The Race To The Bottom Quotes

“Page 10-11: Because of America's vigorous growth, and because the dollar plays a special role in the international economy, foreigners have been willing to finance the nation's imports and consumption. The bad news is that America's trade and investment deficits with the rest of the world (i.e., the amounts by which it is spending more than it is producing and borrowing more than it is lending) are growing so fast that they threaten to place the United States in the position of Thailand in 1997. That is to say, America's debts to the rest of the world may soon become large enough that its creditors could start wondering about the nation's ability to repay. Should foreigners lose faith in America's creditworthiness, they may start dumping dollars the way they dumped Thai baht. In that case, the American consumer would face significant belt-tightening to enable to country to start paying the debt down. Alternatively, the Federal Reserve could raise interest rates very high. This step would aim at persuading foreigners to keep up their lending by offering them higher rates of return on their loans, but it would also slow down the domestic economy by making the cost of money much more expensive for businesses and consumers. It would also add greatly to the total debt that would have to be repaid. ... A significant U.S. slowdown, therefore, would most likely leave the Japanese and Europeans (plus the Chinese and the rest of Asia and Latin America) with ever greater stockpiles of goods that no one could or would buy. These products would either languish on the shelf, or global price wars would break out, with each country trying to undercut the other in a frantic attempt to trim losses. Nations would either offer their goods for sale for much less than their production costs, or they would devalue their currencies, making them cheaper relative to other currencies. Thus their goods would automatically sell for less in foreign markets, and foreign goods would automatically become more expensive in their market.”
― Alan Tonelson, The Race To The Bottom: Why A Worldwide Worker Surplus And Uncontrolled Free Trade Are Sinking American Living Standards

“page 14-15:
A powerful case can now be made that, far from enriching most U.S. citizens and citizens of other countries, the combination of technological advance and current globalization policies is now exerting downward pressure on living standards. More specifically, governments and workers all over the world have been forced into a competition for productive investment that is most often won by scrapping or forswearing most of the laws and regulations that complicate business operations and lower short-term profits, but that also ensure that living wages are paid, that workplaces are safe, and that pollution is controlled. In other words, current globalization policies have plunged the great majority of U.S. workers into a great worldwide race to the bottom, into a no-win scramble for work and livelihoods with hundreds of millions of their already impoverished counterparts across the globe.

In addition, by sapping the earnings power of U.S. consumers, who are almost single-handedly propping up the world economy despite their sagging earnings, continuing this race could all too easily bring the global financial house of cards tumbling down.”
― Alan Tonelson, The Race To The Bottom: Why A Worldwide Worker Surplus And Uncontrolled Free Trade Are Sinking American Living Standards