As Alan Greenspan wrote in yesterday's WSJ:
The surge in competitive, low-priced exports from developing countries, especially those to Europe and the U.S., flattened labor compensation in developed countries, and reduced the rate of inflation expectations throughout the world, including those inflation expectations embedded in global long-term interest rates.
As we will document in a report next week, the U.S. toy and retail industry, after offshoring all their production, consistently used the threat of higher inflation to further lock in their privileges. This is total bunk, of course, since CEOs have mostly pocketed the difference from their overseas labor arbitrage: the average toy and industry retail CEO makes over 19,000 times what their Chinese workers make.
Here's the chain of events: U.S. corporations pushed for less accountability: they got it when Congress yielded its constitutional responsibility to set the terms of U.S. trade policy by passing the Nixon-hatched Fast Track in 1973-74, and then in later years gutted the funding for consumer regulatory bodies like the CPSC. Corporations pushed for greater ease in offshoring their production to countries with low wages and weak regulation: they got it when successive U.S. administrations and sessions of Congress signed off on a series of harmful trade policies under Fast Track. At the same time, corporations wanted to lock in their offshoring strategy’s profitability and insure against democratic accountability in the future: they got this too when Congress signed off on the expansive investment, trade and safety deregulation rules of agreements such as NAFTA and the WTO which authorize challenges in foreign tribunals of domestic safety policies that could limit imports.
Just in case this expansive strategic sense of Corporate "America" is getting you down, it also shows that our work to frustruate their efforts and advance our own interests can be similarly strategic. They've got a lot of pans on the fire: can we take over one of them? That's the spirit of this next song: Fugazi's "Oh":
number one in acquisitions
now there is no foreign soil
go global like a round thing
go global like a hole
to every money matchmaker
splicing green as fast as you can
let's break it down and start again...
you would never say you were out of time
coming with the fiction all the time
but there's a call coming on the other line
your secret's out