Is globalization to blame for our economic woes?
by Mortgage Rates on Friday, October 22nd, 2010 | 11 Comments
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Yes. I agree.
Alex, what we are expercing are the birth pains of a “New World Order” as Britian’s Gordon Brown said.
What is happening is that powerful people are crashing the economy on purpose to set up a foundation for a global government and currency.
Yes globalization is to blame.
Josh you are wrong. It is the creatures of government that created this mess. Fanny, Freddie and the Federal Reserve were created by the government. It is the fault of to much regulation and government intervention.
What both problems boil down to, essentially, are Republican economic policies: deregulation, free trade, tax cuts for the rich.
No, it has to do with the dem’s. on capitol hill getting in bed with Freddie Mac and Fannie May, for way to long.
alex i think you are right. we h ave gotten very arrogant and spoiled here in the US. i’m assuming you’ve traveled to Europe or another country and have seen their happiness with living primarily in the present. they don’t feel the need to horde things – like 100′s of pair of shoes, multiple cars, gargantuan homes that they can’t afford….things are more simple, more real. sadly i see everyone wanting MORE MORE MORE – how many homes have more than one TV,, more than two, three??? sadly i would say the majority. pathetic that people have to monopolize their time separately in front of the “boob tube”. until people realize that less truly IS more — it will never change.
In a way, yes. It’s growing pains.
We can’t have globalization without proper regulation. Free market tends to go out of whack in that kind of thing… so it’s not so much globalization as it is doing globalization the wrong way.
The rest of the world is blaming the global meltdown on us.
Just like everything else, the government creates problems, then tries to convince us we need them to fix it. Kind of like paying the arsonist who set your house on fire, to put it out for you.
It is a fact of life. When we make money on something, other people want it too. When they do better, we need to keep on improving ourselves in order to be ahead. The USA still have large legacy – the knowledge that other countries are still trying to catch up. It is up to the younger generation to make use of what we have. So far the picture is not promising. American youths are so spoiled. They have not been taught to earn anything. I think a recession/depression or two would motivate you young kids to move your butt and learn something good. Otherwise, we have to open the country, accepting brain and labor from outside.
it is one of the causes.
Negative, to answer your question.
There have been several factors in our downfall. When I say our, I am thinking like seventy percent of the population of our country. Dare I say people like Joe the Plumber, not the one we kept seeing on television, the real ones and his employees, which is most of us. As US companies grew and spread globally, the profits grew even as companies started cutting back on American labor here at home. Wall Street, Corporate America and congress have been in collusion with one another for decades. The chasm between the wealthy and the workers grew, unions disappeared, benefits disappeared, pensions disappeared and all the while corporate America thrived, Executive Level Management compensation packages exploded to obscene proportions.
I consider it more of a long term slow attack upon the middle class which started under President Reagan, and ended under President Bush. Greed killed the golden goose. Corporate America with all their slashing of our jobs, we can’t afford to buy their products that are either made overseas and shipped here or the parts are made somewhere else and assembled here.
Last year the CEO of Goldman Sachs pulled in a reported fifty three million, one person.
Wow there certainly are a lot of Republican hacks and free market zealots on YA, aren’t there?
Anyways, to answer your question – not really, no.
One should be careful not to throw the baby out with the bath water on this issue; globalization continues to pose many serious challenges, but on the whole, it’s been a tremendous blessing. The problem in assessing the costs/benefits is that the benefits are diffuse across the entire population, while the costs are concentrated in a few firms and sectors that can’t compete with lower-cost foreign producers. Thus, those people have an enormous stake in inhibiting free flows of goods and capital, and they spend dearly to manipulate public opinion.
Globalization has also gotten a bum rap in the US because many have come to conflate it with the massive “up-and-out” redistribution of wealth that the Bush Republicans have undertaken – upwards redistribution of wealth to the already wealthy, and outwards transfers to finance W’s debacle in Iraq.
The truth is that the development of global supply chains and capital markets occurred mostly in the early 1990s, and contributed to the largest economic boom in decades. Our current woes are mostly the result of nonexistent regulation of the financial sector, artificially low interest rates courtesy of the Fed, and the obscenely irresponsible, short-sighted fiscal and tax policies undertaken by the present administration. The housing bubble was also partially the result of China’s non-equilibrium, artificially weak exchange rate, which effectively led to a glut of savings available to markets the world over. In the west, banks channeled this into mortgages and real estate. Clinton, Bob Rubin, and Larry Summers (Clinton’s Treasury Secretaries) were pushing very hard to get China to adopt market exchange rates, but Bush basically ceased these efforts – he was all too happy to allow China to manipulate the world economy, as it made it much easier to finance his deficit spending.
With regards to labor and labor costs, you’re only talking about half of the equation: yeah, US workers in some industries can’t compete with foreign labor. But the cheap imports also mean lower prices for goods, and larger markets for the competitive US firms. Net-net, it’s a win for the US – we wouldn’t be buying from overseas if we didn’t benefit from doing so, now would we?
However, the most significant benefit of globalization isn’t economic, but what’s known as the “peace dividend.” Countries that buy and sell from one another pretty much never go to war with each other. It’s no coincidence that WWII occurred relatively soon after the rise of economic nationalism in the 1930s.