What Globalism Has Wrought

Mike Scruggs

I am not a fan of protectionism. It is essentially a redistribution of wealth by political rather than free market means. It spawns injustice and misallocations of economic resources that hurt people and national unity and vitality. I have written extensively on how protectionist U.S. tariff policies virtually forced the seven cotton-producing Gulf States to secede in 1861. No serious historian believes that Union armies invaded the South to free slaves or because the U.S flag was fired upon at Fort Sumter. These post war myths were largely created to cover up the ugly politics of sectionalist greed that increasingly dominated American politics from 1824 until catastrophic war in 1861.

However, free trade unregulated by essential national interests has proved almost as disastrous as sectionalist-dominated protectionism. This is particularly true when free trade is not fair trade and politically backed business coalitions are allowed to dominate national economic policy. The latter case is generally the result of “crony” capitalism and government legislation dominated by the most powerful business lobbyists. This is essentially legislative protectionism, which can be just as destructive to free markets and competition as high import tariffs.

Globalism became a popular economic buzzword in the 1980s and began to accelerate in influence with passage of the NAFTA Treaty in 1994. Part of the thinking of globalism was that nations could prosper by specializing without regard for national security or over-concentration in a few areas. An important misguided assumption was that manufacturing was not essential to American prosperity—that we could prosper by concentrating on finance, product design, and more intellectual activities. Somehow we ignored the fact that the financial industry is essentially data processing and

paper-shuffling that can be duplicated wherever there is a concentration of intelligent and ambitious people.

In the last decade, American electronic component and semiconductor producers lost 42 percent of their jobs. Communication equipment producers lost 48 percent of their jobs. Textile manufacturers lost 63 percent of their jobs. These were not just factory jobs. Many were engineering and technology jobs formerly filled by U.S. engineering and science graduates.

We cannot all be bankers. Highly sophisticated banking can be done almost anywhere in the world. We cannot remain a powerful and independent nation by being just bankers, retail clerks, hospital attendants, hotel workers, hamburger flippers, and consumers. It is only a matter of time—it is already here—until the great American consumer market cannot be supported by the salaries of relatively low-skilled employees. Yet those are the kinds of jobs that are being left to us. Indeed, with less American earnings, there will be less demand for retail, restaurant, and hotel jobs. Nor can we depend on keeping financial jobs. They are even more mobile than manufacturing jobs.

Most of the computers, televisions, autos, cameras, toys, clothes, and furniture we buy are now imports. Most of those imports were once made in the U.S., and many were exported. Wal-Mart once took pride in providing American made goods to its customers. Now all of that is gone. Almost everything but groceries in Wal-Mart stores comes from overseas. Our annual trade deficit with China is $300 billion.

China has put savings ahead of spending, capital investment ahead of consumption, and manufacturing ahead of finance. We have done the opposite, but China has now become our banker.

Pat Buchanan lists some heart-breaking statistics in his most recent book, The Passing of a Superpower:

From December 2000 through December 2010, industrial production fell for the first time since the Great Depression. We lost one-third of our manufacturing jobs. A total of 5.5 million of them disappeared. Manufacturing jobs dropped from 27 percent of the American economy in 1950 to 11 percent at the end of 2010. In the last ten years alone, the U.S. has run up $6.2 trillion in trade deficits, of which, $3.8 trillion was in manufactured goods. Over $2 trillion of this was to China. The U.S. has had to borrow $1.5 billion per day to finance it. China now holds over $1 trillion worth of our Treasury securities. The hopes of America leading in advanced technology products (ATP) are now diminishing. From 2007 to 2010 the U.S. ran up cumulative ATP trade deficits of $300 billion with China alone. In a recent TV interview, Buchanan warned that China could reach military parity with the U.S. by 2020.

We need trade policies that benefit all Americans. We cannot afford the heady but treacherous idealism of globalism. In addition, we need immigration policies that are good for Americans. Since December of 2000, we have issued 10.3 million green cards inviting foreigners to come and compete for what is left of the U.S. job market.

However, there are two employment sectors that have been expanding rapidly. According to Stephen Moore, we now have 22.5 million government workers in the U.S, twice the number of manufacturing jobs. There were only 8.7 million government workers in 1960.

Besides that, according to the Bureau of Labor Statistics, 14 million Americans are officially out of work, and as many as 11 million more have either given up looking for a job or have been forced to part-time work. Yet 8.1 million illegal immigrants hold jobs that should belong Americans. Is Congress serious about jobs?
We need to correct our mindless devotion to “globalism” and dispense with the propaganda that Americans won’t do jobs from which they have only recently been displaced. Americans should have a government that is good for America and Americans.