Sunday, June 21, 2015

Sunday Globe Special: Economists Open Eyes

They did mine:

"After doubts, economists find China kills US factory jobs" by Peter Gosselin and Mike Dorning Bloomberg News  June 19, 2015

WASHINGTON — A generation of economists trained to believe that trade had little to do with the long decline in high-paying US factory jobs is changing its mind.

Their findings will probably fuel the opposition within President Obama’s own Democratic Party to his proposed 12-nation Trans-Pacific Partnership and similar pacts lowering barriers to international commerce.

Related: South Carolina Church Shooting Took Attention Away From Fast Track Approval

Mike Rivero also made a good point about it, too. Fast track failed so they changed the rules. Some democratic republic we got here.

Because manufacturing employment as a share of the workforce has been dropping for more than 40 years and the same trend has affected other developed nations, including Japan, with far less liberal trade policies than the United States, many economists had concluded that automation was the primary culprit.

Hasn't helped, but it doesn't explain everything.

But studies examining the impact of China’s entry to the World Trade Organization in late 2001 have made the case that between 1 million and more than 2 million of the 5 million American factory jobs lost since 2000 are traceable to low-cost imports.

“The ‘aha’ moment,” Massachusetts Institute of Technology economist David Autor said, “was when we traced through the industries in which China had surging exports to the local addresses of their US competitors and saw the powerful correspondence between where China had surged and where US manufacturing employment had collapsed.”

I love it when people who said something wasn't going to happens says you are right even after the horse left the barn. Do you ever want to believe or take advice from that person again?

Democrats last week blocked fast-track trade-negotiating authority for Obama, though House Republicans Thursday passed alternative legislation to try to revive it.

Democrats and their allies in organized labor argue that trade deals kill jobs supporting a strong blue-collar middle class without providing offsetting benefits. Senator Sherrod Brown of Ohio said such agreements have “cost millions of jobs.” Senator Elizabeth Warren of Massachusetts said trade accords have “let subsidized manufacturers around the globe sell here in America while good American jobs get shipped overseas.”

Not only that, they are filling ones over here with foreign immigrants, be they illegals or visas.

Democratic presidential front-runner Hillary Clinton echoed some of these concerns at a campaign stop in Iowa on Sunday without directly opposing trade legislation, saying “there should be no deal” unless terms are improved.

One could argue her husband was the one who set most of this in motion, and therefore she looks hypocritically opportunistic here.

Their Exhibit A has been the North American Free Trade Agreement, which they say caused the exodus of hundreds of thousands of US factory jobs to Mexico. But government statistics show that US manufacturing employment actually rose during the five years after NAFTA took effect in 1994, temporarily reversing the long-term decline. An April 16 study by the nonpartisan Congressional Research Service concluded that NAFTA “did not cause the huge job losses feared by the critics.” 

So said this lying, self-serving government.

China is another matter.

In an April paper, economists Justin Pierce of the Federal Reserve and Peter Schott of Yale University found that the biggest US manufacturing employment declines and largest surges in imports were in products for which China permanently locked in the greatest reductions in tariffs as part of its entry to the WTO. Industries such as apparel, leather goods, plastic plumbing fixtures, and surgical and medical equipment sustained substantial hits, they concluded.

“Something big happens” around the time China entered the WTO, Schott said. “In fact, in the industries that were more affected, that’s where you see the job loss occurring.

“That’s the smoking gun for the link with the policy,” he said.

Autor and two coauthors wrote a 2013 paper estimating that between 2000 and 2007, the United States lost 982,000 manufacturing jobs because of Chinese import competition.

Everything does seem to be "Made in China" when you look at it, yeah.

Autor and his colleagues said imports from China and other countries caused one-quarter of all US manufacturing job losses during the period. He said in an interview that the estimate was conservative and that trade might be responsible for half of the losses.

That is where my print copy ended it.

Despite his findings, Autor supports the Pacific-rim trade deal. He co-wrote an op-ed column in the Washington Post saying that the lost factory jobs aren’t coming back and that the deal would help the United States in areas such as intellectual property, where it enjoys a competitive advantage.

He makes the point I made above, and you can see why I'm so vociferous about things going through. Once done, it can't be undone.

The column said the agreement would also put pressure on China to stop gaming the global trade system.

Yeah, right, it's China gaming the $y$tem, not Wall Street and the criminal Federal Reserve.

Before the recent studies, most economists had concluded that something besides trade must be at work in the job losses. They settled on the growing role of automation. They argued that what’s happening in manufacturing in the US and other developed nations is similar to what occurred in agriculture, where industrial techniques allowed farmers to produce much more with a fraction of the workers.

Federal Reserve data back up the critical role of automation in long-run trends: Output per factory worker more than quadrupled from 1970 to 2010, a phenomenon driven by everything from the replacement of people with machines to making work processes more efficient.

Ever notice the problems in the economy are due to anything and everything but the debt-enslaving banks and their fraudulent looting schemes? 

Oh, right, propaganda pre$$ mouthpiece.

As recently as 1980, 1 in 5 American workers was employed in manufacturing; the number today is 1 in 12.

A study by McKinsey & Co. found that before US ports started using cargo containers and massive cranes, a dock worker could move 1.7 tons of cargo per hour. Five years later, the worker could move 30 tons.

Mainstream economists acknowledge that trade has taken a toll on US factory jobs. But they’re skeptical about the dimensions of the new generation’s estimates of its size, as well as its claim of an abrupt change with China’s WTO entry.

They don’t think the new generation gives sufficient weight to the benefits of trade in helping a country make efficiency-improving economic changes and being able to obtain less- expensive products.

“Trade explains about a fifth of the manufacturing job loss since 2000,” said Robert Lawrence, a Harvard economist and a veteran of the academic and Washington trade debate.

“The rest,” Lawrence said, “is the result of slow growth in consumer spending on manufactured goods and productivity gains” from automation, citing the traditional explanation for what’s causing the decline in US factory employment. 


Economists generally defend trade as a way for countries to reallocate their workforces to better and higher uses, a long-term process.

Look, I'm not anti-trade; I'm for fair trade and pay for people and workers as opposed to the truly fa$cist (not that mislabeled nationalism of the 1930s, labeled as such by the banking monopolies that they threatened and their mouthpiece media here) corporatist model we have now.

And they say that consumers, particularly middle- and lower-income households, benefit immediately from the availability of cheaper imported goods.

Yes, your standard of living drops along with the wages and prices you pay for inferior quality crap. But its all good, that Walmart garbage that breaks within a year.

A recent study by economists at UCLA and Columbia University concluded that trade increases the real incomes of those in the middle of the economic spectrum by 29 percent while raising it for poor households by 62 percent.


Also see: What’s the deal with the TPP?

"Take a trip abroad, see the US in decline" by Stephen Kinzer   June 21, 2015

Foreign travel is broadening, but not always in a positive way. For Americans it has an increasingly painful edge. Too often it leaves us with a disconcerting sense that our country is falling behind. In a world where competition comes increasingly from other countries, this bodes ill for our national future.

Last month I visited four countries that might seem to have little in common: Turkey, Iran, Germany, and the Netherlands. All four are intently focused on global competition. Countries like these will be eating America’s lunch in the future if we proceed as we are today.

Germany and the Netherlands have highly successful, innovation-based economies that live from exports. Turkey is laser-focused on its goal of becoming one of the world’s 10 richest countries within a decade. Iran has suffered under decades of economic sanctions but is a young and vibrant society, poised to join the world market with a vengeance if sanctions are eased — which may soon happen.

For Americans, traveling in these countries is sobering because it forces us to confront an unpleasant truth: An increasing number of nations do things better than we do. In an earlier age that might not have mattered because the United States commands such a huge land mass with such lavish resources, and because our political primacy was all but unchallenged. It matters now.

After the end of the Cold War, the US entered into a period of relative geopolitical decline. This was inevitable. Never again will we be as dominant in as many ways as we were during our most powerful days. Globalization has liberated the energies of people around the world.

And also plunged millions into poverty. I'm not even sure I buy his premise, either. Just because he says it doesn't make it true.

The global economy is more competitive than it has been at any time in living memory. This is clear to any American who travels. Our history of power and prosperity has made us complacent while other countries plan more carefully for the future. Turkey, Iran, Germany, and the Netherlands are among countries that smell our blood in the water.

One of the most striking differences between those countries and the US is in physical infrastructure. Highways, bridges, electric grids, and transit systems are modern and carefully maintained. Public art enlivens neighborhoods. It is difficult to find clusters of poverty and deprivation like those in many American cities.

Well, that's what happens when all the tax loot is diverted to the war machine, Wall Street, well-connected corporations, lavish political lifestyles, and Israel. On the flip side of that is the politicians here telling you how much they have done for the infrastructure, be it Obummer and his stolen stimuloot or Patrick and the potholes he left. As for the cities, Bo$ton is third in wealth inequality and sections of that city are in slummy squalor.

The other huge difference, less visible but even more important over the long run, is primary and secondary education. One of America’s chronic problems, steadily becoming more acute, is the emergence of a large class of poorly educated, low-skilled citizens unequipped to compete in the modern economy. Our society does not provide equal access to good education. Students in other countries now regularly outperform Americans on standardized tests. This is a waste of our human resources — and a bad omen for our future.

RelatedThe Reason Education Sucks 

In infrastructure and precollege education, just as in energy policy, environmental protection, and other areas, the United States no longer leads the world.

We do in one very important area: the ability to blow things up with expensive military hardware.

One reason is that many Americans seem unable to grasp the connection between taxes and services.

Oh, really? I grasp that we are paying more taxes than ever for less services.

We want a country that is “number one,” but rebel at the idea of paying for it. Financing a country is no different from financing any other enterprise: You get what you pay for.

Then why is this cost-overrun, missing trillions due to corruption government so lousy? Why are all the high-priced weapons of war all pieces of $hit? How come the government can't contract one software program that isn't full of bugs?

All four of the countries I happened to visit follow the high-tax/high-service model of government.

Maybe it works over there, but over here it's failed. Too many money junkie scum infesting the upper levels.

Americans are deeply divided over whether this model is right for us.

I don't think we are. We want a government that provides decent health care while maintaining the infrastructure -- and one that doesn't lie us into wars for personal gain.

Perhaps the individualist strain in our collective DNA makes some other approach more appropriate. No society, however, survives long when great private wealth thrives alongside public squalor. While Americans argue about how to deal with our national challenges, other countries are surging forward. To see this happening, travel abroad and look around.

Don't even need to do that. Just take a look around your own neighborhood and note its decline.


You can add that article to the collection as my eyes begin to shut.

NDU: Mixed reaction in Mass. to Pacific trade bill