Posted inUncategorized

The biggest issue no one wants to discuss

Financial Times pronounced the recent Davos conference the gloomiest in its history. The "global agenda" of world leaders has crumbled. With the Doha round of trade liberalization in shambles, "protectionism" is seen on the rise. This is one thing that happens during historic economic collapses: old arrangements, particularly unsustainable ones, crash down. This is what happens when an old order enters an pivot point of discontinuity, where the future will be profoundly different from the recent past.

Dangerous destabilization is headed our way. This is why Dennis Blair, the national intelligence director, said this week that the global economic collapse is the biggest threat to the United States, bigger than al Qaeda. The more we try to deny the current reality, or return to the bubbles of the past decade, the worse the reckoning. This is also true of trade. The "free trade" regime that has coalesced since 2000 has hugely benefited the swells and oligarchs that attend Davos, especially by increasing their personal wealth thanks to cheap labor in developing countries.

But the millions of Americans who have lost well-paid manufacturing jobs as a result, with nothing to replace them but a collapsed housing bubble, don't do Davos. They are not all blameless, to be sure. Like all Americans, they are blissfully unaware of the consequences of their consumer decisions. So they happily shopped at Wal-Mart as their jobs went away. No matter. Beware the meme that facing this, as in an abortive House attempt to put a "buy American" provision in the stim package, is "protectionism." Going forward, a new world trade arrangement is essential. It is the biggest issue facing the country that no one in power wants to discuss.

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Posted inUncategorized

Leggy, blonde coed hooker wrecks world trade talks

Years ago, when I was a reporter in San Diego, we had a contest: Who can bore readers with the fewest words in the lede (the winner, at three words: "Otay Water District," as in, "Otay Water District directors voted Tuesday to…" — the reader would have moved on to the hockey scores after only three words).

Nowadays the winner is "world trade talks." A funny thing, that, considering how much globalization has revolutionized American lives, for good and ill, while most Americans haven’t been paying attention. So prop open your eyeballs as I note that world trade talks collapsed yesterday.

I suspect something more fundamental changed. The failure of the Doha Round of talks may well mean the end of the trade paradigm that has prevailed since the end of World War II. This is the biggest news story that will get the least attention.

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Posted inPolitics: National

When we say NAFTA, what do we really mean?

NAFTA figured heavily into the Democratic primary in Ohio, yet most of the news coverage and the debates themselves proved unsatisfying. We were served the canard that NAFTA helps consumers but hurt manufacturing jobs. NPR made it sound as if the trade agreement’s consequences are ancient history. The Democrats were more muted on NAFTA in Texas, where Laredo has boomed as a trade port.

Of course, NAFTA is a proxy for trade liberalization and globalization. China has hurt Ohio manufacturing more than Mexico. So, too, have the domestic automakers, undergirding the state economy, that continue to make boring, homely cars that fewer Americans want to buy.

But the real issue goes deeper even than that, and any fixes will be problematic. That doesn’t mean we shouldn’t make them.

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