In the U.S., globalization has made the rich richer but hasn't helped anyone else. Since 2000, the incomes of the top 1 percent have risen 47 percent, while the average worker has struggled to stay even with inflation. Democrats see this increased inequality as shameful. Their solution is protectionism coupled with "The Free Choice Act," their Orwellian label for legislation enabling unions to organize without elections. I guess their theory is that once unionized, industries will be unable to compete globally and therefore need protection. What Republicans view as shameful is that a bit of this money is going to people who don't vigorously oppose Roe v. Wade. Tragically, neither party understands globalization and how it affects the country. The problem with globalization is imbalance. Industries in which the U.S. is uncompetitive have been globalized, while industries we dominate remain local. For example, we make lousy cars and therefore can't compete in globalized auto industry. Similarly, we can't compete in globalized markets for steel, sweaters, television sets, stemware, etc., because we are not much good at making steel, sweaters, television sets, stemware, etc. At the same time, the things we do well have not been globalized. The four areas in which America excels are:
- Flipping condos.
- Making credit card offers.
- Suing each other.
the best lobbyists in the world. Look at the effectiveness of our corn lobby, which has scammed $51.3 billion in government subsidies in the past decade. This subsidy promotes feeding corn to cattle. Since they did not evolve to properly digest corn, cattle produce vast amounts of methane, a gas with a greenhouse effect 21 times that of CO2. Corn-fed cattle are a greater threat to the environment than SUVs. For $51.3 billion, we could get health coverage for all children under 18, plus 172,000 new teachers, plus 1 million full-tuition college scholarships, plus 800,000 kids in Head Start – and we'd have money left over. Or we could finance eight more months of the Iraq war. Instead, we get farting cows warming the globe. After creating an environmental mess, the corn lobby now proposes a solution – corn based ethanol. Not content with the existing $2 billion annual ethanol subsidy, the corn lobby is now requesting 10 times this amount. They are not deterred by the fact that it takes the equivalent of seven barrels of oil to grow, process, and transport eight barrels of ethanol, according to a study by the Cato Institute. This is how good American lobbyists are. The stellar quality of American lobbyists was documented when the Bush appointed industry lobbyists as secretary of the Interior, deputy secretary of Interior, White House chief of staff, chairman of the Council on Environmental Quality, undersecretary for Natural Resources, and director of the Office of Air and Radiation. Unfortunately, America cannot
use its lobbying expertise internationally, because there is no globalized market for lobbyists. Other countries have statutory and cultural barriers that prevent American lobbyists from competing. The same is true for condo flips, credit card offers, and lawsuits:
- Other nations lack real-estate financing tools such as interest-only strips on pass-through securities based upon pools of collateralized mortgage obligations, sub-debt adjustable rate mortgages, and home equity loans. In these backward nations, people must pay for homes with real money, which prevents condo flipping.
- American credit-card offers often cannot be exported because many languages have no word for "pre-qualified."
- Some cultures, especially Buddhist ones, encourage harmony, creating insurmountable barriers to the export of American litigation.
So we buy cars, steel, sweaters, TV sets, and stemware made by other countries and they buy nothing produced by us. As a result, we run a trade deficit of $700 billion a year that we finance by printing debt. But I forgot. America prints the best debt in the world. No nation can compete with us when it comes to printing debt. Maybe we have nothing to worry about.