Thom Hartmann: So what do we do about the economy here in the United States and around the world? How are things changing, what does it all mean, where is it all going? Gregg "Esterbrook", or is it Easterbrook. Gregg?

Gregg Easterbrook: Yes, I’m here.

Thom Hartmann: Hey. Is it "Esterbrook" or Easterbrook?

Gregg Easterbrook: It’s Easterbrook.

Thom Hartmann: Easterbrook, okay. Gregg Easterbrook is the author of, previously the author of “The Progress Paradox” and the new book out, “Sonic Boom: Globalization at Mach Speed” and is with us. Welcome, Gregg, to the program. You begin your book interestingly in Shenzhen. In 1984 my wife Louise and I were in Hong Kong and we took a tour up through the new territories, had to go to use a bus to get to Shenzhen. At that time it was a little town that probably fewer than 10000 people there, it was an experimental town, it was the first town where they were experimenting with what they called free market capitalism. There were dirt roads running through the middle of town, people selling chickens and birds and things in cages. We ate in the fanciest restaurant in town which was about a five cent meal. The bathroom was a hole in the floor, literally, men and women. I mean it was, and now tell us the story of Shenzhen.

Gregg Easterbrook: Well, I start off by describing Shenzhen and I’m glad you know it, your listeners will be forgiven if they do not. It’s a glistening city of dozens of tall skyscrapers, thousands of apartment buildings, schools, hospitals, restaurants, etc. One of the largest ports in the world is located in Shenzhen. Almost as many people live in Shenzhen as live in all of New York City and the entire city has been built in the last 30 years. It didn’t exist a generation ago. The great cities of the west, San Francisco, Paris, etc, took generations to build. Shenzhen’s been built during the lifetime of the people who live there. And it is both a monument to human ingenuity and the ability of human beings to conquer their material needs and it’s also a scary warning of the accelerating pace of economic change.

Thom Hartmann: Wouldn’t you say it’s also a monument to the Tudor plan? You know, King Henry VIIth put together, back when England’s main export was wool, put together a plan where he said, okay, we are going to ban the importation of certain products in order to force local domestic production and it wasn’t actually a ban it was tariffs. And we are going to subsidize the production of things that we think are strategic and necessary and this is Henry the VIIth and this is immortalized as the Tudor plan. Alexander Hamilton, and it built England into a huge industrial empire.

Alexander Hamilton in 1791 put before Congress his Report On Manufactures which was adopted in 1793 by Congress as about 8 different pieces of legislation. But originally it was an 11 point plan, in fact I have it in front of me, in which he said, protecting duties number one, two, prohibition of rival articles, three pecuniary bounties, 4 premiums. Basically you know doing the exact same thing. And for 200 years in the United States we built this huge industrial economy, Japan did the same thing, China is doing that right now. There’s a 22% tariff on cars imported into China but if we buy a Chinese car it’s a 2 ½% tariff coming into the United States. China’s 830 billion dollar what do you call it, economic promotion package, stimulus package was 100% Chinese only, buy only Chinese. They’ve got all kinds of domestic content laws. Japan used to do that, I used to do business in Japan in the 1970s. I mean, when we gave that up we helped build Shenzhen. Did we not?

Gregg Easterbrook: Well, in a sense we have but there are two sides to the coin, Thom. The fact that the Chinese underconsume domestically and loan us money helps enable us to live at the very high level of material consumption we here in the United States. In an ideal world the Chinese would consume more we would consume less and there would be no trade restrictions between either place. It’s possible, we’re moving towards such a world, we’ve made a lot of progress in the last 20 years. But the situation now is of course far from perfect.

Thom Hartmann: Well, the Chinese have thousands of trade barriers, the Indians have thousands of trade barriers. The Japanese still have trade barriers. There’s some really great stuff in your book. On page 205 you talk about how many states have great public university, you’re calling for mandatory college education. On page 201 talking about how we need to have a national healthcare system. Early on, you know, you talk, this is a great quote. “Bankers,” from page 21. “Bankers and Wall Street brokers don’t create anything as we learned in 2009, they pilfer from what others have created.” I just, I’m baffled by the assumption throughout the book that somehow, let me just play this clip from the Presidential debates with Bill Clinton, George Herbert Walker Bush and Ross Perot and get your take on that, ‘cause I think this is at the crux of my, what I don’t understand about your book. If you don’t mind Gregg?

Gregg Easterbrook: Sure.

Thom Hartmann: We’re talking with Gregg Easterbrook. Here’s Ross Perot.

We have got to stop sending jobs overseas.

To those of you in the audience who are business people, pretty simple: If you're paying $12, $13, $14 an hour for factory workers and you can move your factory South of the border, pay a dollar an hour for labor, hire young -- let's assume you've been in business for a long time and you've got a mature work force -- pay a dollar an hour for your labor, have no health care -- that's the most expensive single element in making a car -- have no environmental controls, no pollution controls and no retirement, and you don't care about anything but making money, there will be a giant sucking sound going south.

So... one last point here. I’ve called, I decided I was dumb and didn't understand it so I called the Who's Who of the folks who've been around it and I said, "Why won't everybody go South?" They say, " we’ll be disruptive." I said, "For how long?" I finally got them up from 12 to 15 years. And I said, "well, how does it stop being disruptive?" And that is when their jobs come up from a dollar an hour to six dollars an hour, and ours go down to six dollars an hour, and then it's leveled again. But in the meantime, you've wrecked the country with these kinds of deals.

Thom Hartmann: And here we are, aren’t we?

Gregg Easterbrook: Well, but you see, I don’t think we’ve wrecked the country by any stretch of the imagination. I think the world is a great deal better off than when Ross Perot said those things. Even though of course there are all kinds of problems including here in the United States. Material standards of living are higher in the United States than when he said those things, our education levels are higher, the world is more peaceful today than it was when he said those things. I would not overturn, in 1992, I would not overturn the last 18 years of world history. Now that said there are all kinds of problems including the problems that you cite, very low, very poor labor protection laws in other nations including China and India.

Thom Hartmann: But so, so you’re suggesting that, I mean we’ve also added a billion people by the way since Ross Perot. And half of the world’s six and change billion population is living on less than $5 a day. That’s a huge potential labor force for any transnational corporation that simply wants to go country shopping or labor shopping. But even labor isn’t the biggest part of the equation, it’s the benefits and it’s the you know the fact that like in the big scandal in today’s paper. Cadmium in toys sold at Wal-Mart from China. Why? Well it’s a waste product from industrial processes. They’re selling it to us as toys.

Gregg Easterbrook: Yes, sure. Population growth is inexorable. The even more amazing figure is that the world population has doubled from 3 to 6 billion in just 35 years. It took us several thousand years to reach 3 billion and 35 years to reach another 3 billion. But what do you propose? Would you ban the bearing of children, mandatory sterilization?

Thom Hartmann: No, I would try to empower women because that’s the one thing that consistently reduces birth rates. But with regard to trade I would go back to a tariff-based system and allow independent nations to determine their economic future rather than the World Trade Organization.

Gregg Easterbrook: Well, certainly that’s a possibility. I think you would find that global prosperity would decline if you did that but if nations wanted to voluntarily choose to reduce their own prosperity, then sure, they should have that choice.

Thom Hartmann: You think we’re more prosperous now than we were in 1992?

Gregg Easterbrook: I think that’s an arguable one. Median family income is up, not a huge amount, but it is up and I think it will continue to go up as the world economy recovers.

Thom Hartmann: I think, Gregg Easterbrook, his book, “Sonic Boom, globalization at mach speed.” I think we’re looking at different countries but it’s a fascinating book and thank you for coming on, Gregg. GreggEasterbrook.com, 2 G’s. 3 G's. GreggEasterbrook.com is the website. Thanks for coming on Gregg.

Gregg Easterbrook: Thanks, Thom.

Transcribed by Suzanne Roberts, Portland Psychology Clinic.