[OPE-L] FAIR, globalization vs. growth

From: glevy@PRATT.EDU
Date: Wed Apr 12 2006 - 13:08:51 EDT

"Globalization vs. Growth" - NYT op-ed omits stats that
debunk pro-corporate claims

Action Alert from FAIR (Fairness & Accuracy in



The April 10 New York Times devoted half its op-ed
space to an elaborate attempt to demonstrate the
benefits of globalization, with charts showing that
"more globalized" nations do better than "less
globalized" on measures ranging from average inflation
to the rule of law. But one obvious measure of economic
health, the economic growth rate, is conspicuously
absent - perhaps because those statistics would have
directly contradicted the op-ed's point.

"Globalizing Good Government," written by Richard W. Fisher and W. Michael
Cox of the Federal Reserve
Bank of Dallas,
chided opponents of a French law that would have made
it easier to fire young employees (the law has since
been scuttled) for "misunderstanding the realities of
our globalizing economy." Fisher and Cox argued that
"the more globalized nations tend to pursue policies
that achieve faster economic growth," while "the least
globalized countries are prone to policies that
interfere with markets and lead to stagnation."

"It is clear that countries with solid policies will be
more successful in the global economy," the op-ed
concluded. "If our data demonstrate anything, it is
that globalization prompts a race to the top by pushing
countries to abandon policies that burden their
economies in favor of those that fuel growth and
economic opportunity."

It's true that on several of the policies favored by
the authors, like "favorable corporate taxes" and
"capital market openness," countries did do better -
from Fisher and Cox's point of view - the more
globalized they were. But do such policies actually
result in faster economic growth? The obvious way to
begin to answer such a question is to compare the
various groups of countries in terms of growth in gross
domestic product. Since the op-ed authors neglected to
do this, FAIR looked up the most recent statistics
available from the United Nations Conference on Trade
and Development
 - the change between 2003 and 2004 - and found some
 surprising results.

Contrary to the op-ed's claims, the "most globalized"
group - which includes the U.S. and Canada, Australia
and New Zealand, several European countries and
Singapore - actually had the lowest average growth
rate, at 3.6 percent. The "more globalized" group,
including Japan, South Korea, Malaysia, Panama and most
of the other European countries, did just slightly
better, with an average growth rate of 3.7.

Growing much faster than either of those groups were
the "less globalized" - a category that includes Asian
countries like Taiwan and Thailand, African countries
like Uganda and Nigeria, Latin American countries like
Mexico and Argentina, and Europe's Romania and Ukraine.
These nations grew at a 6.2 percent clip. (Statistics
on Taiwan, which are not kept by the U.N., come from
the CIA Fact Book.)

The fastest growth rate was found among the "least
globalized" - in other words, the group with "policies
that interfere with markets and lead to stagnation."
This group, which includes China, India, Russia, Brazil
and Venezuela, had an average growth rate of 6.3
percent. (Of course, the fact that China is counted
among the "least globalized" when its exports amount to
42 percent of its GDP - versus 7 percent for the U.S. -
calls into question the whole classification scheme
used by the op-ed.)

Do such figures prove that resisting globalization
leads to faster growth? Of course not; there are many
variables involved, including the fact that the "least
globalized" countries generally start at a lower level
of development. But looking at the actual growth rates
does call into question the op-ed's facile assertion
that pro-corporate policies are the same thing as
"policies that achieve faster economic growth." The New
York Times op-ed page should have done some
factchecking before offering this misleading opinion
piece to its readers.

*ACTION:* Please contact the New York Times op-ed page
to ask why the authors of "Globalizing Good Government"
were not asked to provide the obvious statistics that
would have tested their claims that the policies they
advocate lead to faster growth.

David Shipley, Op-Ed Page Editor
New York Times
oped@nytimes.com <mailto:oped@nytimes.com>
(212) 556-3652


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