Blaming us, the victims, for our crippling trade deficit

“Economic growth slowed by trade gap” was a page one headline in the August 27 Washington Post. The article so irked me that I sounded off in a letter to the editor the same day. Here’s what I wrote.

Yes, our nation’s huge trade deficits are continuing to take their toll. I’m delighted that, at long last, the Washington Post is awakened to a grim reality of economic life.

But you repeat an old mistake. Although you put the blame on several factors, the only one you mention is “overconsumption.” You think, for example, that we, the consumers, are the villains for our trade deficit with China. Really.

Have you ever tried to buy anything made in the U.S.A.? If so, you see how we have been deprived of choice – by a trading system credited, wrongly, for increasing consumer choice.

The continuing total merchandise trade deficit – nearly $50,000,000,000 for June alone -- is basically a mechanism to redistribute the wealth and income of the American middle class to further enrich the upper 10 percent of Americans and Asians. Your story failed to mention that the deficit with China was $26,200,000,000 for June alone.

What is really an overlooked “factor” in this tragedy? Take a look at corporations based in the U.S., American and foreign, and examine the volume of their intra-firm trade – that is, trade between two arms of the same company, also called related-party trade. As the Census Bureau reported on May 12, last year related-party trade accounted for $740,500,000,000 in U.S. goods imports – nearly 48 percent.

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As I expected, the free-trade-obsessed Post did not print my letter.

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Toxic $$ Fight Health Care Reform

A cool $177,000,000 -- that's how much the health care industry has contributed since 1989 to members of Congressional committees now drafting bills to reform the nation's health system. What kind of reform can you expect especially when the key lawmaker on health issues, Senator Max Baucus of Montana, alone collected nearly $1.500,000 from health-related companies in 2007 and 2008?

“What’s on your mind?” That’s the question my Facebook page asked me today, as on every day. And I answered with the above paragraph. The information in it is from an investigative report in this morning’s Washington Post.

The report depressed me. What a way for me to start July 21, my birthday! But thank God, I have a few ways to sound off. I need to enhance my ways of doing so. You should too.

Health care in the United States is sick, in desperate need of a comprehensive cure. But comprehensive reforms usually manage to rally private interests into well-financed coalitions against the public interest.

Where, for God’s sake, are the voices for a health care system that serves the common good? Still far too weak to overcome the power of $177,000,000.

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WTO Isn't Keeping Up with the World

So once again global trade talks have hit a stone wall. Once again the Washington Post sheds tears over the latest collapse in negotiations. A July 30 Post editorial finds it “particularly dismaying” that the People’s Republic of China cast a veto on the World Trade Organization’s latest proposal to save the so-called Doha Round.

Those ungrateful Chinese! After all, “U.S. supporters of Chinese inclusion in the WTO [including the Post] argued that drawing China into a system of multilateral give-and-take would mute its nationalistic tendencies. Evidently, the Chinese see the matter differently. They, and the world, will be poorer because of it.”

Well, the Chinese are not the only ones who see matters differently from the Post.

“Don’t cry for Doha,” says the title of economist Dani Rodrik’s July 30 Weblog. He writes: “There was not a whole lot at stake to begin with for poor nations as a whole…Panicky statements about dire consequences and protectionist spirals will be more damaging than the actual effects of the collapse of the trade talks.”

Be assured: robust world trade will continue, regardless. Robert Wade, professor at the London School of Economics, explains why. In a letter published in the July 26 Economist weekly, he writes:

“There is almost no chance that the global economy would become less integrated as a result of ‘failure’ [of the Doha talks]. The producers of most goods and services in the major economies are much more integrated into complex cross-border systems than between 1914 and the 1930s, when the world economy did become less integrated.”

The WTO suffers from a much bigger failure than the current one in Geneva. The overall failure is this: the world trading system has simply not kept up with the world. That’s not an opinion; it’s a fact.

One example: today's global system, as patched together in the 20th century, ignores the radical changes in information technology since then and therefore does not outlaw the trade barriers erected by China (and other repressive countries) against the free flow of information.

I've written an account of how this particular failure troubles me personally. My article is published in the August 4 issue of America under the title “Buyer’s Remorse: Spatulas, Yahoo, and the conscience of a consumer.” Click here. It is part of my collection of evidence that the WTO has not kept up with the world as transformed by globalization.


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Media Blind Spot: Public's Trade Concerns

“For each item I name, please tell me how important it will be in your vote for president this year.” Pollsters for the Washington Post and ABC News put that request to a national sample of registered voters, and went on to name 17 “items.” Foreign trade (or a synonym, such as globalization) was not among the 17 topics.

I found that strange. The article reporting the poll results on the front page of the July 16 Post also ignored the topic. The second headline over the article said: “Economy Remains the Top Concern.” Indeed, 92% of the respondents rated “the economy” as either extremely important or very important.

In a story on its political blog, Caucus, a day earlier, July 15, the New York Times reported the results of its own poll, this one co-sponsored with CBS News. Its July 15 story, headed “Iraq Still a Dividing Line,” did not cover a question the pollsters asked of registered voters, “What do you think is the most important problem facing the country today?” The answers, available on the Times Website, ranked “economy” as the most important. Again foreign trade or an equivalent term was not on the list of choices, 24 in all, presented to voters. {The Times drew on the same poll findings for a front-page political story on July 16 devoted to the Obama candidacy and the racial divide.)

These four media giants -- The New York Times, the Washington Post, CBS News, and ABC News – have a heavy influence on the news agenda of other media, small and large, across the nation. Therefore, they have a special responsibility to report public opinion fully and accurately, especially on issues that may affect the outcome of a historic election.

On the face of it, the Post and the Times failed to do so in these two polls. Why?

The designers of these two polls may have lumped the public’s concerns about trade into the broad “economy” category. If so, that is careless, at best. The media themselves don’t cover free trade as part of their reporting on (say) “The #1 issue – the economy,” as the CNN series on this theme is called. (According to a new CNN poll, 51 percent of Americans consider foreign trade "a threat to the economy.")

By email and phone, I asked the Post and Times to explain the omission. I suggested the possibility that free trade might have been lumped into the economy category. No response.

David Sirotta, author of The Uprising: An Authorized Tour of the Populist Revolt Scaring Wall Street and Washington, describes the fair trade movement as “one of the most encouraging transpartisan developments of the last few years” – a movement “ignored by the media (and, frankly, much of the blogosphere).”

No such blindspot here. But what explains the media’s?


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