Is Globalization Working For America?

wages-productivity

By Jon Taplin – October 5, 2009  TalkingPointsMemo

” If the average American worker had any economic literacy, they would look at this chart and scream, “I’ve been getting royally screwed since 2001!” Capitalism was not supposed to work this way–as the workers become more productive their wages fall. But of course as wages fall and layoffs grow, the working class is well aware that they can no longer borrow from their home equity or their ten credit cards and so they cut back on discretionary spending. This means that our ten years of overcapacity in what’s left of our industrial plant will get worse.”

“…….Since 1980 politicians of both parties have preached the gospel of globalization–the ability of American multinationals to move their financial and physical resources anywhere on the globe to get the best return. For a while we were able to mask the hollowing out of our domestic industrial base with the fantasy that we would export our services all over the world and that the financialization of the American economy would make up for the shortfall in our industrial output. And now we are reaping the whirlwind of that bankrupt notion. Yes we have poured trillions into Wall Street banks to restart the casino economy, but the average American isn’t buying it. She wants to pay off her credit cards, not borrow more. The small businessman does not have enough orders to need to borrow money. And as a country, the only durable good we make that anyone wants to buy are weapons of war.”

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One response to “Is Globalization Working For America?

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