One of the good things about the stock market coming back down to Earth after a prolonged bubble is that it leads people to question other misconceptions about the economy. When stock prices were soaring we heard all kinds of nonsense about a "new economy," technological revolutions, and profit projections that were just too miraculous to be true.

The standard litany about the wonders of globalization could be the next myth that is ripe for debunking. For decades we have been told that increasing global trade and investment was great for everyone, with the exception of some inevitable "losers" who would hopefully retrain for new jobs (perhaps in the "new economy.")

Like the investment advisers who hawked Enron and WorldCom stocks as they were heading toward disaster, most of the "experts" on globalization have long been avoiding the real numbers.

For starters: the real median wage in 1973 was $12.45 (measured in 2000 dollars). In 2000 it was about $12.90. Considering that the US economy grew by 72 percent (per person) during that period, somebody got shafted. Since the median is by definition the middle of the wage ladder, that somebody includes the majority of employees in the United States -- not just the textile or steel workers who have been hit directly by foreign competition.

Anyone who is old enough to have lived through the 1950s, 60s, and 70s knows that it was not uncommon for a typical wage-earner to buy a house, support a family, and even put the kids through college with just one income. That doesn't happen any more, and these statistics are another way of expressing America's changed reality.

Interestingly, almost all of the research by economists shows that our opening up to foreign trade contributed to this massive redistribution of income. The only question is: how much? Even if we take the smaller estimates of how much redistribution was due to increased trade -- not to mention US firms moving production overseas -- it is easy to show that about three-quarters of the US labor force has suffered a net loss due to globalization. This takes into account (as do the above numbers on the real median wage) all the cheap DVD and CD players, clothing, and other consumer goods that we now import from overseas. For the vast majority of Americans, the losses from globalization have outweighed the gains, in strictly economic terms.

This should not be surprising, since our political leaders have made it their mission for more than 30 years to rewrite the rules of global commerce (for example, in such agreements as the North American Free Trade Agreement or the World Trade Organization) in ways that give corporations more power and workers less.

What about the developing world? Unfortunately the official, undisputed numbers tell a very different story here, too, than the one we have heard from the cheerleaders on TV. The growth of income per person in the low and middle-income countries dropped sharply over the last 20 years. If we compare the last two decades (1980-2000) to the previous 20 years (1960- 1980), we find that these economies advanced by less than half their prior rate of growth.

As a result of this slower economic growth, most developing countries also saw reduced progress over the last 20 years in such areas as life expectancy, infant and child mortality, literacy, and education.

This long experiment in corporate-led globalization has been a failure, at home and abroad. As with the end of the "new economy," it is time to face up to the facts.

Mark Weisbrot is Co-Director of the Center for Economic and Policy Research, in Washington D.C. (www.cepr.net)

###