The Betrayal of Economic Policy

The link (below) is to an article appearing in The Seattle Times, “Low wages, trade deals luring…” and though from April 2015 the article remains an important read; it is well written and sourced. For those who are interested in building a better economic understanding it is a piece of solid perspective and as the Trade Deal (a.k.a., Trans Pacific Partnership/TPP) vote nears it is important for the public to have a solid foundation on a subject that has been completely surrendered to the appeal of donor-laced political favoritism. As you read the article you will want to keep the following few points in mind:

(1) I support the autonomous decision making capacity of any viable business concern. To have a thriving market-based economy capital/investment must be fluid, diverse and unobstructed by the government quagmire; this point is applicable in both directions.

(2) All economy is local and most definitely not international. The origins of what becomes “economy” initiates at the individual level where demand, and the ability to fund/pay for it, occurs; there are no exceptions to this rule.

(3) To provide for (fill) demand it is implicit that enterprise focus first on local “economy” and then extending its capacity for output to other external local “economies”  which includes driving excess output toward export markets.

(4) 2013 stats indicate that the medium cost of living (in the U.S.) for a two-parent two-child household is approximately $63k. This income translates, for a single income household working a 40 hour work week for 52 weeks per year, into an hourly wage of approximately $31/hour net of tax burden.

With these points in hand and while reading the accompanying article I believe you will want to be on alert to its discussions relating to wage base, trade and corporate investment policy the content of which you might consider when developing answers to the following questions:

(1) Is the offshoring of manufacturing truly an economic benefit to the “local economy” (domestic) when you consider the economic effects of having neutralized domestic capacity?

(2) Are the economic effects, in terms of costs, offset by the savings in production costs to the manufacturer (including their development/investment costs)?

(3) Are the logistic components of Trade Agreements proving themselves to be the economic benefit to the domestic economy that they are purported to be?

(4) Given that the very same historical arguments favoring Trade Agreements, and their internal structures, globalization-push, is it then also reasonable to assume that there is little to no understanding, at any level in the food chain supporting these predatory-like Trade Agreements? That the functional economic and social consequence (for the U.S.) in an era where the infrastructure of trade agreements is clearly designed with enforcing global uniformity of trade whilst ignoring the fundamentals of free-market viability and its inviolable rules of conduct?

5) Can the U.S. survive a socialization of a domestic economy into a compartmentalized global economic order?

True, conceptually, you can feed a growing number of household demands with compartmentalized global socialism however at the same time the notion ignores that you must also increase the capacity for meeting that demand. Without it each household is then forced to persist with an every decreasing share (size) of what is also, simultaneously, becoming increasingly smaller. This simple truth explains the occurring truths affecting the U.S. Economy since the mid-1970’s and the numbers are far worse if you adjust the financial data to constant non-inflated dollars. As you know, the first solution to a problem must first be identifying the existing problem.

http://www.seattletimes.com/business/low-wages-trade-deals-luring-auto-plants-and-jobs-to-mexico/

Curtis C. Greco, Founder

This entry was posted in Poli-Econ and tagged , , . Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *