Wednesday, August 01, 2007

As U.S. income stagnates, Democrats reject free trade - Yahoo! News

As U.S. income stagnates, Democrats reject free trade - Yahoo! News: "'For decades we took for granted that everyone agreed with us economists that free trade is good, protectionism is bad. Somewhere along the way, that stopped being the conventional wisdom,' acknowledged U.S. Trade Representative Susan Schwab , in an interview with McClatchy Newspapers . 'And whereas the default vote on a trade bill in Congress used to be a 'yes' vote, the default vote on a trade bill now in Congress is a 'no' vote.'

Why? Because lots of people are no longer convinced that a rising tide of trade lifts all boats— and there's evidence to back them up.

For three decades, the richest 10 percent of Americans have been growing even richer much faster than everyone else. Over the past five years, real wages for all the rest of American workers have been almost flat. Many blame globalization.

During a mid-July congressional hearing, Federal Reserve Chairman Ben Bernanke contended that education levels largely determine income inequality. But he was angrily interrupted by Rep. Barney Frank , D-Mass., chairman of the House Financial Services Committee, who declared, 'Mr. Bernanke, that's simply not true.'

Frank said that the 29 percent of Americans who have bachelor's and even master's degrees haven't seen real income growth, on average, over the past five years. That's what Democrats in Congress are focused on, he said.

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