Sunday, January 14, 2007
The Popularity Of Globalization Wanes
Globalization is rapidly losing favor both here and abroad, and free trade no longer seems so liberating to many. According to Harvard Business School professor Rawi Abdelal, "The idea of globalization and continued societal embrace of openness seems to be in a very deep sense of crisis." This is happening despite low unemployment and increased productivity and profits. As Federal Reserve president Timothy Geithner says, "Despite the relatively favorable average income gains of the past few years, a common feature of the political context in economies around the world is the fragility or weakness of public support for openness and economic integration." Much of the growing resistance to globalization in places such as Venezuela can be attributed to anti-Americanism, but that doesn't explain such resistance in the United States. However, other factors do. While Americans make more money now - at least according to deeply skewed average figures - their economic future is less secure than ever. The risk of a 50 percent drop in income has doubled in the last 30 years. 59 percent of Americans believe that free trade destroys more jobs than it creates, and repeated assertions that globalization is still in infancy only generate a sense of foreboding.
Outsourcing jobs to other countries threatens the financial security of millions of Americans, while mounting corporate profits - in which outsourced Americans do not share - accentuate income inequality. White collar professionals such as computer programmers, radiologists, accountants, copy editors and many others are rapidly losing jobs to offshore resources. Ultimately, 28 million of the 42 million jobs in the service sector of the American economy could be sacrificed to globalization. What we have seen so far, say experts, is just "the tip of the iceberg."
According to USA Today, "Key Democrats say further liberalization is possible only if trade deals are rewritten to include labor and environmental standards and if voters' financial anxieties are addressed." Protecting American workers from the collateral damage wrought by free trade remains a priority for the Democrats, but such "thickening of the social safety net" runs counter to the traditional aims of the Bush administration. The only solution is greater bipartisan cooperation on trade and investment issues. The President currently has the authority to "fast-track" trade promotion efforts by restricting congressional input on trade deals to yea-or-nay votes and disallowing line item changes. This authority will expire July 1st. If the Bush administration wants this authority renewed, it may be forced to grant concessions to Congress in its efforts to protect the welfare of American workers as well as the environment.
"Enthusiasm for globalization ebbs" from USA Today