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Ed Webb

More Wealth, More Jobs, but Not for Everyone: What Fuels the Backlash on Trade - The Ne... - 1 views

  • “More global trade is a good thing if we get a piece of the cake,” Mr. Duijzers said. “But that’s the problem. We’re not getting our piece of the cake.”
  • For generations, libraries full of economics textbooks have rightly promised that global trade expands national wealth by lowering the price of goods, lifting wages and amplifying growth. The powers that emerged victorious from World War II championed globalization as the antidote to future conflicts. From Asia to Europe to North America, governments of every ideological persuasion have focused on trade as their guiding economic force. Advertisement Continue reading the main story But trade comes with no assurances that the spoils will be shared equitably. Across much of the industrialized world, an outsize share of the winnings have been harvested by people with advanced degrees, stock options and the need for accountants. Ordinary laborers have borne the costs, suffering joblessness and deepening economic anxiety
  • When millions of workers lost paychecks to foreign competition, they lacked government supports to cushion the blow. As a result, seething anger is upending politics from Europe to North America.
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  • Much of the global economy is operating free of artificial enhancements. Lower-skilled workers confront bleak opportunities and intense competition, especially in the United States. Even as recent data shows middle-class Americans are finally starting to share in the gains from the recovery, incomes for many remain below where they were a decade ago
  • technological disruption and economic upheaval are now at work in an era of scarcity
  • The worst financial crisis since the Great Depression has left banks from Europe to the United States reluctant to lend. Real estate bonanzas from Spain to Southern California gave way to a disastrous wave of foreclosures, eliminating construction jobs. China’s slowdown has diminished its appetite for raw materials, sowing unemployment from the iron ore mines of Brazil to the coal pits of Indonesia.
  • Trade did not cause the breakdown in economic growth. Indeed, trade has helped generate what growth remains. But the pervasive stagnation has left little cover for those set back by globalization.
  • China’s entry into the World Trade Organization in 2001 unleashed a far larger shock, but a construction boom absorbed many laid-off workers.
  • “We do need to have these trade agreements,” Mr. Bown said, “but we do need to be cognizant that there are going to be losers and we need to have policies to address them.”
  • Corporations that used China to cut costs raised their value, enriching executives and ordinary investors. Today’s Headlines Wake up each morning to the day’s top news, analysis and opinion delivered to your inbox. Please verify you're not a robot by clicking the box. Invalid email address. Please re-enter. Sign Up Receive occasional updates and special offers for The New York Times's products and services. Thank you for subscribing. An error has occurred. Please try again later. You are already subscribed to this email. View all New York Times newsletters. See Sample Manage Email Preferences Not you? Privacy Policy The casualties of China’s exports are far fewer, but they are concentrated. The rugged country of western North Carolina suffered mass unemployment as Chinese-made wooden furniture put local plants out of business. So did glassmakers in Toledo, Ohio, and auto parts manufacturers across the Midwest.
  • Even among those who support trade, doubts are growing about its ability to deliver on crucial promises. A 2014 Pew Research Center survey of people in 44 countries found that only 45 percent of respondents believed trade raises wages. Only 26 percent believed that trade lowers prices.
  • Workers employed in major export industries earn higher wages than those in domestically focused sectors.Americans saw their choice of products expand by one-third in recent decades, the Federal Reserve Bank of Dallas found. Trade is how raspberries appear on store shelves in the dead of winter.
  • In the fallout, the United States maintained limits on unemployment benefits, leaving American workers vulnerable to plummeting fortunes. Social welfare systems have limited the toll in Europe, but economic growth has been weak, so jobs are scarce.
  • automation has grown in sophistication and reach. Between 2000 and 2010, the United States lost some 5.6 million manufacturing jobs, by the government’s calculation. Only 13 percent of those job losses can be explained by trade, according to an analysis by the Center for Business and Economic Research at Ball State University in Indiana. The rest were casualties of automation or the result of tweaks to factory operations that enabled more production with less labor.
  • if robots are a more significant threat to paychecks, they are also harder to blame than hordes of low-wage workers in overseas factories.“We have a public policy toward trade,” said Douglas A. Irwin, an economist at Dartmouth College. “We don’t have a public policy on automation.”
  • China’s relentless development was turning farmland into factories, accelerated by a landmark in the history of trade: the country’s inclusion in the World Trade Organization.The W.T.O. was born out of the General Agreement on Tariffs and Trade, a compact forged in 1947 that lowered barriers to international commerce in an effort to prevent a repeat of global hostilities.In the first four decades, tariffs on manufactured wares plunged from about 35 percent to nearly 6 percent, according to the Federal Reserve Bank of Chicago. By 2000, the volume of trade among members had swelled to 25 times that of a half-century earlier.
  • Mexico — home to about 123 million people — was not big enough to refashion the terms of trade. When China joined the W.T.O. in 2001, that added a country of 1.3 billion people to the global trading system
  • The anti-trade backlash, building for years, has become explosive because the global economy has arrived at a sobering period of reckoning. Years of investment manias and financial machinations that juiced the job market have lost potency, exposing longstanding downsides of trade that had previously been masked by illusive prosperity.
  • Chinese imports eliminated nearly one million American manufacturing jobs between 1999 and 2011. Add in suppliers and other related industries, and the total job losses reach 2.4 million.
  • Mr. Trump vows to slap punitive tariffs on Chinese goods. But that would very likely just shift production to other low-wage countries like Vietnam and Mexico. It would not turn the lights on at shuttered textile plants in the Carolinas. (Even if it did, robots would probably capture most of the jobs.)
  • Trade Adjustment Assistance, a government program started in 1962 and expanded significantly a dozen years later, is supposed to support workers whose jobs are casualties of overseas competition. The program pays for job training.But Mr. Simmons rolls his eyes at mention of the program. Training has almost become a joke. Skills often do not translate from old jobs to new. Many workers just draw a check while they attend training and then remain jobless.
  • European workers have fared better. In wealthier countries like Germany, the Netherlands, Sweden and Denmark, unemployment benefits, housing subsidies and government-provided health care are far more generous than in the United States.In the five years after a job loss, an American family of four that is eligible for housing assistance receives average benefits equal to 25 percent of the unemployed person’s previous wages, according to data from the Organization for Economic Cooperation and Development. For a similar family in the Netherlands, benefits reach 70 percent.
  • Yet in Europe, too, the impacts of trade have been uneven, in part because of the quirks of the European Union. Trade deals are cut by Brussels, setting the terms for the 28 member nations. Social programs are left to national governments.
  • In China, farmers whose land has been turned into factories are making more steel than the world needs. Advertisement Continue reading the main story In America, idled steel workers are contemplating how to live off the land.
  • a provision that would enable multinational companies to sue governments for compensation when regulations dent their profits.Esso, a subsidiary of Exxon Mobil, the American petroleum company, has operations in the Netherlands. Suppose the government went ahead with plans to limit drilling to protect the environment?“They could sue the Dutch state,” he fumed. “We are not so sure in the Netherlands whether we want to give the multinationals so much power. We are a trading country, but it’s not always that trade should prevail against quality of life.”
  • the longshoremen fret about robots
  • Now, many longshoremen sit in glass-fronted offices set back from the docks, controlling robotic arms via computer terminals.
  • The robots will win in the end, because robots never strike. Robots improve with time.
  • Trade deals, immigrant labor, automation: As Mr. Arkenbout sees it, these are all just instruments wielded in pursuit of the same goal — paying him less so corporations can keep more.“When they don’t need me anymore,” he said, “I’m nothing.”
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    Relevant to our class discussion on 9/27/16
Ed Webb

How Many Guns Did the U.S. Lose Track of in Iraq and Afghanistan? Hundreds of Thousands... - 0 views

  • In all, Overton found, the Pentagon provided more than 1.45 million firearms to various security forces in Afghanistan and Iraq, including more than 978,000 assault rifles, 266,000 pistols and almost 112,000 machine guns. These transfers formed a collage of firearms of mixed vintage and type: Kalashnikov assault rifles left over from the Cold War; recently manufactured NATO-standard M16s and M4s from American factories; machine guns of Russian and Western lineage; and sniper rifles, shotguns and pistols of varied provenance and caliber, including a large order of Glock semiautomatic pistols, a type of weapon also regularly offered for sale online in Iraq. Advertisement Continue reading the main story Many of the recipients of these weapons became brave and important battlefield allies. But many more did not. Taken together, the weapons were part of a vast and sometimes minimally supervised flow of arms from a superpower to armies and militias often compromised by poor training, desertion, corruption and patterns of human rights abuses. Knowing what we know about many of these forces, it would have been remarkable for them to retain custody of many of their weapons. It is not surprising that they did not.
  • the Pentagon said it has records for fewer than half the number of firearms in the researchers’ count — about 700,000 in all
  • Overton’s analysis also does not account for many weapons issued by the American military to local forces by other means, including the reissue of captured weapons, which was a common and largely undocumented practice.
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  • One point is inarguable: Many of these weapons did not remain long in government possession after arriving in their respective countries. In one of many examples, a 2007 Government Accountability Office report found that 110,000 Kalashnikov assault rifles and 80,000 pistols bought by the United States for Iraq’s security forces could not be accounted for — more than one firearm for every member of the entire American military force in Iraq at any time during the war. Those documented lapses of accountability were before entire Iraqi divisions simply vanished from the battlefield, as four of them did after the Islamic State seized Mosul and Tikrit in 2014, according to a 2015 Army budget request to buy more firearms for the Iraqi forces to replace what was lost.
  • According to its tally, the American military issued contracts potentially worth more than $40 billion for firearms, accessories and ammunition since Sept. 11, including improvements to the ammunition plants required to keep the cartridge production going. Most of these planned expenditures were for American forces, and the particulars tell the story of two wars that did not go as pitched. More than $4 billion worth of contracts was issued for small arms, including pistols, machines guns, assault rifles and sniper rifles, and more than $11 billion worth was issued for associated equipment, from spare machine-gun barrels to sniper-rifle scopes, according to Overton’s count. A much larger amount — nearly $25 billion — was issued for ammunition or upgrades to ammunition plants to keep those firearms supplied. That last figure aligns with what most any veteran of ground combat in Iraq and Afghanistan could tell you — American troops have been involved in a dizzying number of gunfights since 2001, burning through mountains of ammunition along the way.
  • In April, after being approached by The New York Times and reviewing data from Armament Research Services, a private arms-investigation consultancy, Facebook closed many pages in the Middle East that were serving as busy arms bazaars, including pages in Syria and Iraq on which firearms with Pentagon origins accounted for a large fraction of the visible trade
  • The American arming of Syrian rebels, by both the Central Intelligence Agency and the Defense Department, has also been troubled by questions of accountability and outright theft in a war where the battlefield is thick with jihadists aligned with Al Qaeda or fighting under the banner of the Islamic State.
  • many new arms-trading Facebook pages have since cropped up, including, according to their own descriptions, virtual markets operating from Baghdad and Karbala
  • The data show large purchases of heavy-machine guns and barrels. This is a wink at the shift in many American units from being foot-mobile to vehicular, as grunts buttoned up within armored trucks and needed turret-mounted firepower to defend themselves — a matériel adaptation forced by ambushes and improvised bombs, the cheaply made weapons that wearied the most expensive military in the world.
  • a startlingly risky aspect of the Pentagon’s arming of local forces with infantry arms: the wide distribution of anti-armor weapons, including RPG-7s, commonly called rocket-propelled grenades, and recoilless weapons, including the SPG-9. Each of these systems fires high-explosive (and often armor-piercing) projectiles, and each was commonly used by insurgents in attacks. After the opening weeks of each war, the only armor on either battlefield was American or associated with allied and local government units, which made the Pentagon’s practice of providing anti-armor weapons to Afghan and Iraqi security forces puzzling. Why would they need anti-armor weapons when they had no armor to fight? All the while rockets were somehow mysteriously being fired at American convoys and patrols in each war.
  • a portrait of the Pentagon’s bungling the already-awkward role it chose for itself — that of state-building arms dealer, a role that routinely led to missions in clear opposition to each other. While fighting two rapidly evolving wars, the American military tried to create and bolster new democracies, governments and political classes; recruit, train and equip security and intelligence forces on short schedule and at outsize scale; repair and secure transportation infrastructure; encourage the spread or restoration of the legal industry and public services; and leave behind something more palatable and sturdy than rule by thugs.
  • The procession of arms purchases and handouts has continued to this day, with others involved, including Iran to its allies in Iraq and various donors to Kurdish fighters. In March, Russia announced that it had given 10,000 Kalashnikov assault rifles to Afghanistan, already one of the most Kalashnikov-saturated places on earth. If an analysis from the United States’ Special Inspector General for Afghanistan Reconstruction, or Sigar, is to be believed, Afghanistan did not even need them. In 2014 the inspector general reported that after the United States decided to replace the Afghan Army’s Kalashnikovs with NATO-standard weapons (a boon for the rifles’ manufacturer with a much less obvious value for an already amply armed Afghan force), the Afghan Army ended up with a surplus of more than 83,000 Kalashnikovs. The United States never tried to recover the excess it had created, giving the inspector general’s office grounds for long-term worry. “Without confidence in the Afghan government’s ability to account for or properly dispose of these weapons,” it noted, “Sigar is concerned that they could be obtained by insurgents and pose additional risks to civilians.” Write A Comment
  • What to do? If past is precedent, given enough time one of the United States’ solutions will be, once again, to ship in more guns.
Ed Webb

Why Factories Leaving China Aren't Going to India - Bloomberg - 0 views

  • Vietnam seems to be the consensus pick for winner of the U.S.-China trade war, as Chinese and other manufacturers shift production to the cheaper Southeast Asian nation. If there’s a loser, at least in terms of missed opportunities, it may be the countries of South Asia.
  • Faced with rising costs, Chinese manufacturers must decide whether to invest in labor-saving automation technologies or to relocate. Those choosing the latter present an enormous opportunity for less-developed countries, as Chinese companies can help spark industrialization and much-needed economic transformation in their new homes. 
  • The only proven pathway to long-lasting, broad-based prosperity has been to build a manufacturing sector linked to global value chains, which raises productivity levels and creates knock-on jobs across the whole economy
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  • African countries, too, are making manufacturing a top priority. Ethiopia alone has opened nearly a dozen industrial parks in recent years and set up a world-class government agency to attract foreign investment. The World Bank has lauded sub-Saharan Africa as the region with the highest number of reforms each year since 2012.
  • In the last five years, the American Enterprise Institute’s China Global Investment Tracker has recorded 13 large Chinese investment deals in Africa and only nine in South Asia.
  • In the past few years, Bangladesh has fallen to 176 out of 190 countries in the global Ease of Doing Business country rankings. DBL Group, a Bangladeshi company, is investing in a new apparel manufacturing facility that will generate 4,000 jobs -- in Ethiopia.
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