Middle Class

How Globalization Saved the American Middle Class

Conservatives recommending nationalism are dangerously wrong.

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The only point of consensus in this year's otherwise deeply polarized election seems to be that increased wage and job competition created by globalization has decimated the American

American Middle Class
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middle class. Bernie Sanders, a socialist, proclaimed repeatedly during his failed Democratic presidential bid, "The global economy is not working for the majority of people in our country." Meanwhile, Donald Trump, a capitalist and the successful Republican presidential nominee, insists, "Globalization has wiped out our middle class."

They are both wrong. The American middle class is still standing after economic shocks its absorbed over the last decade, and it is thanks to globalization.

Globalization's two key elements are trade and immigration. Trade has buffeted the American middle class by letting it import riches from abroad, and immigration by generating them from within.

French economist Thomas Piketty, in his 2013 magnum opus Capital in the Twenty-First Century, popularized the notion that the American middle class was hollowing out. His basic thesis was that the rich were getting richer and the poor poorer because the returns on capital, the factor of production that the rich owned, were outpacing the returns on labor, the factor of production that workers owned. So rising productivity wasn't translating into higher wages, widening the income gap. Although Pikkety had to somewhat retract his findings after a barrage of scrutiny debunked some of his data, pundits on both the left and the right have seized on his ideas to blame globalization for decimating working-class wages and jobs by increasing the returns on capital over labor.

That's a plausible hypothesis—but ultimately false.

For starters, notes Manhattan Institute's Scott Winship, the American working class is stable. (His four-part series in Forbes earlier this year dissecting the various arguments and data deployed by inequality-narrative peddlers is well worth a look.) He notes that the rate of increase of median wages of workers has certainly slowed since the 1970s. But that isn't because workers aren't being fairly compensated for their productivity contributions. Rather, he points out, the labor market entered a period of prolonged correction after powerful unions artificially bid up wages for several decades in the post-World War II era. There were other factors too, but realistic calculations show that today's wages, earnings and income—individual and household—are stuck at 2000 levels, he says. "That sounds bad, except that in 2000, the American middle class was richer than it had ever been, and essentially the richest middle class in global history," he maintains.

That is not a bad place to be given how much this country has endured since 2000. The 9/11 attacks, for starters, triggered $7.6 trillion in war and homeland security spending, about $2 trillion on the Iraq and Afghanistan wars alone. The country was still reeling when it went into a financial meltdown that induced the housing crash and the Great Recession, wiping out about $16.5 trillion of household net worth from its peak in 2007. And this does not even count the trillions of dollars in wasteful government spending on unproductive projects to stimulate the economy.

Nor have President Obama's grand social designs been cheap for America's middle class. Obamacare's cost to middle-class families without employer coverage or subsidies is over $10,000 annually in forced premiums, taxes, and other costs. That by itself is enough to offset at least part of the $18,000 annually that the Economic Policy Institute says inequality is costing middle-class households. (Read Winship for why that's a grossly exaggerated figure, by the way.) And then there is the cost of the unparalleled expansion of the regulatory state under this president. The Heritage Foundation estimates that President Obama's new regulations cost the economy $108 billion annually. Total regulatory costs, which are borne disproportionately by the middle class through lost jobs and higher prices, now exceed a whopping $2 trillion annually—more than is collected in income taxes each year.

There isn't an economy in the world—now or ever—that could have endured such massive blows without a major hit to its people. But the worst that has happened in America is stagnant wages. Remarkably, our quality of life has continued to improve.

One big reason is that globalization has given America foreign-born tech workers without whom the Information Revolution is unimaginable. They run almost half of Silicon Valley's startups, transforming the way Americans live, play, work, and conduct business. Some years back, Reason.tv interviewed random people on the street and asked them if they'd give up the internet for a million dollars. It was hardly a scientific poll, but there were no takers. And with good reason.

The internet has not only put free music, social media, and entertainment at everyone's finger tips, but free e-platforms that have radically lowered the costs of doing all kinds of business. Over two million independent merchants sell their wares on Amazon without any major marketing expenditure of their own. Over 6 percent of retail in America is conducted via e-commerce and is projected to touch 20 percent by the end of the decade. AirBnB, the homesharing service, and Uber, the car service, have allowed people to turn their personal effects into money-generating assets, boosting middle-class incomes. The vast majority of AirBnB hosts in Chicago have household incomes of less than $100,000. And the typical Uber driver is married with kids, with a bachelors degree and a car that he uses to supplement a full- or part-time job with a gig that rakes in, on average, $400 a week from 15 hours of driving. Over the last two years, Uber drivers in Chicago have earned more than $250 million.

These IT-powered opportunities certainly cushioned the blow of the exogenous economic shocks to the American middle class. But what's also helped maintain—indeed, vastly improve—Americans' standard of living is the other key ingredient of globalization: free trade. That has radically slashed the cost of production both in terms of dollars and time, putting even luxury items within the grasp of ordinary people.

St. Lawrence University economist Steve Horwitz examined the consumption patterns of Americans post-9/11 in 2014 and found that for virtually every good—washing machines, computers, cell phones, and so on—the consumption gap between the rich and poor diminished between 2003 and 2005. It is possible that the economic downturn since then reversed some of these gains, but hardly all. This is not surprising because the number of work hours required to purchase the bundle of goods that the poor consume has been steadily going down. Consider color TV: In 1973, when median wages were still rising at a healthy clip, it would have required 127.8 hours of work to purchase a TV. In 2013, it took a mere 20 hours.

To be sure, none of this means that everyone in America has it easy in a globalized economy. Much of the white working class in Appalachian America is trapped in poverty and despair. But retreating into a narrow nationalism, as many smart-set conservatives and liberals worried about the middle class are increasingly recommending, would be a big mistake for the very people they want to help.

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  1. OT out of the gate: Libertarian moments abound:

    The Seattle City Council approved an ordinance Monday banning discrimination by landlords against renters with alternative sources of income, such as Social Security benefits, veteran’s benefits, unemployment insurance, child-support payments and other assistance programs.

    The ordinance also will require landlords to review applications one at a time, then pick the first renter who meets their screening criteria.

    And it will prohibit landlords from offering special discounts to renters who work for particular companies.

    Prediction: rent control.

    1. My new screening criterion for landlords in Seattle: Renter must hold unencumbered title to a car, model year 2012 or newer.

      Not foolproof (I wouldn’t qualify, as all five of my cars are 1975-2007), but at least it ups the chances of renting to someone able to pay the monthly rent. I’m sure it would run afoul of some ordinance or another.

      1. Or…. 6 month security deposit

        1. Security deposits are racist. No, seriously.

          1. Yet assuming that only white people are capable of saving money isn’t somehow.

      2. model year 2012 or newer

        Yeah, go eff yourself.

        *goes out and waxes 96 Suburban with no payments*

      3. Why don’t you just go by credit score?

          1. So is car ownership.

          2. 808. They marked me down because I don’t have a mortgage. Assholes.

            1. Yeah, mine is pretty high despite that and no car.

          3. Not if you pay your bills on time.

        1. Expecting people to pay you what they owe is racist.

    2. My criteria: respect for the property rights of others. I screen for that, first, then look at the financials. I don’t think they can stop me, as discrimination is my natural right which makes the “law” null and void.

    3. I’m making $96 an hour working from home. I was shocked when my neighbour told me she was averaging $120 but I see how it works now. I feel so much freedom now that I’m my own boss.
      Just working on the internet for a few hours.
      This is what I do.——————- http://bit.do/GvGO0

    4. Rent control works so well, too!

  2. The 9/11 attacks, for starters, triggered $7.6 trillion in war and homeland security spending

    Much of it on JOBS!

    1. Shikha doesn’t even bother to understand her own damn links. The $7.6TT includes all defense spending. Now I know that all good libertines think we don’t need any fighter jetz, but thinking ppl realize that a good chunk of that spending would have happened regardless.

      1. About half IIRC was “baseline spending”.

    2. The kind of statements such as the wasteful spending argument or so specious. Government spending regardless of what it is will always stimulate the economy in the short term. The question is always whether spending here would be better spending it there. The author is asserting that “wasteful spending” hurts the economy, being that interest rates are historically low, inflation is almost nonexistent, how does one conclude that spending can be hurtful if it hasn’t affected such things? Macroeconomics 101 should be a requisite, government spending goes directly into GDP. Even if the government spent 100 billion on creating a colossal macaroni sculpture of Brittany Spears, it not as if the money goes down a hole, into goes into the economy, people are hired, goods are made and bought etc. Granted this wouldn’t be a good use of the money, but the moneys use would not be harmful to the middle class as the author asserts. I will agree that globalization and immigration get maligned quite unreasonably. Wages are stagnant, true, but look at the price of things, energy is super low, electronics, clothes, etc. healthcare and higher education granted are rising in price, but everything else isn’t. The same people who tout the absence of 3% growth numbers, fail to put in perspective the anemic inflation we have which has essentially completely countered if not overcome the wage stagnation, the last 4 annual CPI numbers 1.7, 1.5, .7, .5.

      1. Its all relative if your wages only increased by 1.5% but inflation is .7, You increased your buying power by .8%, all this spotlight of the glorious growth rates in the 80’s doesn’t compare apples to apples, inflation then was typically in the 4% range, interest rates were in the teens. So all these things counteract growth and buying power. Right now buying power is high, borrowing is dirt cheap. You have to look at everything in context, much of the anxiety occurring now, has to do with non competitive parts of the work force. While immigration and trade are blamed, automation is overlooked, which has probably had a larger impact on those none educated workers than the first two. Remember toll booth operators and subway token people, Now we have EZ pass and metro cards.

      2. Government spending regardless of what it is will always stimulate the economy in the short term. The question is always whether spending here would be better spending it there. ??

        Macroeconomics 101 should be a requisite, government spending goes directly into GDP.??

        Someone is missing the point that ALL ‘government spending’ is tax dollars removed from the free-markets and moved to government-chosen targets AFTER skimming off all of the money needed to support and administer those transfers!

        Henry Hazlett’s “Economics In One Lesson” might shed some light on those misunderstandings if only by pointing out that every ‘input to the system’ MUST be measured by its effect on The Target beneficiaries AND Everyone Else, both in the Short Term AND the Long Term.

        jrad’s comment acknowledges the short term effects, but not the long term or the ‘everybody else’ parts at all.

        That’s my economics 101 opinion, and hey, I’m just an engineer trained to examine a lot of things before drawing conclusions or making recommendations or decisions.
        Critical Thinking is Dead.

  3. Dalmia to the impacted: “I know this hurts but you shouldn’t complain or try and stop the hurting. You’re a big girl, you can take it. Just ssshhhh, *unzips* sssshhhhhhh.”

    1. I suppose the folks in Finance or Actuarial that are watching their positions be shipped to India or Eastern Europe should be rejoicing…

      What Dalmia (as usual) misses is that while overall having the world open to trade, movement and such is a net plus, there are plenty of people who get the hard end of the efficiency decisions. They make up the pissed off Trump/Sanders backers.

      I saw a lot more “Bernie 2016”, “Trump – Make America Great” and “Hillary for Prison 2016” signs than anything else as I traveled across Illinois, Indiana, Ohio and Western Pennsylvania…

      1. And not all of the globalization is necessarily being conducted in a free manner,

        1. Doesn’t really matter.

          Trade takes place between individuals, not countries. If the deal doesn’t provide value to both parties, you won’t make it.

      2. You don’t get to laud the free market for raising three billion people out of abject poverty in places like India while decrying that some poor sod in Wisconsin lost his job when his firm downsized. It’s not a zero-sum game and dislocations are inevitable.

        1. To further my point, I’m not suggesting taking the “piss off, loser” attitude John is convinced cuckservatives are guilty of holding. It’s more so Hazlitt’s dictum that we can certainly sympathize (empathize? Can I get a ruling here?) with “victims” of outsourcing and corporate inversions, but penalizing consumers with retributive tariffs isn’t going to bring those jobs back. Cutting corporate taxes and eliminating rafts of regulations will do much more to making the country and the world a generally wealthier place for everyone, rich and poor.

          1. (Hazlitt’s point was wrt machinery dislocating skilled craftsmen, but I like to think of trade as David Friedman’s miraculous machine that convers grain to cars.)

        2. Absolutely – creative destruction will happen. But to hand wave those folks, like you are batting away a rather pungent fart, is what has given rise to the BernieTrump.

          1. So, “lie back and think of the market” is probably the wrong response?

          2. It’s not at all clear what they want to do about it besides instituting disastrous trade policies, and in that respect they should be waved away. There’s a massive sense of discontent and betrayal in both parties, and yet our president enjoys the public imprimatur going into his home stretch. He’s effectively raised taxes on every working American, either explicitly or hidden as increasing premiums. As Dalmia notes, his administration has been responsible for hundreds of billions more regulatory costs borne on the backs of productive Americans, even while he’s welcoming economic refugees and attempted to naturalize tens of millions of illegals. No president has been so damaging for Trump’s and Bernie’s supporters except for Hoover, Roosevelt, and Johnson. Yet there’s no impetus for reform or cutting taxes because it’s just vengeful spite. They are a pungent fart.

      3. Comparative advantage is all well and good. But people aren’t economic robots. They have families, friends, lands and homes that they want to make better. When India or China subsidizes the bejesus out of widgets, the imported widgets wipe out the widget manufacturing plant in Dogdick Iowa, those people are supposed to then retrain, or move to where there are other jobs et cetera. Yet time and time again, we see those people taking huge losses in income not necessarily because they cling bitterly to families and their homes, but because artificially cheapened widgets flood the market and anti-competitively force those people to make that choice in the first place.

        If they opt for the huge loss, there’s no shortage of Shikha types scorning them for then daring to complain about being forced to make the decision in the first place, because the stupid peasants are supposed to act more like economic robots for maximum efficiency before they’re deemed to have a legitimate grievance.

        1. But such facts and their modern counterparts have led some writers to the opposite extreme of looking only at the immediate effects on certain groups. Joe Smith is thrown out of a job by the introduction of some new machine. “Keep your eye on Joe Smith,” these writers insist. “Never lose track of Joe Smith.” But what they then proceed to do is to keep their eyes only on Joe Smith, and to forget Tom Jones, who has just got a new job in making the new machine, and Ted Brown, who has just got a job operating one, and Daisy Miller, who can now buy a coat for half what it used to cost her. And because they think only of Joe Smith, they end by advocating reactionary and nonsensical policies.

          If China wants to waste gobs of money manufacturing widgets because they think they can make it up in volume, let’s not take it as license to beggar ourselves to emulate them. It didn’t work for Rockefeller, it’s not going to work for the Chinese. Or us.

          1. I never said we should emulate them. I said you should open yourself up to free trade only with those who will do the same. By the time China has decided to stop wasting gobs of money on their widget industry, their foreign competition has already been decimated and they get to enjoy the privileged position of being the market’s established producer rather unjustly.

            1. So, if the Chinese government is taxing its citizens to subsidize industry so that American companies can get cheaper manufacturing, how exactly is that not a transfer of wealth from China to America?

              I don’t think things work the way you imagine they do.

              1. Meanwhile, back in the real world Chinese labor is already beginning to price firms out of the country, and to outsource to other countries.

                I guess that plan to “unjustly” “enjoy the privileged position of being the market’s established producer” by subsidizing the American consumer isn’t working out too well.

                What a surprise.

                http://www.altitudeinc.com/pro…..-in-china/

                Derp.

                1. No one said subsidization actually benefits the Chinese in the long term. The benefits are for the subsdized producer who sells more goods and more short term for the American consumer who buys the subsidized goods. The detriments are for those producers who aren’t subsidized and the Chinese tax payers that are forced to pay for the subsidized goods to American consumers.

                  It’s fair to argue that the detriments of a subsidized firm selling goods outweigh the positives for the vast majority of people on both sides of the pond. It’s not free trade.

        2. If China is subsidizing their widget factories and if that subsidization is doing demonstrable harm to American industries, then a temporary tariff may be an appropriate response to drive down demand on Chinese widgets. But it will not put more money in the American consumer’s pocket overnight, and may not do so ever; it is quite possible that people will simply go with fewer widgets rather than pay more for them.

          1. That may be. Industries, businesses and individual workers should rise an fall on their own merits. It’s worth noting that entire industries being hollowed out because of tax subsidized competition isn’t an industry falling on it’s own merits. And it’s not a problem that simply goes away once the Chinese stop subsidizing the widgets. By the time their subsidy is stopped, manufacturing towns have been abandoned, human capital has fled and the production capital has been stripped down, boxed up and shipped elsewhere. It’s just not always possible to simply jumpstart an industry in the face of a fully established competitor, much less one established because of it’s government’s largess.

            1. But the preservation of capital is not generally achieved by funneling more money into the government. The idea behind the tariff-as-protection is to drive consumer dollars into domestic producers’ hands but the tariff is also a tax and the tariff-as-tax is money out of consumer hands and into government hands.

              1. But the preservation of capital is not generally achieved by funneling more money into the government.

                I’m not saying it is. I’m an eternal enemy of the state and of statism. But make no mistake, capital is not preserved by politically fabricated trade agreements. Signing up small time producers to compete with state capitalist enterprises, be they foreign or right next door, does not result in creative destruction, just plain ole destruction.

          2. As I point out above, such subsidies are actually a transfer from Chinese taxpayers to American consumers. A tariff which ends the American consumer’s receipt of such subsidy can only take money out of his pocket.

        3. Free Society|8.9.16 @ 1:01PM|#
          “Comparative advantage is all well and good. But people aren’t economic robots.”

          So I should be forced to pay more, since some bozo doesn’t think he should learn a new trade?
          Buzz off.

          1. So I should be forced to pay more, since some bozo doesn’t think he should learn a new trade?
            Buzz off.

            So some bozo should be forced to retrain because some political wizards in a far away city want to engage in one-sided “free trade” with countries that don’t reciprocate? Buzz off.

          2. Retrain? Here’s a couple of scenarios.1.) An auto worker in Detroit, in the 1970’s? He’s 40 yrs. old. Got a wife and kids. Can pay his bills. The wife doesn’t have to work but she does. They can take a family vacation somewhere. Auto company leaves. No retraining has been offered or what has been offered doesn’t apply to anything near where they live. End result? No job except what the wife earns. Bills aren’t paid and they lose their home. Vacation spots suffer from lack of tourists and those people lose their jobs.
            2.) Big clothing manufacturers leave the country. Fabric mills close. Those same companies relocate to Bangladesh where they pay pennies in wages. Those same companies turn around and try to sell their product to the same people who used to work for them- at the same price as if they’re still paying high wages. Those people who have lost the well paying jobs, now have to work 2 or 3 jobs just to pay for the same items. If the economy is now more service based instead of manufacturing based, where are decent wages to be found?
            3,) Let’s say that retraining is offered and made use of. What is the likelihood of a retrained 40 yr. old getting hired over a recent college grad in the IT sector? What happens if the person is not a good candidate for IT training? Oh, too bad?

            1. What is the alternative?

              In what scenario does the auto factory in Detroit stay open and profitable at the same employment levels indefinitely? Especially with the new emissions regulations and rising gas prices that arrived in the 1970s?

              It is true that “retraining” is not a viable solution for everyone. Which is why the so-called “underground” economy should not be treated so harshly. The U.S., especially state and local governments, shuts down businesses left and right for violating bullshit rules. Well, where are the new jobs going to come from if you keep killing them off?

              1. In what scenario does the auto factory in Detroit stay open and profitable at the same employment levels indefinitely? Especially with the new emissions regulations and rising gas prices that arrived in the 1970s?

                The repeal of the Wagner Act and hundreds of pages of New Deal legislation at the very least. High gas prices were not unique to the US. Most of the rest of the world had been paying more for a lot longer, and most still paid more during the 1970’s than the US did. What the Asian and European automobile manufacturers had was a superior code of law regarding labor and manufacturing.

      4. Rejoicing? Of course not, but neither should they be pissed off or looking for a political solution to an economic problem. Neither should the beneficiaries be taking their good fortune for granted by assuming nothing will ever change. Both the Americans & foreigners are responsible for their own fortune. Expecting someone else to take care of them, e.g., give them a job, is irresponsible. Everyone is told from childhood their govt. is their savior and all they have to do is obey whatever it commands and trust their lives to it. If they buy that lie, they have no one to blame but themselves for their stupidity.
        Of course, many do buy it, and they try to force it on all. Their faith in force is misplaced and anti-life.

      5. China’s economy is migrating from manufacturing to knowledge-based, just as it migrated from agricultural to manufacturing in the past. They’re noticing that a growing fraction of their economy is now Service-based, following in the footprints of the United States, which has moved through those same transitions in the past century or two.

        The progression is logical and most likely, inevitable. As I’ve pointed out for several years, manufacturing migrated from the developers of it to the countries with lower labor costs. From America to China and from China, if you’ve been watching, to Japan, Malaysia, India, Bangladesh, Afghanistan and more! Look at the labels on most of your clothing for proof.

        I’ve described this path to lower and lower wage countries as a ‘domino effect’ with the Last Domino to be Sub-Saharan Africa, and only because penguins on the Antarctic continent have no manufacturing skills.

        The concept of ‘bringing manufacturing back to America’ is a fool’s errand. To do anything but put effort into making the migration easier for the citizens is, imnsho, foolish.

        But hey, foolish people loved Bernie’s “Economics” and Hillary’s and Donald’s … Promises.
        Stick around. The circus is still in town and we have no idea which act will appear in the center ring next.

    2. They can always comfort themselves with the knowledge that it isn’t their fault. Whoever was responsible for their wellbeing really dropped the ball. Nothing to be done about it I guess.

      1. “…comfort themselves…”?? You mean lie to themselves? They are responsible for their wellbeing, whether they accept that reality or not. But I suspect “H.A.” (Galt’s mentor) knows that.

  4. Wasn’t Piketty a big immigration booster?

    1. What is globalization if not free(er) immigration?

      1. A lot of people associate the term “globalization” with free flow of goods, money and services/outsourcing. Many seem to treat immigration as a special/separate/side issue.

        1. I’m not sure why. I can’t imagine the free flow of goods across borders and broad outsourcing that doesn’t accompany people moving about with those goods, money and trade. I mean, I guess we could just slide everything under the door.

          Random Robby Soave disclaimer: It’s true, slavery was pretty bad.

          1. I work for a big-arsed multinational, I completely get it. But if you talk to a lot of the regular joes and janes pushing a grocery cart or filling up the minivan…they would likely separate the two.

            “Sure, ship the cars, iPods and big screen TVs over…who said anything about coming here and staying?!”

            1. Oh, and random Robby disclaimer: Blowing up the Bamyan Buddhas was NOT OK!

              (I sure hope you have started something, Paul).

          2. the two get separated just like legal and illegal immigration do.

          3. Once a tractor can vote I would agree that they’re equivalent.

          4. Or put it in shipping containers.

      2. Possibly. But he’s a critique trying to reform/rein it in. I don’t think using him was a good choice here.

        “If there are any ills that Globalization is suffering from today, they can only be cured by more Globalization.”

  5. “But now the American Middle Class anti-globalization mantle has been picked up by smart-set conservatives who blame it for decimating the American middleclass through wage and job competition by cheap foreign labor and goods.”

    I’ve never heard Trump referred to as the “smart-set” before. I bet he appreciates that.

    I remain unpersuaded that Republican conservatives can be rightly characterized as anti-free trade.

    Again, Trump’s winning plurality in the primaries (most voted for someone else) was due to the influx of registered Democrats in open primary states and the influx of the white, blue collar, middle class into Trump’s camp–the latter of which is traditionally a core constituency for the Democratic Party.

    http://tinyurl.com/gwc4n6g

    The idea that conservatives, the Republican establishment, the Tea Party, or the grass roots supporters of any of those constituencies should be properly characterized as anti-free trade is absurd.

    It would be one thing if any of them were falling all over themselves to line up behind Trump’s leadership on this issue, but everywhere I look, it’s all anti-Trump all the time.

    1. I would like to believe this Ken, but average Repubs and Tea Partiers have been against free trade agreements for a fair while now. Look at this poll from 2010: http://www.pewresearch.org/201…..-on-trade/

      As a highlight, only 5% of Repubs said free trade agreements create jobs in the U.S. while 58% said they lead to job losses. Only 17% said free trade agreements lead to economic growth while 48% said they lead to economic stagnation.

      Now, those questions were about free trade agreements, and not free trade, so I would like to see polls asking specifically about free trade and broken down by party affiliation to further clarify this. As one example of this (which comes from the same poll), only 42% of Repubs said increased trade with China would be good for the U.S. while 52% said it would be bad for the U.S., which does not suggest party-wide friendliness to free trade. And remember, this is from 2010.

      1. Eric,

        From a Gallup poll from this year, support for “free trade,” and not just FTAs, was at 58% while 34% viewed it as a threat. By party affiliation, 63% of Independents and Democrats viewed free trade positively while 50% of Republicans had a favorable view of free trade.

        1. Maybe it’s this one– http://www.gallup.com/poll/181…..trade.aspx

          51% of Republicans viewed foreign trade mainly as an opportunity, which is better than the numbers from the other poll from 2010. Still, 61% of Democrats and Independents viewed foreign trade mainly as an opportunity as you mentioned. So it seems Republicans in general are split on the issue (at only 51% support) and are less friendly than Democrats or Independents. That’s still very disappointing, but much less so than the results from the 2010 poll.

        2. I also maintain that progressives, social justice warriors, feminists, environmentalists, and others are chasing the white, blue collar, middle class out of the Democratic Party–just like the Democrats doing the same sort of thing during the Carter Administration created the “Reagan Democrat” phenomenon.

          In other words, many of the people who self-identify as Republican today are people who would have been pro-union, blue collar types eight years ago. The people who start switching their party self-identification (if not their party registration) from Democrat to Republican probably aren’t the guys in unions like the Teamsters or the UAW.

          They’re probably more like the people who wish they were in the Teamsters or the UAW.

          Picture Kenny’s dad on South Park. “They took our jobs” is what those people say about immigrants when they’re feeling Republican, but “They took our jobs” is what those people use to say about free trade when they’re feeling more Democrat. Trump is galvanizing their support in rust belt swing states by saying “They took our jobs” on both issues–but those guys are not the Republican establishment. They’re traditionally the Democrats’ core constituency.

        3. Those traditional Democrats who are now self-identifying as Republicans are why Democrat politicians from middle America wish their progressive mates in the Democratic Party from deep blue states would STFU about guns, Muslims, immigration, and environmentalism. Those traditional Democrats in the grass roots being ignored demonized by progressive elitists also does a lot to explain why the Republicans control an historically high number of both houses in the state legislatures.

          Those people used to self-identify as Democrats!

      2. I think it’s important to rank people’s opinions on the importance of free trade as a problem vs. other problems, as well.

        I suspect a lot of libertarians believe that marijuana use among high school kids is a problem. However, libertarians might rank that problem somewhere below problems associated with prosecution of the drug war.

        If a lot of Republicans think free trade is a problem, I bet they still rank somewhere nearer the bottom of their list of problems–while progressives rank it somewhere closer to the top maybe just behind things like racism, homophobia.

        Regardless, holding up Trump as somehow being indicative of where the GOP leadership or the traditional GOP constituencies stand on free trade is highly problematic–when all those constituencies seem to oppose him on pretty much everything but maybe immigration and terrorism. . . . and even then, they’re afraid he’s a loose cannon on those issues, as well.

  6. decimated the middle class

    Probably not much worse than that, I’ll allow it.

    1. *Exponentially* decimated!

      1. So 1/10 + 1/100 + 1/1000…?

        Still good.

        1. “The Great Regression/Recursion”

        2. That is 1/9, correct?

  7. Prediction: rent control.

    If you’re lucky. More likely, the People’s Housing Cadres will assume responsibility for assignment of shelter by decree.

    1. Your attitude is noticed.

  8. Is this another “pssh, borders are just lines on a map” offering?

  9. To be sure, none of this means that everyone in America has it easy in a globalized economy. Much of the white working class in Appalachian America is trapped in poverty and despair.

    Odd that you’d reserve for your last paragraph the demographic that much of the commentary focuses on.

    And, in particular, the white part of that formulation only owes to the historical fact that whites were historically richer than other demographics in the U.S. The group we’re talking about might best be defined as the petite bourgeoisie and the haute proletariat, the elements of the working class just shy of the middle class. While much of the process has been some of the current generation actually moving up into the middle class (through education, for example) I see little evidence in the article that globalization has been a net benefit for them, per se. These guys aren’t going to be driving for Uber or hosting AirBnB. And the new opportunities afforded by Silicon Valley entrepreneurs really don’t do a lot to translate to lucrative opportunities for them.

    Don’t get me wrong. I agree that globalization is a good thing. And perhaps the gains enjoyed by a lot of these people were undue and unsustainable. But, pretending there aren’t losers from globalization is silly.

    1. Change is inevitable. Most people don’t like it though.

    2. The Greater Good, it’s all that matters.

    3. Concentrated losers. Dispersed winners. Recipe for rent-seeking

      1. Isn’t the “recipe for rent-seeking” the opposite? TPTB, the

  10. There is an problem concerning specific markets like steel. China has far over-invested in capacity and will support their steel producers for far longer than a free market would. How should the US respond? By ignoring these issues, Dalmia et al are glossing over the complexities involved. I like free trade too, but China makes US cronyism look insignificant by comparison.

    1. Buying cheap steel subsidized by Chinese chumps?

      1. Hope it turns out better than that drywall from 2004…

        *runs away*

        1. If you can’t trust sneaky chinks, who can you trust?

          1. +1 poisoned dog food

      2. Almost. Chinese buying of US debt allows them to artificially prop up unprofitable Chinese industry leading to low product prices that US manufacturing can not meet even with the cost of shipping and supply chain. The Chinese government does this specifically to build the internal infrastructure and supply chain that is necessary to be a ‘superpower’ and capable of conducted a global war. Pretty much exactly what the US did from 1940 through 1990.
        This has the additional political benefit for the Chinese to drive US manufacturing into the ground. The Chinese are playing the long game. Our political leaders are playing the game that gets them the most personal wealth.

        this is not free trade. this is not globalization. anybody who acts like it is has their head in the sand and is ignorantly focusing on the theory and not what is actually happening.

        1. Explain how trading IOU’s for real tangible goods hurts the US consumer.

          1. Ask him for a cite if you want to watch a BS explosion.

            1. Do you ever have anything constructive to say, or do you prefer just to whine?

          2. I didn’t mention the US consumer. I was responding in agreement with the above post of how China does not at all practice free trade.

            Buying US debt gives China more leverage in currency manipulation allowing them to prop up industries as the state desires.

            US consumer may see lower prices, but I wouldn’t necessary assume that is in the long term interests of the US economy as a whole.

            I’m all for free trade. The point is that China isn’t at all practicing free trade and it skews the picture something fierce

        2. Presumably free trade means reviving Smoot?Hawley or siccing the WTO on China?

          Odd conception of free trade you’ve got there.

          1. No….the point is that Free Trade isn’t what we’re practicing now. China’s state manipulation of their industries and export/import completely morphs any Free Trade benefits.

            The article argues the theory of free trade….which isn’t in question….but then concludes that it is all to the benefit of the US middle class because globalization has advanced.
            The logical disconnect is not addressing the basic question “do we really have free trade???”. And if not, is what we have really to our benefit?

            1. I agree that free trade in its purest form is fantastic. But until we have a government that doesn’t manipulate trade for its own interests (not the consumers), we’re screwed. Before the manufacturing base left, the middle class was able to function well and brought upwards other sectors Nothing replaced that huge huge economic engine. Now we are more of a service, IT and retail based economy; two of which pay lousy wages and benefits.More people have to work 2 jobs just to pay bills…not the least of which is healrh care (robber barons of the 21st century.)
              Why shouldn’t I be able to buy directly from a coffee grower in Guatemala, or Ethiopia? If there was truly free trade, I wouldn’t have to worry about tariffs or embargoes. But it’s always “national interests” aka whose pocket gets lined.

    2. And their subsidies are unsustainable. When they collapse (see oil), someone else will pick up the ball, either by providing steel at market prices OR through creating a better mousetrap (innovation).

  11. Free trade is vital for prosperity, and I don’t mean just here in ‘merica. Competition is also vital. It spurs innovation, efficiency, low cost, etc.

    Why do I keep getting the feeling from those trumpeting globalization that competition is a bad thing? Americans are supposed to step back and aside and let someone else win for a while, right? America is the big meanie that punches down by winning?

    Apparently I am not the only one. Trump says ‘America first’ and Americans line up behind him while the globalization/ faux free trade people lose their shit.

    1. The point Shika generally makes is that globalization is great when it means letting everyone come to America. Is this article different from that?

      1. White people aren’t allowed to have in-group preferences. They’re not allowed to have a say as to who can come and vote in their electorate and leech off their taxes.

        1. I have seen a lot of calls for whites to move to the back lately.

          1. Who the fuck are these “white people”, anyway? I have yet to meet any.

      2. Globalization is what will naturally happen when the technology exists to allow instantaneous communication and quick and easy travel and movement of goods to anywhere in the world. Opposing globalization is like opposing free markets. You might be able to restrain it for a while, but ultimately it’s like trying to hold back the tide.

    1. Unexpectedly.

  12. Good stuff as always. The fact that The Donald had to pivot from Nationalism to conventional Republicanism is just another sign of his weakening support and ultimate downfall.

  13. Incredibly narrow assessment. Sad.

    How can one possibly use wages and luxury goods as the defining marker of “middle class”, while ignoring assets? Home ownership is at a multi-decade low, savings are at a multi-decade low, % of the viable workforce is at a multi-decade low. If the middle class is doing so well, why are these other indicators so off?

    It simply isn’t clear what is driving the changes in the middle class….is it globalization, the information revolution, changing societal desires and stereotypes. I don’t think anyone has really done a thorough analysis of all the conflating factors. Not even sure we have the data to make it possible.
    Pikety was a hack for his half-assed conclusions. Dalmia is apparently less than half. Quarter-assed? Is that a thing?

  14. Ooh – I love Utilitarian arguments, Shikha.

    1. There’s a certain utility for Shikha that American and western societies in general, be absolutely overrun with third worlders from her neck of the woods. Becuz jerbs.

      1. I have long suspected that Shikha has an intense racial hatred for the Chinese. Why else would she applaud the ongoing transition of the most highly polluting industries to China where they can be vastly more profitable in the absence of strict environmental regulations all the while irrevocably poisoning the Chinese poor.
        Yeh…globalization. It allows US greenies to feel like they are accomplishing something!

  15. We’ll never get the beholden-to-unions, anti-free trade, progressives to embrace free-trade. Free trade undermines their top-down vision of a world centrally planned by experts who understand the science of environmentalism and aren’t racist, homophobic, Christian, or absorbed with the selfishness of old white men.

    However, for swinging millennials, one way to get them to treat those progressives like strangers who want you to get in their car with offers of candy? Maybe we should point out that trade is the alternative to war.

    China, for instance, has an authoritarian and bellicose government with a list of historical grievances, new found wealth, a desire for expansion, and the means to throw their weight around. However, if China ever went to war with the United States, its economy would implode–largely because of trade. Trade makes us interdependent and forces compromise rather than war.

    Look at China before it joined the WTO. Before, when people talked about a “Maoist insurgency” somewhere, they weren’t just talking about the group’s philosophy. They were talking about the group’s funding. Back then, China was a force for destabilization and war in the world. That all changed once their economy became dependent on trade with the west. Now, everywhere China goes, they pressure those countries to embrace compromise and stability. Getting resources out of the third world is already a pain in the ass without your stupid government provoking an insurgency!

    1. Trade makes us interdependent and forces compromise rather than war.

      My father was a proto-libertarian and he used to say this when I was a wee bairn bouncing on his knee in the early 70s. It’s amazing how few people understand this.

      1. Why should China wait for the goose to lay golden eggs, when it can carve the goose up today?!?

        1. That sounds yummy.

    2. With the caveat that you’re working with relatively rational political leaders, right?

      German-Soviet trade was fairly substantial and increasing in 1941.

      1. Too bad trade wasn’t better between Germany and France and Germany and the British.

        That trade deal the Nazis struck with the Russians in 1940 was largely a function of the Allies blockade of Germany in the wake of the Molotov?Ribbentrop Pact.

        http://tinyurl.com/hn5kxjv

        There was a new strategic trade agreement between Germany and Russia, but it was precipitated by a total breakdown in trade with the rest of the world. It wasn’t just the allies blockading Germany either; the allies stopped trading with the Soviet Union, too.

        Also, I’m not saying that you’ll never find an exception to trade preventing war, but if there are exceptions, they’re exceptions to a general rule. Certainly, the more you trade with a foreign nation, the less likely you are to go to war with that nation.

        1. Agree with your final para. I was just wanting to clarify your earlier point.

          1. Just to clarify my own point, I was also trying to say that trade through markets makes people behave smarter than they are.

            When an idiot makes a transaction because it’s a good deal or passes by something that’s too expensive, the effects of his decision on other market participants (not to mention signals to people outside the market) are far more ingenious than he’s capable of being on his own.

            To whatever extent foolish leaders choose differently than they would otherwise for fear that the markets will punish them, they are behaving as if they are much smarter than they really are, too.

          2. Just to clarify my own point, I was also trying to say that trade through markets makes people behave smarter than they are.

            When an idiot makes a transaction because it’s a good deal or passes by something that’s too expensive, the effects of his decision on other market participants (not to mention signals to people outside the market) are far more ingenious than he’s capable of being on his own.

            To whatever extent foolish leaders choose differently than they would otherwise for fear that the markets will punish them, they are behaving as if they are much smarter than they really are, too.

            1. Two examples spring to mind.

              One of them was Obama’s foolish choices in the wake of the Gulf oil spill. Obama’s approval ratings were bleeding out like the oil from that spill in relation to the soaring price of oil. Suddenly Obama decided to make the right decision–the markets made him smarter than he would have been.

              The second example is the Greek government. The Greeks kept electing new politicians who promised not to cut spending, but the markets still refused to finance their old budgets at an affordable interest rate. So the Greeks went to the Germans for financing, but the markets punished German and other EU debt issuers for their foolish behavior in financing Greek spending, too.

              In the end, the markets made Greek leaders smarter than they would have been otherwise. The market screamed in their faces, “No, Fuck you, cut spending”.

              Free trade and markets make people smarter than they would be otherwise–politicians, too. Certainly, when Venezuela gets out of its present mess, it won’t be because they ignore the wisdom of the markets. It will only be because their government starts listening to what the markets are telling them. If those leaders won’t listen, the markets will force leadership changes.

    3. I’ve tried that route (trade vs war), then had the prog explain that there are simply too many people in the world and that they (not her) are destroying the planet through overpopulation. She was hoping for a good, clean war to tidy things up and restore a healthy balance.
      They still make the neutron bomb? Not for her neighborhood, of course. But for *them*

      1. There are a couple of problems with that.

        The secondary problem is factual.

        The solution to overpopulation is prosperity. Cross-culturally, there is an indirect relationship between the birth rate and 1) the infant mortality rate and 2) economic opportunities for women outside the home. Meanwhile both of those factors are positively correlated with economic prosperity and trade.

        I don’t care if you’re talking about devout Catholics in Italy and Argentina, the lower the mortality rate is and the more opportunities there are for women to contribute economically, the lower the birth rate drops. Look at demographics in graying places like Italy, and you’ll see the birth rate drop from the highest per capita in the developed world to below replacement level. Meanwhile, in places like North Africa, where infant mortality is higher and economic opportunities for women are lower, the birth rate remains stubbornly high.

        The fact is that the developed world is at below replacement in its birth rate. If we’re growing at all, it is only because of immigration.

        The primary problem is moral.

        Anybody who is against free trade because it discourages the massive slaughter of civilians in wars shouldn’t be trusted alone with small children or defenseless animals. I feel sorry for that person’s friends and family.

  16. Contrast that with the West’s security relationship with Iran. If only we had a free trade agreement with Iran like China, Iran wouldn’t be a force for destabilization in the world (see Lebanon, Syria, Yemen, and elsewhere). Suddenly, their prosperity would depend on trade, which thrives on peace and stability. Free trade is the greatest force for peace and stability the world has ever seen.

    If millennials don’t want the U.S. to go to war with Iran, China, their proxies, or anyone else, get on the free trade bandwagon. Nothing aligns belligerent nations’ interests like trade. That applies to bellicose nations like the Soviet Union, Cuba, and North Korea, and it applies to bellicose nations like the United States. Show me a nation we do a lot of trade with, and I’ll show you a nation that’s in little danger from our warmongers.

    1. . Show me a nation we do a lot of trade with, and I’ll show you a nation that’s in little danger from our warmongers.

      You mean like china. Because I see a lot of saber rattling going on with china.

      It is lik you have to be an insulated well off retard to be

      1. The fact that China and the US continue to compromise rather than go to war (through proxies or otherwise)–despite the saber rattling–is kinda the point.

        If we made the point about trade relations between nations that don’t feature any conflict or saber rattling, that wouldn’t be a very good example.

        And if the United States does ever go to war with China despite our trade relationship, it will be despite our trade relationship rather than because of it, right?

    2. Um, no. Islamic true believers don’t care if their support for terror makes economic sense or not. They’re religious fanatics. Look at Chavismo in Venezuela: they’re starving and still won’t give it up, and it’s not even a religion.

      1. There isn’t anything about Islam that makes believers invulnerable to the effects of prosperity. Did you notice the way sanctions drove them to the negotiating table? Just because Obama sold them the farm in exchange for broken promises and some magic beans doesn’t change the fact that they’re as subject to economic considerations as anyone else.

        If anyone should have been invulnerable to the effects of free trade, it was the communists in China. Not only were they as rigid in their ideology as any Iranian Mullah, their rigid ideology specifically prohibited free trade.

        Economic forces are like the forces of physics in that way–they affect you even if you’re unaware of them–or don’t believe in them.

        1. Of course everyone is subject to economics. My point is that people make trade-offs, and so there is no guarantee that trade with Iran would make them back off terrorism. We traded with Iran up to 1979, and then what happened? North Korea is suffering, but have they changed course? ISIS is sanctioned up the wazoo, but they haven’t backed off. Economics is important, but it’s not everything.

          1. “Of course everyone is subject to economics. My point is that people make trade-offs, and so there is no guarantee that trade with Iran would make them back off terrorism.”

            Their interests would shift dramatically.

            Their interests would no longer lie in destabilizing their neighbors–but in ensuring their stability.

            The Iranians have an army in Hezbollah that’s very existence destabilizes their neighbors from Lebanon to Syria and elsewhere. They’ve been a destabilizing force in Iraq. If their economic interests were centered on trade, they’d be all about trying to find ways to make their neighbors more stable rather than less so as a way to impose their influence. This has had major implications throughout the region.

            We originally deployed troops and bases to Saudi Arabia for fear of Iranian promoted instability. We originally backed Saddam Hussein in his war against Iran for fear of revolutionary Iran’s purposeful projection of its instability. If their interests were in trade and the stability that requires, the question wouldn’t be if Iran pursued efforts to help stabilize their neighbors but when.

  17. OT: but relevant.

    Europe’s Wave of Migration Brought Too Many Men

    There are two scenarios that can unfold from this fact. The first is that destination countries simply end up with an imbalance between the number of men and women in their populations. That would be a problem; even slightly out-of-whack gender demographics can have substantial social impacts. The refugees — already predisposed to experience isolation, disconnection and disaffection from their host society — will thus also bear the desperation of men who have little hope of forming a long-term relationship with a woman and starting a family. This is a recipe for disaster.
    I am, as I have frequently noted in this column, a big fan of immigration. But cultures, particularly homogenous cultures, do need some time to absorb and assimilate the migrant flows. Last year’s refugee wave strained both the political and social systems of many countries. Increasing it by half again, or a third again, in short order, might bring those systems to the breaking point.

    1. McArdle is just discovering what the critics were saying from the jump, but were declared racists and xenophobes.

      1. Over all, refugee men outnumber refugee women nearly two to one.

        Gosh, I wonder why? She doesn’t seem too interested digging any deeper. I could give it a kick-start by looking up the difference between “refugee” and “economic migrant”.

        1. *she* could give it a kick-start – ugh need coffee

      2. Not to mention that fact that so many of them are basically illiterate.

  18. What middle class? Does Reason have any fucking clue what is going on in the world? I don’t know a single person under 25 that is middle class. None fucking zero. All the men (assuming that lable applies to millennial person with testes) are unemployed. 1/2 the wormen are. And they word in fucked up 9.00/hour jobs.

    Contrast with baby boomer parents who had kids, houses, cars and boats by the time they wree 25.

    Look, I get it. You libertarians are pretty smart. And as such are probably successful. But if you think thinks are getting better, if you think just because you are doing well everyone else is, you out of you fucking minds.

    And nationalism isn’t going to die pretty soon. As long as fucks like you people insist on import anti-civilizational forces Read: Muslims, nationalism is only going to rise.

    1. … Muslims have basically fuck-all to do with the state of the economy. Whatever else might be said, that is about the most irrelevant issue to economics that you could possibly come up with.

      My parents were baby boomers (well, one is more early Gen X). My dad was unemployed for a year in 1993 and I remember going to the grocery store and having to leave with nothing because my mom’s check bounced. Our family car was towed fortnightly because it wouldn’t start. My parents didn’t live the upper middle-class lifestyle you’re talking about until their late 30s/early 40s. They had to endure some measure of hardship and accept some support from their parents in their 20s and early 30s.

      Yes, the unemployment rate is dismal. The economic situation is stagnant. This is the late 1970s all over again, except that nobody wants to own up to that reality.

      But I have also known lots of people my age who are unemployed by choice. They refuse to keep a job even when the conditions get a little shitty, they refuse to suffer some stricture to get into a trade or get a useful college degree, they refuse to hold off on buying the latest model of cell phone. Sometimes, it’s just plain stupidity, too. Wealth is built slowly over time, not accumulated in fistfuls of dollars all at once.

    2. And what does “nationalism” say about the causes of all this? What does it say about the social-welfare state that has caused the American economy to stagnate? We are bearing the burden of the “nationalism” of generations ago. Kick out the immigrants, impose trade sanctions, and then what? Hope that the regulations and unfunded mandates start paying for themselves, somehow?

      Maybe your variety of “nationalism” includes some economic reality, but most people’s doesn’t. The variety of “nationalism” being peddled is that it’s the government’s job to take care of the people, as long as those people are of the nation. But how does the government find the money to do all this “taking care of” without a healthy market economy? This is the reality of every nationalist state:

      1. Compromise on the nationalism
      2. Compromise on the social welfare state
      3. Collapse

    3. I can’t say I’m terribly surprised that an individual with your intellectual and academic bonafides has only the unemployed for friends. I can’t say I’m eager to join your circle, either.

  19. Pretty sure we are already languishing. I blame government overspending, taxes, and regulation. As long as those things continue, we’ll languish – with globalism or protectionism or something in between.

    1. also government over control of land Bill Clinton made one of the worlds largest clean burning coal sources out of circulation by making it a national park Obama has been trying to do something similar all sources of water even the piss on the tree under Federal control. the state of California puts limits on the number of salmon born in order to make them an endangered species where if the fisherman could run it the fisheries we would litteraly be swimming in salmon. Actions by our own government that oppress economic growth within and requires us to import form countries who support themselves by the monies our government gives them. they couldn’t do a better job of destroying our economy if they actually tried

  20. One point that seems to get lost in the back and forth about creative destruction, is that creative destruction only works if the resources, human and capital, that are freed by the destruction of the old inefficient business, can then go into creating a new business.

    If globalization leads manufacturing, accounting and other jobs to relocate, the advantage gained is efficiency. Products cost less, and the local capital, both human and material is free to seek a higher value application. The problem is that in our climate of hyper regulation any entrepreneur faces high barriers to entry into a new field.

    To the extent that the discontented are saying “They took our jerbs” they are foolish, but some are saying:

    Ok, you keep telling me about free trade, but then when I try to engage in that free trade, you tell me I need a license, the approval of my competitors, and permission from bureaucrats who want to make sure my business is run according to their rulebook, which I might add, has no relationship to the actual exercise of my business.

    TL:DR Free trade cannot mean only freedom crony capitalist conglomerates, coupled with massive regulation and barriers to entrepreneurship for the rest of us.

    1. Yep, and here’s a good question for the free trade crowd…why are we not shipping cheap rice to Japan by the ton?

      1. There’s something to be said for the fact that Presidents seem to make “deals” with foreign countries not for the best interests of the country any more, but instead for the sake of getting plaudits from their supporters.

      2. Because Japan bans the import of non-processed rice, and American rice exports are heavily geared towards non-processed rice. We ship unprocessed rice to protect the rice processing industries in Latin America. The question I have, is what do Japanese and Latin American import restrictions have to do with free trade?

        1. It sounds like there’s a U.S. export restriction in the mix, too.

          Man, there’s so much free trade, we don’t even know what to do with all that freedom!

          1. We are at easily the lowest tariff levels in history. It isn’t close. Even if you were to rescind every single ‘free trade agreement’ of the last 45 years, tariff barriers since about 1970 or so are 75% or so lower than they ever were anywhere in history. The last two GATT rounds (up to the late 1980’s or so) eliminated most of the non-tariff barriers to actual arms-length-transaction trade.

            All of the WTO and multilateral stuff during the WTO era has been primarily about intra-company ACCOUNTING transactions – not actual trade. And the purpose of that latter has primarily been about protecting capital investments of multinationals (which also protects their financiers) and about erecting a supranational regulatory system that can be captured by multinationals in order that it can be captured to tilt the ‘stuff’ playing field away from small ‘still-national’ competitors. Basically, it is the creation of an ideology that bigger and status quo is better – where the phrase ‘free trade’ has been used to cloak it in older economic terms.

      3. Why is that a good question for the free trade crowd? It’s not free-traders who put restrictions on free trade.

  21. Amazing how far the Reason-type libertarian thinking has diverged from Hayek. With Hayek, there is a basic trust that people actually DO have unique knowledge about their own circumstances. Which is why there is a value in letting people make their own decisions – and an understanding of what societal conditions actually can help.

    With Reason, people are basically gullible and malinformed about their own circumstances. Same mindset as socialism and technocracy/elitism. In their view, ‘freedom’ is viewed rather like spinach. Its good for you – and we don’t give a fuck what you think cuz you’re wrong/stupid – so we’re gonna impose what we want on you cuz FYTW – and you’re gonna be grateful in the end cuz FREEDOM. Most perverse religion-masquerading-as-economics that I’ve ever seen.

    1. Well, there’s the tricky thing about freedom. Yes, people should be making their own decisions. But when they are empowered to make decisions that inhibit others’ freedom to make their own decisions (like whom to trade with or who you may employ or house), then you don’t have freedom anymore.

      1. Likewise, when their life/job/etc is put at-risk by actions of govt/cronies pursuing their own self-interested agendas and imposing them on others. Freedom as a producer and freedom as a consumer occur within the same human – and can be contradictory.

    2. I’m sorry, on what planet does a bunch of Trump supporters telling me how I can and cannot trade constitute me “making my own decisions”?

      You’ve just conflated the collective with the individual. Libertarian card revoked.

      1. Yeesh. Stop drinking the koolaid. Ask yourself – why are all current trade negotiations MULTILATERAL? Trade is bilateral – not multilateral. The only thing that requires multilateral agreements is protection of internal transfers within multinationals. And what is being protected there is capital – not trade. Hell – in a fiat currency with modern financial engineering, capital itself isn’t even an economic concept anymore (no scarcity – just digits and debt).

        But hey – I’m sure that stuff is all about ‘free trade’. Just like the Patriot Act is all about patriotism

  22. Ugh, such hyperbole. The author’s thesis is, basically, that the “middle class,” as she curiously doesn’t even define the term, should just accept its socioeconomic carnival ride because, “um, uh, Here is one counterexample that says you shouldn’t have been doing so well in the first place.”

    Reason.com indeed

    1. Not that Shikha does a very good job of making her case, nor that all economic instability is inherent to economics, but there is no economic system that can promise and deliver stability forever.

  23. Stagnant or falling wages, most low-wage and many professional jobs outsourced or in-sourced…Rationalize all you like. Twist and quote all you like. It’s not better.

  24. This article contains some of the most retared logic I’ve ever seen.

  25. Edit, “retarded”

    1. That’s OK. Your comment has some of the most vapid, insipid verbiage I’ve ever seen.

      That is to say, I’m not quite sure it rises to the level of “retarded”.

  26. I’m starting to feel like this site is a Trojan Horse for establishment propaganda that gets slipped in with a daily serving of libertarian gruel.

    1. Let’s be clear about one thing: the establishment learned to love globalization from libertarians.

      There is no “libertarian” counter-argument to globalization, nor is one possible.

      1. That is to say, libertarianism necessarily implies globalization. Full stop.

  27. So I should be happy to be stuck with 2000 level compensation while the 1%ers are up 50%. Are all economists fools? Rhetorical question.

  28. Prosperity is properly measured by the employment rate and average wages, not by how cheap imported commodities are.
    Moreover, many necessities– housing, healthcare, education, etc.– can not be imported.
    It should be obvious that trade deficits are not sustainable, no matter how cheap imports are now.
    Trump is spot on about our needing trade deals that eliminate deficit trading.

  29. TS;DR

    (Too shitty; didn’t read)

  30. Ahh yes, the idealistic Libertarian who ignores reality. Reality is while fair/free trade sounds good it ends up being unfair trade. It’s always going to be that way because someone has to negotiate the trade. If it was actually governments going hands off and allowing free trade that might work, but that’s never going to happen. My area has been screwed since NAFTA. Each additional unfair trade agreement seems to turn the screw a little more. Maybe if your idea of a middle class is shuffling papers to see how much your foreign slave labor is producing it works out, but the reality here is if you’re working class you’re being squeezed out. As it is “Globalization” has been code for someone buying favors from government, that is NOT libertarianism.

  31. “Globalization’s two key elements are trade and immigration.”

    Unfortunately, as us usually the case, theory and reality are two different animals. As practiced by the globalists in government and industry this means the outflow of manufacturing jobs and the influx of uneducated third world migrants flooding the low end job market and, for those with university degrees, their competition is not each other but a mass of low paid H-1B visa holders who keep salaries down.

    The rich get richer, the rest get debt.

  32. “Decimate” is an interesting word. It means to murder one out of 10. I’ll never forget hearing (in Sunday school) that the Romans would line up their prisoners (or soldiers, I’ve also heard), have them count off, and kill every 10th one.
    That’s what I hear, every time someone misuses the word to describe mere “destruction.” You can’t decimate a town, only its population, and even then, presumably 90% survive.
    I blame that reporter in the Gulf War for ruining the word. It’s a nice, precise, mathematical word (decimal, decade, decimate), and should not be thrown around carelessly.

  33. More than 50% of all immigrants on one or more Welfare programs. More than 70% are legal immigrants. A high percentage (nearly half or more than half depending on age) are on one or more major welfare programs for many years or even decades. Guess what? That is NOT a plus.

    Apparently some people think the folks coming to America are brings suitcases full of gold to share with US Citizens. Got news for them, NOPE.

  34. More than 50% of all immigrants on one or more Welfare programs. More than 70% are legal immigrants. A high percentage (nearly half or more than half depending on age) are on one or more major welfare programs for many years or even decades. Guess what? That is NOT a plus.

    Apparently some people think the folks coming to America are brings suitcases full of gold to share with US Citizens. Got news for them, NOPE.

  35. Oh, and $19T+ in “National Debt”, maybe as much as $100T in unfunded liabilities, and about 3/4’s of the budget paying for “entitlements” versus running the gubment. Hmmmmmmm…….. NOPE

  36. I’ll tell you what has decimated the middle class: The Big Lie, i.e. the belief that federal taxes fund federal spending.

    The Big Lie has been responsible for:
    1. Cuts to Social Security
    2. Taxing of Social Security
    3. The need to install the Rube Goldbergesque “Obamacare.”
    4. Cuts to social benefits
    5. FICA, the most regressive (and wholly unnecessary) tax in America
    6. Income taxes
    7. Corporate taxes
    8. The rusting of American infrastructure
    9. Global warming
    10. The Tea Party

    The false belief that the Monetarily Sovereign U.S. government somehow can run short of its own sovereign currency, has prevented the government from spending to support the middle class — That is what has decimated the middle class.

  37. UNCONSTITUTIONAL Trade KILLED the USA…………

    TTIP “Trade” Regime Would Let EU Meddle in U.S. Policy

    Its ugly how the politicians and their media accomplices continue their path to erode US sovereignty with NO ONE holding them accountable..
    Virtually all of the press so far has focused on the implications for Europe. However, the scheming will have major effects on the U.S. regulatory regime as well. Among other changes, the relevant section of the agreement would force the EU to consult the U.S. government before adopting “legislative” or regulatory proposals. It would also commit U.S. authorities to consulting with Brussels before moving forward on legislation or regulatory schemes across a wide array of subject areas. The U.S. Congress and elected European bodies would then be further sidelined as the two executive branches increasingly rule Americans and Europeans by lobbyist-influenced decree.
    http://www.thenewamerican.com/…..u-s-policy

  38. Oh, the big bad bogeyman called “globalization.” What these people don’t tell their supporters is how globalization benefited them.

  39. Ella . you think Victoria `s storry is astonishing… on saturday I bought themselves a Car after bringing in $7899 this – 5 weeks past and-more than, 10-k last munth . it’s by-far the best-job I have ever had . I began this 8-months ago and almost straight away started to earn minimum $77
    ?????????? http://www.factoryofincome.com

  40. Start working at home with Google! It’s by-far the best job I’ve had. Last Wednesday I got a brand new BMW since getting a check for $6474 this – 4 weeks past. I began this 8-months ago and immediately was bringing home at least $77 per hour. I work through this link, go to tech tab for work detail.
    +_+_+_+_+_+_+_+_+ http://www.factoryofincome.com

  41. This article is staggering in its obfuscation. And the author’s self-interest (an Indian immigrant) is all over it. The “IT revolution” would not have happened without H1-B indentured servants? B.S. for MILES.

    Since 2008, the Dow Jones has skyrocketed, the economy has grown at an anemic 2%, with job growth on the same plane. While millions of American citizens remained unemployed or underemployed, the government has CONTINUED to flood the country with immigrants.

    Why? Their response is that anyone who questions it is a RACIST! Their real reason is that they want cheap labor.

    Corporate donors buying access to cheap foreign labor is 1000% of what both parties’ trade and immigration policies have been driven by for at least two decades now.

    Period. And anyone who denies it is a corporate shill.

    As for libertarianism? Great within the borders of the US. When you take it outside and start unilaterally disarming in trade, and advocating for open borders, it is suicidal insanity.

  42. Shikha Dalmia is an absolute idiot. She is soooo wrong in her analysis here.
    The returns of NAFTA are in and they are HORRIBLE. Thousands of good paying manufacturing jobs, GONE, first to Mexico, then to China.

    1. Shikha says, “One big reason is that globalization has given America foreign-born tech workers without whom the Information Revolution is unimaginable.” Seriously?? So basically she ignores the thousands of AMERICAN BORN IT workers, saying that without the “foreign-born tech workers, we wouldn’t have the Internet or something. Gimmie a break. We didn’t need them before and we sure as HELL don’t need them now, with thousands of IT workers looking for IT jobs.
    2. She also makes the argument that wages were “artificially too high due to Unions.” Too high?? In her own article she points out that wages have been stagnant since 2000. Actually, they have actually GONE DOWN since 1989, while College costs, homes, healthcare, and everything else has skyrocketed.

    The majority of all Americans clearly see what these horrible free trade policies like NAFTA, GATT, have done to our country. 60,000 manufacturing companies have left and gone to foreign, third-world countries with super low wages

    Who cares that you can buy a shirt for $5 if you don’t have a job?

    Free trade with countries that have similar wages as the USA is OK and a good thing. Free trade with countries that have slave wages, lax regulations, like Mexico and China, is a BAD thing.

  43. I am not sure you can say the middle class is thriving just because of the internet? 20 Trillion dollar debt will bring this country to its knees. If you sample the people that make between 70,000 to 150,000 and compare it to the 70’s 50,000 to 120.000 I am fairly confident you will find less people working in that group. Not to mention taxes for the middle class is way worse today than it was in the 70’s and 80’s. That means disposable income for this group is also less.

  44. This article is nothing but spin and obfuscation. Somebody is funding this writer to push this garbage to get you to accept less. Let’s review some American History 101. Unfettered immigration led to the Gilded Age in America in the late 1800’s and the rise of the robber barons. In response, immigration was curtailed (to nearly zero) in the early 1920’s and didn’t resume until the mid 1960’s. Right around that point in the mid 1960’s, workers were in the most commanding position they had ever been in and their power has been deteriorating every decade since that time. And this isn’t by chance or luck, as the multinational globalist corporations continue to lobby for more open borders to raise their bottom line. They also fund, by the way, efforts to take away more of our liberties as Americans. A blind man can see this as clear as day. Don’t buy in to this garbage, it lacks common sense and the simplest of reason.

  45. This article is sociologically ignorant. Which middle class did globalization save? There are two middle classes in the U.S. One is the Knowledge Class like Mr. Dalmia who work in think tanks and the other is the Working Class. Dalmia’s article suffers from confirmation and class bias. Sure globalization saved jobs for people like himself.

    In 2000, according to the U.S. Bureau of Labor Statistics, about 17.1 million Americans worked in manufacturing jobs, and the U.S. trade deficit with China stood at about $83 billion. By July 2011 just 11.7 million Americans worked in manufacturing jobs?a 31.6% drop in only a decade?and the deficit stood at more than $273 in constant dollars.

  46. The underlying problem with the middle class is not regulation. Sure it has a negative effect but what is driving everything, I am in favor of globalization, however, it is what is causing the issue. The problem is that, we are rich, we are stable, and to live here costs money, etc. Labor is marginalized here. Even if you lifted many regulations which are over intrusive, even lifting necessary health, safety and working regulations, it will be nearly impossible to compete for labor globally because wages and cost of living is too high. You wouldn’t put a factory in manhattan. Competing with a place that can pay pennies on the dollar is impossible. Regulation or deregulation won’t change this. The problem I see is that 30 years ago, anyone with a brain could see this happening, and instead of making real changes on a national scale, the status quo was maintained and the can was kicked down the road. I differ from many posters on here, in that I do not bemoan every government action. For sure it can do much harm, but sometimes true shifts and direction changes can only occur with effort from the government. It doesn’t have to be regulation, it can be tax incentives and subsidies that encourage certain actions. 30 years ago a dramatic change in the education system should have occurred.

  47. Computers and technology were obviously the future, but bickering and short term self interest prevented real action. Think about it, computers and technology, aren’t even part of the core curriculum. So now we have a largely outdated non competitive workforce. Instead of using or wealth and infrastructure to create a globally competitive workforce, we sat on our hands and let everyone catch up. I think about on the IT stuff that could be done here, but because of large amounts of labor shortages or high wages because of the supply of this labor(whichever way you looked at it) it gets outsourced. You can pay someone here $70 an hour, you can offshore it for $35, but IMO this could be done here for $25-30, which is a good living wage. If there was enough foresight and conviction to dramatically change the workforce. It didn’t happen so now we are stuck, slowly turning into a banana republic because the labor for isn’t competitive and therefore can’t keep up.

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