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Thomas Friedman Shows Us Why Democracy is Facing Huge Problems

By Dean Baker | Beat the Press | December 19, 2018

When the columnist with the longest tenure at the country’s leading newspaper has no clue on the biggest issues facing the world, then it is a good sign that the elites in general have no idea what they are doing. He notes the disaffection of large numbers of middle class people in both Europe and the United States with the status quo.

Friedman correctly observes that “average work no longer returns an average wage that can sustain an average middle-class lifestyle.” However he absurdly blames this on “rapid accelerations in technology and globalization.”

This is the big lie. Bill Gates is not incredibly rich because of rapid accelerations in technology and globalization, he is incredibly rich because the government gives Microsoft patent and copyright monopolies on Windows and other software. It will arrest people who make copies without his permission. In fact, it negotiates trade deals (wrong called “free trade” deals) that require other countries to arrest people too. Patent and copyright monopolies may transfer as much as $1 trillion a year from average workers to people who have these forms of property in the United States alone. That’s 5 percent of GDP or 60 percent of after-tax corporate profits.

The reason there are very rich people in finance, who can bid up property prices in major cities to make them unaffordable to the middle class, is that we coddle the financial industry. Remember when the market was about to work its magic on Goldman Sachs, Citigroup, and the rest back in 2008? The leaders of both parties could not run fast enough to rescue these bloated turkeys from being destroyed by their own greed and stupidity.

And the reason globalization puts downward pressure on the pay of factory workers, but not doctors and dentists, is that we have protection for doctors and dentists. We make it very difficult for foreign professionals to practice their professions in the United States.

There is a longer list, but the point is that we have screwed middle class workers by deliberate policy, it was not just something that happened, as in “rapid accelerations in technology and globalization.” The fact that our elites refuse to acknowledge this reality and treat the plight of the middle class as a result of personal failings, as in not the right skills, will inevitably cause many to be angry, like yellow vest protestors in France. As long as this is the standard line in policy debates, their anger is not likely to go away.

(Yes, this is the theme of my [free] book, Rigged: How Globalization and the Rules of the Modern Economy Were Structured to Make the Rich Richer.)

January 5, 2019 - Posted by | Book Review, Economics, Timeless or most popular |

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