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(CNN)   Bush trying to drum up support for CAFTA in states where NAFTA was a kick in the nuts   (cnn.com) divider line 91
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8027 clicks; posted to Main » on 16 Jul 2005 at 5:16 PM (9 years ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2005-07-16 04:45:20 PM  
If Bush wasn't still licking at the nuts of the Commie Chinese, I'd say this was actually a good move. Rather buy my cheap goods from South American nations than China: China has enough money and weapons and industry.
 
2005-07-16 04:55:04 PM  
EnormousJuan

Agreed. South America needs more investment.
 
2005-07-16 05:20:51 PM  
Welcome to the New American Banana Republic Century.
 
2005-07-16 05:21:06 PM  
Yes. The problem is that workers' workplace conditions need to be improved in many of those textile jobs. CAFTA doesn't help this much IIRC.
 
2005-07-16 05:26:02 PM  

"Hey lady, tell the press you were the one who told Karl Rove about Valerie Plame, or I'll have your job outsourced ..."


[image from i.a.cnn.net too old to be available]

 
2005-07-16 05:26:02 PM  
Bush gave my dog herpes! Seriously, and the Valtrex isnt supressing it!
 
2005-07-16 05:26:43 PM  
No sign of NAMBLA.
 
2005-07-16 05:27:54 PM  
You know, at this point, America deserves what it gets. If we haven't figured out what a crock of shiat things have become, and still beleive the incredible BS that flows from the Bushies, then we deserve every steaming pile of what's coming to us. (As I said after the election).
 
2005-07-16 05:28:16 PM  
 
2005-07-16 05:29:16 PM  
We're going to win the war on terror by making you unemployed! Don't worry, the job market is looking up, and you got a tax cut too!

/retard.
 
2005-07-16 05:29:37 PM  
Wasn't NAFTA more of a big Clinton issue? Or is my memory just bad?
 
2005-07-16 05:29:56 PM  
Critics contend CAFTA will cost U.S. jobs by making it easier for U.S. companies to relocate operations in Central America, where labor costs are lower.

Right, plus, probably less stringent occupational and environmental safety rules. Those cost lots of money to be in compliance with, you know. American companies LURVE moving grunt-work operations to third world countries, for just those reasons. It's been done time and again.

The White House argues the opposite, asserting it will bring jobs to the United States.

George W. "Underpants Gnome" Bush, hard at work.
1. Lower trade barriers to third world countries
2. ???
3. More jobs in America!

No, seriously. It costs a fortune to manufacture stuff here, why should Costa Ricans give a flying f*ck whether their clothes are Made In America? Hell, Americans wear stuff that's Made In China, or Made in India, or whatever, for just those reasons. Those countries don't have as stringent laws, we lowered trade barriers, now we buy their stuff, not sell stuff to them.
 
2005-07-16 05:30:51 PM  
 
2005-07-16 05:32:20 PM  
Then again, as has been recently brought up in other threads, this is George W. Bush. The man who caused a federal deficit spike that put even Reagan to shame...and Reagan had the Soviet Union to stare down.
 
2005-07-16 05:33:11 PM  
this is going to be a good one
/fetches marshmallows
 
2005-07-16 05:34:21 PM  
Ishidan

And Reagan was honest enough to roll back some of his insane tax cuts. Admitting mistakes is not something the current bunch does.
 
2005-07-16 05:34:25 PM  
NAFTA got a tie vote, so Subemporer Gore got to cast the deciding vote in favor of jamming a bunch of third world countries up our anuses.

And that was such a grand success at eviscerating our ability to build our own stuff, feed our own people, or keep anything like a border from appearing on any map, here comes CAFTA!

As if it wasn't enough that we're getting rammed up the sphincter by a giant green Democrat donkey dork, here comes Mr. "It's not an amnesty" Republican to jam another one into our mouths!

MmmMMmm giant green donkey kum! Thanks, Senate!!! Thanks Bush! MMmM!!
 
2005-07-16 05:35:13 PM  
Ishidan

I like the underpants gnomes reference - I was actually thinking the same myself. Somehow, and he doesn't saw how, CAFTA will create US jobs. I'll withhold judgment until he tells us what #2 is.
 
2005-07-16 05:35:14 PM  
Bush trying to do something good for the economy?

Negative.

Bush trying to stick his little slimey nose up the only few remaining countries that like us?

Affirmative.


When will you Bush backers realize he has done nothing good for us. Nothing good for the economy. Nothing good related to foreign relations. Nothing good for the military. Nothing good for your rights. Nothing good to uphold The Constitution. Nothing good for the elder. Nothing good for the young. Nothing good for the working class. Nothing good to protect your privacy. Nothing good for health care. ....

It seems that the only people I personally know that support Bush are rednecks, drop outs, selfish old men, and generally just very stupid and close minded.

All of which make me ill... you all.. make me ill.
 
2005-07-16 05:43:01 PM  
desynch: All of which make me ill

You aren't 'ill' so much as 'farking nuts', if you actually believe that tripe you wrote.
 
2005-07-16 05:43:01 PM  
I don't care how many times you try to tell me throwing shiat on a field makes things grow. You're still slingin bullshiat.
 
2005-07-16 05:46:10 PM  
Any he will get their support...

Idiots.
 
2005-07-16 05:46:24 PM  
Count me among the "how will this create jobs in the U.S.?" crowd.

I suspect that his line of reasoning goes something like "this will create new markets for U.S. companies." Unfortunately, this does NOT mean that the companies will produce here to meet that need. Rather it means that once the goods arrive off the boat from China, they will be put back on another boat going to Costa Rica.

But at least Mexico has benefitted from NAFTA. The border areas are a million times better than during the 80's. Alas that doesn't help us much.
 
2005-07-16 05:49:16 PM  
Okay, I'm confused. Is it bad the US is so rich and much of the "rest of the world" poor or is it bad to lower barriers to allow the poor areas to change?
 
2005-07-16 05:49:38 PM  
It's not that I'm "farking nuts", it's that you're "farking blind."
 
2005-07-16 05:51:24 PM  
Guys, he said it would create jobs because American textile manufacturers would be able to sell to Central American countries.

Of course, he forgot to point out that all the textile jobs were shipped out a long time ago. Convenient, that.
 
2005-07-16 05:53:04 PM  
Bush will not be happy till every American is unemployed. Wake up America.
 
2005-07-16 05:55:03 PM  
Okay guys, I've been away for a while what is up with the har har guy? Where did that start?
 
2005-07-16 05:56:08 PM  
C4shm0ney:

Okay guys, I've been away for a while what is up with the har har guy? Where did that start?


I'm not sure but I hope it will end soon. It wasn't even that funny to start with and now is just lame.
 
2005-07-16 05:58:03 PM  
Ah I see what the jobs will be now, corn-bread.

Jobs for Marketing and Executives. That's about it.

No, I wouldn't even say jobs for longshoremen. Intelligent marketers would skip the entire offload-onload sequence and just have it shipped straight, while pocketing the dealer fees.
 
2005-07-16 06:00:26 PM  
He forgot about Poland?
 
2005-07-16 06:01:20 PM  
Representatives from the Society of Petroleum Industry Leaders "SPIL", the Society for More Coal Energy "SMOCE", and the Key Atomic Benefits Office of Mankind "KABOOM" unavailable for comment
 
2005-07-16 06:02:09 PM  
The Reagan tax cuts were only insane in the sense that they didn't take into account how congress would react to them: refuse to balance the budget and live within their (our) means. Some congressmen promised up and down that they'd try to live within the budget. Of course they did what scorpions always do when a frog is convinced to let one ride on his back.

I'm glad it happened though. The tax rates are much better today than they were. I was shocked when first learned that income tax rates were once as high as 50% and 70%. I can't understand why anyone would work with a burden like that hanging over them. I like my job, but not enough to work all year and fork over 50% of it to the state.

To some extent I think NAFTA and CAFTA and the flood of Chinese made goods are a symptom of a system where the tax policy doesn't work. If the productive members of society are taxed more than they think is fair they'll find a way around it. Whether it is in fact fair for them to do this is a moot point until we're ready to do something radical like dramatically cut back on foreign imports or completely abolish the current tax system and replace it with something very different.
 
2005-07-16 06:02:18 PM  
The only reason I feel confident things will get better is because I know Bush cannot serve another term.

I wonder which "God" Bush talks to..
 
2005-07-16 06:04:09 PM  
So while all of you biatch and moan, what solutions do you have to the lack of cost-effectiveness to produce goods here?

None.

Go back to your under-the-bridge locales.
 
2005-07-16 06:06:31 PM  
I didn't know Bush read Kafka.

/i am the Walrus
 
2005-07-16 06:06:45 PM  
The same people opposing CAFTA are the same people who keep wanting to make it more expensive to do business in the US. Fark off, the lot of you.
 
2005-07-16 06:06:58 PM  
Free trade can work if everyone benefits. But I'm sure a small group of very greedy people will make sure they get all the benefits, as usual, and any expenses get passed along to the public.
 
2005-07-16 06:07:02 PM  
Threadjack...

The peronals chick Molika needs to know she is way less hittable than Christina Ricci.
 
2005-07-16 06:09:38 PM  
dramatically cut back on foreign imports or completely abolish the current tax system and replace it with something very different.

I agree, Golland, but cutting back on foreign imports would be a government intrusion into private "global free trade", which would bring sanctions by way of the WTO, hurting us EVEN MORE. And then there's the "Fair Tax" being suggested, which is basically Marxism-in-America.

I think you're right, but I'm pessemistic as to whether the powers that be either understand, care, or have the ablity [now] to do anything about it.

I think the only way out of our big problems is, UNfortunately, for us to get sucked into some massive military conflict somewhere. There's always Taiwan. But then it could also backfire and make things way worse.
 
2005-07-16 06:11:50 PM  
Trading in Illusions
By Dani Rodrik
Foreign Policy
March, 2001


Advocates of global economic integration hold out utopian visions of the prosperity that developing countries will reap if they open their borders to commerce and capital. This hollow promise diverts poor nations' attention and resources from the key domestic innovations needed to spur economic growth

A senior U.S. Treasury official recently urged Mexico's government to work harder to reduce violent crime because "such high levels of crime and violence may drive away foreign investors." This admonition nicely illustrates how foreign trade and investment have become the ultimate yardstick for evaluating the social and economic policies of governments in developing countries. Forget the slum dwellers or campesinos who live amidst crime and poverty throughout the developing world. Just mention "investor sentiment" or "competitiveness in world markets" and policymakers will come to attention in a hurry.

Underlying this perversion of priorities is a remarkable consensus on the imperative of global economic integration. Openness to trade and investment flows is no longer viewed simply as a component of a country's development strategy; it has mutated into the most potent catalyst for economic growth known to humanity. Predictably, senior officials of the World Trade Organization (WTO), International Monetary Fund (IMF), and other international financial agencies incessantly repeat the openness mantra. In recent years, however, faith in integration has spread quickly to political leaders and policymakers around the world.

Joining the world economy is no longer a matter simply of dismantling barriers to trade and investment. Countries now must also comply with a long list of admission requirements, from new patent rules to more rigorous banking standards. The apostles of economic integration prescribe comprehensive institutional reforms that took today's advanced countries generations to accomplish, so that developing countries can, as the clich goes, maximize the gains and minimize the risks of participation in the world economy. Global integration has become, for all practical purposes, a substitute for a development strategy.

This trend is bad news for the world's poor. The new agenda of global integration rests on shaky empirical ground and seriously distorts policymakers' priorities. By focusing on international integration, governments in poor nations divert human resources, administrative capabilities, and political capital away from more urgent development priorities such as education, public health, industrial capacity, and social cohesion. This emphasis also undermines nascent democratic institutions by removing the choice of development strategy from public debate.

World markets are a source of technology and capital; it would be silly for the developing world not to exploit these opportunities. But globalization is not a shortcut to development. Successful economic growth strategies have always required a judicious blend of imported practices with domestic institutional innovations. Policymakers need to forge a domestic growth strategy by relying on domestic investors and domestic institutions. The costliest downside of the integrationist faith is that it crowds out serious thinking and efforts along such lines.

EXCUSES, EXCUSES

Countries that have bought wholeheartedly into the integration orthodoxy are discovering that openness does not deliver on its promise. Despite sharply lowering their barriers to trade and investment since the 1980s, scores of countries in Latin America and Africa are stagnating or growing less rapidly than in the heyday of import substitution during the 1960s and 1970s. By contrast, the fastest growing countries are China, India, and others in East and Southeast Asia. Policymakers in these countries have also espoused trade and investment liberalization, but they have done so in an unorthodox mannergradually, sequentially, and only after an initial period of high growthand as part of a broader policy package with many unconventional features.

The disappointing outcomes with deep liberalization have been absorbed into the faith with remarkable aplomb. Those who view global integration as the prerequisite for economic development now simply add the caveat that opening borders is insufficient. Reaping the gains from openness, they argue, also requires a full complement of institutional reforms.

Consider trade liberalization. Asking any World Bank economist what a successful trade-liberalization program requires will likely elicit a laundry list of measures beyond the simple reduction of tariff and nontariff barriers: tax reform to make up for lost tariff revenues; social safety nets to compensate displaced workers; administrative reform to bring trade practices into compliance with WTO rules; labor market reform to enhance worker mobility across industries; technological assistance to upgrade firms hurt by import competition; and training programs to ensure that export-oriented firms and investors have access to skilled workers. As the promise of trade liberalization fails to materialize, the prerequisites keep expanding. For example, Clare Short, Great Britain's secretary of state for international development, recently added universal provision of health and education to the list.

High Tariffs Don't Mean Low Growth

In the financial arena, integrationists have pushed complementary reforms with even greater fanfare and urgency. The prevailing view in Washington and other Group of Seven (G-7) capitals is that weaknesses in banking systems, prudential regulation, and corporate governance were at the heart of the Asian financial crisis of the late 1990s. Hence the ambitious efforts by the G-7 to establish international codes and standards covering fiscal transparency, monetary and financial policy, banking supervision, data dissemination, corporate governance, and accounting standards. The Financial Stability Forum (FSF)a G-7 organization with minimal representation from developing nationshas designated 12 of these standards as essential for creating sound financial systems in developing countries. The full FSF compendium includes an additional 59 standards the agency considers "relevant for sound financial systems," bringing the total number of codes to 71. To fend off speculative capital movements, the IMF and the G-7 also typically urge developing countries to accumulate foreign reserves and avoid exchange-rate regimes that differ from a "hard peg" (tying the value of one's currency to that of a more stable currency, such as the U.S. dollar) or a "pure float" (letting the market determine the appropriate exchange rate).

A cynic might wonder whether the point of all these prerequisites is merely to provide easy cover for eventual failure. Integrationists can conveniently blame disappointing growth performance or a financial crisis on "slippage" in the implementation of complementary reforms rather than on a poorly designed liberalization. So if Bangladesh's freer trade policy does not produce a large enough spurt in growth, the World Bank concludes that the problem must involve lagging reforms in public administration or continued "political uncertainty" (always a favorite). And if Argentina gets caught up in a confidence crisis despite significant trade and financial liberalization, the IMF reasons that structural reforms have been inadequate and must be deepened.

FREE TRADE-OFFS

Most (but certainly not all) of the institutional reforms on the integrationist agenda are perfectly sensible, and in a world without financial, administrative, or political constraints, there would be little argument about the need to adopt them. But in the real world, governments face difficult choices over how to deploy their fiscal resources, administrative capabilities, and political capital. Setting institutional priorities to maximize integration into the global economy has real opportunity costs.

Consider some illustrative trade-offs. World Bank trade economist Michael Finger has estimated that a typical developing country must spend $150 million to implement requirements under just three WTO agreements (those on customs valuation, sanitary and phytosanitary measures, and trade-related intellectual property rights). As Finger notes, this sum equals a year's development budget for many least-developed countries. And while the budgetary burden of implementing financial codes and standards has never been fully estimated, it undoubtedly entails a substantial diversion of fiscal and human resources as well. Should governments in developing countries train more bank auditors and accountants, even if those investments mean fewer secondary-school teachers or reduced spending on primary education for girls?

In the area of legal reform, should governments focus their energies on "importing" legal codes and standards or on improving existing domestic legal institutions? In Turkey, a weak coalition government spent several months during 1999 gathering political support for a bill providing foreign investors the protection of international arbitration. But wouldn't a better long-run strategy have involved reforming the existing legal regime for the benefit of foreign and domestic investors alike?

In public health, should governments promote the reverse engineering of patented basic medicines and the importation of low-cost generic drugs from "unauthorized" suppliers, even if doing so means violating WTO rules against such practices? When South Africa passed legislation in 1997 allowing imports of patented AIDS drugs from cheaper sources, the country came under severe pressure from Western governments, which argued that the South African policy conflicted with WTO rules on intellectual property.

How much should politicians spend on social protection policies in view of the fiscal constraints imposed by market "discipline"? Peru's central bank holds foreign reserves equal to 15 months of imports as an insurance policy against the sudden capital outflows that financially open economies often experience. The opportunity cost of this policy amounts to almost 1 percent of gross domestic product annuallymore than enough to fund a generous antipoverty program.

How should governments choose their exchange-rate regimes? During the last four decades, virtually every growth boom in the developing world has been accompanied by a controlled depreciation of the domestic currency. Yet financial openness makes it all but impossible to manage the exchange rate.

How should policymakers focus their anticorruption strategies? Should they target the high-level corruption that foreign investors often decry or the petty corruption that affects the poor the most? Perhaps, as the proponents of permanent normal trade relations with China argued in the recent U.S. debate, a government that is forced to protect the rights of foreign investors will become more inclined to protect the rights of its own citizens as well. But this is, at best, a trickledown strategy of institutional reform. Shouldn't reforms target the desired ends directlywhether those ends are the rule of law, improved observance of human rights, or reduced corruption?

The rules for admission into the world economy not only reflect little awareness of development priorities, they are often completely unrelated to sensible economic principles. For instance, WTO agreements on anti-dumping, subsidies and countervailing measures, agriculture, textiles, and trade-related intellectual property rights lack any economic rationale beyond the mercantilist interests of a narrow set of powerful groups in advanced industrial countries. Bilateral and regional trade agreements are typically far worse, as they impose even tighter prerequisites on developing countries in return for crumbs of enhanced "market access." For example, the African Growth and Opportunity Act signed by U.S. President Clinton in May 2000 provides increased access to the U.S. market only if African apparel manufacturers use U.S.-produced fabric and yarns. This restriction severely limits the potential economic spillovers in African countries.

There are similar questions about the appropriateness of financial codes and standards. These codes rely heavily on an Anglo-American style of corporate governance and an arm's-length model of financial development. They close off alternative paths to financial development of the sort that have been followed by many of today's rich countries (for example, Germany, Japan, or South Korea).

In each of these areas, a strategy of "globalization above all" crowds out alternatives that are potentially more development-friendly. Many of the institutional reforms needed for insertion into the world economy can be independently desirable or produce broader economic benefits. But these priorities do not necessarily coincide with the priorities of a comprehensive development agenda.

ASIAN MYTHS

Even if the institutional reforms needed to join the international economic community are expensive and preclude investments in other crucial areas, pro-globalization advocates argue that the vast increases in economic growth that invariably result from insertion into the global marketplace will more than compensate for those costs. Take the East Asian tigers or China, the advocates say. Where would they be without international trade and foreign capital flows?

That these countries reaped enormous benefits from their progressive integration into the world economy is undeniable. But look closely at what policies produced those results, and you will find little that resembles today's rule book.

Countries like South Korea and Taiwan had to abide by few international constraints and pay few of the modern costs of integration during their formative growth experience in the 1960s and 1970s. At that time, global trade rules were sparse and economies faced almost none of today's common pressures to open their borders to capital flows. So these countries combined their outward orientation with unorthodox policies: high levels of tariff and nontariff barriers, public ownership of large segments of banking and industry, export subsidies, domestic-content requirements, patent and copyright infringements, and restrictions on capital flows (including on foreign direct investment). Such policies are either precluded by today's trade rules or are highly frowned upon by organizations like the IMF and the World Bank.

China also followed a highly unorthodox two-track strategy, violating practically every rule in the guidebook (including, most notably, the requirement of private property rights). India, which significantly raised its economic growth rate in the early 1980s, remains one of the world's most highly protected economies.

All of these countries liberalized trade gradually, over a period of decades, not years. Significant import liberalization did not occur until after a transition to high economic growth had taken place. And far from wiping the institutional slate clean, all of these nations managed to eke growth out of their existing institutions, imperfect as they may have been. Indeed, when some of the more successful Asian economies gave in to Western pressure to liberalize capital flows rapidly, they were rewarded with the Asian financial crisis.

That is why these countries can hardly be considered poster children for today's global rules. South Korea, China, India, and the other Asian success cases had the freedom to do their own thing, and they used that freedom abundantly. Today's globalizers would be unable to replicate these experiences without running afoul of the IMF or the WTO. The Asian experience highlights a deeper point: A sound overall development strategy that produces high economic growth is far more effective in achieving integration with the world economy than a purely integrationist strategy that relies on openness to work its magic. In other words, the globalizers have it exactly backwards. Integration is the result, not the cause, of economic and social development. A relatively protected economy like Vietnam is integrating with the world economy much more rapidly than an open economy like Haiti because Vietnam, unlike Haiti, has a reasonably functional economy and polity.

Integration into the global economy, unlike tariff rates or capital-account regulations, is not something that policymakers control directly. Telling finance ministers in developing nations that they should increase their "participation in world trade" is as meaningful as telling them that they need to improve technological capabilitiesand just as helpful. Policymakers need to know which strategies will produce these results, and whether the specific prescriptions that the current orthodoxy offers are up to the task.

TOO GOOD TO BE TRUE

Do lower trade barriers spur greater economic progress? The available studies reveal no systematic relationship between a country's average level of tariff and nontariff barriers and its subsequent economic growth rate. If anything, the evidence for the 1990s indicates a positive relationship between import tariffs and economic growth [see chart]. The only clear pattern is that countries dismantle their trade restrictions as they grow richer. This finding explains why today's rich countries, with few exceptions, embarked on modern economic growth behind protective barriers but now display low trade barriers.

The absence of a strong negative relationship between trade restrictions and economic growth may seem surprising in view of the ubiquitous claim that trade liberalization promotes higher growth. Indeed, the economics literature is replete with cross-national studies concluding that growth and economic dynamism are strongly linked to more open trade policies. A particularly influential study finds that economies that are "open," by the study's own definition, grew 2.45 percentage points faster annually than closed onesan enormous difference.

Upon closer look, however, such studies turn out to be unreliable. In a detailed review of the empirical literature, University of Maryland economist Francisco Rodrguez and I have found a major gap between the results that economists have actually obtained and the policy conclusions they have typically drawn. For example, in many cases economists blame poor growth on the government's failure to liberalize trade policies, when the true culprits are ineffective institutions, geographic determinants (such as location in a tropical region), or inappropriate macroeconomic policies (such as an overvalued exchange rate). Once these misdiagnoses are corrected, any meaningful relationship across countries between the level of trade barriers and economic growth evaporates.

The evidence on the benefits of liberalizing capital flows is even weaker. In theory, the appeal of capital mobility seems obvious: If capital is free to enter (and leave) markets based on the potential return on investment, the result will be an efficient allocation of global resources. But in reality, financial markets are inherently unstable, subject to bubbles (rational or otherwise), panics, shortsightedness, and self-fulfilling prophecies. There is plenty of evidence that financial liberalization is often followed by financial crashjust ask Mexico, Thailand, or Turkeywhile there is little convincing evidence to suggest that higher rates of economic growth follow capital-account liberalization.

Perhaps the most disingenuous argument in favor of liberalizing international financial flows is that the threat of massive and sudden capital movements serves to discipline policymakers in developing nations who might otherwise manage their economies irresponsibly. In other words, governments might be less inclined to squander their societies' resources if such actions would spook foreign lenders. In practice, however, the discipline argument falls apart. Behavior in international capital markets is dominated by mood swings unrelated to fundamentals. In good times, a government with a chronic fiscal deficit has an easier time financing its spending when it can borrow funds from investors abroad; witness Russia prior to 1998 or Argentina in the 1990s. And in bad times, governments may be forced to adopt inappropriate policies in order to conform to the biases of foreign investors; witness the excessively restrictive monetary and fiscal policies in much of East Asia in the immediate aftermath of the Asian financial crisis. A key reason why Malaysia was able to recover so quickly after the imposition of capital controls in September 1998 was that Prime Minister Mahathir Mohamad resisted the high interest rates and tight fiscal policies that South Korea, Thailand, and Indonesia adopted at the behest of the International Monetary Fund.

GROWTH BEGINS AT HOME

Well-trained economists are justifiably proud of the textbook case in favor of free trade. For all the theory's simplicity, it is one of our profession's most significant achievements. However, in their zeal to promote the virtues of trade, the most ardent proponents are peddling a cartoon version of the argument, vastly overstating the effectiveness of economic openness as a tool for fostering development. Such claims only endanger broad public acceptance of the real article because they unleash unrealistic expectations about the benefits of free trade. Neither economic theory nor empirical evidence guarantees that deep trade liberalization will deliver higher economic growth. Economic openness and all its accouterments do not deserve the priority they typically receive in the development strategies pushed by leading multilateral organizations.

Countries that have achieved long-term economic growth have usually combined the opportunities offered by world markets with a growth strategy that mobilizes the capabilities of domestic institutions and investors. Designing such a growth strategy is both harder and easier than implementing typical integration policies. It is harder because the binding constraints on growth are usually country specific and do not respond well to standardized recipes. But it is easier because once those constraints are targeted, relatively simple policy changes can yield enormous economic payoffs and start a virtuous cycle of growth and additional reform.

Unorthodox innovations that depart from the integration rule book are typically part and parcel of such strategies. Public enterprises during the Meiji restoration in Japan; township and village enterprises in China; an export processing zone in Mauritius; generous tax incentives for priority investments in Taiwan; extensive credit subsidies in South Korea; infant-industry protection in Brazil during the 1960s and 1970sthese are some of the innovations that have been instrumental in kick-starting investment and growth in the past. None came out of a Washington economist's tool kit.

Few of these experiments have worked as well when transplanted to other settings, only underscoring the decisive importance of local conditions. To be effective, development strategies need to be tailored to prevailing domestic institutional strengths. There is simply no alternative to a homegrown business plan. Policymakers who look to Washington and financial markets for the answers are condemning themselves to mimicking the conventional wisdom du jour, and to eventual disillusionment.
 
2005-07-16 06:15:04 PM  
There should be a rule against pasting someone else's article in here. As if anyone is actually going to read it.
 
2005-07-16 06:15:57 PM  
even worse when the 'cut n' past'r' hasn't read the article...
 
2005-07-16 06:17:38 PM  
I wish I had time (and the attention span) to read all that and agree or disagree. Alas...
 
2005-07-16 06:18:02 PM  
Say "Hi!" to the New World Order.

The future is now and it looks a lot like the 1890s.
 
2005-07-16 06:20:07 PM  
It looks on first scan like I would AGREE with the article, but like I said, I have technical manuals I have to study. No, seriously. I'm not being catty. I desperately need to hone up on my Java skills.
 
2005-07-16 06:21:47 PM  
Digital Religion: the reason why America is not cost effective is because we have more stringent rules than those third world countries. Got it?

We have unions, OSHA, EPA, FLSA, worker's compensation, unemployment insurance, so on down the line. These all cost companies money.

You want to do away with them all? Cause that's what it would take to level the field with countries that don't believe in anything except profits.

Don't forget about the Republican Entity for American-Made Industrial Non-Perishable Goods (REAMING).
 
d23 [TotalFark]
2005-07-16 06:23:30 PM  
kissing ass of big corporations != new jobs.

Everyone knows this... corporations DEFINITELY know this. When they make this argument they are bullshiating you with a false piece of "common sense."

How many people do corporations want to employ? As few as possible.
 
2005-07-16 06:25:54 PM  
"2005-07-16 05:55:03 PM C4shm0ney

Okay guys, I've been away for a while what is up with the har har guy? Where did that start?"

He was over at Genmay.net for years before he migrated over here. Of course, there's now a website that will generate the pics automatically with whatever text you choose, so you don't even have to open Photoshop or MS Paint to do so.
 
2005-07-16 06:29:21 PM  
Major Thomb

God forbid you actually read up on a topic before spouting off on it. But please, don't let my attempt to elevate the discourse stop you from making your random-ass assumptions about people who disagree with you.
 
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