Tuesday, June 16, 2015

Should Americans Sacrifice more to Save the World?

AFL-CIO President Richard Trumka, a determined opponent of the TPP trade agreement, called on House Democrats to vote against TAA (a fund to re-train workers displaced by trade agreements) knowing that a negative vote would derail TPA (fast track for Obama) and possibly shut down TPP (the Asian trade deal). Richard Trumka and others probably believed that the damage that can be done by TPP outweighs any remedial offsets to that damage that are offered by the TAA extension.

The strategy worked — at least for now, because the GOP may bring it up for a re-vote. It appears the GOP really wants the trade deal (TPP) without TAA (the fund to re-train displaced workers). If this is ultimately what the House passes with a re-vote, will the White House (Obama) have the stones to come out against it?

Michael J. Green, a former Asia adviser to President George W. Bush and now at Georgetown University and the Center for Strategic and International Studies recently said: "In Asia, a failed TPP [trade deal] would create an influence vacuum that others, primarily China, would fill."

I have some questions ...

Is it America's moral duty and global responsibly to make sacrifices in our lives in order to help other people in other countries to raise their standard-of-living? And who decides — America's citizens, or wealthy CEOs of large multinational corporations? Or is it wealthy politicians working on behalf of the CEOs of large multi-national corporations, hedge funds and banks who decides whether we sacrifice jobs so that others may work (for much less)?

The New York Times: The Democratic Tea Party (By David Brooks on June 15, 2015):

Last week, the Congressional Democrats defeated the underpinnings of TPP trade agreement. Let’s count up the things these Democrats will have done if this policy stands. Impoverish the world’s poor. [But what about America's poor?]

There’s an argument over what trade agreements do to workers in the nation’s rich countries, but there is no question they have a positive impact on people in the poorer ones. The North American Free Trade Agreement, for example, probably didn’t affect the American economy too much. But the Mexican economy has taken off. With more opportunities, Mexican workers feel less need to sneak into the U.S. As Fareed Zakaria has pointed out, a regime that was anti-American has turned into one that is pro-American. [This has already been thoroughly debunked].

In Asia, the American-led open trade era has created the greatest reduction in poverty in human history. The Pacific trade deal would lift the living standards of the poorest Asians, especially the 90 million people of Vietnam. It would be nice if Hillary Clinton emerged and defended the treaty, which she helped organize." [Nike employees thousands of workers in Vietnam paying them 60 cents an hour.]

The Atlantic:

The U.S.-based CEO of one of the world’s largest hedge funds told me that his firm’s investment committee often discusses the question of who wins and who loses in today’s economy. In a recent internal debate, he said, one of his senior colleagues had argued that the hollowing-out of the American middle class didn’t really matter. “His point was that if the transformation of the world economy lifts four people in China and India out of poverty and into the middle class, and meanwhile means one American drops out of the middle class, that’s not such a bad trade,” the CEO recalled.

Is it America's moral duty and global responsibly to make sacrifices in our lives in order to help other people in other countries to raise their standard-of-living?

In his last year of office, President Bill Clinton called on Congress to make normal trade relations with China permanent. So legislation was introduced to the House on May 15, 2000 by Rep. William Reynolds Archer (R-Texas) saying that permanent normal trade relations (PNTR) with China was a top priority, and was vital to the U.S. agriculture market (to gain access to a market with one-fifth of the world’s population).

The other crucial point that was made was that the involvement of the U.S. was needed "to help the workers of the People’s Republic of China to lead better lives". Since then, 500 million Chinese people have been lifted up into the middle-class.

Paul Krugman provides the graphic below and writes, "There have been huge gains for what we might call the global middle — largely consisting of the rising middle-classes of China and India. Now for the bad news: Between these twin peaks lies what we might call The Valley of Despond. Incomes have grown slowly, if at all, for the advanced-country working classes."

So some Americans were forced from the middle-class in the U.S. so that people in other countries can move into their middle-class. Have we sacrificed the few to save the many? Who decides? Those with the most money who have the most to gain financially — they get to play God? Or should those who would be sacrificed make that decision for themselves? Or should the politicians have the last say?

Valley of Despond


  1. Dean Baker: one of the main purposes of the TPP is to create stronger and longer patent and copyright protection. This will most importantly raise the cost of prescription drugs, but the prices of many other items will also rise due to increased protection.


    1. If I owned a company that made $1,000 in profits every year, and spent 1 penny on lobbyists and political campaigns to pass a law that could increase my profits by $25 a year, if the law doesn't pass, I've only lost a penny that I could probably write off on my taxes. But if the law passes, then a $25 profit is a good return on my 1 cent investment — even if it means millions of people would suffer in some way. That's Big Pharma.

  2. Our multinational corporations want to swap Chinese workers for new sources of cheap labor (and consumers of our goods and services) in South East Asia, and India. If the Pacific trade deal lifts the living standards of the poorest Asians, especially the 90 million people of Vietnam, it is good PR...


  3. A recent rebuttal by Dean Baker to the post "Tea Party Democrats"


    1. Other rebuttals:

      NYT Runs "Free Trade" Filler for TPP


      How Does the TPP Improve People's Lives by Raising the Cost of Drugs and Making Them Pay More for Old Movies and Music?


  4. Here is Roosevelt Institute Senior Economist Adam Hersh's testimony before the United States House Committee on Foreign Affairs' Subcommittee on Asia and the Pacific as part of a hearing on "China's Rise: The Strategic Impact of Its Economic and Military Growth" ---

    "The Trans-Pacific Partnership (TPP) has less to do with freeing trade, creating jobs, raising wages, or rebalancing geo-politics than it does with rewriting the rules of global trade and investment to favor big businesses at the expense of almost everyone else in society. These rules do not embody economic principles of open competition so much as the preferences of industry lobbyists that had the best seats at the U.S. Trade Representative’s table. The outcome is an agreement that fails to address America’s economic needs and geostrategic goals. Problems with current U.S. model for trade policy do not end with TPP. A multitude of agreements are underway under the same basic template (TTIP and TISA). I will make two points today:

    1. The most fundamental element of national security is a strong national economy, and TPP would weaken our economic base.
    2. TPP fails the geostrategic rationale for checking China’s rise.

    [Read the details here]

    From his conclusion: "Getting to a deal that serves more than the narrow interests of powerful corporations, their CEOs and shareholders will require Americans be willing to walk away from the agreement we have now."