Another Secret ‘Trade’ Deal Leaks, Shows Corporations Still Control Trade Process

“”There are no red lines which would clearly protect environment and health.” – Jorgo Riss, director of Greenpeace EU

There has been a major leak concerning another “trade” agreement that is currently being negotiated in secret. This time it is the TTIP and it was leaked by Greenpeace.

TPP, TTIP, What?

First, some explanation. If you are reading this you’ve been hearing a lot about the TPP, which is the Trans-Pacific Partnership. There’s another “trade” agreement being negotiated called the TTIP, which is the Transatlantic Trade and Investment Partnership. So for shorthand on the shorthand: TPP = Pacific, TTIP = Atlantic.

The TPP (Pacific) negotiations have been completed. The TPP negotiations took place in a secret process dominated by the giant multinational corporations, and the final agreement is waiting to be approved or rejected by Congress – probably during the “lame duck” session, because that is when members are least likely to be held accountable for their votes.

The TTIP (Atlantic; you may hear it referred to as “tee-tip”), on the other hand, is still being negotiated, also in a secret process dominated by the giant multinational corporations.

The Big Leak

Now, back to the story. There has been a leak of parts of the TTIP (Atlantic). Once again we have to learn about our own government’s positions from leaks instead of through transparent, democratic processes that would impose accountability. And once again we learn that our own government’s positions are actually the positions of the giant multinational corporations and not at all in the interests of We the People, or of the citizens of the countries we are negotiating with.

Here is what the leak shows. Just as we saw happen with the TPP (Pacific), the big corporations are trying to use a “trade” deal to maneuver governments to sign something that gets governments out of their way. The TPP lets corporations around the Pacific bypass the rules and regulations of the governments that sign onto the agreement. It gives corporations the ability to move jobs and production to countries with extremely low wages and minimal worker and environmental protections, and it stops governments from having the ability to do anything about it.

This leak shows that the U.S. government has entered into negotiations asking for the same thing with the Atlantic countries. TTIP limits their sovereign powers to regulate what the giant, multinational corporations do, to bring them under the jurisdiction of sovereign courts, to control their size and power, and to tax them and otherwise protect citizens from their profit-seeking actions. For example, the proposals would actually lower existing European governmental standards for things like food and drug safety, in favor of increasing the profits of giant American and other multinational corporations. It would end the European bans on animal testing, on a number of pesticides (even one that “chemically castrates male frogs”), on GMO contamination in foods, even the “precautionary principle” that requires pharmaceutical companies to prove drugs are safe before offering them to the public.

Some Coverage Explains More

The Guardian, in “Leaked TTIP documents cast doubt on EU-U.S. trade deal,” explains “U.S. demands that would require the EU to break promises it has made on environmental protection.” But what about the things these governments are telling their public?

The public document offers a robust defence of the EU’s right to regulate and create a court-like system for disputes, unlike the internal note, which does not mention them.

Jorgo Riss, the director of Greenpeace EU, said: “These leaked documents give us an unparalleled look at the scope of U.S. demands to lower or circumvent EU protections for environment and public health as part of TTIP. The EU position is very bad, and the U.S. position is terrible. The prospect of a TTIP compromising within that range is an awful one. The way is being cleared for a race to the bottom in environmental, consumer protection and public health standards.”

U.S. proposals include an obligation on the EU to inform its industries of any planned regulations in advance, and to allow them the same input into EU regulatory processes as European firms.

The New York Times, in “Greenpeace Leaks U.S.-E.U. Trade Deal Documents,” explains,

The Sierra Club said the documents showed that the Americans were proposing to allow corporations to “petition” for the repeal of a regulation if it was “more burdensome than necessary to achieve its objective,” given its impact on trade, and that the Europeans had proposed allowing certain environmental standards to be deemed “technical barriers to trade,” which would, perhaps, weaken labels that require the climate footprint of a product or service to be disclosed.

The group also warned that the text included trade rules that could be used against “buy local” programs that support local clean-energy jobs in nearly two dozen American states.

Corporations At Center Of Policymaking

According to Greenpeace’s director, these proposals “would put corporations at the center of policymaking, to the detriment of environment and public health.”

If these proposals are enacted the giant corporations will have power to, according to a statement from Robert Weissman, President of Public Citizen, “block, slow, undermine and repeal European regulations. … [T]he Regulatory Cooperation chapter poses a major threat to health, safety, environmental, labor, consumer, civil and political rights, and other regulatory protections. The U.S. proposals in the Regulatory Cooperation chapter seek to export many of the worst features of U.S. rule-making.” The U.S. proposals are “proposals are affirmatively hostile to the precautionary principle.”

This Shows It Is Time To Remake Our Trade Negotiating Process

This leak shows that it is time to completely reformat the way the U.S. initiates and negotiates trade deals. Instead of our current “captured”, corporate-dominated process, rigged from the start to produce “trade” deals that only benefit the giant corporations, their executives and their Wall Street shareholders, we need a process that includes from the start all of the stakeholders in international trade. Consumer groups, labor groups, environmental groups, democracy groups, human rights groups and all other stakeholders must be represented in this process from the start. The process must also be transparent, so the public knows what is being negotiated in their name, from the start.

This is the only way we can come out of the process with actual trade deals that bring about actual, beneficial trade between countries that actually lifts all people on all sides of trade borders.

Greenpeace’s TTIP Leaks website has the leaked documents. Greenpeace also has a news release on the documents.

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This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF. Sign up here for the CAF daily summary and/or for the Progress Breakfast.

Are Fair Trade Policies “Extreme?” Is Clinton Ready For Trump On Trade?

Is it really “extreme” to think we should have fair trade policies?

The New York Times on Tuesday published a story by Nelson D. Schwartz and Quoctrung Bui, “Where Jobs Are Squeezed by Chinese Trade, Voters Seek Extremes,” reporting that, “research to be unveiled this week by four leading academic economists suggests that the damage to manufacturing jobs from a sharp acceleration in globalization since the turn of the century has contributed heavily to the nation’s bitter political divide.”

By “sharp acceleration in globalization since the turn of the century” they mean millions and millions of manufacturing jobs, and more than 60,000 factories, all moved to China since 2000 to take advantage of China’s non-democracy that allows exploitation of workers and the environment. (But China doesn’t really “trade” with us by buying things, resulting in a record $365.7 billion trade deficit with China just last year.)

They go on:

Cross-referencing congressional voting records and district-by-district patterns of job losses and other economic trends between 2002 and 2010, the researchers found that areas hardest hit by trade shocks were much more likely to move to the far right or the far left politically.

“It’s not about incumbents changing their positions,” said David Autor, an influential scholar of labor economics and trade at the Massachusetts Institute of Technology and one of the paper’s authors. “It’s about the replacement of moderates with more ideological successors.”

Mr. Autor added: “In retrospect, whether it’s Trump or Sanders, we should have seen in it coming. The China shock isn’t the sole factor, but it is something of a missing link.”

So Sanders, who basically advocates returning to policies that are not even as “left” as those that were dominant in the Eisenhower era, is now considered by these reporters to be “extreme” and “the far left”? In some minds, apparently, the answer is yes.

There’s Trade And Then There’s “Trade”

There is trade and then there’s “trade.” Trade is the exchange of goods and services across borders. People who live in certain climates and can grow bananas can also have cars, and people who make cars can have bananas. Both sides benefit – as long as the value of the banana going one way and the value of cars going the other way line up. In other words, with actual trade we buy things from other countries and they buy things from us.

In our country’s current trade regime, however, “trade” is used as a justification and enabler for closing American factories and moving American jobs to places where people are paid less and the environment is not protected, and bringing the same goods that used to be made here back here and selling them in the same outlets. The people who used to employ those American workers can then pocket the wage and environmental-protection-cost differential; the country gets a massive trade deficit.

The Times article quotes corporate economists who, “like most economists,” explain that “we all” benefit because “lower prices” result when things are made somewhere else by people who are paid almost nothing. (Apparently moving our jobs out of the country is good for us.) It does not address the inequality and economywide worker wage stagnation that has resulted from these policies. It ignores that our country has had enormous, humongous trade deficits every single year since “free trade” ideology became dominant in elite thinking. Oh well.

This is the reason for the disconnect in American thinking about trade. Elites tell us “free trade” is good but voters can see and feel that what this country has actually been doing has been bad for them. Americans like the idea of actual trade, but they hate our country’s trade deals. They are rational; they see that the “trade” deals have really been about moving jobs to benefit corporate elites and they see and feel the terrible results of this all around them.

What About Clinton?

Note that the story specifically names Sanders as on the “far left,” while candidate Hillary Clinton also claims to oppose the trade deals that shipped jobs and the upcoming Trans-Pacific Partnership (TPP), also claims to be as “progressive” as Sanders, and has taken many of the same positions on most issues as Sanders. The reporters apparently simply do not believe her. There’s that old credibility problem cropping up in the strangest places.

This exposes what will likely be one of Clinton’s biggest problems in the coming election if she and Trump are the nominees. As the Times story notes, Trump has built his campaign partly on a popular and resonating message about how our trade deals have hurt the country. Clinton says she opposes TPP and other bad trade deals, but no one believes her.

This election will be at least partly, if not mostly, about trade. The consequences of decades of moving jobs out of the country are coming home to roost. People are fed up. This means Clinton needs to toughen up her trade policies – and mean it. She should start by calling on President Obama not to submit TPP to Congress, The public gets it, Clinton better get it, too.

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This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF. Sign up here for the CAF daily summary and/or for the Progress Breakfast.

Clinton Should Ask Obama To Withdraw The TPP

Hillary Clinton has a credibility problem when it comes to our country’s trade policies and the resulting enormous, humongous trade deficits that measure job loss – especially with regard to the Trans-Pacific Partnership.

But Clinton has a chance to shore up her credibility with Democratic voters on this issue. It comes as President Obama, Wall Street and the multinational corporations are preparing to grease the skids for pushing the TPP through Congress in the post-election “lame duck” session.

Clinton, Credibility And Free Trade

Following months of demands that she take a position on the trade agreement, Clinton stated during an October PBS Newshour interview (just before the first debate with candidate Bernie Sanders) that TPP could, “… end up doing more harm than good for hard-working American families whose paychecks have barely budged in years.”

Unfortunately for Clinton, few believe she means it. The business community, for example, sees Clinton’s position as simple posturing to voters for the election, believing she will switch back to supporting the agreement immediately after the election, as Obama did on NAFTA after promising throughout the 2008 campaign to renegotiate the agreement.

For example, Chamber of Commerce President Tom Donohue went so far as to say in a recent Bloomberg TV interview that he believes Clinton will switch to supporting TPP after the election.

Tory Newmyer, in a Fortune story after the Ohio primary, “Hillary Clinton and John Kasich Win Ohio, and So Does Free Trade,“ described Clinton as pro-free trade, writing she really won the Ohio primary because she favors TPP, not because she opposes it,

Buckeye State voters in both parties delivered wins to trade-friendly candidates on Tuesday—and denied them to a pair who staked their claims on pledges to oppose new deals, starting with the Trans Pacific Partnership. That outcome was in doubt after Ohio’s neighbors to the north in Michigan last week voted for reality-show billionaire Donald Trump and Vermont Sen. Bernie Sanders, the most aggressive trade foes in the field.

But in Ohio, Hillary Clinton and home-state Gov. John Kasich prevailed.

The business community doesn’t believe for a minute that Clinton really opposes TPP.

Working-class voters have a similar problem, solidly identifying Clinton with free-trade positions. Candidate Bernie Sanders has used this perception against her, winning Michigan and Wisconsin and gaining on her in Ohio and other states. These wins were a result of campaigning as a candidate who will restore balance to our country’s trade policies, as opposed to Clinton as a candidate favoring agreements that send jobs out of the country and who has even said such offshoring “is probably a plus for the economy in the long run.”

President Obama Presents Clinton With An Opportunity To Restore Credibility

President Obama is presenting Clinton with an opportunity to restore her credibility on TPP. Politico’s Morning Trade reported on Monday that the Obama administration is ramping up “a process” for “pushing for TPP approval in Congress.”

The escalating anti-trade rhetoric emerging from the presidential election isn’t striking any fear in the heart of President Barack Obama or decreasing his willingness to send the TPP to Congress for approval, Commerce Secretary Penny Pritzker said in an interview with Pro Trade’s Doug Palmer.

“This president is not intimidated and he’s not afraid to act here,” she said. “We have a process we have to go through first. We reviewed the process this week, so we could understand all the steps. This president is fully committed to TPP, as is our administration and, frankly, as is the business community.”

Pritzker said she met with the CEOs and former CEOs of Caterpillar, Boeing and the Campbell Soup Company in recent days to talk about “the efforts their companies are going to make” as well as the efforts of the Business Roundtable, which Caterpillar CEO Doug Oberhelman chairs. She added that businesses are “raring to go” when it comes to pushing for TPP approval in Congress.

Also in Monday’s Morning Trade, another Obama official says “there will be an opportunity to get TPP done this year,” likely meaning after the election:

National Economic Council Director Jeff Zients argued forcefully on Friday for Congress to approve TPP. … “So I am very confident that there will be an opportunity to get TPP done this year, and we’ve got to do everything we can to get it done because, if we don’t, there’s no guarantee when we’ll have our next shot,” he said, arguing the trade deal matters to U.S. workers and businesses. “I can assure you it matters to this president, which is why he will be doing everything he can to get TPP done.”

Clinton Should Ask Obama To Withdraw TPP

Reports like this only serve to further undermine Clinton’s credibility on TPP. Clinton is seen as the “establishment” candidate, and is described in the media as “hugging the Obama agenda,” “bear-hugging Obama,” “embracing Obama ‘as close as she can’” and other similar descriptions.

Obama’s push for TPP therefore harms Clinton as she tries to be seen by voters as the Obama successor. Voters hate the TPP. Having that threat of its passage after the election hanging out there only harms Clinton in the eyes of the electorate. Candidate Clinton has an opportunity to address her TPP credibility problem by asking Obama to withdraw TPP from consideration by Congress, and calling on her supporters and endorsers in Congress to join her in demanding that the agreement be withdrawn.

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This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF. Sign up here for the CAF daily summary and/or for the Progress Breakfast.

Panama Papers Expose Another Way Our Trade Agreements Fail Us

Global Witness recently presented this TED talk on “how exposing anonymous companies could cut down on crime.”

Should our own government help oligarchs, billionaires and their corporations, criminals and terrorists hide their loot, launder their funds, and drain countries and their governments of needed revenue? Or should our government try to help stop this?

So far our government has too often been on the side of the bad guys.

Criminals, drug cartels, human traffickers, arms dealers, tax evaders, corrupt politicians, terrorists, oligarchs and plutocrats can use anonymous, secret shell corporations in tax-haven countries to stash, launder and hide their money. There are trillions of dollars of hidden wealth, much of it accumulated through crime and corruption. The secrecy is draining governments around the world of badly needed tax revenue, and it is enhancing and accelerating poverty and inequality.

Frederick E. Allen explains at Forbes, in “Super Rich Hide $21 Trillion Offshore, Study Says“:

A new report finds that around the world the extremely wealthy have accumulated at least $21 trillion in secretive offshore accounts. That’s a sum equal to the gross domestic products of the United States and Japan added together. The number may sound unbelievable, but the study was conducted by James Henry, former chief economist at the consultancy McKinsey, an expert on tax havens and offshoring. It was commissioned by Tax Justice Network, a British activist group.

The Panama Papers

The Panama Papers exposé by The International Consortium of Investigative Journalists has helped expose how certain countries enable the world’s plutocrats, outlaws, corrupt leaders, terrorists, warmongers, and the rest of the worst to use tax havens and anonymous shell corporations to hide their wealth, dodge taxes, dodge sanctions and even drain the wealth of countries. The reporting so far shows that just one Panama company had created up to 215,000 offshore shell companies for 14,153 clients. The reports link 143 politicians (or their families and close associates) to the use of tax havens to shield huge amounts of money. Again, this is from just one company in just one tax-haven, anonymous shell corporation-enabling country.

This also exposes how our own government is sometimes a party to enabling, even encouraging this activity. Our own government allows anonymous shell corporations here at home, and does not fight countries that enable them abroad when it negotiates so-called “trade” agreements that are supposed to lay down rules for financial interaction.

So-Called “Trade” Agreements, For Example

Our government negotiates what are called “trade” agreements with other countries. These negotiations are an opportunity to set up the rules for financial interactions between countries.

The 2012 U.S.- Panama Trade Promotion Agreement is promoted by our own U.S. Trade Representative’s office as “a comprehensive free trade agreement that provides elimination of tariffs and removes barriers to U.S. services, including financial services.” This agreement was an opportunity to fight global tax evasion, shell-corporation secrecy and other results of Panama’s bank and corporate secrecy. We could have negotiated to require an end to bank secrecy and shell corporations. But bank and corporate secrecy were not even part of the negotiations.

This demonstrates how the warped priorities of our “trade” process are hurting not just U.S. citizens and government but all citizens and governments.

Repeated Warnings

Before the Panama trade agreement was approved, individuals, organizations and even politicians warned repeatedly that the agreement would enhance the ability of corporations and individuals to hide wealth and taxable income from governments and criminal investigators.

In 2011, Vermont Senator Bernie Sanders, for example, gave a speech on the Senate floor opposing the trade agreement, warning that Panama’s entire economic output at the time was obviously too low to be of any benefit to American workers. “Then why would we be considering a stand-alone free-trade agreement with Panama?” Sanders said the real reason for the agreement is that “Panama is a world leader when it comes to allowing wealthy Americans and large corporations to evade taxes.” He said it “will make this bad situation much worse.”

To show how Panama enables people and corporations to hide behind corporate secrecy, an intern at Public Citizens set up her own personal Panama shell corporation. Here’s what The Huffington Post’s Arthur Delaney wrote about this:

It’s so easy for U.S. corporations to set up an offshore tax haven in Panama, an intern could do it. Really! To make this point, Public Citizen’s Global Trade Watch division had one of its interns call up some Panamanian law firms for advice on starting up a shell company.

“Panamanian corporations basically pay no taxes on foreign-derived income,” one man explained to the intern, Jessica. Another said: “You’re protected by the strictest banking secrecy laws in the world,” thereby “totally removing you from the legal trail.”

Public Citizen was warning that the Panama Free Trade Agreement (FTA) did not fight and in fact further enabled the secrecy:

“It would give investors registered in Panama new rights to challenge U.S. anti-tax haven regulations and other initiatives for taxpayer-funded compensation,” said Todd Tucker, research director for Public Citizen’s Global Trade Watch division, in an interview with The Huffington Post.

… Tucker said that the Panama FTA would compromise the Obama administration’s recently-announced crackdown on tax havens, which the president said would save $210 billion over the next decade. (A 2008 Senate report estimated that the U.S. loses $100 billion to tax havens every year.)

With so many groups and individuals warning that the Panama agreement would boost the ability of people and corporations to dodge U.S. taxes using subsidiary shell corporations and secret bank accounts, the Obama administration announced in 2010 a “Tax Information Exchange Agreement with Panama.” This agreement had a loophole letting Panama to set aside tax transparency provisions if Panama decides they are “contrary to the public policy” of Panama. Of course, Panama invoked the loophole because so much of Panama’s income comes from bank secrecy, tax-free status and the ability to set up anonymous Panama shell corporations.

This week Public Citizen’s Lori Wallach issued a statement on the revelations in The Panama Papers:

“Nearly five years after the U.S.-Panama Free Trade Agreement (FTA) vote, the Panama Paper leak proves once again how entirely cynical and meaningless are the American presidents’ and corporate boosters’ lavish promises of economic benefits and policy reforms from trade agreements. The top promise about the benefit of the U.S.-Panama FTA was that it would end Panama’s financial crime secrecy protections and tax haven and money laundering activities, but what this leak shows is that, if anything, Panama’s outrageous financial crime facilitation has intensified while the FTA’s investor protections and official U.S. stamp of approval have increased inflows of dirty money to Panama.

Our Isaiah J. Poole writes, in “Panama Papers Controversy Offers An Opportunity To Push For Transparency“:

The silver lining in the Panama Papers scandal is that the world’s attention is being focused on a global problem in which the wealthy and powerful act beyond the reach of law, playing by a different set of rules from the rest of us. The United States does not have to go it alone in addressing this problem. But our elected officials, and the people running to be our next president, should lead. Supporting legislation that supports more transparency would be a start.

Countries that allow banking secrecy, the formation of anonymous shell corporations and tax-haven status should be considered rogue, outlaw countries. There should be international sanctions against individuals and corporations that do any business with such countries. There certainly should not be “free trade” agreements with such countries.

Harmonizing international tax law and prohibiting anonymous shell corporations should be at the center of our trade negotiations. Unfortunately, our corporate/billionaire-dominated trade process appears to have worked toward just the opposite. We the People and all of trade’s stakeholders – labor, consumer, human rights, environmental, democracy and other such groups – need to have seats alongside our businesses and government representatives at the trade negotiating table.

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This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF. Sign up here for the CAF daily summary and/or for the Progress Breakfast.

Fact-Check This: Arrogance Of Elites Helps Drive The Trump Phenomenon

For some time now most of the people in this country have been under economic pressure. Pay is not going up very much or at all, while living costs keep rising. One recent statistic stands out – 63 percent of Americans would have difficulty raising $500 to cover an emergency, like a sudden need for car repair so they can get to work. Around them the community’s roads and schools and services are in decline.

Most of the public can see this clearly, yet so many elites can’t see at all, and see it or not, they do little or nothing to make things better. This arrogance of our blind, well-fixed elites is helping drive the Donald Trump phenomenon.

Among the “establishment” – the people “in charge” of our “system,” including the news and opinion elites who serve as gatekeepers of information – there is willful blindness to how things have been getting worse for millions of Americans and their communities. They tell the voters they are wrong, that our trade policies are actually good for them.

The voters turn to Trump, who promises he will make it all better, that it will be beautiful.

No one else (except Sanders) is offering hope.

Magazines Are Good For Us

A perfect example of that elite blindness is last week’s Washington Post “Fact Checker” piece, “Trump’s trade rhetoric, stuck in a time warp” by Glenn Kessler.

According to Kessler, Trump “appears to have not been reading newspapers or economic magazines enough to understand that globalization has changed the face of the world economy, for good or bad. In an interconnected world, it’s no longer a zero sum game in which jobs are either parked in the United States or overseas.”

Right, magazines. That’s the ticket. Trump (and his supporters) should read more magazines that publish elites like Kessler, who can use a lot of big words like “globalization” and “interconnected” and tell laid-off workers to suck it up because it’s “no longer a zero sum game” and that’s that. Too bad for you. If they would only read more magazines they would understand why moving their jobs out of the country is good for all of us.

The Trade Deficit Is Good For Us

On Trump’s complaints about the trade deficit, Kessler writes, “Trump frequently suggests the United States is ‘losing money’ when there is a trade deficit, but that reflects a fundamental misunderstanding. Americans want to buy these products from overseas, either because of quality or price.”

This is simply an astonishing statement. In 2015, the U.S. had a goods trade deficit of $758.9 billion. We have closed so many factories here and moved the jobs there that we paid out $758.9 billion more for imports than we received from exports. That did not happen because “Americans want to buy these products from overseas”; that happened because the owners of the factories wanted to dodge American wages and environmental protection costs, and move production to places where workers are made to live in barracks, forced to stand for 10 hours, and get paid squat.

Moving Jobs Out Of The Country Is Good For Us

Then Kessler gets into the old game of saying that moving the jobs out of the country is good for us because we all get to pay lower prices.

Kessler also says all those jobs aren’t gone because we moved millions and millions of jobs out of the country so investors could pay lower wages, pollute all they want and pocket all of the savings; no, the jobs are gone because of “increased productivity.”

“The manufacturing sector has declined as a source of jobs in the United States, but again Trump would be fighting against economic shifts long in the making. American manufacturing has becomes incredibly productive, so fewer workers are needed to make the same number of goods.”

Kessler makes excuse after excuse, but think back to that $758.9 billion goods trade deficit. Imagine what would happen to the U.S. economy – and to the economic lives of all those Trump supporters – if U.S. manufacturers received $758.9 billion of orders right now. And then another $758.9 billion in orders next year. Think about the factories opening, the workers hired, the wage increases as companies fought to get enough workers, the ripple effect for the suppliers, the stores where people shop and the overall economic health of the communities where these workers live and work.

That is the effect of that trade deficit. It is $758.9 billion of orders our factories are not getting, because that is how much more we are importing than making here.

It isn’t about productivity; it’s about a $758.9 billion goods trade deficit.

NAFTA Was Good For Us

Kessler also explains to ignorant, laid-off auto workers whose jobs were moved to Mexico why this was good for them.

As a result of NAFTA, the United States, Canada and Mexico constitute an economically integrated market, especially for the auto industry. Auto parts and vehicles produced in each country freely flow over the borders, without tariffs or other restrictions, as thousands of part suppliers serve the automakers that build the vehicles. This is known as the “motor vehicle supply chain.” In fact, the prospective Ford plant that Trump complains about appears to be intended to produce cars for export from Mexico — and thus would free up production to produce more trucks in the United States.

Visit Flint, Detroit, other places where workers were laid off and factories were shut down and moved to Mexico. Look at the devastation that resulted, and tell people why this is good for them.

Meanwhile the Mexican auto-worker wage is around $26 a day. That’s $26 per day, not per hour. Workers who try to improve conditions are fired. A newspaper Kessler never reads (he reads magazines) reported last year, in “Workers may be losers in Mexico’s car boom” on the working conditions for those Mexican auto workers who have those jobs that used to be in Detroit and Flint and similar places.

“They don’t treat you with humanity. It was exploitation in general,” said Ricardo Gutierrez, 32, who had spent two years at the plant before losing his job. “But there was nothing we could do.”

[. . .] For a job with 12-hour days, often including weekends, that paid about $75 a week — with $3 of that disappearing into union dues — some decided it was not worth it.

[. . .] “They threatened me. They told me if I didn’t sign, nobody was going to give me work, because they were going to tell all the car companies bad things about me,” Rodriguez said. “Since then, I’ve been looking for work. But I can’t find anything.”

But moving jobs to Mexico was really good for all of us, you see.

Laying People Off And Rehiring At Low Wages Is Good For Us

Who doesn’t know someone whose job was shipped to China? Or who was threatened with their job being moved if they try to demand a raise? Or who is afraid their job will be shipped to China if they take a sick day or a vacation day.

The American workforce consists of:

1) People whose jobs were moved out of the country, who when took forever to find a new one (if they ever did) and who get paid much less now. In the process, maybe they lost their house or their retirement savings.

2) People who know someone this happened to.

3) People who are afraid this will happen to them. This creates a climate of fear. They don’t take vacations or sick days. They take on extra work at nights or weekends. They work “on call,” never far from the phone and checking work email into the night. They try to make everyone else look bad so they’re not first on the firing line.

4) People who don’t get raises as a result of 1, 2 or 3. Meanwhile the cost of living, rent, health insurance co-pays, etc. keeps going up and up. Pressure builds. (Trump beckons…)

5) People who are doing really well, maybe write op-eds for a living, have a great stock portfolio, don’t believe 1, 2, 3 or 4 exist at all, and believe “everyone is better off because of free trade.” (They also read magazines, apparently.)

The people in categories 1, 2, 3 and 4 are potential Trump voters. People in category 5 just don’t get it. Kessler and similar elites are in category 5.

It’s Their Own Fault Anyway

Our elite class loves to explain to laid-off workers why their woes are their own fault. They don’t have a college degree. They should have started their own companies. They’re on drugs. They don’t know how to program computers. They’re too fat or lazy or dim to quickly adapt.

Trump beckons… “There will be so many jobs.” “It will be beautiful.”

At least New York Times columnist David Brooks doesn’t try to arrogantly dismiss the concerns of Trump voters. In last week’s “No, Not Trump, Not Ever,” he writes,

Well, some respect is in order. Trump voters are a coalition of the dispossessed. They have suffered lost jobs, lost wages, lost dreams. The American system is not working for them, so naturally they are looking for something else.

Moreover, many in the media, especially me, did not understand how they would express their alienation. We expected Trump to fizzle because we were not socially intermingled with his supporters and did not listen carefully enough. For me, it’s a lesson that I have to change the way I do my job if I’m going to report accurately on this country.

Trump voters are “a coalition of the dispossessed.” Government has done nothing for them. Elites: You’re not going to stop Trump by telling his voters how wrong they are about the economy and the effects of our country’s trade policies. They’re not wrong. You are. They’re not stuck in a time warp. You are.

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This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF. Sign up here for the CAF daily summary and/or for the Progress Breakfast.

What’s The Problem With “Free Trade”?

Our country’s “free trade” agreements have followed a framework of trading away our democracy and middle-class prosperity in exchange for letting the biggest corporations dominate.

There are those who say any increase in trade is good. But if you close a factory here and lay off the workers, open the factory “there” to make the same things the factory here used to make, bring those things into the country to sell in the same outlets, you have just “increased trade” because now those goods cross a border. Supporters of free trade are having a harder and harder time convincing American workers this is good for them.

“Free Trade”

Free trade is when goods and services are bought and sold between countries without tariffs, duties and quotas. The idea is that some countries “do things better” than other countries, which these days basically means they offer lower labor and environmental-protection costs. Allowing other countries to do things in ways that cost less “frees up resources” which can theoretically be used for investment at home.

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“Free Trade”: The Elites Are Selling It But The Public Is No Longer Buying

“Free trade”: The elites are selling it but the public is longer buying it. Look at the support for Democrat Bernie Sanders and Republican Donald Trump, especially in light of Sanders’ surprise 20-point comeback in this week’s Michigan primary. With primaries coming soon in Ohio, Illinois, Missouri and North Carolina, will Sanders’ trade appeal resonate again?

Voters See Free Trade Killing Their Jobs And Wages

Voters have figured out that our country’s current “free trade” policies are killing their jobs, wages, cities, regions and the country’s middle class. Giant multinational corporations and billionaires do great under free trade, the rest of us not so much.

Elites say increasing trade is always good. But when you close a factory here, then open the factory “there” and bring the same goods back to sell in the same outlets, you have “increased trade” because those goods now cross a border. The differential between wages paid here and there goes into the pockets of the executives and shareholders. Those unemployed American workers add to wage pressures on the rest of us. Inequality increases.

There are other bad consequences as the effects of free trade ripple through local economies. The stores and gas stations and restaurants where the workers shopped and dined have to cut back. The factory’s suppliers have to cut back and lay off, too. Property values drop in the neighborhoods where all of those workers lived. The local tax base erodes. Roads and buildings and downtowns deteriorate… (The old lead pipes going to the houses do not get replaced.)

On a national scale, these local effects add up to a tragedy.

The national industrial ecosystem collapses as well. The manufacturing “know-how” migrates out of the country. The schools that taught people how to do what the factory did drop those classes. The investors who know how to evaluate manufacturing proposals go away. The raw materials pipeline migrates away. Reviving the outsourced industries will require tremendous and nationally coordinated investment.

For decades we’ve been told all this is actually good for “us.” But people have come to understand that the “us” this is good for doesn’t include about 99 percent of “us” or our country.

Trade Behind Sanders’ Michigan Upset

Sanders’ Michigan primary upset was most likely driven by his repeated trade message. Michigan’s primary upset demonstrates again that voters have caught on that our country’s trade policies have sent millions of jobs out of the country, put tremendous downward pressure on wages, decimated regions of the country (Flint, Detroit, the “rust belt”) and are dealing a death blow to America’s middle class.

Watch this Sanders ad on the damage our trade deals have done:

While people talk about “NAFTA” (the North American Free Trade Agreement) the term is really used as a shorthand for all of our country’s disastrous trade policies, including the millions of jobs and tens of thousands of factories outsourced to China.

Dave Jamieson, Labor Reporter at The Huffington Post, writes about how trade contributed to Sanders’ upset, in “Why Bernie Sanders And Donald Trump Won The Michigan Primaries“:

The exit polling from Michigan indicates that most voters there are wary of free trade agreements — and that Sanders and Trump drubbed their opponents among those voters.

According to CNN, 58 percent of Democratic voters polled after casting ballots said they believe U.S. trade with other countries takes away U.S. jobs, compared with just 30 percent who said they believe it creates them. Among that group, Sanders won by a whopping 17-point margin: 58 percent to Democratic rival Hillary Clinton’s 41 percent. He won the primary overall by less than a 2-point margin.

[. . .] Trade — and resentment toward U.S. trade policy — has been the sleeper issue in 2016.  By eliminating trade barriers with low-wage countries, the North American Free Trade Agreement and subsequent treaties over the past two decades have encouraged U.S. companies to move jobs to countries where workers are paid less.

Sanders has made a point of pressing Clinton on trade throughout the Democratic debates, including just days ago. The Vermont independent has been a vocal opponent of the Trans-Pacific Partnership, a trade deal with 12 Pacific Rim countries championed by President Barack Obama. Clinton’s stance on the deal hasn’t beennearly as clear.

The New York Times reported in “Trade and Jobs Key to Victory for Bernie Sanders“:

Mr. Sanders pulled off a startling upset in Michigan on Tuesday by traveling to communities far from Detroit and by hammering Mrs. Clinton on an issue that resonated in this still-struggling state: her past support for trade deals that workers here believe robbed them of manufacturing jobs. Almost three-fifths of voters said that trade with other countries was more likely to take away jobs, according to exit polls by Edison Research, and those voters favored Mr. Sanders by a margin of more than 10 points.

At The Washington Post, David Weigel and Lydia DePillis write in, “Voters skeptical on free trade drive Sanders, Trump victories in Michigan“:

The salience of trade, in a state where unemployment had tumbled more than half since the start of the Great Recession, blindsided a Democratic Party that has struggled to find coherence between its labor base and its neoliberal leadership. It also worried Republicans, whose leaders and donors are resolutely in favor of free trade.

“There has been a bipartisan conventional wisdom that the damage done to working-class jobs and incomes are simply part of inevitable changes, ones we cannot and should not challenge,” said Larry Mishel, president of the left-leaning Economic Policy Institute. “Even President Obama is blaming inequality problems on technological change, which is not even a plausible explanation for post-2000 America. People correctly understand that many elites simply believe that wage stagnation is something we cannot change.”

… In Michigan, exit pollsters for the first time asked voters whether they thought trade created or took away American jobs. The “take away” faction made up 55 percent of the Republican primary vote and 57 percent of the Democratic primary vote. Trump won the GOP faction with 45 percent, and Sanders won the Democratic side with 56 percent.

Trump, Too

A YUGE part of Donald Trump’s appeal is his position on trade. A new poll shows that 66% of Republican voters oppose TPP.

Last week’s post, Trump Taps Into Economic Anxiety Resulting From ‘Free Trade’ noted that “Trump is tapping into an economic anxiety felt by many, many Americans. Our trade policies are at the root of this anxiety, and Trump knows it and says it, and people nod their heads.” Here is Trump speaking after the “Super Tuesday” primaries:

Our nation is in serious trouble. we’re being killed on trade, absolutely destroyed, China is just taking advantage of us. I have nothing against China, I have great respect for China but their leaders are just too smart of our leaders, our leaders don’t have a clue. And the trade deficits at 400 billion dollars and 500 billion dollars, are too much, no country can sustain that kind of trade deficit. It won’t be that way for long, we have the greatest business leaders in the world, on my team already, and believe me we’re going to redo those trade deals and it’s going to be a thing of beauty.

Trump has been sounding this message throughout his campaign. Here is Trump on trade from last November:

Trump on Sanders:

“I’ll tell you, there’s one thing that we’ve very similar on,” Trump said during a town hall hosted by MSNBC’s Joe Scarborough and Mika Brzezinski. “He knows that our country is being ripped off big league, big league, on trade.”

Elites Getting The Message

The country’s elites might just be getting the message. The D.C. insider newsletter Daily 202 agrees, in “Six explanations for Bernie Sanders’s surprise win in Michigan“:

1. A message of economic populism, particularly protectionism, is much more potent in the Rust Belt than we understood.

Most Michiganders feel like they are victims of trade deals, going back to NAFTA under Bill Clinton, and they’re deeply suspicious of the Trans-Pacific Partnership. Outsourcing has helped hollow out the state’s once mighty manufacturing core.

Trump and Sanders both successfully tapped into this.

Six in 10 Michigan Democratic primary voters said international trade takes away U.S. jobs, and Sanders won these voters by roughly 20 points, according to preliminary exit poll data reported by CNN. Only 3 in 10 thought trade creates jobs; Clinton won that group.

One-third of voters said Clinton is too pro-business. Sanders won more than four in five of them.

… Clinton, after speaking supportively of the TPP, flip-flopped once the agreement was signed.

Similarly, D.C.-insider Politico, “5 takeaways from Bernie’s Michigan miracle“:

4. Free trade is Clinton’s albatross. Just as the cable networks were calling the shocker for Sanders, an email popped into my inbox from one architect of Obama’s 2008 triumph, who was travelling overseas. “Americans really hate free trade,” he wrote. “Don’t know how else to explain it. Same thing running through republican race.”

Clinton … has the burden of schlepping the albatross of NAFTA with her throughout the Midwest. This is where voters’ lack of trust and her core belief in the value of open markets for American manufacturers collide: When Clinton questions free trade nobody really believes her; Sanders’ thunderous anti-free trade talk taps a vein of deep grievance, his cash advantage allowed him to saturate markets with word of his opposition to TPP and NAFTA – and his debate-stage answer on the topic was pithier and more convincing than Clinton’s.

Will Sanders’ Trade Position Resonate In Upcoming Primaries?

There are primaries coming soon in Ohio, Illinois, Missouri and North Carolina, and there are signs that a fair trade message is breaking through. The Alliance for American Manufacturing took a look at one of these states, Ohio, writing in,” Ohioans Love Manufacturing — and Favor Getting Tough on China Trade“:

And a new statewide poll of likely Ohio voters finds trade will likely be a dominant issue in the March 15 primary, as vast majorities of respondents worry that the United States has “lost too many manufacturing jobs” and think it would be effective to “crack down on foreign countries that violate their trade agreements.”

… Conducted Feb. 27 to March 2 by Public Opinion Research and The Mellman Group, the poll looked at voter opinion on trade, manufacturing and the presidential candidates. Researchers discovered that while support for American manufacturing is nearly universal, majorities of respondents are worried about a shrinking middle class and the impact of manufacturing job loss.

Most participants are also concerned about foreign trade, including with China. Ninety-one percent agreed that it’s time for crack down on countries that violate trade agreements, and 83 percent said that it is important that China is officially declared a currency manipulator.

… Other key findings:

● 93 percent of participants worry that the U.S. has “lost too many manufacturing jobs in this country.”

● 74 percent of participants have unfavorable views of “manufactured goods made in China,” including 77 percent of “conservative” respondents.

● 96 percent of participants are favorable of “manufactured goods made in America,” including 98 percent of “conservative members of the GOP.”

● 92 percent of participants think that “too many jobs are being shipped overseas” and 86 percent are worried they “don’t seem to manufacture anything here in America anymore.”

Illinois, Missouri and North Carolina have also been hammered by outsourcing of jobs caused by trade policies and likely have similar sentiments.

There Is A Better Way To Do Trade

Current U.S. trade policies are written by representatives of multinational corporations with the intent of locking in their dominance while driving wages and environmental costs down. The resulting agreements are clearly in their interests and not the rest of us. Our country’s enormous, humongous trade deficit is a metric for understanding the damage being done to our country.

Now that the public is clearly rejecting the current trade approach, there are alternatives available. Just having non-corporate stakeholders including representatives of labor, consumer, human rights, environmental and other groups at the table would bring about a more fair and just trade regime.

The Congressional Progressive Caucus has released “Trade Principles that Put Workers First in Trade Agreements.” Click through for details, but summarized:

● Protect Congress’ Authority to Set Trade Policy
● Restore Balanced trade
● Put Workers First
● Stop Currency Manipulation
● Expand Buy America Procurement Practices
● Protect the Environment for Future Generations
● Prioritize Consumers above Profits
● Protect Nationhood Rights
● Secure Affordable Access to Essential Medicines and Services
● Respect Human Rights
● Provide a Safety Net for Vulnerable Workers

The 2013 AFL-CIO convention passed Resolution 12: America and the World Need a New Approach to Trade and Globalization, calling for a “people-centered trade policy” that will:

● Create shared gains for the workers whose labor creates society’s wealth.
● Strengthen protections for the environment. Companies must not use trade rules to pit one country’s environmental rules against another, as they seek the lowest-cost place to produce.
● Protect the freedom to regulate in the public interest.
● Set rules for fair competition. Workers of a nation must not be unduly disadvantaged by unfair economic competition resulting from choices about how to organize their economies.
● Include strong rules of origin so that trade agreements are not merely a conduit to ease the global corporation’s race to the bottom.
● Not provide extraordinary privileges to foreign investors.
● Effectively address currency manipulation.
● Retain the ability for all nations to stimulate their economies through domestic infrastructure and spending programs.
● Protect the right of governments to choose the scope and level of public services to provide.
● Protect intellectual property (IP) in a fair and balanced manner.
● Protect the unique U.S. transportation regulatory and legal structure.
● Protect the right of governments to secure the integrity and stability of their financial systems.
● Be negotiated in an open, democratic and accountable manner.
● Be flexible and responsive.

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This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF. Sign up here for the CAF daily summary and/or for the Progress Breakfast.

Trump Taps Into Economic Anxiety Resulting From ‘Free Trade’

Many people don’t “get” Donald Trump’s appeal, ascribing it to his racist, xenophobic talk. But there is another factor, a very strong one, and we had best pay attention.

Trump is tapping into an economic anxiety felt by many, many Americans. Our trade policies are at the root of this anxiety, and Trump knows it and says it, and people nod their heads.

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Sanders Vows To Kill TPP If Elected. Will Clinton?

As the Trans-Pacific Partnership (TPP) “free-trade” agreement was signed in New Zealand by representatives of the 12 participating countries, Democratic presidential candidate Bernie Sanders strongly voiced his opposition and committed to doing what he can to kill the deal if he is elected president.

Rival Hillary Clinton has also stated opposition to the TPP, but will she also vow to kill it if elected?

Sanders Vows To Kill TPP

Saying that TPP follows in the footsteps of failed trade agreements like NAFTA, CAFTA, and Permanent Normal Trade Relations (PNTR) with China, Sanders promised to “fundamentally rewrite our trade policies to benefit working families, not just the CEOs of large, multinational corporations.”

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The Latest Tax-Scam Corporate ‘Inversion’ – Who Pays Instead?

Johnson Controls Inc. and Tyco International PLC have announced a $14 billion merger, with the resulting company pretending to be “Irish.” This is called an “inversion” and is all about dodging taxes.

Johnson Controls is actually based in Milwaukee. Tyco is based in Princeton, N.J. but became “Irish” through its own prior tax-dodging inversion(s). The Washington Post explains this, in “Manufacturing giants Tyco and Johnson Controls agree to merge“:

This is not the first time Tyco, which started as a New Jersey-based research laboratory for the U.S. government in the 1960s before growing into a global behemoth with workers in about 50 countries, has made use of tax-avoidance measures. In 1997, it merged with a Bermuda-based company in another corporate inversion before moving its headquarters to Switzerland in 2008. It moved to Ireland in 2013.

Tyco is also remembered for its former President Dennis Kozlowski, who was convicted in 2005 of various crimes related to looting shareholders and using the money for things like a 2001 $2.2 million party on the island of Sardinia.

The Inversion Tax Scam Game

An inversion allows corporations to pretend to be non-U.S. companies and dodge taxes while still getting the full benefits of our country’s taxes: roads and other physical infrastructure, advanced legal system, educated workforce, police and other protections, military protection, and so on.

November’s post, “Pfizer Buying Allergan So It Can Pretend To Be Irish In Tax Scam” explained how this works: “In other words, the resulting merged company will make and sell products in the same places it makes and sells them now. The same executives will occupy the same buildings. It will receive the same taxpayer-funded U.S. services, infrastructure, courts and military protection that it receives now. But the company will now claim it is “based” in tax-haven Ireland and thereby dodge U.S. taxation.”

The thing is, corporations and shareholders already pay lower tax rates than regular people do. They also get special privileges including “limited liability.” People who make money trading corporate shares get a special, lower “capital gains” tax rate. (This capital gains tax rate is lower because the wealthiest make most of their income from capital gains, and the wealthiest make most of their income from capital gains because the capital gains tax rate is lower.)

But they want more. They want it all. And they’re getting it.

Who Pays Instead?

The billionaires and other shareholders already enjoy special lower tax rates than the rest of us (low capital gains tax rates, the Social Security “cap,” the carried interest loophole, multitudes of other breaks…) This is just one more tax break they utilize as their wealth builds and builds. And that massive accumulated wealth buys more and more privileges and breaks.

We the People of the United States, through our elected Representatives in Congress, allow this. Or, to put it in today’s reality: Billionaires and their corporations pay handsomely for a Congress that allows this.

But when these giant corporations and the billionaires behind them don’t pay their taxes, guess who has to either make up the difference or suffer the cutbacks in the things government does to make our lives and economy better? (Hint: Register to vote today and be absolutely sure to show up and VOTE this time. Don’t be misdirected, demoralized, suppressed or otherwise tricked into not voting. Talk to other people about registering and voting, too.)

The Candidates

The Republican candidates generally propose stopping corporate inversions to avoid U.S. corporate taxes by reducing or even ending U.S. taxation of corporations.

Presidential candidates Bernie Sanders and Hillary Clinton have similar proposals for limiting these “inversions.”

Here’s Hillary Clinton’s statement on the Johnson Controls-Tyco inversion deal:

“It is outrageous when large multinational corporations game the tax code and shelter money overseas to avoid paying their fair share, including through maneuvers like inversions. As I have said throughout my campaign, these efforts to shirk U.S. tax obligations leave American taxpayers holding the bag while corporations juice more revenues and profits.”

Clinton’s “detailed and targeted plan to immediately put a stop to inversions and invest in the U.S.” includes:
● A 50 percent threshold for foreign company shareholder ownership after a merger before an American company can give up its U.S. identity.
● An “exit tax” to ensure multinational companies that change their identity pay a fair share of the U.S. taxes they owe on earnings stashed overseas.
● A crackdown on “earnings stripping,” one of the key benefits of inversions.

Sanders released a statement condemning “corporate deserters”:

“The potential Johnson-Tyco merger would be a disaster for American taxpayers,” Sanders said. “Profitable companies that have received corporate welfare from American taxpayers should not be allowed to renounce their U.S. citizenship to avoid paying U.S. taxes. These corporate inversions must stop.

“My message to these corporate deserters is simple: You can’t be an American company only when you want corporate welfare from American taxpayers or you want lucrative contracts from the federal government,” Sanders continued. “If you want the advantages of being an American company then you can’t run away from America to avoid paying taxes.”

The Sanders Corporate Tax Reform Plan involves:
● Ending the rule allowing American corporations to defer paying federal income taxes on profits of their offshore subsidiaries.
● Closing loopholes allowing American corporations to artificially inflate or accelerate their foreign tax credits.
● Preventing American corporations from claiming to be foreign by using a tax-haven post office box as their address.
● Preventing American corporations from avoiding U.S. taxes by “inverting.” Under Sanders’ bill the U.S. would continue to tax such a company as an American corporation so long as it is still majority owned by the owners of the American party to the merger or acquisition.
● Prevent foreign-owned corporations from stripping earnings out of the U.S. by manipulating debt expenses.
● Preventing large oil companies from disguising royalty payments to foreign governments as foreign taxes.

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This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF. Sign up here for the CAF daily summary and/or for the Progress Breakfast.

What To Watch For Next In The Fight Against The TPP

The Trans-Pacific Partnership (TPP) will likely be back in the news at least for a brief moment next week, when the treaty comes up for a formal signing ceremony involving representatives of the 12 participating countries, including the United States.

The agreement has largely been out of the news since the release of the text in early November. President Obama did mentioned it briefly in his State of the Union address earlier in January. Other than that, there have been no dramatic headlines.

Meanwhile, the public and much of Congress remain solidly opposed to the agreement – as have presidential candidates in both political parties. That, hopefully, means the politics do not line up for a vote on the agreement before the 2016 election. But there’s always the risk that Wall Street will find a way to force a vote sooner. So people should continue pressing Congress to oppose the TPP.

Formal Signing Feb. 4 In New Zealand

The date for the big signing ceremony for TPP was announced last week. It will be Feb. 4 in Auckland, New Zealand. Ministers from participating countries, including U.S. Trade Representative Michael Froman, will participate.

Note that this ceremony does not “trigger” any timeline forcing Congress to vote within a certain number of legislature-in-session days. That clock starts when President Obama submits authorising legislation to Congress.

Report On TPP’s Economic Effect

Next up for the U.S. process is the International Trade Commission’s (ITC) report on TPP’s economic impact. The commission is expected to produce this report by May 18.

The Washington Post PowerPost explained what’s happening with the ITC in “Independent agency holds big sway over TPP trade deal“:

For three consecutive days last week, in eight-minute segments spanning nine hours each day, lobbyists for some of the nation’s biggest corporations, labor unions and trade groups testified before the panel of six appointed bureaucrats.

They included lobbyists for Walmart and Gap Inc., who praised the deal for lowering tariffs on beef, cheese, pencil cases and cotton sweaters. Leaders of the U.S. Chamber of Commerce and National Association of Manufacturers framed the pact as a chance for U.S. companies to sell more goods abroad. Representatives for the AFL-CIO, United Steel Workers and other unions urged the commission to consider the deal’s potential to erode labor conditions and wages.

Corporate lobbyists might frame TPP as “a chance for U.S. companies to sell more goods abroad” because they have to say that in public. What they really mean is that TPP will encourage them to lay off even more U.S. workers, close even more U.S. factories and move even more production to countries with near-slave-labor conditions and no costly protections for the environment. This offshoring lets them pocket the wage and protection differential while enabling them to use havens to dodge U.S. taxes.

Studies by outside groups have determined that whatever TPP’s economic effect is for Wall Street and U.S. multinational corporations, it will not by favorable for U.S. workers or the economy. For example, from December, “Important Report Says TPP ‘Skews Benefits To Economic Elites’“:

The congressionally created Labor Advisory Committee for Trade Negotiations and Trade Policy (LAC) has just released a scathing report that urges President Obama “in the strongest possible terms” to send the Trans-Pacific Partnership “back to the negotiating table” instead of to Congress, saying the treaty “will harm our economy overall.”

… “The TPP is likely to harm U.S. manufacturing interests, cost good jobs, suppress wages, and threaten our democracy and economic security interests,” the report said.

Note that laying off U.S. workers, closing the factory, moving production out of the country, then importing the same goods to sell in the same outlets to the same customers “increases trade” because now those goods cross a border.

Negotiating Implementing Legislation

After the ITC report is released, the administration will formally send Congress an official, final TPP text. Even though TPP’s text has been released to the public, this is a formal action, and will be accompanied by details of how the administration plans to implement TPP.

The administration has begun negotiating with Congress to finalize an implementing legislation bill. The administration is deciding when to submit this formal, final implementing legislation to Congress. That does start a countdown clock as specified in the “fast track” trade legislation passed last year. The White House will do this based on when they think they have the best chance to get TPP passed. Currently, it looks for a number of reasons as if this is likely to be delayed until after the election – but it could come at any time.

Significant Public Opposition

The optimism that a vote on the TPP might not happen until after the election, if ever, is directly related to significant public opposition to the agreement. For example, earlier this month The Washington Post, in “Hundreds of advocacy groups ask Congress to block Obama’s Pacific Rim trade pact,” reported that a “coalition of more than 1,500 interest groups is sending a letter to Congress on Thursday demanding that lawmakers block the Trans-Pacific Partnership (TPP), the 12-nation Pacific Rim trade pact championed by the Obama administration.”

Labor unions, environmental groups, consumer advocates and faith groups are among the 1,525 organizations that signed onto the document, which was organized by the Citizens Trade Campaign. Hundreds of local labor union affiliates have signed on.

Presidential candidates Bernie Sanders and Donald Trump are actively and vocally campaigning against TPP, with Sanders also continuing to attend rallies and lobby other members of Congress to oppose it. Candidates Hillary Clinton and Ted Cruz have gone on record as opposing it because of the public opposition.

Republicans Demanding More Corporate-Favoring Language

Another barrier potentially in the way of a near-term vote is Republican opposition based on TPP not being favorable enough for corporations. For example, Republicans leaders are demanding changes that favor big corporations like tobacco. TPP has a “tobacco carve-out” that can keep countries from being sued when they try to protect public health by helping citizens stop smoking or keep children from starting. This interferes with corporate profits, which under the investor-state dispute settlement “corporate court” provisions countries cannot do.

Non-tobacco companies say that allowing any such “tobacco carve-out” is a bad precedent, opening up a slippery slope of allowing countries to protect citizens from other products that harm or defraud their citizens. They are joining with tobacco companies to demand side letters from participating countries saying they will allow these suits even as TPP’s formal text gives them a choice of opting out of them.

Republicans are also demanding even longer patent monopoly terms for pharmaceutical companies.

Election Issue Risk – Or Lame-Duck Risk?

Usually public opposition does not matter in Congress if Wall Street is in favor of something, as it is with TPP. But in an election year there is a risk of something as overwhelmingly unpopular as TPP becoming an election issue. For example, Sacramento-area Representative Ami Bera is facing opposition after he voted in favor of “fast track” trade legislation. Local Democratic clubs are refusing to endorse him, and there will be a full floor fight over endorsing him at the February statewide Democratic convention. With the election coming up, other “corporate Democrats” are taking note of this.

However, the big corporate lobbying organizations, the Business Roundtable, the Chamber of Commerce and National Association of Manufacturers (NAM) are pushing the administration to move the TPP toward passage as soon as possible. Under the fast-track trade legislation passed last year, the timing of a vote is in the administration’s hands, not those of congressional leaders. If there is a reason to think Congress will pass TPP, the administration will move very fast to get a vote.

But it currently looks like Wall Street, the big corporations, the Obama administration and the Republican Party are lining for a TPP vote in the “lame duck” session after the election. In a lame-duck session members who have retired or been kicked out of office are still allowed to vote – but there is no way for the public to hold them accountable. So for them a TPP vote would be like an audition for a lucrative corporate lobbying position. Also members who have been elected or re-elected with Wall Street financing will be asked to repay their contributors, with two whole years before the public can do anything about it.

Rep. Brad Sherman (D-Calif.) explained on a press call earlier this month why a TPP vote might come in the “lame duck” session. “Wall Street has the money that our current campaign finance system requires,” he said. “Members can take the money for their campaigns, get elected in November, then deliver the votes in December to reward those contributors after the election.”

Either way – whether the vote is orchestrated to come before or after the elections – everything that people can do to push Congress to line up on the side of the public will could prevent a vote from happening at all, or ensure a vote defeating the TPP. Contact Congress today to let your representative know you want that person to come out publicly in opposition to the TPP.

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This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF. Sign up here for the CAF daily summary and/or for the Progress Breakfast.

Government Run Like A Business Led To Lead In Flint’s Water

“If the kids in a rich suburb of Detroit had been drinking contaminated water, we would have done something about it.”
– Hillary Clinton

“There are no excuses. The governor long ago knew about the lead in Flint’s water. He did nothing. As a result, hundreds of children were poisoned. Thousands may have been exposed to potential brain damage from lead. Gov. Snyder should resign.”
– Bernie Sanders

You might have heard that there is lead in Flint’s water. You’re not going to believe how much. And you’re not going to believe how bad lead exposure is for people. But you’ll probably believe it happened because government-hating Republicans set aside democracy so Flint’s residents couldn’t stop them from running government “like a business” and cutting government spending.

Trade Policies Sent The Jobs Away

Michigan is one state that has been hard hit by our country’s trade policies. Once considered the center of the automobile industry, factories and jobs were sent out of the country to places where people are exploited and barely paid, and the environment is not protected. (Yes, we let them do that.)

The result has been absolutely devastating (see “ruin porn“) to Michigan cities like Detroit and Flint as jobs disappeared and people who could afford to move to try to find jobs did just that. The rest of the city’s residents are left in poverty amidst miles of boarded-up, abandoned and falling-down buildings and homes, empty storefronts, and absolutely overwhelmed and underfunded public services. Help from the state and federal governments is not forthcoming.

Run Government Like A Business

Rick Snyder is a businessman (CEO, venture capitalist) who in 2010 campaigned for governor on running government like a business, promising to be the CEO governor who would create jobs. Michigan was starved for jobs, first from Wall-Street-sponsored deindustrialization, then from the Wall-Street-caused crash and recession/depression. So any promise of jobs went a long way. Maybe it was time to try turning government over to someone wealthy from outside government who said he knew better than government how to run government. Daily Beast noted at the time, “there is a more than a hint of plutocrats-know-best in Rick Snyder’s campaign pitch.”

But government in a democracy is nothing like a business. It is supposed to organize itself to deliver services and make people’s lives better, not profit off the people. Managing government and business requires entirely different skill sets and mindsets. (Also, that thing about businesses “creating jobs?” That’s not what businesses strive to do; they strive to cut costs and eliminate jobs. According to the Daily Beast, “While Snyder was on the board of Gateway [a U.S.-based computer company that had its heyday in the 1990s but ceased independent operations in 2007], the company’s workforce contracted from 21,000 American workers in 2000 to 7,400 workers in 2003.”)

Emergency Manager Law, Setting Aside Democracy

In 2011, Republicans passed a controversial law allowing the governor to run government like a business and appoint a CEO-style “emergency manager” when a city is considered to be financially irresponsible (i.e., too black). Under the law, it does not matter that the people of the city already elected a mayor, council and other leaders. The governor sets the election aside, brings in an emergency manager to take control of the local government, reduce its size and cost, and privatize public property, no matter the effect on the people there.

Like a turnaround CEO brought in from another company, the emergency manager has few connections to the community. Cut services, cut costs, strip, streamline, just like a business would do. (Such cities are typically surrounded by well-off “white-flight” suburban areas that are not required to financially or otherwise participate in solving the problems.)

The affected communities didn’t like that, and, unlike a business, could still do something about it. Michigan’s emergency manager law was repealed by referendum in 2012. So Republicans re-passed it in a lame duck legislative session. But this time they included a small appropriation, which under Michigan law meant it cannot be subject to a voter referendum. That’s that; the board has spoken, everybody get in line, all row in the same direction, play on the same team, run the ball down the field, just like in a business, or get out. Except unlike in a business there is no “get out” – you still live there.

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Public Health Emergency

Flint’s public health emergency started when the city’s emergency manager “saved money” ($8.5 million over 5 years) by switching the city’s water source from Detroit via a pipeline to drawing water from the polluted Flint River. People involved in water systems will tell you that river water is acidic, which leaches lead and other metals from pipes, but they were not asked. The emergency managers could have added corrosion control chemicals to the water, but that would be more “government spending,” and they didn’t.

This happened in April 2014. Immediately people started complaining about the taste and smell of the now-brown water that was coming into their homes. For 18 months people complained. They started getting rashes. People’s hair was falling out. The government, run like a business, did what businesses do: they entered “damage-control mode,” denied there was a problem, blamed the messengers and tried to spin things their way. City and state officials said the water was OK. But there were growing concerns that there was a problem.

A Flint pediatrician, Dr. Mona Hanna-Attisha of Hurley Children’s Hospital, compared blood test results for 1,746 children in Flint before and after April 2014 and discovered an increase in lead levels. “But when we announced the results, the state called me ‘an unfortunate researcher causing near hysteria,’ an ‘irresponsible researcher.’”

Then, in September, 2015, a study from Virginia Tech‘s Marc Edwards was released showing dangerous levels of lead in the water. Then in October city officials finally said, yes, something is wrong with the water and people should not drink it.

What was happening? Lead and other metals were “leaching” into the water as corrosion affected old pipes. From April 2014 until October 2015 the people of Flint were forced to drink contaminated water, filled with toxic amounts of lead and other metals.

How Much Lead Are We Talking About?

How much lead is in Flint’s water? Brace yourself.

The Washington Post provided a way to understand just how much lead, in “This is how toxic Flint’s water really is“:

In the spring of 2015, city officials tested water in the home of LeeAnne Walters, a stay-at-home mother of four and a Navy wife. They got a reading of 397 ppb, an alarmingly high number.

But it was even worse than that. Virginia Tech’s team went to Walters’ house to verify those numbers later in the year. They were concerned that the city tested water in a way that was almost guaranteed to minimize lead readings: They flushed the water for several minutes before taking a sample, which often washes away a percentage of lead contaminants. They also made residents collect water at a very low flow rate, which they knew also tended to be associated with lower readings.

So the Virginia Tech researchers took 30 different readings at various flow levels. What they found shocked them: The lowest reading they obtained was around 200 ppb, already ridiculously high. But more than half of the readings came in at more than 1,000 ppb. Some came in above 5,000 — the level at which EPA considers the water to be “toxic waste.”

The highest reading registered at 13,000 ppb.

Five parts per billion of lead are a concern. When lead reaches 15 parts per billion, the EPA says you are in trouble. 5,000 parts per billion is considered “toxic waste.”

From April 2014 until October 2015 (and later, and still) the people of Flint were drinking water with up to 13,000 parts per billion of lead in it.

What Lead Does To Health, Especially Children

Lead has terrible and irreversible effects on people’s health, especially children. Even low levels – 5 parts per billion – of exposure have been shown to have many subtle health effects.

According to the CDC, short-term exposure can cause people to feel:
● Abdominal pain
● Constipated
● Tired
● Headaches
● Irritable
● Loss of appetite
● Memory loss
● Pain or tingling in the hands and/or feet
● Weak

But if a pregnant woman is exposed, it can damage a developing baby’s nervous system. “Even low-level lead exposures in developing babies have been found to affect behavior and intelligence. Lead exposure can cause miscarriage, stillbirths, and infertility (in both men and women).”

In children lead exposure has “lasting neurological and behavioral damage.” It leads to intellectual disabilities, serious difficulty controlling impulses, retaining information and learning in school. It is difficult or impossible for them to later have thought-intensive jobs.

Lead can also keep the body from getting nutrients required for cell development and the growth of strong teeth and bones. (One way it does this is to “inhibit or mimic the actions of calcium.”)

According to the Natural Resources Defense Council’s (NRDC) “How Lead Poisons the Human Body,” “The lead builds up in soft tissue — kidneys, bone marrow, liver, and brain — as well as bones and teeth. … Some scientists believe that low-level chronic lead exposure in childhood can alter secretion of the human growth hormone, stunting growth and promoting obesity.”

The NRDC document has a warning for the future: “Unfortunately, most children do not present overt symptoms of poisoning. Because their symptoms (ranging from irritability to stomach upset) may not be immediately recognizable as lead-related the majority of cases go undetected.”

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Cover Up?

Between April 2014 and October 2015, when studies confirmed that the water was poisoning people in Flint, people fought to get the city and state to do something. The water smelled, was brown, tasted bad and people were experiencing symptoms from it. And doctors were warning that people were showing signs of lead poisoning but could not yet confirm from where it was coming. All along the state kept saying this was not the result of the emergency manager’s decision to switch Flint’s water source to cut government spending, business-style.

It’s not as if people around the country were not trying to sound the alarm.

In May 2014, just a month after the water switch, the city learned that trihalomethanes ( TTHMs) were above levels allowed in the Clean Water Act, but did not inform residents until January 2015, and did not switch back to safe water.

In October 2014, GM noticed that the water was corroding engines and started trucking water in from elsewhere.

In March 2015, The New York Times reported:

After Flint changed the source of its drinking water last spring, Ms. Mays said, she noticed a change in the water’s color and odor. Then she started having rashes, and clumps of her hair fell out. When the city issued a boil order, she stopped using the water for drinking and cooking. Now her family spends roughly $400 a month on bottled water.

… Flint officials insist that the city’s water is safe. They say that the issues of odor and color are separate from the question of whether the water meets federal standards, and that no link to health problems has been proved.

…“I don’t feel hopeful,” Mr. Palladeno said. “At one time, I loved this town. I still love it. There’s good people here. But the governing is killing us. I think we need a federal intervention.”

The Atlantic wrote in July 2015:

Melissa Mays looks around the emergency room at a frail, elderly man in a wheelchair and a woman with a hacking cough and can’t quite believe she’s here. Until a few months ago, she was healthy—an active mother of three boys who found time to go to the gym while holding down a job as a media consultant and doing publicity for bands.

But lately, she’s been feeling sluggish. She’s developed a rash on her leg, and clumps of her hair are falling out. She ended up in the emergency room last week after feeling “like [her] brain exploded,” hearing pops, and experiencing severe pain in one side of her head.

Mays blames her sudden spate of health problems on the water in her hometown of Flint. She says it has a blue tint when it comes out of her faucet, and lab results indicate it has high amounts of copper and lead. Her family hasn’t been drinking the water for some months, but they have been bathing in it, since they have no alternative.

The State of Michigan, under the direction of Governor Rick Snyder, tried to keep the story under wraps, and deny there was a problem, apparently even after they knew there was a serious problem. As late as September the state was still denying there was a problem with the water from the Flint river, and taking issue with the studies saying otherwise. Michigan Live wrote, “State says data shows no link to Flint River, elevated lead in blood“:

Angela Minicuci, a spokeswoman for the Michigan Department of Health and Human Services, said blood lead levels in Flint have remained fairly steady for children under 16 years old since the city switched from Lake Huron water to the river.

However, while denying there was a problem, the governor’s office was secretly ordering filters be supplied to Flint.

Professor Marc Edwards from Virginia Tech University says the reason the state was still denying the link could be that they altered data from samples. CNN reports in “Did Michigan officials hide the truth about lead in Flint?

Documents and emails show discrepancies between two reports detailing the toxicity of lead samples collected by the Michigan Department of Environmental Quality and the city of Flint between January and June 2015, Professor Marc Edwards from Virginia Tech University said.

… According to Edwards, the Michigan Department of Environmental Quality and the city of Flint collected 71 lead level samples from homes when they were required to collect 100. The final report from the Department of Environmental Quality however, only accounted for 69 of those 71 samples.

Edwards said those two discarded samples were “high-lead” and would have lifted the “action level” above 15 parts per billion.

But wait, there’s more,

Edwards said the samples should have been taken from homes with lead pipes. The reports say they were, but Michael Glasgow, then-assistant supervisor of the Flint water plant, said this is not true. Glasgow told CNN the records were not complete, and the sampling teams did not know which homes had lead pipes.

“In essence, the state took an ‘F-grade’ for Flint water’s report on lead and made it into an ‘A-grade,'” Edwards told CNN.

But wait, there’s more,

The memo notes that residents were instructed to “pre-flush” taps before samples were taken, a practice that has been shown “to result in the minimization of lead capture and significant underestimation of lead levels.”

Michigan’s Department of Environmental Quality notified the city on June 25, 2015 that they had found high lead levels in some of the samples. It was after that notification that the samples changed, and showed no more lead.

Now Legionnaire’s Disease, Too

On top of the lead crisis, Legionnaire’s disease is breaking out in Flint, also apparently a consequence of the problems with Flint’s water. So far 87 cases of Legionnaire’s Disease, 10 of them fatal, have turned up.

Federal Emergency

Saturday President Obama declared a federal emergency in Flint. This means the federal government, the Federal Emergency Management Agency and other agencies can start to help the people there. FEMA will provide water, filters and cartridges and other items, up to $5 million. However, he did not declare Flint and its county, Genesee, to be disaster areas, which would bring additional funds and assistance, because that status has always been used for natural disasters rather than man-made (in this case we should say Republican-made) ones.

This crisis is terrible news for Flint. It comes as Flint was entering a period of revival. The University of Michigan had opened dormitories for its Flint campus and the result was new restaurants and shops springing up. Housing prices were finally stabilizing and increasing.

What Must Be Done

Michael Moore wrote a public letter to President Obama (with a petition, click through) asking for President Obama to provide federal assistance:

● The CDC here at once to truly assess all of the disease and damage that has been forced upon the people of Flint.

● FEMA has to supply large water containers in every home in Flint — and they must be filled by water trucks until the new infrastructure is resolved.

● The EPA must take over matters from the State (can the governor be removed and replaced like he did to the mayor of Flint?). Immediately.

● You must send in the Army Corps of Engineers to build that new water infrastructure. Otherwise, you might as well just evacuate all the people from Flint and move them to a white city that has clean drinking water — and where this would never happen.

The people in Flint are going to need complete health evaluations and care for any problems that show up. But this is also a long-term public health crisis. People will need evaluation and care for years.

Flint’s children that have been affected are going to need special teaching and other assistance, as well as other help for the rest of their lives.

Rachel Maddow

The reason this story has come to the attention of the nation is because Rachel Maddow has been pounding on it and making people listen. Here are links to some of the segments Maddow has shown. (If you only watch one, watch this one.)

● Dec. 15, 2015 Lead-poisoned children prompt emergency declaration from mayor

● Dec. 18, 2015, Kids’ toxic test results raised alarm over water supply: Doctor

● Dec. 19, 2015, Flint toxic water tragedy points directly to Michigan Gov. Snyder

● Dec 22, 2015, Snyder admin allowed Flint to drink toxic water despite warnings

● Dec. 23, 2015, Flint community scrambles to cope with state’s water error

● Dec. 29, 2015, Michigan governor apologizes for Flint water

● Jan. 4, 2016, New calls for federal probe of Snyder admin in Flint water fiasco

● Jan. 6, 2016, Flint water concerns ‘blown off’ by state: Snyder staffer e-mail

● Jan. 7, 2016, Water donations run dry in Flint, no action from Governor Snyder

● Jan. 11, 2016, Meager progress in Flint toxic water crisis by Michigan’s Snyder

● Jan. 13, 2016, Spike in cases of Legionnaires’ eyed for tie to Flint toxic water

● Jan. 15, 2015, Clinton chastises Snyder on Flint, state calls for federal help

Other Resources

Listen to “Not Safe to Drink,” a special documentary about the Flint water crisis

● Daily Kos, Anatomy of a community poisoned: The water disaster in Flint, Michigan

How To Help

How to help Flint, Michigan

How you can help people in Flint during the water crisis

Ways to help Flint residents during water crisis

Bottles for the Babies

One more thing. Like a business, Flint is telling customers they still owe for the poisoned water. They are sending shut-off notices to residents telling them they will be cut off if they do not pay up.

Government is not a business. It shouldn’t be thought of as a business and especially not run like a business. Government is supposed to represent us, We the People, and help us have better lives. It should serve us, not profit off of us and disregard our lives.

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This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF. Sign up here for the CAF daily summary and/or for the Progress Breakfast.