[NYTr] George Bush and Lies About The Economy

[All the News That Doesn't Fit]

sent by Steven L. Robinson - activ-l

Working Life - October 12, 2007
http://www.workinglife.org/blogs/view_post.php?content_id=7191

George Bush and Lies About The Economy

by Jonathan Tasini

The Wall Street Journal has an interview today with George Bush that
gives great insight into the disinformation, lies and, charitably,
cognitive dissonance that underpins the Administration's economic
policy.

"We have lost sight of what it means to be a nation willing to be
aggressive in the world, and spread freedom or deal with disease," he
said in an interview with The Wall Street Journal. "We have lost our
confidence in the ability to compete internationally."

Actually, we've been pretty aggressive in the world. Putting aside that
little mess in Iraq, the U.S. has tried for the past several decades to
impose an economic system that, increasingly, people don't want. In
Costa Rica, for example, 100,000 people turned out to protest the
Central American Free Trade Agreement, which only passed by the barest
of majorities in a national referendum. The same kinds of protests can
be found in other corners of the world.

The truth is that one reason for this press offensive is that Bush and
Republicans are concerned about the deep dissatisfaction bubbling up
even from their own ranks about the insanity of so-called "free trade."
There is a huge political moment at hand when two-thirds of Republicans
say they believe trade has been a bad deal for Americans.

The reaction from Bush--and, frankly, from the media pundits and still
a few Democrats --is pretty typical: blame the people. We're afraid, we
don't understand the "real" benefits from trade and we should just buck
it up and be brave and confident. I can't help but feel that the
president--who made his own fortune thanks to connections and cronies
and friends of the family, not hard work--is calling for economic
bravery with the same voice that stirred inside him when it came to
serving in Vietnam: let someone else carry the burden.

Then, in the interview, the president just turns to a series of
whoppers:

In the interview, Mr. Bush repeated his belief that free trade and
globalization are good for Americans. "There's a lot of high-paying
jobs as a result of trade," he said, noting that the current strength
of U.S. exports is helping to pump up overall domestic growth. He also
reiterated his often-stated belief that trade helps lift poor nations
out of poverty. That, in turn, could help relieve the pressures that
create illegal immigration to the U.S., he said.

But Mr. Bush also observed that skepticism toward free trade and
globalization appears to be growing. "The United States has been through
these trends in the past," he said, noting that tariffs levied before
the Great Depression and in its early days exacerbated the nation's
economic decline. "This country has got to make sure that we don't
isolate ourselves or try to wall ourselves off from the world."

In fairness, these are whoppers that the president is not alone in
making.

Whopper #1: the current rise in exports has very little to do with the
imposition of so-called "free trade" agreements like CAFTA. It's almost
entirely due to the fall in the dollar--which was overvalued. I've
pointed out sometime ago that bringing down the dollar was a better way
of dealing with the Chinese currency question and our overall trade
deficit than the war of words with the Chinese over China's currency
valuation. Yeah, a lower dollar makes tourism more expensive for
Americans but the real people annoyed by a lower dollar are the
executives at Wal-Mart (and other companies) who love a high dollar
that makes their imports from slave-labor countries cheap.

Whopper #2: what, exactly, is the number of high-paying jobs resulting
from trade? I'm not surprised that the Journal lets that assertion go
unchallenged. But, it is highly questionable if not an outright lie. In
fact, the opposite is likely true, as I underscored in highlighting a
story by Louis Uchitelle of The New York Times. Here's the important
excerpt:

Across America, more than 30 million people have been forced out of jobs
since the early 1980s, the Bureau of Labor Statistics reports, and
regaining lost incomes has not been easy. Nearly 50 million new jobs
have been created over that same period, according to the bureau, so
there are always new opportunities but more often than not at lower
pay. Among those who have lost work, only a third held new jobs two
years later that paid as well as those that were lost, according to the
bureau's surveys of displaced workers. Another third of those displaced
were in jobs that paid, on average, 15 to 20 percent less than their
previous employment - while the final third had dropped out of the
labor force entirely

Sure, trade has created some high-paying jobs-I'm guessing in the
banking and financial services sector at the very high end. But, the
actual stats show that, broadly speaking, most people are not finding
"a lot" of high-paying jobs.

Whopper #3: that so-called "free trade" alleviates poverty. So-called
"free trade" is based on the search for the lowest wage possible. In
fact, so-called "free trade's" promise of economic growth is false. Let
me say that again: false. If you look at the facts, as my colleague
Mark Weisbrot did. I cited a piece of Mark's incisive analysis which is
worth repeating here:

If we ignore income distribution and just look at income per person -
the most basic measure of economic progress that economists use - the
last quarter-century has been a disaster. From 1960 to 1980, per capita
income in Latin America grew by 82 percent, after adjusting for
inflation. From 1980 to 2000, it grew by only 9 percent; and for the
first five years of this decade (2000-2005), growth has totaled about 4
percent. To find a growth performance in Latin America that is even
close to failure of the last 25 years, one has to go back more than a
century, and choose a 25-year period that includes both World War I and
start of the Great Depression.

Whopper #4: is a natural extension of the previous whopper--so-called
"free trade" will alleviate immigration. Actually, it is exacerbating
the movement of people. If you just look at Mexico, NAFTA was a
disaster, and is a principle reason people are coming from Mexico to
the U.S. because that so-called "free trade" deal helped crash the peso
and impoverish millions of peoplewho could no longer survive on their
land.

I can't end without adding this little tidbit on executive compensation:

"Do I think some of the salaries are excessive at the top? I do," the
president said. "I don't think it's the role of government to regulate
salary. But I do believe it's a role of boards of directors to be very
transparent with shareholders about these different packages, the
employment packages that these executives get."

Excessive executive compensation "just sends a signal of unfairness, and
people in America want...fairness," Mr. Bush said,...

Two whoppers on that end:

Whopper #1: The administration has been dead set against the attempt to
make private equity pay its fair share of taxes. Is there anything more
unfair that sends a particular signal to people than the ability of
private equity big shots to pay just 15 percent on their income, as
opposed to the 35 percent other rich people pay? As one expert points
out, the Administration is content to let them write their own rules.

Whopper #2: And, of course, George Bush talking about economic fairness
is akin to, well, George Bush talking about "stratergy" in Iraq.

Can we ever hear some truth about "globalization" and so-called "free
trade."