Results 1 to 2 of 2

Thread: Uh oh - second thoughts on globalism floating around MSM

  1. #1
    God/dess Deogol's Avatar
    Joined
    Dec 2003
    Posts
    5,493
    Thanks
    120
    Thanked 50 Times in 35 Posts

    Default Uh oh - second thoughts on globalism floating around MSM

    Duh!

    ----

    "Global Investor: The Hollowing Ring of Davos
    By Stephen Roach
    Newsweek International

    Feb. 6, 2006 issue - The world economic forum in
    Davos is the cradle of the modern globalization
    paradigm: the "win-win" proposition that the
    development of poor countries is a huge plus for
    rich countries. This consensus has often been
    challenged by street protests at Davos, and the
    summit has often worried itself over the impact
    of globalization on poor economies. But this time
    was different. Panelists from German Chancellor
    Angela Merkel to former senior Clinton economic
    adviser Laura Tyson raised tough questions about
    the assumed benefits of globalization... for rich
    economies.

    This is a big shift, but not surprising. One of
    the "wins" in the win-win of globalization has
    failed to materialize. Job creation and real
    wages in the mature, industrial nations have
    seriously lagged behind historical norms. It is
    now common for economic recoveries to be either
    jobless or wageless�or both. That this has
    occurred in the midst of accelerating
    globalization is all the more disconcerting.

    It was one thing for this to happen to the
    structurally impaired economies of Europe and
    Japan. But now it is occurring in the world's
    most flexible economy�the United States. Gains in
    U.S. worker compensation�by far the biggest
    component of overall personal income�have lagged
    while productivity growth has soared. As several
    Davos panelists stressed, this defies a basic
    premise of economics�that labor is always paid in
    accord with its productivity. Yet over the first
    48 months of the current expansion,
    private-sector compensation in the United States
    has increased only 12 percent in
    inflation-adjusted terms. By contrast, over
    comparable periods of the past four business
    cycles, real gains in private compensation
    averaged 20 percent.

    The Davos crowd is stunned by this turn of
    events. The recent high-profile layoff
    announcements in the global car industry only
    added to the grim realization. Of course, the
    hollowing out of manufacturing in the industrial
    world has been underway for more than 30 years.
    But in a year when the World Economic Forum is
    celebrating the emergence of China and India,
    their impacts on the global labor market are
    hitting home as never before. After all, if India
    is to services as China is to manufacturing, what
    does the future hold for high-wage workers in the
    developed world?

    The toughest part of this story is that there may
    be no easy way out. That's because the Internet
    has changed the rules of engagement for
    globalization. It has revolutionized the
    logistics of supply-chain management,
    accelerating the diffusion of global
    manufacturing and making possible offshore
    outsourcing in once nontradable industries. The
    globalization of information services is
    migrating quickly up the value chain, from its
    start in call centers and data processing five
    years ago to software programming, design,
    medicine, accounting and other professions.

    The speed of this transformation turns the
    win-win models of globalization inside out. And
    it puts knots in the stomachs of most free-market
    economists, including myself. For generations we
    harbored the belief that while painful, it was
    also understandable for rich countries to lose
    market share in manufacturing activities. This
    was never viewed as a serious threat because the
    developed world was blessed with a growing
    profusion of highly educated knowledge workers
    employed in nontradable service industries. Rich
    countries would be able to buy cheaper things
    from poor countries, thereby expanding the
    purchasing power of an increasingly
    knowledge-based work force. And as producers in
    the developing world turned into consumers, these
    new markets would provide nothing but opportunity
    for the industrial world.

    Those hopes have now been dashed. Fears of the
    zero-sum game have crept into the discussions at
    Davos. This has taken us to the brink of a very
    slippery slope�the blame game. Middle-class
    workers and their political representatives are
    up in arms. Witness the outbreak of China bashing
    in the U.S. Congress. Yet I don't believe that
    global leaders would be so foolish as to repeat
    the all-out tariff battles that led to the Great
    Depression. The more likely danger is that a
    growing distrust of the Indias and Chinas will
    lead industrial nations to squander the greatest
    opportunities of globalization. For example, any
    U.S. move to discourage trade with China would
    amount to a cut in American consumer purchasing
    power, by redirecting trade to higher-cost trade
    partners, like Mexico. Like it or not, IT-enabled
    globalization has unexpectedly tilted the playing
    field. Labor markets in the industrial world have
    an increasingly hollow ring. And so did this
    year's debate at Davos.

    ROACH is chief economist and director of global
    economic analysis at Morgan Stanley.
    � 2006 Newsweek, Inc.

    � 2006 MSNBC.com

    URL:
    "

  2. #2
    Banned Melonie's Avatar
    Joined
    Jul 2002
    Location
    way south of the border
    Posts
    25,932
    Thanks
    612
    Thanked 10,563 Times in 4,646 Posts
    Blog Entries
    3
    My Mood
    Cynical

    Default Re: Uh oh - second thoughts on globalism floating around MSM

    (snip)Job creation and real wages in the mature, industrial nations have seriously lagged behind historical norms. It is now common for economic recoveries to be either jobless or wageless�or both. That this has occurred in the midst of accelerating globalization is all the more disconcerting.

    It was one thing for this to happen to the structurally impaired economies of Europe and Japan. But now it is occurring in the world's most flexible economy�the United States. Gains in U.S. worker compensation�by far the biggest component of overall personal income�have lagged while productivity growth has soared. As several Davos panelists stressed, this defies a basic premise of economics�that labor is always paid in accord with its productivity. Yet over the first 48 months of the current expansion, private-sector compensation in the United States has increased only 12 percent in inflation-adjusted terms. By contrast, over comparable periods of the past four business cycles, real gains in private compensation averaged 20 percent.(snip)
    Careful, Deogol ! Posting a source like Roach speaking on a subject like middle class real wages declining, thus precipitating a downturn in developed countries' economies, is likely to draw a request for a 'Shit from Shinola-Meter' reading in DD LOL !

    (snip)Those hopes have now been dashed. Fears of the zero-sum game have crept into the discussions at Davos. This has taken us to the brink of a very slippery slope�the blame game. Middle-class workers and their political representatives are up in arms. Witness the outbreak of China bashing in the U.S. Congress. Yet I don't believe that global leaders would be so foolish as to repeat the all-out tariff battles that led to the Great Depression. The more likely danger is that a growing distrust of the Indias and Chinas will lead industrial nations to squander the greatest opportunities of globalization. For example, any U.S. move to discourage trade with China would amount to a cut in American consumer purchasing power, by redirecting trade to higher-cost trade partners, like Mexico (snip)"
    Now you've really hit on an area where the 'Shit from Shinola-meter" SHOULD be applied ... politicians writing new legislation with a direct and massive impact on the economy, with an 'idealistic' goal in mind, but with massive 'unintended' negative real world consequences on the very people the legislation was intended to help in the first place.

    The point about US politicians seriously considering tariffs on Chinese goods takes us right back to the Maudlin chart at . If the 27% Chinese tariff is enacted, US consumers nationwide will essentially wind up facing the same situation as localized consumers in 'Wal-Mart free' areas do now ... seeing their 'fixed costs' increase significantly on items like clothing, small appliances, electronic devices etc., thus leaving even less in terms of discretionary spending budget.

    As a dancer, it is the discretionary spending budget of potential club customers that provides your 'bread and butter'. Lap Dances and VIP room charges are about as non-essential as discretionary spending gets, and are one of the first expenses to be thrown 'overboard' as guys' discretionary spending budget comes under pressure. Therefore, logically speaking, anything that cuts into the already declining discretionary spending budget of potential club customers is going to cause an even higher proportional reduction in dancer earnings potential. This is the primary reason why I keep emphasizing the importance of stagnant/declining real earnings levels, increasing taxes etc.

    While these factors do arguably affect the stock market and return on dancers' investment portfolio over the medium/long term, they potentially have a very large and immediate effect on dancer earnings potential in the short term. Well, at least this is the case for clubs that cater to middle class customers (i.e. super-upscale 'show clubs' which cater to 'rich' customers are much less affected)
    ~
    Last edited by Melonie; 01-29-2006 at 10:22 PM.

Similar Threads

  1. Taking MSM to CAUSE nightmares
    By Autumn Lily in forum The Lounge
    Replies: 14
    Last Post: 06-08-2010, 11:33 PM
  2. Floating So High....
    By PaigeDWinter in forum The Lounge
    Replies: 25
    Last Post: 03-19-2008, 02:33 AM
  3. floating drink prices?
    By abacusdog in forum Customer Conversation
    Replies: 12
    Last Post: 02-01-2008, 03:53 PM
  4. What the MSM won't tell ya
    By Deogol in forum Member Boards
    Replies: 0
    Last Post: 12-14-2006, 08:38 AM

Bookmarks

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •