Would we truly be racist if we demanded "Made in the USA"?

Amazingly, in the past several months I've been called a racist 3 times, more than anytime in my life!  The first time was when the Jeremiah Wright thing broke out and I defended the guy, I was called bigoted against whites.  Then, just the other I was called first "pro-Black" then "racist against whites" because I favored Barack Obama over that walking museum piece from Arizona.  Now, today, the conservative economic blog site, Carpe Diem, is labeling people like me racist for demanding things be made in this country!

Considering that I'm a white guy, I found the first two accusations humours, to say the least.  But I take issue with Carp Diem's assertions that because I would prefer my products be made at least in North America, that I some how am a bigot.  Of course, Mark J. Perry (the site's author) was coy in not saying it himself but quoting Ayn Rand to University of Rochester Economics Professor, Steven E. Landsburg instead.

"Both major parties are infested with protectionists who would discriminate on the basis of national origin no less virulently than David Duke or any other racist would discriminate on the basis of skin color."

- Prof. Landsburg

Giving preference to American-made products over German or Japanese products is the same injustice as giving preference to products made by whites over those made by blacks. Economic nationalism, like racism, means judging men and their products by the group from which they come, not by merit.

~Ayn Rand Institute

We're all familiar with who Ayn Rand is and the institute with her name on it.  But what about Professor Landsburg?  Well he was on Fox News a while ago, ironically enough Carp Diem has that clip. He was an John Gibson, the infamous Fox News anchor who recently lost one of his shows, talking about this.  Of course, the site's author decided to the side of the professor, while amazingly enough the anchor of the normally pro-free trade network, went against him.

I frankly have a problem with the whole notion of economic patriotism = racism.  Yeah, in an abstract way, you could make that argument.  But then if you could also say I favor Iranians over Indians because I go to the 7-11 by my house versus the EZ Mart a half  a mile away.  At the very least, I can be accused of being a nationalist, but I tend to think I'm more of a regionalist.  The color of one's skin, or their ethnicity was never a factor or played importance, I grew up believing you don't judge a book by it's cover.  But wanting to have stuff made here, using good union labor is not the same damn thing!

Now, if one were to go to those so-called victims of our racist thinking, primarily Asia, what do you think they are thinking on such a topic if asked?  Do you think the average worker in Kyoto or Shanghai holds an altruistic viewpoint when it comes to jobs?  I remember, back in the early 80s, and my father's best friend, who was an engineer for Mister Coffee telling us how on his trip to Japan, it was common to see on television Japanese auto workers taking a sledgehammer or crowbar to an American-made product.  That throughout the media, the newspapers, radio, even the NHK, that commentary would be pepper with "the superiority of Japanese-made goods" along with the continued promotion of high trade barriers and the usage of domestic-made goods.  He always came back home feeling ill, it should be noted, my dad's late best friend was a Nisei.

China's the big manufacturing place now.  Patriotism, especially since the Olympics, has been running more commonplace than ever.  Are you going to tell me, that 400-thousand plus slave-waged folks working at the Foxconn assembly plants building your Wiis and iPods aren't saying the same thing to themselves?  No folks, this isn't racism at all, it's demanding economic security!

What we have here, is another shill for the free-traders.  I don't know what this professor is getting out of this.  Perhaps he's trying to make it with the Cato crowd.  There are many like him, who believe that its ok to ship jobs to lower waged nation, because its part of some grand idea of such august intent.  A friend of mind once said that these folks are like a corrupt version of the hippies, peace and harmony through a balance sheet.

Carpe Diem, though should be ashamed to make such accusations.  And seriously, if you're gonna say it, then at least say it and don't hide behind others' quotes!  You think it's racist, don't just add that title, add some meat to your claims!  Well, what else can I say?  Folks like us are for restoring the middle class and giving economic security, while it seems (and I am willing to admit if I'm wrong) that jokers like the one mentioned here want simply want free trade so they can save a buck at Wal-mart.  The again, I'm not surprised, its one of the sites Larry Kudlow often quotes and uses on the air.

Actually, if one thought about it, what these fools propose is more economic suicide.  Indeed, straight from the same site, Carp Diem shoots themselves in the foot.  Several days ago, he was going on about how that there was no "inflation threat," particularly the wage kind.  Now he put up a chart using the Bureau of Labor Statistics data on % change for previous year on in monthly average hourly earnings.  Please take a look at this chart, and tell me what you see. 

 

I will grant you, that the rate of growth was going higher and higher prior to '83, indicating wage inflation as a component of the larger inflationary period.  But overall, earnings for workers were north of 5%, well above even the the longer-term trend official bullshit government inflation number.  Suddenly though, as we cross into 1985, overall wage growth collapses. Hourly-waged employees went from a growth of 7-8% a year to 2 and a half to 4% a year; hell, growth dipped even as low as 1.5%!  Now if you want to take the government's official inflation rate, which is currently 6.2% and subtract that from the wage growth.  That negative number, while unscientific, in a way is showing what employees are losing.  You know what, better yet, take a look at a chart below. 

This is the official CPI/inflation chart from the government (courtesy of Freelunch.com).  Take the period from when Carp Diem starts and compare it to the same period on the second chart.  You will see that Americans have either been net losers to inflation, or just barely matching the official malarkey rate!  So what was happening from the start of that wage collapse to now?  Free trade deals, from Reagan on to the present, have been made or attempted. 

Globalization, in which wage arbitrage has been the real name of the game to get ahead against one's competitors.  Now, ok, I grant you I haven't posted any empirical evidence to prove that assertion of free-trade and the wage collapse. But what the hell else with such force against a workforce's wages (outside of outright deflation) could have such an impact?  Any basic economics class will give you the laws of supply and demand and its impact on price.  When you introduce a massive amount of labor supply from the formally-labeled "Third World," and it meets with a set amount of demand from owners of manufacturing companies, you can bet it will hit the price of labor!   So are we racist?  More like realists!

Meta: 

Comments

The Race Card

race cardI'm fairly certain in the deck of public relations playing cards, sitting on the tables of corporate board rooms everywhere, when the major players are worried about their hands....they pull the Race card from under the deck.

You are now a racist if:

  1. you want America to be strong
  2. you want US citizens to be first up for jobs in America
  3. you don't like Obama
  4. you do like Obama
  5. you like Hillary Clinton
  6. you don't want comprehensive immigration reform - a bill written by & for the US Chamber of Commerce
  7. you want trade reforms
  8. fill the blank no matter how obscure
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Steven E. Landsburg

I really think Dr. Landsburg needs to be stripped of his post. Clearly he is a racist. He needs to be moved to Bangladesh or maybe say somewhere in the middle of Nairobi to finish his research.

Somehow he thinks he has some right to the United States higher education Professor position, probably because he's a US Citizen and therefore went to college here and thus it's clearly racist he ever got this post. He's clearly a bigot for taking that post and not giving it to someone in Egypt.

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Free Trade Dogma

It's amazing how these same people who flame anyone and everyone with just a smidgen of protectionism, are also the same people who are against the free flow of humans across borders.
They are the ones that are racist, not you.

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not quite accurate

They are all for guest worker Visas and of course they are, because open borders is precisely what corporations want. They want unlimited migration/immigration for by the laws of labor economics...that will put wage repression on steroids.

Don't believe me? See anyone from Alan Greenspan pointing this will repress middle class incomes (as a desirable thing) to WTO GATS mode 4 and various analysis thereof to any credible labor economist, including Paul Krugman. The fact the US chamber of Commerce lobbies for this extensively as well as our Silicon valley CEOs are demanding this as a payoff for campaign contributions should clue some people in here. It's about cheap labor and in the case of higher skills, global technology transfer.

The people who are the "no amnesty" crowd very often also want dramatic trade reforms. They are not the same as the corpocrats or neo-cons running the GOP.

The "guest worker" crowd (both parties) is the most obviously bought and paid for agenda.

I assuredly do not want the "free flow of humans across borders" because that would be the ultimate disaster for US workers. That is called a major "lose-lose" idea for all workers on a global scale but especially in the United States.

Ya know, this is one of those issues that truly one needs to look at the credible facts, the history of labor flows and especially the agenda of multinational corporations.

It sounds warm and fuzzy on the surface but the net effect is opposite the intent.

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Let's take the argument to it's logical conclusion

Okay, let's try and do some math, and remember some history, and demographics.

* The USA has about 5% of the world's population.
* India and China have about 40% of the world's population, and those nations are graduating about 12X as many tech degrees as the USA. And this is to say nothing of Eastern Europe, South America, Africa, etc.
* Offshore workers are much cheaper than US workers - and there are way more than enough cheap offshore workers.
* I would estimate that 75% of US jobs could be either offshored, or done by foreign guest workers, but I will conservatively estimate 50% - just to be more than fair.

So let's offshore every possible job, and thereby save as much money as possible. That would cause a 50% unemployment rate, which I believe is about twice the unemployment rate that the USA endured at the peak of the great depression. Add that to the USA's already beleaguered economy, 9.4 trillion dollar debt, etc. And there is only one logical conclusion: a complete and total economic collapse, the end of the USA as we have come to know it, we would all be dirt poor, from now on.

BTW: I had to do a double-take when the professor essentially said: "oh sure it would cost some jobs, but we would get stuff cheaper so it's more than worth it." It reminded me of Homer Simpson arguing that "the 55 mph speed may saves lives, but millions of people will be late!"

I would rather pay $30 for a toaster than $40, all other things being equal. But, if it's between paying a $10 more for that toaster, or losing my livelihood - well, isn't that a no-brainer?

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40M jobs at risk of being offshore outsourced in next decade

This is Alan Blinder's research. I have it listed in the Studies page (which I'm having a hard time linking up due to we're running out of real estate on the site).

In this page I'm trying to list landmark studies/breakthrough research that is considered highly accurate by their colleagues.

Blinder's study is damning and he is also not a fringe economist in any way so this is one example of breakthrough research.

I wrote about this in the Emperor Has no Clothes.

BTW: If Anyone wants to recommend a landmark/breakthrough economics paper/study please let me know...no fuzzy math papers, let's avoid the "political" papers to research some conclusion, corporate sponsored papers...ones where the statistics, the mathematics, the objective accuracy are thorough and it really stands up.

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No big surprise here

The "free" trade and "free" marketeer crowd are simply employing the same old tactics used by the right wingers - if your argument can't stand on its own merits - resort to name calling and personal attacks.

As the evidence continues to mount of the failures and fallacies of this idealogy their arguments get weaker and weaker - little wonder they are now stooping to name calling

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Does India really want free trade?

As I understand it, India is extremely protectionist themselves:

> For now, India's protectionist regulations give homegrown companies like Pantaloon Retail, RPG Retail and now Reliance Retail a head start. But there is political opposition to opening the retail sector to foreign investment, with fears that overseas competition would lead to job losses and drive smaller domestic operations out of business.

iht article.

> British companies, especially distillers, supermarket retailers and financial and legal services companies, have found Indian bureaucracy and protectionism a formidable opponent.

timesonline

Go to google, type in: "Indian protectionism" with no quotes, and read as much about it as you want.

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Fire him or outsource his job

This so-called educator is a complete and utter moron, that doesn't understand a basic concept of economics. I'm sure that all of the parents of students that are paying tuition with the wages earned from their manufacturing jobs would love to hear that this is where some of their pay is going. They shouldn’t worry though because when their jobs get outsourced at least the parents of some kid overseas will be able to send their child to the U of R to be taught by this person while our kids are busy working the fast food circuit.

I’ve extracted three points from all of the idiocy that this person conveyed. One point was that foreigners have the same right to our jobs as we do. A second point is that it is good for us all when jobs do go to foreign countries. The third point is that nationalism is wrong.

I’ll do my best to respond to each of those items.

1. (Foreigners have the same right to our jobs as we do)

This is simply one of the most ignorant things I’ve heard in quite some time. The only way that this could be possible is if there was no such thing as foreign countries. But alas, there are, we have different belief systems, civil rights systems, economies, approaches toward foreign policy, and defense systems. People working and a strong economy is what enable any country to support whatever system they have. I happen to think that our way is probably not perfect but it is the best in the world. I’m not interested in helping to build the economic infrastructure of other countries that don’t share at least similar belief systems. There was a time when doing so would be considered treason. One last point here. If a foreign citizen wants a job that is in the US, they can go through the immigration process and come and get one, just like our grandparents and great grandparents did. Through that process they have a right to it, but then again they would no longer be foreign citizens would they?

2. (It is good for us all when jobs go to foreign countries)

This concept is more foolish than the first. The idea that we can buy things cheaper, balances for the lost jobs and makes us wealthier is something that can only be defined as bizarre.

What this associate professor person has failed to understand is that if your client base gradually can't afford, or doesn't possess the ability to purchase your product then demand will go down. As an example, we've all just seen this with something as essential to us all as gasoline. In the face of skyrocketing prices the demand in the US dropped. People simply cut back.

With the tremendous rate of outsourcing US jobs to foreign countries the same thing will occur and is occurring on an even grander scale. Unemployment is rising. People are already delaying the purchase of cars, trucks, couches, dishwashers, houses, and all of those other wonderful items we enjoy and which help to drive the US economy. Just look at what is happening to the big 3 automakers, and housing starts are at a 20 year low.

This is a vicious cycle with impact that has a compounding effect. Let's say that 200,000 people that make printer parts lose their jobs to overseas. Hey great, we all now get to buy cheaper printers (yes I'm being sarcastic). Those people are now on unemployment, which impacts the rest of the taxpayers, and reduces the amount of income tax revenue to our government. Where do you think they are going to make up the difference? That's right, tax increases. Back to those now unemployed people, they can't afford to buy cars, trucks, new houses, and all of the other things previously mentioned. With the drop in the demand for those items, guess what happens next. That's right, more job cutbacks = more unemployment = more of the above.

Plus, wouldn’t it be foolish to think that producers are sharing the majority of savings from foreign manufacturing with the US consumer?

3. (Nationalism is wrong)

All I have to say to this point is…what?

Some would say that to not be a practitioner of nationalism is to be treasonous. While that may be extreme, it does provide some prospective. Nationalism is not only correct it is an obligation of citizens living in whatever country they choose to live in. Not being loyal to, and not wanting to protect ones own country and the prosperity of the citizens of that country is a self-destructive mentality and indicates that you are probably living in the wrong place. See above reference on how so many immigrated to the US for jobs. I'm no professor of history but I'm sure some came because they didn’t have the same belief system as the country they lived in and decided to come to a place that did.

We’ve all heard that you have to love yourself first before you can love others. This is no different. We have to sustain the love (protect freedoms, jobs, and economic success and security) of our country first before we can share it with other countries and only those that share similar belief systems.

It is clear that trade reform is needed. Foreign countries in particular China and India are running all over us. Rules are being broken, copyrights are being infringed upon, and they operate with a clear agenda of protectionism. You can't play by one set of rules and ethics while others create their own. I admire the protective stance foreign countries have taken where jobs of their people are concerned. It is not 100% protectionism, but rather a metered approach insuring economic growth at home. The rate of economic expansion in China ranging about 10% isn’t because jobs are being sent to foreign countries.

Conclusion

I’m sure there are some points here, which I’ve either made poorly, and are made out of emotional response, or which may be able to be attacked. I am highly offended by the statements made by the professor. That position is one that is clearly anti-American and probably comes from someone that has never had to turn a screw to make a living. We can only hope that as the inevitable decline in student enrollment occurs as a result of rising unemployment, that the first job cut is his. Consider that this person is pumping this message into the heads of our youth who by the way have no choice. I’m guessing that they either will comply or will take the bad grade. I’ve heard of radio personalities coming under nationwide fire, losing their jobs, or getting suspended for substantially more benign statement they make. Hopefully as the video becomes more widespread and the faculty understands the negative impact this will have on the school, the good professor will in turn then understand what it is like to wonder how you are going to pay the mortgage. Better yet, however unlikely it would be great if they could outsource his job, after all that guy over in India deserves it as much as he does.

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