I tend to agree with Krugman, but as a report from Carnegie Endowment convincingly argues, we have a global unemployment problem resulting from lack of demand. Due to free trade, global unemployment lead to US unemployment. It is not reasonable, given the trade deficit, to expect US to generate more demand. Euro zone countries could do more, but are hampered by conservative fiscal policy. The report outlines specific policy solutions to increase employment and thus demand globally: - Doing away with agricultural subsidies in USA (and EU) would generate agricultural jobs in developing countries currently being destroyed by subsidized imports from US and Europe. - Labor Rights as part of trade agreements, which in effect means that workers in developing countries will have some money to spend, that is they generate demand. The report gives bilateral treaties with Jordan and Cambhodia as positive example, OTOH: "Since 2002 the United States has adopted a much less rigorous approach to labor rights in trade agreements. U.S. negotiators now require only that trading partners enforce their existing labor laws, even if those laws are so flawed that workers are denied basic rights. For example, if a country's labor law allows employers to fire workers who try to organize unions, the current U.S. trade model requires only that those laws be effectively enforced." - International co-ordinated macroeconomic policy. That is G8 getting their act together (like Chinese allowing their currency to rise in value.) However, "(i)nternational macroeconomic policy coordination is not easy, and it is likely to be particularly difficult in the current international atmosphere where trust is under strain." Which is putting it very politely, and while there is much blame to go around for failures of trade talks, etc. Bush and company deserves heaps of it for destroying couple decades of work on establishing international co-operation in general. The point: Bush's failures internationally are the root cause of his domestic failures. Cheers, Teemu Helsinki, Finland __________________________________ Do you Yahoo!? Friends. Fun. Try the all-new Yahoo! Messenger. http://messenger.yahoo.com/ ------------------------------------------------------------------ To change your Lit-Ideas settings (subscribe/unsub, vacation on/off, digest on/off), visit www.andreas.com/faq-lit-ideas.html