Language Selection

English French German Italian Portuguese Spanish

Globalization's Next Victim: US

Filed under
Misc

President Bush says the U.S. economy is the envy of the world, and Federal Reserve Chairman Alan Greenspan insists economic growth is solid despite a bit of froth, but the truth is that the global economic scene is now more troubled that at any time since the trade wars with Japan 20 years ago.

The U.S. trade deficit was considered unsustainable at around $25 billion annually by the Reagan administration. It is now nearing $700 billion, an unprecedented 6 percent of our gross domestic product.

As a result, the U.S. economy is on life support. Our lifeline to finance this deficit is huge infusions of foreign lending, much of it from the central banks of China and Japan. Congress is calling for China's scalp, and Treasury Secretary John Snow is demanding that Beijing revalue its currency. The new U. S. Trade representative is promising to get tough with China just as I and other U.S. trade officials promised to do with Japan in the past.

Former Federal Reserve Chairman Paul Volcker is forecasting a 75 percent probability of a major international financial crisis within five years.

How, if the United States is the envy of the world, can we be having all these problems? Easy.

Although the world, as characterized by columnist and author Tom Friedman, is getting flatter as a result of removal of trade and other barriers, it is also being tilted at an increasingly steep angle.

Think of it as a sliding board, very flat and smooth but inclined to speed the move of production, services, technology, wealth and power from West to East and often from open, democratic systems to more opaque, authoritarian regimes.

In short, despite the miracles it has accomplished in the past and may bring in the future, globalization is distorting the world economy in ways that pose increasing risks to the United States and the rest of the international community. This is an issue that didn't make it onto the agenda of the world leaders at the G-8 meeting in Scotland last week, but should make it onto future agendas.

Part of what's wrong is illustrated in recent statements by the chief executive officers of Intel and IBM. In testimony to a presidential advisory panel, Intel's Paul Otellini said his company might build some future factories overseas. After selling his company's personal computer division to China's Lenovo, IBM's Sam Palmisano told the New York Times that he had gotten a blessing on the deal from China's top leaders and added that "IBM wants to be part of China's strategy."

Remember now, we're talking about Intel and IBM, two of the three or four top technology companies in the world, both based in the United States.

According to our elite economists, America's future lies with high tech - - with companies like Intel and IBM. Yet here are two of U.S. high-tech industry's top CEOs saying the future may lie abroad, especially in China.

Add the fact that U.S. trade in high-tech products has swung from a surplus to a deficit, and it is not at all clear that this country's future will be in high tech.

At the heart of the problem is the false assumption that all the countries in the globalization contest are playing the same game. They're not: Some countries have strategies, but others don't have a clue. The United States is in the latter category.

Full Article.

More in Tux Machines

These Are the Hottest New Open Source Projects Right Now

Gobs of new open source projects are released every year, but only a few really capture the imaginations of businesses and developers. Open source software management company Black Duck tries to spot these, measuring which projects attract the most contributors, produce the most code, and garner the most attention from the developer world at large. Read more

Review: Kdenlive, the Linux video editor I want to use

There once was a time when video editing on Linux was an elusive beast. Well, that's not exactly true. Professional-level video editing on Linux has been solid and mature for many years now, with the likes of Lightworks, Cinelerra and Blender. But the "hobbyist" video editor market just wasn't very well-served. There were video editors out there… but they were often buggy and lacking in critical features. Read more

Atomic Mode-Setting/Display Support Progresses In Linux 3.20

Going along with many DRM graphics driver improvements for Linux 3.20 is the seemingly never-ending work on atomic mode-setting. Atomic mode-setting/display support has been talked about for years but is finally nearing a reality within the mainline Linux kernel with drivers like the Tegra DRM driver adding initial support. With Linux 3.20 there's the actual Linux DRM Atomic IOCTL and along with other changes means that Linux user-space can start accessing the atomic support, albeit it's hidden for now behind the experimental drm-atomic=1 flag. Read more

Industrial box-PC takes Linux-on-Haswell to extremes

The Acnodes “FES8670″ is a rugged industrial box-PC that runs Linux on a 4th Gen Core CPU, and offers four GbE ports and numerous storage and display ports. So far, we’ve still only seen one company (Congatec) announce products based on Intel’s new 5th Generation Core (“Broadwell”) processors, although we expect many more to break cover at Embedded World next month. Yet, there’s still plenty of juice left in the 4th Gen Haswell Core chips, which drive Acnodes’s powerhouse FES8670. Earlier Acnodes industrial PCs have included the Atom D2550-based FES2215. Read more