01/06/2014 archive

Free Trade Insanity

SOPA Reddit Warrior photo refresh31536000resize_h150resize_w1.jpg Albert Einstein said that the definition of insanity was doing the same thing over and over again and expecting different results. When it comes to free trade agreements the US government fits Einstein’s definition to a tee. Twenty years ago congress passed the North American Free Trade Agreement (NAFTA) with expectations that it would improve the working conditions for the poorest workers in southern partner, Mexico. NAFTA is being touted by economists as a great success but for workers, both south and north of the border, NAFTA has been a massive failure (pdf) with hundred of thousands of jobs lost, mass displacement and instability in Mexico and corporate attacks on environmental and health laws. Mexico is NAFTA’s biggest lie.

Currently, the US is in secret negotiations to pass a massive “free trade” agreement with fourteen Pacific Rim nations that would radically change international rules to favor multinational corporations. The Trans-Pacific Partnership (TPP) has been called “NAFTA on Steroids” that could significantly hurt not only workers but their families as well due to watered-down safety provisions when it comes to food and products. It could also drive up prescription drug prices, hurt the environment and reduce Internet freedom. Despite the evidence of the damage that NAFTA has done and breaking his 2008 campaign pledge to oppose such agreements, President Barack Obama is now asking congress to “fast track” passage of TPP which would prevent debate or amendment of the agreement. NAFTA, too, was “fast tracked.” This is just repeating the same mistakes that were made by NAFTA only on a larger scale. In an article at Huffington Post, James P. Hoffa, General President, International Brotherhood of Teamsters, explains the damage that preventing debate and amendment can bring:

The problem with the TPP is that as it stands, the public doesn’t know what’s in it. Which raises the question how can constituents discuss the proposal with elected officials when they don’t know what they should be concerned about? That, however, seems to be of little consequence to some in Congress.

Congressional committee chairmen who favor free trade have agreed to move forward with considering fast track soon after they return to Capitol Hill this month. They obviously believe they are doing the right thing for America. But is it right that corporations take in all of the gains while hard-working Americans get all of the pain? Is that what this country is really all about?

No one is against trade, just unfair trade. We’ve seen enough lost jobs, shuttered plants and abandoned communities. It’s time to make things in America again. When is the U.S. going to approve an agreement that actually helps its own workers?

Letting people see what is included in the TPP is the first step towards letting them decide which direction the nation should take. The next step is to derail the old fast track and replace it with a process that allows Congress to fully debate the deal and make the TPP work for working families.

The last thing that Americans need is another hit to the working class, we need to tell our representatives to stop the “fast track” of the TPP. End the insanity. Don’t Let Congress Fast-Track TPP.

20 Years of NAFTA

(note: This is Timothy A. Wise, Director of the Research and Policy Program at the Global Development and Environment Institute, Tufts University not Timothy J. Wise, anti-racism activist and writer)

How beer explains 20 years of NAFTA’s devastating effects on Mexico

Timothy A. Wise, Global Post

January 2, 2014 07:00

NAFTA produced a devastating one-two punch. For the first 10 years, the flood of US exports of corn, wheat, meat and other staples drove Mexican producer prices well below the costs of production.

By the mid-2000s, Mexico was importing 42 percent of its food, mostly from the United States. Corn import dependence had grown from 8 percent before NAFTA to 32 percent. Mexico was importing nearly 60 percent of its wheat where before it had imported less than 20 percent.

Import dependence was more than 70 percent for soybeans, rice and cotton.

Then came the sucker punch. In 2007, international prices for many staple crops doubled or tripled, and so did the cost of importing them. Countries like Mexico that had gotten hooked on cheap imports paid a heavy price. Call it the Age of Dependency.

US policies had as much to do with these high and volatile prices as they had with the Age of Dumping. Now, instead of price-depressing surpluses caused by US agricultural policies, US subsidies and incentives were diverting 40 percent of US corn – 15 percent of the global supply – into ethanol production.

This drove up the price of corn, but also prices for related crops, like soybeans and wheat, and the livestock products that had relied for so long on cheap feed.

(T)he beer sector is a perfect example of the kind of integration NAFTA can achieve.

“Look, Mexico’s even importing the barley malt from us to make its beer!” I said.

I took another sip.

“So Mexico’s agricultural contribution to its beer exports is … what?” I asked.

Nervous laughter.

Here is a case where NAFTA has gotten the United States to open its market to something of value that Mexico can export, and Mexico can’t even capture the value from it. The industry’s growth benefits US barley growers and US malt makers. Mexico can’t even import the barley and make the malt themselves.

So the country is basically a maquiladora for beer bottling. I guess Mexico contributes the water. Which it doesn’t have enough of.

20 Years on, Mexico is NAFTA’s Biggest Lie


(note: David Bacon is an award-winning photojournalist, author, and immigrant rights activist who has spent over twenty years as a labor organizer.)

NAFTA Hurt Workers on Both Sides of the Border


By Pushing the TPP, Obama is Repeating the Mistakes of NAFTA


Punting the Pundits

“Punting the Pundits” is an Open Thread. It is a selection of editorials and opinions from around the news medium and the internet blogs. The intent is to provide a forum for your reactions and opinions, not just to the opinions presented, but to what ever you find important.

Thanks to ek hornbeck, click on the link and you can access all the past “Punting the Pundits”.

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Richard (RJ) Eskow: The Generations Should Fight Their Retirement Battles Together

This recent piece by Ayobami Olugbemiga has much to recommend it, but the most striking thing about it may be this:  Mr. Olugbemiga manages to discuss the retirement crisis faced by Millennials for seven paragraphs without once blaming older generations for their woes. The author’s photograph suggests he’s too young to be a Boomer. He nevertheless manages to observe that older Americans are also facing a retirement crisis, and cites an AP story which notes that this is a global phenomenon. [..]

The generational war is a hoax. In this global economy the fight for retirement security should unite us, not divide us, across barriers of age and race. The generations share a common agenda: for job creation, stronger Social Security, and economic equality; and against job-killing and wage-suppressing trade deals, usurious debt, and runaway banks.

It’s going to take all of us, young and old, to fight for an agenda like that.

Mohamed A. El-Erian: Extending Unemployment Benefits Makes Good Economic Sense, Too

Our lawmakers will be debating this week the emergency benefits received by the long-term unemployed. There are solid economic and social arguments in favor of restoring these important benefits that lapsed on December 28 for 1.3 million Americans.

The social case is clear.

The long-term unemployed are among the most vulnerable segment of society today. They are also part of two problems whose size and duration are unprecedented in modern American history, and worrisome: the growing threat of high structural unemployment and the curse of excessive societal inequalities of income, wealth and opportunities.

For any given opportunity, the long-term unemployed face much greater difficulties in securing a job than others who have been unemployed for less time. (And, unfortunately, there are still quite a few of the latter too.)

Finally, the country can afford to pay these benefits without undermining other programs and priorities. And in no way does the monetary burden of these benefits threaten overall national wellbeing and financial soundness.

Dan Gillmor: My 2014 resolution: stop my country from becoming a surveillance state

This will be a vital year in the fight for privacy and an open internet. All Americans should join the cause before it’s too late

Our New Year’s resolutions tend to be well-meaning and hard to keep. That’s because we resolve to change our lives in fundamental ways – get fit, etc. But inertia and habit are the enemy of change, and we usually fall back into old patterns. It’s human nature.

Despite all that, I’ve made a resolution for 2014. It is to do whatever I can to reverse my country’s trajectory toward being a surveillance state, and to push as hard as possible for a truly open internet.

I realize I can’t do much on my own, and hope many others, especially journalists, will join in. This year may be pivotal; if we don’t make progress, or worse, lose ground, it may be too late.

Robert Reich: The Year of the Great Redistribution

One of the worst epithets that can be leveled at a politician these days is to call him a “redistributionist.” Yet 2013 marked one of the biggest redistributions in recent American history. It was a redistribution upward, from average working people to the owners of America. [..]

For years, the bargaining power of American workers has also been eroding due to ever-more efficient means of outsourcing abroad, new computer software that can replace almost any routine job, and an ongoing shift of full-time to part-time and contract work. And unions have been decimated. In the 1950s, over a third of private-sector workers were members of labor unions. Now, fewer than 7 percent are unionized.

All this helps explain why corporate profits have been increasing throughout this recovery (they grew over 18 percent in 2013 alone) while wages have been dropping. Corporate earnings now represent the largest share of the gross domestic product – and wages the smallest share of GDP – than at any time since records have been kept.

Hence, the Great Redistribution.

Mark Weisbrot: NAFTA: 20 Years of Regret for Mexico

Mexico’s economic growth stalled since the ‘free trade’ deal was signed with the US, and its poverty rate is about the same

It was 20 years ago that the North American Free Trade Agreement between the US, Canada, and Mexico was implemented. In Washington, the date coincided with an outbreak of the bacteria cryptosporidium in the city’s water supply, with residents having to boil their water before drinking it. The joke in town was, “See what happens, NAFTA takes effect and you can’t drink the water here.”

Our neglected infrastructure aside, it is easy to see that NAFTA was a bad deal for most Americans. The promised trade surpluses with Mexico turned out to be deficits, some hundreds of thousands of jobs were lost, and there was downward pressure on US wages – which was, after all, the purpose of the agreement. This was not like the European Union’s (pre-Eurozone) economic integration, which allocated hundreds of billions of dollars of development aid to the poorer countries of Europe so as to pull their living standards up toward the average. The idea was to push US wages downward, toward Mexico’s, and to create new rights for corporations within the trade area: these lucky multinational enterprises could now sue governments directly before a corporate-friendly international tribunal, unaccountable to any national judicial system, for regulations (eg environmental) that infringed upon their profit-making potential.

Robert Kuttner: Obamacare: Republican Obstruction or Needless Blunders?

Two words that strike fear into the hearts of insurers are Adverse Selection. That’s insurance-speak for the tendency of the sickest people to gravitate to the most generous insurance policies. The flipside is that young and healthy people, whose premiums are needed to subsidize the care of the sick, tend to avoid insurance that they think they can’t afford or won’t need. An insurance pool that includes only the sick will be astronomically expensive. [..]

But, unless everything breaks just right, the odds are that more voters will feel grumpy than grateful, due to dislocations, price hikes, and plain frustrations with healthcare.gov. Yes, much of this is the result of Republicans blocking cleaner and simpler legislation and the Supreme Court blocking mandatory expansion of Medicaid. Yet some of the blind spots were plainly the administration’s own.

There are many good features in President Obama’s health reform. Political prescience wasn’t one.

On This Day In History January 6

This is your morning Open Thread. Pour your favorite beverage and review the past and comment on the future.

Find the past “On This Day in History” here.

January 6 is the sixth day of the year in the Gregorian calendar. There are 359 days remaining until the end of the year (360 in leap years).

On this day in 1838, Samuel Morse’s telegraph system is demonstrated for the first time at the Speedwell Iron Works in Morristown, New Jersey. The telegraph, a device which used electric impulses to transmit encoded messages over a wire, would eventually revolutionize long-distance communication, reaching the height of its popularity in the 1920s and 1930s.

Samuel Finley Breese Morse was born April 27, 1791, in Charlestown, Massachusetts. He attended Yale University, where he was interested in art, as well as electricity, still in its infancy at the time. After college, Morse became a painter. In 1832, while sailing home from Europe, he heard about the newly discovered electromagnet and came up with an idea for an electric telegraph. He had no idea that other inventors were already at work on the concept.

Morse spent the next several years developing a prototype and took on two partners, Leonard Gale and Alfred Vail, to help him. In 1838, he demonstrated his invention using Morse code, in which dots and dashes represented letters and numbers. In 1843, Morse finally convinced a skeptical Congress to fund the construction of the first telegraph line in the United States, from Washington, D.C., to Baltimore. In May 1844, Morse sent the first official telegram over the line, with the message: “What hath God wrought!”