The Additional Truth about US Inequality and Economy: “What’s Obama’s America’s Pacific Century Got to Do with Them?” – Global Trade Industry Perspective” (slightly revised)

Thesedays, the issue of “Inequality,” “Middle Class Crisis” has become an increasingly serious national issue over that of economy, being symbolized by the on-going outbursts of “Occupy Wall Street” protestors all over the nation.

Professor Robert Reich talked about six factors that have contributed to this US domestic condition of inequality, middle class crisis in his “The Truth about the US Economy”:

1. Flattening US wage regardless of economic growth over the last decades.

2. Increasing concentration of social wealth/ resources on super rich

3. Rich’s wealth-based political influence on government policies such as lowering taxes on super riches.

4. Huge budget deficits

5. Middle class divided

6. Anemic recovery

To complement Prof. Reich’s domestic perspective on this issue, I’d like to address the global perspective: the contribution of shifting global trade and industrial structure on shifting US job/employment structure and intensifying US inequality and middle class crisis. This global trade and industrial perspective also gives glimpse on

“What would be the Potential Impacts of President Obama’s latest introduction of the Era of America’s Pacific Century and the signing of US Free Trade Agreements including the one with South Korea on “Not Only Boosting the Devastated US Economy (if everything else works well)” “But Also Alleviating the US ill symptoms of Skewed Job/Employment Structure, Inequality, and Middle Class Crisis.”

Especially as China’s devaluation of currency is likely to help boost US exports to the country and the recent signing of US Free Trade Agreement with South Korea is going to boost US exports to the country starting from those of cars (if everything else works well),

“Pres. Obama’s Ushering of America’s Pacific Centry will contribute to creating more export-related middle class jobs in this country, help recover the health/balance of US economy and partially straighten up the skewed national employment structure toward finance, retailing, non-trade sector jobs by adding more export-related manufacturing jobs for middle class workers, and weaken income inequality and middle class crisis (unless Europe financial crisis further depresses the conditions of European and Asian economies).”

I post my previous blog post below because of its relevance with elaborating the points I made above: the shifted, skewed US job / employment structure over the last decades because of increasing globalization, global trade/industrial shifts, flight of traditional US manufacturing jobs to foreign countries of cheaper wages and increasing US outsourcing / imports, which, along with unbalanced domestic economic social structure of flattening wages, increasing concentration of social wealth on super rich that has increasingly exerted interest politics on US policy makings in their favor including lower taxes on them and loose business regulations and so on, have culminated to the current extreme income inequality and middle class crisis.

How to Fix the Economy III: The Big Picture

This was originally posted on 2011/07/23

The increasingly globalizing world economy, trade, and shift of industrialized and industrializing countries’ (US, Western Europe, more advanced Asian countries) manufacturing bases to cheaper producing countries of often less development have greatly contributed to the decreasing US jobs of low, medium value added  goods, the kind of jobs that have mainly supported US middle class. As a result of this trend of global market economy and industrialization in conjunction with the US market economy and industrial structure skewing toward increasingly relying on domestic consumption, the major source of US domestic employment has shifted away from the tradable sector (that includes manufacturing goods, engineering, computer design etc.) toward the non-tradable sector (that includes sectors such as construction, retailing, restaurants, hotel, etc.).” Dr. Spencer points out this US employment shift from the tradable sector to the non-tradable sector.

This global and US trend of industrialization and employment have (a) increasingly eliminated US middle class jobs that hire low-medium educated workers to produce low-medium value added products; (b) increased US jobs of producing high value added, tech/skill/information-intensive goods that hire highly educated workers (This trend appear to have contributed to the increasing concentration of US wealth/resources into the high-income group but minimal effect on creating and increasing the number of employment to replace the lost employment that has resulted from the shift of US manufacturing to foreign countries); and (c)  these shifts increased jobs in non-tradable sector that hire low-medium educated workers and pay lower wages with less fringe benefits, which have increasingly lowed the living quality and standard of middle class people in this country.

The combined effects of this global and domestic industrialization and employment trend, along with the troubles in US social, economic systems that have drained/shifted wealth/resources from the low/middle class to the high income class that had culminated to the US housing, health care, and financial markets crisis and the current great recession comprises current condition of anemic economic recovery and continuously high unemployment. What is needed is to fix the fundamental problems in the economic and social structure of US domestic and global market system?

Here, I repeat the points I made earlier: “If Everything Else goes well,” President Obama’s latest introduction of “the Era of America’s Pacific Century and the Signing of US Free Trade Agreements including the one with South Korea (along with the revaluation / weakening of Chinese Yuen that will make US exports to the country cheaper and Chinese exports to this country more expensive than before) will contribute to boosting US exports to these countries, creating  more export-related middle class manufacturing jobs in this country, helping recover the health / balance of US economy, partially straightening up the skewed national employment structure away from its increased dependence on finance, retailing, and non – manufacturing / non-trade sector jobs toward more manufacturing, middle class jobs, and softening income inequality and middle class crisis.

The prospect of domestic economic growth  by domestic demand may be anemic; but the prospect of US economic growth potential by exploring US global competitiveness and foreign demand for US exports, spurred by the latest White House Initiatives, has not been tested/proved yet and worthy options to explore (unless global financial crisis suddenly worsens it). If these WH Initiatives work well in future, the positive outcomes will “not only boost “the devastated US economy” but also alleviate the US symptoms of unbalanced employment structure by moving it more toward manufacturing, trade sectors that value middle class workers, and soften income Inequality and middle class crisis.

Elizabeth Warren Running for Massachusetts Senate.

Is Professor Elizabeth Warren, a long-time advocate of consumer and middle class and Harvard law faculty, running for the Senate seat of Massachusetts? I think it’s a good thing to see people like her, with passion, devotion, and being driven-to good causes, in the race. (Source: http://news.yahoo.com/elizabeth-warren-enters-mass-senate-race-192519562.html)

What Lessons of Election Day?

I think Mr. Kuttner’s post,

“What Lessons of Election Day?”

 

(Source: http://www.huffingtonpost.com//robert-kuttner/post_1183_b_776752.html) is a great one to think about at this election time.

Regarding his statement:

“liberals are dismayed with Obama not because this or that initiative was insufficiently lefty. They are mad at Obama for blowing what had to be a Roosevelt moment, and thereby ushering in a totally needless period of far-right resurgence, dominated by a lunatic right that makes Newt Gingrich and Karl Rove look like moderates.”

As a person of pragmatism and willingness to compromise for good (which may make me sometimes look too weak), I feel like I understand President relatively well. But at this point, I have to admit the deadly combination of destructive opposition, partially ill-spinned pragmatism of president, and the screw-up of his economic team (except dear Christina Romer).

I admire liberals for their eagerness for pregress. But sometimes, I also wish them to take accounts of barriers, limits too. I strongly agree with Mr. Kuttner that:

“Far better would be for Obama to draw the right lessons and surprise his critics now.”

Elizabeth Warren, Tim Geithner Look To Simplify Mortgage Red Tape

It sounds great that Prof. Warren and Treasury Geithner are doing their best to work together and make progress in consumer protection. Fantastic to read that:

“Warren said that Obama told her not to worry about job titles, but to “start pushing back” against companies fighting new regulations aimed at protecting borrowers. She said, “That’s exactly what I intend to do, and I intend to do it as hard as I can.”

A string of positive changes that the administration is making recently, along with the positive action of group of economists against deficit hawks, celebrities John Stewart and Colbert’s March to Washington to Restore Sanity, which will definitely draw huge public attention, these changes should eventually soften public’s heart toward election.
Read the Article at HuffingtonPost

http://news.yahoo.com/s/ap/20100922/ap_on_bi_ge/us_obama_economic_adviser

http://www.huffingtonpost.com/2010/09/20/obama-hedges-on-possible-_n_732520.html

http://www.huffingtonpost.com/2010/09/21/elizabeth-warren-tim-geit_n_733615.html

Elizabeth Warren, Finally Got There? Almost.

I am relieved to hear the following news in Prof. Elizabeth Warren’s words:

“The president asked me, and I enthusiastically agreed, to serve as an Assistant to the President and Special Advisor to the Secretary of the Treasury on the Consumer Financial Protection Bureau. He has also asked me to take on the job to get the new CFPB started — right now. The president and I are committed to the same vision on CFPB, and I am confident that I will have the tools I need to get the job done.”

One step at a time. One by one.

Of course, as Prof Warren is known to be critical to Federal Government, it may not have been an easy decision for the White House to onboard its own critique as its crew. But I heard that “Big Person” has the capacity of being open, listening to it own critics, and accepting/adjusting to some of them if reasonable. Eventually, that adjustments will pay off.

The ruined US economy became the condemning ghost of previous presidency and helped the candidate Obama get his momentum high toward US Presidency. But, since then, it has turned its claws around to hunt him back down, with the same trap, in the middle of his presidency. Some differences in President’s policies may have made some, or slight differences in current political climate. But, the fundamental problem must have remained anyway and the current situation may have been inevitable for President anyway. Because few people have found any solution to the current national trauma of joblessness, ruined economy.

Making every efforts to take a right step at every endeavor into right direction. That is, I believe, the best strategy that President Obama can take on now, to wither through the tough currents of unbearably ridiculous politics. And, for the remaining part, let time heal the wounds and bring the best solutions. I believe, President should do his best to show his sincerity with honest heart to the public, make sure it is not misunderstood as his cleverness with less heart, and stick with middle class and jobs.

“Fighting to Protect Consumers,” http://www.huffingtonpost.com/elizabeth-warren/fighting-to-protect-consumers_b_720410.html

“Elizabeth Warren To Lead Search For New Consumer Chief, Could ‘Pull A Dick Cheney’”, http://www.huffingtonpost.com/2010/09/16/elizabeth-warren-could-pull-a-dick-cheney_n_720429.html

Obama, Elizabeth Warren, Meet Amid Speculation She Could Be Picked To Head Consumer Protection Agency

Adding Elizabeth Warren to his crew, along with his new economic plan of expansion, extension of research and development tax credits, allowing businesses to write off their equipment plants investments, $50 billion infrastructure investment, will help President better steer tough pre-election water. At this point, positive thinking is better. Nobody knows the outcome yet.
Read the Article at HuffingtonPost

My Name is Beautiful City.

I admire big trees with deep roots, withstanding everything – rains, storms, snow, thunders to prosper hundreds years. They look enduring, trustworthy.

My name means “beautiful city” in Chinese character. When I was little, my name was different. When I was about 2-3 years old, a guy who was disabled during the Vietnamese war and rented a room at my parents’ house observed  me crying. He told my mother that my original name was not good for me, he will make another one that will bless my future. My mother waited a month or so for him to tell her my new name. This disabled war veteran came up with my current name, mi kyung, which he decided mainly based on the number of lines of the Chinese words because that specific number of lines of chinese characters happens to give me blessed future. That happens to be this name. There are many same names like mine in Asia, using different chinese characters, meaning different, but sounding same.

Strangely, I don’t have birth dreams of my kids. Maybe because I was in America, not in Asia. In Asia, baby-expecting mothers or their mothers or somebody close to those expecting mothers usually have birth dreams of expected babies that give symbolizing meaning about their babies. When pregnant with me, my mother’s birth dream was, she was flying in sky above her house and saw her front yard of house completely covered with white cherry blossoms. She flew down to the house and saw an very old woman with gray hair (a legendary woman who is believed to bring babies to families) plants endless numbers of cherry trees that were covered with white cherry blossoms. She noticed that those cherry trees didn’t have roots and asked the old lady why she was planting those rootless cherry trees although they will die. The old lady said that she will see in future how these rootless cherry trees will blossom and prosper. And now I am in America (rootless), but my skin is yellow, or rather say olive color instead of white. I write small things from time to time as notes, planning to use them somewhere sometime.

Robert Gibbs, Elizabeth Warren, and the 2010 Election

” Does President’s hope for the November mid-term election depend on Elizabeth Warren and Hispanic Voters (if immigration issue is more important to them than any other political issues)? Or are there something more than them?”

Knowledgable people continuously point out that hiring Elizabeth Warren as the head of the Bureau of Consumer Financial Protection is a politically winning strategy for President Obama. He should try it asap in order to give people more time to soften their mind toward Democrates before the Nov election.

It’s very interesting phenomenon that, no matter whether how much republicans politicians seem to fight against the interests of country and their own people, republican voters are still so enthusiastic and royal to their political party even when they are supposed to revolt against it. On the other hand, democrats are the exact opposite. Where this republican royalty comes from? Even when justice is denied, still people seem not to care, or do not understand, or not be able to register it in their mind correctly. So, the predicted dominant turnouts of economically wealthy, older voters in the Nov election, is this doomsday scenario for democrats? Hispanic voters are not going to roam around the election sites that much to release their anger against immigration issue?
Read the Article at HuffingtonPost

America Without a Middle Class

That’s right. I worry about the future of young generation, the future of my kids. I worry about how to protect them from this increasingly “UNSURVIVABLE LIVING ENVIRONMENETS” of this country where middle class and poor people have to save their money for food and clothing to feed the pockets of company executives so that they can live like kings and quees of ancient times.
My kids are doing great at school. So, I’d like to assume that they will be successful in their future. But what if anything unexpected happen to them, to us. And they were not able to go to higher education and have to end up having high school diplomas and have to work several jobs to make basic living. But still can not afford to have house or ????
This country is going to be increasingly un-inhabitable to people who has just high school diploma or even with college degree if the social, economic system continues to be corrupted as it has increasingly been.
More on The Recession
Read the Article at HuffingtonPost

America: Is it in the Passage from a Land of Dream to a Land of Harsh, Unsustainable Life?

I recommend you to read Dr. Elizabeth Warren’s blog “America Without a Middle Class” at Huffington Post.

http://www.huffingtonpost.com/elizabeth-warren/america-without-a-middle_b_377829.html

This is a respectable article that tells us the big picture of where this country is standing in “its passage from a land of dream to a land of harsh, unsustainable life and social economic systems” for the majority of people. In this country, working hard has been increasingly dissociated with having financially manageable, good life and securing financially relaxed retirement.

This blog tells us how this country’s wrong, deceptive economic, social systems have increasingly forced people to sacrifice their money for basic necessities, including food and clothing, to feed the pockets of riches such as those in the financial industry, to the point of unmanageable life. This blog makes us better understand why we need “reforms” in various industrial, social, economic sectors.

Throughout history, we witnessed the demise of nations happening when riches, ruling classes extorted money/resources from the middle, low-income classes, creating unstable social structure and clash between classes. How the current US situation is different from the lessons of history?