Tuesday's interesting reads

"Workers Strike at Nike Contract Factory" Google/AP:


"More than 20,000 Vietnamese workers have walked off the job at a Taiwanese-owned plant that makes shoes for Nike Inc., demanding higher pay to keep pace with skyrocketing prices, officials said Tuesday.

The workers at Ching Luh plant, in southern Long An province, went on strike Monday. They want a 20 percent bump to their $59 average monthly salaries along with better lunches at the company cafeteria, said Nguyen Van Thua, an official with the province's trade union.

The plant has been making sneakers since 2002 and employs about 21,000 workers, most of them young rural women. The company is paying the workers 14 percent more than minimum wage, but soaring inflation is eroding their earnings, Thua said."

I think this is a good thing. People often say that workers in these poorer parts of the world don't have any options. They do. They also seem to be able to realize they are valuable enough to their employers to ask for more money. I'm sure they also understand the risks that Nike might not hire them back. It just shows the ability for employees and employers to negotiate amongst themselves to set wages.


"Obama is the free trader free traders have been waiting for" freeexchange at economist.com.

The poster seems to sympathize with Obama's stance that we need to focus on the losers of free trade and that is why he (Obama) voted against Cafta. He thinks that Obama will establish a "social safety net" for those negatively impacted and then get the support he'd need to expand globalization. I used to believe that we should provide some kind of safety net, really just money for education, for those displaced, but I've changed my mind. I posted the following comment to the blog:


"I understand the desire to want to help the people adversely affected by free trade. But how exactly do you identify those who were hurt by free trade? How do you know they didn't lose their jobs from, say, better technology? Did the factory worker lose his job because of cheaper foreign imports, forcing his boss to lay off workers to cut costs, or because his boss just bought a new machine that made his old job obsolete? And what if, let's say, he lost his job at the factory in Ohio because management decided it would be cheaper to operate it in Alabama? Is the displaced worker now OK with losing his job as long as the job stays stateside? What if the factory was closed down because they were simply inefficient, or the demand for the product waned, or the folks at corporate simply made a strategic decision to close it down? My point is that by trying to understand why exactly someone lost their job or a plant was closed down, you introduce all kinds of uncertainty that will require someone in some government bureaucracy to make the decision that Rob will have the free trade safety net while Dan just collects regular unemployment.

Instead of holding out carrots to help citizens get on board with free trade, or worse taking the populist route and bash on free trade, politicians need to educate."


"Reform a la Glasgow" WSJ editorial:

"Yet the politicians, in their typical election-year panic, now demand more power for the same regulators who failed to use the power they already have to prevent the current crisis. Mr. Paulson is proposing to consolidate some of the financial bureaucracy, and we're all for that. But the mortgage mania and panic weren't caused by a failure of the regulatory "structure" or a dearth of rules. They were caused by a failure of the men and women who ran those financial and regulatory institutions...

Today's credit panic isn't some "crisis of capitalism" that needs a vast new layer of regulation. We are living through the aftermath of a societal credit mania fueled by excessive money creation. The regulators are as much to blame as the regulated, and Adam Smith is providing more punishment and reform than Washington ever will."

Regulators won't get it any better than anyone else. If they just get out of the way, it'll sort itself out. It sounds overly simplistic and optimistic, but it's true.


"The Immigrant Gap" WSJ op-ed:

"Skilled immigrants have long contributed to rising U.S. standards of living. They bring human capital, brimming with ideas for new technologies and new companies. They bring financial capital as well, with savings and resources to develop these new ideas. And they often bring connections to business opportunities abroad, stimulating exports and affiliate sales for multinational companies...

America is currently facing many economic challenges. In Washington and on the presidential campaign trail, however, we hear very little about immigration. And what we do hear is mainly about issues such as fences and drivers' licenses. This is unfortunate. To maintain high standards of living for Americans, the U.S. economy needs skilled workers. But our immigration policy keeps out many of the world's best, and as a result threatens America's competitiveness. The solution? Eliminate the cap on H1-B visas."

I've talked about this before. Like I said then, I think they should open immigration opportunities for people at both ends of the skills spectrum, but starting with high-skilled workers would be good. This topic was actually mentioned a few other places today in the blogosphere here and here, the one in the WSJ is just the one I read first.


"Watch Out for that Pillow" WSJ op-ed:


"These folks represent the American Society of Interior Designers (ASID), an industry group whose members have waged a 30-year, multimillion-dollar lobbying campaign to legislate their competitors out of business. And those absurd restrictions on advice about paint selection, throw pillows and furniture placement represent the actual fruits of lobbying in places like Alabama, Nevada and Illinois, where ASID and its local affiliates have peddled their snake-oil mantra that "Every decision an interior designer makes affects life safety and quality of life.""

Just another example of a ludicrous license. Again, not the first time I've talked about this.

"Paulson's Plans" IBD Editorial (HT: Club for Growth):


"[T]he idea that the government can simply wave a wand and everything will be better is naive. Usually it's government itself that causes the problem — and then blames industry for it. That's certainly true with the subprime crisis."