First, Unions are a Cartel of labor much like OPEC is a cartel of oil. Free trade destroys their labor pricing power by allowing an avenue to cut cartelized labor out-of-the-loop. Pardon me for not shedding a tear. This was inevitable, and is a good thing for the American consumer, it also forces labor to price their labor based on, you-know, value.

Second, US companies are only US companies by choice. They are not owned by, or otherwise beholden to the US. They ARE the property of the stockholders, wherever the stockholders are and their purpose in life is to provide to the stockholders, value. You are mixing your nationaliZm with the simple fact that a company must have a HQ somewhere and it is kind of scary. The way you cross over and back again speaking with regards to US BASED companies as if they were possessions of the US government or US people, most of who are NOT stockholders is frankly a little disturbing.

Lastly, If I am truly free, than what business is it of yours where I purchase the products I want? When I choose as a free citizen to purchase a car from a company based in Japan, what makes you think I should be beholden to someone from Detroit? Whether it is Sugar from India, Oranges from Brazil, or Cell Phones from Korea, as much as you feel compelled to *manage* the economy, with it you are managing my options and with it my freedom. Companies and workers in this country have an obligation to create products and services that are of the quality and type that I want to buy. From what I just read, you seem to feel that if I choose differently, I should be compelled to buy American products from American workers through the coercive power of trade tariffs and taxes.

Nice.

I don’t know where you get your Authoritarian bent, but keep your grubby paws off my freedom.

Classical economics implies that very large trade imbalances can’t exist. Yet there they are. Is economics wrong or is there something else at work here?

Asia runs big surpluses which tend to push up their currencies? Great! that means they can buy lots of foreign goods and increase their standard of living! Large forex reserves tend to be inflationary and drive up wages? Good! that’s what’s *supposed* to happen. That isn’t what’s happening? Don’t blame economics, it’s government meddling on behalf of politically powerful actors (who don’t work for wages, by the way).

There’s no reason a low wage country can’t trade with a high wage country. Europe seems to manage it. Immobile factors of production aren’t subject to enough arbitrage to equalize prices. Housing prices are higher here than in India, why shouldn’t wages be higher also?

Unbalanced trade is at the root of the problems we’re talking about and politics is at the root of unbalanced trade. Yes, global corporations don’t have our national interest at heart. Yes, there is no effective political voice for labor–but it’s more than that. There is no voice for the common interest of the nation and the world–only special interests. Economists are reluctant to admit that the sum of the special interests is not the common interest in many cases (nonlinear phobia?). There’s a fallacy of composition here which needs to be studied. Under which circumstances do we get this divergence? What structural changes can minimize it?

The ongoing upward income redistribution facilitated by profit gains from wage declines will eventually catch up with us. When you fire all your customers, eventually your sales will collapse. Joe Sixpack is putting everything on his Visa card for now, but he will eventually reach his credit limit and we will again be talking about “underconsumption” ala the 1930’s.

As you suggest, political conflicts of interest (nationally) will prevent changes. Robert Reich says this is because political parties drink from the same trough.

* Most of ex-communist and non aligned spheres has been merged with the rest of the global economy, and several large countries with lots of labour and short of capital have started to become accessible. As other people have noticed, the global amount of capital has hardly gone up, but the global amount of labour has nearly doubled. The relative leverage of labour and capital in the west is much weaker for labour and stronger for capital, and viceversa.

* The disappearance of a global political competitor which if only in words declaimed to be on the side of workers means that the ”home front” does not need to be taken care of anymore.

* Extraordinarily low interest rates have meant that for corporations the capital to build new plants and offices has been essentially free, and this has subsidised divesting in the west and move production abroad. To the point that many investments abroad are quite capital intensive, in countries where labour is very cheap.

* The demise of unions means that while wealthy individuals and corporations can sponsor large numbers of lawmakers, their opposition cannot afford to do so, which has resulted in the steady creation of rules favouring rentiers and corporations.

Overall the trends has been one of ”headquarterization” of the western economies; in countries like the USA and the UK used to have local and regional economies, with local and regional stock exchanges, company bases, and conversely large centers used to have production activities.

Now industry and production have largely left places like New York or Chicago (or London) for cheaper farther away places like the USA south, and viceversa corporate HQs have moved to financial centers.

The same is happening to whole countries: HQs are moving to them even from NDCs, while productive activities are moving from them to NDCs.

What to do? Well, I think the best tactics are to try and move employment patterns in the west towards HQ type jobs (largely services and ”courtier” style functions), and to attempt to revive unions as the aggregators of political action for workers, just as the Chambers of Commerce and industry associations are the sponsors of so much political force.

«From an American worker perspective, the global economy has always had abundant supplies of cheap labor.»

Not quite, because a couple billion people were behind impassable political barriers; and the others were either in countries with comparable capital/labour ratios (e.g. western europe, japan) or too improductive as they were in countries with scarce capital.

«making it illegal for corporations to reincorporate outside the US to escape US tax laws;»

Thats completely pointless, it is very easy to evade. it is much better to just tax corporations on their USA profits (or even better, sales) no matter where they are domiciled.

«In Washington, elite policy thinking is funded and lobbied for by corporations. Consequently, corporations control trade policy at a time when corporate interests differ from the national interest.»

The “national interest” is just a vacuous expression. And what is funded by the corporates and the rich is not “elite policy thinking” it is the campaign money, and this buys a lot of favourable legislation…