Is America Losing At Globalization?

This article is a bit dated but relevant. With our help, and in part due to our suicidal industrial policies over the past few decades, the world has caught up and in some economic areas, surpassed us. Common sense would say this is not unusual and even to be expected. But the speed and angle of descent into economic misery for our fellow countrymen is not. This was a belated warning to all of us.------lee

From Newsweek.com
by Daniel Gross
August 30, 2008

Free trade used to seem like a good thing for U.S. businesses and consumers. Now we're not so sure.

In the just-completed summer Olympics, America's status as the globe's athletic hegemon was clearly under attack. The United States won the overall medal race, edging out China 110 to 100. But the hosts won significantly more gold medals, and favored U.S. individuals and teams fell victim to Jamaican sprinters, Japanese softball players and boxers from pretty much everywhere. Action off the field also highlighted a similar shift in the balance of power, as viewers marveled at the impressive hardware (buildings like the Water Cube and the Bird's Nest) and software (the spectacular opening ceremonies). "None of these was an accident," says Edward Gresser, director of the project on trade and global markets at the Washington, D.C.-based Progressive Policy Institute. "They reflect the deep economic trends of a decade in which our competitors have raised their game and we haven't."

The Olympics may be the ultimate quadrennial global competition. But from China's gleaming maglev trains to India's superior wireless-phone networks, there are also signs that the United States is losing ground in the daily global competition for economic supremacy. In the 1990s, while the loss of manufacturing jobs was controversial, American consumers and businesses seemed to regard globalization and free trade as net positives. The integration of China and the former Soviet bloc into the trading system lowered inflation, opened new markets and brought billions of workers into the labor force. Armed with a strong dollar, Americans roamed across the flat world like Kenyan distance runners.

But in this decade, rampant growth in emerging markets has mercilessly boosted prices for energy and commodities; competition from foreign workers has tamped down wage growth, and the weak dollar has made U.S. companies vulnerable to foreign buyers. "In the 1990s, we got all the upside of globalization," said David Smick, a consultant and author of the new book "The World Is Curved: Hidden Dangers in the Global Economy." "Now we're getting some of the downside."

As a result, Americans are now more inclined to see themselves as victims of globalization—rather than as beneficiaries of it. A Los Angeles Times/Bloomberg poll this spring found that 50 percent of respondents said free trade hurt the economy, while only 26 percent said it helped.

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