my palley ..tom
here's some
crystal clear pieces
by a very decent
pro north union chap
too bad he's a magoo
caught up in typical
union pie card staff infection
jargoneering jingo-jango jingles
when his sunday pounch
is so simple and clear
bust the trans natwage rate crushing
trade wind machine
reval the south forexs
big time and pronto
==========================
"Over the last forty years
the Democratic Party has ...
slowly lost its voice
and fallen silent on the economy
...substituting a laundry list
of program plans for economic vision"
----------- nice conceit this...
pretend there was a camelot
make it a return toglory
not a quest for an unseen grail
which it actually is.....
the donks have never had anything worth shit for a policy agenda
let alone ....vision
samuelson had technique and confidence
not vision
keynes had vision
we imported that vision
and bent it into a bi partisan kold war helmet
so when was there vision
not
apt policy
" malgre..." ????-----------------
" most economists are singing
the same hymn ....."
--------true but not ...-----
Friedman’s 1968 classic,
proclaiming a “natural rate of unemployment”
that is worsened by minimum wages,
unions, and labor standards"
----------- ie not
the real wage control reserve labor
force job scarcity bitthat was 70's
pre globalization ----------
"As a result of the dominance
of the Chicago school..."
---------nonsense
that witch doctor shit was strictly
for south country export --------
" both Democratic and Republican economic advisers
are trained to occupy a common intellectual space"
----------- well at the policy top ya ...----------
"The current cohort of Democratic policy advisers
unconsciously uses the same
analytical framework as their Republican counter-parts"
" Professor Greg Mankiw of Harvard University
Council of Economic Advisers (CEA):
a new-Keynesian
a school of thought
that maintains unemployment
exists because of inflexible prices and wages"
---------so now its not friedman...its new keynesianism
true but sloppyand confusing
who can follow that don't already know the way ???--------------
" Ben Bernanke of Princeton University,
Federal Reserve Chairman : a new-Keynesian "
"Alan Blinder
the very best of Democratic economic advisers
....deeply sensitive
to problems of income inequality
and out-sourcing
shares the same analytical views...
as Mankiw and Bernanke.
on monetary policy and the economic logic
of free trade and globalization
" only different positions :
progressive taxes
and
the need for social insurance"
---------- here tom slips passed the use of the thranfer system to compensate households wacked by globalization
ie he never meets the enemy on its strongest flank------------
" economists tolerate
only one “core” theory at a time
about how the economy works "
----------very fine point
worth a world of investigation
how
the contradictions within consensus
burst the consensus apart
my take
at some point
like 1930
reality just makes too big a monkey
out of the panglossian dogma de jour ------------
" within todays laissez-faire paradigm
its a deduction
that
compassion usually reduces efficiency"
-------i cleaned that quote up some -----------
" Republicans own the market efficiency franchise
while Democrats own the fairness franchise"
" efficiency appears to trump fairness
with the American electorate...."
---------- seems our man thinks
the amerikan voting majority
is getting what it asks for ...
hmmmmm -----------
"which explains Democrats relative disadvantage
in public economic debate"
--a notion of the bending of interklass dialogue
by the class presently
" in hegemony"
would help this chap -------.
------------ but here's a very nice swipe
at rubinomics --------
" The one area where elite Democratic policymakers
have made an upfront economic efficiency argument
is the budget deficit
but this poorly conceived foray
has merely risked turning the party of FDR
into the party of Herbert Hoover"
"Three generations ago Keynes
identified the economic challenge
as one of optimizing capitalism
so that it delivers for all"
----------okay so he must not have been
very much like
a new keynesian eh ???---
"that challenge continues
in the era of globalization
Meeting it
requires unashamedly and openly ......"
------here comes his punch ------------
"making the economic efficiency case
for labor standards, trade unions,
minimum wages, corporate accountability
and financial market regulation "
----------- errrrr ...ya ... bbbb but
then make it bub ....----------------
------------------- nope------------------
the end
-----------------------------------------------------------
-----------why factor theory seems to help
but doesn't .....--------------
There is a famous theorem in international economics
– the Stolper-Samuelson theorem –
that says when a rich capital-abundant country
(such as the U.S.)
trades with a poor labor-abundant country
(such as China),
wages in the rich country fall
and profits go up.
The theorem’s economic logic is simple
. Free trade is tantamount
to a massive increase in the rich country’s
labor supply
since the products
made by poor country workers
can now be imported
Additionally, demand for workers
in the rich country falls
as rich country firms
abandon labor-intensive production
to the poor country
The net result is an effective increase
in labor supply
and a decrease in labor demand
in the rich country
and wages fall.
" a “super-sized” Stolper-Samuelson effect"
------------- well to be honest labor and machines were not the factors they might be labor and nature
but not intermediate products like machines
let alone know how ...and economies of scale
which muck it all up
then what
capital as in credit ????
but thats not a productive factor
but i quibble --------------
"Globalization has accelerated
the process of international integration"
--------that much is surely true by definition -----------.
"Whereas classical free trade connected
goods markets across countries,
globalization creates a global labor market
and moves jobs"
----------- the key
three card montee move
just went down
did u see it ???
trade is still in googs
and old time trade ...moved jobs
across borders too
if not workers themselves
who merely switched sectors --------
" Previously trade arbitraged goods prices,
now it also arbitrages wages
through job shifting"
Especially bitter,
is the fact that the process of globalization
is being driven
by large American multinational corporations
that American workers helped build
Globalization demands
that we begin anew
the task of establishing
fair and just rules
that make the economy work for all.
China, India
and other industrializing developing countries
must agree to, and enforce,
core labor standards and worker rights.
Trade cannot be free without worker freedom
and the right to share in the wealth created.
This is a task that will not be easy
given Washington’s captive economic policy elite
and big business’ interest in concealing the new reality.
Domestic political economy has historically
been constructed around the divide
between capital and labor,
with firms and workers being at odds
over the division of the economic pie.
A core problem for labor
is that workers are also consumers,
thereby creating a divide
between desires for higher wages
and desires for lower prices.
This problem is worsened
by the fact that globalization
impacts the economy unevenly,
hitting some sectors first and others later.
In previous decades manufacturing as whole
opposed trade deficits
and an over-valued dollar
because of the adverse impact of increased imports.
the spread of multi-national production
and out-sourcing
has divided manufacturing
into two camps.
"This division opens the possibility
of a new alliance between labor and those manufacturers
and businesses that remain nationally based."
"The NAM has been significantly divided
regarding the over-valued dollar "
-----------------------------------------------
For the past five years
the global economy has been
flying on one engine.
That engine is the U.S. consumer
who has been on a consumption binge
financed by borrowing,
in turn backed by a housing price bubble
the global economy has been heading
in the wrong direction,
hollowing out the middle class in America
while failing to create
a big enough middle class
in the developing world
A
Spurred by our own policy makers,
the International Monetary Fund,
and the World Bank,
developing countries
have adopted an export-led approach
to manufacturing growth and development
countries rely on selling in foreign markets
rather than their own domestic markets.
countries use under-valued exchange rates
to subsidize their products
China exemplifies this model,
exporting over half of its manufacturing output
and having an exchange rate
that is up to forty percent undervalued.
The focus on export-led growth
has distorted the global economy.
it has created
the global financial imbalances
that Wall Street is so apprehensive about
U.S. manufacturing has been undermined
by unfair competition
subsidized by under-valued currencies.
This in turn has accelerated
the hollowing of America’s middle.
Third, export-led growth
promotes the global race-to-the-bottom
since countries look for
international competitive advantage
however possible.
Consequently, workplace standards,
wages, and the environment
are all subject to persistent
retrograde pressures,
impeding the development
of a middle class in developing countries.
the global economy must shift
from export-led development
to domestic market-led development.
In an export-led world,
higher wages undermine employment.
In a domestic market-led world,
higher wages can promote employment.
This is where labor standards and unions enter.
The challenge is to establish
a system that has wages rising
with productivity
so that workers can buy
what they produce,
rather than dumping it on world markets.
Setting wages by government edict
does not work,
as evidenced by the former socialist economies.
Instead, labor standards
and unions are the way forward,
since they provide a decentralized mechanism
that links wages and productivity
through bargaining.
History supports this.
Every country that has ever made
the transition to developed industrialized status
has traveled this route.
china has the most under-valued exchange rate,
the worst labor repression,
and is by far the largest
developing country exporter.
China is the gravitational attractor
for the race to the bottom.
Other countries must change too,
but they can only do so
if China changes
so that none lose relative competitive advantage
. If China revalues its exchange rate
, other East Asian countries can also do so.
Likewise, if China raises wages,
so too can others.
Democratic reform in China is not a nicety
. It is a necessity
for the global economy to work.
-----------------------------------------------
The Economist magazine (September 24, 2005)
recently ran a story about
the threat posed by global financial imbalances.
The moral of the story
was that the U.S. is saving too little,
the rest of the world is saving too much,
and the net result
is a dangerous global saving imbalance
that requires an adjustment of saving patterns.
Rather than focusing on saving,
focus on demand
and the need for adjusting global
patterns of demand.
Having been brought up on
resurrected pre-Keynesian economics,
today’s economists instinctively focus on saving
attempts to increase saving can lower demand.
The U.S. needs to change the “composition”
of its spending, and shift from imports
to domestically produced goods.
This will reduce imports
and improve the trade deficit.
It will also increase
U.S. incomes and saving.
Such an outcome can be achieved
by depreciating the dollar,
thereby making foreign goods
relatively more expensive.
Side-by-side,
foreign economies must also
change the composition of their demand,
and switch from reliance on exports
to reliance on domestic consumption.
Exchange rate adjustment
will reduce their exports,
but these economies lack mechanisms
to increase their domestic consumption.
" global labor standards are important.
Such standards are not just about
preventing exploitation.
They are also about enabling countries
to consume their production.
standards must be accompanied
by rules governing exchange rates
to prevent unfair competition
based on devalued currencies.
The global economy cannot
save its way out of the current impasse.
It has been living on borrowed time
provided by U.S. consumption
funded by back-to-back equity
and house price bubbles.
The international system
lacks these rules,
erodes what national rules there are,
and actively promotes
the participation of countries
that are the most egregious rules violators
Posted by pinky at February 14, 2006 10:29 AM