CONNECTING THE DOTS: Free Trade to Global Economic Collapse

"All economists know that when American jobs are outsourced, Americans as a group are net winners."

-- Steven E. Landsburg, Professor of Economics, NY Times 1/16/08.

The problem with universal knowledge is that it is often wrong. The problem with what "all economists know" is that it is always right until it is wrong and, then, it is often disastrously wrong.

Proponents of trade policies that masquerade under the name of Free Trade have a marked tendency to frame the debate in terms that disqualify conflicting points of view.

Harkin back to the birth of the labor movement: The union busters, the Pinkerton thugs, the railroad strikes, the Haymarket massacre, the endless coal mining disasters, the age of child labor, indentured servitude, sweat shops, deregulation and laissez faire economics.

All the economists were in agreement: Labor was irrelevant to the national economy. Minimum wage, labor standards, a forty-hour workweek and the right to organize a working force were all considered unnatural interferences in the free flow of a working economy.

All power belonged to the industrial masters, the corporate elite, and all the economists agreed that this was how it should be: the natural order of economic efficiency.

Along came the Great Depression and the universal tenets of natural economies were sucked down the drain into the cesspool of endemic poverty.

Suddenly all knowledge was born again and the role of government in protecting the poor and the working people from the excesses of corporate greed came back into fashion.

Adherents of Adam Smith, the champion of libertarian Free Trade capitalism, cried out in horror as social security and Medicare became institutions imbedded in the American soul and the government itself became an active regulator of corporate misconduct.

Public works, minimum wage, labor standards, the right to organize and strike were embraced by the people and their representatives in government as a sacred compact.

Over the years, the lessons and values of the New Deal underwent a gradual process of erosion culminating in the election of Ronald Reagan and a rebirth of the naked capitalism of Adam Smith. Casting off its responsibilities to the poor and working class, government resumed its former role as the enforcement arm of the corporate elite.

Union busting, strike breaking, deregulation and the trickle down theory of tax breaks for those Americans least in need became the new federal mandate. Free Trade (which is anything but free) and the dismantling of social services made inroads in American economic policy but they would have to wait for Bill Clinton to become the bipartisan institutions they are today.

Of course, the economists will remind us that the good times were rolling during the nineties of the Clinton reign – and there is something to be said of good management skills – but it is the nature of economics that you play today and pay tomorrow.

In the metaphor of politics as a blood sport, if Franklin Roosevelt was Julius Caesar, then Reagan is Mark Anthony, Bush is Marcus Aurelius and Clinton is Marcus Brutus.

Without the resistance that a Democratic presidency should have provided, the younger Bush was empowered to finish the job: Unconscionable tax cuts for the wealthy elite at a time of rising dept, evisceration of federal agencies, deregulation and global Free Trade.

Allowed to run to its logical extreme, the Adam Smith philosophy of the 18th century collides head on with the collapse of the consumer base in a globalized economy.

The time has come to pay the piper for the piper must be paid.

Yet all the economists agree: the fundamentals are reasonably strong. What we are facing is a normal downturn of economic cycles – like waves of the ocean.

All the economists are always right until they are wrong and then, they are often spectacularly wrong.

I am not an economist and my expertise does not extend beyond my front door but I believe we are confronting much more than a natural recession. I believe we are faced with global economic collapse if do not take serious action (much more than a stimulus package) to prevent it.

How did we arrive at this juncture? Connect the dots: When industry began shipping jobs overseas under the banner of Free Trade, it was the trickle down theory on a global scale. Built on the backs of cheap labor, the only trickle was not corporate profits but lower wages.

Against the prospect of relocation, already weakened unions lost their bargaining chips and were compelled to cave in on wages and benefits. Dissatisfied workers blamed the union and the unions grew weaker still.

With the united support of economists, politicians assured us and we were willing to believe that it was only a cyclical downturn. The economy was strong, jobs would return, wages would rise and benefits would be secured.

So we used our good credit, re-mortgaged our homes and waited for the next wave to carry us back to the good times.

But the wave never came and millions of us lost our homes. The wave never came and someone in the family got sick. The wave never came but the bills never stopped and there was nowhere to turn.

Understand that I am not an economist and all economists agree: Free Trade is good for all and the last thing we need now is to panic.

They all agree but I suspect they are all living in sturdy homes with diversified portfolios and fallbacks in gold with secure retirement funds, while we are out in the cold.

I may be wrong.

I hope I am wrong.

But if I am right, we had better start rethinking the role of labor in the economic equation, the role of government in protecting its people, and a global trade policy that regards the worker as a cheap commodity when in fact the worker-consumer is the foundation that makes the global economy work.

Jazz.

JACK RANDOM IS THE AUTHOR OF THE JAZZMAN CHRONICLES (CROW DOG PRESS) AND GHOST DANCE INSURRECTION (DRY BONES PRESS). THE CHRONICLES HAVE BEEN POSTED ON NUMEROUS CITES OF THE WORLDWIDE WEB, INCLUDING THE ALBION MONITOR, BELLACIAO, BUZZLE.COM, COUNTERPUNCH, DISSIDENT VOICE, THE NATIONAL FREE PRESS AND PACIFIC FREE PRESS. SEE WWW.JAZZMANCHRONICLES.BLOGSPOT.COM.