Protectionism, Trade and Democracy

This post originated at Imagine Democracy

“Protectionism” literally means we, as a nation, protect our national interests. It is one more word that has been twisted to make people think it’s a bad thing, like “entitlement” (the things we are entitled to as citizens in a democracy) or “welfare” (people in a democracy making each others’ lives better.)

“Trade” is about competitive advantages. It used to mean one region can grow bananas and another can grow corn, and by trading they each end up with both bananas and corn in their kitchens. (Good.) Today, though, it means authoritarian governments have the “competitive advantage” of allowing slavery and pollution so their factories can make things for less. So (the executives of) big corporations move production there, then squeeze the remaining workforce here with threats to move their jobs as well if they won’t lower their standard of living. (Bad.) All the gains of that “trade” are passed to a few already-wealthy owners and managers of that means of production. They use some of the gains to influence our laws to allow them to do this.

A democracy obviously would consider its people’s standard of living an interest worth “protecting” and would never allow businesses to influence lawmaking.

Trade can be done a different way but that requires democratic governance. Economists (used to) tell us that society gained from trade because making the economy more “efficient” by moving production to lower-cost regions frees up resources, providing increased investment and general prosperity; better infrastructure, higher pay and more free time for everyone in the society. And the production moved to the lower pay area means jobs and investment there, so they also move up that same ladder to increased investment and prosperity. That assumption depended on viewing society as liberal democracies capable of making and enforcing rules that would pass these gains on to everyone.

The failure of our country to maintain itself as a democracy has resulted in the allowance of trade with slavers and polluters, resulting in the extreme inequality we see. Thereby enabling further squeezing of workers and environment here. It also incentivizes authoritarian governments to allow slavery and pollution.

The solution to this, and so many other problems, is, of course, to remove the influence of money from our political system.

So Much For The System

What was left of our “system” has now passed the turning point.

We wanted accountability for crimes we could clearly see with our own eyes. But Republicans effectively killed investigations or oversight in the Congress. The people at the top of the FBI and Justice Dept were removed and the rest held under threat of ruin. The entire system of checks and balances was besieged.

We the People were left hopeless and helpless, no part of our government able to step up and tell us why the crimes we could see happening were continuing. So we put all of our eggs in the Mueller basket for any remaining hope to save us.

We all saw collusion and obstruction in plain sight, and believed the Mueller investigation knew even more. We KNOW there was money laundering, extortion, bribery, fraud, lies and lies and lies and you name it. Don Jr lied to Congress and we know it. Erik Prince did, and we know that. Flynn and Gates and Cohen and others were given light or no sentences so they could tell us what happened.

We know that at the least Trump had lied about his plans to build Trump Tower Moscow. The Russians knew at the time that he had lied so he was compromisable. And he acted compromised. (Meeting alone with Putin with no transcription? Ending sanctions?)

Our remaining hope for accountability lay in Mueller’s investigation and we were let down. The basket dropped and our remaining eggs are broken. Those who want accountability have lost. We failed to kill the king and now we face the consequences. The right’s media/propaganda/lie machine has an ability to set the discourse and reach the public that outweighs our ability to do anything about it. Trump is now exonerated for every crime or future crime and will be beyond reach.

The right-wing drumbeat to leave Trump alone will now become merciless. Dems will now be cast as sore-losers who engaged in a plot to to smear a good, Godley man and his family for political gain. Anyone questioning Trump’s divine right to rule will be marginalized, ostracized, called you name it. Democrats will be the radicals who want to force us into communist training camps

I asked in May, 2017, “Will our system withstand the attack? We don’t know. Kleptocracy is powerful.”

Now we know the answer. The promise of a “taste” of the kleptocracy will buy Republicans a lot of good will. (Stock buybacks alone have topped $1 trillion since the tax cuts.)

The Republican project is complete. Accountability is over. Corruption rules. The rich and powerful are fully in charge. “American carnage” reigns.

Who Are We To Object To What Putin Is Doing?

There are people who say, “The US has been and is doing bad things all over the world. It interfered with Russia’s elections. It bombs people. It overthrows governments.” Etc.

The United States interferes with elections in other countries. It has overthrown governments in other countries, bombed and even nuked other countries, supported brutal regimes, etc. It has committed genocide against Native Americans, held slaves, enforced an apartheid, made people of color second-class citizens, fought unions and kept wages low, allowed terrible environmental destruction, tortured people … and done a lot of things we are all against.

In general that United States has done everything it can to keep We the People here and everywhere down and under the thumb of a wealthy few.

So who are we to object to what Putin has done and is doing?

Wait, Did WE Do That?

But is that United States that does those things OUR country? Did “we” do those things?

The instances of the US doing these kinds of things here and elsewhere have been when our democracy is undermined, corrupted, manipulated by anti-democracy moneyed interests for their own gain.

That isn’t “US.”

The United State is under the control of a wealthy few anti-democracy plutocrats who OPPOSE what the “We the People’ Constitution stands for. That is the bad version of the United States that progressives fight, now and historically.

Trump is the leader of THAT United States and he is aligned with Putin to make things even worse for We the People.

WE did not go to war in Iraq, we were against it. WE are not helping Israel suppress the Palestinians, we are against that. WE are not helping the Saudis bomb Yemen, we are against that. WE did not support apartheid, we fought it.

We the People of the United States have not decided we should do these things. We the people just want a better life and the freedom to make our decisions over how our government should operate – and every time that actually happens things get better for people, more equal, more just.

What Trump was and is doing — with Putin’s Russia by his side — is to further promote this very undermining of the “We the People” democracy that we fight for.

Republican Deficit Fear Strategy

Driving up deficits and then using deficit fear to stop spending on things that We the People want and need has been open Republican strategy since Reagan. Google “strategic deficits.”

Tom Wicker explained in the NY Times in 1985, in IN THE NATION; A Deliberate Deficit,

To hear Larry Speakes tell it, President Reagan emerged from anesthesia righteously demanding action on the budget deficit ”this week.” That sounds fine – except that it now appears that the deficit was deliberately created by Mr. Reagan in order to do away with Democratic social programs dating back to the New Deal.

Who says so? David Stockman, the departing Budget Director, at second hand, and Friedrich von Hayek directly. He’s the Nobel Prize-winning economist who’s been a guru of Reaganomics.

… After the Budget Director’s resignation last week, Senator Moynihan of New York said Mr. Stockman had told him that even in 1981 Mr. Reagan knew the tax cuts would mean loss of revenue, but that the President had accepted the resulting rise in the deficit in order to bring pressure on Congress to cut spending.

That sharply contradicts what Mr. Reagan then publicly argued – that cutting taxes would expand the economic base and increase revenues. In his 1980 campaign, he even contended that the increase in revenues resulting from the tax cut would pay for the military buildup he also planned.

But Mr. Moynihan said Mr. Stockman had told him that in 1981, ”the plan was to have a strategic deficit that would give you an argument for cutting back the programs that weren’t desired. It got out of hand.”

Reagan used tax cuts and spending increases to goose the economy. A good economy gets votes. Then under Dems the entire Republican media machine blasted us with deficit/debt fear to force cuts in the things government does to make people’s lives better. Cuts are bad for the economy (and people), so voters not happy with Dems.

So everything people think they uderstand about deficits and debt is just the result of decades Republican “family budget around kitchen table” propaganda.

REPUBLICANS understand this and use it. The Federal budet is NOT like a family budget.

Republicans understand our government issues its own currency. It CAN NOT go “bankrupt” because it can just issue more currency. It CAN NOT “go broke.” We can issue currency to pay for the things We the People want and need. The additional currency is money in the economy.

If we issue too much currency (too much money in the economy) we end up with inflation. So taxes soak up the excess.

Taxes are not “revenue” that is used to “pay for” spending. Taxes are useful to redistribute, rebalance the economy.

Taxes redistribute and rebalance. Is inequality rising? Raise taxes on the rich. Are billionaires and corporations exerting influence on government? Tax them back down to size. Etc.

Deficit fear is just a tool to move votes to Republicans, make the rich richer and keep We the People down.

This post is based on this Twitter thread.

There Are No Real Republican “Deficit Hawks.” Here’s Why.

Democrats are making a terrible mistake fighting the Republican tax cuts by saying they add to the deficit, that they will “blow a hole in the budget,” etc.

Why are Democrats saying this? They are using the “increase deficits” line because they think they can appeal to a few “deficit hawk” Republicans who spent the Obama years complaining about government sending and “deficits.”

It is a mistake for Democrats to think they can “get Republican votes” by mouthing Republican deficit-fear rhetoric without understanding the strategy behind their rhetoric.

Strategy: Republicans Create Deficits, Stoke Deficit Fear, Then Campaign Against Government Spending

Here’s the thing. There are no real Republican “deficit hawks.” Republicans stoke deficit fear, and then say they are opposed to budget deficits. But they always, always increase deficits. On purpose. There’s a reason.

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Corporate Tax Cuts Are Really Just Tax Cuts For The Rich

Republicans are proposing a huge, huge cut in corporate tax rates. They are also proposing to let giant, multinational corporations keep much of the taxes they already owe on profits they are keeping in “offshore” tax havens.

Lower tax rates mean higher after-tax profits, which increases the value of stock holdings.

Who owns corporate stock, and therefore receives the benefits of these tax cuts?

Do We All Benefit From Corporate Stock?

Lets look at just who owns corporate stock.

Republicans like to pretend that all of us are invested in the stock market, if not by directly owning stocks, then through “our” retirement plans. This is usually written by and believed by upper-level, comfortable people that actually do have retirement plans.

But 45% of Americans have no money for retirement at all. Only 44% of Americans put anything into a 401K if their company offers one — and this number includes workers with only $100 in the plan. Only 18% of Americans are putting money in an Individual Retirement Account (IRA), ehich may or may not hold stocks. Only 4% of private-sector workers have only a “defined benefit” plan, usually called a pension.

So much for “our” retirement plans. Aside from retirement plans, a 2016 Gallup survey found that only 52% of Americans own any stocks at all – down from 65% in 2007.

So Who Does Own Stock?

Here is a chart of who owns corporate stock (and therefore pays those taxes.)

As of 2007, the top 1 percent owned 50.9 percent of all stocks, bonds, and mutual fund assets. The top 10 percent owned 90.3 percent. Things have only concentrated upward since 2007.

How much have things concentrated upwards since then? 20 Americans now hold as much wealth as half of all Americans put together and “the 400 richest Americans now have more wealth than the bottom 61 percent of the population.”

People talk about an “upper class” that holds most of the wealth in our society now. Maybe the thinking on this needs to change from a “class” of people to just a few people.

It is these few people who are the beneficiaries of corporate tax cuts. As tax rates drop the value of their stock holdings rises. The rest of us lose our ability to have good schools, roads, health care, courts, scientific research and all the rest of the things our government tries to do to make our lives better.

This is who we are talking about when we talk about corporate tax rates. It’s not anonymous, nameless corporation, it is people — just a few people.

Must Must Must Listen Podcast: Robert Reich On This Election

I listened to this on a walk, and it is a must, must, must listen podcast.

Robert Reich, speaking Tuesday at the Commonwealth Club in San Francisco: “The Oddest Presidential Election in Living Memory

From the website:

Tue, Sep 27 2016 – 6:30pm
Robert Reich, Chancellor’s Professor of Public Policy, University of California, Berkeley; Former Secretary of Labor; Author, Saving Capitalism

Holly Kernan, Executive Editor for News, KQED—Moderator

In the midst of an unpredictable presidential election, get insight from a veteran political figure who knows Washington inside and out. Time magazine named Reich one of the 10 most effective cabinet secretaries of the 20th century. He is a founding editor of the American Prospect magazine and chairman of Common Cause. Come hear his provocative thoughts on the presidential election and the future of America.

Banks Used Low Wages, Job Insecurity To Force Employees To Commit Fraud

The manager instructed her to push accounts but not to tell the customers about the downfalls and fees of new accounts. “Make them read the paperwork.” She replied, “But you know no one ever reads the paperwork.” His response: “Exactly.”

You might have heard that Wells Fargo Bank was busted by the Consumer Financial Protection Bureau for opening millions of fraudulent accounts – ruining customer credit scores and finances to rack up profits from big fees – and had to pay a $185 million fine.

You might have heard that the bank said management didn’t know about the 1.5 million to 2 million fraudulent accounts that were racking up big profits, gave the head of the division responsible for those accounts a $125 million bonus, blamed low-level employees and fired more than 5,000 of them. Now those former employees have the words “ethics” and “fraud” on their records.

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Paul Ryan Says Poor Are Victims, But Blames Them For Being Poor

House Speaker Paul Ryan in an NPR interview Monday acknowledged that the poor are victims of our economic system. The interview sounds reasonable, almost soothing, until you examine what Ryan is really saying.

After acknowledging that poverty is systemic, he turns around and blames the poor themselves as being personally – even morally – responsible for being poor. He implies the poor are just lazy. He cited addiction, lack of skills, and, of course, government handouts as the real causes of poverty. He said raising the minimum wage would not help. His soothing-sounding words are actually quite radical and extreme.

The Interview

Ryan was interviewed on Monday’s NPR’s Morning Edition by Steve Inskeep about his ideas on helping people get out of poverty.

When asked about people born into poverty who can’t get out of poverty, Ryan responds “That’s right … you go look at the country and the conditions, you’re just as likely to stay poor today as you were if you were born into poverty 50 years ago. … There are people out there fighting poverty … that do well, succeed but for government I think in many cases they could do more.”

Q: You’ve argued that welfare “is keeping people away from work, it disincentives work.”

Ryan: “Right. Yeah.”

Q: Do you want to cut welfare?

Ryan: “The smarter thing to do is to customize a benefit to a person’s particular needs. … Maybe this person needs addiction counseling, or maybe she needs a GED or transportation or something. You customize the benefits for her particular needs with the proper accountability.”

Asked about low minimum wages keeping people in poverty, Ryan rejects raising the minimum wage as a “one-size-fits-all solution.” Inskeep asks, “Why not do something that raises wages?”

Ryan: “Well, skills. I think when you raise the minimum wage … you’ll lose over a million jobs … So you don’t want to take away those entry-level jobs that give people hard and soft skills they need just to learn how to do work. Every person has a different problem, sometimes a person has an even deeper problem like addiction or something like that.”

What Ryan Is Saying

Ryan begins by acknowledging that the “country and the conditions” are what is keeping people poor. He says if you “look at the country and the conditions, you’re just as likely to stay poor today as you were if you were born into poverty 50 years ago.” But then he says there are people who are fighting poverty whose efforts would succeed “but for the government”

Ryan then contradicts what he said about “the country and the conditions,” and blames the poor themselves for being poor. They don’t have skills, they don’t have an education, they are addicted, and they are so lazy that a little bit of “welfare” keeps them from looking for work. He says they need to “learn how to do work.”

Several states have bought in to this “blame-the-poor” mentality to the point where they require drug testing before a person can get assistance. Earlier this year Think Progress surveyed these programs and found that despite the cost of this drug testing, several states did not find even one person testing positive. The national total was 321 positive tests, out of the millions in circumstances where they need help.

So why does Ryan bring up “addiction” when talking about poverty? For the same reason he talks about government and “welfare” causing people to not bother to look for work or even “learn how to do work.” These kinds of words point the finger at people for personal, moral failings, and contribute to a story that the poor are really just bad people who do not deserve our assistance.

Minimum Wage

Ryan also implies that people in poverty are lazy, saying “welfare” is “keeping people away from work.” But because of the decrease in the purchasing power of the minimum wage, many working people, even those working in full-time jobs, make so little that they qualify for “food stamps” and other government aid.

This chart, “Share of workers receiving public assistance for the poor, by industry” from The Washington Post Wonkblog report, “When work isn’t enough to keep you off welfare and food stamps,” tells the story:


“Share of workers in each field who rely on at least one program among Medicaid/CHIP, TANF, the EITC or food stamps. UC Berkeley Center for Labor Research and Education”

According to the Wonkblog report, “The problem, according to this picture, isn’t that poor people won’t work — it’s that the work they do can’t sustain them.”

Ryan also says “when you raise the minimum wage … you’ll lose over a million jobs.” But a National Employment Law Project (NELP) report from May, titled “Raise Wages, Kill Jobs? Seven Decades of Historical Data Find No Correlation Between Minimum Wage Increases and Employment Levels,” found that,

The results were clear: these basic economic indicators show no correlation between federal minimum-wage increases and lower employment levels, even in the industries that are most impacted by higher minimum wages. To the contrary, in the substantial majority of instances (68 percent) overall employment increased after a federal minimum-wage increase.

So raising the minimum wage, giving working people more money to spend in local stores, not only doesn’t kill jobs but increases demand in the economy enough that it might actually cause those stores to hire people. Who could have predicted?

Plus, never mind that increasing the minimum wage to a “living wage” level would end the need for public assistance for millions of people.

Note that “welfare” as Ryan and Republicans describe it – giving cash to people who don’t work – ended with the 1996 “welfare reform”. Today people – overwhelmingly single mothers with children – can get minimal temporary cash assistance, minimal food assistance and health care. Some can get housing subsidies and a few other forms of aid.

The results of the 1996 experiment of ending “welfare” have not been good. Studies show it has “failed,” had a “negative impact,” has “shortened lives,” led to “less education,” and “created a system rife with racial biases.”

Personal Responsibility

Ryan is repeating the old “personal responsibility” language conservatives have developed to shift people’s thinking about government and democracy away from the idea that We the People are in this together, toward a selfish idea that we should all be on our own. Of course, this leaves individuals defenseless against the powerful forces of aggregated wealth and power.

Paul Ryan, like many Republicans, is an admirer of Ayn Rand, who taught that society consists of a few “producers” and lots of “looters” and “parasites.” Rand taught that democracy is a “statist” “collectivism” of those parasitic looters, that it is wrong for people to help other people, altruism is evil and government is “monstrously evil,” “the political expression of altruism.”

Ryan’s words on “welfare” fit right into this radical, extreme framework, but in a more soothing-sounding way.


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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 Progressive Breakfast.