A Little Honesty May Help Sell the Green New Deal

28th June 2019 Off By binary
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(This post originally appeared on my Patreon site.)

The Washington Post had two columns last week that told us much more than their authors likely intended. The first was a piece by E.J. Dionne, that told readers about the need to “tame” capitalism, because of the damage caused in recent decades by the untamed version.

The second piece was by Catherine Rampell. From France, she told us of the difficulties of imposing taxes on carbon, even in a country that is ostensibly fully committed to the Paris Agreement and reducing greenhouse gas emissions. Both pieces were fascinating for what they left out of the picture.

While Dionne’s piece is focused on the need to address the growing inequality of the last four decades (its theme is the pseudo-mea culpa of the Wall Street funded group, Third Way), the gist of it is that it was a mistake to let the market run amuck. In other words, the upward redistribution of the last four decades was something that happened, not something that folks like the Third Wayers did.

This is an important distinction from a logical, moral, and most importantly, political standpoint. It matters hugely whether most of the country was left behind due to the natural development of the market, as opposed to being left behind because the folks with political power structured the market to redistribute income upward.

People familiar with my writing know that I have long argued that the upward redistribution was by design. Just to take the most obvious example, we are routinely told that manufacturing workers in the United States and other wealthy countries were destined to get whacked for the simple reason that there are hundreds of millions of people in the developing world who are willing to do the same work for a fraction of the pay.

In that story, the downward pressure on the wages of manufacturing workers was an inevitable outcome of globalization. Unless we want to block globalization, we can’t have manufacturing workers in the U.S. and Europe getting $40 and $50 an hour in pay and benefits when workers in China, Vietnam, and elsewhere will do the same work for less than one tenth of this amount.

The loss of these high-paying jobs for workers with less education is just an unfortunate side effect of globalization. The downward pressure on the wages of less-educated workers more generally that results from the loss of manufacturing jobs is also just another bad side-effect. But hey, these people are all better off than the under-employed workers in the developing world, so it would be greedy and wrongheaded to try to stop globalization to protect less-educated workers in rich countries.

The fact that there are hundreds of millions of workers in the developing world who are prepared to work for much lower pay than our manufacturing workers is true, but there are also millions of bright and ambitious people in the developing world who would be happy to train to U.S. standards and work as doctors, dentists, lawyers and other elite professions at a small fraction of the pay of the people who currently hold these jobs.

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