Labor vs. The Globalists

It has been those lost jobs, that has caused the American Labor Force participation Rate to drop. And I believe that it has been this relatively poor employment outlook that has caused many workers to change their basic world view. Although like most consumers, these workers have also benefited from the imported low cost goods at, for instance, Walmart. There is now a growing realization that those low cost items, have been purchased at the cost of US Jobs. And the person who made that point, more than any others, was a rough and tumble business man from Queens New York, named Donald Trump. This multi-billionaire has somehow bonded with the American middle class, the wage earners and small business men, who have been hurt by globalization.

Most economists date the beginning of the recent trend toward globalism, as beginning around 1981, and continuing up until now. It has been a time of increasing international trade, of the ever-growing importance of international trade organizations, such as the World Trade Organization among others, and most of all a shift in worldwide production.


At the beginning of this period of Globalization, we saw Japan, become a predominant producer of electronics and other consumer goods. As the United States saw most of its production of Televisions, consumer radios and other appliances relocate to Japan.

It would be only latter than China would really begin to enter the picture, beginning with low priced consumer goods, and now culminating with such high tech items as iPhone, personal computers and other household tech goods.


Now on Wall Street, we've tended to look at this transfer of production from the consumer's point of view. And on balance, this has been a net gain for consumers as they have benefited from historic low prices on imported goods.

Wall Street has also viewed the trend toward globalization from the corporate perspective, bidding up foreign companies that do business in US markets, companies such as Sony and Hitachi,

And most especially the Street has supported those multinational US Companies that have substantial production facilities in low labor cost countries like South East Asia and particularly China.The the primary example of this business model, is, of course, Apple Computer with its relationship with Foxcomm, giving much of their cell phone production to the Chinese.

But other mega corporations benefit from offshore production, and chief among these would be Walmart, which stocks its selves with low-cost Chinese made goods.

But in all this analysis, there is one group that has been conspicuously absent and that group is American Labor. The real loser in that move of American factories to offshore locations.It has been those lost jobs, that has caused the American Labor Force participation rate to drop.

And I believe that it has been this relatively poor employment outlook that has caused many workers to change their basic world view. Although like most consumers, these workers have also benefited from the imported low-cost goods at, for instance, Walmart. There is now a growing realization that those low-cost items have been purchased at the cost of US Jobs.

And the person who made that point, more than any others, was a rough and tumble businessman from Queens New York, named Donald Trump. This multi-billionaire has somehow bonded with the American middle class, the wage earners and small businessmen, who have been hurt by globalization. And those are his constituents and his supporters.

The policies he has implemented, such as the Chinese Tariffs, the withdrawal from NAFTA and the Paris Accords, are all aimed at promoting jobs here in the United States.Trump knows that this is where his votes are. And appealing to the American Middle Class, will be his best course from reelection.

So with that perspective, let's look at what lies immediately ahead, and the likely course of action for the President.

First up, on January 15th is scheduled the signing of the Phase 1 Trade Agreement with China. This is an important first step for the administration as it shows the good faith of the US in attempting to reach a trade agreement with China. But don't look for much beyond this. Remember that China is the principal competitor for US Labor, and labor is now Trump's constituency.

January 21st to January 24th will be the World Economic Forum in Davos Switzerland. Look for international leaders to press Trump to become more accommodating in his approach to trade and regulation. Unlikely that he will go along with any move in that direction. Remember his voters.

And finally on January 31st Article 50 of the European Agreement with Great Britain will expire. It is here that Brexit, at last, will occur. If all goes as Prime Minister Johnson anticipates, the United Kingdom will withdraw from the European Union. And waiting on the other side will be President Trump, anxious to develop a new market, for a revised American workforce.

Its a grand strategy, developed by the President and his advisers, to promote the American middle class, and perhaps change the world. We will all know how successful he has been in November, at the next elections.

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Start listening to Perhaps A Little Sunshine?
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Start listening to Perhaps A Little Sunshine?
6:45