The Chickens of Globalization Come Home to Roost

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Mitt Romney is today the beneficiary of some desperate counsel from alarmed Republicans on how to escape the snare in which he has found himself.

Democrats are charging that Mitt was still chairman and CEO of Bain Capital between 1999 and 2002, when the company was advising some of America’s premier outsourcers.

The facts are in dispute. But the evidence seems on the side of the Romney camp — that Mitt did not run Bain after he went off to fix the Salt Lake City Olympics. Yet the matter raises a larger question.

What has the Republican Party got against outsourcing?

Does not the party establishment preach the gospel of free trade?

Did not the Republican Party come to the rescue of NAFTA and GATT when Bill Clinton cried for help in fighting off the wicked protectionists?

Did not the GOP foreign and economic policy elite endorse entry into a World Trade Organization where we have no veto and one vote?

The Chamber of Commerce, Business Roundtable and National Association of Manufacturers, all GOP allies, proclaim the right of U.S. corporations to move production out of America — to where taxes are lower, regulations lighter and labor cheaper.

When has any GOP platform ever laid the wood on a U.S. corporate behemoth like GE, Boeing or Apple that moved production abroad?

The GOP has long been a celebrant of the Global Economy and benefited mightily from the contributions of lobbyists and executives of companies that outsource.

Under GOP-blessed rules of free trade, these corporations are able to shutter plants here, move to Latin America or Asia, and produce there. Now they have the right to bring their China-made goods back to the United States, duty-free, and fill the malls of America with those goods.

As Republicans rightly argue, by cutting the cost of production by moving it abroad, companies can offer lower prices for those goods here at home. Soaring profits from those higher sales mean higher stock prices and dividends, not to mention seven- and eight-figure salaries for the corporate magicians who work such miracles.

But as Milton Friedman observed, “There is no such thing as a free lunch.” And though Milton was its champion, free trade is no free lunch.

While there are winners from free trade, there are also losers.

First among them are high-wage U.S. factory workers whose plants are closed when production moves abroad. Next are factory workers who lose their jobs when foreign-made goods fill up the malls and the companies they work for, companies that stayed in the U.S.A., go under.

Was it a free lunch for the 6 million who lost manufacturing jobs in the last decade when 50,000 U.S. factories disappeared? Has it been a free lunch for the American worker who has not seen a pay raise in four decades?

And what of the nation?

For decades, America has been de-industrializing, with manufacturing shrinking as a share of gross domestic product to 11 percent, from over 30 percent in 1950. Not since before the Civil War have we been so dependent on foreign goods for the necessities of our national life, including the national defense. Our independence is a thing of yesterday.

This was the predicted and inevitable fruit of globalization.

Is this good for America?

Perhaps if one is a believing globalist. Then, whatever the result of globalization, whoever the winners and losers, that is what is best, for a globalized world is the best of all worlds.

This, of course, is not patriotism talking, or the voice of wisdom born of experience. It is a recitation from the globalist catchism.

When the history of American decline is written, the historians will zero in on a choice the nation made, when the interests of Middle America collided with those of Corporate America.

Decades ago, America’s great companies, having saturated the U.S. market, wanted to go out and capture the world’s markets.

Free to move production out of the U.S.A., they wanted to be able to bring their products back to the United States, duty-free. Make them there; sell them here. And if the U.S. companies were to be allowed to produce and to sell in foreign countries, those countries wanted the right to dump their goods in the U.S.A.

And here is where the national interest and the interests of Corporate America diverged. Here is where what was good for the boardroom elite collided with what was best for Middle America.

And this conflict could not be reconciled. The party had to choose. And the party chose K Street over Main Street.

Free trade, the Kennedy Round of trade negotiations, the Uruguay Round, the Doha Round, NAFTA, GATT, the WTO — what they all produced is a Magna Carta of the transnational corporation, which looks longingly to the end of nation-states and the arrival of world government.

Did the Republican songbirds of globalization not understand this?

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