Saturday, February 27, 2010

Free trade and the decline of the American middle class

I increasingly hear people who support free trade talking in very pessimistic terms about the decline of the middle class and their inability to envision improvement in this trend. For example, I listen to the podcast "Left, Right and Center" and Matt Miller, the moderator who was in the Clinton Administration and has never said anything (that I've heard) to question free trade (in fact, even the leftist voice on the show supports free trade), has been very pessimistic about middle class prospects since the economy crashed.

Unfortunately, none of these voices seem to be making a connection between free trade policies and the decline of the middle class. Many, including Mr. Miller, go as far as to tie the middle class decline (at least in part) to competition with China and India. So with that perspective, why on earth aren't these voices making the obvious step of questioning the wisdom of free trade? Well, that's largely because most political pundits drank the Cool Aid, most of them work for Corporate conglomerates that benefit from offshore exploitation, and many have--or aspire to attain--such wealth that they financially benefit from the exploitation. With most of the media refusing to see the light, it's left for the American people to figure it out on their own. By the time we figure it out as a country (clearly many individuals get it), so much American money will have funneled to China and India that it will be too late. And the fat cats that made a fortune out of the transfer will just smile knowingly and feign pity (or at least a handful will pretend to care).

It's becoming increasingly obvious that the corporate interests that make so much of their money off of exploiting cheap, offshore labor (and more often off-shore tax breaks) have such influence in Washington that is not going to change until it's too late. The only scenario that I can imagine at this point is for American's to get so pissed off that enough of them refuse to buy Chinese (start with China and then build from there). Only enough Americans would have to participate to build credible competitors and then it would start eating into corporate profits enough to make it unprofitable to move overseas. But even that seems close to unimaginable, given the zombie shoppers in Wal-Mart. I did a quick search to see what kind of sites are out there encouraging non-Chinese made purchase, and I can't find anything! Unbelievable!!! There is no web site www.dontbuychinese.com! How is this possible? Did the Chinese purchase the domain to keep it from establishing? Seeing this makes me almost certain we are headed toward American economic catastrophe, the likes of which will make 2008 look like a warm-up. But just maybe...maybe...some of these pundits will finally get it and start speaking out about the pitfalls of outright free trade before it's too late. Matt Miller? Anyone?

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