Wednesday, June 29, 2016

Wayback Wednesday: Globalization

Back in the late 1990s while Tom Friedman was profiting hugely from a globalization boner he got while  (no kidding) --
...eating a sushi box lunch on a Japanese bullet train after visiting a Lexus factory and reading an article about conflict in the Middle East.
-- and David Brooks was braying about how the productivity of the American worker had turned the American economy into an indestructible prosperity machine capable of indefinitely sustaining any level of tax cutting folly --
Yes, There Is a New Economy
Thanks to once-in-a lifetime productivity gains, Bush's plans are easily affordable
MAR 19, 2001

...even if today's productivity improvements are only on the scale of, say, the improvements our economy saw after World War II, we may be in for a long and sunny ride. There is a rough historical pattern here. A new technology is invented. It takes a long time before people figure out how to use it. The electric motor was invented in the 1880s, but it didn't transform factories until the 1920s, economist Paul David has noted. Once the technology is fully deployed, however, there are decades of positive results. Daniel Sichel of the Federal Reserve points to previous technology-driven surges that lasted 10 and 25 years. That suggests we may still be near the beginning of this particular period of bounty.

If we are, an occasional period of slower growth or even a recession may occur, but the U.S. economy is fundamentally strong, and both laymen and legislators have good reasons to believe it will remain strong for many years. Industrial productivity is surging. Americans are not only the hardest working people on earth (the average American works about 10 weeks a year more than the average European) but also the most productive workers -- by far. If you measure value added per hour worked, Americans do about 20 percent better than Germans and the French, and 40 percent better than the Japanese.

In other words, if you wade through the economic literature, it's hard not to agree with the Cleveland Fed's Jerry Jordan: We are living at a once-in-a-generation moment of economic opportunity. As productivity grows, the economy will grow. As the economy grows, revenues will grow, maybe beyond what the CBO projects. The real question about the Bush tax cuts, then, is not, Can we afford them? The real question is, Why are they so small?
-- one dirty hippie named Richard Sennett (about whom I have written once or twice) committed an unmitigated act of actual journalism by venturing to the Magic Mountain in Davos where the lords and ladies of capitalism had gathered and reported back on what they had in store for the rest of us.

His account from twenty years ago reads like it could have been ripped from pages of yesterday's New York Times. Here are his conclusions:
The dizzy life of Davos man

Every year, on a magic Alpine mountain, the monarchs of capitalism assemble their courtiers and meet to plot all our futures. Is the world safe in their hands? Richard Sennett thinks not

Richard Sennett Saturday 10 October 1998

Yet I had an epiphany of sorts in Davos, listening to the rulers of the flexible realm. "We" is also a dangerous pronoun to them. They dwell comfortably in entrepreneurial disorder, but fear organised confrontation. They of course fear the resurgence of unions, but become acutely and personally uncomfortable, fidgeting or breaking eye contact or retreating into taking notes, if forced to discuss the people who, in their jargon, are "left behind." They know that the great majority of those who toil in the flexible regime are left behind, and of course they regret it. But the flexibility they celebrate does not give, it cannot give, any guidance for the conduct of an ordinary life. The new masters have rejected careers in the old English sense of the word, as pathways along which people can travel; durable and sustained paths of action are foreign territories.

It therefore seemed to me, as I wandered in and out of the conference halls, weaved through the tangle of limousines and police on the mountainous village streets, that this regime might at least lose its current hold over the imaginations and sentiments of those down below. I have learned from my family's bitter radical past; if change occurs it happens on the ground, between persons speaking out of inner need, rather than through mass uprisings. What political programmes follow from those inner needs, I simply don't know. But I do know a regime which provides human beings no deep reasons to care about one another cannot long preserve its legitimacy.
Once again, the dirty hippies were sounding the alarm bell in the night about dangerous forces that were being unleashed for the benefit a tiny, privileged minority at the expense of the rest of us.

Once again, none of the Very Serious People wanted to hear the roar of the avalanche until it was at their door.

As for Friedman and Brooks, I wonder whatever happened to those guys?

Laughed out of the business, one would assume.  

1 comment:

banker puppy said...

Statistics teaches us that the members of a particular group are frequently distributed along a continuum, with most of the members huddled near the center and a handful of outliers at each end. Somebody has to occupy the “insanely successful” end of the spectrum.

Remember also that Tom and David are residents of The Grey Lady Co-dependency Ward, also known as the New York Times op-ed team. NYT goes to great lengths to protect its own, even though their work of late can’t even be used as a bird cage lining.

Co-dependent relationships ultimately inflict severe damage on one or both parties. So grab the popcorn, place your bets on who self-destructs first, and enjoy the show.