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Old 04-12-2005, 08:06 AM   #1 (permalink)
 
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spinning globalization?

two stories reacting to yesterday's release of trade figures, which show a record trade deficit. in the ny times this morning:


Quote:
Trade Deficit Reaches All-Time High in February
By THE ASSOCIATED PRESS

Published: April 12, 2005

Filed at 10:44 a.m. ET

WASHINGTON (AP) -- The U.S. trade deficit, exacerbated by surging imports of oil and textiles, soared to an all-time high of $61.04 billion in February.

The Commerce Department said Tuesday that the February imbalance was up 4.3 percent from a $58.5 billion trade gap in January as a small $50 million rise in U.S. exports of goods and services was swamped by a $2.58 billion increase in imports.

The surging trade deficit is leading to an increase in protectionist pressures as American textile and clothing manufacturers are lobbying the administration to limit imports of Chinese textile and clothing goods to ward off a flood of products now that global quotas have expired.

For February, imports of textiles and clothing from China rose by 9.8 percent even though America's overall trade gap with China actually narrowed to $13.9 billion, down by 9.2 percent from a January deficit of $15.3 billion. The improvement reflected an increase in U.S. exports to China and declines in other import categories outside of textiles.

For the first two months of this year, the trade deficit is running at an annual rate of $717.2 billion, a full $100 billion above the record imbalance of $617.1 billion set for all of 2004.

Trade deficits of this magnitude have raised worries among economists about America's ability to continue to attract the foreign financing needed to cover the shortfall between exports and imports. If foreigners decided to hold fewer dollar-denominated investments such as stocks and bonds, it could trigger steep declines in U.S. stock prices and a sharp increase in interest rates.

Critics point to the soaring deficits as evidence that President Bush's free trade policies are not working and have instead contributed to the loss of 3 million American manufacturing jobs since 2000.

The Bush administration argues that the deficit primarily reflects the fact that the U.S. economy has been growing at a much faster pace than the economies of its major trading partners, pushing up imports while dampening demand for U.S. exports. Treasury Secretary John Snow was expected to use a Saturday meeting of finance officials from the Group of Seven major industrial countries to once again lobby for Europe and Japan to pursue more growth-oriented policies.

The U.S. dollar has been declining for three years, a fact that should help narrow the trade deficit by making imports more expensive to American consumers while making U.S. exports cheaper. However, economists say the dollar needs to fall further to deal with the widening trade deficit, and they are predicting a further increase in the trade gap this year.

The record February deficit of $61.04 billion surpassed the old record of $59.4 billion set last November.

Imports of goods and services rose by 1.6 percent to an all-time high of $161.5 billion.

Demand for foreign petroleum products shot up 10.3 percent to $18.2 billion, the second highest level on record, surpassed only by $19.6 billion in imports of petroleum last November.

The February increase reflected higher prices as crude oil climbed to $36.85 per barrel, compared to $35.25 in January, offsetting a drop in the volume of oil imports. Analysts said America's foreign oil bill is likely to climb even further in months ahead, reflecting further increases in global oil prices.

Exports were up by $50 million to a record $100.48 billion in February, reflecting increases in shipments of drilling and oilfield equipment, civilian aircraft and pharmaceutical products. These gains offset declines in sales of U.S.-made cars and auto parts and food.

The administration, at the urging of U.S. textile and clothing manufacturers, has begun investigations into whether to re-impose quotas on Chinese imports of various products to protect the domestic industry from market disruptions following the removal of global quotas that had restricted shipments to the United States for more than three decades.
obviously most of the coverage is centered on textiles, which seems to function as a way of staging a conflict between industries interested in maintaining a nationally-organized manufacturing base (this despite the nature of textiles as an industry, fully integrated into the globalizing capitalist system)...only passing reference to other advsersely affected sectors: automobiles, steel, technology....

here is another take from le monde this morning:

http://www.lemonde.fr/web/article/0,...-638260,0.html

the text is in french (sorry about that) but the general argument is straightforward enough: grouping the various declining sectors together, the writer at le monde argues that these figures indicate an acceleration of the deindustrialization process with older, heavier industries caught in a nasty circle of rising costs, declining investment and stagnant production levels.

the le monde article quotes a former reagan staff economist as worrying about the implications of this trend in american economic devolution: that the states is in danger of becoming a country that exports raw materials and imports finished products.

all this is predictated on the illusion that nation-states can be understood as geographic expressions of patterns of ownership--something that in structural terms has been ludicrous since the early 1970s, at the point where international stock trade was instituted, and which is even more obviously absurd now.

why the difference in coverage?

1. i would link it to a kind of systemic neoliberal biais in american journalism concerning economic matters: the two major parties are simply arguing for variants of the same basic order, one rooted in fictions concerning markets, their self-regulating character and disregard of both data that tends to falsify these ideological assumptions and the social consequences of neoliberalism in general.

2. it also seems to follow from the nationalist frame of reference brought to bear by the ny times, which i take (for better or worse) to still be one of the more consistently interesting dailies in the states. for the nyt writer, this increasingly obsolete category of nation-state remains a primary organizing tool for processing data. the assumptions behind it appear to be those of bushworld: that it at some level makes sense to simultaneously encourage an acceleration in the transnationalization of production (which follows on the transnationalisation of ownership) and remain nationalist in some way. the bush=specific solution to the contradictions any child could see in this? ignore social consequences altogether and work to substitute a kind of hallucinatory nationalism rooted in the usual suspects the "war on terror" blind patriotism, the framing of arguments in nonfalsifiable ways about the status of nation, the endless repetition of reassuring banalities about capitalism lifting all boats, and the systematic suppression of information that might indicate the contrary is in fact holding.

so it looks like the difference in coverage between these two papers can be explained with reference to a consensus that cuts across those minimal lines that in fact seperate the two major political parties concerning economic ideology. it seems to me that this consensus is central to the drift-toward-identity of the two parties (republican media delusions to the contrary notwithstanding) and to the massive act of collective self-blinding to the consequences of policies that derive from this economic ideology.

what do you make of this?
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Last edited by roachboy; 04-12-2005 at 08:11 AM..
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Old 04-12-2005, 09:03 AM   #2 (permalink)
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Quote:
what do you make of this?
US: living in a little bubble world. Both parties.

Europe: outside the bubble and can see things a bit more clearly.

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Old 04-12-2005, 02:29 PM   #3 (permalink)
spudly
 
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roachboy,
Do you follow the writing of Thomas Friedman (NY Times foreign affairs columnist/book author)? He writes excellent analyses of globalization and its implications (in my opinion). Now, he would be the first to admit that his point of view is explicitly pro-globalization, but for good reason (I think). All first-world coutries are so plugged into the international economy that choosing to be pro or anti-globalization is a moot point by now. One can only choose to cooperate with the new world order or damage your own economy by trying to resist and delaying the inevitable. In short, the only choice that is real is that of when you are going to start to compete in the new globalized economy. You could let your industries take an immediate hit and innovate now or die, which will definitely mean that some US companies will go under, in particular raw manufacturing and blue-collar work. This is part of what Friedman calls the "creative destruction" of capitalism. The only other alternative is "protectionist" policies, such as import limits and tariffs. These may buy a little time in terms of domestic sales, but will make the fall so much harder when the pressures of the global economy finally set in. There is no withdrawal from the global system - not for the developed world.

What makes the individual decisions seem difficult is that politics creates pressure to act to preserve US jobs (as if that were truly possible). Saving those jobs now may be politically expedient in the short term, but it is a false economy (in both senses). Companies must compete now or compete later, that much is certain. Choosing to impose artificial restraints on our domestic market to protect domestic corporations will only stifle the inevitable competition that will come. Just ask China, Korea, Indonesia, and Malaysia about that.

Of course, this is highly ironic - we in the US see ourselves as the inventors and guardians of capitalism, and with the commoditization on shipping and information transmission (due to digital technology) there is virtually no way for our basic manufacturing and blue-collar processes to compete with the coutries we were previously exploiting. My question is more focussed: what will be the role of domestic labor unions in a globalized economy? If unions persists in driving production costs up to fund a standard of living without yielding some serious concessions in productivity, they will only drive domestic companies out of the country or out of business faster.

Raveneye's point is both short-sighted (sorry Raveneye!) and very insightful. The US doesn't live in a bubble-world - it is our economy, military and ideology that in large part prepared the way for globalization. However, anyone of any party who thinks that we can choose between globalization and a nationalistic economy is not just losing the game - they're playing the wrong sport. Arguing these sorts of points is stupid, shortsighted and ultimately futile. We need to be figuring out what we are going to do about globalization (how to continue to adapt and excel), not how to stop it. Incidentally, it isn't Europe that is outside the bubble and seeing clearly - it's Asia. The countries I mentioned before aren't wondering at their recent economic success - they know exactly what they have done to produce growth, and that is conform to the pressures of a global economy, give up local control, and compete fiercely in an international system.

I'd suggest Thomas Friedman's books The Lexus and the Olive Tree: Understanding Globalization and The World Is Flat: A Brief History of the Twenty-First Century to anyone who want to understand what will probably be the defining paradigms for the next period of politics and economics.
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Last edited by ubertuber; 04-13-2005 at 10:24 AM..
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Old 04-13-2005, 07:30 AM   #4 (permalink)
 
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uber: i know friedman's writing--but thanks for the recommendation.

most "antiglobalization" movements are not so much opposed to the fact of the reorganization of capitalism as they are concerned about the implosion of existing feedback loops that had connected citizens to the legal mechanisms that shaped socio-economic activity within capitalism since the outset--the nation-state. the general argument is that economic policy-making is being shifted to transnational institutions that operate at a considerable remove from the nation-state, and which are not responsible to anyone for the consequences of these policies. so the problem comes stems from the attempt to make the institutional framework within which globalizing capitalism is taking shape into an extra-political space.


the underlying argument is that one of the main achievements within capitalism over its earlier phases (up to about 1970) was that organized citizens were able to force changes into the nature and role of the state, shifting it away from being the simple legal arm operating in the interest of holders of capital into a legal mechanism at the center of conflicts between capital and, in the main, working-class people (obviously other social movements were able to focus their activities across their own projects as well--but the channels that enabled them to do so were largely implemented through old-school class conflict).

so the state had been transformed through pressure brought to bear on it from outside into a type of feedback loop, into a space for pressure to be brought, into an instrument for the limitation of the prerogatives of capital, and into a mechanism whereby the social consequences of social and economic policies could be addressed.

the other main argument is that these feedback loops were central to the coherence of the system as a whole--not only did this pressure bring about a somewhat less barbaric type of capitalism, but it also provided the state (and capital) with a type of friction that was necessary for anything approaching rational policy formation and implementation. (this claim is parallel to those of hayek's concernign price history and its function in the utopia of "free markets"--the history of which was mostly a function of his fantasy life)

they also were a result of a great expansion in the purview of political action for citizens--who had to organize to be able to access anything like political power.

the transfer of socio-economic power to transnational institutions threatens to wipe out all these loops. this same transfer changes the existing states from functional to obstacle.

one of the most well-organized of these groups is attac:

http://www.attac.org/indexfla.htm

if you read through some of the papers collected on this site (i did a small amount of translation for attac when they operated through a translator pool with more frequency)---the political situation is outlined pretty clearly--i do not think that the tobin tax is the magic bullet that attac seems (or seemed) to think it is (the tobin tax is geared toward putting breaks on transnational currency speculation by taxing it at 5%)--but in the main i think they have worked out an interesting framework for understanding this aspect of globalizing capitalism.



this is the context within which i think it best to understand bushworld.
the right is caught in a bind.
they have no choice but to cheerlead globalization. their prior economic and social committments leave the right in america no latittude on this.
but they also know that, if this process unfolds along the lines set out already, the nation-state will become increasingly obsolete.
their ideology will collapse well before the nation-state does: the writing is on the wall.
the right opposed clinton, from this viewpoint, not because he was such an advocate of globalization, but because he was too much a proponent of multilateral agreements and not enough a nationalist. the residents of bushworld have tried to implement another logic, which is geared around preserving the ideology of nation, not because it is coherent, but because it is central to the political survival of conservative politics in anything like its present form. because without the nation, what do conservatives have to talk about?

nothing at all.....

but if you think about it, bushworld is not at odds with the larger trends in globalizing capitalism noted above: they simply would rather carry out the depoliticization of capitalism wrapped around the ideology of nation. so you have the conservative "philosophy" of the state, whcih sees it as little more than an element that introduces irrationality into the center of otherwise pure and totally functional market relations. that this view is totally false empirically and disastrous as policy is of no consequence--that it fundamentally falsifies the role and meanings the state had come to acquire through 150 of social conflict is also of no consequence---the arguments the right uses to rationalize shrinking the state are obvious, are well-known, and are entirely disengenuous--what they are about is an attempt to remove the core of the state---the military apparatus----from a space of political contestation. on the basis of a militarized state, the right understands it is easier to sell an ideolgy of nationalism. on the basis of a militarized state, the purview of politics is reduced to a kind of vanishing point. add to this a campaign designed to emphasize the individual and make all attempts at self-organization of citizens suspect (unless they originate in far-right protestant evangelical churches, it seems, which are fine because their structure enables them to be tightly controlled).

conservative ideology is about self-disempowerment in the name of the Rugged Individual. but that is simply a set of signifers that are floated: what they conservative ideology is mostly about is the preservation of conservative ideology itself. consequences be damned. to implement this last view, the most tactic is to eliminate feedback loops that would force them (or holders of capital) to look at them, not to mention address them.

so the right has nothing to say about the long or even medium term consequences of globalizing capitalism on american workers.
the really sorry thing is that the democrats dont either.
what seems to matter is the maintenance of the illusion of stability--so the right works to restrict the adaptive functions of the educational system in the states in the name of "tradition" or "basic skills"--because they have no way of addressing class disparities except to blame the victims for it, what these policies mean in real time can be safely ignored. so you have the right fighting to maintain an educational system that reproduces a labor force for an economy that, increasingly, no longer exists---it functions across a different geography.
the consequences of this will be the systematic trashing of thousands and thousands of lives.
how to deal with that?
dont look at it.
how do you manage that?
eliminate the mechanisms through which the problems could be forced onto the state and combine it with an ideology of reassurance that never, ever, refers to anything structural (either vague bromides or isolated anecdotes only) anbd then, maybe, if they are honest (they rarely are), you get the justification out of schumpeter--the "creative destruction" of capitalism--which is something you might be able to talk about in the abstract from a position at the ny times or some such--removed from what the term refers to, reduced to a kind of tsk tsk tsk..

i may have had a bit too much coffee this morning.......
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Last edited by roachboy; 04-13-2005 at 07:37 AM..
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Old 04-13-2005, 10:11 AM   #5 (permalink)
spudly
 
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roachboy,

First, an apology, because at this moment I only have time (and energy) to pick out two points of your long post (which has much excellent material in it, btw).

Quote:
...if this process unfolds along the lines set out already, the nation-state will become increasingly obsolete.
their ideology will collapse well before the nation-state does: the writing is on the wall.
While I agree with your point, I'm not ready to assign the nation-state to obsolescence. I think that the nation-state as it currently exists will be pushed out of the way in a globalized world. I'm not ruling out the nation-state responding to these environmental pressure by evolving new functions or a new operating space.

My second point from your post is in regard to republican/democrat ideology and support for globalization. My memory is hazy on this time period (because it is in the cracks between adult experience and history, due to my age), but NAFTA was being debated in the 1992 election, right? I thought Clinton was for it and Bush I was against it, but I could be wrong, in addition to skipping over a whole ton of nuance. Where did Perot stand? I get the feeling that you are claiming that you think the Republicans have a problem with globalization that isn't wrapped up in nationalistic ideals as well... Could you clarify that are a little for me, please?

I do know one thing, which I probably harped on in my first post in this thread: globalization is like gravity - you can dislike its effects, but there is no point in being against it. It is simply the system by which the world is learning to function. Speaking of which, one of the first things you mention is the phenomenon of power being controlled by trans-national entities (corporations and conglomerates). As I said above, this can only diminish the efficacy, if not the very role, of nation-states in global power and economics. Do you think it could also be the avenue through which the WTO, IMF, and UN could become true world-governing institutions? I think this is at least a possibility to be considered.

Quote:
the underlying argument is that one of the main achievements within capitalism over its earlier phases (up to about 1970) was that organized citizens were able to force changes into the nature and role of the state
This is one place I might quote Friedman to you again: I believe that his analysis of the world's major players is concise and accurate. Superpowers, Supermarkets, and Super-empowered individuals are all thrust into positions of influence by the world's level of connectivity. Although he's no role model, bin Laden is an example of what a super-empowered angry man can do - he has managed to affect the timbre of international relations. Of course, his message seems to be a dead-end, in that he has no viable alternative to the current state of world affairs, only anger at it. And it is also true that his most effective time was that which he spent having free reign in a nation-state (Afghanistan). It is my belief that as people learn to use our new level of connectivity, individuals will find more productive ways to express the anger and super-empowerment. However, even in the short term, I wouldn't count the little guys out of the game - it was essentially a group of bloggers that caused the ouster of Dan Rather. 10 years ago, you know CBS would have scoffed at the idea of moonlighters and amatures sparking a debate that would lead to such major changes...

I'll come back to this post later - there were many good ideas in it to chew on.
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Last edited by ubertuber; 04-13-2005 at 10:22 AM.. Reason: spelling and new ideas
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