The Forbes article fleshed out what I have noticed for some time. Global trade has benefited the Investor class more than the Working class.

1. Trade between rich and poor nations raises the real income of poor nations. While on the surface this is true, there is an unaccounted cost that isn’t being factored in the rising income– the environmental and health costs. This is something that conservatives often ignore. What would be the economic gains in China had the same environmental laws been in place that we have? It would still be cheaper to manufacture in China due to labor costs, but the gap would be closer.

2. Trade between rich and poor nations raises the real income of rich nations. Global trade has benefited Capital more than Labor. Or as I said, it has benefited the Investor class more than the Working class. I’m not a socialist and would expect that Capital always has the upper hand. But the disparity is massive and not healthy, IMO.
As to real income of the working poor benefiting from cheap goods– I would posit that the cheaper goods haven’t offset the falling wages. That is born out by data.

3. Trade between rich and poor nations depresses wages / reduces jobs for poor members of rich nations. The 5 million manufacturing jobs lost due to outsourcing since the 1990’s weren’t “poor” jobs. These were middle income jobs paying wages significantly higher than the minimum wage jobs (sometimes part time) that have replaced them.
Yes, these are the “losers”. This did not come about as a by-product of “Markets” but a legislative choice by congress to allow products produced in countries that have minimal labor and environmental regulations to be sold on par with ours.

We are still battling sub-standard products sometimes using toxic components being imported because of lax quality control/inability to monitor quality control in facilities offshore.

While a certain segment of Americans have benefited from this unaccountable global trade (I think free trade is a misnomer) the long term costs of losing manufacturing in this country will be catastrophic.

So what we are arguing here is whether or not the government should intervene in the Markets to help the losers. I think you have mis-characterized the issue. Government intervened by creating favorable trade agreements that exacerbated the problem.

Allow me to summarize the situation (and nothing I’m writing here contradicts the Forbes article.

1. Trade between rich and poor nations raises the real income of poor nations. (This is the least controversial idea in play, as we’ve all witnessed the emergence of Chin, India and before that the Pacific Rim, not to mention Europe after WWII).

2. Trade between rich and poor nations raises the real income of rich nations. (This is not addressed in the article, but is not challenged either. It is true, not only in theory, but in practice…mostly because cheap imports raises the REAL income of all Americans).

3. Trade between rich and poor nations depresses wages / reduces jobs for poor members of rich nations.

#3 is the crucial point.

So what we are arguing here is whether or not the government should intervene in the Markets to help the losers.

I’m willing to have that argument. But I just wanted to make sure we know what we are arguing about.

Now some mainstream economists are beginning to agree that there is a problem. Celebrated labor economists David Autor, David Dorn and Gordon Hanson, have just published a study, “The China Shock: Learning from Labor Market Adjustment to Large Changes in Trade.” It shows that increased trade with China caused severe and permanent harm to many American workers:

“Adjustment in local labor markets is remarkably slow, with wages and labor-force participation rates remaining depressed and unemployment rates remaining elevated for at least a full decade after the China trade shock commences. Exposed workers experience greater job churning and reduced lifetime income. At the national level, employment has fallen in U.S. industries more exposed to import competition…but offsetting employment gains in other industries have yet to materialize.”

The study shows that the affected industries and regions “have been hit hard and have not recovered. Workers in these industries and regions don’t go on to better jobs, or even similar jobs in different industries. Instead, they shuffle from low-paid job to low-paid job, never recovering the prosperity they had before Chinese competition hit. Many of them end up on welfare. This is very different from earlier decades, when workers who lost their jobs to import competition usually went into higher-productivity industries, to the benefit of almost everyone.”

The problem is, we need both, medium skilled and high skilled. Only we’re now seeing the peverse incentives of importing high skilled labor, kind of a reverse outsourcing. How does that help American labor?

Interesting Forbes article that concludes offshoring was done for short term profits (share price) and an end run around unions.

Why the focus on the short-term and the stock price? In the 1970s and 1980s, public corporations began adopting a notion that even Jack Welch has called “the dumbest idea in the world.” In an effort to deal with the pressures of globalization, deregulation and new technology, these companies embraced the notion that the very purpose of a corporation is to create shareholder value as reflected in the current stock price. Their focus turned inward towards making money for the shareholders and the executives as the primary goal.

Companies scrambled to find ways to keep their current share price rising, by whatever means necessary. One of those ways was off-shoring.

One of the reasons for this phenomenon is the emergence of technology companies offering huge returns. How do more mundane companies compete for investor dollars? Beat analyst’s expectations.

While this has always been true, the focus on short term returns has led to companies making decisions that are counter to their long term interests– all the while concentrating wealth to a degree never seen before.

No one, at least not me, is suggesting for equality. I’m merely pointing out that sustaining a healthy, productive society won’t be done with minimum wage jobs.

https://www.forbes.com/sites/stevedenning/2016/03/08/should-we-blame-trade-agreements-for-loss-of-jobs/#62cca6bc210d

AS to comparative advantage, any country with a low standard of living with few or no worker protections, few or no environmental protections will always have comparative advantage.

Yes…they will have a comparative advance in regards to low-skilled jobs. Wealthier nations will have a comparative advantage for high-skilled ones.

While in the short term, it seems to be an ideal situation, the dislocation, economic disruption and subsequent imbalance of wealth to capital doesn’t create a long term healthy society.

No, this is backwards. Dislocation and economic disruption are short-term consequences of free trade. In the long run, jobs lost (dislocation) are replaced by jobs created.

Keynes’ famous quote is actually a retort to this truism: in the long-run the free-market works. Its just that in the short-run, you have to help those who are victims of the disruption / dislocation.

Also, disruption applies more to the wealthier nation, not N.Korea…because when you ain’t got nothing you got nothing to lose.

That leaves “subsequent imbalance”, which I read as “inequality”. This is true. In the long-run capitalist economies will be unequal. I don’t have an issue with this, but apparently the RingWing in this country suddenly does.

Well, freedom and equality will always be at odds. (I think Allan Bloom said that).

As to convincing Kim to abandon his dictatorship and embrace the world paradise just around the corner from global trade, good luck with that.

Well, somebody convinced the Maoists in China to embrace the Market. And, in my book at least, Chinese Communists were as Evil as Hitler. So you never know…

The Experts know diplomacy, not child development.

Trump is causing Xi and Kim to really part ways.

That’s something we’ve never seen before.

The deal with Oriental politicians is that they can’t admit error or reversal.

THAT’S why Tokyo had to be nuked to terminate the Pacific War.

Kim has climbed out so far that he can’t walk his propaganda back.

His party line is not open to adjustment.

His dependency upon Tehran is not getting enough media comment.

It is TEHRAN that is obtaining H-bombs.

Tehran has out sourced its atomic program.

That’s why Israel had to bomb the infamous Syrian facility.

Iran is right back at the same store — building missiles in Syria — right now.

And in a similar vein, Pyongyang is shipping ballistic missiles to Iran.

So Barry Soetoro sold the West down the river.

Parker:

We accidentally EMP’d ourselves in 1962. It was NOT the end of the world as we know it. It was a complete surprise.

EMP is not a bit different than a lightning strike in terms of physical effect. It’s a jolt of energy. You’re NOT going to find EMP operating faster than the speed of lightning.

The power industry has to deal with lightning strikes — constantly. They have been solved with automatic reclosers. Further, big power lines have provisions — unpublicised — to dump excess energy.

If you are paranoid, install surge protection at your panel.

The BIG hazard is North Korean cyber war against our power grid.

We stand NAKED against that threat.

My digital meter can be shut off by using a cell phone app.

There are millions of said meters — and they were never built with any cyber protection. They are still out there. Everywhere.

EMP is a joke compared to the open barn door of cyber threat.

Ask Sony how cyber attacks worked out for them.

And we are DEFENSELESS against Nork cyber attacks.

Check out how Pyongyang stole $90,000,000 from the Bank of Bangladesh — via cyber attack.

North Korea is a near peer cyber power. THAT’S the nightmare.

And America is permitting driverless trucks and cars to roam our roads.

VBIEDs coming our way — courtesy the arrogance of Washington.

Recall candidate Trump complaining about trade deals with China. He can now say to China, “Cut off their oil or I impose tariffs on you.”

Dealing with NK for the last 25 years as an honorable country has failed. Bill Clinton got duped into giving them uranium. Nice Yalies didn’t realize the Norks are lawless cavemen. Big mistake.

Recall the discussion here about how Donald took his daughter to a real estate closing. He cooked up something out of thin air and claimed there was a defect in the real estate. Made it up. Said he wouldn’t close unless price was cut. He knew seller needed to close and sell more than he needed to buy and seller couldn’t take the delay and litigation expense. Trump is ruthless. He’s doing much of the same thing with NK but the stakes are way higher. He knows Kim is lawless and answers to no one. Trump is the same. He is not a nice and professional guy who follows the rules.

One worrisome possibility is N. Korean warheads outside of the state. Essentially it would be a primitive version of our submarine strategy.

The mainland is destroyed but some vessels at sea survive.

They don’t even need specialized delivery systems to use them. A simple one would make it possible to send them at night at motorboat speed into populated coastal areas even after N. Korea has been defeated.