside chat.

After talking about the war, which was still being fought on two fronts, the president offered what should have been recognized immediately for what it was, nothing less than a blueprint for the future of the United States. It was the clearest statement I've ever seen of the kind of nation the U.S. could have become in the years between the end of World War II and now. Roosevelt referred to his proposals in that speech as "a second Bill of Rights under which a new basis of security and prosperity can be established for all regardless of station, race or creed."

Among these rights, he said, are:

"The right to a useful and remunerative job in the industries or shops or farms or mines of the nation.

"The right to earn enough to provide adequate food and clothing and recreation.

"The right of every farmer to raise and sell his products at a return which will give him and his family a decent living.

"The right of every businessman, large and small, to trade in an atmosphere of freedom from unfair competition and domination by monopolies at home or abroad.

"The right