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Home Publications Blogs Beat the Press Thomas Friedman Escaped and Is Writing About Economics Again

Thomas Friedman Escaped and Is Writing About Economics Again

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Saturday, 15 February 2014 21:33

Thomas Friedman is loose in Silicon Valley, the economic hub best known for colluding to rip off its workers. He can't contain his enthusiasm for "start-up America," telling readers;

"What they all have in common is they wake up every day and ask: 'What are the biggest trends in the world, and how do I best invent/reinvent my business to thrive from them?' They’re fixated on creating abundance, not redividing scarcity, and they respect no limits on imagination. No idea here is 'off the table.'"

Yeah, it must have taken some brilliant Silicon Valley imagination for Apple to sue Samsung to get its competitor's cell phones off the market. In places that are behind the curve they would think that they have to produce a better cell phone, but in Silicon Valley they have the government just remove their competitor's products from the shelves. See, no idea is off the table.

Okay, but that's just cheap fun. The real story here is that Friedman is calling out Washington for not supporting the trade deals the corporations love. Just to be clear, Friedman makes no pretense of evaluating trade deals based on evidence. In fact, he boldly proclaimed the opposite:

"I was speaking out in Minnesota — my hometown, in fact — and a guy stood up in the audience, said, 'Mr. Friedman, is there any free trade agreement you’d oppose?' I said, 'No, absolutely not.' I said, 'You know what, sir? I wrote a column supporting the CAFTA, the Caribbean Free Trade initiative. I didn’t even know what was in it. I just knew two words: free trade.'"

Given his religious devotion to pacts labeled "free-trade" agreements, it is hardly surprising that Friedman would strongly support the Trans-Pacific Partnership (TPP) and the Trans-Atlantic Trade and Investment Pact (TTIP). He begins by calling them "next generation" trade agreements:

"that even the playing field for us by requiring higher environmental and labor standards from our trading partners and more access for our software and services."

That's a great story. Obviously he hasn't heard about the leaked environmental chapter of the TPP that is universally recognized as a joke. No one, other than perhaps Thomas Friedman, thinks the labor chapter will be any more serious.

Then Friedman quotes the Economist:

"Studies suggest that proposed deals with Asia and Europe could generate global gains of $600 billion a year, with $200 billion of that going to America,"

His keepers were supposed to keep Friedman away from big numbers. Does Friedman think these numbers are for next year, ten years out, twenty years out? He doesn't tell us and probably doesn't have a clue himself. Hey, the world is flat, everyone is hyper-connected, why does it matter?

For those who actually like their numbers to mean something, these projections are for somewhere around the middle of the next decade when world GDP will be around $160 trillion and U.S. GDP will be close to $30 trillion. That puts the projected gains at a bit less than 0.4 percent of world GDP and 0.7 percent of U.S. GDP. That's not trivial, but hardly the difference between booming growth and a stagnant economy. In the case of the U.S. the boost to growth would be around 0.05 percentage points.

While Friedman insists these numbers are too low, the opposite is almost certainly true. These deals are focused to a substantial extent on increasing patent and copyright type protections. These government granted monopolies, restrict competition and raise prices. (This is likely to be an especially big issue in the case of prescription drugs.) The studies that show gains from these trade agreements don't make any effort to incorporate the higher prices that result from these protections.

These monopolies will be a drag on growth and will quite likely more than offset any projected gains from the trade liberalization portions of the deals. They also have the effect of redistributing income upward. That is why serious people have serious reservations about the TPP and the TTIP.

But such issues don't trouble Thomas Friedman, after all he "just knew two words: free trade."

 

Note: Typos corrected, thanks Fairleft and Robert Salzberg.

Comments (16)Add Comment
President Costanza
written by President Costanza, February 15, 2014 9:52
Thomas Friedman is popular because his articles are comforting to a certain type of reader: high-income metropolitan elites who benefit from the current economic model. He is not, however, not very insightful nor is he intellectually curious. His economic thinking is very deficient, to say the least.

Friedman's article does not even address what TPP really does. And even if GDP does increase as a result of TPP, (which I doubt for reasons Baker pointed out) that does not mean that total well being will increase. Just look at China, where GDP has increased but people now have to wear masks and use air purifiers in their home because the air quality is so bad as a result of the air pollution. Much of the water is not longer safe to drink. So, yes, China's GDP has increased, but at what cost?

Also, these trade agreements would make environmental protections for animals, such as the US ban on cat and dog fur, illegal under the investor protection provisions. The US "safe dolphin" labeling was successfully challenge by Mexico under NAFTA and EU's seal fur ban was successfully challenged by Canada.
...
written by dicj c, February 16, 2014 12:32
"They also have the effect of redistributing income upward." Surprise, surprise! Since the average person, once again, has no say in what's being negotiated, I'm reminded again of that old saying, "If you don't have a seat at the table, you're probably on the menu."
fix this!
written by fairleft, February 16, 2014 2:49
" ... projected gains at a bit less than 0.4 percent of world GDP and 0.7 percent of world GDP."
Friedman Celebrates Silicon Valley as Predators Push Internet into Dark Age
written by Last Mover, February 16, 2014 5:31
"What they all have in common is they wake up every day and ask: 'What are the biggest trends in the world, and how do I best invent/reinvent my business to thrive from them?' They’re fixated on creating abundance, not redividing scarcity, and they respect no limits on imagination. No idea here is 'off the table.'"


There's that (implied) word again, "innovation" to invent and reinvent, what Friedman rests his case on, cloaked in the usual trap that without it, America is doomed to redivide the scraps of scarcity among itself as it goes down fighting over zero-sum scraps like cats and dogs.

Excuse me, but when is Friedman going reinvent himself and talk about what really holds America back, the systematic choking off of opportunity to earn a living at all on both the supply and demand side - much less change the world with postive-sum innovation?

The economic predators literally running the country now from top to bottom politically and economically, have no respect for innovation whatsoever, except when it's squarely under their thumb, carefully controlled and released under a slow trickle to extract as a much monopoly economic rent as possible for the 1% and even higher concentrated power, under the obscene guise of "free trade".

What more Americans are asking instead every day when they wake up, is not how to reinvent themselves, but why the playing field tilted so much the last time they reinvented themselves.

Why is the only answer they get anymore are crank charlatans like Friedman giving them cheap cheerleading motivational speeches - instead of explaining where the opportunity and jobs went the last time around? How long does this game of musical chairs with so few positions at the top glorified by Friedman last anyway?

We're waiting Thomas Friedman. Do tell us won't you, exactly how Brian Roberts wakes up every day to reinvent himself and the Comcast broadband monopoly service for the postive-sum benefit of America, this time by merging with Time Warner.

And when you're done, do compare the result as you usually do, with those really bright upstart smart kids in other developed countries raised on seriously advanced and widespread available broadband so powerful and fast it puts America in the dark age of innovation.
...
written by Kat, February 16, 2014 6:02
They’re fixated on creating abundance, not redividing scarcity

I would say that the enormous amount of energy and resources they put into collecting our data and spying on us us demonstrates just how fixated on scarcity they are.
Friedman probably doesn't read the Times
written by Ben, February 16, 2014 7:47
If so he would have known that Apple scoured the world for investment opportuntiities for their billions and came up with the notion of buying back their stock. 40 billion worth with the "b". Great innovation, another reason why they have to sue Samsung.
The wisdom of a Tom Friedman Column is in the readers comments.
written by John Wright, February 16, 2014 9:07

Here is the top readers' selection comment.

"MetroJournalist:
is a trusted commenter NY Metro Area 13 hours ago

Here we go again. Start a new company. Have Thomas Friedman shill for it. Wash. Rinse. Spin. Repeat.

You lauded Groupon, which is not doing so well. You suggested that we monetize our closets, as if garage sales and eBay never existed. And renting space in your home. Some of the start-ups you cheer for were not created by people who can create the future, but are desperate. When will you realize, Mr. Friedman, that not everyone is an entrepreneur and not everyone has bright ideas.

Better yet, when with [s.b. will?] the powers that be at The New York Times realize that many of the people who respond to your columns are more creative and insightful than you are? (And can write for less money than you command.)"

I'd like the Times to give America an opportunity to watch a re-invention of an American by firing Tom Friedman. He doesn't need the money, as his wife has wealth in General Growth Properties shopping centers, but he does have a great need for publicity and attention.

The Times could report on the re-invention process as Tom works his contacts to try to land another columnist or high profile think tank job.

The Times could replace his column with a new "Personal Innovation Section", which is simply blank newsprint ready for Americans to sketch their innovative ideas.

This is a win-win deal for everyone, Friedman gets to show America personal re-invention and his column inches are replaced with something useful.
...
written by Kat, February 16, 2014 12:28
John,
Guess what? That reader comment seems to have disappeared.
...
written by PeonInChief, February 16, 2014 12:59
The innovator who created the Friedman column generator needs to revise it to take some random paragraph or two from the Economist to illustrate his point.
Comment on the disappearing comment.
written by John Wright, February 16, 2014 2:00
Kat, thanks for the notice about the disappearing comment.

The author of the comment, "MetroJournalist" is (maybe "was" is more accurate now) a "Trusted commenter".

A trusted commenter's comments pass directly through to the comments area without a NY Times moderator's purview.

When I recommended the metrojournalist's comment, I was the 90th, so there was a lot of reader interest. Sorting by readers' picks shows it is no longer there.

One obvious lesson is the NY Times appears to keep its "Trusted commenters" on a hidden leash, which was unknown to me.

A bit of Orwell's 1984 re-writing of history as the comment disappears from the Times history as if it never happened.

The cleanup process is not completely thorough, as they preserved a reply to Metrojournalist from reader "mancuroc".
*****************

"mancuroc: is a trusted commenter Rochester, NY

@MetroJouranlist - you are not alone on your comparison of the responses and the columns themselves. Referring to the responses to yesterday's remarkably similar column by Joe Nocera, I wrote how most of them are intellectually way ahead of the typical op-ed. I suspect that we both have plenty of company.

Friedman's columns particularly seem to be on autopilot. It gets really tiresome to read his promotion of startups as the wave of the future, and his cheerleading for entrepreneurs who tell him what he wants to hear and peddle to his readers. Even if they don't admit it, they must know deep down that for every one of them that made it, there very many equally talented and determined people that didn't.

If we are all our own entrepreneurs, and maybe 90 or 95% of us can’t make a living from it, who will be customers of the ones who succeed? Friedman is surely smart enough to understand this is an untenable model, as most those who respond to him are. Why then does he keep on pushing it?

Mr. Freidman, please have the curiosity to talk to some of the multitude who have gone broke after starting (sometimes multiple) businesses, cutting-edge or otherwise, and include them in your illustrations of how an entrepreneurship-dependent economy might work. It won’t be as easy as your cookie-cutter articles, I promise you.

In reply to MetroJournalist
85 Recommend"

***********************************
At the bottom of "mancuroc"'s reply comment should be a link to the original metrojournalist comment.

But the link to the "metrojournalist" comment doesn't work.

I'll check later to see if "mancuroc"'s reply survives the NY Times damage control cleanup operation.




Friedman and Brooks
written by ezra abram, February 16, 2014 5:07
Gods gift to lazy bloggers.
I mean, isn't it axiomatic that 90% of what TF and DB write is silly (at best) ?
alto TF was a great reporter back in the day; his book on the Beirut civil war has some great anecdotes.

that you, and others, feel this constant need to explain TF and DB only re inforces the role of the N Y Times as an arbiter of what is news
...
written by watermelonpunch, February 16, 2014 10:02
Comment on the disappearing comment.
written by John Wright, February 16, 2014 3:00

"mancuroc: is a trusted commenter Rochester, NY
If we are all our own entrepreneurs, and maybe 90 or 95% of us can’t make a living from it, who will be customers of the ones who succeed? Friedman is surely smart enough to understand this is an untenable model, as most those who respond to him are. Why then does he keep on pushing it?

Well I hope this comment doesn't disappear, because this is the type of comment that belongs everywhere people hype up unrealistic open-a-business blathering as a red herring.

It plays upon the lottery ticket carrot on a string psychology.
YOU TOO CAN BE A BUSINESS OWNER
So don't look over there or say anything about the rights of workers.

Of course most small business ventures don't actually result in life-long prosperous success.
And most people, including people who have great ideas, or even would be good at it... just don't have the luxury trying.

The truth is that this dream of having a bunch of small time self-employed entrepreneurs running around in this dreamy free market economy is just that - a fantasy carrot on a string hanging out there.

A community of small-time self-employed entrepreneurs usually seems to wind up being more involving bushmeat poachers & bootleg peddlers than innovators making iphones, insulin pumps, or even bed clothes suspenders.

And TF betrays his convoluted contradiction himself...

The other is to have an immigration policy that not only provides a legal pathway to citizenship for those here illegally but enables America to attract the best brainpower and apply that talent to the data mountains and software opportunities we’re creating.


What?
If innovation comes for small time start-ups by regular Joe Americans living out their American Dreams... why do big corporations need to get near-slave labor from other countries with H1B visas for this venture?
I mean, because we know he's not talking about attracting lunch van operators to come to the U.S. to "start-up", right?
...
written by dax, February 17, 2014 7:29
+2 Dean.
The true entrepreneurs realize small business is not easy and pre-ordained for success
written by John Wright, February 17, 2014 8:05
I worked for Hewlett-Packard for more than 20 years before the part I worked for was spun off.

I remember reading the late Bill Hewlett mentioned "HP could have gone broke" in the early years as H-P struggled to build the business.

So even one of the most successful US companies of the 20th century could have failed in its early days.

And Friedman MUST be familiar with his wife's (Ann Bucksbaum) family business, General Growth Properties (shopping centers) as per
http://en.wikipedia.org/wiki/General_Growth_Properties

"The company's problems forced the ouster of CEO John Bucksbaum, though he remained chairman of the board. On October 26, 2008, Bucksbaum resigned. Director Adam Metz became CEO. The value of the Bucksbaum family fortune shrank by 97 percent since December 2007."

So this is a LARGE business that entered hard times in 2007, 53 years after its 1954 founding.

So Friedman must be aware of how difficult it is to start, grow, and run a successful small (or large) business.

But I don't expect his columns to change as, apparently, the higher ups at the New York Times are satisfied with the content.

The readers, to judge from the comments at the NY Times website, not so much.
playing that little violin for those impoverished silicon valley workers....
written by pete, February 17, 2014 11:33
Friedman didn't even knowt the title
written by Anand, February 20, 2014 1:46
The quote about CAFTA is funny because not only did Friedman not read the agreement, he did not even read the title. The "CA" in CAFTA stands for "Central American", not "Caribbean", as Friedman claims.

Friedman is almost beyond parody.

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.

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