Saturday, November 12, 2005

Globalization

Globalization. World economy. NAFTA. CAFTA. Level playing field. Most favored trading status. All these buzzwords and phrases. What does this mean for the United States, and ultimately, you and your children?

Disaster, that's what it means!! What many people do not seem to understand is that the United States is in an economic war with the rest of the world, not a shooting one. We are in the middle of the bullseye, and our business leaders do not seem to care as long as they make a dollar or two for themselves and their shareholders. What's worse, our government doesn't seem to understand this concept. Here are a couple of examples.

Way back when Al Gore and Ross Perot were having a discussion (debate) on NAFTA. Al was trying to make the case for NAFTA by using the example of Valmont Electric moving their operations from Danville, Illinois to Mexico. He stated that Mexico's standard of living would eventually rise to meet that of the United States, and businesses like Valmont would stop moving to Mexico.

What an idealistic but flawed idea! As a matter of fact, it's a large load of BS. How many generations of American workers will be put out of work while this great social and economic experiment runs its course? Considering that the Mexican government sets ceilings on wages for the majority of jobs in Mexico, I would say just about the next couple of hundred years worth until all the jobs are gone from our country. As long as there is an advantage to businesses moving to Mexico or some other country to reduce their costs and maximize their profits, they will.

Second example is that there are numerous countries that subsidize their industries for economic and political reasons. France, Korea, and Japan are just a few of these countries. At the same time, they implement tariffs on US goods, and threaten economic war if the US tries to do the same on those countries products.

The problems that threaten our country's economy are many. There is not a global level-playing field as our politicians from both parties repeatedly state. Not when there are wage differences throughout the world as well as working and standard of living issues, and foreign countries protecting their own economies. Global economy is just another phrase that means that the country with the lowest (and probably worst working conditions) will get the jobs, which leaves the rest of us without jobs and no way to sustain ourselves.

What needs to be done is for our government, our duly elected officials, to put aside their political aspirations for greater power & control, get a spine, and fight fire with fire. Subsidize or create nationwide incentives for industry to grow. Raise or create tariffs on goods & services we import from other countries that are similar to what we produce domestically to equalize the values of the various products. To those people who cry "That's not fair! Those countries will raise tariffs on us & block our products from their markets!" I say, what's different from the present situation? We are on the losing end of the trading war with other countries. Would there be a tariff war? Most likely, but we should be able to use the same tools to protect our country, our citizens, and our economy as other countries use to protect themselves.

Is this protectionism? You bet! Look at Europe. They went to a common currency solely to compete with the United States and not each other. Going to the Euro standard equalized wages across all the countries of Europe, so they have the "level playing field" between themselves, and now have a larger market in which to compete with the rest of the world. Don't believe me? Do some research on your own & educate yourself.

Now I realize that the above is a very simplified solution. It's not perfect by any stretch of the imagination, but it is an idea that needs to be considered by our politicians on both sides of the aisle. Otherwise, the jobs and economic wealth of this country will become eroded to the point that we will become a second- or third-rate country. And that is a sure bet…

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