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Globalization: Now identified as 'boomernomics'
Globalization is an economic theory, more recent than "Reaganomics," where free traders have tried to make economics in the real world appear just as in textbooks, the way they learned it in economics class.
Free traders specifically point to 'free-market economics', and believe we can force the world to look just like this simplified model. It is a tenet of faith that there is no higher wisdom than that of free markets, ruling through supply and demand. Another article of faith is that all trade, transactions, and economic activity are good in and of themselves, justified because each party gets what it wants.
(Many adherents, having read this far, see nothing wrong. The truly zealous free trader must approve of, for example, selling nuclear weapons to Saddam Hussein.)
Free trade chiefly tries to remove the hand of government -- and any "non-economic" considerations -- from business. In promoting free trade, the point was, "business is business - we want to see no borders, know no issues, and while we're at it, leave out values and ethics - they get in the way."
It could be one thing if such policies were kept within business. But this view became applied by government. What they did is on a scale akin to making atheism the state religion.
The view noted is a simplified academic theory, which gives no quarter to other subjects. Globalization is troubled by flying in the face of reality…where borders do exist. Issues do exist. Values and ethics do exist.
For an academic model, perhaps one can isolate each subject. But it is a weak politician who will take such wishful simplicity, and attempt to encompass the real world therewith. To make it stick, it has been necessary to elevate trade policy above all else, even national security.
Human rights, labor, environmental, and consumer concerns are lower down the agenda, along with national security. And, at the TOP of the agenda, free trade says that the other considerations must be OFF the agenda.
Government therefore gets its hands tied, as for addressing valid government / public concerns. And, it so happens, tying the hands of government was exactly the agenda of the organized business interests, who prompted this state of affairs as they wanted government "off their back."
Moreover, Globalization has found business types taking a direct hand in government at NAFTA, the WTO, and prospectively, at the FTAA. These bodies have panels, which effectively strike down laws. (They have redefined a "law" to be a "non tariff barrier to free trade.") In addition to overruling legislatures, they are ascribed the power to compel legislation. And, democratic values do not apply. These are unelected, unaccountable business types, representing private-sector interests. A shadowy crew is reputed to have become the "world's highest law making body."
Protesters of Globalization have directly decried a "corporate takeover" of government.
American history, beginning with the founding fathers, has yielded 14 generations. Globalization did not occur under the first 11 American generations. It has been promulgated under the stewardship of the 12th generation. For this reason, I refer to Globalization as "Boomernomics."
We have noted five problems of Boomernomics:
There is a sixth problem of Boomernomics:
A myth circulates in the establishment, that trade deficits can be safely ignored. Trade deficits were shrugged off by the architects of Boomernomics. This was a mistake. Upon closer analysis, trade deficits hurt the economy, dollar-for-dollar.
The economic damage of these deficits was not evident at that time. Boomernomics encouraged larger trade deficits, which followed suit by growing. In the 1980s, our deficits with China were under $4 billion. They have grown to $86 billion, and total trade deficits have grown to $350 billion.
They do hurt. They are a problem. Several other economic measures are hurt by trade deficits, including employment, wages, cost of living, value of the dollar, and prospective inflation.
The effect is seen in our troubled economy, right now. The economy is now saying "TILT," and one reason is Boomernomics, with its built-in encouragement of trade deficits.
Trade deficits have never received as much attention as we used to heap on federal budget deficits. They have been shrouded in the myth, as above. For the management of a sound economy, the myth is a dangerous misunderstanding. It is time to wake up, grow up, and face up to trade deficits.
For a short definition, a trade deficit is when "we are getting poorer, and somebody else is getting richer." There is a $350 billion hole in our economy. Even more economic activity is curtailed, because there is a multiplier effect as money recirculates. Spent in a trade deficit, money recirculates and multiplies in somebody else's economy, not ours.
In sound economics, we should be striving for balanced trade, bringing trade deficits down to $0. Trade deficits are truly a bogeyman to our economy.
Accepting the above logic, our economic model need not change. Capitalism is still capitalism, known for working well. It should stay there, and free trade can remain an ideal. Yet, the ideal of free trade should become a baseline case, with expected departures.
Trying to reduce the trade deficit, we need reasons for higher tariff rates. There are ready reasons which can come to hand. We could--
Bring back borders.
How will America's 12th generation be remembered? Hopefully, not for helping a nuclear-armed, communist superpower to arise. Together, we must decide what is valued. Is it tyranny and exploitation? Or, democracy and sound management?
* John Kusumi is the GenX politico who introduced "Practical Idealism" and the China Support Network to America in the 1980s. He is also remembered as 1984's 18 year old candidate for U.S. President. He subsequently went into business, but his politics live on at kusumi.com, through publishing, and in speechmaking with the Chinese pro-democracy movement.
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