Toxic Toys, Deadly Dog Food and Other Wonders of "Free Trade"

By Todd Tucker, Eyes on Trade
Posted on August 21, 2007
http://www.alternet.org/story/60323/

The Times had this gem this morning:

Separately, laboratory tests have found that some Chinese-made vinyl baby bibs sold at Toys "R" Us stores appear to be contaminated with lead.

Industry analysts said Mattel's woes are part of a much larger problem.

"If I went down the shelves of Wal-Mart and tested everything, I'm going to find serious problems," said Sean McGowan, managing director and the toy analyst at Wedbush Morgan Securities. "The idea that Mattel -- with its high standards -- has a bigger problem than everybody else is laughable. If we don't see an increase of recalls in this industry, then it's a case of denial."

Even Mattel executives said repeatedlyyesterday that the company may have more recalls.

"No system is perfect," Robert A. Eckert, Mattel's chairman and chief executive, said in a conference call. "There's no guarantee that we will not be here again."

Wow. Before yesterday, these mega corporations were saying, oh, it's just a few bad apples caught up in the supply chain. (Kinda like Enron… remember that?) Now, we have the mega-corps admitting that - no, actually it's part of the design of the system.

System?! You mean it's not just a few bad apples? How could such a "system" have ever been devised? Did anyone ever vote on this "system", because I can't imagine it would be popular among anyone that, well, eats or consumes. Oh, that's right - thanks Billy, Joey, Chrissy, Johnny, Sammy, Freddy, and Johnny, also known as the boy band of former and perhaps future presidents. (They unfortunately lack many of the redeeming qualities of those other boyz' bands.)

For an excellent read into what a stupid (in the dictionary definition of the term) SYSTEM we have now, please check out Barry Lynn's piece in Harpers on the madness of mega-corporations' unregulated, global sourcing strategies.

Look closely at today's global production system and you will see shockingly high degrees of specialization, in terms of both geography and ownership. More and more activities take place in only one or a few places on earth, and within one or a few companies. This is especially true in electronics: Taiwan produces more than half of the world's vital customized chips. But it is also ever more true of heavy industries, like automobile manufacturing, even of agriculture and food processing. One of the crowning conceptions of the Enlightenment has been achieved, yet economists appear entirely unwilling to recognize the fact, let alone begin the task of examining how this revolutionary event might alter the purposes and pathways of their work.

At the other side of the Times (the ed board), they don't like to think about that, saying that we shouldn't change the way we look at supply systems or trade policy, but rather we should have Mattel police itself and the U.S. government play global cop, flying around the world to inspect hundreds of thousands of factories. No doubt about it: I agree with the Times and 99.999999% of the civilized, non-libertarian world that the FDA needs more resources. But as we've shown, having trade agreements that prioritize safety over a race to the bottom is a far more efficient way of pursuing the same end.

How many more pets have to die or consumers get sick before we accept that states and social institutions have a legitimate role to play alongside the market?? These other institutions at least have the virtue of predating the market, as Karl Polanyi pointed out decades ago:

No society could, naturally, live for any length of time unless it possessed an economy of

some sort; but previously to our time no economy has ever existed that, even in principle, was controlled by markets. In spite of the chorus of academic incantations so persistent in the nineteenth century, gain and profit made on exchange never before played an important part in human economy. Though the institution of the market was fairly common since the later Stone Age, its role was no more than incidental to economic life.

Not that I want the Stone Age, mind you, but we also don't have to feel bashful about using state power to protect people. As Polanyi's book shows, state and social regulations were the only thing that made the emergence of the modern market even thinkable. Anyone wanting a sustainable globalization is going to have to make sure that states have the flexibility to be able to guide the process. First stop for that kind of alter-globalization - shrink or sink the WTO.

© 2007 Independent Media Institute. All rights reserved.
View this story online at: http://www.alternet.org/story/60323/

Smashing Capitalism!

By Barbara Ehrenreich, HuffingtonPost.com
Posted on August 22, 2007
http://www.alternet.org/story/60506/

Somewhere in the Hamptons a high-roller is cursing his cleaning lady and shaking his fists at the lawn guys. The American poor, who are usually tactful enough to remain invisible to the multi-millionaire class, suddenly leaped onto the scene and started smashing the global financial system. Incredibly enough, this may be the first case in history in which the downtrodden manage to bring down an unfair economic system without going to the trouble of a revolution.

First they stopped paying their mortgages, a move in which they were joined by many financially stretched middle class folks, though the poor definitely led the way. All right, these were trick mortgages, many of them designed to be unaffordable within two years of signing the contract. There were "NINJA" loans, for example, awarded to people with "no income, no job or assets." Conservative columnist Niall Fergusen laments the low levels of "economic literacy" that allowed people to be exploited by sub-prime loans. Why didn't these low-income folks get lawyers to go over the fine print? And don't they have personal financial advisors anyway?

Then, in a diabolically clever move, the poor - a category which now roughly coincides with the working class -- stopped shopping. Both Wal-Mart and Home Depot announced disappointing second quarter performances, plunging the market into another Arctic-style meltdown. H. Lee Scott, CEO of the low-wage Wal-Mart empire, admitted with admirable sensitivity, that "it's no secret that many customers are running out of money at the end of the month."

I wish I could report that the current attack on capitalism represents a deliberate strategy on the part of the poor, that there have been secret meetings in break rooms and parking lots around the country, where cell leaders issued instructions like, "You, Vinny -- don't make any mortgage payment this month. And Caroline, forget that back-to-school shopping, OK?" But all the evidence suggests that the current crisis is something the high-rollers brought down on themselves.

When, for example, the largest private employer in America, which is Wal-Mart, starts experiencing a shortage of customers, it needs to take a long, hard look in the mirror. About a century ago, Henry Ford realized that his company would only prosper if his own workers earned enough to buy Fords. Wal-Mart, on the other hand, never seemed to figure out that its cruelly low wages would eventually curtail its own growth, even at the company's famously discounted prices.

The sad truth is that people earning Wal-Mart-level wages tend to favor the fashions available at the Salvation Army. Nor do they have much use for Wal-Mart's other departments, such as Electronics, Lawn and Garden, and Pharmacy.

It gets worse though. While with one hand the high-rollers, H. Lee Scott among them, squeezed the American worker's wages, the other hand was reaching out with the tempting offer of credit. In fact, easy credit became the American substitute for decent wages. Once you worked for your money, but now you were supposed to pay for it. Once you could count on earning enough to save for a home. Now you'll never earn that much, but, as the lenders were saying -- heh, heh -- do we have a mortgage for you!

Pay day loans, rent-to-buy furniture and exorbitant credit card interest rates for the poor were just the beginning. In its May 21st cover story on "The Poverty Business," BusinessWeek documented the stampede, in the just the last few years, to lend money to the people who could least afford to pay the interest: Buy your dream home! Refinance your house! Take on a car loan even if your credit rating sucks! Financiamos a Todos! Somehow, no one bothered to figure out where the poor were going to get the money to pay for all the money they were being offered.

Personally, I prefer my revolutions to be a little more pro-active. There should be marches and rallies, banners and sit-ins, possibly a nice color theme like red or orange. Certainly, there should be a vision of what you intend to replace the bad old system with -- European-style social democracy, Latin American-style socialism, or how about just American capitalism with some regulation thrown in?

Global capitalism will survive the current credit crisis; already, the government has rushed in to soothe the feverish markets. But in the long term, a system that depends on extracting every last cent from the poor cannot hope for a healthy prognosis. Who would have thought that foreclosures in Stockton and Cleveland would roil the markets of London and Shanghai? The poor have risen up and spoken; only it sounds less like a shout of protest than a low, strangled, cry of pain.

Barbara Ehrenreich is the author of thirteen books, including the New York Times bestseller Nickel and Dimed. A frequent contributor to the New York Times, Harpers, and the Progressive, she is a contributing writer to Time magazine. She lives in Florida.

© 2007 Independent Media Institute. All rights reserved.
View this story online at: http://www.alternet.org/story/60506/