“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.


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.


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.


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.


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.”


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.


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.

Keystone, Food Labeling Cases Demonstrate TPP’s Threat To Democracy

The Trans-Pacific Partnership (TPP) has provisions that allow corporations to sue governments for laws and regulations that limit profits. The cases bypass national court systems and are heard by “corporate courts” with the governments allowed no appeal. These investor-state dispute settlement (ISDS) provisions are also in trade agreements like the North American Free Trade Agreement.

When fast-track trade promotion authority was being debated, people like Sen. Elizabeth Warren raised warning flags about the ISDS provisions in TPP.

[. . .] In her letter, Warren raises concerns that the deal could include provisions that would allow foreign companies to challenge U.S. policies before a judicial panel outside the domestic legal system, increasing exposure of American taxpayers to potential damages.

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The Infrastructure Cure For The Economy

Everyone understands that our (and the world’s) economy is underperforming. While U.S. unemployment is down, people are finding jobs that underpay and/or don’t provide enough hours. Regular people just don’t have enough to get by – never mind enough to drive consumer economies. The lack of pay causes a drop in consumer demand, which leads to economic malaise.

Economist Joseph Stiglitz puts it clearly: “The only cure for the world’s malaise is an increase in aggregate demand.”

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Sanders’ Corporate Tax Reform Plan Pays For His Infrastructure Plan

In the recent post, “How The Clinton and Sanders Infrastructure Plans Measure Up,” I mistakenly wrote that candidate Bernie Sanders does not yet have a corporate tax proposal:

Clinton’s infrastructure plan says only that it will be paid for through “business tax reform.” It does not detail the nature of the reforms that would pay for this spending. Similarly, Sanders does not yet have a specific individual and corporate tax proposal, but he has proposed a financial transaction tax and says he will close loopholes.

Oops. It turns out that Sanders does have a detailed corporate tax plan to pay for his infrastructure plan. He introduced the plan as a Senate bill shortly before announcing his run for the Democratic nomination for President. It is called the Corporate Tax Dodging Prevention Act. So let’s take a look at it.

Elizabeth Warren’s Principles For Corporate Tax Reform

First, though, that infrastructure post references Elizabeth Warren’s speech in which she laid out some criteria for evaluating the candidates’ plans. Summarizing:

1) Increase the share of revenue that corporations pay. … any “revenue neutral” plan leaves the country with too little money to fund basic services.

2) Level the playing field between small and big businesses. The business tax code is rigged against small businesses, making it harder for them to compete.

3) Promote investment and jobs in the U.S. Lower tax rates and loopholes for hiding profits overseas encourages more outsourcing of jobs and investment.

Also, there is the question of how the candidates treat the huge stash — more than $2.1 trillion — of corporate profits being hoarded in tax havens. Do they propose that these corporations pay the taxes they owe? Or do they offer these companies cash reward for having dodged taxes, if only they would please let We the People have some of the revenue we are owed?

Sanders’ “Corporate Tax Dodging Prevention Act”

Senator Bernie Sanders Corporate Tax Dodging Prevention Act is summarized in an April 14 Senate Budget Committee blog post, (Sanders is the ranking member of that committee.)

1) Ending the rule allowing American corporations to defer paying federal income taxes on profits of their offshore subsidiaries.

This would immediately bring in up to $620 billion of federal tax revenue currently owed on “offshore” profits but deferred. (It would also make available in the US more than $2 trillion of corporate profits that have been kept offshore, which could be reinvested or distributed to shareholders.)

Additionally, this would increase federal tax revenue by as much as $90+ billion each year thereafter.

These amounts are based on a report from Citizens for Tax Justice (CTJ) and the U.S. PIRG Education Fund, titled “Offshore Shell Games.”

A second look at the amounts owed by these companies , detailed in a letter to Congress titled, 24 International Tax Experts Address Current Tax Reform Efforts in Congress sets the amount this would bring in at ” about $900 billion over 10 years.”

2) Closing loopholes allowing American corporations to artificially inflate or accelerate their foreign tax credits.

A current loophole allows corporations to claim foreign tax credits for taxes paid on foreign income even if that income is not subject to current U.S. tax. This closes that loophole.

3) Preventing American corporations from claiming to be foreign by using a tax-haven post office box as their address.

This would stop American corporations from avoiding U.S. taxes by claiming to be a foreign company because they have a post office box in a tax haven country. Sanders’ bill says a corporation could not claim to be from another country if their management and control operations are primarily located in the U.S. (See last month’s post, “Pfizer Buying Allergan So It Can Pretend To Be Irish In Tax Scam.” The resulting company would still be based in NY/NJ.)

4) Preventing American corporations from avoiding U.S. taxes by “inverting.”

In an inversion, an American corporation acquires or merges with a (usually much smaller) foreign company and then claims that the newly merged company is a foreign one for tax purposes — even though the majority of the ownership is unchanged and little or no personnel or operations have actually moved offshore.

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.

5) Prevent foreign-owned corporations from stripping earnings out of the U.S. by manipulating debt expenses.

This stops multinational corporations from loading up their U.S.-based corporation with debt to companies they own outside of the US as a way to shift profits out of the U.S. company. They make interest payments to the foreign companies, deduct it, and this reduces or wipes out their U.S. income for tax purposes.

6) Preventing large oil companies from disguising royalty payments to foreign governments as foreign taxes.

U.S. oil and gas companies have been disguising royalty payments to foreign governments as foreign taxes in order to claim foreign tax credits. Sanders’ bill would stop this.

Does Sanders’ Plan Pay For His Infrastructure Proposal?

Sanders has proposed a detailed plan for addressing the country’s infrastructure needs, with an investment of $1 trillion. His plan to close several corporate tax loopholes appears to raise the necessary funds to cover this. Ending deferral alone would bring in $620 billion, and another $90+ billion each year following. This would raise the necessary funds.

On top of this the Senate’s Joint Committee on Taxation took a look at Sanders’ bill and a “partial score” concluded that items 2-6 would bring in an additional $133 billion.

The Washington Post fact checker looked at Sanders’ plan to fund infrastructure by closing these corporate tax loopholes and concluded that “What matters most is that Sanders’s claim of raising $1 trillion is at least credible — assuming the money is not also earmarked for other spending projects.”

Does Sanders’ Plan Measure Up To Warren’s Principles?

● Sanders’ plan closes loopholes and raises substantial revenue for use by We the People. It meets Warren’s principle #1.

● Sanders’ plan end the advantage that multinational corporations gain over corporations that want to keep their production and profit centers in the US. It meets Warren’s principle #2.

● Sanders’ plan ends incentives to shift jobs jobs, production and profit centers out of the US. It meets Warren’s principle #3.

● Finally Sanders’ plan tells companies to bring profits back from tax havens to the US and pay all of the taxes due. It does not reward them in any way for having dodged taxes. It meets the requirement that companies not be offered a “repatriation” tax break.

So Sanders has indeed met all of the criteria in a detailed, specific way.

Candidate Hillary Clinton has proposed spending a modest $250 billion directly on infrastructure, and another $25 billion to establish a National Infrastructure Bank for loans to cities and states for infrastructure projects that would be repaid through user fees, etc.

Clinton has said this will be paid for through corporate tax reform, but has not yet provided a detailed plan. Will her plan meet Warren’s three principles, as Sanders’ does? Will it require tax-dodging companies to pay-in-full the taxes they owe on that huge overseas stash of profits? We will see.


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.

Will the TPP Increase Trade? That’s the Wrong Question

One of the selling points for the Trans-Pacific Partnership (TPP) agreement is that it will “increase trade.”

Here’s the thing. If you close a factory in the U.S., lay off all of the workers, devastate the surrounding community, and move the production to a low-wage country like Vietnam, bring the same goods back to the U.S. and sell them in the same stores, you have just “increased trade” because now those goods cross a border.

Plus you have the added bonus that executives and shareholders can pocket the wage difference (or park the money in the Cayman Islands). Hopefully they can also pocket the difference in environmental protection costs, workers safety costs, etc., because in places like Vietnam, good luck with ever getting those things.

Economists will tell you that moving the factory to Vietnam is an efficient allocation of resources. The workers and factory here in the U.S. can now be used for something that “we do better here in the U.S,” they might say, and the workers will be rehired at a better wage. The repurposed factory will sell higher-value things to the world that more than make up for the loss of exports of what the factory had been making.

Look around you. Is that what is happening as a result of our trade policies? No; we instead have a massive trade deficit. Entire regions of the country are shifting to third-world status, downtowns boarded up, foreclosed houses falling down, people feeling hopeless… and a few people get more and more wealthy at the expense of the rest of the world.

Regular Americans see their standard of living falling as a direct result of trade policies designed to break unions and increase the wealth and power of a few at the top. Many workers in other countries have few rights, the environment is not protected, government and self-determination are undermined…

If our trade policies were combined with policies that share the benefits from lower production costs, etc. with all of us on all sides of trade borders, then increased trade would be a good thing. That is not what is happening. The trade policies are designed to break worker power and to break governmental power.

So, yes, TPP will “increase trade.” Which means more and more jobs and production moving out of the U.S.


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 The Clinton and Sanders Infrastructure Plans Measure Up

“Investing in infrastructure makes our economy more productive and competitive across the board.”
– Hillary Clinton

Democratic presidential candidate Hillary Clinton has announced a plan for infrastructure investment. How does her plan stack up against that of her chief competitor, Bernie Sanders?

Also, how will Clinton and Sanders pay for their plans? On that question, Sen. Elizabeth Warren (D-Mass.) recently came up with a set of principles we can use to judge this.

Clinton’s Infrastructure Plan

Clinton on Monday announced a plan for investing in infrastructure improvements. Meteor Blades laid out the need for infrastructure investment at Daily Kos in “Clinton proposes $275 billion spending for infrastructure“:

… 11 percent of the nation’s bridges are structurally deficient and a fourth of them are functionally obsolete. Similar deficiencies can be found in schools, dams, levees, railroads, the electrical grid, and wastewater facilities. In its 2013 quadrennial report card on U.S. infrastructure, the American Society of Civil Engineers said the nation would need to invest an additional $1.6 trillion by 2020 to put its infrastructure into good repair. And that doesn’t include innovative infrastructure like universal broadband.

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Must Watch – Warren’s Warning About The Coming Corporate Tax Giveaway

“It’s not that taxes are far too high for giant corporations, as the lobbyists claim. No, the problem is that the revenue generated from corporate taxes is far too low.”
– Senator Elizabeth Warren

Senator Elizabeth Warren gave a “Change Is In The Air” speech Wednesday, talking about corporate tax reform. If there was ever an Elizabeth Warren speech to see, it is this one.

Warren began by describing how lobbyists and corporate CEOs are swarming Congress and saturating the media with a pitch that says corporations are paying too much in taxes, that this is forcing corporations to flee abroad and the solution is to slash corporate tax rates. This story of overtaxation is told and retold.

Warren says there is just one problem with this: “It’s not true.”

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