Wednesday, February 4, 2009

About Protectionism (and Salary Deflation)

As the new $800 billion stimulus bill is being put together, a clause about "Buy American" contained within it is stirring fears of protectionism. The clause would require all projects funded through the bill to use American-made steel, etc.

Sounds very reasonable, but lots of (interested?) parties are against it claiming it would result in a wave of countermeasures against the US. In particular, they resurrect the old bugaboo of the Smoot-Hawley Tariff Act, often blamed for exacerbating the Great Depression.

This analysis is just another example of knee-jerk thinking from "inside the box". In addition to objecting to the above clause, this line of post hoc thought is also responsible for other misguided and inappropriate actions, such as massive bank bailouts, zero interest rates and quantitative Fed easing.

Why? Because what really happened was not globalization of trade but an abrupt and massive relocation of manufacturing capacity, mostly to China. The US alone has "exported" an incredible 4.5 million manufacturing jobs in just seven years, an unprecedented economic event of historic proportions. Other western nations have done the same.

Gone to China: 4.5 million manufacturing jobs

What did we exchange these jobs for? Loans of Chinese labourers' savings in the form of US Treasury and other bonds, i.e. debt. This insane policy of national emasculation will surely go down as one of the worst mistakes in the history of all empires.

OK, so why is "Buy American" a good idea? Because, first of all, it is most definitely NOT protectionism - just look at the above chart. And also because...

a) It will work towards slightly rebuilding manufacturing capacity and well-paid jobs.
b) It will encourage localization of production and distribution, sorely needed in a world of diminishing resources and environmental degradation.
c) It more fully recognizes real production costs, as stricter US environmental and social protection regulations must be adhered to, as opposed to the anything-goes regime in China.

...and...

President Obama (annual salary $400,000) has recommended that compensation for bailed-out executives be capped at $500,000 annually. Oh ho, ho! That's not even enough to pay for pool maintenance, never mind food and drink. But it is a most definite sign of deflation - even if it is highly populist and very popular with the hoi polloi.

Compare the measly 500K with compensation at Citi during 2007, to pick just one example. Click to enlarge for legibility.

From Citi Annual Report 2008

I am aware of the restricted stock provisions of Mr. Obama's proposal, but even so I bet a ca. 97% reduction in
lucre as loot is most definitely deflation.

42 comments:

Apres Bush, le deluge said...

Eviscerated. That's really the only word for that chart.

Re-industrializing is going to look a lot like the people getting off the ship at the end of Wall-E talking about growing pizza plants. Having no experience of agriculture or where food comes from, they are starting over from nothing. The people who understand how to run plants and actually design and build the lines on which things are made are either already gone, or getting ready to go out to pasture. There are no young pups coming up, cutting their teeth and gaining experience.

Something else that comes to mind when I read "Buy [insert rich nation state]" is a story I heard on some NPR show the other day about luxury goods brands from Europe moving large parts of production to China, but hiding it by doing the finish work in the old ateliers in order to skate by with a "Made in France/Italy" label. I hadn't been aware of such subterfuge and am surprised the unions let it slide. All this time I've been thinking it's perfectly reasonable to rationalize a $1200 Louis Vuitton bag because it's not made by slaves in China but by someone in France who's paid a living wage. In fact it could be mostly made in China and then just completed by non-slave labour. Apparently almost all Italian shoes are really made in China. So now you can't even trust labeling from the EU. Anyone trying to be a responsible consumer (oxymoron?) and procure things from "trusted supplier" countries where exploitation is not the norm really has no standards to go by. It's as bad as Tom Delay getting those sweatshops in Saipan the ability to label clothes "Made in USA" to fool people.

bb said...

http://ftalphaville.ft.com/blog/2009/02/04/52016/buy-american-datapoint-du-jour/

this is an interesting look from the other side

Jesse said...

Excellent and insightful.

Our ideological preoccupation, in support of narrow capitalist greed, has helped to dismantle the fabric of the nation.

We have been misled. We will rebuild.

Anonymous said...

Been a long time reader. Love the insight, but I have to disagree with this post.

The last couple points you made are variations on a theme with regards to anti-globalisation rhetoric. Kind of like the "100 mile" diet etc.

fajensen said...

The sole purpose of a nation-state in the first place is for the protection of it's own citizens!

Globalisation works directly against that purpose for the benefit of the few trans-nationalists that can readily provide for their own independent security; i.e. the mob, basically!

Joe said...

"We have been misled. We will rebuild."

Yes, but only from the ashes. Our wealth creation mechanism has been dismantled. There is no way we can pay off our huge debt.

The system is hopelessly insolvent. The difference between insolvency and bankruptcy is mark to market.

They are still trying to avoid this with "The Bad Bank". It will not work.

Some where, some failure is going to go cascade on us and topple the tower of babel debt monster. Nothing can stop it at this point.

Joe M.

specularbage said...

Hi Hellasious,
Long-time reader and big fan of the blog.
But here I am quite surprised by the point of view of your post, and the rational.

You write:
"Because, first of all, it is most definitely NOT protectionism - just look at the above chart"

Just because the US was not protectionist in the past 20 years (refer the chart), does not mean it will not become protectionist.
I do not follow your logic here.

And for the rest, did we not learn from the communist countries that restricting competition is not exactly the path to good products and improved civilization ?

The clause "which would ban the use of non-American steel in the $800 billion of construction projects" sounds like protectionism to me.

Refer: http://www.telegraph.co.uk/news/worldnews/northamerica/usa/barackobama/4414202/Barack-Obama-to-dilute-Buy-American-plan-after-Europe-threatens-US-with-trade-war.html

specularbage said...

I am all for "made in USA" products by the way. In fact I posted I foresee a strong comeback of "made in USA":

http://specularbage.blogspot.com/2009/01/made-in-usa-is-back.html


but what I hope is for good american products stamped "made in USA"... not subsidized american workers.

On top of it, what signal is this sending to the rest of the world ?

Jakob said...

Long time reader first time poster. I couldn't disagree with you more. Protectionism is the road to ruin. That's why even American corporations like GE and CAT have spoken out against the "Buy American" provisions.

damocles said...

Why do I get the feeling that a lot of Citibank executives are about to become "consultants" who are not subject to compensation caps?

J said...

Sweatshops offer no well paid jobs and say thanks that the Chinese are ready to do them for almost nothing. The automobile industry in Detroit offers well paid jobs, but three quarters of the money comes from subsidies. The product they make is almost unsellable. Adam Smith established 200 years ago that the division of labor is good for everybody. May be he was wrong.

Greenie said...

"President Obama (annual salary $400,000) has recommended that compensation for bailed-out executives be capped at $500,000 annually."

But the president gets free room, board and private jet.

Julien Couvreur said...

Trade and specialization are what allows you to not grow your own food and work on what you are best at.

Let people buy what they feel is a good deal and things will work out.

The US may have exported 4.5 million manufacturing jobs, but it didn't lose that many. In other words, the jobs moved to other sectors.

Nobody can really tell if the current job allocation in the US is correct. Most likely the allocation is not balanced right now (for example, real-estate and construction are too crowded), but trying to control trade is not the answer. Re-balancing is the solution and it will happen (the natural process won't be stopped by the government), even it is not a pleasant change.

Mike said...

Slightly off topic. I've been reading this and other financial blogs for a few years and I keep coming back to this basic question: Where did the proceeds of bad loans go? Aren't they still in circulation in our economy? Or not?

Say a home buyer borrows and uses the proceeds to pay the builder.

If the borrower defaults and the investor (who bought the MBS) loses, aren't the loan proceeds still circulating in the economy? Hasn't the defaulted loan simply effected a money transfer from investor to home builder?

So why should the default trigger a financial collapse? Aren't there other entities, like the builder, who benefitted from the loan? Why doesn't it all even out?

Thai said...

fajesen- nonsense. We in the west have been confiscating the wealth of these other countries for years. Globalization lets them get it back. Contrary to Norwegian claims otherwise, all the wales in the world's oceans are not Norwegian property.

Mike, we are collapsing because we built bigger homes than we really ever could have afforded. And we built more of these homes than we ever should have. Further we made more (and bigger) cars than we could really use, we consumed more health care than we ever should have, etc...

The money in the bubble may have been phony. And there may been a lot of left pocket right pocket going around, but the bubble did encourage ALL OF US to expend (waste?) very real energy resources we otherwise would not have expended.

Debra said...

I like this post, Hell.
As far as globalization/protectionism is concerned, I recommend for all concerned Schumacher's book "Smal is Beautiful", written in the 1970's like so much of my priceless literature.
Well, we are moving away from globalization because it is not sustainable, because it exacerbates rootlessness, and we are creatures with homes (not territories...) and limited capacities for abstraction.
American jobs have been created in the service sectors, haven't they ?
This prompts the following observation :
in France, there are lots of people trying to make a living giving dance classes, doing massage, buying and selling, whatever, but it seems to me that the economy has to be based on something BESIDES services, because how are the people buying the services going to PAY, in the long run ? If everyone is into services, then where are the THINGS coming from ? We need material things to keep us grounded.
I don't think that a service economy is a viable one.

But I hope that manufacturing is dead. It kills the soul.
We need a new approach to work...

Greenie said...

Commies are always in favor of protectionism. I grew up with those MFs and know them very well. During my entire youth, we used a soap that tasted so bitter that one would cry, if a single drop went into your mouth. It was made from a plant called 'Neem'. Check that out over the net.

Why did we use it? Because 'foreign-made soap is a luxury. We must use the crap made in India and protect local job and tradition.'

To be honest, Hell, you are a nutcase and should be put in prison. Communism killed more people than anti-semitism or slavery, yet we let lunatics like you continue to preach the same faulty propaganda.

Americans are not borrowing because of China. They are borrowing, because of their own manipulative system.

Camabron said...

The root cause of this mess is the undue influence and lobbying of big business in Congress plain and simple (Eisenhower warned us of this in his farewell address a few decades ago). After decades of this undue influence, this crisis is the final blow-off of a system geared towards facilitating big business interests in Congress, this issue has not been addressed at all (Obama said he would though). This is why banks became so big as not to be allowed to fail in the first place. The real power in the US (and most democracies) are Corporations, not the Government.

Cottonbloggin said...

Debra,

you read my mind with small is beautiful. And I left you an answer in the last comment section.

TH said...

US GDP is only 1/5 of total world GDP so it makes little sense to encourage protectionism at the expense of alienating the rest of the world. Better to stimulate projects that already rely mainly on US goods and ervices.

http://www.becker-posner-blog.com/archives/2009/02/buy_american_on.html
http://www.becker-posner-blog.com/archives/2009/02/protectionism_i.html

Tiago said...

Small is beautiful.

Lets not call this protectionism. We are better of if our food does not come from the other side of the planet. If some black swan happens, then no food on the table.

Yes, yes we loose efficiency (do we?). But we get resiliency! Yes, no new IPod every 6 months coming at good prices from a sweat shop in another continent. But we regain some control about our lives.

At the end of the day, "protectionism" can be reframed as a away to assure the survival of our species: If we are all interdependent than it is easy to conceive an event that will wipe as all. If we are autonomous then, we, us a species have a better chance.

The only global thing that we need is a mechanism to avoid some countries to impose their will on others.

Joe said...

From Jesse's Cafe today:

"There is widespread suspicion that this exercise is designed to protect a handful of large money center banks from realizing their losses - JPM, C, Morgan Stanley, B of A, and Goldman Sachs."

This is the whole game, in a nutshell. There are so many inter-dependancies, in play, through derivatives that a single loss of one of these players will bring the whole system down.

However, as I said earlier, it cannot be contained now. Somewhere, a failure will cascade out of control.

The whole global economy will sit in stunned silence
when this occurs.

Joe M.

gael said...

Please tell me you forward all your posts directly to President Obama.
Love your site!

T Z said...

America has many ideological problems, one of those being 'Exceptionsim'. I.e. anything is OK as long as it works for America. The US, a signatory of the WTO, agreed to reciprocating trade rules. For decades, the US filed complaints of foreign subsidies and in fact successfully brought down any and all foreign government direct subsidies and protection. The US was all about 'free trade' because the US was making money all over the world.

Now the US is in trouble, not because of any foreign unfair trade rules, but because of its own financial and economic mismanagement. Now it wants to subsidize and protect its own industries.

American exceptionism.

The world will not allow this to fly. Because -

The great majority of average Americans do not know a 'scary' fact - US economic power in 2009 is 40% that in 1999. Repeat - 40%. China is 170%. (These are calculations by academic experts in the US.)

America, both the public and government, are no longer in position to demand much of anything from the world. The reality of a superpower is gone, but the mind will take longer to adjust.

Protectionism, like the 1930's soon after the stock crash, will truly create depression 2. Because the US now is in an even worse economic position than 1929.

There is only one way to fix US economy. ONE WAY. Convert from consumption to production. Of valuable things and services. I need to spell this out just in case somebody think Wall Street 'financial engineering' is a value creation activity. It is, of course, the world biggest WMD that has actually been deployed and detonated.

I wonder if Obama is going to redirect the 'war on terror' towards the country that actually has just about blew up half the world. On purpose!

Anonymous said...

Hell, I'm shock you're all for the "Buy American" policy which smacks of protectionism all over no matter how you try to disguise it. This policy would send a wrong signal to the world and may even initiate a trade war. It certainly goes against what the US had been preaching all these years since capitalism and free trade were embraced and would surely set a bad precedence for US if adopted - talk about double standards. What I think the Americans should do is to come to terms that competition with countries like China and India is inevitable and would be getting tougher each year. This will cause salary deflation in the US as well as lower the current standard of living somewhat especially if the US does not come out with something innovative to sell the world this century (but I doubt it as the US is still miles ahead in terms of technology and research so don’t blow it). During the industrial revolution last century, the US (& Europe) is able to profit due to the shortcomings (eg. communism; poverty & instability) of these emerging countries. Now that they have gotten their act together and are playing by the capitalistic books, the US runs for cover with the “Buy American” policy. Just stand up and compete like a real man I would say and not distort the truth to your advantage when competition gets tough with human rights issue, revaluation of yuan, etc. Basically, if the quality of Product A (made in China) and Product B (made in the USA) is the same but Product A is half the price, then the conclusion is essentially that there is something wrong with the US system that needs to be fixed – or maybe the Americans have had too much of a good life for so long that no one is willing to face up to the fact. The bottom line is this: when someone buys Product A, he/she doesn’t care if it will work towards slightly rebuilding manufacturing capacity and well-paid jobs; encourage localization of production and more fully recognizes real production costs? He buys it simply because it is of the same quality and is cheaper – that’s sustainability and nature for you.

Cottonbloggin said...

I'm with Tiago.

And I believe that the real revolution is the individual who "grows tomatoes" (sorry Debra). I consider that shorthand for an agricultural permaculture modeled on the practices (though not the politics) of Havana, Cuba. With a politics based on the socialist direct democracy of the Iroquois nation.

It's a resilient, distributive agricultural system which values individuality and is not prone to any devastating Black Swans (human extinction and wwIII). It breeds a localized craft based society which can be globalized by modern communication systems. to foster an economy based on a craft of best practice where Quality is valued over risk. Farming (and any other trade based occupation) have the ability to teach a form of organic growth over time (think darwinian evolution of the individual and society), as opposed to a world of instant gratification and permagrowth.

Hellasious said...

I dare anyone to convince me, by using classical or any economic theory, that a product made in China by a subjugated labor force that gets no pension, no medical care - and no voting rights to change things, of course - using a manufacturing and energy infrastructure that devastates the local and global environment, utilizing a manipulated pegged currency should be termed "global competitiveness".

Please don't even breathe the name Adam Smith in such circumstances because he will rise from the dead and strike you across the mouth.

Amen.

Anonymous said...

well" h " all wrong . 4.5 million jobs went to china and india becasue the usa wants cheap products not bad- but cheap. of course we want the most pay too so your silly idea about bring jobs here doesnt work. we outpriced ourselves.game over !! we are in the beginning of the "greater depression" and its situation hopeless. you all can "bs" all you want but "reality" is here. at some point there we be social unrest and thats why "nortcom" of our
3'rd army surrounds the usa. most countries are in riot as we speak and our spoiled brats will see it here in time. sooner than later. the average drone doesnt have a clue. they will. its the end of living the beginning of survival . ws, mot, always

Tiago said...

The fallacy of globalised competition is that more production is always good. I would dare to suggest, that after a country produces enough to feed, shelter, take care of young and elderly and educate all, production as a goal should be take the back seat.
Yes, we have to produce food for all. But do we really need IPods for all? Maybe the Chinese are better at producing cheap electronics, but do we really need it? To the point that we trade the resiliency of local dependencies for the fragility of global dependencies?

After a certain level of general comfort, production at all costs is uneconomic growth.

Note that I am not even starting with the argument of competition through near-slave labour and how that is unfair, immoral.

Lets put a stop to the fundamentalist church of consumption and production.

Production, consumption and competition are good up to a certain level. After that it generates massive dependencies, waste and a plutocratic system. Very similar to communism in many ways.

bb said...

Hellasious,
look no further than the imperialist past of great britain and the offspirng you inhibit now and you will realize the quickest way to accumulate wealth are exploitation and looting.
the 'exceptionism' that another poster noted is sooo british and sooo relevant to you as well.

Debra said...

Well, it certainly looks as though the comments section has some really hellfire and brimstone negatives giving free rein to total despair.
One advantage to symbolic systems that work on consensus is that : when the consensus no longer exists, they collapse.
So...
That means that the "money" will be worth nothing. (This has already happened, I think, right ?)
So what ?
When something disappears it's not the end of the world, even if we think it's the end of the world. (A lot of people will lose in it, but that doesn't mean that when you lose MONEY you lose your LIFE, right ?
I have already turned off my television set (not my computer, mea MAGNA culpa...) gotten rid of my wristwatch, do my own cooking, buy basically ONLY sustainable clothing, and food (well a few imported tomatoes, mea MAGNA culpa again...), hitch rides from others, or take the bus/bike.
Lots of things that I'm trying to do, that I SEE PEOPLE ALL AROUND ME TRYING TO DO, once they catch on to the fact that they CAN individually make a difference.
I'm not listening to international or national news either.
Some comments on globalization :
even as violence has been almost extinguished in "developed" countries (you don't believe me look at the statistics, they are there) we manage to export all that aggressiveness that we find intolerable IN OOURSELVES AND IN OTHERS onto other stages, you know, like African countries, or, the Palestinian conflict.
And we soak in all that violence through the media to get our daily fix of aggression that we don't get elsewhere.
Talk about colonization, there's another novel dimension of it...
P.S. I'm having a hard time navigating all the "anonymi" on this blog...

Thai said...

Hell, I am a little surprised at your view as well.

Every criticism you suggest is absolutely true, but I do not see how it justifies a 'buy American' mentality. You seem to have moved into the same kind of bizarre logic world that a couple of your other regular readers live, i.e. "two wrongs make a right".

The fact that the social system in China is ugly does not at all justify not purchasing their goods. Would the social situation in China be better if we did not trade with them? We already forced open their markets to our benefit once upon a time at gunpoint, and now the Chinese are making many of the unbelievably ugly but necessary sacrifices that have to be made in order to become a first world nation you sign up with the current generation of sloths who are scared to death of what it means for them?

If it makes sense to keep things local from an energy standpoint, it makes sense. But taking a 'buy American' approach to reach this policy is just plane wrong at so many levels. Invest in energy efficiency, redesign our society to be more compact and efficient, invest in alternative energy generation and delivery systems, but 'buy American'? No way.

If an idea is worth doing, if it really stands on its own merits, then it is worth doing. If it needs subsidizing, then it needs subsidizing and we subsidize it, but call a spade a spade.

We all share this planet- Americans, Europeans, Chinese, etc... I have met MANY chinese citizens over the years and I have developed more respect for some of them than (sadly) some of my fellow countrymen (or SOME Europeans).

Europe went thru unbelievably ugly events to create the society it has ultimately become and achieve the lifestyle it currently enjoys. Need I remind you how many Englishmen died in London during the industrial revolution? How many American Indians were killed by Europeans carving a 'better life' for themselves at the native's expense? Have you forgotten how many Japanese died in the industrial policies of the Meji reformation? If you or most of your readers have, what planet did they think they were studying when they took ANY history class in school?

And I am not condoning ANY of these events, simply they are what they are.

But to argue that since China made unbelievably ugly but (arguably) necessary choices which includes things like limiting family size (I might add using very 'liberal' or 'pro regulatory' policies which have been quite fairly enforced), etc... in a policy that has been to the economic advantage of every other citizen of this planet, is bizarre. That you would suggest we take a backhanded approach to promoting a greener energy policy with a slap in the face of this kind is just wrong on so many levels. Kind of reminds me of the people in the health care policy wonk arena who promote ways to save health care dollars in one publication and 'oh by the way' periodically promote the right to die/death with dignity movement in other publications, as if there was no connection between the two subjects?

Did we think it was going to be easy for China to do this? Was it easy for us? Open up your family album if you have forgotten.

"Yes", their environmental/labor issues are tremendous. And they go away if we stop buying from them? As if that genie is not now out of the bottle? Bizarre.

So much for western integrity.

Tiago said...

Thai,

While patriotic/nationalistic arguments might be wrong (I would agree), they serve a purpose of buying local. One of the arguments here is that globalisation creates too much interdependencies and his prone to black swans.

That is an independent argument from fair-trade (to which I would subscribe also).

They happen to collude in the same direction: "Buy Nationalistic", which is a reptilian idea at its core, ends up being quite useful in some respects.


"in a policy that has been to the economic advantage of every other citizen of this planet"

That, my friend, is a matter of opinion. I happen to disagree profoundly. But discussing this would be endless and I am pretty sure we would not arrive at any meaningful agreement. I just want to say that it is a matter of opinion, not fact.

Thai said...

Tiago, there is no need to mix purposes IMHO. Either the issue stands as legitimate on its own or not. The demon of nationalism can be VERY unpredictable and seems totally unnecessary to invoke for this purpose. Didn't Samuel Johnson once say "patriotism is the last refuge of a scoundrel". I think of myself as quite patriotic but this does not seem a 'building block' of that patriotism I see requiring nurture.

As for "in a policy that has been to the economic advantage of every other citizen of this planet".

I do not mean to imply that were I 'emperor' of China, I would handled family planning issues the same as China (Indeed Thailand, Japan and Bangladesh have all clearly shown China's approach was completely unnecessary). The Chinese do seem prisoners of their own mind, transfixed with a false idea that strong leadership, as opposed to nudging neighbors, will solve their national dilemmas (but FWIW, the Chinese are not the only residents of this prison, many of its inmates seem to be the regular readers of this blog).

AND, at the same time, don't kid yourself that you weren't a beneficiary of this policy, EVEN IF YOU MAY HAVE BENEFITED MORE had China chosen another approach.

But I will completely agree with you if you are suggesting there is/was always more than one way to skin the proverbial cat.

Debra said...

One of the greatest fallacies that I see paralyzing American thought is the idea that you can't change your mind on something without being a traitor to someone, or some idea, etc etc.
Only idiots and "insens├ęs" never change their minds.
So much for the issue of flip-flopping.
So...
Why promote buying "American" when you can promote buying "local" ?
Personally I despise nationalism.
As I have said before in this blog, it was responsible for the last two world wars, and is still responsible for the major part of the conflicts in the world.
France is a case study in the difficulties of artificially trying to throw together a hodge-podge of different regions with different customs, different languages.
What does it mean to be French ?
Lots of uncertainty on that subject these days.
Lots of uncertainty on what it means to be American too.
Just look at all those conflicts states' rights and federal government's rights, if you want to explore the subject...
And Thai, my God, I think you are operating under that major delusion which is called "fairness". (A delusion fostered by "democracy" ?)
When we get down to two potatoes in the pot, the fact that the Chinese were not on the scene earlier, and only just managed to show up in front of the pot now doesn't change the REALITY of the situation of the pot, even if it isn't FAIR.
Our ancestors COMMITTED many acts and crimes, for that matter, for which we are paying and will continue to pay. It's not FAIR, is it ?
It's not fair, but it's THERE. And it's not going to go away, is it ? Tough shit, but no use whining about it, is there ? Or pretending it's not true, either.
The Chinese should be (and ARE already, I think) concentrating on bolstering the social conditions in their society so that THEIR people can afford to buy THEIR goods, right ?
That's what I think...
And we should be doing the same, right ? (along with reorganizing the very idea of work)
That's not protectionism, that's common sense...

Debra said...

I know I'm getting long winded, but just one or two other "little" points.
Words are EVERYTHING.
Every politician, every ad man, and every preacher knows this.
The word "local" is not the same thing at all as the word "american".
It's harder to take the word "local" and wrap yourself up in it the way you can with the word "american".
And because it's harder, that means the word is richer, more challenging, and less likely to form that little island of identity that gives rise to flag waving.
That's why I use "local" and not "american".

Tiago said...

Debra, Thai,

It is really nice to have a civilized discussion.
Debra, I agree that words are important, very important. And it would be better to say "buy local" than "buy national" (I won't say American, because I am not American). I despise nationalism.

Where I do disagree was that nationalism was the cause of both wars. At least WWII was caused by economic distress in Germany (hyperinflation and all). Nationalism was a (bad) way to channel things.

"Buy National" while it might make put all of us on the wrong track (and there is such a risk) is nonetheless an idea where you can piggyback "buy local". And that is a way to untangle the immense global dependencies which are not healthy at all.

Thai, I have profited nothing from Chinese cheap profits:
1. Before globalisation and chinese imports my material quality of life (middle-class western) was enough for me to build my happiness. The extra material comfort of cheap products dind't really add to my overall happyness.
2. Some people around lose their jobs through outsourcing (I happen to be from a country which was self-sufficient on clothes).

So I've got extra material comfort which I didn't really needed, while economic uncertainty around me increased. The truth is, my parents generation was a bit poor but had security (near full employment), my generation and newer ones have more material goods (when they have a job) but have added insecurity.

Debra said...

No, Tiago, you have to go open up Mein Kampf, (which most people are afraid to do) to see that the identity problem was capital to World War 2.
Adolf Hitler was born on the border between Austria and Germany. His father was a customs officer.
Living on the border can do funny things to you.
Like when you start making the observation to yourself that 2 kilometers away from you, something happens that you can't see at all. The people are often speaking the same language, they are living the same kind of life as you, etc etc, and for some obscure reason they're called "Austrians" or "Swiss", or whatever.
And, on the other side of the problem is the fact that in, say, Grenoble, people have a certain set of customs, speak (rather spoke...) a certain dialect, and 500kms away, where people don't have the same language or customs, or whatever, nevertheless SOMEONE is going to decide that... we are both FRENCH, for example.
(This example can be seen everywhere, of course.)
Adolf Hitler initially wanted Austria and Germany to fuse to form one empire. Because he couldn't accept the idea of an (arbitrary) border.
So yes, it was a question of nationalistic identity.

Anonymous said...

The US may have exported 4.5 million manufacturing jobs, but it didn't lose that many. In other words, the jobs moved to other sectors.

Sure did. Wal-Mart, McDonalds, Nail Salons...

Jenna's Bush said...

To be honest, Hell, you are a nutcase and should be put in prison.

And you need to go back to your shit-hole country because you obviously don't understand American values if you think people should be put in prison for the ideas they express.

mak said...

Keep destroying that credit card balance. Once it's gone, you will have a lot more freedom in your budget.

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CFO Salaries said...

Check out the job salary of a pizza shop manager. It's hirer than mine is and I manage an IT staff.