Friday, September 25, 2015

Unions Vote with GOP and Hillary Clinton on TPP

America’s Collapsing Trade Initiatives (by Robert Kuttner)

Obama's trade policy is in tatters. The grand design, created by Obama's old friend and former Wall Street deal-maker, trade chief Mike Froman, comes in two parts: a grand bargain with Pacific nations aimed at building a U.S.-led trading bloc to contain the influence of China [TTP] — and an Atlantic agreement to cement economic relations with the European Union [TTIP]. Both are on the verge of collapse from their own contradictory goals and incoherent logic.

This past June, the president, using every ounce of his political capital, managed to get Congress to vote him negotiating authority (by the barest of margins) for these deals. Under the so-called fast-track procedure, there is a quick up-or-down vote on a trade agreement that can't be amended.

[Editor's Note: 81% of all Republicans in Congress (Senate and House) voted FOR fast track and TPP — while 80% of all Democrats in Congress (Senate and House) voted AGAINST fast track. Here's what Hillary Clinton said about the TPP trade deal. That's why it amazes me that so many labor unions have been endorsing her rather than Bernie Sanders. It's as if labor unions were endorsing the Republicans!]

The assumption was that the administration could deliver a deal backed by major trading partners. But our partners are not playing. The U.S. negotiators, increasingly, are prepared to give away the store, to get a deal.

It is a bit premature to write the obituaries for these deals. Never underestimate the power of corporate elites. But one has to ask, what was Obama thinking? The U.S. faces serious economic challenges from an economy that is still stagnant for regular people. And we face complex national security challenges from China. These trade deals address neither challenge, much less the even more daunting economic woes in Europe.

Comments from Mark Thoma's blog:

Free trade is a great thing to pursue for a country that has a solidly built set of domestic policies for evenly distributing the fruits of its expanding prosperity, and for promptly addressing the dislocations and insecurity that are created by the flux of capitalist dynamism.\

But free trade in the neoliberal era has meant abandoning 100 million working people to the rigors of wage competition with fellow workers in poor, developing countries — while the benefits of those lower costs (increased labor "flexibility" i.e. exploitability and expanding markets) are mainly accumulated by the owners of capital, and a few super-well-educated and super talented special snowflakes.

Americans are Fed up with rust belts, stagnant wages, economic insecurity as a way of life, and expanding social and economic divides that are opening up between the corporate and knowledge class Brahmin elite on the one hand, and everybody else on the other side.

The US needs to pursue a path of "socialized freedom" on the trade side. We can trade freely with the world as a team, if we reap the benefits and distribute the results evenly as a team.

But I don't single out or blame Obama particularly. Obama is just following the same general formula that the entire US leadership elite has followed for 40 years. Over time, the marginal benefits of that formula have declined, and its accumulating destructiveness and social costs have become more and more apparent.

The neoliberal strategy has been very beneficial for a minority class of highly well-positioned and privileged Americans — the "best and the brightest". Unfortunately, like every President, Obama is 100% surrounded by such people (a minority class of highly well-positioned and privileged Americans who push for these trade agreements).

The Pacific trade deal [TPP] appears to be more about expanding intellectual property protections (patent and copyright) rather than expanding trade. If enacted, that would raise prices and barriers to trade. They also seem to be pushing for a system that would allow corporations to sue in special tribunals against laws protecting citizens if those laws hurt profits.

So, just because it's called a "trade" agreement doesn't mean it expands free trade or lowers trade barriers.

[Editor's Note: It will be very interesting to see the democratic debates (debate schedule here) when Bernie Sanders faces off with Hillary Clinton on this subject.]

Click to enlarge poster below.

TPP infographic


  1. The FBI has just arrested a politically prominent Chinese millionaire, the alleged secret source of foreign money in a campaign finance scandal during the Clinton administration.



    Two major unions have decided to delay endorsements in the presidential race -- a move labor insiders attribute in part to the uncertainty Vice President Joe Biden’s potential run has inserted into the Democratic primary. The decisions are a setback for Hillary Clinton, who has been courting the labor giants in the hopes of an early lock down of two powerhouse unions that can organize millions of members and resources on the ground.

    Supporters of Vermont Sen. Bernie Sanders hailed the delay as a victory, and attributed it as much to Biden’s influence on the race from the sidelines as Sanders’ momentum.

    “The hesitation on their part is likely due as much to Bernie as to Biden -- he throws uncertainty into the mix,” said Rand Wilson, communications director for SEIU local 888 in Boston, who personally supports Sanders.

  3. (New York Times via Mark Thoma's blog) The Soaring Price of Political Access:

    "Top-tier Republican donors will pay $1.34 million per couple for the privilege of being treated as party insiders, while the Democratic Party will charge about $1.6 million ... Four years ago the most an individual could give to a national party was $30,800 ... The prices for getting into the inner sanctum are rising because of loosened restrictions on political money from the courts and Congress."

    Mark Thoma comments: "There was a time when unions provided a bit of countervailing influence over politicians, and hence provided a way to consolidate the political power of individual workers. That influence has faded over time, in no small part due to the very imbalances in political power that unions helped to overcome. Unfortunately, no new institutions have risen to take their place. Until that happens, until the power of individuals is magnified through collective coordination, if ever, it's hard for me to see how the problem of inequality of income, and the problem of inequality of political influence will be overcome."


    Some teachers are resisting union endorsement of Hillary Clinton for president. Many are saying no — or at least, not yet — and calling upon their state leaders to resist a move by the president of the union representing 3 million teachers to endorse Clinton. The pressure has been intense enough to prompt some notable defections in the National Education Assn.

  5. UPDATE:

    WSJ: Hillary Clinton and Ted Cruz have spoken out against the TPP trade deal (that Obama is hoping Congress will pass next year), even though both previously supported Obama’s trade policy — and could well embrace the trade deal in the future.