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Pat Choate, “Dangerous Business”

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Pat Choate was Ross Perot’s running mate in 1996.  Perot is not running for president this year, but has a new website, with his trademark charts, on the fundamental financial and fiscal problems of the U.S.

Pat
Choate has a new book, a profound book, "Dangerous Business."  It
lays bare the faults with the globalization model.  Here is the
Prologue.

Prologue

Dangerous Business, The Risks of Globalization for America

by Pat Choate

“The extraordinary enigma we must seek to understand is
that despite an expanding economy, violence increases, the number of
those living in poverty grows and urban slums spread in cities
throughout the world. How is it that our greatest period of
technological and scientific achievement has come to endanger the
conditions that allow life on earth? There is a growing realization
that something fundamental has gone wrong and a pervasive feeling that
those in power do not know what should be done.”
(The Trap by Sir James Goldsmith, 1993)

After the fall of the Berlin Wall in 1989 and before the creation of
the World Trade Organization in 1995, the toughest geo-political
question the world faced was how to integrate into the global economy
the four billion people who had long been separated from the West by
their political systems, which were primarily communist or socialist.
The solution adopted by the United States, Europe and Japan is what
became known as “globalization.”

Months before the U.S. Congress voted to ratify U.S. membership in the
World Trade Organization (WTO), the main institution for globalization,
Sir James Goldsmith, one of Europe’s most flamboyant financiers and a
staunch WTO opponent, came to Washington to meet with like
minded-people, of which I was one, in preparation for a similar
political battle in Europe.

A citizen of both England and France, a Member of the British
establishment, a French aristocrat who owned a three-star restaurant in
Paris, a person who traveled on his own two-bedroom Boeing 757 and a
man with three families, Sir James was greeted in Washington with some
uncertainty. Any doubts immediately disappeared, however, upon
exchanging views with him. His interest was neither superficial nor
temporary.

Indeed, he was instructively well informed, even prescient. Goldsmith’s
concern was that an unfettered, unregulated open trade regime, under
the World Trade Organization, would “shatter the way in which
value-added is shared between capital and labor. “In mature societies,”
he said, “we have been able to develop a general agreement as to how it
should be shared. That agreement has been reached through generations
of political debate, elections, strikes, lockouts and other conflicts.

Overnight that agreement will be destroyed. The social divisions that this will cause will
 be deeper than anything ever envisaged by Marx.”

Transnational corporations, he argued in his book, The Trap, would seek
the lowest cost labor in nations with the weakest environmental and
worker safety  regulations. These companies would shift as much of
their manufacturing as they could, plus their service work as well. The
interests of these corporations, who owed alliance to no country, were
divorced from those of society.

Surely, he said, it would be a mistake for a nation to adopt an
economic policy that makes its corporations rich if they transfer
production abroad and eliminate their national work force, but which
bankrupts them if they do not relocate and continue to employ their
country’s workers. This was the trap.

Sir James and his allies failed to persuade the European governments to
reject the WTO and create a less ideological, more practical system of
global trade, as we WTO opponents in the United States also failed.

By joining the WTO, the United States altered radically its trade
policies with other nations. The domestic social compact forged between
corporations, workers and society over the prior century was fractured
and soon began to shatter. Over the next decade, more than 40,000 U.S.
factories were moved abroad or closed. Millions of American workers and
their communities where they lived were left to their own devices.
Moreover, those were only the most visible and most immediate
consequences of this great policy shift.

Which brings us to the subject of this book—the dangers of
globalization. We are now deeply trapped in the world that Goldsmith
feared. The globalization policies adopted by the administrations of
Presidents George H.W. Bush, Bill Clinton and George W. Bush
collectively constitute the single worst economic policy mistake in
U.S. history.

Millions of American workers are moving from higher paying jobs with
health insurance and pensions to lower paying jobs with no benefits.
Lifetime jobs are being replaced with short-term, dead-end work,
destroying our middle-class. The U.S. industrial base is being hollowed
out to the point that our national security is threatened.

The federal government has gone deep into debt, with foreign owners
owning almost half of the debt. The U.S. trade deficit has soared to
more than $800 billion per year. The U.S. government has surrendered,
through dozens of trade treaties, its sovereign right to act
unilaterally against other nations that violate their trade obligations
to the U.S. The economies of most developing nations, such as Mexico,
are so ravaged by these policies that millions of their citizens have
illegally entered the U.S. in search for work. Foreign workers are
being abused in dozens of countries to a degree and on a scale that
future historians will view as economic war crimes. And as Goldsmith
predicted, the global environment is being rapidly destroyed.

These historic changes are neither political accidents nor the
consequences of immutable cosmic forces. They flow directly from the
decisions of our last three Presidents and the Congress who
year-after-year purposefully have ignored the outsourcing of American
jobs and the resulting decline in U.S. living standards, even as they
pursue ever more open-ended trade treaties without providing even the
most elementary safeguards for American consumers and workers. Their
actions have enabled decision makers in transnational corporations and
global finance to place their interests and those of their investors
above those of the American people and the nation. These corporations
and the compliant politicians they support are transforming the United
States into a corporate state, the mass of whose citizens face an
increasingly bleak future.

The challenge we face is to institute a new approach to globalization
that creates a broad-based prosperity with stability, sovereignty with
vision and security with peace, while not endangering the conditions
that allow life on earth.

The central question surrounding further integration of the world
economy (globalization) is not whether the U.S. economy will become
ever more entwined with those of other nations, for it will. The issue
is how will this be done, to what degree and in whose best interests.
This book explores three fundamental questions:

  1. Why did the United States, still the world’s trading and economic
    powerhouse, choose to integrate its economy with the rest of the world
    without providing even the most basic safeguards for the nation and its
    people?
  2. Can the United States maintain its standard of living, pay its
    debts, retain its sovereignty and assure its national security under
    present policies?
  3. What must the U.S. do to gain the benefits of globalization without plunging itself into economic ruin?

 

5 Responses to “Pat Choate, “Dangerous Business””

  1. Shannan Eid says:

    Since started becoming evident that America was falling apart I have been looking for an intelligent and comprehensive analysis of what actually has happened. This book is IT. What a mess America has become. It is a very scary thing. My hope is that this book will become well read and that we will have leaders who understand what has happened, leaders who will implement the steps required to save our country, our middle and lower classes, and the world’s environment which, after all is said and done, sustains our lives…so far. Thank you Mr. Choate for writing this book.
    Warm Regards, Shannan Eid

  2. Steve says:

    Havent read the book yet – however it will be on my list of things to do. I have been saying whats mentioned above for years and frankly am frustrated at the complete lack of understanding in Washington DC and even with my own politicians.

    I did write a song about this though which has been slowly catching on called “Mad in America” you can download it free at http://www.madnamerica.com – its also on I-Tunes if you want to go on record to purchase it and get it some credit on that site.

  3. JD says:

    It didn’t really penetrate into my everyday existance until, upon purchasing a new house, a former employee of a tech / manufacturing firm caught my attention. He delivered the new appliances for my home as a service employee for Lowes. His previous employer, Andrew Corporation, had moved the manufacturing facility to Mexico. He had worked for Andrew Corp for 23years. This book, puts none too fine a point on the fact that the people most obviously affected by these changes are the american middle class. The less obvious long-term effects will untimately change the American way of life. The ruling class will be largely unaffected,

  4. Margaret Bartley says:

    I never know how to respond to writers who act like they don’t see what’s really going on.

    It’s not as if the Presidents and Congress are autonomous people who can vote their consciences and interests, and they just need to be educated as to the consequences of their decisions. I’ve talked to all my elected representatives, and some of their staffers, mostly back in the late 90’s and early 2000’s, when this issue was first coming on stream. It was very clear to me that they knew exactly what they were doing, which was the job they were getting paid to do.

    The $100K a year they make from their Congressional salary is nothing compared to the millions they take in from outside interests, and it is those outside interests who are calling the tune.

    The destruction of the American middle class started long before the presidency of GHWB. The Lima Accords, which called for the transfer of the manufacturing sector from the US to Third World nations, going by the name of Economic Democracy, was signed in 1974. I remember reading articles in the academic journals and economic press about the high cost of American workers in the mid 70’s. It took about a decade to hammer out the details, and another decade or so to build the legal and contractual framework.

    By the time the Uraguay round of the WTO finished, in the early 90’s, all they did was ratify the previous decades’ work by academics and influential decision-makers. By the time it gets to Congress, it’s been finely honed by all the players, and all Congress does is ratify it.

    This is a long-term game plan, and I don’t think there’s much we can do to stop it. It wasn’t our money that came into the US in the early 20th century and built up our industrial base, and we weren’t able to stop that money from leaving.

    What we can do now is decide how to best use our existing resources. Certainly getting a handle on immigration is a big part of it. I suspect that the main purpose of opening the flood-gates of illiterate, low-wage workers is to destroy the aspirations of the working-class.

    We still have a large pool of healthy, educated, involved citizens, and a strong civic community, precious things, and we should take advantage of them.

    We should realize that we are not a rich country any more, and start looking at how we are spending our public monies.

    We need to elect people who will be honest with us, and at least acknowledge our dropping standard of living, instead of pretending that it is due to the “greening” of American consciousness, and the need to lower our carbon footprint.

    We need to deal with the real issue, which is that we are ruled by people who do not have our best interests at heart, and that their actions are based in ignorance or mistaken policy, corrected with information and lobbying, but a concerted attack that we need to address head-on.

  5. Margaret Bartley says:

    Correction on my previous post –
    The last partshould read
    “their actions are NOT based in ignorance or mistaken policy, corrected with information and lobbying, but a concerted attack that we need to address head-on.”

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