Globalization Craze Petering Out

Tomorrow's NY Times features a piece by Larry Rohter about the collapse of Globalization. International capital, cheer-led by Thomas Friedman, in a quest for cheap labor, avoidance of social norms (like environmental standards), and higher margins, seems to have goofed up big time and, as the Times puts it, "globalization may be losing some of the inexorable economic power it had for much of the past quarter-century, even as it faces fresh challenges as a political ideology."

Cheap oil, the lubricant of quick, inexpensive transportation links across the world, may not return anytime soon, upsetting the logic of diffuse global supply chains that treat geography as a footnote in the pursuit of lower wages. Rising concern about global warming, the reaction against lost jobs in rich countries, worries about food safety and security, and the collapse of world trade talks in Geneva last week also signal that political and environmental concerns may make the calculus of globalization far more complex.

“If we think about the Wal-Mart model, it is incredibly fuel-intensive at every stage, and at every one of those stages we are now seeing an inflation of the costs for boats, trucks, cars,” said Naomi Klein, the author of The Shock Doctrine: The Rise of Disaster Capitalism.

“That is necessarily leading to a rethinking of this emissions-intensive model, whether the increased interest in growing foods locally, producing locally or shopping locally, and I think that’s great.”

...To avoid having to ship all its products from abroad, the Swedish furniture manufacturer Ikea opened its first factory in the United States in May. Some electronics companies that left Mexico in recent years for the lower wages in China are now returning to Mexico, because they can lower costs by trucking their output overland to American consumers.

When Bush first stole the election in 2000, the cost of shipping a standard 40-foot container from Shanghai to Long Beach was $3,000. Now that the Bush Economic Miracle has begun to kick in, the cost is around $8,000... and rising-- and slower, as the ships cut their speed to save money on fuel. And ocean freighters aren't the only problem. Friday, the price of a barrel of oil closed at $125.10. Let's say it falls all the way back down to $107 a barrel for the rest of 2008. In that case, the aviation industry would merely lose $2.3 billion for the year. A more likely scenario is that oil averages $135/barrel for the rest of the year... in which case the industry loses $6.1 billion. That's the end of that industry.

Shotgun marriage: Robin Hayes and Tom DeLay

Four more years of Bush economics-- aka- a McCain administration-- and we'll probably be bringing back three-masted China Trade clippers that are even older than John McCain is. "The industries most likely to be affected by the sharp rise in transportation costs are those producing heavy or bulky goods that are particularly expensive to ship relative to their sale price. Steel is an example. China’s steel exports to the United States are now tumbling by more than 20 percent on a year-over-year basis, their worst performance in a decade, while American steel production has been rising after years of decline. Motors and machinery of all types, car parts, industrial presses, refrigerators, television sets and other home appliances could also be affected." The U.S. may have to actually rebuild a manufacturing sector. Post-Bush, North Carolina, for example, may be actually gaining good jobs instead of losing them. This is what Larry Kissell has been bashing Bush rubber stamp incumbent Robin Hayes over the head with for almost 4 years!

Until recently, standard practice in the furniture industry was to ship American timber from ports like Norfolk, Baltimore and Charleston to China, where oak and cherry would be milled into sofas, beds, tables, cabinets and chairs, which were then shipped back to the United States.

But with transport costs rising, more wood is now going to traditional domestic furniture-making centers in North Carolina and Virginia, where the industry had all but been wiped out. While the opening of the American Ikea plant, in Danville, Va., a traditional furniture-producing center hit hard by the outsourcing of production to Asia, is perhaps most emblematic of such changes, other manufacturers are also shifting some production back to the United States.

As I mentioned yesterday, I'm reading Robert Wexler's book, Fire Breathing Liberal and I just recalled a part I read a few days ago that has former Mississippi Congressman Ronnie Shows remembering how viciously the "free trader" traitors insisted on shoving their failed orthodoxy down everyone's throat. Although no one is worse on this than Democratic leader Rahm Emanuel, Shows' remembrance involves Tom DeLay (the GOP version of Emanuel) and the aforementioned North Carolina Republican rubber stamp Robin Hayes. Shows is recalling a vote on renewing some horrible trade arrangement with China "that had devastated the textile and furniture industries in North Carolina."

The Republicans wanted this legislation to pass-- but a Republican congressman from North Carolina [Hayes] intended to vote against it. It was a terrible bill for his district. As Shows recalls, "After this member voted against the bill, I watched DeLay walk up to him on the floor and force him to change his vote. The man literally was crying as he cast his vote. DeLay stood right behind him until he changed his vote."

Robin Hayes is a weak, spineless rubber stamp who won't even stand up for his own manhood, let alone for his constituents livelihoods. It's why he nearly lost in 2006-- 60,926 to Larry Kissell's 60,597-- and why Larry is expected to beat him handily in November.