Globalization has gotten a bad name. Vocal pundits like Lou Dobbs are talking about how American jobs are being exported abroad and how this is all part of a supposed war on the middle class. They would have you believe that globalization is an evil plot to ruin America. The truth is that globalization and free trade are good for us.
Here are some examples of how globalization is helping me personally. I am sure that my readers will be able to think of many different ways in which globalization is good for them:
1. My Job - let's start with my job. My company, which is traded on the NASDAQ, was founded and is still headquartered internationally. Without globalization, my job would not exist. So, every time Mr. Dobbs and his ilk talk about how globalization is responsible for the loss of American jobs, remember that there are many people in this country who owe their jobs to globalization.
2. My Blog - It is amazing how much people from around the world are alike, and many of us share the same financial concerns: how to save for retirement, how to ensure financial stability for our families, how to advance our careers. These concerns seem to be universal, and many of this blog's regular readers come from places outside the U.S.
To date, I have had visitors from 40 countries and territories, including: Antigua and Barbuda, Argentina, Australia, Belgium, Brazil, Brunei, Canada, China, Egypt, Finland, France, Germany, Hong-Kong, India, Indonesia, Ireland, Israel, Italy, Japan, Kuwait, Malaysia, Mexico, Netherlands, New Zealand, Norway, Pakistan, Portugal, Russia, Singapore, South Africa, Spain, Sweden, Taiwan, Thailand, Turkey, United Arab Emirates, United Kingdom, United States and Vietnam.
Globalization is not only helping this humble blog, it is the cornerstone of much of U.S. industry. Globalization ensures that Microsoft operating systems, Cisco routers, Hollywood movies and Detroit cars get sold around the world. And those sales mean jobs here in the States.
3. My Kid's Toys - when I was a kid, getting a new toy was a big deal. These days, my oldest son has so many toys that we are literally running out of space to store them all. Other parents in my son's school are apparently running into the same problem. In some recent birthday parties, the parents have asked kids no to bring gifts, and instead bring a book that the kids can trade. One big reason for this ridiculous bounty of toys is that due to globalization, manufacturing has gotten extremely cheap. And it's not just toys that are becoming cheaper, it's practically everything you buy: just look for that "made in China / Malaysia / Philippines" tag and you'll know I'm right. Globalization means that your hard earned Dollar can buy more.
4. My Portfolio - I have previously written that my goal is to keep 25% of our portfolio in international stocks. By investing in foreign equity, we are getting more diversification and exposure to rapidly growing foreign markets. However by investing in the S&P you are also getting some international diversification since practically every large company out there has gone global. Just like diversification is good for an individual portfolio, it is good for companies.
By going global companies limit their exposure to the vagaries of a single economy and regulatory system. They can insure themselves, and hence their shareholders, against a recession in a single country or a small group of countries. By allowing for easier diversification, globalization is making your U.S. investments less risky, while also providing U.S. companies with access to rapidly growing markets.
OK. Let me slowly get off from my soap box and end this speech. Don't get me wrong, I know that there are serious problems and challenges with globalization. These problems may merit their own article but these days there are plenty of people out there who argue against globalization, so I will leave that job to them. However, on balance, I think it is patently clear that globalization is a good thing. Someone should explain that to Lou Dobbs and some of the populists on Capitol Hill.