Trade & Globalization

In today's Huffington Post, Bruce Jentleson, a policy wonk, and Jay Pelosky, a seasoned global investor, argue that the public and private sectors in the United States must cooperate if the country is to "revitalize domestically and compete globally."

The economic environment in America today is more dire than most of us have ever known. We are in the midst of an unemployment emergency, in essence a jobless recovery: notwithstanding recent marginal upticks in official U.S. jobs numbers, there will be no fundamental improvement in the unemployment picture unless major new national economic strategy initiatives are taken. Who will step up to drive them forward?

The global economy is suffering from severe shortage of demand. In developed economies that shortfall is explicit in high unemployment rates and large output gaps. In emerging market economies it is implicit in their reliance on export-led growth. In part this shortfall reflects the lingering disruptive effects of the financial crisis and Great Recession, but it also reflects globalization's undermining of the income generation process.

The global economy is suffering from severe shortage of demand. In developed economies that shortfall is explicit in high unemployment rates and large output gaps. In emerging market economies it is implicit in their reliance on export-led growth. In part this shortfall reflects the lingering disruptive effects of the financial crisis and Great Recession, but it also reflects globalization’s undermining of the income generation process. One mechanism that can help rebuild this process is a global minimum wage system. That does not mean imposing U.S.

Earlier this month, Congress took up a major trade package that includes free-trade agreements with Colombia, Panama and South Korea. All these pacts are flawed in their own way, but none is more problematic than the proposed deal with Colombia, which would reward a political elite that has long repressed labor unions and could devastate that country's rural farmers.

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Things are not working. Two years after the National Bureau of Economic Research (NBER) declared the recovery underway, it is clear that things are not working, at least not in the sense that most Americans expect. The U.S. economy is like an aging sports car running on three cylinders, fouled spark plugs and a flat tire.

The U.S.-Colombia Free Trade Agreement, stalled in Congress since the George W. Bush Administration signed it in 2006, is likely to be voted on by legislators this summer as part of a broader trade package that also includes the pending pacts with Panama and South Korea.

The myth of the smug teetotaler is no joke. Many of the most popular theories of economic growth in wealthy countries, dating back to the Protestant work ethic of Max Weber, emphasize the abstemious and sober virtues of the well-to-do. And from the 18th-century Gin Acts in Britain to Prohibition in 1920s America to a certain class of modern-day economists, there's a long tradition of blaming intemperance for the persistence of poverty.

-- This is a guest post by Jay Pelosky, Principal, J2Z Advisory, LLC --

GLOBAL BACKDROP

Does China’s rise strengthen the existing international order or overturn it?  How we perceive and react to China’s rise will have dramatic consequences for Sino-American relations and China’s role in the world. Whether we see Beijing as a friend, a challenger, or whether those labels engender a false choice is critical to how we develop the right foreign policy for a rising China.

Watch Ely Ratner and Steven Weber in their discussion on how we should approach U.S.–China relations during this period of great power transitions.