Item 1: Puppet of the Year. Time Magazine has named George Bush its "Person of the Year". Absurd.
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Naming Dubya "Person of the Year" is like naming Howdy Doody, Miss Piggy, or Charlie McCarthy "Person of the Year".
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George Bush is a puppet, not the real president. He showed plainly in the first debate that unless his handlers can script something for him, he doesn't know what to say! In later debates, they more thoroughly prepared him, and wrote him lots of lines for different situations, so he wasn't completely baffled. But it is plain that George Bush says what he is told to say by his betters, the Real Presidency, a collective leadership — or rightwing politburo — that really sets the policies that Bush merely announces. He is our second Imitation President, after another teflon Republican, Ronald Reagan, the best actor in the history of the world, who actually had billions of people believing he was President of the United States!
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If Time were properly to go with a Republican this year, it would have had to go with a "Group of the Year", comprising people like Dick Cheney, Karl Rove ("a tech-savvy puppet master for Bush", says Wayne Madsen in CounterPunch newsletter), Paul Wolfowitz, Tom Delay, and many others, some in a foreign-policy group, some in a domestic-policy or economic-policy or social-policy group. Outsiders don't know who all of them are, nor how large a group it is. What we do know is that George Bush is the front man for a faceless, collective leadership whose most prominent member is doubtless Vice President Cheney, the man who acted decisively (tho too late) in the September 11th crisis while Dubya dithered in a gradeschool classroom.
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The only way you could get George Bush's photo on the cover of Time Magazine to represent the Real President is if you did a foto-montage like the one I placed in this blog October 17th (which see), made up of many little fotos of other faces, the faces of the real individuals who comprise the Collective Presidency that the Republicans have given us two of their last three times in the White House. (Dubya's father really was President — not a very good President, mind you, but real. He gave orders. Baby Bush takes them.
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Item 2: Offshore Outsourcing a Permanent Disaster. Dubya's handlers in the economic-policy working group have proclaimed repeatedly that offshoring even the best jobs in the Nation (except, of course, their own) is not just 'inevitable' but also good for us! Their arguments were destroyed last March, in an article in the Asian edition of Business Week that I heard about only today from a colleague in Britain. In that article, an Assistant Treasury Secretary during the Reagan Administration (Paul Craig Roberts) demolishes the claims of Bushian economists that offshore outsourcing promises to benefit everyone.

Today's economists can't identify what the new industries and occupations might be that will replace those that are lost, but they're certain that those jobs and sectors are out there somewhere. What does not occur to them is that the same incentive that causes the loss of one tradable good or service — cheap, skilled foreign labor — applies to all tradable goods and services. There is no reason that the "replacement" industry or job, if it exists, won't follow its predecessor offshore. * * *

This is what is wrong with today's debate about outsourcing and offshore production. It's not really about trade but about labor arbitrage. Companies producing for U.S. markets are substituting cheap labor for expensive U.S. labor. The U.S. loses jobs and also the capital and technology that move offshore to employ the cheaper foreign labor. Economists argue that this loss of capital does not result in unemployment but rather a reduction in wages. The remaining capital is spread more thinly among workers, while the foreign workers whose country gains the money become more productive and are better paid.

Economists call this wrenching adjustment "short-run friction." But when the loss of jobs leaves people with less income but the same mortgages and debts, upward mobility collapses. Income distribution becomes more polarized, the tax base is lost, and the ability to maintain infrastructure, entitlements, and public commitments is reduced. Nor is this adjustment just short-run. The huge excess supplies of labor in India and China mean that American wages will fall a lot faster than Asian wages will rise for a long time.

How long is "a long time"? How about 100 years?
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The latest Chinese census showed, in 2001, that Communist China's population is over 1.2 billion, and had grown by 132 million since 1990. Population experts think the figures are low because of hidden children (China's government pursues a "one child" policy, so extra children may well be concealed when the census-taker comes around) and may actually be as high as 1.5 billion. China is presently growing by 14 million a year, so today, three years after the census, should have 1.3 billion people.
To put that in context, 1.3 billion is four times the total population of the United States; 1.5 billion would be five times our total population.
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India's population passed a billion in 2001 and is increasing by 16 million a year, such as to pass China in population by the year 2050, at 1.6 billion over 1.4 billion.
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Together, China and India account for less than half the population of the Third World, which comprises 80% of the world's total population and is growing much faster than the First World. The Population Reference Bureau says that "nearly 99% of all population increase takes place in poor countries".
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How are wage rates to rise when the labor pool of the Third World grows at such an extraordinary rate? If anything, the natural dynamics of supply and demand should REDUCE world wage rates, ours included if we are forced to compete over open borders with people who make a tiny fraction of what we do? How tiny? One study, of wage rates of McDonald's counter staff, shows Americans making $6.00 an hour but Chinese 42 cents an hour (1/14th the American pay rate) and Indians 29 cents an hour (less than 1/20th the American rate). What about better-paying types of jobs?

An entry-level software programmer in India earned about $6,400 last year. Indian call center operators earn about $3,000.

But more seasoned programmers or managers do far better. An Indian IT programmer or other professional with at least five years on the job typically earns $25,000 to $30,000.

That's less than half the $60,000 to $80,000 for a similar IT worker in the U.S.

That report says that Indian wages have indeed risen so high that other countries are now undercutting them! If Indian wages are being undercut, what on Earth will happen to American wages?
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How are we in the First World, and more particularly in the United States, supposed to provide jobs to all the world's people without destroying our own economy and civilization?
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And if the United States collapses, the world collapses. There is no replacement for the United States as engine of the world economy and world development, and guardian against world war. If the U.S. falls, the entire planet enters a new Dark Age — but with nuclear weapons in the hands of a dozen nations this time!
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Should we in the United States accept a stark reduction in our wages for 100 years until the Third World catches up with our wage rates and every working man, woman, and child — yes, child — makes the same crappy wage with no benefits? Or should we accept that the only way to reduce the steep wage differential that ships jobs overseas without ravaging our own working people is by promoting economic revolution in the Third World in which workers DEMAND good wages and benefits so they can live as well as people here?
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U.S. and other First World labor unions should be fomenting worker revolution across the Third World, including general strikes and, if need be, violent overthrow of despotic, plutocratic and kleptocratic governments, to achieve a fair distribution of wealth abroad, which alone will reduce the steep slope between First World wages and benefits on the one side and Third World wages and benefits on the other, without destroying the United States for the sake of the rich — which would end up being the reverse of "enlightened self-interest" ("benighted self-interest"? "endarkened self-interest"?), because if the United States collapses, the rich fall with the rest of us and may actually find themselves shot dead, their mansions burned to the ground, and their own bodies and those of the children they pretend to be doing all this for, hacked to pieces.
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Let's be plain: it is absolutely impossible for there to be free trade between the United States and the Third World without economic catastrophe to the United States, all without, at the same time, bringing commensurate benefit to the people of the Third World. It's a lose-lose situation for everybody but the rich (and if it goes too far, even they will be destroyed by it).
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The rich are few. We are many. Why do they rule — and so STUPIDLY?
- posted by L. Craig Schoonmaker @ 3:01 PM