Economic Freedom vs. Economic Security?

How should the U.S.A. respond to the impact of globalization on economic stability, security, and foreign policy? The Dubai Ports controversy is a prime example of the fact that capitalism doesn't take homeland security into account when decisions are made. Interestingly, foreigners cannot own U.S. television stations, yet at the same time approximately 20% of the Pentagon's contracts are with foreign companies (many of which involve sensitive technologies). Many experts say that limiting these contracts would reduce quality and increase costs. The solution posed by this article is simply to make Americans feel a little more secure in the midst of the rapid globalization that is taking place. It's hard to feel "economically secure" when your job could be offshored to China at any time. At the same time, protecting U.S. jobs with tariffs and quotas only hurts our standard of living.


Billy said...

It’s interesting how the Time Magazine author, Joe Klein, says in this article, that there are two approaches for Americans with respect to globalization: 1) a capitalism approach; and 2) a protectionism approach. He says that neither one may be the answer. Then, he mentions a third approach that is somewhere in the middle. In the explanation of the third option, he says that the government needs to implement universal health insurance to American workers, that the government should subsidize a pension reform, that the government should offer wage insurance for American workers, and that the government should be “turbo-charged” to support new industries like alternative fuel sources. That doesn’t sound like it meets in the middle. It sounds like uber-protectionism to me. It is an option that, for the republican capitalists like me, seems to lie on the other side of the liberal protectionists. If the government were to introduce those programs, we would be taxed to the point that we wouldn’t bring any of our paychecks home. Then, the populous would clamor for the government to subsidize food and housing. Then, what do you have? Socialism. What happened to our capitalism? Well, we got too scared of competition and legislated away our basic rights, privileges, and freedoms.

Dr. Tufte said...

-1 on Billy's comment for spelling errors.

Having said that, while Billy's comment is over the top, he has pinned down Joe Klein's political views - whether you approve of them or not - pretty accurately.

What bothers me is that this piece is economically incoherent. Somehow he seems to think that the restriction on TV ownership is good - even though it was put in place to prevent competition and raise profits. On the other hand, my guess is that he is generally critical of the Department of Defense, even though it presumably outsources to be efficient and save money.

Here's some advice: if someone is advocating economic protectionism, and can't clearly delineate why their suggestion is not racist, assume that they are.

FWIW: Joe Klein wrote (initially, anonymously) the book Primary Colors which was made into a movie starring John Travolta, and which was based on Klein's insider view of Clinton's 1992 campaign.