Globalists admit: U.S. workers suffering

The cover article in the current issue of the Council on Foreign Relations magazine Foreign Affairs asserts globalism has harmed even well-educated workers in the U.S., creating a gap between the "haves" and "have-nots" greater than any time since the 1920s.

Yesterday, after delivering his testimony to the House Financial Services Committee, Federal Reserve Chairman Ben Bernanke was grilled by the committee's chairman, Rep. Barney Frank, D-Mass., on the same theme. The congressman argued the Fed is too concerned with inflation and not sufficiently concerned with the political fallout of income inequality.

Both discussions affirm a key argument of my new book, "The Late Great USA: The Coming Merger with Mexico and Canada."

The article in Foreign Affairs is important, because it marks the first time in print the CFR has admitted globalism is under attack. With the Democrats now controlling Congress, Republican presidential candidates are going to be hard pressed to argue that the Security and Prosperity Partnership – a trilateral agreement with Mexico and Canada – and North American integration "will benefit anyone but the CEOs, MBAs, and lawyers who manage and advise our multi-national corporations."

In "The Late Great USA," I argue the intentional opening of U.S. borders with Mexico and Canada under the SPP has allowed millions of uneducated illegal aliens to enter the country, competing for jobs in the lower-skilled work categories.

At the same time, multinational corporations are driving the globalism agenda out of a desire to out-source millions of U.S. manufacturing jobs to slave and near-slave labor in China, again to the detriment of American wages.

In their Foreign Affairs article, Kenneth F. Scheve, a political science professor at Yale University, and Matthew J. Slaughter, an economics professor at the Tuck School of Business at Dartmouth and a Senior Fellow for Business and Globalization at the CFR, agree.

Scheve and Slaughter argue that under the globalization policies pursued by the Bush administration from 2000 to 2005, "Even college graduates and workers with nonprofessional master's degrees saw their mean real money earnings decline."

They conclude average earnings for 96.6 percent of all U.S. workers fell between 2000 and 2005, due largely to globalism.

The only workers to experience income gains were at the very top, those with doctorates or top professional degrees, including law degrees and business school degrees.

Scheve and Slaughter appear worried not so much because of the income inequality itself, but because the income inequality is causing a backlash against globalism.

U.S. trade policy is becoming more protectionist, they write, "because the public is becoming more protectionist, and the public is becoming more protectionist because incomes are stagnating or falling."

Scheve and Slaughter's analysis is particularly troubling to supporters of globalism who typically respond that more education of the population in general and job retraining in areas adversely affected by open borders and global outsourcing will solve the problem.

"Significant payoffs from educational investment will take decades to be realize," Scheve and Slaughter write, "and trade adjustment assistance is too small and too narrowly targeted on specific industries to have much effect."

The writers find an increasing number of Americans are asking themselves, "Is globalization good for me?" and increasingly the conclusion is that it is not.

Scheve and Slaughter believe the solution lies in a "new deal" for globalization under which payroll taxes, which contain a Social Security and a Medicare portion paid half by the worker and half by the employer, would be eliminated for all workers earning below the national median income level.

The argument is that by rewriting the tax code to redistribute income to those earning less than the median income level, globalism can be "saved."

Scheve and Slaughter argue that public opinion data suggest Americans "would be more inclined to back trade and investment liberalization if it were linked to more support for those hurt in the process."

I disagree.

What the CFR article makes clear is that globalists will not give up easily. Rather than face head-on the reality that SPP, open borders and World Trade Organization globalism are a direct assault on the U.S. middle class, the CFR apologists for globalism suggest a tax gimmick to mollify the vast majority of Americans who are going to lose economically under their scheme.

With the coming August summit meeting of SPP leaders in Ottawa, the Bush administration is going to have an increasingly hard time keeping the lid on their globalist agenda.

How many spokesmen does President Bush plan to send forward at Ottawa denying that SPP is anything but a dialogue?

As more Americans lose their jobs to global trade and as their homes are seized by eminent domain to make way for NAFTA superhighways, the lid is going to be hard to keep on SPP, no matter how many times Tony Snow tells the American public that the idea of a North American Union is just an Internet myth.

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