Presidential candidates should address globalization's challenges
BY JOHN L. THORNTON
As the presidential candidates turn to the South Carolina primaries, differences have emerged between the parties about how to maintain America's economic competitive advantage, particularly given the rise of countries like China and India. Most candidates seem aware that China is on its way to becoming the world's largest economy by 2050. Yet when asked how America — and places such as South Carolina — will compete in this new world, neither the Republican nor Democratic answers do justice to the challenge.
Republicans celebrate the Port of Charleston, where container ships unload foreign-made consumer goods, as contributing to the region's decade-long boom. Democrats, in contrast, point to shuttered textile mills and workers struggling to afford housing and transportation, and they blame booming economies such as China and India for shattering the state's tranquility.
The next president should put forward a positive agenda for strengthening American competitiveness that learns from both the good news and the bad news in South Carolina. A comprehensive national strategy should embrace trade, address legitimate concerns about globalization, prioritize science and mathematics, invest in innovation and build strong communities.
Global trade has propelled the world's longest and largest economic expansion and been a cornerstone of international security for six decades. For the U.S., commerce has contributed to consistent growth, increased productivity, innovation, lower prices and greater choice for consumers. Trade is not the main culprit behind the loss of jobs. Recent studies have shown that 90 percent of U.S. manufacturing job losses are due to companies shedding workers as they become more technologically advanced.
The next president needs to make the case for trade persuasively and unapologetically. At the same time, he or she will need to give the benefits of trade concrete meaning in American minds by aggressively expanding markets abroad for our most competitive industries — from information technology to aerospace to financial services to entertainment. Trading partners respond no better than we do to unilateral demands or mixed signals, which unfortunately is how U.S. policy is often viewed abroad. If the president is truly committed to addressing our imbalance with China, for instance, he or she needs to make the issue the first talking point, without hectoring, in each meeting with Chinese leaders. The U.S. can also work with influential Chinese, in and out of government, who themselves argue openly that China's massive surpluses are distorting its own economy the most.
A recent Wall Street Journal/NBC News poll found that Democratic and Republican voters alike worry about globalization. Even if the proportion of American job losses attributable to trade is comparatively low, they are no less real for the affected families and communities. The next president should address globalization's painful reality with more than words. The U.S. labor market is second to none in job turnover, yet we spend the smallest share of GDP on "social protection" programs of any industrialized nation except South Korea and Ireland. Comprehensive health care reform would help considerably. But even less ambitious fixes go a long way. Wage insurance policies, costing as little as $25 per year per worker, would provide support and incentives to nearly half a million workers finding jobs after trade-related shocks.
More — and better — teaching of science and engineering is essential to innovation and the key to long-term competitiveness. Chinese students who transfer to American high schools typically discover that the most advanced math classes offered teach subjects that were covered years ago back home. Intel Executive Vice President Sean Maloney recommends that the U.S. recruit 10,000 new mathematics and science teachers each year, doubling the nation's number of engineering graduates and giving incentives to induce 1,000 more top engineering students annually to pursue doctoral studies. Meanwhile, until the U.S. can ramp up the number of American engineers back to competitive levels, Maloney and others argue that the U.S. should double the number of H1-B visas for highly skilled foreign workers to meet market demand.
Charleston remains one of the world's most attractive places to work and live. Its port is linked to the interstate system, the city center is flourishing, and the region boasts the beauty of the Atlantic seashore.
Like many metropolitan areas, however, Charleston's future growth is threatened by congestion, increasing air and water pollution, and a shortage of affordable, accessible and livable neighborhoods. The region has tried to protect its coastline, retain open land, and preserve historic and natural landmarks. But no city can go it alone.
The next president could promote the country's top-100 regions as central to national competitiveness through a mix of federal, state and local policies. As Brookings Institution expert Bruce Katz has noted, 83 percent of Americans live in metropolitan areas which "dominate the economy and house our wealth-generating industries." The next administration should put forth a coordinated strategy of housing, education, transportation and environmental policies that will sustain the communities that form the foundation of national prosperity.
As voters consider who to choose in South Carolina, Republican and Democratic candidates should be required to discuss specific policies in a serious debate about American competitiveness that eschews sound bites and populist pandering. As the examples here show, there is no shortage of ideas that could form the basis of that conversation.
John L. Thornton is chair of the board of the Brookings Institution, which joined The Post and Courier, South Carolina ETV and the College of Charleston to host the Opportunity '08 forum: "Competitiveness: From Charleston to China," last week at the Riviera Theater.
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n6532l (anonymous) says...
Your claim that trade is not the main culprit is not persuasive. From 1828 until 1947 we were a tariff protected economy. During that time we had all the things you attribute to trade plus stable well paying jobs. The Average Weekly Earnings (an inflation adjusted wage) of Americans peaked in 1973 and are down since. Before the 1970s, as far back as we have data, there was not a single decade in which the Average Weekly Earnings of American did not rise. Even during the decade of the Great Depression real wages rose. Since the 1970s there has not been a single decade of real wage increase. That is the price we pay for free trade. Free trade apologist generally ignore Average Weekly Earnings preferring instead to deal with household income. They hope you will not notice that they are comparing a single income of years ago to more that a single income today. A lie is as good as the truth if you can get anyone to believe it.
Presidential candidates are not going to deal with globalization's challenges because it is to their advantage not to. Education will not do it. Outside the U.S. there are more English speaking college graduates than the U.S. has population. We can all be replaced with H-1B cheap labor. The only thing that will make us globally competitive in a world of free trade and free movement of capital is for wages to decline to the world standard. Without tariffs to protect us we can not compete in a world that pays workers a dollar a day with twenty dollar an hour labor. No candidate is going to say that.
January 14, 2008 at 4:47 p.m. ( permalink | suggest removal )
Brittanicus (anonymous) says...
Part of the globalism agenda is the free-movement of cheap illegal foreign labor. This has had a devastating effect across the nation, on an average American workers wages.
South Carolina is like all states no mater small is important in the Democratic process. Probably one of the top searing issues is illegal immigration.
Before this President steps down, we must be aware of the decisions we make for our children's future? Before we go to the ballot box to vote, that is our right; who are going to vote for? Senator McCain joined with ultra-liberal Ted Kennedy to give an easy path to citizenship, better known as AMNESTY! The one's who see the mass numbers of illegal immigrants, as a voting power who can keep them in power, no matter the consequences? Or equally dangerous the NEOCOMS who want to stifle America workers with illegal aliens counterparts, who see unparalleled numbers as unheard of profit. You, the taxpayer are presented with a tax bill, along with future generations. Then there is the estimated profit to U.S. corporations and businesses employing illegal aliens in 2005 which was more than $2.36 TRILLION dollars; The cost of immigration to the American taxpayer in 1997 was a NET (after subtracting taxes immigrants pay) $70 BILLION a year, [Professor Donald Huddle, Rice University]; the cost is MANY TIMES GREATER now in 2006! In 2006 the average cost of each Illegal Alien here is 11,000.00 per year for American Taxpayers! Then according to Center for Immigration Studies and the tax burden will grow -- because 15 million more immigrants are set to arrive by year 2017 according to their latest research. according to Center for Immigration Studies and the tax burden will grow -- because 15 million more immigrants are set to arrive by year 2017 according to their latest research. More than 10 million immigrants have arrived since year 2000; it is estimated that nearly 6 million are illegal. All told, the group of immigrants now account for 38 million at the moment according to the White House's own census bureau.
January 15, 2008 at 10:37 p.m. ( permalink | suggest removal )
monster910 (anonymous) says...
Your claim about lack of American engineers is inaccurate. At this current time, the US universities are graduating more engineers that the market will bear at current engineering salaries. The marketplace has been flooded with 65,000 H1B visas and illegal use of L-1 visas. According to most studies, the prevailing wage of a visa worker is 25% below the prevailing wage of a four year BS degree at a major university. Hence, our children who have chosen engineering as a profession, cannot get a job because corporate lobbyists have fooled Mr. Thornton and congress to allowing cheap foreign labor to come to the US and work.
The corporations love it because they get the best of both worlds - local cheap labor without the risk to move and coordinate operations 12 time zones away!
Eliminate visas and make corporations choose to hire Americans and pay more or move their operations overseas. Speaking from vast IT experience and managing offshore efforts, some will choose to move, but the vast majority will stay put because it is costly and risky to move operations overseas.
January 16, 2008 at 12:01 p.m. ( permalink | suggest removal )
mrunpc (anonymous) says...
The Democrat controlled Media machine is doing all it can to choose THEIR "favorite" GOP candidate. This is how Mike Huckabee was elevated to frontrunner in IA, emerging from obscurity in a matter of a few weeks. Nothing but puff stories and absolutely NO scrutiny of his mediocre, often liberal, voting record as AR Governor. As a result, and much to the joy of the liberals, IA voters picked Mr. Huckabee to be Pastor of the United States. He is the weakest, least qualified candidate and easiest for Dems to beat.
And McCain's record?
McCain-Feingold - the most brazen frontal assault on political speech since Buckley v. Valeo.
McCain-Kennedy - Amnest for Illegals.
McCain-Lieberman - the most onerous and intrusive attack on American industry - through reporting, regulating, and taxing authority of greenhouse gases - in American history.
McCain-Kennedy-Edwards - the biggest boon to the trial bar since the tobacco settlement.
And then there's the McCain defense record which somehow evolved into McCain taking credit for forcing the president to adopt General David Petreaus's strategy...and where's the evidence?
Moreover, Iraq is an important battle in our war against the Islamo-fascist threat. But the war is a global war, and it most certainly includes the continental United States, which, after all, was struck on 9/11. How does
McCain fare in that regard?
McCain-ACLU - the unprecedented granting of due-process rights to unlawful enemy combatants (terrorists). McCain has repeatedly called for the immediate closing of Guantanamo Bay and the introduction of al-Qaeda terrorists into our own prisons - despite the legal rights they would immediately gain and the burdens of managing such a dangerous population.
While McCain proudly and repeatedly points to his battles with Secretary of Defense Donald Rumsfeld, who had to rebuild the U.S. military and fight a complex war, where was McCain in the lead-up to the war - when the military was being dangerously downsized by the Clinton administration and McCain's friend, former Secretary of Defense Bill Cohen? Where was McCain when the CIA was in desperate need of attention? Also, McCain was apparently in the dark about al-Qaeda like most of Washington, despite a decade of warnings.
Mitt Romney is a TRUE family man and very successful at turning failed or failing enterprises around and Lord knows the United States of America needs turning around. It should be run as a business first, with a strong military to protect it from harm. All other social, giveaway programs should be scrutinized (and certainly would be under a Romney presidency) as to efficiency and even necessity. The fact that he was even elected Governor in a state (MA) controlled by 85% Democrat legislature was a feat in itself. In spite of it, he did a very admirable job as Governor, turning a large state deficit into a surplus.
January 16, 2008 at 6:14 p.m. ( permalink | suggest removal )
jlb (anonymous) says...
All of America watches SC Saturday. It looks for wisdom as to the choice for our next President. Having known John McCain since we were POWs together, I can affirm that his loyalty, courage, national and international experience, high energy level and proven motivation to put the interests of the nation above self make him my choice--and I hope John McCain will be South Carolina's choice this Saturday and in November. I am not a paid staffer--just an American who cares. Thank You. John Borling (Major General USAF-ret)
January 17, 2008 at 9:32 a.m. ( permalink | suggest removal )
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