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

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

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

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

Trade Policies Sent The Jobs Away

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

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

Run Government Like A Business

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

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

Emergency Manager Law, Setting Aside Democracy

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

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

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

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Public Health Emergency

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

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

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

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

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

How Much Lead Are We Talking About?

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

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

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

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

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

The highest reading registered at 13,000 ppb.

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

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

What Lead Does To Health, Especially Children

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

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

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

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

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

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

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

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Cover Up?

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

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

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

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

In March 2015, The New York Times reported:

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

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

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

The Atlantic wrote in July 2015:

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

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

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

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

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

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

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

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

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

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

But wait, there’s more,

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

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

But wait, there’s more,

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

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

Now Legionnaire’s Disease, Too

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

Federal Emergency

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

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

What Must Be Done

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

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

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

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

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

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

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

Rachel Maddow

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

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

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

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

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

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

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

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

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

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

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

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

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

Other Resources

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

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

How To Help

How to help Flint, Michigan

How you can help people in Flint during the water crisis

Ways to help Flint residents during water crisis

Bottles for the Babies

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

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

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

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.

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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.

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.

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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 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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Another Secret Trade Deal – Are We Citizens Or Subjects?

In addition to the notorious Trans-Pacific Partnership, the U.S. Trade Representative (USTR) is negotiating another secret trade deal. This one is a trade, investment, and governance agreement with the European Union (EU) called the Trans-Atlantic Trade and Investment Partnership (TTIP). Once again, everything is secret – at least on the U.S. side.

Last week, representatives from more than 75 U.S.-based organizations involved in “good governance and transparency,” as well as members of Congress, sent a letter calling on the trade representative to open up TTIP negotiations to at least some transparency so the public can have some idea what is being negotiated in their name. The letter says the secrecy “demeans the role of citizens—in many ways treating us more like subjects than the source of legitimate governmental power that we are.”

Marc Perrone, President of the United Food and Commercial Workers Union (UFCW) said of the letter,

“The U.S. must show its commitment to creating better trade deals and better lives by immediately releasing their TTIP proposals. Trade agreements negotiated in secret have had a devastating impact upon our families, our jobs, and this nation. Hard-working men and women simply cannot afford anything less than complete transparency when it comes to global trade.”

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What You Should Know About That Completed TPP “Trade” Deal

Countries negotiating the Trans-Pacific Partnership (TPP) say they have reached a deal. So here it comes.

Monday morning it was announced that a “Trans-Pacific Partnership Trade Deal Is Reached,” presented as much as a foreign policy success as a “trade” deal.

“The United States, Japan and 10 other Pacific basin nations on Monday agreed after years of negotiations to the largest regional trade accord in history, an economic pact envisioned as a bulwark against China’s power and a standard-setter for global commerce, worker rights and environmental protection.

… The trade initiative, dating to the start of his administration, is a centerpiece of Mr. Obama’s economic program to expand exports. It also stands as a capstone for his foreign policy “pivot” toward closer relations with fast-growing eastern Asia, after years of American preoccupation with the Middle East and North Africa.

The effect the deal will have on actual “trade” is unclear, since the U.S. already has trade agreements with many of the participating countries. Also much of the deal appears to be about things people would not usually consider “trade”, like investor rights and limits on the ability of countries to regulate.

Though the deal remains secret, here is some of what is known about the agreement deal.

● Currency manipulation is not addressed in TPP, even though Congress’ “fast track” legislation said it must be. To get around this, a “side agreement” supposedly sets up a “forum” on currency. Past side agreements have proven unenforceable. For this reason Ford Motor Company has already publicly announced opposition to TPP.

● A “tobacco carve-out” is in the deal, in some form. This was added because the agreement contains investor-state dispute settlement (ISDS) provisions that will allow corporations to sue governments that use laws or regulations to try to restrict what the companies do. These provisions restrict the ability of governments to protect their citizens so thoroughly that tobacco companies have used ISDS provisions in similar agreements to sue governments that try to help smokers quit or prevent children from starting smoking. TPP proponents felt that this carve-out will help TPP to pass, while the ability to limit other laws and regulations remains.

● President Obama has said TPP includes the “strongest labor provisions of any free trade agreement in history.” Previous “trade” agreements do not even stop labor organizers from being murdered, so even if TPP has “stronger” labor provisions, that is an extremely low bar.

● TPP reduces or eliminates many tariffs, further encouraging companies to move factories out of the U.S. to low-wage countries like Vietnam. An example of the effect TPP will have on U.S. manufacturing is Nike vs. New Balance. Nike already outsources its manufacturing to take advantage of low wages, while New Balance is trying to continue to manufacture in the U.S. When tariffs on imported shoes are eliminated Nike will gain an even greater advantage over New Balance. New Balance has said that the tariff reductions in TPP will force it to stop manufacturing inside the US.

● The reduction and elimination of tariffs reduces revenues for the governments involved.

What Next?

Here is a brief rundown on what to expect as TPP begins to make its way toward a Congressional vote:

● The TPP is still secret and according to the terms in this year’s fast-track legislation it will remain secret for 30 days after the president formally notifies Congress that he will sign it. That could be a while still, as the agreement’s details need to be “ironed out.” After that 30-day wait the full text has to be public for 60 days before Congress can vote. The full timeline is yet to unfold and will be reported here as it does.

● Expect a massive and massively funded corporate PR push. The biggest corporations very much want TPP. It massively benefits the interests of giant corporations and the “investor” class, even as it incentivizes moving jobs and production out of the U.S.

● While only a small portion of TPP is about what people would normally consider to be “trade,” TPP will be heavily pushed as a “trade” deal. Many people believe that “expanding trade” increases jobs. Note that closing a U.S. factory and importing the same goods “expands trade” because those goods cross a border.

Also see the American Prospect, “What’s Next for the TPP: Clyde Prestowitz in Conversation with David Dayen.”

Questions To Ask About TPP

When the still-secret TPP becomes public, these are some of the questions the public will want answered:

● What do regular, non-wealthy people in the U.S. get from TPP? Will it increase American wages? Will it have provisions that force wage increases in countries that currently pay very little, thereby helping those workers (and helping them buy American-made products, too) and reducing downward pressure on American wages? Or will there be NAFTA-style provisions encouraging outsourcing to low-wage countries like Vietnam, creating further downward pressure on wages and increasing inequality?

● What do people in the U.S. lose? For example, the Los Angeles Times explains, “U.S. industries such as auto, textiles and dairy, however, could experience some losses as they are likely to face greater competitive pressures from Vietnam, Japan and New Zealand.”

● Does the TPP contain badly needed provisions to require member countries to jointly fight global climate change?

● Will provisions on state-owned enterprises force further privatization of publicly owned and publicly operated infrastructure like the U.S. Postal Service, highways, water systems and other public utilities – even services like municipal parking operations?

● Will TPP enable the U.S. to continue using tax dollars to help American companies, like our “Buy America” procurement policies?

● Will TPP expand imports from countries where food is often found to contain banned toxic chemicals? If so, will TPP require increases in food and product safety standards and inspections?

● Does the TPP increase oversight of financial companies like banks, insurance companies and hedge funds?

TPP Pits Obama, Republicans, Wall Street And Big Corporations Against Democrats, Labor, Progressives

While still secret, the agreement is likely to have many of the same proponents and opponents as the fast-track trade promotion authority battle had. As the Los Angeles Times words it today, it “pits the White House, many Republicans and supporters of free trade against organized labor, civic groups and many lawmakers from Obama’s own party, who fear the deal will hurt workers and the environment.”

In a Monday morning call Representative Rosa DeLauro (D-Conn.) said the TPP text Congress is allowed to see has not been updated for some time, so even they don’t know what is in it. Saying Congress has had to rely on leaks and hasn’t seen the supposed “side agreements” at all, DeLauro asked the administration to “have the courage” to show Congress and the public the text now.

DeLauro complained that leaked drafts show U.S. negotiators negotiating hard for pharmaceutical companies, but not for the interests of American workers. “The administration has put big corporations first, workers last.”

She said rules-of-origin requirements allow less than half to be made in U.S. and TPP countries, the rest can come from countries like China. “None of us can think of a clearer mechanism for taking American jobs”

Rep. Paul Tonko (D-N.Y.) said, “we’ve seen the nightmare NAFTA brought to our manufacturing sector and hard-working American families; this deal is NAFTA on steroids” because this is much broader. Multinational corporations will benefit from increased drug prices and access to cheaper labor.

Rep. Dan “Rock Star” Kildee (D-Mich.) said “what’s not there is there is a lack of any enforceable currency provision. This ties American manufacturer’s hands behind their back as they try to compete. Worse, new rules of origin allow the Chinese to provide more than half the content of a car and it will be treated as domestic. Combined with no currency rules, this will have a devastating effect.”

He added, “I would ask members who voted for fast track to look at the details. When they see specific details and impact on their businesses I think they will vote no.”

Rep. Debbie Dingell (D-Mich.) said, “I’m a car girl … we are only operating on early reports but already Ford and Chrysler are opposed, joining the UAW, and those companies have strongly supported previous deals.”

Rep. Brad Sherman (D-Calif.) called TPP a “huge win for China because of currency, rules of origin; we get zero access to the Chinese market.”

On the ability to ensure even these ow rules of origin, Sherman said, “What about de facto rules? How does anyone police it? Are Chinese going to report companies that are mislabeling?”

Petitions

The Teamsters are asking people to sign this petition:” Tell Congress: Show Me the Text on Reported TPP Deal.”

Democratic presidential candidate Bernie Sanders has released this petition and is asking people for signatures: “Sign my petition to join our fight against the disastrous Trans Pacific Partnership trade deal. We cannot afford to let this trade deal hurt consumers and cost America jobs.”

The U.S. Trade Representative office has released this summary

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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.

Final (?) TPP Talks Underway Now In Atlanta

A new round of negotiations is underway in Atlanta this week between the United States and 11 Pacific Rim countries. They are trying to finalize the Trans-Pacific Partnership (TPP).

Some groups are asking people to come to Atlanta to protest. There are also calls for presidential candidate Hillary Clinton to make her views known on TPP.

A major reason for the push to get TPP completed now is the upcoming presidential election. The negotiators want Congress to vote before TPP becomes an issue in the campaign, which would mean the public will begin learning of the pact’s provisions and hearing arguments against them.

Negotiators are pushing TPP because it helps get government out of the way of big corporations. A provision in TPP called investor-state dispute settlement (ISDS) lets corporations bring cases against governments in corporate-arbitrated courts that are outside of national legal system, if those government pass laws or regulations that interfere with corporate profits. For example, tobacco corporations will be able to sue governments for engaging in efforts to help citizens stop – or prevent children from – smoking. (See “Tobacco ‘Smoking Gun’ Shows Real TPP Agenda” and “Tobacco “Carve-Out” Dispute Tells Us What We Need To Know About TPP.”)

TPP will also help defund governments by reducing revenue from tariffs. The U.S. Trade Representative (USTR) Michael Froman recently boasted in Politico that TPP will lower government revenues, saying, “TPP will deliver billions of dollars of tax cuts every year going forward” in the form of cuts in tariffs that U.S. manufacturers and farmers face in the TPP countries.

While the agreement – the largest “trade” agreement in history – supposedly is a broad agreement defining the rules of doing business in the 21st century, the negotiations are actually about horse-trading immediate concerns and deals and markets between different corporations. Following is a summary of a few of the remaining issues in the way of completing the agreement: currency manipulation, autos and auto parts, and Donald Trump.

Currency Manipulation

Some countries manipulate their currencies, which makes goods made there cost less in world markets. Meanwhile the U.S. currency is “strong,” which means American manufacturers lose business and are forced to shed workers. Many in Congress want TPP to contain clauses regulating this manipulation.

Last week 158 members of Congress sent a letter to the White House, which, according to the Detroit Free Press, urged “that strong, enforceable provisions against currency manipulation be made part of a Pacific Rim trade deal.”

From the Free Press report,

Legislators from industrial states, including Michigan, have argued that strong, enforceable currency standards must be part of any trade deal with Pacific Rim nations to ensure the U.S. is not put at a disadvantage to countries which may manipulate their currency to help their own industries.

“In just the last month, three of our trading partners — China, Korea, and Vietnam — have each taken steps that have caused their currencies to weaken, disadvantaging American businesses,” the letter said. “These steps have raised significant concerns and highlighted the importance of enacting strong, enforceable protections.”

“U.S. workers and businesses are the best in the world, and it is critical to our country’s economic future that they are able to compete in a fair global marketplace,” the letter continued. “For that reason, it is critical the TPP include strong, enforceable protections against currency manipulation.”

Autos And Auto Parts

Canada and Mexico are opposing a Japanese proposal to lower the requirement for how much of a car and auto parts have to be made in TPP countries to avoid tariffs. U.S. auto companies and parts manufactures, of course, side with Canada and Mexico, but Japan wants to be able to have cars and parts made in China, yet still avoid tariffs.

Unbelievably, our own country’s trade negotiators – desperately wanting this deal to conclude this week – appear to be siding with Japan and China against American, Canadian and Mexican manufacturers. For details, see: “Under Pressure To Finish TPP, Are They Giving Away More Jobs?” and “TPP Terms Are Even Worse For U.S. Than NAFTA?

Trump

Part of Donald Trump’s popularity comes from his opposition to the way that previous trade agreements like NAFTA have hurt American workers and industries. For example, Trump has stated that he will end that NAFTA trade agreement that cost so many jobs and moved so many factories out of the U.S. The Hill reports, in “Trump threatens to ‘break’ trade pact with Mexico, Canada“:

Donald Trump is calling the North American Free Trade Agreement (NAFTA) a “disaster” and vowing to renegotiate or break the deal if elected president.

“It’s a disaster,” Trump told CBS’s Scott Pelley in an interview airing Sunday on “60 Minutes.” “We will either renegotiate it or we will break it because you know every agreement has an end.

“Every agreement has to be fair. Every agreement has a defraud claim. We’re being defrauded by all these countries,” Trump continued.
Pressed on whether he supports free trade, Trump responded, “We need fair trade, not free trade. We need fair trade it’s got to be fair.”

Trump has blasted trade policies, accusing leaders of allowing China and Mexico to steal U.S. jobs and hurt American workers.

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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.