Just Foreign Policy wrote:
JFP News, 4/1:
From: Just Foreign Policy [info@justforeignpolicy.org]
Sent: Wednesday, April 01, 2009 2:16 PM
To: Tom
Subject: JFP News, 4/1: The problem of asset bubbles6) The problem of asset bubbles – like the US housing and stock market bubbles – did not even make it into the G20′s draft communiqué, notes Mark Weisbrot in the Guardian. But it is the economic issues of the developing world that are most obscured and neglected. Since 1980, there has been a sharp slowdown in economic growth in the vast majority of low- and middle-income countries. As would be expected during a long period of reduced economic growth, there was also reduced progress in the areas of life expectancy, infant and child mortality and other social indicators. A likely explanation for this massive economic failure is that it had something to do with the neoliberal economic policy reforms that were introduced since the 1980s: the abandonment of development strategies, the introduction of much more restrictive monetary and fiscal policies, an indiscriminate opening to international trade and capital flows, and of course the de-regulation and excesses of the financial sector that the world is now forced to recognize as harmful.
The economic plight of the developing countries is the most neglected. The down-turn in growth of the poorest countries can be attributed to the economic policies initiated by Reagan and continued through Clinton and both Bushes. NAFTA was heralded by Clinton as a cure for the impoverished of the world because of its language that recognized the huge discrepancy in wage earnings.
NAFTA was promised as a leveler of those conditions, but as of today it has failed miserably because there has been no effort from any U.S. administration to pressure for, or offer monetary support of, wage increases in even favored trading partners like Mexico and China. Our labor force has also born the weight of free trade instead of fair trade with poorer countries.
Since the playing field is no longer being leveled by tariffs, our manufacturers race to move to poorer countries thereby exploiting cheap labor and leaving behind our unionized labor force. These manufacturers have upped their profit margins but the prices of goods have risen and they have not passed the savings onto anyone except their CEOs.
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