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Adviser feeds Giuliani
By Dan McCue
Staff Writer
On the afternoon that the Charleston Regional Business Journal spoke with David Malpass, chief economist at Bear, Stearns & Co. Inc., former New York Mayor Rudy Giuliani was preparing for a major speech in Michigan on economics and global trade.
The gist of the speech, to which Malpass contributed both an economist’s perspective and some specific policy and language, was that a Giuliani administration would expand the nation’s involvement in the global economy by aggressively advancing free trade and opening new markets to American-made products worldwide.
At the same time, Giuliani said, he wanted to revise the nation’s educational system to help the American work force compete more effectively with workers in other countries.
Giuliani wanted his speech, Malpass said, to prompt people to think about ways to make the United States stronger through trade.
Currently, Giuliani is mulling the development of a policy that reinforces those aims, he said.
Meanwhile, a report recently released by the U.S. Department of Commerce said while the nation’s trade deficit had continued to widen, U.S. exports had expanded significantly during the previous month.
That’s good news, Malpass said.
It means “there’s a global boom going on and there’s still a lot of room for the U.S. to do more to enhance its position in it,” he said.
“For instance, I think the U.S. has been sending mixed messages to poor countries in recent years. On the one hand we say that we would like them to grow, but on the other hand we seem to be preoccupied with their repaying the loans our banks have extended to them.”
If other nations’ economies and standards of living improve, the U.S. will benefit, Malpass said.
“It’s simple, really: The better our exporting partners are doing economically, the larger the market will be for U.S. goods,” Malpass said. “But there’s more to it than that. One problem with focusing simply on growth is that you look back and discover that while a country claimed its economy grew, its people didn’t actually get better off … What you need for international economic expansion to benefit us is for there to be growth and a rise in the standard of living in the country.
“A case in point is the recent debate over immigration reform. Wouldn’t it have benefited everybody if Mexico simply had a higher standard of living and more jobs?”
Hammering out a policy that involved globalization couldn’t be done with blinders on. malpass noted that domestic reaction to a policy calling for more prosperous foreign economies would have to be weighed.
“There’s no question, you have to get the message across that these policies will make for a stronger U.S. economy that will ultimately help South Carolina businesses,” he said. “Remember, if the standard of living begins to rise in foreign countries, their labor won’t be as cheap and they’ll be able to buy more from the United States.”
So how will trade enhance the nation’s reputation, another oft-stated goal of Giuliani’s?
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