Can the Tea Party's Platform Reduce Unemployment? On Saturday evening in my native New York City, I attended a dinner party at which the topic of globalization dominated the cocktail period.

The consensus among the couples in attendance was that globalization -- the adoption of free markets around the world, the expansion of international trade, and the transfer of jobs to lower-cost production centers -- has been a net-negative for the United States, at least through its recently concluded first two decades.

Yes, globalization has had its upsides for the U.S.: strong international sales for U.S. corporations, especially in emerging markets; adequate-to-good quarterly earnings growth; and lower prices for many products for U.S. consumers.

The downsides for the United States, though, have been more profound: massive job losses to overseas markets, especially in manufacturing; and stagnant incomes.

And now, we're experiencing a third negative side effect, one that had been predicted for certain product categories, but that wasn't supposed to permeate the whole economy: rising prices and costs. Globalization's decree of lower wages for many job segments was supposed to be more than offset by lower prices and costs. In the United States, it hasn't worked out that way.

While some products now sell at lower prices, for others, prices and costs have actually increased. Oil, the world's most vital commodity, as well as food commodities and any number of raw materials are prime examples. Believers in supply-side economics and other conservatives blame the federal government's fiscal and monetary stimulus for the price increases, but the bigger driver of costs is the rising demand for these commodities in emerging markets -- a rise triggered by globalization.

As the era of globalization enters its third decade, its result for many Americans has been reduced earning power, a lower standard of living, and an enormous shortage of jobs.

Social Safety Net: Necessary or Irrelevant?


Problems like these are the sort that citizens of a democracy expect their politicians to address. And today, the most energetic political movement in the United States is the Tea Party. So it's worth asking what solutions the Tea Party has to offer for the painful side effects of globalization.

Unfortunately, the Tea Party platform, instead of mitigating the economic and social problems triggered by globalization, is more likely to magnify them. The consensus of my fellow dinner guests was that in troubled times like these, the United States needs to bolster its new universal health care program, offer more generous unemployment insurance, and expand worker retraining programs for those whose jobs have been lost to globalization. The Tea Party-led Republicans and other conservatives propose the reverse.

Tea Partiers argue that decreased government spending, and lower income taxes, especially on upper-income groups and the mega-rich, will lead to job growth. And they suggest that by shrinking the social safety net, both the U.S. economic system and society will be strengthened. But there seems to be little logic to this argument: High unemployment, plus a smaller social safety net, plus reduced government spending (and therefore still more layoffs) leads to ... a healthy economy? It doesn't add up.

Whichever policy path the United States takes -- either addressing globalization's downside or magnifying it -- one thing is certain: If the U.S. economy is to recover, strong job growth must resume. The fundamental underpinnings of the American economic system -- the two main reasons many people tolerate its relative harshness -- are profits and jobs. Take either one away and a systemic adjustment usually follows. A lack of job growth for a long period puts major pressure on our society -- and in the past, those periods have been when the biggest economic reforms have occurred.

It goes without saying that the country is experiencing those pressures at critical levels now, just as it did in the early 1930s. And, just as the reforms President Franklin D. Roosevelt implemented under the New Deal provided a safety valve then, President Obama and the Democrats, guided by Keynesian economics, are attempting to relieve that pressure now.

The Tea Party's far-right ideology is hot right now. They'd better hope that the U.S. unemployment rate declines sharply after their policies are enacted. If it doesn't, the period of reforms that began in 2009 will resume. And those additional reforms will not be coming from the conservative movement.

Increase your money and finance knowledge from home

How to Avoid Financial Scams

Avoid getting duped by financial scams.

View Course »

Goal Setting

Want to succeed? Then you need goals!

View Course »

Add a Comment

*0 / 3000 Character Maximum

1008 Comments

Filter by:
inasctg56

reply to cphaed regarding "fewer and simpler taxes and free markets will create jobs". We have already tried that thru the Bush and gop years - it doesn't work. Corporations and businesses took the money and ran. The dems legislation of 100% write offs for improvements made in THIS country is working. Our manufacturing sector and exports have seen 19 months of gains and as those paychecks come back into our communities to be spent, demand for goods and services increases which leads to more job growth, our tax base returns, and the natl debt can be addressed more aggressively. It's that simple. We just needed a president that worked with our manufacturing sector instead of Bush refusing to meet with them.

March 17 2011 at 6:58 PM Report abuse +1 rate up rate down Reply
inasctg56

reply to dtwoleftfeet regarding illegals: The dems passed legislation that holds businesses accountable for hiring illegals - no job, they go home. More illegals have been rounded up the last two years than the prior eight years. The senate dems wanted to move illegal immigration up on the agenda and the gop declined. Why? Because the chamber of commerce loves cheap labor. Why don't you ask Boehner where this is on his agenda. Even gop states that are passing some form of illegal immigration are proposing not to include the gop's gardeners, housekeepers, nanny's etc. Go figure. So just who is representing you?

March 17 2011 at 6:53 PM Report abuse +1 rate up rate down Reply
inasctg56

Cutting jobs and wages while handing it over to corporations for job creation when all they do is take the money and run doesn't work. What does work is having a president that works with our manufacturing sector (19 months of gains), negotiates better trade deals (over 19 months of export gains), enforces existing trade laws (Bush refused to do), and passed legislation for 100% write offs of improvements made in THIS country. This is what works and why unemployment is declining and financial forecasts for 2011 states over 2 million in job gains. Proving again that dems policies and legislation do work.

March 17 2011 at 6:48 PM Report abuse +1 rate up rate down Reply
scipiochris

Crushing debt, job-killing regulations, public sector unions and big corporate turds getting their Capitol Hill flunkies to do their bidding - none of this really matters when you get that TINGLE UP YOUR LEG KNOWING THAT ?????????????????: MARCH MADNESS IS BACK AT THE WHITE HOUSE, and President Barack MAObama is picking the top seeds to advance to the Final Four!!!!!!!

For the third straight year, MAObama has filled out an NCAA tournament bracket for ESPN.com senior college basketball writer Andy Katz. He says Duke, Kansas, Ohio State and Pittsburgh will make the men's Final Four.

The Dear Leader MAObama predicts Baylor, UConn, Stanford and Tennessee will advance in the women's tournament.

The Dear Leader's men's bracket, including his choice for national champion, will be revealed on the noon (ET) "SportsCenter" on Wednesday. His selections for the women's bracket will be unveiled Friday on the 9 a.m. (ET) "SportsCenter."

The basketball-player-in-chief is 1-1 when it comes to college basketball's men's national championship.

He correctly picked North Carolina to win in 2009. Last year, he went with Kansas, but Duke ended up taking home the trophy.

Information from The Associated Press was used in this report.

March 16 2011 at 11:50 AM Report abuse -1 rate up rate down Reply
scottee

only smaller government and fewer and simpler taxes and free markets will create jobs....

March 16 2011 at 11:35 AM Report abuse rate up rate down Reply
flyfishy2k

prioty i would love to shove something down your throat

March 16 2011 at 9:57 AM Report abuse -1 rate up rate down Reply
flyfishy2k

their are questions that obama may be behind the rising gas prices.if so why is he still the leader of this nation

March 16 2011 at 9:45 AM Report abuse rate up rate down Reply
bopaan

The Author can't see the damages of all the spending over the last decade and is promoting more? He doesn't know we are $14 trillion in debt. We are running in the red on SS and Medicare is soon to be broke? Obamacare will expand medicaid and ad new subsidies that will further put us in debt. We have massive regulation that keep us from being self dependent on energy and keep us less then competitive in a global market. We have lobbyist and specisl interest that run the country by paying off our politicians. We are going deeper in debt everyday that we could tax all 100% and still not get out of that debt. Then we have liberal far left idiots who flunked math 101 as well as economics 101 who sit around the table and blame the right for everything because they don't want to throw any more money into our black hole of debt. .

March 16 2011 at 6:54 AM Report abuse +3 rate up rate down Reply
dtwoleftfeet

Want to grow jobs???? Ship the illegals out!!!

March 16 2011 at 6:47 AM Report abuse +3 rate up rate down Reply
Michael

So, the author and his dinner guests are in favor of the government spending more money it does not possess. 1.6 trillion in deficit spending is not enough?

March 16 2011 at 6:25 AM Report abuse +3 rate up rate down Reply
1 reply to Michael's comment
bopaan

The Author and his dinner guest are fools who can't see the value of the dollars become less and less as they spend more and more.

March 16 2011 at 6:59 AM Report abuse +4 rate up rate down Reply