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PostPosted: Sat Oct 06, 2007 5:17 am 
Sunshine wrote:

The key word is FREE. When trade is FREE, some people will be better off and some people w


You are 100% right about this. I am a free trade proponent. This is not a free trade agreement.

The biggest reason this will fail is that it will hurt the average Tico. Cell phones and insurance cost will go way up as CAFTA will end state run organizations that now provide those services. The benefits to CAFTA are all theoretical; these increased expenses are very tangible for the average Tico.

Opponent’s claims that it will cost jobs are full of bull. There is a lot of emotional BS against this agreement. But it is hard to argue that it is not going to cost the every day Tico more money for those basic services listed above.

Make no mistake; Costa Rica is very pro USA. In Latin America countries are either aligned with the USA or with Chavez (Venezuela). Chavez hates Costa Rica for its economic success and its alignment with the USA and the average Tico has no use for Chavez. Costa Ricans don’t like Bush (duh), but make no mistake, most are very pro USA.


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PostPosted: Sat Oct 06, 2007 4:11 pm 
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My BA is in Economics. I remember from freshman Econ101, like most of us do, the concepts of comparative advantage and the theoretical advantages of free trade (ceteris parabus all parties gain from free trade). Back in the 90's I supported NAFTA. I used to be a big proponent of free trade, but I've come to realize it will never be that simple. Ceteris parabus (all things being equal) only exists in theory. Writing a free trade agreement will never be as simple as writing a 1 page document. Modern economies are just too complex. Consider some of these problems.
1) What will the US do about its agricultural subsidies? Ignore the farm lobbies from politically powerful states like Iowa and New Hampshire :roll: and repeal subsidies entirely? Or leave them in place and somehow try to take back those subsidies just for any farm products that are exported? Either way is either politically or practically impossible.
2) What about environmental laws? Should our industries that are required by law to put in place expensive pollution controls be expected to compete on an "even" playing field (non-offsetting tariffs) with foreign manufacturers who are free to dump whatever they want into the air and water (as is happening in China)?
3) Workplace laws? Minimum wage, Ch*ld labor practices, workplace safety, employee health coverage - each of these translate to costs for our manufacturers that often don't exist or are much more limited in other countries.

Unless you address these and other issues, it will never be as simple as just eliminating tariffs. And should we dumb down our laws to the lowest common denominator or expect other countries to raise their business lawas up to ours. There are valid reasons for protecting your industries from competition even if it means higher prices for the consumer.
1) National security - not that our defense industry has much competition, but say it did, should we ever allow our weapons production or other key elements of our defense to be completely outsourced? Should we have allowed Dubai to takeover critical US ports as would have happened in your "free trade utopia"
2) Infant industries - the US and other industrialized countries have a competitive advantage in some industries not because of any innate ability but really just because we've been doing it for so long and those industries have simply been able to grow to a scale that grants them that advantage. Is it fair to freeze the developing countries out of those industries merely because they happened to come along late.
3) What is good for the corporate profits of the big MNC's and their shareholders is not necessarily good for their employees. Free trade may lead to lower prices, but if the average worker, who makes up the bulk of the consumer market also makes less money they still won't be able to buy any of it.

Since these issues are too complex to be boiled down to a one page document, someone has to sweat out the details. Invariably that will be done by the parties that hold the keys to the economy: the US gov't and economy over our much smaller trading partners, the MNC's over small business, US Agribusiness over the small farmer, business over labor, etc. And the fine details in the resulting documents will invariably favor those who already hold the most power.

The results of NAFTA, which I admitted I originally supported, bear this out.
1) US companies flood to Mexico where they're not subject to our much more stringent labor laws, environmental laws or higher labor costs.
2) As a result, high wage manufacturing employment in the US goes down to be replaced by low wage WalMart jobs, where the new working poor can then go to buy the cheap imports they once produced themselves.
3) Real income (ie adjusted for inflation) in the US for the bottom 4 quintiles declines. So while prices do decline, the average consumer sees no improvement in after-tax purchasing power.
4) Because of the flood of manufacturers who moved their operations over the border to evade US regulations, The maquiladora region on the other side of the Rio Grande becomes a toxic polluted environmental disaster.
5) Of course jobs are also created in those factories but they don't pay enough to keep the Mexicans in Mexico and many cross the border in search of income sufficient to support their families back in Mexico.
6) The farm sector in Mexico that was supposed to gain from NAFTA can't compete with modern US agribusiness and farmers who used to be able to eke out a living on their small plots of land find themselves forced to join their urban brothers in the northward migration.

ID, asked what these previous free trade issues have to do with CAFTA and the answer is maybe not much but I think there is enough similarities in the underlying issues that the past history can provide important lessons for what might happen if this pact goes into effect.

I'll repeat a quote that ID seems to have overlooked:
Quote:
We are told that CAFTA increases exports and increases Foreign Direct Investment (FDI) and that this will increase employment. Nevertheless, none of this reasoning is true. On the one hand, CAFTA does not guarantee an increase in exports nor in FDI. In fact, last year Guatemala, Honduras, and El Salvador, with the agreement in place, actually saw their exports to the United States decrease.

No increase in foreign investment is guaranteed. Last year foreign investment in Costa Rica, without the treaty in place, was greater than that which was invested in all of the other Central American countries put together. Also, an increase in exports and in FDI does not guarantee that employment rates will rise. Between 1994 and 2006 in Costa Rica FDI rose by 500%, exports by 300%, and nevertheless unemployment also rose. This is because FDI displaced national production, and in doing so sometimes generated more unemployment than employment. This also was a result of an increased rate of displacement of national producers and employees. All such effects would be exaggerated if the agreement were to be approved.
CAFTA advocates maintain that this pact will increase CR exports and thus create jobs, but recent history with CAFTA itself in the other countries that have already adopted it shows differently. Exports to the US from those countries have actually decreased. CAFTA advocates maintain that this pact will increas US investment in CR (and the rejection will lead to a flight of capital) and that investment will create jobs. But CR over the last 12 years without CAFTA has been able to increase FDI 500% and exports by 300% and experienced increased unemployment in spite of that. So how why do they really need CAFTA to increase exports and investment and even if they do why would those exports and investment translate to increased jobs any more than they have in the past?


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PostPosted: Sat Oct 06, 2007 4:40 pm 
where is the delete button when you need it


Last edited by Casper on Sat Oct 06, 2007 4:41 pm, edited 1 time in total.

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PostPosted: Sat Oct 06, 2007 4:40 pm 
Pro,

You cannot compare Mexico/Nafta to Costa Rica/Cafta. They are entirely different situations. Costa Rica has one of the best education systems in all of Latin American. The sort of companies that will be attracted here will be more in the mold of Intel, which is already here.

allow me to respond to some of your points:

Prolijo wrote:
1) What will the US do about its agricultural subsidies? Ignore the farm lobbies from politically powerful states like Iowa and New Hampshire :roll: and repeal subsidies entirely? Or leave them in place and somehow try to take back those subsidies just for any farm products that are exported? Either way is either politically or practically impossible.


Looks to me that you are answering your own question ......

Prolijo wrote:
2) What about environmental laws? Should our industries that are required by law to put in place expensive pollution controls be expected to compete on an "even" playing field (non-offsetting tariffs) with foreign manufacturers who are free to dump whatever they want into the air and water (as is happening in China)?


Costa Rica has some of the toughest enviornmental laws in the world. They do not have the resources to enforcement them across the board, but this will not be the case for US companies doing business here.

Prolijo wrote:
3) Workplace laws? Minimum wage, Ch*ld labor practices, workplace safety, employee health coverage - each of these translate to costs for our manufacturers that often don't exist or are much more limited in other countries.


Costa Rica #1 has a better health care system than US (World Health Org CR #35, US #36) and probably better laws protecting its worker than we do in the US. I am not sure what the point is here.

Prolijo wrote:
1) National security - not that our defense industry has much competition, but say it did, should we ever allow our weapons production or other key elements of our defense to be completely outsourced? Should we have allowed Dubai to takeover critical US ports as would have happened in your "free trade utopia"


Side issue

Prolijo wrote:
2) Infant industries - the US and other industrialized countries have a competitive advantage in some industries not because of any innate ability but really just because we've been doing it for so long and those industries have simply been able to grow to a scale that grants them that advantage. Is it fair to freeze the developing countries out of those industries merely because they happened to come along late.


Confusing, how does this relate to CAFTA?

Prolijo wrote:
3) What is good for the corporate profits of the big MNC's and their shareholders is not necessarily good for their employees. Free trade may lead to lower prices, but if the average worker, who makes up the bulk of the consumer market also makes less money they still won't be able to buy any of it.


Unlike Mexico (or other central american countries), CR has a well educated work force. CR should see more well paid jobs from CAFTA. Look at Intel. Those are some of the best paid jobs in CR.

Prolijo wrote:
The results of NAFTA, which I admitted I originally supported, bear this out.
1) US companies flood to Mexico where they're not subject to our much more stringent labor laws, environmental laws or higher labor costs.


That just does not apply to Costa Rica.

Prolijo wrote:
2) As a result, high wage manufacturing employment in the US goes down to be replaced by low wage WalMart jobs, where the new working poor can then go to buy the cheap imports they once produced themselves.


The new working poor in the US are Mexicans that are enjoying a higher standard of living than they had in mexico

Prolijo wrote:
3) Real income (ie adjusted for inflation) in the US for the bottom 4 quintiles declines. So while prices do decline, the average consumer sees no improvement in after-tax purchasing power.


Misleading ...... this is explained by Mexican Immergration.

Prolijo wrote:
4) Because of the flood of manufacturers who moved their operations over the border to evade US regulations, The maquiladora region on the other side of the Rio Grande becomes a toxic polluted environmental disaster.


Again, CR has very strict environmental laws.

Prolijo wrote:
5) Of course jobs are also created in those factories but they don't pay enough to keep the Mexicans in Mexico and many cross the border in search of income sufficient to support their families back in Mexico.


How else do we think we are going to compete with China without cheap Mexican labor? WE NEED MEXICO (AND MEXICANS) TO COMPETE IN THE GLOBAL MARKET!!!! When are we going to learn that we can't fight everyone? I think ultra conservatives have their head up their butt on this issue.

Prolijo wrote:
6) The farm sector in Mexico that was supposed to gain from NAFTA can't compete with modern US agribusiness and farmers who used to be able to eke out a living on their small plots of land find themselves forced to join their urban brothers in the northward migration.


I'll take your word for it.


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PostPosted: Sun Oct 07, 2007 10:33 pm 
Prolijo wrote:
My BA is in Economics. I remember from freshman Econ101, like most of us do, the concepts of comparative advantage and the theoretical advantages of free trade (ceteris parabus all parties gain from free trade).


Pro, what? No Response? 8) This is a first ...... :D



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PostPosted: Mon Oct 08, 2007 1:24 pm 
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I wasn't going to post a response, even though I disagree with just about everything you said there and could back up my positions, I had decided to just let it go since I really don't want to get into the tit-for-tat line-by-line analysis that you seem to be spoiling for. However, since you absolutely insist, I will make a few isolated comments on some of your remarks:

1) I never said ALL the things that happened under NAFTA were applicable to CAFTA. If you'd have bothered to notice, that developed out of a wider response to what I thought were overly simplistic and glowing perspectives on the theoretical merits of free trade in general by you and others which did not recognize the actual inherent problems that also actually exist with it in the real world. ALL aspects of the NAFTA agreement may not apply to ALL cases but they ARE representative of the TYPES of problems that CAN and DO occur in the REAL world.

2) I'd also disagree with your summary dismissal of even on those issues that don't necessarily apply to CAFTA. To suggest that the growing numbers of working poor can be written off as being due mostly to mexicansis absurd. In 2005 the hispanic population of the US still only amounted to less than 15% and only 10% of those qualify as being real "working poor". Even if you include the estimated 12M illegals out of a total US population of over 300M that is just a small percentage. And. in fact, roughly 7 in 10 of working poor are white, with the rest evenly divided between blacks and hispanics. (sources: http://www.bls.gov/cps/cpswp2000.htm, http://www.bls.gov/cps/cpswp2003.pdf. But I'm not just talking about those on the very very bottom of the economic ladder. I'm also talking about the squeezed middle class and anyone who hasn't shared in the economic growth. In the US the median family income has been fairly stagnant while the Gini index (a measure of income inequality) has gone up to levels nearly twice that of other developed countries. this means if you were take out all those stratospheric CEO salaries the income of the remaining 80-90% of the population has probably gone down. The top 10% of the population carried away some 48.5 percent of all reported income in the US in 2005—and that is the highest percentage since 1928, on the eve of the Depression. (sources: http://en.wikipedia.org/wiki/Income_inequality_in_the_United_States. What about all the high wage anglo manufacturing & assembly workers who were put out of work when their jobs went to Mexico (and China and India and everywhere else) who now work for minimum wage at Walmart where they now hhave to shop because they can't afford the quality products they used to be able to buy? What about all the poor black people of New Orleans who are STILL out of work and displaced while they watch all the reconstruction jobs go to mexican laborers of questionable immigration status? Here in my hometown of Tampa (in a state known for having more than its share of hispanic immigrants), most of the working poor are what we call "crackers", native white people living in trailer parks and mobile homes.

3) While it is true that CR is more developed and prosperous than its neighbors it is still a developing country. According to the IMF, for 2005 the PPP per capita (purchasing power parity or GDP adjusted for local price levels) of CR is about the same as Mexico and both are only 1/4 that of the US. US MNC's are not looking at this pact so they can go to CR for engineers and computer programmers. They are looking at it for cheap low-skilled or semi-skilled assembly workers.

4) The environmental picture is very different but no less alarming. While it is true that CR's existing environmental laws are much more stringent than Mexico's, the problem has always been more in the area of enforcement. There is already strong economic pressures to loosen those strings in spite of the money raised from eco-tourism (which I could also argue is also a very mixed bag in terms of its impact on the environment). There is already relatively small scale illegal lumbering and poaching going on now in national forests and not enough rangers to stop it (or paid enough not to take bribes to look the other way). And what is permitted outside the parks is often subject to the interpretation of a governmental official who might also be easily bought. There is no equivalent of the EPA or OSHA and certainly whatever they do have wouldn't have enough inspectors nor would the ones they do have be paid enough not to be vulnerable to corruption. If CAFTA is as "successful" as it supporters hope, where are they going to get the electrical power to run these new factories and what are they going to do with the inevitable waste and what is this small national government going to say when this new economic powerhouse in their country places demands to deal with those problems in a way that is to their economic interest? I'll close by pointing to just 2 examples from that original article I cited which specify particular parts of the treaty showing where this could be a problem:
Quote:
Biodiversity: Chapter 15 on Intellectual Property permits patenting the genes of living organisms, and Chapter 10 on investment prohibits, among other things, requiring knowledge transfer from multinational companies, thus making it possible for the multinationals to conduct research into our native species and maintain any knowledge they might acquire in secrecy. The benefits of these rules go to the huge pharmaceutical and the cosmetic industries and Costa Rica loses control over its own resources.
Water and Natural Resources: Chapter 10 on investment, Chapter 17 on the environment, and Chapter 20 on dispute resolution, taken together and in the best of interpretations, enable multinational corporations to sue the Government of Costa Rica should it take measures they might consider "equivalent to expropriation" or that "affect their earnings" (Article 10.7.1, appendix 20.2). With this, businesses' access to the water and natural resources, and their "right" to profits take precedence over any measure (whether human or social) that might be taken by the government or municipalities.


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PostPosted: Mon Oct 08, 2007 2:50 pm 
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This is an interesting if albeit a little "heated" exchange of ideas 8) ...

Without going into verbose detail here...I would just raise the focus up one level or two. The reason why our countries...and the globe...is involved in all these "Free/Fair" trade contracts in the first place is because of the chain of government controlled markets throughout the world. Governments have reacted to each other for over 200 years now with restrictive/controlled laws that have built huge false chains of labor and controls into what USED to be a free market. The USA has...even though the banner country of "freedom"...led the way globally for this mentality. Ever since Roosevelts "New Deal", and Johnsons "Great Society" built on socialistic, big government controls and "protection" of individual's dilemmas...people have quickly gone from self sufficient to government subsistant. From living off their land and their work...to living off of entitlements and the government "dole". And this is something the poor AND the rich and succumbed to. The poor now believe and count on the government to take care of them instead of working themselves out of a hole...and the rich take advantage of every government loophole with smarter lawyers and accountants as well as more freedom to put their money elsewhere outside of the "Rules" the poor have to live by. Unfortunately, many small countries like Costa Rica have followed that bad USA example.

Some people may defend the USA system by saying how it is the best and brightest the world has to offer (which may be debatable)...but one might ask..."what would it be like if it was truly a thriving free economy and system with stronger individual rights and sovereignty?" And now you have this economic upside-down pyramid of federal budgets and expenditures due to collapse or implode sooner than most of us think...unless huge taxes are levied and increased on the dwindling working class in the USA...or on the rich...which is rather doubtful since they control the legislators with big money controlling elections.

So...my prediction is big changes are coming. Future warfare will be more of an economic and technological nature...and the pressures are based on these inequities that statist centralized governments have built on for the past 200 years and especially the last century...which will take a major revolution to change back to basic free "laissez-faire" economics. I mean, what will all these government workers around the world do for a living when they are not needed anymore? Hopefully these little trade pacts will help with the painful symptoms of these realities...but they dont really change the realities.

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PostPosted: Mon Oct 08, 2007 9:14 pm 
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Interesting post Tman. I can't say I completely agree with all the Libertarian aspects of it since I feel there is some place for government to do the things that private business would never do if it were left just up to them (e.g. environmental laws, worker safety and consumer safety). But I would agree that in many areas government, sometimes at the behest of those very economic power groups, have gotten involved in areas they shouldn't have (usually to the disadvantage of less powerfully connected groups such as small businesses, the consumer, workers and LDC's, etc). Unfortunately, for better or worse, these things exist everywhere throughout the world economy in one form or other or one degree or another.

And the point I was trying to make above is that it will NEVER be as simple a matter as saying let's remove all rules and just make trade totally free. As long as each country has its own set of rules, the playing field will never be even enough to have BOTH free AND fair trade. Most countries are unlikely to ever adopt a purely libertarian economic policy so some rules are always going to exist. Also, these countries will never agree on a one-size fits all set of rules for all countries, so the the rules are always going to be somewhat different. Because of that these trade pacts come down to each country PARTIALLY stripping down their rules (or sometimes making the other country put some up on their side) to a level that both sides agree on that will foster greater economic integration and trade and these agreements. And such agreements by their very nature are going to be extremely complex. The final part in my chain of reasoning is that someone has to draw up and understand these complex agreements and invariably it is the powers that be that have not only the most influence in writing these up but also in getting them passed (witness the 10:1 funding advantage that the Si side had over the No side in the CR vote, not to mention the influence of both respective governments and it still barely passed).

Regardless of your view on whether this agreement is a good thing for CR or not (personally, with all the rhetoric and disinformation on BOTH sides, I'm not sure which it is), it is now the law of the land (or will be as soon as the Legislative Assembly formally ratifies it). We can only all hope that all the wonderful things that its proponents have promised really do come to pass.


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PostPosted: Tue Oct 09, 2007 1:01 am 
Pro,

You are so touchy ...... Lighten up brother ….. Why not just make your points and leave the commentary about my intentions out? It adds nothing to the discussion. In fact I would argue that it results in nothing but ill will. I am not going there with you brother. If you are going to be crabby when making your points I will not respond in kind.

You have made some good points. Some are way off the point. Who cares what CEO's make? My point is that you can't compare Mexico and Costa Rica, so I don't see how that point about CEOs is relevant to anything we are debating.

As far as working poor, I guess that depends on what you qualify as working poor.

Some would argue that what we call poverty in the US is something completely different than what is considered poverty in the rest of the world. In many parts of the world what you are classifying as "working poor" would be considered middle class elsewhere in the world.

So in fact, to a certain extent we are talking semantics’. So in that regard I think some would consider your characterization of my opinions as “absurd” unnecessarily rude and off point.

I would also argue that there was some statistical slight of hand in your analisis of the 12 million mexicans added to the population that you classify as "working poor". , When you add 12 million to the existing population of what you call "working poor" it is not insignificant. There is an element of double talk here, because the significance is not the percentage that the 12 million represents in relationship to the overall population of 300 million.

The bottomline if that yes, Mexican immigration does very much explain why the total number of those classified as working poor has grown so dramatically. The people in New Orleans were poor before and they are still poor so again you are off point and just putting out detail for the sake of detail.

As far as your point of what is happening to "high wage" manufacturing jobs, they are going the way of "high wage" agricultural jobs. My point is that we are in a global economic transition where manufacturing jobs are being increasingly commoditized. This is a trend that is independent of any political agreements. High wage jobs are being created at a much faster rate in other sectors of the economy as manufacturing jobs are being marginalized. This is particularly the IT and Service sectors. More high wage jobs are being created here in the US in these other sectors as more and more people are moving into the middle class in the developing world. As a greater portion of the worlds population moves into the middle class there is a growing market for things like Jets, Software, Entertainment, Video Games, Telecommuncations, Ipods, Tractors and Power Plants. This is what happens when you go through this sort of economic transition. There was a time when Blacksmiths and Buggy Makers were great jobs. No longer. NAFTA and CAFTA recognizes these sort of economic transitions and reallocates resources appropriately. Some get hurt in the process, but many more are helped. The problem for many is that they fail to realize that nothing is guaranteed in life and fail to adapt to changing circumstances.


Last edited by Casper on Tue Oct 09, 2007 8:19 am, edited 4 times in total.

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PostPosted: Tue Oct 09, 2007 2:11 am 
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Prolijo...I understand what you are saying about the world not being ready for a truly free...Libertarian type...trade environment. Therefore, with you, I hope that these trade agreements at least START taking us down the path of more open markets and growing economies.

KC...I still dont see all the growing middle class on a global basis you are mentioning...though I would love to see it. THe way I see it, the scales are still tipped in the favor of the HAVES...over the have NOTS. I do believe somewhat that "trickle down" benefits are better than no benefits at all...which recent systems have been primarily providing. That being said, I am still counting on the new market waves to continue benefiting markets like Panama, Costa Rica and even Colombia. If successful, these are our best hopes of snuffing out the resurgence we see in Nicaragua, Venezuela and Bolivia of the communistic approah to redistrubution based on a benevolent "big brother" named Chavez, Ortega, et al. I hope it doesnt come down to guns and government "big sticks" to supposedly bring order.

The modern day Castro-ites must see Costa Ricas ratification as a dismal day for them... :?

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PostPosted: Tue Oct 09, 2007 2:29 am 
Tman wrote:
Prolijo...I understand what you are saying about the world not being ready for a truly free...Libertarian type...trade environment. Therefore, with you, I hope that these trade agreements at least START taking us down the path of more open markets and growing economies.

KC...I still dont see all the growing middle class on a global basis you are mentioning...though I would love to see it. THe way I see it, the scales are still tipped in the favor of the HAVES...over the have NOTS.


Personally I don't have a problem with the HAVES making more money. It is the HAVES, that create jobs. Cuba and the Soviet Union are perfect examples that governments are generally ineffective at growing an economy. So if we don't have the HAVES around to create jobs, who is going to do it?

All you have to do is look at what the stock markets of the so called "emerging markets" to understand what is going on. They are labeled as "emerging markets" because there are new and better jobs being created in what were once backward and under developed countries. Right now there is an explosion of economic growth across the globe. Better jobs has created unprecedented purchasing power and thus, these economies are going gang busters. These advancements are uneven and not everyone is helped, in fact some are hurt. But overall there is an unprecedented wave of global economic growth today and many, many more are helped than hurt.


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PostPosted: Tue Oct 09, 2007 10:03 am 
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Kccostarica wrote:
You have made some good points. Some are way off the point. Who cares what CEO's make?
It may be way off point to the original CAFTA discussion but it is right on point about what I was saying about the growth of the working poor and income inequality. When you take out the humongous growth of the incomes of the top 10-20% of the US population from the total, you'll see that the rest of us haven't really gotten any further head by whatever economic growth we hace heard or have even fallen further behind. The growth at the top hasn't trickled down to the average US citizen, like supplysiders would have us believe, because the economic incentives for shareholders and those at the top has been to invest outside the US or move existing production offshore where costs are less (part of the benefits of free trade).
Kccostarica wrote:
My point is that you can't compare Mexico and Costa Rica, so I don't see how that point about CEOs is relevant to anything we are debating.
Like I already said, that part of my first post wasn't about CR at all. It was about the effects of NAFTA as an example of why what passes for free trade in the today's world is not all wine and roses. And like I clarified in my response to your point by point disection of my post, some of those things might also apply to CAFTA and CR but some may not. Do we have to go over that again?
Kccostarica wrote:
As far as working poor, I guess that depends on what you qualify as working poor.
According to wiki: "Working poor is a term used to describe individuals and families who maintain regular employment but remain in relative poverty due to low levels of pay and dependent expenses. Officially, in the United States, the working poor are defined as individuals who spent at least 27 weeks in the labor force (working or looking for work), but whose incomes fell below the official poverty level. Often, those defined as "working poor" have negative net worth and lack the ability to escape personal and economic contingencies. The working poor are often distinguished from paupers, poor who are supported by government aid or charity." My own intent was to include anyone in the US, who have to struggle harder to get by than they have in the past. That would include, families that need 2 incomes to maintain a lifestyle that could have been maintained by one in the past, people that had relatively high wage skilled jobs that are now working at relatively low wage unskilled jobs such as factory workers who now work at Walmart selling the same products they used to make themselves, the under-employed and those so discouraaged that they have dropped out of the labor market and thus no longer show up on official unemployment reports.
Kccostarica wrote:
Some would argue that what we call poverty in the US is something completely different than what is considered poverty in the rest of the world. In many parts of the world what you are classifying as "working poor" would be considered middle class elsewhere in the world.
This may be true. But in this part of the analysis. I was talking about the effects of trade on the US not on those other places and the only comparison that is relevant to that is how well off we are now to how well off we were before. By all measures, the income gap in this country is widening. The only question is how much of that is due to foreign competition (the so-called "race to the bottom" for traditional factory workers), and how much is from other causes.
Kccostarica wrote:
I would also argue that there was some statistical slight of hand in your analisis of the 12 million mexicans added to the population that you classify as "working poor". , When you add 12 million to the existing population of what you call "working poor" it is not insignificant. There is an element of double talk here, because the significance is not the percentage that the 12 million represents in relationship to the overall population of 300 million. The bottomline if that yes, Mexican immigration does very much explain why the total number of those classified as working poor has grown so dramatically.
First of all, I don't think the US census bureau is counting those 12 million illegals in their own count of the working poor. If you do then that just means the true working poor is even higher the official totals and non-hispanic working poor are still growing significantly in numbers and make up a huge chunk of the total. Secondly, as I stated above, I was just using the working term buzz word, what I was really talking about was all the people in the lower 4 quintiles who have not really shared in the beenfits of free trade and who in many instances have become worse off from it. And in terms of those numbers 12 million IS still insignificant.
Kccostarica wrote:
The people in New Orleans were poor before and they are still poor so again you are off point and just putting out detail for the sake of detail.
I'll agree that they certainly were poor before Katrina. However, NAFTA goes back to the early nineties. Maybe they were poor before that too. In fact, they probably were. But it is not way off point. Where are all the benefits of NAFTA that free trade advocates had promised? It certainly hadn't beenfited the working poor of New Orleans. The rising tide in this case did not raise all ships.
Kccostarica wrote:
So in fact, to a certain extent we are talking semantics’. So in that regard I think some would consider your characterization of my opinions as “absurd” unnecessarily rude and off point.
Perhaps it was unnecessarily rude to use the word absurd. I think I've just shown above that it is more than just semantics. From my perspective your arguments that much of the US population hasn't shared in the benefits from free trade as their income has eroded or that most of those whose has can be written off as just mexican immigrants does seem myopic (for that matter, you never addressed why if free trade was so good for Mexico, so many of them have had to come up here). But if I've been rude, I apologize. No ill will was intended and we can agree to just disagree on these points.
Kccostarica wrote:
As far as your point of what is happening to "high wage" manufacturing jobs, they are going the way of "high wage" agricultural jobs. ... Some get hurt in the process, but many more are helped. The problem for many is that they fail to realize that nothing is guaranteed in life and fail to adapt to changing circumstances.
I actually agree with nearly all of this paragraph. I would point, however, that nowadays thanks to the power of the internet and low-cost global communication increasingly its not just agricultural and manufacturing jobs that are being exported. IT and other knowledge based jobs are also being outsourced. High wage high tech jobs are being created though I'm not so sure that they are as many as are disappearing. A lot of the service sector jobs are not high wage at all, but rather much lower wage jobs than the manufacturing jobs they replaced (IMHO, partly because those factory jobs were probably overvalued to begin with). But where else is the average semi-skilled worker going to make the type of income he used to make on the assembly line without a college degree or a lot of retraining and is our educational system really up to it?

Some get hurt in the process, some certainly get helped. World-wide perhaps more benefit than lose. Or perhaps there are more benefits but those benefits go mostly to a smaller group of individuals (such as the global corporations). In the US, I think it is much more questionable. As our balance of trade worsens and our national debt grows, the dollar declines and our own standard of living relative to the rest of the world declines with it. Some of that is self-correcting (as the dollar declines, imports and prices in general go up, hurting consumers but exports go up too, helping the american worker). Some of it is inevitable or even only fair as we've enjoyed being top dog for so long and now we have to compete with the rising economic powers of China and India and others for resources and share of the pie. That overall pie is increasing in some respects as the world economy grows, but some resources like oil are limited and I think it remains to be seen how well the US will adapt to this changing playing field.


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PostPosted: Tue Oct 09, 2007 12:10 pm 
I don't need to go point by point. I can boil this down to the essential argument. I do not agree with your approach of comparing disparities in “relative poverty”. Further, I just don’t think these “inequality” arguments are relavant to anything unless of course you are promoting a socialist style redistribution of wealth.

When we talk about the "relative poverty", I don't think it is meaningful to talk about comparing the “working poor” to people in the highest income.

I feel it is much more meaningful to compare our "working poor" to agricultural "working poor" in Costa Rica or Nicaragua. By that comparison, US working poor are doing great.

Or how about comparing the US "working poor" to the "working poor" in the US that my father grew up in during the Great Depression? Today’s "working poor' have cell phones and cable TV for heavens sake. Who can possibly argue that our lower classes are not doing much better than they were during the Great Depression? I feel these measurements of “relative poverty” are much more meaningful.

I find the comparisons you are making as a false comparison, one that is rigged to justify a redistribution of wealth by government. I understand that you are using definitions of others when you refer to working poor, but that does not make these definitions any more meaningful to this discussion.

I will agree that we are seeing is a transformation whereby manufacturing jobs are becoming the jobs of the working poor. This is a fact that is understandably troublesome to many. In the past working poor jobs were restricted to agricultural jobs. I would argue that this trend is beyond the scope of governmental policies and fundamental to a transformational global economic revolution. Similarly, prior to 1900 agricultural jobs were good jobs. The industrial revolution marginalized these jobs and pushed agricultural workers into poverty. We are seeing the same sort of transformation now in the midst of another transformational economic revolution.

Because of globalization, in the new economy, manufacturing jobs will be jobs of the “working poor”. This is a trend that is reflective of a fundamental transformation in the world’s economy that is impossible to stop. Nafta and Cafta do not create these conditions, they merely recognize the reality and allow the countries involved to best adapt to these changing realties. China will continue to manufacture products cheap no matter what governmental policies we enact. If we want to protect our way of life we need to adapt or fall behind.

I find hope in the fact that worldwide, a higher percentage of people are now enjoying a higher standard of living than in anytime in history despite the fact that HALF the people that have ever lived are alive today. This is truly amazing. Yes some are not doing as well, but we cannot loose sight of the big picture.

Government policies did not create the Industrial Revolution. Government Policies are not responsible for the current IT/Communication Revolution. Those that adapt and change with these changing realities will do well. Those that fail to adapt will loose out. Look at France. They are a perfect example of what happens when you try to freeze your economy in a moment of time. As a result, their economy is a mess and they are falling further and further behind with few prospects for competing in the global marketplace.


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PostPosted: Tue Oct 09, 2007 12:35 pm 
Am important thing to look at is the effect of CAFTA on all the other countries that ratified it a few yrs ago.

In every country except for Nicaragua the trade deficit increased with the USA . That is not good for CR or any of the other countries.

Factor in there will be no more 8$ a month cell phones and the big price jump in prescription drugs (which has already happened in the the other countries) and it is obvious that CR voted against its own interests. Just like in the states.

For those who don't believe that cell phone rates will skyrocket, in Ecuador I paid 31 cents a minute calling the same companies cell phones otherwise it was 51 cents a minute. With those rates you run up a big bill quick. Pretty uch the same in Peru.

And this election proves once again that the side who spends the most money almost always wins. Where did all the SI cash come from????


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PostPosted: Tue Oct 09, 2007 12:36 pm 
Am important thing to look at is the effect of CAFTA on all the other countries that ratified it a few yrs ago.

In every country except for Nicaragua the trade deficit increased with the USA . That is not good for CR or any of the other countries.

Factor in there will be no more 8$ a month cell phones and the big price jump in prescription drugs (which has already happened in the the other countries) and it is obvious that CR voted against its own interests. Just like in the states.

For those who don't believe that cell phone rates will skyrocket, in Ecuador I paid 31 cents a minute calling the same companies cell phones otherwise it was 51 cents a minute. With those rates you run up a big bill quick. Pretty much the same in Peru.

And this election proves once again that the side who spends the most money almost always wins. Where did all the SI cash come from????


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