NAFTA

Bill Clinton's Book -- The Ideas On Trade Agreements

Dave Johnson — Fri, 02 Dec 2011 14:20:55 -0500

I've been taking a look at Former President Bill Clinton’s new book, Back to Work: Why We Need Smart Government for a Strong Economy. Part of the book discusses trade so it is interesting to see what he has to say now that we are living with the results of NAFTA, China's entry into the WTO and other trade agreements. Not nearly enough, unfortunately.

Clinton's book contains a number of ideas for creating jobs and improving the economy. Part I looks at where we are today as a country with our economic problems. He looks at the conservative anti-government movement, launches a defense of government and talks about the country’s debt and where it came from. Finally he compares this to how things are doing in other countries.

In Part II he details several policy ideas for reviving the economy, paying off the debt and creating jobs.

Trade

Idea number 27 is pass new trade agreements. Here is what he writes, in his own words:

27. Pass the pending trade agreements with South Korea, Colombia, and Panama. We don’t have a trade deficit in goods and services with the countries with which we have trade agreements. That’s because the negotiations are tough and thorough, designed to meet both sides’ needs, and supported by enforcement mechanisms. Our trade deficit is largely with the countries we buy oil from and the countries we borrow lots of money from, China and Japan.

He follows that up with idea 28, Enforce trade laws:

28. Enforce trade laws. We lost manufacturing jobs in every one of the eight years after I left office. One of the reasons is that enforcement of our trade laws dropped sharply. Contrary to popular belief, the World Trade Organization and our trade agreements do not require unilateral disarmament. They’re designed to increase the volume of two-way trade on terms that are mutually beneficial. My administration negotiated three hundred trade agreements, but we enforced them, too. Enforcement dropped so much in the last decade because we borrowed more and more money from the countries that had big trade surpluses with us, especially China and Japan, to pay for government spending. Since they are now our bankers, it’s hard to be tough on their unfair trading practices. This happened because we abandoned the path of balanced budgets ten years ago, choosing instead large tax cuts especially for higher-income people like me, along with two wars and the senior citizens’ drug benefit. In the history of our republic, it’s the first time we ever cut taxes while going to war.

Clinton says trade agreements are, "designed to increase the volume of two-way trade on terms that are mutually beneficial." But the book ignores that this is certainly not the way it is working out. It just advocates more trade agreements to boost exports. Boosting exports is good, but it doesn't address what happens when the balance shifts to imports.

Clinton is saying that Bush came in and refused to enforce the rules, letting other countries just grab the jobs. He has a point, Bush didn't enforce trade laws and we lost 40-50,000 factories and millions of manufacturing jobs while he was President. But I think Clinton still has way too much faith in the good intentions of America's corporate elite. He seems to believe that just opening up trade means that our corporate leaders will strive forth to compete fairly in a world that will compete fairly in return. He misses the way that the trade laws were used by our own corporations to sidestep democracy, moving our own jobs to places that do not have democracy, so people are unable to demand good wages and working conditions. Then they came back to our own workers and said, in essence, "shut up and take pay and benefit cuts or we'll just move your job, too, and you and your family will starve."

Free trade agreements were supposed to be about trade. As Clinton writes, trade is a two-way exchange that is mutually beneficial. Well instead we have the result of job loss, a downward wage and benefits spiral and a terrible, terrible trade deficit that has been and is draining our economy -- not so mutually beneficial.

Really, is closing a factory here, moving the machines and raw materials and supply chain to another country, and then bringing the same goods back and selling them in the same stores something that should be called "trade?" Of course not, and it should never have been allowed.

The Week of Walking Backwards

Leo Gerard — Fri, 14 Oct 2011 10:01:36 -0400

As the Occupy Wall Street movement spread across the nation last week, politicians in D.C. flipped the bird at protesters – including those camping in Washington’s McPherson Square.

Here’s how: While occupiers sought political focus on the unemployment, impoverishment and foreclosures suffered by the nation’s non-rich 99 percent, politicians considered three major pieces of legislation and passed only the one that will help the wealthiest 1 percent and hurt the remaining 99 percent.

Senate Republicans murdered-by-filibuster the American Jobs Act, which would surtax the 1 percent to provide jobs for the 99 percent. The Senate did pass the currency manipulation bill, but House GOP leaders refused to schedule a vote on the measure that would protect jobs for the 99 percent by punishing countries that undervalue their currencies to artificially lower prices on their exports.

By contrast, both houses of Congress adopted the so-called Free Trade Agreements with Panama, Colombia and Korea, which will, just like their predecessor NAFTA, destroy jobs held by the 99 percent.

It’s incredible. Inexplicable. Inexcusable. In a country where joblessness is a painful 9.1 percent. Where one in five children lives in poverty. Where foreclosures rose again last month. Where a whole movement is growing to protest the appeasement of the rich at the cost of the middle class. In that place, Congress chose to walk backwards. It didn’t take two steps forward – which it could have by passing the currency bill and jobs act. No. It just took a giant step backward by embracing job-killing trade agreements.

It all forces the 99 percent to demand even more loudly: Where’s the jobs?

WHERE’S THE JOBS?

Either the Occupy Wall Street protesters aren’t loud enough or the politicians in Washington refuse to listen. It’s not just street demonstrators who politicians can’t seem to hear. Poll after poll has shown Americans’ first priority, their major concern is jobs.

Yet when President Obama proposes the American Jobs Act, a measure that would create 1.9 million jobs and ease taxes on the middle class and small businesses, Republicans in the Senate rebuff it. If the majority ruled, the jobs act would have passed the Senate with 51 Democrats in favor. But in the Senate, the GOP stops all action by requiring 60 votes to end their filibusters. They talk and talk and talk. And Americans who need jobs get nothing.

Where’s the jobs?

Amazingly, in a city frozen by political gridlock, the Senate passed with bipartisan support the currency manipulation bill. The legislation would make it easier for the United States to punish market-distorting currency undervaluing by imposing tariffs. The measure is crucial to stop what now seems an inexorable rise in the U.S. trade deficit with China, which continuously kills American manufacturing and jobs.

Last month that deficit rose to a record $28.96 billion, an increase of $2 billion over one month’s time. Over the past decade, 57,000 U.S. factories have closed and 6 million jobs have disappeared, with deliberate currency undervaluing by China a major factor. Though employment rose overall last month, the nation lost 13,000 good-paying manufacturing jobs.

The currency manipulation bill has 225 co-signers in the House, more than the majority it needs to pass. But Republican Speaker of the House John Boehner has said he will not permit the chamber to vote on it. He will thwart an attempt to end the practice that is destroying American jobs – even though Republicans in both the House and Senate support it.

Where’s the jobs, Boehner?

Then Congress passed the Free Trade Agreements. Despite the incessant claims that the three will create “tens of thousands of jobs,” it’s clear that they won’t because simultaneously Congress finally renewed the lapsed Trade Adjustment Assistance for workers who lose their jobs as a result of free trade.

Here’s what the New York Times said about the agreements and jobs:

“Economists generally predict that free trade agreements, which eliminate tariffs and other policies aimed at protecting domestic manufacturers, benefit all participating nations by creating a larger common market, increasing sales and reducing prices. But such deals also create clear losers, as workers lose well-paid jobs to foreign competition.”

The United States can’t afford to lose any more manufacturing jobs. Yet it is projected that these agreements will particularly damage the U.S. textile, electronics and auto supply industries.

Again and again, politicians told Americans that NAFTA would create hundreds of thousands of U.S. jobs. It did the opposite. Why would something different occur with these three copycat deals?

Where’s the jobs?

This is what the Times editorial board said about Republicans:

“The Republicans offer no actual economic plans, only tired slogans about cutting regulations and spending, and ending health care reform. The party seems content to run out the clock on Mr. Obama’s term while doing very little. On Tuesday, Mr. Obama’s campaign manager, Jim Messina, accused Republicans of trying to “suffocate the economy” in hopes that the pain would work to their political advantage. They are doing little to refute that charge.”

As the Occupy Wall Street movement has shown, America can’t wait. The middle class needs help now.

Where’s the jobs?

Colombia FTA: Rewarding Promises Instead of Performance

Leo Gerard — Tue, 12 Apr 2011 10:22:56 -0400

Tragically, the government of Colombia exhibits the behavior of an addict. And, just as regrettably, the United States is co-dependent, so addicted to so called free trade that it plans to award Colombia an agreement based solely on promises.

Addicts always promise. They’ll stop, they pledge. Their co-dependents desperately want to believe, so they cooperate with the addicts’ demands.

Colombia, the most dangerous country in the world for trade unionists, has pledged to try to stop the murders to persuade Congress to approve a Free Trade Agreement (FTA). Promises, promises.

And the United States has agreed to accept those promises rather than demand performance before signing an FTA. American’s Wall Street banks and multi-national corporations crave another FTA so badly they will believe anything.

When the Colombia FTA was first proposed, Congress refused to approve it because so many trade unionists are assassinated each year by the Colombian military and paramilitary forces that the murders exceed the number of unionists killed in all other countries of the world combined. In 2007, the year that former President George W. Bush completed the agreement, 39 Colombian unionists were slain.

The Colombian government knew why Congress denied approval. It could have responded four years ago by protecting trade unionists and preserving their lives. It did not.

Instead, the murders increased. In 2008, 52 Colombian trade unionists were assassinated, one a week. In 2009, the number declined by 5 to 47, but it was back up to 52 last year. Six have been slain so far this year, including Hector Orozco and Gilardo Garcia, members of the agricultural union known as Association of Peasant Workers of Tolima, who were threatened by the Colombian military just before they were assassinated. Promises, promises.

In response to the concerns expressed by Congress about the murders, the newly-proposed FTA requires Bogota to improve safeguards for workers by April 22, and to develop a plan by May 20 to enhance the capacity of regional judicial offices because the murders of trade unionists go unpunished by the Colombian government – giving the killers an impunity rate of approximately 95 percent. And by mid-June, the Colombian government promises to increase penalties for threatening workers.

The government of Colombia could have completed all of those steps four years ago. It didn’t bother.

To this point, Congress has taken the moral high ground by refusing to approve the trade deal. It said, basically, as long as Colombia continued to countenance the slaughter of its community and labor leaders, Afro-Colombians and indigenous people, America would not give it special treatment for trade purposes.

In addition, Congress recognized the FTA’s potential to devastate Colombian farmers. The FTA would speed forced displacement of Afro-Colombians and indigenous people by encouraging increased exploitation of their land by business interests, such as palm oil companies, half of which are owned by paramilitary groups. Expelling these farmers from their land would further swell Colombia’s internally-displaced population – the largest in the world at 4.3 million.

Making matters worse for Colombian farmers, the main U.S. beneficiaries of the FTA would be big agricultural companies which would be permitted to dump cheap, subsidized food stuffs into Colombia duty-free. This would result in farmers’ impoverishment and land loss because small growers would not be able to compete with the low-cost American produce. In Haiti and Mexico, domestic food production was wiped out by similar free trade agreements. It’s likely that Colombia would follow the path of Mexico, where, as the ability to grow legitimate crops became economically impossible, farmers turned more and more to producing illicit drugs. Colombia already produces as much as 80 percent of the world’s cocaine.

Business groups, like the U.S. Chamber of Commerce, protested the refusal by Congress to approve the FTA, contending that increasing American exports and jobs was more important than protecting Colombian lives and human rights.

The Chamber’s position is not only depraved, it’s based on flawed calculations of exports and jobs. Just like the North American Free Trade Agreement (NAFTA) and granting China entrance to the World Trade Organization (WTO), the Colombia FTA will cost America jobs and exacerbate the U.S. trade deficit.

Previous projections by the Chamber and the U.S. International Trade Commission (ITC) that NAFTA and China’s WTO membership would improve the U.S. economy proved catastrophically off base.

When the U.S. signed NAFTA in 1993, it had a $1.7 billion trade surplus with Mexico. After the agreement, that surplus quickly morphed into a deficit, which ballooned to $64.7 billion in 2008. These annual deficits cost the U.S. 560,000 jobs between 1993 and 2004.

Similarly, the ITC predicted that the tariff reductions China offered when it entered the WTO would result in a trade deficit of $1 billion a year. Instead, between the years of 2001 and 2008, the actual result was deficits of $185 billion, and the loss or displacement of 2.3 million American jobs.

The U.S. already runs a trade deficit with Colombia. It was $1.86 billion in 2009. The Economic Policy Institute calculates that the proposed FTA with Colombia would nearly double that trade deficit by 2015, which would cost the United States another 55,000 jobs.

Frankly, the EPI calculation, which factors in effects on trade like currency manipulation, is far more credible than the ITC and Chamber reports, which ignore these issues.

Bogota wants the FTA because it believes the deal will be good for Colombian business interests. One immediate bonus, for example, is that the FTA would eliminate tariffs on 80 percent of Colombia’s exports to the U.S.

To get what it wants, the Colombian government is willing to say anything. Just like an addict. Promises, promises. The Colombian government’s past performance shows its pledges to protect workers from assassination are empty.

America must reject the role of co-dependent. It must demand the proof of performance before rewarding the government of Colombia with an FTA.

Without proof of performance, the government of Colombia will get away with murder. It will export more of its goods – crude oil, coffee, fruit and flowers -- to the U.S. And unwitting Americans will buy more blood red Colombian roses.

What Will Tea Party Members Do When Their Politicians Betray Them?

Dave Johnson — Tue, 26 Oct 2010 12:38:38 -0400

Tea Party members hate Wall Street bailouts, trade deals like NAFTA, job outsourcing, giant corporations buying laws, government spending, and elites telling the rest of us what to do. But there is no question that their candidates - many of them wealthy corporatists themselves - are funded by big corporations (even foreign oil companies) and Wall Street. So the question is, once in Congress will they vote with their base or their owners? And when they vote with the people who bought them, what will Tea Party members do about it?

Trade

Tea Party members want to be able to buy things that are "Made In America" in stores again. I have yet to meet a Tea Party supporter who doesn't absolutely hate NAFTA, WTO and other one-sided “free trade” agreements. They say these treaties "violate our sovereignty." But Tea Party candidates are funded by groups like the Chamber of Commerce and others who are the drivers of these "free trade" policies that close American factories and send jobs out of the country. This does not bode well for these candidates voting the way Tea Party members expect them to if they are elected.

Outsourcing

Tea Party members are astonished when they learn that the government gives companies tax breaks that encourage companies to send jobs away. But just a month ago a bill to do something about this was filibustered in the Senate by a unanimous Republican caucus. One thing about Tea Party candidates - they're also unanimously Republicans. Does anyone other than Tea Party members really think the Tea Part candidates are going to go against the now-unanimous Republican support for these outsourcing incentives if elected? Tea Party candidate Scott Brown didn't after he was elected.

Bailouts

If there is one thing that unites all Tea Party members, it is hatred of the Bush Bank Bailouts (except they think these passed under Obama.) But this is an area where their leaders will almost certainly stand with the banks, because that's where the money is -- their campaign money to be precise. The other day I wrote about In Oregon one Wall Street hedge fund manager is spending up to $1 million (pocket change) on a front group to elect a Tea Party candidate and unseat a Congressman who sponsored a couple of Wall Street reform bills.

Government Spending

Will Tea Party politicians vote to balance the budget? Really? Their members certainly expect them to. But like so many misinformed Americans, Tea Party members think the government spends most of its money on welfare and foreign aid. This is why Tea Party candidates refuse to specify just what spending they will cut to balance the budget. (Also see here, and here, and here, and here, and here, and here, and here, and here, etc.)

So when they get into office will they really cut spending -- where the spending really is? There are plenty of reasons to think they won't. The first and foremost reason is they are funded by people like the Chamber of Commerce who really, really want that spending to keep flowing. This is why Republicans increased government spending and deficits so much the last time they were in charge. In fact, there are reasons to think they'll incresase spending. For example, they hate health care reform, but if they really vote to repeal it they will increase the deficit, because the reform cuts the projected deficits by at least $138 billion.

But the bloated, huge, vast, overwhelming military budget might be worth a look. We spend more on military than every other country combined. (Total military-related spending actually pretty closely matched the deficit this year.) What do you think the odds are that the Tea Party politicians will cut the military budget?

Foreign Oil

Tea Party members understand that our addiction to foreign oil is harmful. We spend more than $300 billion a year on foreign oil -- much of it sent to the Middle East (MUSLIMS!) -- and need to find alternative sources of energy. But Koch Oil is the primary organizer, supporter, funder, and everything of the Tea Party, as well as much of the so-called "conservative movement." But Koch Oil is mostly about oil, not representative government. This is why they directly fund or set up front groups to support climate denial or oppose transit projects, alternative energy, even energy conservation. So don't expect Tea Party leaders to do anything -- anything -- that Koch Oil doesn't want them to do.

What Happens When Tea Party Members Are Betrayed?

It's pretty clear that the Tea Party members are being set up for a big disappointment. There is little chance that the politicians they are supporting are going to do what the members think they're going to do once in office. The members might supply the votes, but the big corporations behind so many of the things that the Tea Party members hate are the ones supplying the money and organization. These politicians, once in office, will understand that the big money can go after them just as well is it went for them this time, if they don't do what they're told by their big corporate funders. But on the other hand, there will be lucrative lobbying jobs waiting for them if they play along. They are going to disappoint the Tea Party members, no question. What will Tea Party members do then?

A Possible Change In NAFTA Trade Policy?

Dave Johnson — Sat, 17 Oct 2009 12:02:23 -0400

This is interesting: US, Mexico, Canada to hold talks on NAFTA.

From the story,

US Trade Representative Ron Kirk said in a statement Thursday that he will host Mexico's Secretary of the Economy Gerardo Ruiz Mateos and Canadian Trade Minister Stockwell Day for talks on "ways to ensure that the benefits of our trilateral trade and economic relationship are widely shared and sustainable."

. . . Obama hinted on the campaign trail last year that he might renegotiate NAFTA to include greater labor and environmental safeguards, but Canada and Mexico have expressed wariness at the prospect of reopening trade negotiations.

Seeing the words "shared" and "sustainable" in a statement on trade talks is certainly refreshing -- and promising. Is it possible that they are going to talk about ways to think long term and conduct trade in ways that actually benefit the people and workers in the NAFTA countries, instead of just boosting the short term gain of a few large corporations at the expense of the rest of us?

Less promising is this statement in a Canadian paper, the Winnipeg Sun, Day to meet with U.S., Mexican counterparts,

Curbing protectionism and keeping borders secure but open for business will top the agenda when Trade Minister Stockwell Day meets with his U.S. and Mexican counterparts.

. . . “We need to work, among ourselves, to make sure the costs that we put on the backs of business are as low as possible — especially in light of this global downturn,” he said.

Unfortunately, these days the word "costs" in the context of businesses too often means ... well, us. When big business talks about shedding "costs" they mean pensions, wages, workers, laws against dumoing toxins into the air and water, laws against fleecing customers, laws against just stealing, etc.

So we'll see.

Rangel: Obama Aides Sending Pro-NAFTA Expansion Signals

David Sirota — Sat, 22 Nov 2008 14:21:10 -0500

In my column last week, I praised the Obama team for suggesting they see the political and policy danger of backing President Bush's proposed NAFTA expansion into Colombia - a country with one of the worst human rights records in the world. But now I see this little tidbit from Inside U.S. Trade:

House Ways and Means Committee Chairman Charles Rangel (D-NY) in a wide-ranging interview yesterday (Nov. 20) expressed optimism that President-elect Barack Obama will support passage of the Colombia and Panama free trade agreements during his time in office...

“I did not talk directly with the president-elect over Colombia, but everything that I heard from those people that [are] talking with him, [is] that he thought he could handle that and get it passed during his administration,” Rangel said.

Rangel is the chairman of the committee that oversees trade, so this can't be chalked up to uninformed speculation - this is likely real, though by no means concrete. Team Obama knows 70 new Democratic members were elected on explicitly anti-NAFTA themes, they know Obama campaigned throughout the industrial Midwest promising to change our trade policy; and they know that in the third presidential debate Obama explicitly reiterated his opposition to the Colombia Free Trade Agreement.

They're going to have to weigh all that against the pressure they're feeling from their corporate donors to pass this NAFTA expansion. If they go forward, we could see a pretty tumultuous battle ensue.

Wash Post Re-Floats Possibility of Lame-Duck NAFTA Expansion

David Sirota — Thu, 20 Nov 2008 11:26:21 -0500

Glenn Greenwald long ago taught us why we should always look skeptically at the fact-free prognostications of the Washington Post's Steve Pearlstein. That said, this line in Pearlstein's column today caught my eye today (h/t lutton):

"The haggling now [about the automaker bailout] is over the appropriate mechanism. My guess is that the whole thing will be wrapped up shortly after Thanksgiving, perhaps in a holiday package that will include congressional approval (but delayed implementation) of the free-trade agreement with Colombia." (emphasis added)

My last newspaper column explored how the Colombia Free Trade Agreement is about nothing other than serving corporate interests; how poll after poll after poll has shown Americans intensely oppose such NAFTA expansions; how in 2006 and 2008, a total of 69 new congressional lawmakers - mostly Democrats - won on an explicit promise to stop NAFTA expansions; and how therefore, the Republican push for this trade deal is a political ploy designed to fracture Democrats much like NAFTA fractured them in 1993.

Pearlstein admits that his prediction is a "guess" - which, in journalism speak, usually means it is the reporter's wish, but the reporter knows most of the facts align against that wish. That's probably especially true in this instance, considering even NAFTA proponent Rahm Emanuel has said Democrats are not going to support tying any economic stimulus or automaker bailout package to the Colombia Free Trade Agreement. Emanuel may support corporate-written trade policies - but he's a political operator first and foremost, and likely understands what I was getting at in my column.

That said, the fact that the Washington Post's top business columnist feels the need to longingly push out this possibility shows us that the fight to reform our trade policy is far from over. The corporate media Establishment has long been one of the most powerful forces pushing mindless free-trade fundamentalism - and that Establishment is not about to let up.

UPDATE: For more on the Colombia Free Trade Agreement, check out the Economic Policy Institute's recent backgrounder.

It's a Trick - Get An Axe

David Sirota — Fri, 14 Nov 2008 13:26:47 -0500

"It's a trick - get an axe." - Ash

This fearful and prescient line, spoken by Bruce Campbell's character in the cult film Army of Darkness, is a good political strategy for Democrats in the final weeks of the Bush administration. All of this media nonsense about Bush being magnanimous and showing a bipartisan spirit of cooperation in the transition is a trick - and Democrats better be ready to get a legislative axe to fight back.

Case in point is what happened this past week. It seemed, at first glance, strange - really strange. Why would President Bush make a massive economic stimulus package and aid to automakers contingent on Democratic support for a relatively tiny trade deal with a Latin American nation that has one of the worst human rights records in the world? Why would our gambling president, who always bets big, ask for something so seemingly small? Those are the questions I examine in my new syndicated newspaper column this week, and the answer is pretty clear: It's a trick...time to get an axe.

Specifically, Bush is looking both to cement the NAFTA trade model, and tear apart the Democratic congressional majority before it has time to unify behind a bold agenda.

In terms of direct economic impact, the Colombia Free Trade Agreement is a drop in the bucket (though because it pits American workers into a salary-cutting competition with foreign workers who can be killed for joining a union, it will put additional downward pressure on domestic wages). It's outsized relevance in this week's high-profile Oval Office meeting between President Bush and President-elect Barack Obama was as a political instrument - not an economic one - a tool to wedge apart the Democratic Party.

There's clear historical precedent for that. Go read Rick MacArthur's timeless book "The Selling of Free Trade" and you'll see how Bush's father dropped NAFTA into the lap of the last new Democratic administration, and it was NAFTA that then fractured the congressional Democratic majority between its Wall Street wing and its progressive wing; thus demoralizing the progressive movement, scuttling health care reform, and helping birth the 1994 Republican revolution.

Fortunately, the Obama team appears to see what Bush is trying to do. In a bit of strange bedfellows, Obama chief of staff Rahm Emanuel - the same Rahm Emanuel who championed NAFTA as a Clinton staffer - has said Obama will not support linking the Colombia Free Trade Agreement to economic stimulus. That's good policy and good politics - the latter both because of the resounding election mandate against NAFTA-style trade deals, and because it will prevent Bush's last-ditch effort to fracture the Democratic Party.

You can read the whole column here.

The column relies on grassroots support, so if you'd like to see my column regularly in your local paper, use this directory to find the contact info for your local editorial page editors. Get get in touch with them and point them to my Creators Syndicate site. Thanks, as always, for your ongoing readership and help contacting local editors. This column couldn't be what it is without your help.

TRADE REPORT: Your Weekly Fill of What's Really Going On

David Sirota — Thu, 14 Aug 2008 16:22:45 -0400

With this week's reemergence of globalization and trade as major 2008 campaign issues, we thought it as good a time as any to launch our regular report on globalization, helping you sort through what is too often an esoteric and inaccessible discourse on one of the most important set of issues we face. We are aiming to have this report out every Thursday - though bear with us as we get this product off the ground. Ultimately, we hope you consider it your one-stop must-read to keep up to date on all the economic rhetoric - and propaganda - that is now filling up the airwaves.

CAMPAIGN '08 - IS OBAMA'S RENEWED POPULISM THE REAL DEAL, OR A WINK AND NOD?

The Hill newspaper reports that the Obama economic adviser Jason Furman issued a particularly scathing statement in response to this week's Commerce Department announcement that the U.S. trade deficit hit $693 million in June.
Since the Democratic primary ended, Obama has noticeably tamped down his criticism of NAFTA-style trade pacts - even giving an interview to Fortune magazine suggesting he may not be as aggressive a fair trader as he once portrayed himself to be.

So this week's announcement, coupled with new evidence that he is focusing on trade in swing states, may signal his campaign's tack back to more populist themes - themes that Washington Post columnist Harold Myerson (and before that, yours truly) says is the best way for Obama to counter McCain's race-tinged cultural populism. Then again, at the same time Furman lashed out at the trade deficit, the Wall Street Journal reports that he "is spending this weekend in the tony Hamptons outside New York, as will many top Wall Street executives" where he will try to court corporate leaders to support Obama's campaign.

CONVENTION '08 - FAIR TRADERS IMPACT THE DEMOCRATIC PLATFORM

The Wall Street Journal reports that fair traders - led by Steelworkers President Leo Gerard - have used the pre-convention political lull to focus on adding stronger language to the Democratic Party's official platform - and that their efforts were successful. The final document "promises to improve the North American Free Trade Agreement," writes the Journal - a stunning rebuke to longtime NAFTA backers Bill and Hillary Clinton at a time the Denver Post reports that the Democratic convention is being quietly engineered to celebrate the Clinton legacy.

CONGRESS - BAUCUS DEMANDS MORE NAFTAs

Montana Sen. Max Baucus (D) this week told the Associated Press that he is worried that his fellow congressional Democrats are having too much success stopping NAFTA-style trade pacts. The statement follows Baucus's statement a few weeks ago - almost completely unreported - that he officially supports the passage of President Bush's Colombia Free Trade Agreement.

Though Baucus is an obscure lawmaker, he chairs the Finance Committee, which oversees U.S. trade policy. As I wrote in my syndicated column last week, that means he will be in a pivotal position to trip up what could end up being a clear election mandate demanding trade policy reform.

BUSINESS - RACE TO THE BOTTOM CONTINUES AS CHINA WAGES RISE

Fortune magazine reports that with China's wages and environmental standards gradually rise, corporations are now looking to move their outsourcing operations to countries where conditions are even more desperate. "China's actions to strengthen its environmental and worker protections are unquestionably good moves for the country, its people, and the global economy," writes the magazine. "But for outsourcers focused on rock-bottom production prices, the search is on for new low-cost countries."

Of course, this race-to-the-bottom dynamic is encouraged by a standards-free U.S. trade policy that allows companies to troll the world for the worst conditions, exploit those conditions, and sell the products of that exploitation back into the American market. Put another way, our trade policy is helping foreign governments manufacture comparative advantages out of their horrific labor, environmental and human rights records.

The good news is an unexpected silver-lining around the energy crisis: Businessweek reports that as energy costs rise, more companies are keeping operations in the United States. As much as Tom Friedmans of the world scoff at blue collar work, the magazine notes that this is "a good time for an American manufacturing renaissance."

The trend directly undermines President Bush's attempt to cite jobs as his reason to oppose the Kyoto Treaty. If carbon controls result in higher prices for fossil fuels, that may actually encourage companies to keep manufacturing operations at home, so as to avoid higher transportation costs. The challenge, though, remains reducing the cost of necessity energy - gasoline, heating, etc. for the middle class - without incentivizing job outsourcing.

McCain's Flea-Market Economy

Tula Connell — Wed, 02 Jul 2008 16:41:48 -0400

George W. Bush's solution to our nation's economic mess—that his failed policies helped create—is to applaud people who must work three jobs to make ends meet.

Sen. John McCain colors his solution to working families' financial struggles with similar crayons: He encourages us to make a living selling stuff on eBay. As reported on Bloomberg:

McCain, seeking to address voter anxiety about the economy, uses eBay to signal that he is ``fundamentally optimistic about the capacity of the U.S. economy to innovate, for that innovation to give new opportunities for jobs,'' said Doug Holtz-Eakin, the candidate's senior economic adviser. "We shouldn't be obsessed with looking backwards all the time, and saying, 'Gee, where did those jobs go?' "

Why worry indeed? After all, top McCain adviser Randy Altschuler is fond of an India-based company whose mission is to convince U.S. companies to outsource jobs to India. McCain also takes economic advice from a former lobbyist for a bank with interests in the housing market—and then there's Douglas Holtz-Eakin, a top economic adviser to McCain who acknowledges McCain doesn’t want to include labor and environmental standards in trade agreements.

McCain's support for a flea-market economy based on eBay is fundamental to his disconnect from the realities facing working families. Like Bush, McCain recently admitted he doesn't know the price of gas. Guess what? Working families sure do.

Stumping for the presidential primaries, McCain has snubbed America's workers by:

· Promoting failed trade agreements like the North American Free Trade Agreement (NAFTA) while standing in front of a failed factory in Ohio.
· Holding a town hall meeting at Worth & Co., a Bucks County, Pa., contracting company investigated by the state Department of Labor and Industry for “intentionally failing to pay the predetermined minimum wage” to its employees. The state has accused the company of cheating employees out of $142,000 in wages for government projects.
· Not bothering to respond to invitations by union members holding roundtables on the economy.

This is how McCain's treats workers when he needs votes. Imagine what a McCain presidency would be like for working families when he thinks he has a mandate to govern.