[Congressional Record Volume 149, Number 138 (Thursday, October 2, 2003)]
[Extensions of Remarks]
[Page E1971]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                        GONE WITH GLOBALIZATION

                                 ______
                                 

                           HON. BARNEY FRANK

                            of massachusetts

                    in the house of representatives

                       Thursday, October 2, 2003

  Mr. FRANK of Massachusetts. Mr. Speaker, on Tuesday, September 30, 
one of our nation's most thoughtful commentators on public policy, E.J. 
Dionne, Jr., published a very important article about globalization. 
E.J. Dionne is an enlightened and sophisticated student of world 
affairs, and he has been a consistent voice against isolationism, 
xenophobia, or any other prejudice against the rest of the world. So it 
seems to me particularly worth noting when he questions some of the 
assumptions that have long governed the opinion of many of the most 
highly educated people in this country about globalization. E.J. Dionne 
is not an opponent of increasing global economic integration, but like 
many of us who understand the inevitability of this, in this column he 
makes some extremely important points about how it has played out, and, 
what thoughtful public policy ought to be to deal with the downside of 
globalization. Indeed, the very fact that he here describes that 
downside makes this an important article, because too many of those who 
have embraced international economic integration have done so through 
an excessively rosy set of glasses.
  It is not coincidental, Mr. Speaker, that both Mr. Dionne and I have 
a very important connection to the city of Fall River, Massachusetts. 
He was born and grew up there, and his family remained an important 
part of that city's cultural, religious and educational life for 
decades after he moved to Washington. I have had the privilege of 
representing Fall River in this body since 1982, and he and I have thus 
both had a chance to see first hand what the downside of globalization 
has been among many of our more vulnerable, hardworking citizens.
  The balanced view of globalization which E.J. Dionne takes in this 
article is one that is sorely lacking in many quarters, and because 
this is one of the most important public policy issues confronting our 
country, I ask that E.J. Dionne's article be printed here.

               [From the Washington Post, Sept. 30, 2003]

                        Gone With Globalization

                          (By E.J. Dionne Jr.)

       Except for the saints in our midst, everyone has prejudices 
     including the well educated and well-to-do: But when upscale 
     folks have prejudices, they usually call them ideas, 
     convictions or principles.
       So how can you tell when a principle is merely a prejudice? 
     When someone keeps making an argument even though the facts 
     suggest it no longer holds up.
       It is time to ask whether the overwhelming support for free 
     trade and globalization among well-off, highly educated 
     people is more a prejudice rooted in their own self-interest 
     than a matter of high principle.
       Okay, maybe that's too harsh. So try this: Even if 
     globalization made a lot of sense during the buoyant 1990s, 
     shouldn't the troubling economic developments since 2000 
     force people to modify their views? Is it not now undeniable 
     that globalization has serious costs that are not merely 
     ``transition problems'' and that these costs are borne 
     disproportionately by certain parts of the country and the 
     society?
       Now, I don't want to be accused of prejudice myself, so let 
     me stipulate that most educated folks really believe on 
     principle in free trade. They can rely on reams of writing by 
     intelligent economists to support their view.
       Moreover, no one likely to hold power in our country would 
     return us to the days of William McKinley and high tariff 
     walls. The globalizers are right when they argue that too 
     many Americans are now reliant on the global economy for such 
     policies to work.
       But it ought to be equally obvious that the globalizers in 
     both political parties were too carefree when they asserted 
     in the 1990s that, well, yes, there are ``losers'' from 
     globalization, but there are so many more ``winners'' that we 
     really shouldn't worry. Those who lost out in this grand 
     process would eventually find their footing, the argument 
     went, and government could help them make the transition. By 
     the way, where was all that help? In any case the prophets of 
     our bright future said the United States shouldn't worry 
     about ``old'' industries such as steel or apparel. It should 
     worry about leading the way in all that is ``new'' and ``high 
     tech.''
       Having grown up in Fall River, Mass., a place whose job 
     base was once rooted in the apparel industry, I've always 
     felt that writing off an industry as, ``old'' is a lot easier 
     for people who never depended on it. Maybe, that's an ``old 
     economy'' prejudice on my part, especially since my home town 
     has been remarkably inventive in giving birth to new 
     enterprises.
       Still, it's not a form of prejudice to cite statistics 
     showing that the sharp decline in manufacturing jobs over the 
     past few years has been accompanied by a decline in overall 
     family incomes.
       Consider the Census Bureau's report for 2002 showing that 
     U.S. household incomes had declined for the third year in a 
     row and that the number of Americans living in poverty had 
     increased by 1.7 million in a year. The old manufacturing 
     states--including Michigan, Illinois, Ohio, and Missouri--
     were among those hit, the hardest. (Politicians take note: 
     These are swing states.)
       The economists reassure us that the poverty rate is a 
     ``lagging'' indicator and that a robust recovery will start 
     lifting people up again. But will it? Is it not just as 
     plausible to worry that the flight of jobs to China and 
     elsewhere, courtesy of globalization, has combined with big 
     improvements in productivity to create an economy that leaves 
     many of our fellow citizens behind even in flush times?
       The Institute for Supply Management, which keeps some of 
     the best numbers on manufacturing, pleased the stock market 
     earlier this month with report showing that economic activity 
     in manufacturing grew in August, as it had in July. But its 
     manufacturing emplopment index actually fell and remained 
     below the 50 percent break-even point for job creation for 
     the 35th consecutive month
       If supporters of globalization really do hold principles 
     and not prejudices, they should admit that the facts make it 
     increasingly difficult to say that everything will eventually 
     get better for everyone and that changes in the system will 
     only make it worse. Worse for whom exactly?
       Our tax and social policies are supposed to respond to 
     inequities as they arise. But our current approach seems 
     based mostly on begging China to fix its currency and praying 
     for 5 percent growth. Michigan, as it sometimes has in the 
     past, will just have to rely on a pass and a prayer.
       The evidence suggests that we're not in the New Economy 
     anymore but in a New New Economy with problems that weren't 
     supposed to arise. The real lagging indicator is our economic 
     thinking.

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