I’d say this sums it all up:
Conservatives deride using government to help American companies export their goods as “picking winners and losers,” even when the winners are American exporters and workers.
So Republicans have closed the Export-Import (Ex-Im) Bank, hopefully temporarily. The Ex-Im Bank provides financing guarantees to customers of American exporters if they cannot obtain financing elsewhere. This helps American companies make the sale.
Republicans have shut down the Export-Import (Ex-Im) Bank as of midnight, July 1. They are touting it as a blow against “corporate welfare” and “crony capitalism.” But who are the real winners here?
It’s certainly not us workers.
Last year the bank helped finance almost $30 billion worth of U.S. exports — things made here, by workers employed here. Germany, Japan, China and many other countries have similar agencies. Now they will be picking up that business. Our trade deficit will increase. Jobs, wages and factories will move elsewhere.
The United States does not have an economic/industrial policy that supports American manufacturing. Meanwhile, other countries support their industries. As a result, the U.S. has an enormous, humongous trade deficit, trading American assets for foreign-made commodities. We lose jobs, factories, companies, and entire industries to countries that understand the long-term benefits to their economies of national investment in key, strategic industries. On the other hand, a few people here get enormously wealthy from selling off our net worth in the short term. So, there’s that.
Our enormous, humongous trade deficit is a measure of how many jobs, factories, companies and industries we are losing to our pro-Wall Street trade policies. A trade deficit drains our economy of wealth, jobs and future economic opportunity.
Corporations are notorious for sneaking things into laws and regulations before the public can find out and rally to stop it. And we know from the conservative Supreme Court arguments against the Affordable Care Act that even what amounts to a typo can be used to change the obvious meaning and intent of a law.
These are reasons we need to see the text of the Trans-Pacific Partnership before Congress votes to preapprove it with fast track trade promotion authority (TPA). They are pushing what is literally a pig in a poke on us. We the People need to open that bag and have a good, long look inside before fast track buys the TPP pig in our name.
Negotiated in secret by corporate representatives, it is probable that the Trans-Pacific Partnership (TPP) is loaded with things the big corporations have snuck in. We already know from leaks that TPP contains provisions allowing companies to sue our government in “corporate courts” if they feel a law or regulation is cutting into their profits. What else is in there?
The Bureau of Economic Analysis reported today that the gross domestic product (GDP) fell at an annual rate of 0.7 percent in the first quarter of 2015. Much of the reason is our trade deficit.
The Bureau of Economic Analysis reported today that the gross domestic product (GDP) fell at an annual rate of 0.7 percent in the first quarter of 2015.
Our enormous, humongous trade deficit is literally draining our economy. The trade deficit is because we import things we used to make here and sell there, but we allowed companies to move the factories and jobs there in order to force wages down here. This makes a few plutocrats vastly wealthy but it is killing jobs, wages, factories and our middle class.
Trade Deficit Subtracted 2 Percent From Growth
The White House issued an analysis by Jason Furman, Chairman of the Council of Economic Advisers, explaining this was because of “harsh winter weather, tepid foreign demand, and consumers saving the windfall from lower oil prices.” The statement largely (and correctly) blamed “net exports.”
From the White House analysis: “A decline in the trade balance was another major contributor, partially reflecting the continued drag on U.S. exports from the slowdown in foreign growth. Indeed, net exports subtracted nearly 2 full percentage points from quarterly GDP growth.”
“Decline in the trade balance,” “tepid foreign demand” and “net exports” are other ways of saying our “trade” policies have caused an enormous, humongous trade deficit that sends away jobs, factories and our ability to maintain a middle class. A negative “net export” balance means we import more than we export, which means we have a trade deficit. We have had a trade deficit every year since the neoliberal “free trade” and “free market” ideology ascended in the late 1970s. But you won’t find the words “import” or “trade deficit” anywhere in the statement.
Now that we know what “net exports” really means, here it is again: “net exports subtracted nearly 2 full percentage points from quarterly GDP growth.” The trade deficit subtracted almost 2 percentage points from the quarter’s growth.
Close Factories Here And Move Them There = Trade Deficit
We have a trade deficit because we make “trade” deals with countries that sell to us without buying from us and then we don’t do anything to fix it. A lot of this “trade” deficit is because companies here close factories in the U.S. that made goods to sell in our retail outlets and move them to countries with little democracy, resulting in low wages and few pollution regulations. They send the goods back here to sell in the same outlets. Our “trade” deals let them do this with no cost or penalty. The executives and investors then pocket the difference in wages and cost of controlling pollution for themselves. This is why the plutocrat class that now controls our government supports these so-called “trade” deals. (It’s also why these “trade” deals have to be kept secret until Congress preapproves them with Fast Track.)
The Wall Street Journal’s At A Glance blog explains how the trade deficit cut into growth:
Trade was the biggest drag on top-line GDP figures in the opening months of the year. U.S. exports of goods fell by the most since the first quarter of 2009–the midst of the recession–while overall imports climbed. The widening deficit subtracted 1.9 percentage points from economic growth. A stronger dollar has tamped down overseas demand for U.S.-made goods while making foreign products cheaper to import. Meanwhile, congestion at West Coast ports constrained trade earlier in the year.
In “Yes, Trade Deficits Do Indeed Matter for Jobs,” Josh Bivens explains (in economese) at the Economic Policy Institute how the trade deficit is creating jobs, but not here – especially in manufacturing. He blames the trade deficit largely on currency manipulation by our so-called “trading partners”:
Trade deficits occurring when the U.S. economy is stuck below full employment and at the zero lower bound (ZLB) on short-term interest rates are a drag on economic growth and overall employment, period. And this describes the U.S. economy today, so a reduction in the trade deficit in the next couple of years spurred by a reversal of trading partners’ currency management would boost growth and jobs.
[. . .] if the trade deficit was reduced in coming years by ending widespread currency management by our trading partners, the United States would see a pick-up in output and employment growth.
[. . .] Yes, the relationship between trade deficits and jobs can be nuanced, but it’s really not that hard. In today’s U.S. economy, trade deficit reductions engineered by ending currency management would boost U.S. output and employment, and trade deficit reductions will (all else equal) always and everywhere boost manufacturing employment.
This Is The Result Of Intentional Policy Choices
From the recent post, “Enormous, Humongous March Trade Deficit Creating Jobs Elsewhere“:
This didn’t just suddenly happen. Globalization is not some kind of inevitable natural process of history that has caught up with us. This was and is the result of intentional policy choices, designed to force deindustrialization, break unions, drive down wages and benefits and increase inequality as that pay differential is pocketed by a few. This is the result of the “free market, free trade” ideology that rose up in the late 70s. Free trade policy was and is designed to give a few plutocrats and their giant corporations — “the 1 percent” — increased power over governments.
We have a trade deficit (negative “net exports”) because we import more than we export. A lot of this is imports of things that used to be made here by people who used to be paid here. Congress lets this go on because it makes a few plutocrats vastly wealthy – at the expense of the rest of us.
The trade deficit is eating our economy, closing factories, killing jobs, forcing wages down. But the White House isn’t allowed to say that because they want fast track trade authority to pass next week.
The House is expected to vote on fast track trade promotion authority as soon as next week. If it passes, the corporate-negotiated Trans-Pacific Partnership (TPP) is a done deal — even though it is still secret. Why is presidential candidate Hillary Clinton still silent on this?
The Money Wants TPP — The People Do Not
TPP is the most important economic issue facing the Congress between now and the election — because it could happen, and because if it does the results will be terrible for working people. The game will be further rigged in favor of the 1 percent and against the rest of us. It will increase corporate power over governments — and us.
The Money wants TPP, because it will be very, very good for them. The people do not want fast track/TPP because it means increased corporate power, fewer jobs, more pressure, and lower pay.
A corporate/plutocrat-bought Congress is being told by The Money — Wall Street, the giant corporations and the plutocrats — to pass it, and for some incomprehensible reason President Obama will sign it. Street-level activists are fighting tooth and nail to get the word out and rally opposition. This is now. This is urgent. This is the focus.
This is an either/or. There is one side, and there is the other side. This is us vs. them. This is The Money vs. We the People. There is no in-between on this one, no waiting it out, no holding back, and no fence-sitting. It is one or the other. Not choosing a side on this is really just choosing the wrong side.
Clinton Still Silent On Fast Track
Here’s the thing: Fast track essentially pre-approves TPP. Fast track comes up for a vote as soon as next week. If fast track passes, TPP is a done deal. Where is Clinton on this?
Hillary Clinton is the leading Democratic candidate for president. A lot of activists are looking for reasons to enthusiastically support Clinton’s candidacy. She has taken great, progressive positions on immigration and other issues. But it is still early; opinions are not yet hardened. Things can change.
So far Clinton is trying to stay on the fence about fast track and TPP:
“There are questions being raised by the current agreement. I don’t know what the final provisions are yet,” she said. “I want to judge the final agreement. I have been for trade agreements, I have been against trade agreements.”
But fast track preapproves that “final agreement.” The vote on fast track in the House could be as soon as next week. After next week, TPP could be a done deal. Clinton owes it to the public to show up and lead on this. She especially owes it to the activists. They are fighting in the streets over this. They would appreciate some help. They will remember who was there with them — and who wasn’t.
Political Calculation vs. The Right Thing
Clinton’s advisors are calculating that this whole controversy will fade away after fast track’s passage makes TPP a done deal. They are trying to get her past this without taking a stand that risks putting off either side. They are betting that with time people will forget and get over it.
But to the activists on the street, this is the big one — just like the Iraq War vote was. People will remember, because people who know about it are fighting in the streets today, doing everything they can to stop this. And those people will say that taking no position is the same as being for it, because it is allowing it to happen, without laying down in front of the moving fast-track train.
Some people care about the issues, not the horse race. They care about substance, not image. Not everyone cares, to be sure, or is even paying attention yet. But in the long run the positions are what will matter, not the day’s calculated image. This is because the results of this will not fade away; they will matter to people’s lives.
For example, Nike wants TPP because it lowers the tariff on shoes imported from Vietnam and Malaysia. But when this forces New Balance to shut down their U.S. manufacturing, that will be in the news, people will feel it, and they will look back and say “Where was Clinton?”
The Iraq War vote looked like the pragmatic political position to take, but that political calculation came with a cost in the long run because the consequences of that vote mattered to people’s lives. Doing the right thing comes with a reward in the end.
Sitting back and hoping important issues just go away won’t cut it this time. You can’t make it just go away. Better yet, the way to make it just go away is to grab it by the horns and move it in the right direction.
Looking For A Champion Who Pushes For Transformative Change
People are impatient for a real champion. This is not a time to be safe, sit back, read polls, and wait out controversy. The economy simply is not working for most of us, and people know it. People see that the game is rigged and want proposals for transformative change.
There is no question that TPP is on the wrong side of this, and will result in even more hardship for the very people Clinton says she is campaigning to help. Fast Track preapproves TPP and the vote is coming up very, very soon.
Staying on the fence on this one is a mistake. By staying on the fence she risks being remembered as “No-Position Clinton” on the issue that matters most.
President Obama says progressives who warn that trade laws let corporations overrule U.S. law are “making this stuff up.” Two attacks on U.S. laws and regulations are underway right now, illustrating how the “corporate courts” provisions in the Trans-Pacific Partnership (TPP) would open our country up to attacks from foreign corporations.
“They’re making this stuff up.”
Sen. Elizabeth Warren, legal scholars and others have been sounding the alarm about the Investor-State Dispute Settlement (ISDS) provisions that have leaked to the public from the secret TPP negotiations. They are warning that the ISDS provisions, as the New York Times put it, “would allow foreign corporations to sue the United States government for actions that undermine their investment ‘expectations’ and hurt their business, according to a classified document.”
As the Senate begins consideration today of the “fast track” trade promotion authority for the Trans-Pacific Partnership, President Obama says that Sen. Elizabeth Warren is expressing concerns because she is “a politician.”
The president’s statement demeaning what Warren (D-Mass.) is saying as just what politicians say makes it seem that he thinks that listening to constituents and doing that they want (a.k.a. “representative democracy”) is a bad thing. But Warren and almost every other Democrat have come to understand that trade agreements that send American jobs out of the country – and the fast track process that is used to push them through – have become core issues that could trigger severe public reaction. This Fast Track vote is politically the third-rail equivalent of the 2002 vote to authorize Bush to invade Iraq.
Senate Majority Leader Mitch McConnell has scheduled the voting process for trade promotion authority, commonly known as “fast track,” to begin as early as Tuesday. If passed, fast track prohibits the Congress from amending trade agreements no matter what problems might show up, requires these agreements to be voted on within 90 days, limits the debate Congress is allowed and prohibits filibusters.
Passing fast track will essentially pre-approve the secret Trans-Pacific Partnership (TPP) “trade” agreement before the public gets a chance to know what is in it, as well as future trade deals regardless of who is president or what the rigged, corporate-dominated negotiating process produces.
With a vote coming as soon as Tuesday, presidential candidate Hillary Clinton has not yet spoken out for or against fast track.
President Obama is scheduled to visit Nike’s Oregon headquarters on Friday to promote the Trans-Pacific Partnership (TPP). Yes, Nike – a company that grew to billions by outsourcing jobs to overseas sweatshops, a company that sets up P.O.-box subsidiaries in tax havens to avoid paying U.S. taxes, a company that uses threats to extort tax breaks from its “home” state.
Phil Knight, head of Nike, is now worth $23 billion because America’s trade policies encourage companies like Nike to create and move jobs outside of the U.S. The 23rd-richest American is one more symbol of the kind of inequality that results from outsourcing enabled and encouraged by these trade policies. Workers here lose (or never get) jobs; workers there are paid squat; a few people become vastly, unimaginably wealthy.
Meanwhile Massachusetts-based New Balance struggles to manufacture its athletic footwear in the U.S. TPP will remove tariffs on imported Vietnamese and Malaysian shoes, benefiting Nike and wiping out New Balance’s efforts to maintain its manufacturing here.
If you make things and sell them, you do better over time than if you borrow to buy things. If you send jobs and factories out of the country, you end up with devastated cities like Baltimore.
Sure, a few people get rich from that, but 99 percent of us get poorer. How hard is it to see that?
You may have heard that gross domestic product growth was dismal in the last quarter. You may have heard that there were riots in Baltimore. You may not have heard that these are both at least partly caused by our enormous, humongous and continuing trade deficit.