Wednesday, February 28, 2007

Josh Bevins presents an interesting view of future globalization.

Josh Bevins over at TPM Cafe presents an interesting view of Globalization. It is an overview of the central problems of the U.S. Economy in a world of globalized trade and his suggestions of what has to be done to bring the American economy back into balance with the global economy. He presents it as an attempt to lay out the ultimate goals that people discussing globalization would probably agree on.

I hadn't realized that the way the Chinese have pegged the value of their currency to the value of the dollar keeps the dollar from falling to its proper international value. But it is reasonable when it is pointed out. That makes our currency automatically overvalued, so that our production industries which export are priced out of the global markets.

That has left the American overdepending on interest-rate sensitive industries (like Construction) to keep producing. When the dollar does finally reach the proper (lower) level, then Construction will have too much labor and industrial production will not have enough. The shift back will be difficult for both industries, but especially for the labor that must be retrained - if we bother to retrain older laid off workers.

There is a lot there. Go read it.

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