Skip to main content

View Diary: Social Security by the Numbers (73 comments)

Comment Preferences

  •  Manufacturing did not peak in 1978 (0+ / 0-)

    The manufacturing output in this country has been on a constant upward phase calculated by GDP and value added. What you mean to say is that manufacturing employment has gone down because we use more robots and technological goods to create manufacturing products.

    And again, I reject the idea of blaming trade policy. Trade policy is a net benefit for all countries involved. "Everyone has a comparative advantage" You can see Krugman for the backup information if you don't believe me. The US has constantly been on the bath of trade liberalization since the 1940's.

    Throughout my entire public career I have followed the personal philosophy that I am a free man, an American, a public servant, and a member of my party, in that order always and only." -- LBJ

    by moderatemajority on Sun Mar 31, 2013 at 12:24:58 PM PDT

    [ Parent ]

    •  We'll Have to Disagree on That (0+ / 0-)

      Regardless of whether you say manufacturing has continued to climb, the effect on jobs is the same. The reason we've seen a decline in wages (and employment levels) is still because of trade policy. We've shipped wealth-producing jobs overseas. It is no coincidence that wages and employment rates have fallen as we've done this.

      Trade policy (if you mean free trade) is not always a net benefit for the countries involved. It depends entirely on what's traded. So far, our trade policy has caused enormous structural damage to the economy. This is why we have a federal deficit to begin with. You can't ship hundreds of billions of dollars a year out of the country, year after year, without causing damage.

      When trade is beneficial to all countries involved it is in balance. I don't remember our last trade surplus. Last year our trade deficit was on the order of $50 billion. That's $50 billion that resulted in absolutely no funding for Social Security. If that production had occurred here it would have resulted in about $25 billion in worker incomes, meaning about $2.5 billion to the Social Security fund.

      And then there's the question of who it benefits. It's benefited investors, but it has not benefited workers. Workers were seeing steady increases in their compensation in proportion to the increase in productivity right up through the 1970s. Once we turned to free trade wages leveled off and wages for the typical worker declined, while productivity continued to climb. This is why you see increased income disparity and sizable changes in wealth distribution. (Much of that disparity in wealth would have occurred with globalization, anyway, because of scale, but not at the expense of worker incomes. That part came about because we allowed in cheap imports.)

      A trade policy that's constantly shortchanging our retirement system (not to mention Medicare, state governments, and the rest) is not helpful to the U.S. economy. Moving production back here would increase wealth in the U.S. A better trade policy would be one that encourages that.

Subscribe or Donate to support Daily Kos.

Click here for the mobile view of the site