A few thoughts on globalism
Editor’s note: With a minimum of editorial interference, this is a comment by Randy Abraham which I felt needed its own post.
We could have had Hillary Clinton. We could have had a competent woman at the helm of the world’s only empire, guiding us to a soft landing of the recession which was inevitable. Instead, we have a sociopathic liar who, like Hitler, doesn’t know when to cut his losses and retrench.
What's so frustrating is that this was all too predictable and avoidable.
Donald Trump’s attempt to strike a trade agreement with China is untenable and doomed to failure because he has no agenda, no coherent strategy, no leverage, and no momentum: some of our key allies, who might otherwise be expected to lend their support to us — and prevail upon China to address their violations of agreements they made as a party to the World Trade Organization, such as stealing intellectual property, using their state-subsidized industries to dump steel under cost onto world markets and manipulating their currency to achieve a competitive price advantage for their exports — are currently laboring under U.S.-imposed tariffs.
Let's talk about leverage.
I believe we had the leverage to shape the challenge of globalism to our benefit and to the benefit of workers in other nations.
And when speaking of leverage, let’s remember what happened in the aftermath of the 2008 financial collapse, which devastated economies globally. The U.S., pursuing a fiscal policy of economic stimulus and an accommodative monetary policy, recovered from the crisis better than any other developed economy and has created more private sector jobs than all other developed economies combined.
In contrast, the UK and the European Union responded to the financial and economic collapse by tightening the noose on their citizens with government spending cuts and other austerity policies — to their detriment, as their economies are still coping with high unemployment and struggling to emerge from recession.
And if the British pound continues to take a beating, if capital leaves the UK, and economic stagnation sets in, Brexit will be seen not as a success but as a setback for British workers and a triumph of demagoguery, and the prospect of repeating that in the U.S. becomes extremely worrisome. Because Brexit will be seen as a self-defeating retreat from a successful and hard-fought community of interests and a destructive lashing out in misplaced anger.
Consider the prospect of the UK attempting over the next few years the arduous task of renegotiating trade deals, debts to the EU, and other agreements they were a party to while an EU member, while wary outside investors postpone making investments in the UK with all this uncertainty swirling about.
I hope that such an impulse or scenario does not play out in the U.S.
The electoral success of Brexit represents economic anxiety over globalism and the missed opportunities of expanded trade, but also provides an opportunity for a new approach to globalism, one that champions worker rights, environmental protections and workplace safety.
China in recent decades rose to economic superpower status through a model featuring cheap labor and credit, foreign investment, and cheap exports, but when the Great Recession reduced the demand for its exports, China turned inward and resorted to stimulative measures involving large-scale land development projects as part of an effort to preserve jobs.
However, as we’ve seen the past few years, China’s meteoric rise has slowed down from its previous era of double-digit annual growth, and since 2015’s near-meltdown of its stock markets, and the turbulence of its bond market at that time, we witnessed the Chinese government’s uncertain attempts to contain this crisis and to stem rising debt levels and ongoing capital flight — an estimated $300 billion in the first six months of 2016 — that left investors wary.
Moreover, consider that while China’s economic growth had been slowing, China’s leaders — perhaps mindful of the possibility that they may be reaching the limits of their foreign investor- and export-driven economic model, and are also reaching the limits of their population’s ability to absorb the pressures of the relentless industrialization and urbanization of recent years — had announced it would pursue policies that could sacrifice short-term growth in favor of more long-term stability. And that they might want to promote policies that foster a stronger consumer-based and less trade-reliant economy, to boost domestic spending to help sustain their economy, which could lead to even more-protectionist policies.
In that brief window of time, we had an opportunity to leverage our negotiating assets of a major market, a dynamic and growing economy — the world’s largest — a vast security umbrella, and a strong and stable currency that serves as the basis of much of the world’s trade to convince the decision makers in other nations to join us and agree to establish a floor of enforceable international labor and environmental standards that lessen the incentives for American firms to outsource while reducing trade barriers to American exports, in exchange for terms that are similarly favorable to our partners.
So, no, there is no single “magic bullet” to achieve a more robust economic revival, but the combined force of all of these factors, together with good public policy and the attempt of this and the next administration to rally support for crucial investments and mutually beneficial trade agreements, can get us closer to realizing this goal.
And wistfully hoping for a return to the 1950’s — when the U.S. dominated international trade in a world devastated by World War II, and almost half the American workforce enjoyed the benefits of union membership — is not a realistic strategy. Neither is economic protectionism that attempts to insulate ourselves from global competition. Business has been international and operating across national borders for a long time, and if we don’t forge a trade agreement that upholds our values and protects our interests, and the interests of workers in developing countries, we will continue to be sidelined.
For there to be an optimum balance between private gain and the public good, there need to be standards for fair business practices that ensure that worker’s rights, the ability to organize into unions, and the environment are protected. Otherwise, in the absence of enforceable standards, there will be a race to the bottom, where businesses seek out countries with low wages and minimal regulations, and set poor and developed countries against each other in competition for jobs.
We face a choice between two competing visions and sets of values. One calls for us to work within and strengthen a community of nations, and to coexist and resolve problems peacefully without a desire to dominate another people.
The other calls for us to look to other nations with suspicion, to enact policies that provide additional benefits and privileges to the richest and most powerful among us, and act as the ‘muscle’ behind a new global colonialism driven by moneyed interests and unaccountable deal makers loyal to no country’s flag.
The entire global economy is in the doldrums, and much of the world is looking for American leadership. And since our economy is on an upswing, with growth outpacing other advanced nations, and with much of the developed world experiencing declining growth rates at best or scrambling to avoid another recession, we have an opportunity — and the leverage — to reject a politics based on fear, resentment and hatred of the Other and execute an advantageous trade agreement, champion American interests here and abroad, and uphold — and export — American values.
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