Alan Tonelson is a Research Fellow at the U.S. Business & Industry Educational Foundation and the author of The Race to the Bottom: Why a Worldwide Worker Surplus and Uncontrolled Free Trade are Sinking American Living Standards (Westview Press).

Wonder of wonder, miracle of miracles, as they sang in 'Fiddler on the Roof.' Signs are growing more and more common that the economic establishment -- including even the national media -- are starting to get it on U.S. globalization policy. Although editorial writers remain stubborn holdouts, government officials, economists, and reporters are regularly acknowledging major arguments made for years by globalization critics -- especially we in the economic nationalist camp.

Take trade deficits. Globalization cheerleaders still deride the notion that trade deficits of any size could weaken the American economy. Some even continue to insist that these imbalances are a sign of U.S. economic strength (signaling our still world-beating growth rates, our continuing ability to buy robustly from abroad, and the world's continuing willingness to lend us the money to do so).

But journalists are finally starting to present the official interpretation of trade deficits held by the U.S. government's professional economists -- that they detract from economic growth by replacing goods and services made in the U.S.A. (the very components of economic growth) with goods and services made abroad.

Thus in late August, a Reuters story stated that the "longstanding and huge trade deficit is a drag on the U.S. economy because every dollar spent on imports supports overseas production at the expense of domestic production."  Not only did Reuters present this point as a reality, not a mere opinion, it did so in a stunningly matter-of-fact way.

Journalists are also finally recognizing that a large and growing share of these trade deficits now consists of high tech products. On August 21, after noting the explosive rise in Chinese exports of computer accessories to the United States, The Wall Street Journal reported, "Only in the areas of aircraft and agricultural commodities does the U.S. still run a sizable trade surplus with China."

In late June, a somewhat less perceptive New York Times article on Mexico described the movement of U.S. aerospace parts production to Mexico -- a far cry from the low-end garments and consumer electronics that still dominate globalizers' picture of the country's manufacturing activity. Unfortunately, Times reporter Ginger Thompson said absolutely nothing about the fact that such high-wage aerospace work used to be done in the United States.

At the same time, broad U.S. trade and investment patterns with Mexico are finally being described accurately. During the first years after NAFTA's signing in late 1993, the press uncritically swallowed Clinton White House and Fortune 500 propaganda observing that U.S. exports to Mexico were surging and claiming that all exports affect the American economy in the same positive way.

They almost willfully ignored NAFTA critics, who argued that most U.S. exports to Mexico represent a new kind of trade. As opposed to exchanges of finished products between unrelated buyers and sellers, most cross-border trade consists of the parts, components, and other inputs of final products. And they were being traded within the international production chains of multinational companies. Another big chunk of U.S. exports to Mexico consists of the building blocks of factories (capital goods).

When U.S.-based factories send Mexican customers final products, U.S. workers and the economy's long-term health do indeed benefit. But most of the other kinds of goods (called intermediate or producer goods) are exported, assembled in Mexico, and sent back to the United States as final products to be consumed by Americans. Their effects on the U.S. economy are very different, because the original U.S. exports were simply supplying Mexican factories that used to be located in the United States -- and that used to employ American workers.

How sweet it was, therefore, to read the August 15 USA Today article pointing out that Mexican and Canadian exports to the United States are "very different. Mexico makes more intermediate products, like car doors, that are then shipped to U.S. factories to be included in the final product. Canada, however, manufactures products that are ready to be sold as is, like stereo speakers."

In addition, recent news articles and even editorials have spotlighted some major weaknesses in the World Trade Organization. An August 21 Wall Street Journal editorial ridiculed the hopes of U.S. companies with big China investments that China's entry into the WTO would solve their problems anytime soon.

"Without a thorough reform of the judiciary," the Journal's free trade crusaders wrote, "we expect that in three or four years time our pages will be full of stories of multinationals who piled into China in 2002, only to have their high hopes dashed by a marketplace in which the most basic rules needed to conduct business are only sporadically enforced." If only such editorial writers were sounding these warnings before Congress approved China's WTO entry.

And then there's Alan Greenspan, steadily slipping off his pedestal as the maestro of the U.S. and world economies. At an early September conference, the somewhat defensive Fed Chairman insisted that his critics were wrong, and that he could have done nothing to safely deflate the late-1990s stock market bubble whose bursting has created so much economic turmoil lately.

Greenspan's reasoning was widely reported: Raising interest rates high enough to undercut the stock market bubble would have probably thrown the economy into recession. But the implications of this remark went largely unnoticed (especially by Greenspan): that the late-90s economic boom itself was a bubble.

At the very least Greenspan's arguments implicitly conceded that low interest rates (and hence growth itself) were possible to sustain only by permitting a dangerous speculative frenzy to gather momentum. Does that really sound like a Goldilocks Economy? And since so much of the establishment's case for current globalization policies was based on the U.S. economy's superficially sterling performance, doesn't this mean that there has been less to these policies, too, than meets the eye?

The economic establishment and its rubber stamp media still have a long way to go. But clearly not even they can keep ignoring the cracks appearing in the facade of the current version of globalization.

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