Thursday, December 21, 2006

Go Shopping


Did you go shopping to save the country yet? For those of us whose mouths are still hanging open because the cretin in chief still felt comfortable basing his policies for this country on urging the public to contribute to the morass, at least this is another guarantee of Democratic advances to come.

As mentioned before, I work with a financial firm, and yesterday I had a little conversation that brought me up short. And this a.m., I see some more spreading of the talking points I had used on me. So just in case you think that the business mentality may be realizing that lower family incomes, weaker dollar, and doubling energy/transporatation costs may be worrying to the financiers, hahahahaha.

Some manufacturing workers in the United States -- such as those who labored in huge factories making basic steel -- have suffered as they've seen their jobs leave America for low-wage countries. But for workers as a whole, the truth about globalization and inequality is the opposite of what the protectionists claim. There are three caveats to the steel worker's story and two larger perspectives on inequality.
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A second caveat is that there are two ways to increase people's standard of living. One is to increase their wages. The other is to decrease prices so that they can buy more things with the same amount of money.

The ability to buy inexpensive, quality Chinese-made shoes and Japanese-made cars at lower prices disproportionately benefits lower income Americans. The Wall Street banker who pays $350 for Church's shoes benefits relatively little, but the janitor who buys shoes for $25 rather than $50 at Payless or Target or Wal-Mart benefits greatly.

Lower prices due to imports from China alone -- ignoring all other similar results of globalization -- probably raise the real incomes of lower income Americans by 5 to 10 percent. That's something no welfare program has ever accomplished.


Your clothes and shoes, coming from impoverished workers, are cheaper so you unwashed radicals are ignoring the facts. You might not be able to drive to work, heat your house, buy, cook and refrigerate your food, or send your kids to school, but look! that Made in China/Nicaragua/Haiti/Thailand label proves you're better off because the $60 sweater is $50. And don't think your financier reading the Wall Street Journal isn't convinced he/she is in possession of real facts that you choose to ignore because you're a librul and want to give their money away to the unworthy poor.

At bottom, anyway, some one else's poverty so I have cheap imports isn't working. If foreign workers don't get buying power, they don't buy the stuff we export. Next trip abroad, you'll find your dollar is already not going as far. While the people you're visiting are growing ever more resentful of their poverty, your prosperity.

According to Global Labor Strategies (GLS), major corporations including Wal-Mart, Google, Procter & Gamble, Microsoft, Nike, General Electric, and Intel are “acting through business organizations like the American Chamber of Commerce in Shanghai and the US-China Business Council,” to lobby against China’s Draft Labor Contract Law. This new law proposed by the Chinese government aims to secure minimal labor standards for workers, such as enforceable labor contracts, severance pay regulations and negotiating power over workplace procedures and policies. A GLS report entitled: “Behind the Great Wall of China: U.S. Corporations Opposing New Rights for Chinese Workers,” notes that while the law will not eliminate labor problems in China, it is an important step in improving a system where poverty wages, lack of health and safety protections, and the absence of any legal contracts are common for Chinese workers. Organizations representing US companies have threatened to withdraw business from China if such a law is passed.

Just now I am watching a report on the influx to America of foreign consumers, snapping up our goods for half price in view of the dollar's weakness. Now there's another bright spot. With the dollar falling in relation to the strong EU from those worker-friendly countries, the manufacturers here are pulling in more buyers from abroad. Maybe the State of the Union Address will have a message for the world - come here and go shopping to keep our companies earning obscene profits for the GOP voters. Maybe I will write and suggest it.

However, the weak dollar isn't good for the long term.

Until now foreigners have reinvested most dollars in the United States. In the year ending in September, they bought about $1 trillion worth of U.S. stocks and government and corporate bonds, says David Wyss of Standard & Poor's. Private investors -- not governments -- made 85 percent of those purchases, he says. But if the preference for dollar investments subsides, U.S. stock and bond markets could weaken. The dollar might drop sharply against other currencies. The U.S. economy could suffer from a loss of wealth and confidence; foreign economies could suffer from a loss of exports.

The conversation I had yesterday stalled when I pointed out that I didn't want protections for workers removed by sending jobs overseas to workers in bad conditions, so that I could have cheaper clothes. The banking consultant I was talking with hadn't contemplated that anyone might prefer good working conditions for others to a benefit for their own advantage.

I doubt that on Sunday night three ghosts will be visiting all the scrooges being harbored in the realms of financial advisors, showing them the harm they've done their world and themselves. But the liberal community needs to be aware that that insulated realm is making decisions based on principles of greed, and assuming they are shared greed.

Go shopping? Let's talk about a living wage. And let's talk about good working conditions. And, btw, take back that mink.

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2 Comments:

Blogger Vicar said...

The entire base of economic theory is that doing what is in your own self interest is best for everyone. There is logic behind this assumption, but then it creates the problem of perverse incentives or a tragedy of the commons. The socially responsible economist notes that a purpose of government is to align the selfish incentives so that what is in people's self-interest is best for everyone.

It makes sense when you talk to them, and many of them are poor to upper-middle class academians. Still, no matter how educated the speaker, it's always hard to swallow the "best for me - best for all" mentality.

On the other hand, forcing, encouraging, and begging for social responsibility is a clear failure. People are by and large selfish, and hte more selfish, th more powerful? Perhaps I'm being cynical...

6:27 AM  
Blogger Ruth said...

sorry, gotta take exception to 'the base of all economic theory'. You're assuming that there is an equation of action with pure theory - that the reason for having a theory is to carry it out. I would contend that analysis of cause and effect doesn't necessarily entail trying to effect any particular end.

Selfish interest as the basis of action is a libertarian tenet, indeed. This administration is doing a good job of proving, at a growth rate of 2%, that it isn't working.

10:36 AM  

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