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Recession Hits Home for Tom Friedman
| Fri Apr. 17, 2009 1:03 PM PDT
New York Times columnist Thomas Friedman is one of free market capitalism's loudest cheerleaders. The premise goes like this: Developing countries make consumer goods so inexpensively that people in rich countries can afford to buy them and have money left over. Because of all the extra dough, demand for consumer products shoots up and makes third world countries rich. What's good for China is good for America and everyone wins, right? Not quite.
Yesterday morning, another crack appeared in Friedman's the-consumer-always-wins model when one of America's largest shopping mall companies, Chicago-based General Growth Properties, filed for bankruptcy. Friedman's pretty close to GGP's malls; the Bucksbaum family owns them, and Ann Bucksbaum is Tom Friedman's wife.
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But despite his connection to one of America's richest families, Friedman has always portrayed himself as a champion for the common man. Yes, high-paying manufacturing jobs were gone from the American Midwest, but look at all the things average Americans can afford with their newfound buying power, he would explain.
But that's not what's happening anymore. Retail stores are closing across the country and mall vacancies are at their highest point in almost a decade, forcing malls to make weird decisions about how to stay afloat, like offering radically inexpensive rents for desired tenants and converting malls into office space.
GGP, which owns prized properties like Ala Moana Center in Honolulu, Water Tower Place in Chicago, and the Grand Canal Shoppes at the Venetian in Las Vegas, has been struggling for some time. Harper's Magazine estimated that last year the Bucksbaum fortune shrank from $3.6 billion to $25 million. And Friedman's brother-in-law, John Bucksbaum, was forced to resign as CEO after an internal audit revealed that the Bucksbaum family trust made private loans to company officers without informing the board of directors.
Friedman has always kept quiet about his relationship to GGP. This is understandable; he's a journalist, after all, and plays no role in the management of the company. But GGP's bankruptcy says something about the way the global economy really works. Friedman's often accused of ignoring that there are both losers and winners in globalization, but now it looks like even his rich in-laws are hurting.
Comments
If people aren't buying
Submitted by Anonymous (not verified) on Sat Apr. 18, 2009 8:48 AM PDT.
If people aren't buying cheap foreign goods, what makes you think they'll buy less-cheap American goods? Try again.
why buy products of the USA?
Submitted by politicalbear (not verified) on Sat Apr. 18, 2009 12:59 PM PDT.
The answer is really quite basic. When we buy what we produce, then the standard of living of everyone goes up for everyone. Henry Ford recognized this when he paid his line workers a real living wage and was chastized for doing so, but his retort was that those were the people who would now buy his cars... and they did. The rest is history and we've been in an income nosedive ever since the "global market" (good for the wealthy) and free trade was put in place. Free trade can be very good, but there have to be some enforable ground rules that don't drag down the rest of the free world.
Because they'll have jobs
Submitted by DaveD (not verified) on Sun Apr. 19, 2009 7:32 AM PDT.
Because they'll have jobs producing those American made goods?
Since so many of the good paying jobs (like those 'evil' union jobs) have gone overseas so that those who have the money can buy those goods cheaper, fewer people can afford those "cheap" foreign made goods. And I question whether the cost savings of producing those goods overseas has been passed on to the consumer as reduced prices as much as it has been passed on the the corporate executives as increased compensation.
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