Panama

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?

Here's A Deficit To Worry About

Dave Johnson — Thu, 11 Aug 2011 13:01:18 -0400

Washington is in a Fox News tizzy about budget deficits. But even though the budget deficits were clearly caused by tax cuts for the rich, huge military spending increases and the effects of the lack of jobs, ideas for fixing those are the very things that are "off the table" in DC's discussions. If DC wants to worry about a deficit, let me suggest this one: Bloomberg: Trade Deficit in U.S. Unexpectedly Widens,

The U.S. trade deficit unexpectedly increased in June to the highest level since October 2008 as a slump in exports exceeded a decline in shipments from overseas.

The gap widened 4.4 percent to $53.1 billion from $50.8 billion in the prior month, Commerce Department figures showed today in Washington. The deficit exceeded all estimates in a Bloomberg News survey of economists in which the median was $48 billion. Exports declined the most since January 2009.

And the usual suspects are lurking in the numbers, China and oil. (Oil imports dropped but imported oil is a big component of the problem, and always a drain on our economy.) Politico: U.S. trade deficit widens as China gains

The goods deficit with China increased to $26.7 billion in June, a cause for concern for the Alliance for American Manufacturing as China continues to gain ground on American industry.

“A rising trade deficit is not the prescription for job creation in America,” said Scott Paul, the group’s executive director. “The June trade deficit exceeded virtually every estimate and is further proof that our economy is falling behind.”

Paul called on the administration to pressure China into letting its currency float on the open market, which would increase its value against the dollar. A stronger Chinese yuan would make China’s goods less attractive to American buyers.

Why does this matter so much? June's Rotten Trade Numbers Mean Weaker Q2 Growth,

While this news is bad for its own sake, it will have negative ramifications on the already weak second quarter GDP estimate.

... It's getting harder and harder to see where a recovery is going to come from. We already know that consumer spending has been weakening. The federal government will soon join state and local governments with austerity measure to cut spending. Now we see that net exports are declining. With all of the other three corners of the economy weakening, it may be up to business investment to carry growth. Yet faced with slowing economic activity, firms' spending could begin to decline as well.

The New York Times, in an editorial today, Where Will Economic Growth Come From?, drives the point home that trade has to be balanced to restore the economies of the world,

In 2009, China led efforts to help the global recovery, investing heavily in infrastructure and boosting consumer spending, but today it is taking the opposite tack and trying to combat inflation, which is running at 6.4 percent.

To keep its goods cheap, it has allowed its currency to rise only about 6 percent against the dollar since June 2010, even as the dollar has plunged against other currencies. Last month, the I.M.F. called on China to help global growth by letting the currency appreciate more rapidly, which would make Chinese goods more expensive around the world and give a break to competing manufacturers.

China has so far resisted that advice. It lashed out at economic mismanagement in Washington after the Standard & Poor’s downgrade, which could potentially reduce the value of its $1.1 trillion stash of American Treasury bonds. Rather than berate Washington, it should abandon its currency manipulation. ...

The burden of global growth cannot be placed on China alone. Germany has the third-largest trade surplus in the world, after China and Japan, sapping growth in its European neighbors.

So we have a terrible trade deficit that is draining us of funds. We owe everyone money because we have fallen for "free trade" nonsense. Companies move our factories out of the country and past the borders of the benefits of our democracy, making democracy a competitive disadvantage and forcing our workers into a race to the bottom. As incomes stagnate then drop, demand in the economy dried up, forcing layoffs.

And what is the DC-preferred solution? (I mean, other than ever more tax cuts for the wealthy?) Even more trade deals that will make the jobs/wages/trade deficit problems even worse! Of course! For example, here is an op-ed just today in DC's Politico, by Republican Senator John Thune, pushing for more of what has gotten us into this mess. Blocking trade deal is blocking jobs,

Under the Panama agreement, American grain exports are estimated to increase by more than 60 percent, and automobile exports would go up by 43 percent.

Exports to Colombia would increase by almost 14 percent overall, including large increases in machinery, chemical products and agricultural goods. Exports to South Korea would jump by 25 percent or more as tariffs on U.S. products are eliminated.

Yes, agriculture will benefit, and that is good. We will export a few more cars to Korea - also good. But. But this is really one more corporate-written opportunity to move our factories beyond the borders - and therefore beyond the wage, safety, environmental and other protections of our democracy. And this is killing us. It was our democracy that made us prosperous in the first place. The free trade deals are just extracting that prosperity from us, for the benefit of a few. That is the opposite of democracy.

"Free Trade The Root Cause Of All These Problems"

Ian Fletcher yesterday, at Huffington Post, It's the Free Trade, Stupid, (go read the whole thing, please)

One point seems largely to have been missed in recent weeks, amid all the excitement over the Federal budget and the sovereign-debt crises in Europe: free trade is largely the root cause of all these problems. So let's trace the causation for a minute.

[. . .] The underlying lesson is the same in our case and theirs: free trade causes trade deficits and therefore debt. The free market, on its own, will neither limit the accumulation of excessive debt nor redress the excess once it has been created. Government is eventually forced to step in, to solve a crisis it could have largely avoided if it had not embraced free trade in the first place.

Dear DC, If you want to worry about a deficit, please start worrying about our trade deficit.

Past Trade Agreements Have Cut Jobs, Wages And Democracy

Dave Johnson — Thu, 02 Jun 2011 15:05:25 -0400

Our trade agreements have pitted working people in countries that do not protect rights or people against the working people here who fought to win the protections of democracy. The result has been devastating to our communities, our economy and our democracy.

America is (was, anyway) a democracy governed by We, the People. As Monday’s Memorial Day ceremonies remind us Americans fought and sacrificed to build and keep the protections and benefits that democracy offers. Those include good jobs with good wages, worker safety laws, rules preventing companies from polluting, and so many other things that companies complain make us less “business-friendly.” But we got involved in “trade” deals that let companies get around democracy’s protections, pitting employees here against people who have no voice, no power and no money. You can see the results all around us.

Korea, Panama, Columbia ... and China

Now we're looking at new trade agreements with Korea, Panama and Columbia. The President is holding out for assistance for all the workers who will be displaced while Republicans say, "Why bother?" Neither side is holding out for agreements that lift workers on both sides of the border.

But these agreements will hurt American workers and communities by lowering wages and killing jobs. For example, the National Council of Textile Organizations, American Manufacturing Trade Action Coalition, National Textile Association, American Fiber Manufacturers Association, U.S. Industrial Fabrics Institute got together to warn that,

We have analyzed the agreement carefully and come to the unfortunate conclusion that the textile portions of the KORUS agreement are seriously flawed. If passed in its current form, the agreement will open the U.S. market to a massive one-way flow of sensitive textile products from South Korea, as well as illegal Chinese imports, while providing no new export business to our textile manufactures and workers.

And more clearly, there are ...uh ... labor rights "problems" in Columbia, too: Colombian Labor Rights Lawyer in Critical Condition after Assassination Attempt,

On May 13, 2011, armed men on motorcycles fired five bullets into labor rights lawyer Hernán Darío in the heart of downtown Cali, Colombia. Mr. Darío is the lead attorney in a high-profile case defending the leaders of a group of sugarcane workers who led a labor strike in 2008 from criminal charges. While no one has taken responsibility for this shooting, it is widely believed to be connected with the sugar strike and Mr. Dario’s defense of the sugar workers.

The shooting comes only weeks after the Colombian government agreed to implement a “U.S.-Colombia Labor Action Plan,” a plan to make improvements in labor rights conditions in Colombia, in connection with U.S. Congressional consideration of a Free Trade Agreement (FTA) between the U.S. and Colombia. The shooting underscores the continuing and serious labor rights problems in Colombia. It also calls into question whether there has been real progress on the labor rights situation in Colombia.

Of course, arguments over these are really proxies for our trade relationship with China, which is the real problem because it is the biggest problem. Our trade deficit with China is in the hundreds of billions - meaning they sell to us and don't buy from us, costing jobs, lowering American wages and increasing our debt. And China not only cheats, they really cheat. This is from Another Reason CEOs Should Rethink Outsourcing and Offshoring,

Fellowes Inc., one of the world's largest makers of office and personal paper shredders, is witnessing the destruction of its business, as its large Chinese manufacturing plant has been shut down by its joint venture manufacturing partner.

The company's Chinese joint venture firm has barred 1,600 employees from entering the plant, stolen all of its proprietary manufacturing production equipment and forced the venture into bankruptcy. The contracts Fellowes signed with its Chinese production company meant nothing. For Fellowes, there is no such thing as rule of law in China.

The Itasca, Ill.-based company has lost $168 million worth of business and is no longer able to produce personal shredders for the world market. It has taken its case to Chinese courts, to no avail. It has pleaded with members of Congress and federal agencies, with no results.

Wrong Turn On Trade

"Trade" is when you ... uh ... trade with others. A country might be able to grow bananas, and need machine tools, so you set up a deal to trade with them. And you both benefit!

But "trade" is not supposed to mean you just let a company just close their factories here because they don't want to pay reasonable wages or protect worker safety or the environment, or pay taxes to support the communities that provide workers and services and customers. You don't just let them send those jobs across a border to a "business-friendly" country that will let them pollute at will or treat employees like slaves and then think they can just bring the same products they used to make here back here to sell.

Somewhere along the way we made a wrong turn that has taken down a road toward ruin. Somewhere along the way we made a deal with the devil to let a very few people here get extremely wealthy at the expense of the rest of us.

The Cost To Communities

These trade agreements have had a terrible effect on our manufacturing communities, particularly in the midwest. From last year's post, Lorain, OH Keep It Made In America Town Hall Meeting,

As you drive from town to town in Michigan and Ohio you see one after another a ring of the "big box" stores and national chain stores around each city. You also see the "brownfields" of rusted-out, closed factories, empty, falling-down buildings. Then you go to the downtown and you see boarded up houses, empty storefronts, deteriorating and deteriorated communities, idle people standing on corners. As you drive into these towns you can just see what is happening in a nutshell.

... Here are some pictures from the inner Lorain area but you see it all around: (click for large)

The Cost To Sovereignty

Our trade treaties prevent us from governing our own country with the laws We, the People want to pass, even when we can get them passed around the money of the corporate gatekeepers.

The World Trade Organization (WTO) says says we cannot require Country Of Origin Labeling (COOL)
WTO rules against U.S. COOL program

A World Trade Organization panel has issued a preliminary ruling on the case that Canada and Mexico filed against the U.S. country-of-origin-labeling law, charging that the mandatory rule violates WTO trade standards.
Specifically, the WTO ruling upholds that requirements tied to U.S. mandatory COOL violate provisions of WTO's agreement on Technical Barriers to Trade or TBT. The WTO panel also ruled that the mandatory COOL requirements to not meet the United States' stated objective that the labeling law informs and helps U.S. consumers make purchasing decisions regarding the origin of meat, produce and other products covered by the labeling law.

Just over a week ago the WTO ruled that we can’t even make companies tell consumers whether tuna they buy is “dolphin-safe.” David Sirota writes about this in Salon, When "free" trade trumps U.S. law

... so-called free trade agreements (i.e., NAFTA, bilateral NAFTA replicas, the WTO regime, etc.) are free only of protections for human beings -- that is, free of provisions that preserve, say, labor rights, human rights and the environment. But those deals' "hundreds of pages" are chock-full of protectionist provisions for multinational companies -- provisions that, for example, allow foreign firms to sue governments for lost profits and empower international panels to unilaterally override a nation's domestic laws if those laws reduce corporate revenues.

According to Public Citizen's Eyes On Trade,

For the second time in a week, reports have surfaced about the WTO clobbering a U.S. consumer labeling policy. Last week, the U.S. voluntary dolphin-safe tuna label was deemed a WTO violation. This week, Reuters is reporting that the WTO has ruled that U.S. beef labels are a WTO no-no.

Corporate meatpackers are rejoicing...

. . . Consumers, ranchers, farmers and legislators worked hard to pass the labeling rules after seeing ground beef horror stories in Schlosser's movie and book Fast Food Nation.

Heck, even free marketeers will be upset with the WTO ruling, since labeling transparency allows the consumer to make the free choice as to what kind of product they want to buy without the government dictating the outcome.

[. . . ] Unlike the U.S. Constitution and legal system, the WTO puts maximization of trade volumes first - ahead of consumer safety or the environment. As if corporations needed any more incentive to destroy local food production.

The Cost To Democracy

People watch these trade agreements take away our jobs and lower our standard of living. The see China cheating, taking everything and know that they can’t buy things in stores that are made in the USA. People clearly see this smashing the middle class and don’t understand why our political leaders don’t step in to defend the country. They don’t understand why government is not addressing these things that are costing jobs, and then see government making even more trade deals when it is obvious that trade with China is costing us jobs.

People understand this is big-company corruption buying politicians and making economic change impossible. They watch the big corporations take over the government, telling the Congress and administration what to do while they are unable to do anything about it. They come to believe the game is rigged. The result of all of this is that many people feel powerless and tune out.

The frustration over this is being channeled into a belief that it is government and democracy that are responsible, and that government spending is why they have no money. This loss of faith is dangerous to our society and our political system.

To Fix The Economy And Budget , Fix Trade

We have to fix our trade relationships if we hope to fix our economy and out budget problems. Ian Fletcher explains, in Why the Budget Is the Wrong Thing to Fight About,

So... what is the solution? What do we have to fix?

The number one thing is trade. Free trade collapsed a very long time ago. What we have today is not free trade at all, it's ruthlessly manipulated trade -- manipulated by America's big trading partners, starting with China but including many others. And we're doing nothing to stop them.

America's titanic ($497 billion last year) trade deficit is ripping the guts out of industry after industry, but we have no answer. And you can't gut industry after industry and expect not to reduce your GDP.

If we didn't have this horrendous trade deficit, we simply wouldn't be fighting many of these budget battles. Why? because we'd have a larger GDP, so tax revenues would be higher. Spending on public benefits would be lower, and painlessly so, because fewer people would be poor and middle-class people would have more money to take care of themselves.

SOTU Shows How Bush's Trade Policy Is All About K Street

David Sirota — Mon, 28 Jan 2008 21:31:25 -0500

President Bush's State of the Union speech is chock full of demands that Congress ignore the fact that the Colombian government actively colludes with paramilitary gangs to murder union organizers, the Panamanian government has made its country a corporate tax haven, and simply ram through "free" trade deals with these countries at the behest of corporate lobbyists. How do you know that Bush is thinking only of Big Money interests on trade? Because even the bone he tried to throw to workers crushed by unfair trade was a factually dishonest lie.

Bush, still pretending he's a "compassionate" conservative rather than a country-club Royalist Republican, said he wants "Congress to reauthorize and reform trade adjustment assistance, so we can help these displaced workers learn new skills and find new jobs." How nice — except for the fact that after the U.S. House did just that on a bipartisan basis, the Wall Street Journal reported back in October that Bush threatened to veto the bill.

Here's a report on what happened from a newspaper in Michigan — a state destroyed by the Bush-Clinton free trade fundamentalism that has dominated our government for the last 16 years:

"The Democrats who control Congress want not only to renew the [trade adjustment] program, but also to significantly expand its reach and spending. They want to increase the program's benefits and make those benefits available to broader categories of workers, including people in service industries. The House recently passed legislation that would achieve those objectives. But most Republicans opposed it, and the Bush administration threatened to veto it, calling the bill too broad and too generous."
— Grand Rapids Press, December 25, 2007

The bill ultimately died under threat of a veto.

Incredible, right? Yes, the same "compassionate" conservative who supposedly cares a lot about workers killed the bill he's calling for because he said was "too generous" to American workers thrown out on the street thanks to his K Street-written trade policies. And you can bet this brazen dishonesty insulting American workers will go almost completely unreported by the media tonight.

This kind of behavior truly could come only from a man who happily tells a country at war and in a recession that "life’s pretty comfortable inside the bubble" of the White House. Thankfully, he'll be out of that bubble soon. The problem is, we don't really know if the next person entering that bubble — Democrat or Republican — will actually reflect America's deep anger at a corrupt trade policy that continues to sell us out.