What Obama Got Wrong In His State of the Union Remarks On Trade

The President briefly spoke about trade in his State of the Union speech. He admitted that “past trade deals haven’t always lived up to the hype” but then he called for doing more of the same. He called for Trade Promotion Authority (TPA) — “Fast Track” — to pass the Trans-Pacific Partnership (TPP).

Here is what President Obama said about trade (from pre-released transcript):

21st century businesses, including small businesses, need to sell more American products overseas. Today, our businesses export more than ever, and exporters tend to pay their workers higher wages. But as we speak, China wants to write the rules for the world’s fastest-growing region. That would put our workers and businesses at a disadvantage. Why would we let that happen? We should write those rules. We should level the playing field. That’s why I’m asking both parties to give me trade promotion authority to protect American workers, with strong new trade deals from Asia to Europe that aren’t just free, but fair.

Look, I’m the first one to admit that past trade deals haven’t always lived up to the hype, and that’s why we’ve gone after countries that break the rules at our expense. But ninety-five percent of the world’s customers live outside our borders, and we can’t close ourselves off from those opportunities. More than half of manufacturing executives have said they’re actively looking at bringing jobs back from China. Let’s give them one more reason to get it done.

But…

1) Exports are good for an economy, but exports and imports must be balanced. While our exports are up, our imports are up even more. This is why we have an enormous, humongous trade deficit. When imports are greater than exports it means jobs, factories and if the imbalance continues eventually the necessary pieces of industry ecosystems are lost. Our trade deficit is enormous and our trade has been out of balance since the 1970s.

Here is Paul Krugman, writing at his blog Monday,

The immediate problem facing much of the world is inadequate demand and the threat of deflation. Would trade liberalization help on that front? No, not at all. True, to the extent that trade becomes easier, world exports would rise, which is a net plus for demand. But world imports would rise by exactly the same amount, which is a net minus. Or to put it a bit differently, trade liberalization would change the composition of world expenditure, with each country spending more on foreign goods and less on its own, but there’s no reason to think it would raise total spending; so this is not a short-term economic boost.

Krugman also points out that current trade tariffs and protections are low, so a “trade” deal doesn’t really remove imposing barriers. He suspects that groups representing the giant multinationals, like the Chamber of Commerce, are really pushing this deal because it rigs the system in their favor and “will yield them a lot of monopoly rents.” Which leads to Obama’s next argument.

2) This idea that “we” should “write the rules” to “level the playing field” is interesting. Yes, China would like to write rules of trade in its favor. But it doesn’t follow from this that we should allow the giant multinational to write the rules in ways that rig the system against everyone but them. And this is exactly what TPP does. TPP is being negotiated in secret with participation of corporate representatives while representatives of labor, consumer, democracy, human rights, women’s, environmental and other “stakeholder” groups are kept away from the table. Only a small part of TPP is about “trade” at all, while parts of it elevate corporate rights above the rights of citizens in democracies to make their own laws. (For example tobacco companies can sue governments for profit-loss from anti-smoking campaigns. Under similar “trade” agreements this is already happening.)

And speaking of rigging the system …

3) Trade Promotion Authority (TPA) hardly “protects American workers.” Also known as “Fast Track,” TPA essentially pre-approves trade agreements before anyone even sees them. TPA pre-rigs the approval process by forcing an up-or-down vote with no amendments allowed within 90 days of anyone even seeing the agreement for the first time. This means the public doesn’t have time to fully comprehend what is in the agreement and rally opposition if opposition is warranted. Fast Track shifts the public and press focus to “will they kill the whole agreement” rather than on what is actually in the agreement. (This is how they were able to push Wall Street deregulation through the last “Citibank Budget” deal.)

4) There is nothing in past or upcoming trade agreements that will incentivize bringing manufacturing and other jobs back to the US, which the President promised. On the contrary, TPP includes Vietnam which boasts a minimum wage of 30 cents per hour and has a terrible record on labor rights. This tells us what we need to know about the incentives for manufacturers to bring jobs back.

5) One of the biggest factors in American job loss is currency manipulation, but TPP does not address currency manipulation. (TPP is being negotiated in secret but leaks and other indications tell us that there is nothing to address currency manipulation.) Jared Bernstein wrote about this in a January 9 NY Times op-ed, How to Stop Currency Manipulation, saying,

“… there’s one thing the administration can do that will both win over some opponents and address one of the biggest issues in global trade: add a chapter on currency manipulation.

… In a compelling argument for including a chapter in the Trans-Pacific Partnership to restrict currency manipulation, C. Fred Bergsten of the Peterson Institute for International Economics estimated that America’s trade deficit “has averaged $200 billion to $500 billion per year higher as a result of the manipulation” by the rest of the world, resulting in the loss of one million to five million jobs.

The loss of 1-5 million jobs to currency manipulation is a lot of jobs, yet this isn’t even in the agreement!

6) The President said that “past trade deals haven’t always lived up to the hype.” Please see last week’s post What You Need To Know When Obama Talks Trade for a breakdown of what has happened with previous trade agreements. Also see the Public Citizen report, Prosperity Undermined: Fast-Tracked Trade Agreements’ 20-Year Record of Massive U.S. Trade Deficits, American Job Loss and Wage Suppression for a more comprehensive look at what these trade agreements have cost US workers, our manufacturing ecosystem and our economy — just so that a few executives and billionaires can get even wealthier.

Boost Wages Or Trade Agreements — But Not Both

The President wants to address income inequality. But these trade agreements have been a major driver of income inequality. American worker wages have been frozen for decades as workers were threatened with their jobs being moved out of the country. A few at the top have pocketed this wage differential for themselves. Trade deals that pit American workers and the “costs” — higher wages, environmental protections, etc — of democracy against non-democracies where people don’t get good wages and the environment is not protected work against the President’s stated goals.

Josh Bivens writes at the Economic Policy Institute blog, Trade Agreements or Boosting Wages? We Can’t Do Both,

To put it plainly, if policymakers—including the President—are really serious about boosting wage growth for low and moderate-wage Americans, then the push to fast-track TPP and TTIP makes no sense.

… the most staid textbook models argue precisely that for a country like the United States, expanded trade should be expected to (yes) lift overall national incomes, but should redistribute so much from labor to capital owners, so that wages actually fall. …

Also see Obama vs. Obama: The State of the Union’s Self-Defeating Trade Pitch at the Eyes on Trade blog for “a side-by-side analysis of how Obama’s push to Fast Track the TPP contradicts his own State of the Union agenda.”

A Few Other Reactions

At a Wednesday press conference with Rep. Louise Slaughter (D-NY) and other House Democrats, Rep. Slaughter said, “The president said last night that previous trade deals had not lived up to the hype. That may be the understatement of the century. We will fight this tooth and nail, and I believe we are going to win.”

Also at the press conference, Rep. Pete DeFazio (D-OR) said, “Fast track is designed to embed into these so-called free trade agreements a bunch of things that are detrimental to the American public.”

Coalition for a Prosperous America (CPA) “The Coalition for a Prosperous America (CPA) advocates a new direction in trade policy focusing upon balanced trade, a comprehensive US competitiveness strategy, and producing more of what we consume here. We oppose Congress ratifying the past, wrongheaded trade strategy which produces trade deficits, job loss, and incentives to offshore manufacturing for re-import into the US.”

Alliance for American Manufacturing (AAM): “By ignoring the concerns of industry, workers, and majorities of the House and Senate, he’s not only putting the TPP at risk, he’s putting a whole lot of auto jobs in the US at risk, too.”

Communications Workers of America (CWA):

“…[W]e cannot stand with the President in his alliance with Republican Majority Leader Mitch McConnell, House Speaker John Boehner, the U.S. Chamber of Commerce and Business Roundtable to send more U.S. jobs offshore, undermine U.S. communities and weaken U.S. sovereignty under the guise of “free trade.” The Trans-Pacific Partnership (TPP) has much more to do with protecting the investment of multinational corporations and maneuvering around China than lowering trade barriers.

Public opposition to “fast track authority” and the TPP is strong, and growing more vocal everyday. Consumer groups, workers, environmentalists, people of faith, students and more have united to stop this attack on U.S. jobs and communities. Conservatives, who do not believe that nations should relinquish their sovereign power to secret tribunals, also are on board.

Over the past 20 years, millions of U.S. jobs have been lost. The jobs U.S. workers had been promised over those years of course never materialized. In fact, just two trade deals – NAFTA and the Korea Free Trade Agreement — have resulted in the loss of nearly 800,000 jobs. The promoters of the TPP are again promising job gains through growth in U.S. exports. But we can do the math. Any new jobs will be dwarfed by the flood of jobs that go offshore.

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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 You Need To Know When Obama Talks Trade

President Obama is likely to use the State of the Union to push for passage of the Trans-Pacific Partnership (TPP) and the rigged “fast track” trade promotion authority. Here are some facts to counter the expected public relations campaign.

Of Course “Trade” Is Good

But first, of course “trade” is a good and necessary thing. We all trade with others. This is how people, businesses and even countries “make a living.” Critics of our country’s current trade policies are not “anti-trade”; they are anti-trade-deficit. They are opposed to the use of so-called “trade” agreements to promote the interests of the largest multinational and Wall Street corporations at the expense of America’s working people, its middle class, its domestic “Main Street” companies, our environment and the country’s long-term economic health.

Compare the timeline of a chart of our country’s trade deficits with the increase in the economic tensions of our middle class, our manufacturing regions and other economic troubles:

Trade policies that are rigged to boost the interests of the giant, multinational corporations at the expense of the rest of us are not good at all. “Trade” agreements and “offshoring” of jobs have become synonymous. But “trade” doesn’t at all have to be about moving American jobs and factories out of the country so that executives can pocket the pay difference and the difference in the cost of enforcing environmental protections.

The Recent Korea-U.S. Free Trade Agreement Is An Example

During the State of the Union speech the president is expected to feature the owner of a small business that has increased its exports to South Korea since the Korea-U.S. Free Trade Agreement (KORUS FTA) was signed. This is ironic. Americans believe in and support small business – hence the use of the owner of one – but our country’s trade deals have been negotiated primarily for the benefit of giant, multinational corporations, and their interests often collide with the interests of smaller, “Main Street” businesses.

Some American businesses have indeed added sales and workers as a result of the KORUS FTA. But the fact is that since that trade agreement was signed the U.S. trade deficit with Korea has grown 50 percent – a metric that has resulted in 50,000 American jobs lost. In other words, since the KORUS FTA went into effect, South Korea is selling much more to us than the country is buying from us – and this problem is getting worse and worse. And as the trade deficit chart above shows, this just happens to be the record of our “trade” agreements.

Please take a look at this Census Bureau data page, “Trade in Goods with Korea, South.”

The KORUS FTA went into effect in March 2012. That month we sold $4,224 million in goods to South Korea and we imported $4,788.2 million in goods.

In November 2014 the U.S. had a $2.8 billion monthly trade deficit with Korea – the highest monthly U.S. goods trade deficit with Korea on record. We had $6.3 billion in imports from Korea (a record) and $3.5 billion in exports to Korea that month. In the first two years of the KORUS FTA, the U.S. goods trade deficit with Korea went up by 50 percent (a $7.6 billion increase).

So since March 2012 our exports to South Korea decreased from $4.224 billion to $3.5 billion. Meanwhile, our imports increased from $4.788 billion to $6.3 billion.

The KORUS FTA has hit American small businesses harder than large ones. According to U.S. Census Bureau data, small firms with fewer than 100 employees saw exports to Korea drop 14 percent while firms with more than 500 employees saw exports decline by 3 percent. According to “Report Funded by Big Business Explains to Small Businesses What’s Best for Them” at Public Citizen’s Eyes on Trade blog, “As a result, under the Korea FTA, small businesses are capturing an even smaller share of the value of U.S. exports to Korea (just 16 percent), while big businesses’ share has increased to 72 percent.”

This is the record: The KORUS FTA so far has resulted in a trade deficit of $2.8 billion a month, representing the loss of around 50,000 jobs. It has been harder on smaller businesses than larger ones, allowing the larger businesses to push the smaller businesses aside. But in the State of the Union, the president is going to bring attention to the owner of one small business that increased its exports and hired more workers, and use this to say to make the public think that the KORUS FTA has been good for our country – and that we should enter into more agreements like it.

Other Trade Agreements

The KORUS FTA certainly is not our only “free trade” agreement. NAFTA is the shorthand name many Americans use for our trade agreements generally. How has NAFTA – the North American Free Trade Agreement – worked out for the U.S.?

The Public Citizen Global Trade Watch report titled, “NAFTA at 20: One Million U.S. Jobs Lost, Mass Displacement and Instability in Mexico, Record Income Inequality, Scores of Corporate Attacks on Environmental and Health Laws” compared the promises with which NAFTA was sold to the results measured 20 years later. Some of the effects of NAFTA that are highlighted in the report include:

● a $181 billion U.S. trade deficit with NAFTA partners Mexico and Canada,
● one million net U.S. jobs lost because of NAFTA,
● a doubling of immigration from Mexico,
● larger agricultural trade deficits with Mexico and Canada,
● and more than $360 million paid to corporations after “investor-state” tribunal attacks on, and rollbacks of, domestic public interest policies.

The data also show how post-NAFTA trade and investment trends have contributed to:

● middle-class pay cuts, which in turn contributed to growing income inequality;
● U.S. trade deficit growth with Mexico and Canada 45 percent higher than with countries not party to a U.S. Free Trade Agreement,
● U.S. manufacturing and services exports to Canada and Mexico that have grown at less than half the pre-NAFTA rate.

What about our deal to bring China into the World Trade Organization? Obviously South Korea is small potatoes when compared with China and the data bear this out. In August 2012 the Economic Policy Institute estimated that the U.S. lost 2.7 million jobs as a result of the U.S.-China trade deficit between 2001 and 2011, with 2.1 million of those lost in the manufacturing sector. Along with these job losses, U.S. wages fell due to the competition with cheap Chinese labor, which has cost a typical U.S. household with two wage-earners around $2,500 per year.

The Commerce Department reported earlier this month that our November trade deficit with China was $29.8 billion. That’s $29.8 billion in one month! Our exports to China decreased $200 million to $11.1 billion and our imports from China decreased $100 million to $40.9 billion from the previous month. Think how many jobs would be created here if $29.8 billion of additional orders came in to companies making and doing things inside the U.S., and this continued every month!

Balance Needed

Trade should be balanced or economies are thrown out of whack. “Trade” is supposed to mean we buy from them and they buy from us. It is not supposed to mean we buy from them and later they use the money to buy us. It is not supposed to mean we send jobs and factories out of our country so that a few executives and shareholders can pocket the wage difference and the reduction of environment enforcement costs.

Exports are great, but if a deal to increase exports increases imports even more, we have a trade deficit and are still at a net loss of jobs, factories and wealth. This means that we are still offshoring jobs so that executives can line their pockets with the wage differential. This has been the case with the KORUS FTA. This has been the case with NAFTA. This has so obviously been the case with China. The last thing We the People need is even more of this.

The reason our trade policies are working out this way is because the beneficiaries of this kind of trade deal are the ones controlling and negotiating these trade deals. The giant, multinational corporations and Wall Street make money from offshoring U.S. jobs and production – partly because our tax laws encourage this activity. The rest of us, including our “Main Street” businesses and the country at large, are net losers. This is obvious to anyone who drives through much of the country or who talks to regular, working people. This is obvious to anyone who looks at the timeline of that trade deficit chart and compares that to the economic shifts of our last few decades.

Our trade negotiating process is rigged from the start. Giant, multinational and Wall Street corporate interests are at the negotiating table. Consumer, labor, environmental, human rights, democracy, health and all the other stakeholder representatives are excluded and the results of these negotiations reflect this. A rigged process called “fast track” is used to essentially force Congress to pre-approve the agreements before the public has a chance to analyze and react to them.

Obviously the giant, multinational and Wall Street corporations would want the public to believe that everyday small businesses gain from our trade deals, when in fact they do not. It is less obvious why President Obama would want to present at the State of the Union the story of one small business that does not reflect the reality of the trade deals he is promoting.

Rep. Alan Grayson Explains Trade Deficit Harm

Rep. Alan Grayson (D-FL) is trying to get people talking about the trade deficit and the harm it is doing our wages, our jobs and our potential for mutual prosperity. He’s right to do this.

Last week Grayson spoke at a press conference with several other House Democrats and representatives from a broad coalition of organizations, expressing opposition to “Fast Track” Trade Promotion Authority. Fast Track is a weird process whereby Congress essentially approves of trade deals before even reading them. I wrote about this press conference in “House Members, Activist Leaders Form United Front Against Trade Scheme.”

Now Grayson is emailing his short talk out to his list. This is Grayson’s letter, which repeats what he said at the press conference:

Trade is a simple concept. You sell me yours, and I’ll sell you mine.

That’s not what’s happening.

What’s happening is that day after day, month after month, and year after year, Americans are buying goods and services manufactured by foreigners, and those foreigners are not buying goods and services manufactured by Americans. We are creating millions — no — tens of millions of jobs in other countries with our purchasing power, and we are losing tens of millions of jobs in our country, because foreigners are not buying our goods and services.

What are they doing? They’re buying our assets.

So we lose twice. We lose the jobs, and we are driven deeper and deeper into national debt – and, ultimately, national bankruptcy. That is the end game.

This is not free trade; it’s fake trade. We have fake trade.

That’s why before NAFTA was enacted and went into effect, this country never had a trade deficit as much as $140 billion a year, while every single year since then — for 20 years now — we have had a trade deficit of over $140 billion a year.

We have had a[n average annual] trade deficit of half a billion dollars now, for the past 14 years.

Look back all across history. Look all across Planet Earth. You will see that the 14 largest trade deficits in the history of mankind are – all [of them] — the American trade deficits for the last 14 years.

(I cannot rule out the possibility that somewhere on Alpha Centauri there might be a country that has a larger trade deficit. But here on Planet Earth, no.)

Listen, we are in a deep, deep hole, thanks to fake trade. Thanks to fake trade, right now, 1/7th of all the assets in this country — every business, every plot of land, every car – 1/7th of all the assets in the country are now owned by foreigners. And ultimately, if we keep going the way we’re going, they all will be.

That’s why we have the most unequal distribution of income [among all industrial nations] in our country, [and] the most unequal distribution of wealth in our history.

We’re in a deep, deep hole. And there’s a simple rule about holes: When you’re in a hole, stop digging. Stop digging!

So I’m calling upon our leaders. I’m calling upon the American people. Let’s stop digging.

Let’s not only have a trade policy. For once, let’s also have a trade deficit policy.

Let’s deal with the reality that has robbed the American Middle Class now for decades. Let’s address it, and let’s defeat it. That’s what I’m calling [for], right now.

Let’s stop digging deeper. Let’s raise ourselves up, let’s climb out of this hole, and rebuild the American Middle Class. Thank you very much.

Courage,

Rep. Alan Grayson

Grayson’s email includes this chart showing the history of how our enormous, humongous trade deficit has grown and grown:

This is a big deal, because Grayson reaches a lot of people, and information spreads. So, maybe Grayson’s efforts will help drive awareness of the the trade deficit problem.

What Is The Trade Deficit?

The trade deficit is a direct measure of how much more our country buys from other countries than it sells to other countries. It also directly measures dollars and jobs literally drained from our economy. The trade deficit — contrasted with the budget deficit which we largely owe each other inside the country — really is like a family or business budget and we are spending more than we are taking in. In fact, we have been spending more than we are taking in for a long time.

Last month our trade deficit was $39 billion. That is $39 billion worth of business that went to non-US factories and other providers representing $39 billion worth of jobs and store purchases and the jobs and taxable revenue all of that represents. And that was in just one month.

Meanwhile China reported that their trade surplus has increased by almost 50%. “China 2014 trade surplus rockets to record high”:

China’s trade surplus soared by almost half last year to a record $382 billion, the government announced Tuesday…

Exports increased 6.1 percent to $2.34 trillion in 2014, while imports rose 0.4 percent to $1.96 trillion, the General Administration of Customs said on its website.

That translated into a trade surplus of $382.46 billion, the highest ever and a 47.2 percent increase on 2013.

That trade surplus represents a direct transfer of $382 billion of wealth into China from other countries — largely our own — while our trade deficit represents a direct transfer of wealth out of our own country, mostly to China.

Grayson’s little chart shows how long our trade deficit has been draining jobs, factories, and prosperity from our country. Nothing like this has ever occurred before in human history. If you look at the effect on the country you can trade the years of factories closings and community devastation in much of the country to the lines on this chart. You can trace the “hollowing out’ of America’s middle class by following the lines on this chart.

Budget Deficit Or Trade Deficit — Which Matters More?

You have heard a LOT about the budget deficit over the years. Conservatives and Wall Street have put a lot into making people scared about the budget deficit. This scare machine has been effective and as a result most people don’t even know that the budget deficit is way down from where Bush left it. (“By 73 percent to 21 percent, the public says the federal budget deficit has gotten bigger during the Obama presidency.”)

The reason conservatives and Wall Street are investing so much in budget-deficit propaganda is that if people are fearful about the budget deficit they demand certain policies that are, to say the least, a lot more beneficial to conservatives and Wall Street than to regular, working people. These include allowing cuts to the federal budget (and its oversight of and push-back against the giant corporations) that would be unthinkable without budget deficit fear stampeding the public. (The budget deficit was caused intentionally to force these results.)

However, if people come to understand and worry about the very real trade deficit they will demand policies that are very good for regular, working people as well as for “Main Street” businesses that make or do things in America. Policies that balance trade would increase jobs and wages, general prosperity and tax revenue.

These policies to help balance trade include outlawing currency manipulation which makes foreign-made goods less expensive relative to American-made goods, enforcing existing trade rules and finally renegotiating the trade deals that have caused our massive trade deficits (China, in particular).

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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.

Watch TPP Outsource A Congressman’s Office

If we let Congress pre-approve the Trans-Pacific Partnership (TPP) with Fast Track we won’t need Congress anymore. Corporations will decide what the rules should be.

PS: This is for real. The next round of “NAFTA-style” trade agreements actually let corporate courts — with corporate attorneys as the judges — stop countries from passing laws that interfere with profits. Treaties like these already let tobacco companies sue countries to block government-sponsored anti-smoking campaigns. This is for real.

So essentially passing Fast Track outsources Congressmembers’ jobs! See for yourself:

Get ready now for the Fast Track Fight. Call your member of Congress and let them know you say NO FAST TRACK.

And visit No Fast Track at nofasttrack.org

Get Ready Now For Fast Track Fight

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As soon as the new Congress is sworn in next year, the fight over Fast Track will begin. Start preparing now.

David Cay Johnston, explains in “Full Speed Ahead On Secretive Trade Deal”: (Note the ‘t’ in his last name. I am David C JohnSON.)

Early next year, after the 114th Congress begins meeting, a new Washington coalition will move quickly to approve the Trans-Pacific Partnership (TPP), a 12-nation trade agreement that will destroy American jobs, restrict individual liberty and burden American taxpayers. Oh, and it will do so without any real debate.

… The agreement would even let foreign companies seek damages if U.S. or state rules threaten their profits. Plaintiff companies would not have to sustain damages to collect damages from American taxpayers. They would only need to show a threat to their profits, leaks from the trade talks have revealed. Under previous trade deals, American taxpayers already have paid $3 billion in damages, with $14 billion in claims still in litigation.

Johnston explains that this will be pushed using Fast Track:

Fast track = little debate

Don’t expect a vigorous congressional debate exploring the agreement and its implications, especially for workers, before it becomes the law of the land.

Obama wants Congress to fast-track the agreement, which would mean perfunctory congressional hearings followed by an up-or-down vote within 90 days, no amendments allowed. That congressional Republicans favor fast-tracking has an “Alice in Wonderland” quality, given GOP attacks on his supposed dictatorial use of executive orders. (He has issued far fewer executive orders per year than any other president in the last century.)

Secrecy and fast track are not how democracy is supposed to work. They are also a glaring contradiction of candidate Obama’s transparency promises in 2008.

There will be a massive effort to push this through. Richard McCormack has the story on this effort over at Manufacturing and Technology News, in President Obama, Wall Street Financiers, Corporate CEOS And Members Of Congress Meet Together To Plan Strategy To Sell And Pass Free-Trade Agreements, (note that TPA is commonly know as “Fast Track.”)

The country’s top executives from Wall Street and corporate America are working directly with President Obama and members of his cabinet and appointees on passing a free-trade agenda that is unpopular among the president’s natural constituents of democrats, labor unions, environmental and consumer groups and the American public as a whole.

Obama, his staff and members of Congress met directly with CEOs of major multinational corporations in Washington, D.C., on December 11 to discuss the “ground game” — as his aides described it — needed to persuade Americans on the benefits of free trade and to lobby Congress on passage of Trade Promotion Authority [TPA] and the Trans-Pacific Partnership [TPP] next year.

… In joining the meeting of his Export Council, Obama sat between council co-chairs James McNerney, CEO of Boeing, and Ursula Burns, CEO of Xerox Corp., and encouraged them — along with two dozen other executives from companies like IBM, Archer Daniels Midland, Dow, Pfizer and Deloitte — to help him “make the sale. . . It’s going to be very important for business to be out there and champion this and show that this is ultimately good for you, for your suppliers, for your workers,” Obama said.

Obama told Boeing CEO McNerney to galvanize his company’s suppliers “and their workers . . . presumably in every congressional district [to make] the case so [that] it’s not just a bunch of CEOs calling [members of Congress] but it’s people who understand they’ve got a stake in it.”

So there will be a massive, well-funded push by the administration and the giant multinational corporations starting early next year. They will promise jobs and prosperity. They will push Congress to pass Fast Track, which essentially pre-approves trade agreements before anyone even knows what is in them. The model for doing it this way is the recent “Citibank Budget.” Citibank snuck a provision deregulating derivative trading with taxpayer-protected funds into the budget at the last minute. So the debate was over whether voting against it would shut down the government, and not over the merits of the provision.

We Need Balanced Trade, Not More Imports

The President says he is pushing these trade deals because we need to increase exports. He is right that it is a good thing to increase exports, but the Wall Street Journal explains the problem with this, in U.S. Manufacturing Rebound Lags Behind Work Sent Abroad, “The U.S. has continued to grow more reliant on imports from China and other Asian countries despite a much-discussed trend toward “reshoring” of manufacturing, a study by the management consulting firm A.T. Kearney Inc. shows.”

In other words, the things we have been doing to gain jobs by increasing exports have cost us even more jobs than we gained, because we increased imports more than we increased exports. What we need is balanced trade, not more trade.

Fast Track essentially pre-approves trade agreements before people get a chance to read them, analyze them and rally opposition. It prevents Congress from fixing problems in the agreements. This is the wrong way for our country to do this.

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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.

How “Citibank Budget” Push Foreshadows “Fast Track” For Trade Deals

It is worth examining how the process was rigged to push that budget deal through Congress over the weekend that contained Citibank-written derivative deregulation and all kinds of other goodies for the rich and powerful. That’s because the “cromnibus” formula will be formalized in the next big deal, in a process called “fast track.”

Congress passed the “cromnibus” (continuing resolution for omnibus budget) right at the deadline for another government shutdown. (After they extended the deadline, actually.) The budget contained a Citibank-written provision that undoes some Dodd-Frank Wall Street regulations. It authorizes a cut in many people’s pensions by up to 60 percent, severely cuts the IRS budget and its ability to collect taxes, dramatically expanded the ability of big money to influence elections, reduced the EPA’s authority, and included many other provisions that could not have passed in the light of day. This budget “deal” was pushed through Congress using a rigged process that kept representative democracy from stopping it.

What lessons can we learn from the way the “Citibank” provisions in the budget deal were pushed through? How do these lessons apply to the next big fight?

Continue reading

Here’s What ’60 Minutes’ Should Have Reported About Infrastructure

“60 Minutes” ran a report Sunday, “Falling apart: America’s neglected infrastructure,” describing the seriousness and damage to the economy caused by our country’s crumbling infrastructure.

Here are a few choice quotes, but really you should click through and watch the whole thing (and then come back here):

  • “Except for the stimulus nothing much has happened. It is ‘just another example of political paralysis in Washington.’ “
  • “1 of every 9 bridges (70,000) is structurally deficient.”
  • “It all comes down to funding.”
  • “These all are tragedies waiting to happen.”
  • “32% of major roads in America are in poor condition.”
  • “It’s falling apart because we haven’t made the investment.”
  • “Public spending on infrastructure has fallen to its lowest level since 1947.”

How bad is the problem? The American Society of Civil Engineers (ASCE) issues a regular “report card” on “the condition and performance of the nation’s infrastructure.” The 2013 grade is D+ and the cost to get us back to normal is now at $3.6 trillion. (The longer we wait the more the cost increases.) Because of this, The World Economic Forum’s Global Competitiveness Report ranks the U.S. as 16th in the quality of its infrastructure.

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Starting Saturday: A Week Of Action Against Fast Track, TPP

A “week of action” starts Saturday against “fast-track” trade promotion authority legislation, which would be used to usher in the Trans-Pacific Partnership (TPP) “trade” (i.e. corporate rights) agreement.

The #StopFastTrack Week of Action is timed to coincide with international mobilizations and runs through next Friday, November 14. Sign up for the Thunderclap, attend one of the upcoming Fast Track protests, write a letter to the editor and get your own organizations to schedule an email blast directing supporters to StopFastTrack.com or your own action tools.

This weekend President Obama flies to Asia for a week of meetings. Part of the agenda is to get TPP finalized. In response, a broad coalition of labor, environmental, consumer and other “stakeholder” groups has delivered to congressional leaders a petition signed by more than 500,000 people opposing “fast-track” authority for the pact. It is these groups that are launching a week of action to drive up awareness of the dangers of Fast Track and TPP.

TPP is a twelve-nation pact that setting up new rules for approximately 40 percent of the global economy. While part of TPP is about relaxing tariffs and quotas, more of the agreement gives corporations new rights under financial regulations, limits the ability of governments to require that public procurement be done with in-country suppliers, gives the big pharmaceutical companies new powers over medicine patents and limits the ability of governments to set their own environmental policies. A section of the agreement called “investor-state dispute settlement” lets companies sue governments for doing things that limit corporate profits – even limiting a country’s ability to launch anti-smoking campaigns.

The giant, multinational corporations are going to try to sneak fast-track authority through the Congress because it greases the skids, making TPP almost inevitable, no matter how many people and organizations oppose it. We have to try to stop this.

Resources

Join the #StopFastTrack Thunderclap

Twitter hashtag: #StopFastTrack

For more information please visit:

Stop Fast Track

CWA: “Stop the Sneak Attack on Democracy!”

#StopFastTrack Week of Action – Citizens Trade Campaign

Flush the TPP: Nov. 8 to 14: Week of Action to Stop Fast Track and Unjust Trade

AFL-CIO: No Fast Track and sign their petition: Tell Congress to Stop Fast Track

Events

Here’s an initial list of events taking place throughout the country:

California
Sacramento Community Forum on the TPP & Fast Track – Stop the Sneak Attack on Democracy!
Wednesday, November 12 * 5:30pm
SEIU Local 1000
1325 S St * Sacramento, CA
RSVP Online: https://www.facebook.com/events/730070970381918/
Contact: Xiomara Castro, xiomara@citizenstrade.org

#StopFastTrack Overhead Light Brigade
Monday, November 10 * 5:00pm
Taylor Street Overpass over I-8
RSVP Online: https://www.facebook.com/events/858778814167627/
Contact: Kali Gochmanosky, kali@citizenstrade.org

San Diego #StopFastTrack Rally
Wednesday, November 12 * 4:00pm
Outside Congresswoman Susan Davis’ Office
2700 Adams Ave * San Diego, CA
RSVP Online: https://www.facebook.com/events/783089711732353
Contact: Kali Gochmanosky, kali@citizenstrade.org

Colorado
Rally: Stop the Sneak Attack on Democracy
Friday, November 7, 2014 *12:00pm
Outside Rep. Jared Polis’ Office
4770 Baseline Rd. * Boulder, CO
RSVP Online: bit.ly/FastTrackRallyCO
Contact: Carolyn Bninski, Carolyn.Bninski@gmail.com

Veterans’ Day Fast Track Protest (MoveOn Metro Denver Council)
Tuesday, November 11 * 5:00pm
Veterans Park at the Capitol
200 E. Colfax Ave * Denver, CO
Contact: Laura Avant, lavant04@comcast.net

Florida
Fast Track Opposition Commitment Appreciation Presentation
Date and Time TBA * Contact Event Organizer
South Florida AFL-CIO
4349 NW 36th St * Miami, FL
Contact: Fred Frost, frost180@bellsouth.net

Reminding Rep. Castor to Help #StopFastTrack (Tampa MoveOn.org)
Thursday, November 13 * 12:00pm
Outside Rep. Castor’s Office
4144 N Armenia Ave * Tampa, FL
RSVP Online: https://www.facebook.com/events/677294822367924/
Contact: Chris Radulich, cradulich@yahoo.com
Contact: Harriet Heywood, harrietheywood@gmail.com

Illinois
Mike Quigley Has Mail (#StopFastTrack Literature Drop)
Saturday, November 8 * 2:00 – 4:00pm
Lakeview/Wrigleyville Neighborhood * Chicago, IL
Contact: Carson Starkey, iltrade@citizenstrade.org

Rally Against Fast Track in Elgin
Sunday, November 9 * 1:00pm
Eligin Public Library
270 North Grove Avenue * Elgin, IL
Contact: Carson Starkey, iltrade@citizenstrade.org

#StopFastTrack Accountability Phone Bank
Monday, November 10 * 5:00 – 7:00pm
Workers United Office
333 South Ashland Ave * Chicago, IL
Contact: Carson Starkey, iltrade@citizenstrade.org

Massachusetts
Protest: Stop the Sneak Attack on Democracy, Rep. Neal!
Wednesday, November 12 * 8:00am
Outside the Boston Harbor Hotel
70 Rowes Warf * Boston, MA
Contact: Pat Fiero, patfiero@yahoo.com

Oregon
Fast Track Protest at Sen. Wyden & Rep. Blumenauer’s Offices
Friday, November 14 * 12:00pm
Gather Outside Rep. Blumenauer’s Office
729 NE Oregon St * Portland, OR
Contact: Elizabeth Swager, elizabeth@oregonfairtrade.org

Pennsylvania

#StopFastTrack Rally
Thursday, November 13 * 12:00pm
Outside Rep. Dent’s Office
3900 Hamilton Blvd * Allentown, PA
Contact: Amy Conahan, amy@citizenstrade.org

Washington
Stop Fast Track Rally (Occupy Bellingham)
Saturday, November 8 * 2:00 – 6:00pm
Holly and Railroad * Bellingham, WA
Contact: Dianne Foster, diannefoster234@gmail.com

Stop the Sneak Attack on Democracy! Light Brigade Action
Tuesday, November 11 * 5:00 – 6:30pm
Federal Building
915 2nd Ave (btw Marion St & Madison St)* Seattle, WA
RSVP Online: https://www.facebook.com/events/297265820474582/
Contact: Gillian Locascio, gillian@washingtonfairtrade.org

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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.

Why You Shouldn’t Be “Optimistic” About Corporate “Tax Reform”

Washington elites are “optimistic” about another “reform.” That’s never good.

According to an article in The Hill this week, “WH adviser ‘optimistic’ for corporate tax reform“:

A top economic official in the White House on Tuesday expressed confidence that the next Congress can pass corporate tax reform.

… Obama has proposed lowering the corporate statutory rate from 35 percent to the high-20s while eliminating many deductions. Camp also proposed to lower the rate, but down to the mid-20s.

Camp has proposed shielding most of the profits corporations make offshore from U.S. taxation, while Obama has called for a minimum tax on global earnings.

Why is it that any time you hear the word “reform” coming out of Washington, it always ends badly for about 99 percent of us? They talk about entitlement “reform” – meaning cutting Social Security and Medicare. They talk about regulation “reform” – meaning our food and workplaces are going to be less safe. They talk about spending “reform” – meaning doing less of the things that make We the People’s lives better. (They never “reform” the military budget. It is more than double what it was when ‘W’ Bush took office. Because we have to defend against the Soviet Union.)

“Reform” is lobbyist-speak for opening up the floodgates, hanging the flags out, lighting the savings accounts on fire, letting dozens of blackbirds fly out of the pie, letting the horses out of the barn and generally fleecing the citizenry.

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Reagan Set Up The Death Of The Middle Class, But China Was The Clincher

Campaign for America’s Future’s 2010 Reagan Revolution Home To Roost series, especially the post Reagan Revolution Home To Roost — In Charts described the beginning of the great decoupling of the American economy from the middle class.

The summary:

Conservative policies transformed the United States from the largest creditor nation to the largest debtor nation in just a few years, and it has only gotten worse since then.

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Who Gets Rich Harvesting Burger King and the American Economy?

As fast-food workers across the country strike for decent pay, Burger King is still preparing to abandon the U.S. as its home country. How does a burger company get flipped like this and who gets rich when it happens?

Burger King is a company whose products encourage obesity, heart disease and diabetes in its customers and pays its employees so little that they require food stamps and other government assistance just to be able to sustain themselves. Now Burger King is asking us to swallow something even unhealthier than their food and lower than their pay. They are asking us to let them off from paying many of the taxes that sustain the very infrastructure, courts, education system and food safety system that enables them to stay in business – even the trademark system that keeps others from using the name “Burger King” or calling their product a “Whopper®.”

The company has been stripped, financialized and any remaining value is ultimately being moved across the border. The story of what is happening with Burger King is the story of what American capitalism and its financial speculation has been and is doing to the American economy. It is being done to the company and to us by the financiers. In this case it is names like Goldman Sachs, TGP Capital, Bain Capital, 3G Capital – all playing games with Burger King, other companies the American economy and our lives. And the latest plunderer, Bill Ackman and his Pershing Square Capital Management, is a financial manipulator who when he sees a company’s carcass worth plundering, goes after it – even if it involves betting on a company’s stock going down and then working to drive the company into the ground.

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