Paul Klugman, Nobel laureate economist, and deeply entrenched and enriched pundit has always been an arrogant git who loved to lambast and excoriate any critics of globalism – what his school of economics called “Global Capitalism” – as fools and their fears as silly. His position, defended from on high, was that we should not worry about it. He said that unrestricted trade will have, at the very most, only a very minor negative impact on our people’s prosperity and posterity.
Well, that was then and this is now. Klugman has finally admitted that the large number of people whom he thought didn’t understand macroeconomics very well and who were silly were right and he and his fellow Globalist Keynesians were utterly and totally wrong.
To make a long and convoluted story short and – possibly overly – simple: Despite vast numbers of people warning otherwise, Klugman and his fellow travelers both fervently believed that manufacturing moving to Third World nations, e.g., China, would perforce raise wages in those countries, thereby raising the costs of the manufactured goods close enough to those domestically produced so as not to upheave the market greatly. They also grossly underestimated how much and how often corporations would take advantage of both the amazingly low-cost labor pools and tax benefits of such off-shored manufacturing.
In other words, Klugman and Co. arrogantly derided those people who warned them of what globalism would cause and they were completely wrong in doing so. Those “silly” fears turned out to be not so silly after all.