These costs have proved overwhelming in communities that depend on industry for sustenance, vastly exceeding what economists anticipated. Policy makers under the thrall of neoliberal economic philosophy put stock in the notion that markets could be trusted to bolster social welfare.
In doing so, they failed to plan for the trauma that has accompanied the benefits of trade. When millions of workers lost paychecks to foreign competition, they lacked government supports to cushion the blow. As a result, seething anger is upending politics in Europe and North America.
Well, that is not free markets. It is managed trade, and yes it is a mess, and yes government has not, because it cannot, even if it wanted to, ameliorate the damage done. I am happy to call it "neoliberal" economics, and yes it is a mess. But free markets are the only antidote to the problem.
In the United States, the Republican presidential aspirant Donald J. Trump has tapped into the rage of communities reeling from factory closings, denouncing trade with China and Mexico as a mortal threat to American prosperity.Well, I doubt Trump denounces trade with China and Mexico. Sure he denounces the trade deals, and this is typical false-dilemma argument: trade is what the Hegemon calls it, and there is no alternative. He and Hillary are posing as anti-TPP TTIP candidates, for the time being, but both of them will cut some deal, when the only free market deal is unilateral. In free trade, we have no opinion on what crosses borders; the legal fiction is the importer is the manufacturer, so we hang USA importers for problems, not blame the Chinese.
“The trade policy of the European Union is paralyzed,” said the Italian minister of economic development, Carlo Calenda, during a recent interview in Rome. “This is a tragic situation.”Tragic for whom? For Ministers of Screw-the-Prole? What does he mean? Trade in Eurozone has ended? The only thing that has ended is the game of playing with ex nihilo credit at interest, which has no rational basis, so is ending for no rational reason (meaning we'll never see it coming, nor understand why it ended).
Years of investment manias and financial machinations that powered the job market have lost potency, exposing longstanding downsides of trade that had previously been masked by illusive prosperity."the job market" as if the only job market is the one in place, as if it is not a false economy job market.
The worst financial crisis since the Great Depression has left banks in Europe and the United States reluctant to lend.This is absurd! They lend like crazy, for credit cards, autos, student loans: fog a mirror, get a spanking new degree, car or vacation. Bonds are debt, money lent. We have 13 trillion in bonds at negative interest rates, which can only be viewed rationally as a mania to lend. What is ending is people who can take on more debt, or, those who qualify don't want it, those who want it, don't qualify.
And as Pynchon notes, just get them to ask the wrong question, and the answer does not matter. (Classic example: Trump V Clinton. The answer does not matter.) We do not need banks lending anything in a free market. What we need is asset based credit, at no interest, which any business is free to generate on its own. That is necessary and sufficient for a sound prosperity.
... said Chad P. Bown, a trade expert at the Peterson Institute for International Economics in Washington. “There were people talking about these things, but they weren’t taken very seriously at the time. There’s a lot of policy regret.”
“We do need to have these trade agreements,” Mr. Bown said, “but we do need to be cognizant that there are going to be losers, and we need to have policies to address them.”
"We?" "Policy regret?' I shall be sick directly. As if anyone cared in the slightest about who got hurt as wealth was concentrated, the old tried and true way, through interest. But on steroids: interest on ex nihilo credit. As Mr. Bown implies, all policies have winners and losers (except free trade, which is no policy at all) and he has a job talking about what to do with losers. No, we neither need these managed trade agreements nor policies to address the losers, as no trade policy means no losers.
China targeted crucial industries for domination, lavishing favored companies with sweetheart credit terms while investing aggressively in ports, highways and electrical generation. Anyone with ideas about organizing Chinese labor risked landing behind bars.Yes, yes, yes. China adapted exactly the same policies USA used to get some bankers "rich."
The rugged country of western North Carolina suffered mass unemployment as Chinese-made wooden furniture put local plants out of business. So did glassmakers in Toledo, Ohio, and auto parts manufacturers across the Midwest.No, no, no! The unemployment started in the 70s and 80s as the roll up of the local retailers by anyone willing to borrow massive amounts of ex nihilo credit (junk bonds, anyone?) Indeed, whoever borrowed the most won. In my book I mention Levitz wiping out Kreoehler, which in the 1960s had 8,000 people making furniture in USA, but by the late 70s was foundering. They got nailed by the folly of price cutting, "making up in volume what they lose on each sale.." Sports Authority, Petco, Lowes, Micky D, CVS, Safeway, Best Buy, these are the last dinosaurs standing of a economic scam that wiped out USA small retail and gutted USA manufacturing. Times Kroehler by 10,000 and you see what happened in USA when banks started lending ex nihilo credit at interest. The program began to die in the late 70's, for as with today, ex nihilo credit leaves a scorched earth. We had that lats 70s recession.
But then, and I was there to watch it, Deng Xiaoping opened China, and offered USA big business the exact same ex nihilo credit deal Uncle Sam offered in USA. Uncle Deng gave USA bankers a whole new lease on life, a massive ex nihilo credit pool, and USA industry was completely hollowed out, with our big #1, autos, now gone full Zombie. Now we lack USA manufacturers, USA small retail, and our pride and joy, the big box discounter, is dying. We have not much left. But this does leave a huge vacuum, and opportunity for a renaissance in USA authentic economy. We'll need to shift back to materialism from consumerism, that is buy a good coat that lasts 20 years (I have a pair of Allen Edmonds shoes I bought in 1984, paid cash, still the best looking shoes I've ever seen. Resoled countless times and "reconditioned" once. Consumerism is buying a new pair of shoes each year. On credit.) All we need is the will to rebuild America in spite of the evil we invited in, accepting ex nihilo credit regime, at interest. We just man up, and get to work.
“I had to tell my son that he can’t go back to McKendree for his junior year,” Mr. Morrison says, straining to choke back tears. “He has to go to community college.”
He swallows hard. Tears emerge from the corners of his eyes.
“It just crushes you,” he says. “I didn’t get to go to college. I wanted my kids to succeed. When you see the disappointment in your kids’ eyes. …”
Well, spare the rod, spoil the child. You were willing to slack off during the boom contributing to the damage, and now you just break down and cry when a little adversity strikes? Now, if a kid has the temerity to look at you with disappointment, then he needs a good slapping around. The two of you ought to be contributing your unique gifts to building an authentic economy, not crying over disappointments. Sheesh!
In China, farmers whose land has been turned into factories are making more steel than the world needs.
In America, idled steelworkers are contemplating how to live off the land.
Right. What goes around comes around. USA did this to the world, and the world is now doing it to the USA.
Stop our wars. Deregulate something, anything. Medicine? Banking? Education? It does not matter what. Just free a field up, any one of them, for everyone of them has so much repressed potential that the intire USA and its unemployed 94 million, would be offered prosperity and opportunity.
The way out is the way in. Import what you want, using the excess capacity now overseas, and as you build markets in USA, transfer the manufacturing back here. If we are still America we can do this. If we do not wallow in self-pity because a a fantasy did not play out.
The most revolutionary act an American can perform is to start up a business. I teach that. You can find links on the upper right of this blog, and at http://www.johnspiers.com/Teaching.html .
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