Thomas Frank: What's the Matter with Kansas?

Politics and religion
21

Euri- That’s nonsense. Where does the money go? Walmart doesn’t burn it.

Jason-

  1. Well, I’ll take you at your word rather than checking, but if you get to argue against Cato, I’m going to argue against Nader.

  2. We are already industrialized. Why would we take any lessons from how we industrialized? You’re looking at this in a way that screams having decided beforehand. The reasonable way to look at it is to see how countries with free trade performed, not how all countries did it across hundreds of years of history and whether any succeeded without free trade. Or, for example, recent economic performance by free trade countries.

As for the Detroit example, you aren’t arguing against trade, you’re arguing for a safety net. This is the 2nd time you’ve made that leap that if you allow free trade some clause in the Constitution gets activated that removes any trace of the welfare state. Nothing about importing cheap Japanese cars makes instituting universal health care difficult.

Trade restrictions deny people access to cheap Japanese cars. How is that a good thing for the working class? “Shit, I’m poor, but thanks to the McCullough Tariffs at least I can’t buy a well made, fuel efficient car for under $15,000.”

People who whine about the evils of big business can’t turn around and beg the government to give Big Business a fat check for being unable to compete with foriegn products.

22

Euri- That’s nonsense. Where does the money go? Walmart doesn’t burn it.

Wal-Mart certainly doesn’t reinvest it locally.

  1. Nader is powerless, Cato isn’t. And I think you’re underestimating how little restrictions the right wants on trade (and immigration) - Bartley’s WSJ opinion page called repeatedly for an open-borders amendment to the constitution back in the 1980s. That Bush has been an usually bribable politician by specific US industries has confused things a bit for the moment, but just for the moment.
  1. We are already industrialized. Why would we take any lessons from how we industrialized? You’re looking at this in a way that screams having decided beforehand. The reasonable way to look at it is to see how countries with free trade performed, not how all countries did it across hundreds of years of history and whether any succeeded without free trade. Or, for example, recent economic performance by free trade countries.

The point is that econ 101-level analysis of trade is simplistic and wildly at odds with the evidence, and anyone trying to sell you that as a model to explain how the world works is full of it and should not be trusted. The evidence does not show that the way to get rich is little restrictions; it shows the opposite. It doesn’t show the way to get rich is to let Detroit die; it shows the opposite.

Here on earth, the trade debate is not “well should we have trade or not have trade”; it’s “can we stop the GOP from forcing open every form of exploitative trade that benefits the rich, regardless of how badly it screws everyone else, oh, and they won’t accept any harm mitigation either.” Note that if you consider labor like any other tradable good, the net effect of immigration has been to wildly increase the supply of low-wage labor, which has the effect of making low-wage US laborers poorer and the US rich richer.

Trade restrictions deny people access to cheap Japanese cars. How is that a good thing for the working class?

Again, blackboard economic theory, not evidence-based. Can you tell me the working class has done ok since the 1970s? The real-dollar working class hourly wages of men has dropped by 25%. There’s a disturbing one-to-one inverse relationship between worker standard of living in the United States and how much “trade loosening” there’s been.

There’s a larger framework here than “less restrictions means cheaper cars for everyone here”; there’s feedback effects on wealth concentration, union power, you name it.

23

IMHO, the real problem with capitalism is that the metrics used to measure it’s success are skewed and incomplete.

Just one example is the way that businesses can be “succesful” based almost entirely on how effeciently it can either defer or externalize costs. There are dozens of ways to do this. Some underhanded, unethical or downright illegal, but many many others that are perfectly legal, acceptable, and encouraged business practices.

Capitalism essentially only works by capitalism’s rules. Communism lost by capitalism’s rules, yes, but socialism is not communism, any more than, say, a plutocratic republic is a representative democracy.

Capitalism, at least the flavour we practice today, is as unsustainable and ultimately destructive as, for example, presently accepted policies in energy, agriculture, health care, etc. Virtually nothing about the present way we live is sustainable. There is very little in the present political/economic world that will still hold in 100 years. Basically more or less the length of time that modern capitalism has been around. It’s simply impossible.

That said, I always find it ironic how capitalists claim to defend “freedom” and “the free market”, when the Corporation itself is such a fundamentally anti-democratric, even counter-democratic, construct.

24

This is so simplistic.

In Wal-Mart’s relentless and ruthless pursuit for the absolute lowest retail price, they’ve become completely reliant on cheap foreign labour, to the point that now 80% of their products are manufactured in Asia, mainly China.

How is THAT a good thing for the domestic working class???

See, $15K may seem cheap to an American worker. May seem like a good price for a car, a bit less than a year’s income, right? Well, $15K is the year’s income of TENS OF THOUSANDS of Chinese workers.

You have got to understand this.

25

It makes consumables more afforable for them. Especially if they are the poor working class.

26

It makes consumables more afforable for them. Especially if they are the poor working class.[/quote]

Why are they poor? Oh yeah, some multinational shipped their semi-skilled job overseas and left them with no choice but a low wage McJob.

Do you seriously fail to see the connection?

27

That’s only “ironic” if you buy into the propaganda line that democracy equals freedom, which is untrue. The two concepts are largely unrelated. Being allowed to vote says nothing about the freedom one enjoys in any other area of one’s life. Even prisoners are allowed to vote.

On the other hand, unrestrained democracy equals mob rule which leaves very little freedom to the victims of the mob. “Human rights”, including various kinds of freedom, are guaranteed by a constitution which is exempt from democratic decisionmaking.

28

That’s only “ironic” if you buy into the propaganda line that democracy equals freedom, which is untrue. The two concepts are largely unrelated. Being allowed to vote says nothing about the freedom one enjoys in any other area of one’s life. Even prisoners are allowed to vote.

On the other hand, unrestrained democracy equals mob rule which leaves very little freedom to the victims of the mob. “Human rights”, including various kinds of freedom, are guaranteed by a constitution which is exempt from democratic decisionmaking.[/quote]

Very, very well said. The current triumphalism of the religious right and their desire to remake the Constitution in their own image are a perfect example of how democracy and freedom have little correlation with one another.

29

That’s only “ironic” if you buy into the propaganda line that democracy equals freedom, which is untrue. The two concepts are largely unrelated. Being allowed to vote says nothing about the freedom one enjoys in any other area of one’s life.[/quote]

I wasn’t “buying in”. I’m trying to reveal hypocrisy by measuring things against their own metrics. You know, the way Communism failed by capitalist measurements.

Capitalists can defend the “freedom to do business” afforded by deomcracies in one breath, and then turn around and condemn the “socialist/communist” tendencies of the same government(s) when they try to apply (and occasionally even succeed in applying) a few checks and balances to keep businesses from consuming and assimilating everything in their path. Granted that is what businesses are supposed to do, but that is also what a cancer is supposed to do, and that’s only really good for the cancer.

China, for example, is increasingly finding capitalism absolutely compatible with their communist policies. Capitalism doesn’t need democracy to thrive. What it loves best is a weakened immune system (like a corrupt government, be it democratic or dictatorial).

Huh? Unless I missed something, only prisoners in a handful of states are allowed to vote. Did you mean “Even some prisoners are allowed to vote”? As in, some animals are more equals than others?

Perhaps by design, but not in reality. You’ve heard of the ammendment? In any case, I get your point. The constituion may be exempt from direct democratic decision making. But it is not written in stone. It can be changed by politicians.

And “human rights” is practically an invention of “the mob”.

30

I know they can vote in my country and it seems they can vote in Christoph’s country, so in my perspective, it looks like democracy is on the march.

31

Jason- So basically, you want to ignore an entire field of study based on personal anecdote?

Here, construct me a theory of how trade restrictions to prevent cheap Japanese cars from killing Detroit still allows for cheap Japanese cars on the market. I’ll wait.

Oh, and on the Nader dodge? Next time a libertarian candidate costs a Republican an election, you can tell me how Cato has power but Nader doesn’t.

Whatever measure of wealth you want to use, America is richer than it was before. Since we’ve previously established that one only needs one data point to make authoritative statements regarding variables, free trade is absolutely a positive force.

You don’t like the way the gains are distributed, that’s cool. There are ways to deal with that. To deny yourself the gains…?

Bren- Yeah, Communism only failed by capitalist metrics. Capitalism has a screwed up scoring, I’m sure under a communist metric murdering kulaks has significant point value.

And corporations are “counter-democratic”(What a sweet word), and capitalism is totally on the verge of collapse. You’ve clearly read and thought a lot about this issue, kid.

32

Jason- So basically, you want to ignore an entire field of study based on personal anecdote?

It’s a “personal anecdote” for me to to point out that according to factual history, neoliberal trade policy is neither necessary nor sufficient for getting or staying rich? That anyone who tells you it is, and that “well, we just have to ship all of our jobs overseas to stay competitive” is full of it based on the evidence?

Here, construct me a theory of how trade restrictions to prevent cheap Japanese cars from killing Detroit still allows for cheap Japanese cars on the market. I’ll wait.

You’re missing the point: that trade without policies to compensate the people who get screwed, what we’ve been doing for the last 30 years, is the worst of all possible scenarios for the working class - actually worse than protectionism. If the US decides to let the domestic auto market go, ok, there’s plenty of policies to mitigate the damage and have the winners compensate the losers. If the US decides to keep the domestic auto market, ok, there’s policies to do that. Either is fine, based on political economy & cost/benefit analysis and policies to fairly spread the cost and benefits both.

The policy practiced by Reagan, however, was neither of those. It actuality we did not compensate the losers at all; the domestic auto market was dealt a near-fatal blow, and the benefits went to a) the rich and b) people not in manufacturing, mostly rich. Total nationwide output went up, but auto & manufacturing workers in general were flat-out worse off than before. Reagan might as well have passed a lot mandating that auto workers hand over money to everyone else.

33

Condescension. How refreshing.

Capitalism and the corporation is like a campfire we started not too long ago the stoke the economy of our infant industrial society. But that campfire has grown into a raging inferno, consuming everything. We’ve been hypnotized by it for some time, thinking “Look how warm and bright it is!”

You, son, are clearly dogmatic to the point of failing to see the forest fire for the tree.

I have read and thought a great deal about the issue, and my reading has admittedly been fairly mainstream. Reality is becoming harder and harder to ignore. Free falling should not be mistaken for flying, though both feel very fast. That’s the ground rushing towards us.

The fact that capitalism’s performance metrics are innacurate is increasingly self-evident to all except freshly-minted MBAs trained to perform to the status quo. There will have to be significant discussion – at the very least – in the decades to come, and likely a significant overhaul of the GDP formula. These things are being discussed in public forums more and more, and you can be damned sure they’re being discussed very seriously behind closed doors at the WTO and on Wall Street.

Have you even heard of “true cost economics”?

I’m not saying the whole system has to be torn down, especially if we have nothing demonstrably better to replace it. I’m no communist. I don’t even think I’m even a socialist. But I do recognize, like many others smarter than I, that it is time we have to face facts, and admit, to some degree, it’s time to pull this runaway gravy train into station.

34

Well, I don’t accept the connection because someone on the internet spits out a one liner. That America has, overall, moved from a manufacturing to a service-oriented economy is nothing new and has been going on for 20 years. Someone going from a “semi-skilled labor” job to a cashier job at the local Walmart has lost what precisely? I’d like hard numbers, by the way. Precisely how much has their wages gone down, and precisely how much hast their cost of living gone down since they can buy cheaper items?

35

Condescension. How refreshing.

Capitalism and the corporation is like a campfire we started not too long ago the stoke the economy of our infant industrial society. But that campfire has grown into a raging inferno, consuming everything. We’ve been hypnotized by it for some time, thinking “Look how warm and bright it is!”

You, son, are clearly dogmatic to the point of failing to see the forest fire for the tree.

I have read and thought a great deal about the issue, and my reading has admittedly been fairly mainstream. Reality is becoming harder and harder to ignore. Free falling should not be mistaken for flying, though both feel very fast. That’s the ground rushing towards us.

The fact that capitalism’s performance metrics are innacurate is increasingly self-evident to all except freshly-minted MBAs trained to perform to the status quo. There will have to be significant discussion – at the very least – in the decades to come, and likely a significant overhaul of the GDP formula. These things are being discussed in public forums more and more, and you can be damned sure they’re being discussed very seriously behind closed doors at the WTO and on Wall Street.

Have you even heard of “true cost economics”?

I’m not saying the whole system has to be torn down, especially if we have nothing demonstrably better to replace it. I’m no communist. I don’t even think I’m even a socialist. But I do recognize, like many others smarter than I, that it is time we have to face facts, and admit, to some degree, it’s time to pull this runaway gravy train into station.[/quote]

Full marks for style. But what are you really saying? I think I can distill your whole post down to “Capitalism == Bad” or possibly “Corporations == Bad” (not sure which). Care to flesh out the details and propose some remedies?

Myself, I’m quite the fan of American style corporations. They are quite predatory by nature, but so are hawks and there’s nothing wrong with hawks. Predatory isn’t a problem as long as it’s constrained to reasonable bounds, which is why we regulate things (EPA, FCC, FDA, SEC etc) to mitigate the bad parts of short-sighted self-interested behavior while keeping the good parts going strong.

36

I think there is some terminological problems here. The “US” ships jobs overseas? No, more accurately shareholders in US companies demand returns that require cheaper labor that require shipping jobs overseas. It’s a vicious cycle, but there isn’t some figurehead with a “US” stamp on his head shipping things overseas and fucking everybody. Even national tariffs which arguably come down to the smallest group of decision makers are still decided by 550+ “lawmakers” and trade agreements.

One benefit everyone got when Japanese cars came to the market: auto prices tanked, cost of living went down. Nice. I’m not saying it is all cherries and roses, but it wasn’t all doom and gloom either. And look now, 15 years later there are still a few areas that are hating life but overall the economy recovered, the affected workers found new jobs and trades, and things worked out.

37

Well, I don’t accept the connection because someone on the internet spits out a one liner. That America has, overall, moved from a manufacturing to a service-oriented economy is nothing new and has been going on for 20 years. Someone going from a “semi-skilled labor” job to a cashier job at the local Walmart has lost what precisely? I’d like hard numbers, by the way. Precisely how much has their wages gone down, and precisely how much hast their cost of living gone down since they can buy cheaper items?[/quote]

shifty, I’m not responsible for your education. I don’t have the time or talent. So do it yourself. Here’s a nudge.

http://www.aflcio.org/yourjobeconomy/jobs/outsourcing_problems.cfm

38

Egad, you’re killing me. I said basically the same thing in three different posts. And it was not that. If anything it was simply “Capitalism != Good” or “Corporations != Good”, if merely by definition. Both are like technology, or super powers. They can be used for good. They can be used for EVIL. They are not inherently one or the other.

And honestly, no I don’t really care to flesh out the details or propose remedies. Like teaching, that’s not my bag. That’s what guys like Greenspan are supposed to do. I don’t pretend to be an economist, and even understand the specifics of the problem or solutions. But it really doesn’t take a genius to see past the fallacies, and anyone who is honest can see the weaknesses. IMHO, we become so enamored of the carrot, we start pretending there isn’t a stick.

  • shakes head *

Yeah, the EPA, there’s an effective organization, huh? The US’s environmental policies sure have improved recently, haven’t they? The FDA, yeah, and the US has hit a agricultural trade deficit for the first time in, what, 50 years? And the SEC really acted to prevent Enron and a fabricated west coast energy crisis, Worldcom, S&L fraud, etc.

Gimme a break.

39

Someone going from a “semi-skilled labor” job to a cashier job at the local Walmart has lost what precisely? I’d like hard numbers, by the way. Precisely how much has their wages gone down, and precisely how much hast their cost of living gone down since they can buy cheaper items?

At the broadest aggregate possible, the real dollar hourly earnings of men with a highschool education but no college have dropped 25%. Womens have gone up, but not enough to make up the difference. Sorry, can’t find any links.

It’s a vicious cycle, but there isn’t some figurehead with a “US” stamp on his head shipping things overseas and fucking everybody.

I hear there’s a little thing called “government” that has control over trade policy…

And look now, 15 years later there are still a few areas that are hating life but overall the economy recovered, the affected workers found new jobs and trades, and things worked out.

As I pointed out earlier, the auto industry workers in question have got part of their losses back because of the 1990s boom in SUVs - fueled by import quotas on Japanese versions of those vehicles.

40

Are you sure you don’t mean zero sum economics?