Wed, Nov 15, 2017 - Page 8 News List

Put national interests first in trade

By Eric Chiou 邱奕宏

Innovation in the financial sector and the information-technology industries had been widely perceived as being two major pillars and engines for growth for the US economy. Instead, both rosy expectations nurtured two gigantic bubbles, while undermining the strength of US manufacturing to renovate.

Furthermore, the rapid growth of the US financial services sector intensified rampant speculation, and eventually led to its destruction and the US economic meltdown as a whole.

Externally, the consequences of the global imbalance, with the US trade deficit paving the way for massive inflows of foreign capital into the US, fostered a US real-estate bubble in 2007 and led to the global financial crisis of 2008.

Although the indolence and negligence of US financial regulatory and supervisory agencies should take the blame, US politicians and the public alike who have indulged in overconsumption and tolerated a persistenly swelling debt are similarly inexcusable.

What politicians in Washington have prescribed as remedies for this chronic illness are self-deceiving placebos, such as compelling other countries to purchase US goods, devaluing their currencies and opening up foreign markets.

However, few have dared to confront the biased liberal economic ideology and point out that the essence of the global market remains the severe competition among nations. No one dares to call for the restoration of the long-lost diligent spirit and hardworking tradition of Americans.

Even worse, profit-driven US multinationals and their accomplices in academia and Washington have aggravated the degeneration and distortion of the US economy by claiming that outsourcing is an innovative way of enhancing economic efficiency and global competitiveness, while leaving countless laid-off workers and run-down industrial neighborhoods behind.

The second myth is that technological innovation will create a better economic welfare and provide more job opportunities. Indeed, US technological innovation leads the world with its cutting-edge advantages — but it is hardly a magic wand for job creation.

Growth in the financial services and high-tech industries has been unable to absorb the jobs that had been lost in the US manufacturing sector. The immobility and inertia of labor forces also make it almost impossible for middle-aged manufacturing workers to shift to other industries.

It is no surprise that a significant number of blue-collar Americans vented their deepest grievance and grudge by voting for Trump, who has spoken for them.

Another myth is that the more liberal and open environment a state facilitates, the more innovative businesses can prosper. The truth is that a liberal and free environment fostering business innovation is not a guarantee that industries will be better equipped to deal with global competition.

Indeed, China has shown that it can provide an even freer and more dynamic and innovative business-friendly environment, as long as corporations’ activities do not touch upon politics, nor disobey its policies.

An inconvenient and deplorable truth is that the majority of profit-driven entrepreneurs and companies rarely care more about democracy or freedom of speech than market share and revenue. After all, it is unrealistic to hold each company to the same standard as Google when it comes to the Chinese market.

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