The "Davos Dilemma"

Can the divide between the world's political and economic forces be bridged? Martin Wolf has some possibilities:

A divided world of economic success and political turmoil, by Martin Wolf, Commentary, Financial Times: The world's economy is in excellent shape, but its politics is disturbing. ..-. The question is whether and how this divergence might end. ...

One possible outcome might be the exact opposite of conventional wisdom: economic disappointment and political stability. ... Today, the underpricing of risk and the combination of low interest rates with fast growth almost invite economic blunders. Meanwhile, the world's political leaders, aware of the risks of conflict and reliant on their people's prosperity for retaining power, may well continue to muddle through. This surprising outcome is quite possible.

A second alternative is that the economic and political tracks would continue in their separate directions. The reason for this would be that, far from being distinct, the contrasting economics and politics are two faces of just one globalising world. ...

The fact that economics is making our world more interdependent and connected, while politics remains national or local, makes the contrast between economics and politics inevitable. ...

It is plausible, therefore, that political disarray and economic success will continue in tandem, the challenge being to avoid the emergence of too wide a gap between the two. For, as we learned in the first half of the 20th century, a big enough backlash is capable of causing devastation. In a nuclear age, that devastation would be greater still. ...

A third possibility is that the politics overwhelms the economics, as it did between 1914 and 1945 and in the communist "second world" and much of the so-called "third world" for much longer. An attack on Iran - a much-discussed possibility in Davos - would bring far closer the clash of civilisations... feared by so many... In that case, the economic optimism of today would prove unfounded - possibly destroyed by a world of $150-a-barrel oil in the aftermath of the closing of the straits of Hormuz through which so much of the world's oil flows.

Yet there is also a far more comforting possibility: the economics overwhelms the politics. One of the stories of our era is the way in which vast countries such as China and India are orienting their politics around the goal of prosperity. This forces them to seek domestic and global stability and accept international openness and mutual dependence. They see no benefit in international conflict. It is surely possible that this view of national priorities will take hold in more of the world, including the Middle East. ...

In such a world, the issues discussed in Davos - climate change, the Doha round and African development - might be handled successfully. The difficulties of collective action are profound. But ..., the less credible are unilateral approaches to a resolution, the more likely are co-operative ones.

This year's "Davos dilemma" - the contrast between the world's favourable economics and troublesome politics - is clear enough. But its resolution is not. A range of possible outcomes, from the perverse and catastrophic to the uncomfortable and even benign, is conceivable. The outcome is not inevitable. We can choose. ...

Comments

[wjd123]

"A second alternative is that the economic and political tracks would continue in their separate directions. The reason for this would be that, far from being distinct, the contrasting economics and politics are two faces of just one globalising world. ...

"The fact that economics is making our world more interdependent and connected, while politics remains national or local, makes the contrast between economics and politics inevitable. ..."

Duh to Davos! If you want to find your glasses, look at the end of your nose.

There seems to be a logical course of action to mitigate this problem. International government like the EU where you get free trade and standards combined. That way you bring both, the economic and political sphere, along together.

[Meh]

wjd: But Martin Wolf and other Davos-ites largely believe that economic success is a result of keeping politics out of economics. That is to say, they don't realise/acknowledge that a lot of the political turmoil is because the economics are successful for corporations and certain classes, but leave others (indeed possibly a majority) no better off. That ideological slant disrupts the analytical relevance of many at Davos.

[Bruce Wilder]

As I read this post, I was wondering how Wolf and others are likely to over-read the coming crash in China.

China is headed toward a sudden, deep, but possibly quite short, recession. Such a necessary shifting of gears in the world's second largest economy (yes, Virginia, China only seems to lag behind Germany because of its absurdly weak currency; in actual real output, it is already bigger than Japan) is going to send shockwaves across East Asia and the whole world. It is likely to coincide with some weak statistics from the U.S.A. When? 2009 would be my best guess. But, a Bush war with Iran could accelerate a lot of nasty business.

[Movie Guy]

U.S. Presidential Candidates' Positions on International Trade and Illegal Immigration

Here are some of the known and potential candidates' positions on international trade and illegal immigration.

Senator Hillary Clinton

Trade:
Globalization should not substitute for humanization. (Jun 1999)
Supports MFN for China, despite concerns over human rights. (Oct 2000)
Voted YES on free trade agreement with Oman. (Jun 2006)
Voted NO on implementing CAFTA for Central America free-trade. (Jul 2005)
Voted YES on establishing free trade between US & Singapore. (Jul 2003)
Voted YES on establishing free trade between the US and Chile. (Jul 2003)
Voted NO on extending free trade to Andean nations. (May 2002)
Voted YES on granting normal trade relations status to Vietnam. (Oct 2001)
Voted YES on removing common goods from national security export rules. (Sep 2001)
Rated 17% by CATO, indicating a pro-fair trade voting record. (Dec 2002)

Illegal Immigration:
Voted YES on establishing a Guest Worker program. (May 2006)
Voted YES on allowing illegal aliens to participate in Social Security. (May 2006)
Voted YES on giving Guest Workers a path to citizenship. (May 2006)

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Senator Barak Obama

Trade:
Insist on labor and human rights standards for China trade. (Jul 2004)
Fair trade should have tangible benefits for US. (Jun 2004)
Voted YES on free trade agreement with Oman. (Jun 2006)
Voted NO on implementing CAFTA for Central America free-trade. (Jul 2005)

Illegal Immigration:
Extend welfare and Medicaid to immigrants. (Jul 1998)
Voted YES on establishing a Guest Worker program. (May 2006)
Voted YES on allowing illegal aliens to participate in Social Security. (May 2006)
Voted YES on giving Guest Workers a path to citizenship. (May 2006)

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Senator Joseph Biden

Trade:
Voted NO on free trade agreement with Oman. (Jun 2006)
Voted NO on implementing CAFTA for Central America free-trade. (Jul 2005)
Voted NO on establishing free trade between US & Singapore. (Jul 2003)
Voted NO on establishing free trade between the US and Chile. (Jul 2003)
Voted YES on extending free trade to Andean nations. (May 2002)
Voted YES on granting normal trade relations status to Vietnam. (Oct 2001)
Voted YES on removing common goods from national security export rules. (Sep 2001)
Voted YES on permanent normal trade relations with China. (Sep 2000)
Voted YES on expanding trade to the third world. (May 2000)
Voted YES on renewing 'fast track' presidential trade authority. (Nov 1997)
Voted YES on imposing trade sanctions on Japan for closed market. (May 1995)
Rated 42% by CATO, indicating a mixed record on trade issues. (Dec 2002)

Illegal Immigration:
Voted YES on establishing a Guest Worker program. (May 2006)
Voted YES on allowing illegal aliens to participate in Social Security. (May 2006)
Voted YES on giving Guest Workers a path to citizenship. (May 2006)
Voted YES on allowing more foreign workers into the US for farm work. (Jul 1998)
Voted NO on visas for skilled workers. (May 1998)
Voted NO on limit welfare for immigrants. (Jun 1997)

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Senator Chris Dodd

Trade:
Voted NO on free trade agreement with Oman. (Jun 2006)
Voted NO on implementing CAFTA for Central America free-trade. (Jul 2005)
Voted NO on establishing free trade between US & Singapore. (Jul 2003)
Voted NO on establishing free trade between the US and Chile. (Jul 2003)
Voted NO on extending free trade to Andean nations. (May 2002)
Voted YES on granting normal trade relations status to Vietnam. (Oct 2001)
Voted YES on removing common goods from national security export rules. (Sep 2001)
Voted YES on permanent normal trade relations with China. (Sep 2000)
Voted YES on expanding trade to the third world. (May 2000)
Voted YES on renewing 'fast track' presidential trade authority. (Nov 1997)
Voted YES on imposing trade sanctions on Japan for closed market. (May 1995)
Rated 17% by CATO, indicating a pro-fair trade voting record. (Dec 2002)

Illegal Immigration:
Voted YES on establishing a Guest Worker program. (May 2006)
Voted YES on allowing illegal aliens to participate in Social Security. (May 2006)
Voted YES on giving Guest Workers a path to citizenship. (May 2006)
Voted NO on allowing more foreign workers into the US for farm work. (Jul 1998)
Voted YES on visas for skilled workers. (May 1998)
Voted NO on limit welfare for immigrants. (Jun 1997)

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Former Senator John Edwards

Trade:
Renegotiate NAFTA rather than cancel it. (Feb 2004)
Require labor and environmental standards plus right-to-know. (Jan 2004)
Against NAFTA, against Chile trade, against Singapore trade. (Jan 2004)
Level the playing field for American workers. (Nov 2003)
I supported steel tariffs, but now ease off. (Sep 2003)
National venture capital fund for those hurt by trade. (Sep 2003)
Against Fast Track--not enough for US workers. (Jul 2003)
Voted NO on establishing free trade between US & Singapore. (Jul 2003)
Voted NO on establishing free trade between the US and Chile. (Jul 2003)
Voted YES on extending free trade to Andean nations. (May 2002)
Voted YES on granting normal trade relations status to Vietnam. (Oct 2001)
Voted YES on removing common goods from national security export rules. (Sep 2001)
Voted YES on permanent normal trade relations with China. (Sep 2000)
Voted NO on expanding trade to the third world. (May 2000)
Rated 17% by CATO, indicating a pro-fair trade voting record. (Dec 2002)

Illegal Immigration:
Roadmap to citizenship for undocumented immigrants. (Jan 2004)
Differentiate terrorists from the immigrants. (Jan 2004)
Welcome immigrants with earned legalization program. (Jan 2004)
Hard working immigrants earn right to citizenship. (Sep 2003)

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U.S. Representative Dennis Kucinich

Trade:
Withdraw from NAFTA and WTO. (Nov 2006)
Withdraw from WTO because they disallow protecting jobs. (Feb 2004)
Americans' social consciousness overrides cheap goods. (Jan 2004)
Free trade encourages privatization, so avoid it. (Jan 2004)
Bilateral trade structure to support American manufacturing. (Jan 2004)
President has authority to cancel NAFTA and WTO-I will. (Jan 2004)
Push trade deals based on power of US market leverage. (Nov 2003)
Against China MFN because of $100B trade deficit. (Sep 2003)
First act as president will be to cancel NAFTA. (Sep 2003)
Need specific worker rights written into trade agreements. (Sep 2003)
Companies profit from trade based on Third World misery. (Sep 2003)
Review & modify all treaties not respecting human rights. (Aug 2003)
No NAFTA, No WTO, No Fast Track. (Aug 2003)
Cancel NAFTA and the WTO. (May 2003)
Don't sacrifice our rights to global corporate ethic. (Apr 2003)
Retaliatory tariffs yes; GATT no. (Jul 1996)
Voted NO on implementing CAFTA, Central America Free Trade. (Jul 2005)
Voted NO on implementing US-Australia Free Trade Agreement. (Jul 2004)
Voted NO on implementing US-Singapore free trade agreement. (Jul 2003)
Voted NO on implementing free trade agreement with Chile. (Jul 2003)
Voted YES on withdrawing from the WTO. (Jun 2000)
Voted NO on 'Fast Track' authority for trade agreements. (Sep 1998)
Maintain anti-dumping restrictions against foreign importers. (Oct 2001)
Rated 39% by CATO, indicating a mixed record on trade issues. (Dec 2002)
No MFN for China; condition trade on human rights. (Nov 1999)

Illegal Immigration:
Roadmap to citizenship for immigrants. (Jan 2004)
Bush immigration program is indentured servitude. (Jan 2004)
Extend our arms to world-immigrant amnesty and more. (Sep 2003)
Voted NO on preventing tipping off Mexicans about Minuteman Project. (Jun 2006)
Voted NO on reporting illegal aliens who receive hospital treatment. (May 2004)
Voted YES on extending Immigrant Residency rules. (May 2001)
Voted NO on more immigrant visas for skilled workers. (Sep 1998)
Rated 0% by FAIR, indicating a voting record loosening immigration. (Dec 2003)

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Governor Bill Richardson

Trade:
NAFTA critically important for US as well as Mexico. (Nov 2005)
Expand regional trade with Chihuahua. (Oct 2002)
Supports NAFTA, GATT, & WTO. (Nov 1996)

Illegal Immigration:
Declared state of emergency on Mexican border. (Nov 2006)
Path to legalization if illegals pay taxes & learn English. (Nov 2006)
Reduce immigration; no automatic citizenship for kids. (Nov 1996)
Guarantee human services to illegal immigrants. (Nov 1996)

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Former Vice President Al Gore

Trade
Link trade to environment and labor. (Sep 2000)
Fair trade: standards for child labor & environment. (Aug 2000)
Agrees with unions on 90% of issues, but not on free trade. (Mar 2000)
Open Europe & Japan to genetically-modified farm products. (Jan 2000)
Use Fast Track to encourage new markets. (May 1999)
Free and fair trade means economic growth and jobs. (May 1999)
Protectionism only protects us from prosperity. (Nov 1998)
Push Congress aggressively on China/WTO. (Mar 2000)
Supports permanent normal trade relations with China. (Dec 1999)
Supports MFN for China. (May 1999)
Speed up China’s access to WTO. (Nov 1998)
More Latin American trade, with labor & enviro protections. (Oct 2000)
Debate with Perot was instrumental in passing NAFTA. (Mar 2000)
WTO talks will continue, with labor & environment input. (Dec 1999)
WTO requires Japan & Europe to deal with our trade issues. (Dec 1999)
Open markets with safeguards for labor and environment. (Dec 1999)

Illegal Immigration
English is our language, but “English-Only” divides us. (Nov 2000)
Citizenship for 1.2M cleared backlog, but sacrificed quality. (Aug 2000)
More immigrants to alleviate labor shortage. (Mar 2000)
Immigrants from communist Cuba are different. (Jan 2000)
Immigration leads to diversity and cultural tolerance. (Apr 1999)

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Senator John McCain

Trade:
Against foreign sales corporations (offshore tax breaks). (Feb 2000)
Substitute trade treaties for protectionism. (Jan 2000)
Free trade with any country except security risks. (May 1999)
Retaliatory protectionism is a “murder-suicide pact”. (May 1999)
Chile in NAFTA is good, but Fast Track isn’t. (May 1999)
Mexico: balancing act between free trade & stopping drugs. (Mar 1999)
NAFTA has had unambiguously positive impact on US. (Mar 1999)
Pro-NAFTA, pro-GATT, pro-MFN, pro-Fast Track. (Jul 1998)
Admit China to WTO based on their concessions. (Jun 1999)
China: Keep open trade & diplomacy; but keep eyes open. (Apr 1999)
Voted YES on free trade agreement with Oman. (Jun 2006)
Voted YES on implementing CAFTA for Central America free-trade. (Jul 2005)
Voted YES on establishing free trade between US & Singapore. (Jul 2003)
Voted YES on establishing free trade between the US and Chile. (Jul 2003)
Voted YES on extending free trade to Andean nations. (May 2002)
Voted YES on granting normal trade relations status to Vietnam. (Oct 2001)
Voted NO on removing common goods from national security export rules. (Sep 2001)
Voted YES on permanent normal trade relations with China. (Sep 2000)
Voted YES on expanding trade to the third world. (May 2000)
Voted YES on renewing 'fast track' presidential trade authority. (Nov 1997)
Voted NO on imposing trade sanctions on Japan for closed market. (May 1995)
Promote the Andean Free Trade Agreement. (May 2002)
Rated 100% by CATO, indicating a pro-free trade voting record. (Dec 2002)

Illegal Immigration:
Make possible for immigrants to do a job Americans won't do. (Oct 2004)
Give everyone in the world an opportunity to come to America. (Oct 2004)
No more ballot initiatives against immigration. (Mar 1999)
More help for legal immigrants when immigrating & once here. (Jul 1998)
Voted YES on establishing a Guest Worker program. (May 2006)
Voted YES on allowing illegal aliens to participate in Social Security. (May 2006)
Voted YES on giving Guest Workers a path to citizenship. (May 2006)
Voted YES on allowing more foreign workers into the US for farm work. (Jul 1998)
Voted YES on visas for skilled workers. (May 1998)
Voted YES on limit welfare for immigrants. (Jun 1997)
English immersion over bilingual education. (Jul 2001)

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Former Governor Mitt Romney

Trade:
Emergence of Asia is an opportunity for trade and commerce. (Dec 2006)
"I recognize there are some people who will argue for protectionism because the short-term benefits sound pretty good, but long term you kill your economy, you kill the future. What you have to do in order to compete on a global basis long term is invest in education, invest in technology, reform our immigration laws to bring in more of the brains from around the world, eliminate the waste in our government." (Mar 2006)

Illegal Immigration:
Tuition breaks encourage illegal immigration. (Nov 2005)
"We must reform the current immigration laws so we can secure our borders, implement a mandatory biometrically enabled, tamper proof documentation and employment verification system, and increase legal immigration into America." (Feb 2007)
"We need to make America more attractive for legal immigrants -- for citizens -- and less attractive for illegal immigrants. I want to see more immigration in our country, but more legal immigration and less illegal immigration." (Jun 2006)

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U.S. Representative Duncan Hunter

Trade:
Voted NO on implementing CAFTA, Central America Free Trade. (Jul 2005)
Voted YES on implementing US-Australia Free Trade Agreement. (Jul 2004)
Voted NO on implementing US-Singapore free trade agreement. (Jul 2003)
Voted NO on implementing free trade agreement with Chile. (Jul 2003)
Voted YES on withdrawing from the WTO. (Jun 2000)
Voted NO on 'Fast Track' authority for trade agreements. (Sep 1998)
Rated 24% by CATO, indicating a pro-fair trade voting record. (Dec 2002)

Illegal Immigration:
Voted YES on preventing tipping off Mexicans about Minuteman Project. (Jun 2006)
Voted YES on reporting illegal aliens who receive hospital treatment. (May 2004)
Voted NO on extending Immigrant Residency rules. (May 2001)
Voted NO on more immigrant visas for skilled workers. (Sep 1998)
Rated 100% by FAIR, indicating a voting record restricting immigration. (Dec 2003)

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U.S. Representative Ron Paul

Trade:
Voted NO on implementing CAFTA, Central America Free Trade. (Jul 2005)
Voted NO on implementing US-Australia Free Trade Agreement. (Jul 2004)
Voted NO on implementing US-Singapore free trade agreement. (Jul 2003)
Voted NO on implementing free trade agreement with Chile. (Jul 2003)
Voted YES on withdrawing from the WTO. (Jun 2000)
Voted NO on 'Fast Track' authority for trade agreements. (Sep 1998)
No restrictions on import/export; but maintain sovereignty . (Dec 2000)
End economic protectionism: let dairy compacts expire . (Aug 2001)
Rated 76% by CATO, indicating a pro-free trade voting record. (Dec 2002)

Illegal Immigration:
Voted YES on preventing tipping off Mexicans about Minuteman Project. (Jun 2006)
Voted YES on reporting illegal aliens who receive hospital treatment. (May 2004)
Voted YES on extending Immigrant Residency rules. (May 2001)
Voted YES on more immigrant visas for skilled workers. (Sep 1998)
Rated 100% by FAIR, indicating a voting record restricting immigration. (Dec 2003)

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Former U.S. Representative Newt Gingrich

Trade:
Protectionism helps China & India challenge US supremacy. (Dec 2006)

Illegal Immigration:
Immigrants must learn key values of American history. (Dec 2006)
Make it harder to sneak in, but easier for guest workers. (Dec 2006)

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Former Mayor Rudy Giuliani

Trade:
No issue stance yet recorded by OnTheIssues.org. (5 Mar 2007)
No stated position at Giuliani exploratory committee web site. (5 Mar 2007)
Google research was of little use, though I know he touched on this subject last week. (5 Mar 2007)

Illegal Immigration:
Supports Senate guest worker plan & path to citizenship. (Nov 2006)
Seal the border. Identify who is in the United States. (Jul 2006)

Sources:
http://www.ontheissues.org
Other web sites