Who Will Stand Up And Salute?

Reading the (weak) tea leaves it appears Obama has said all he intends to say about the illegal NSA spying in last Friday’s hectoring (and boring) lecture.

So what will Obama talk about in the State of the Union address next week.  The smart money says there will be two main themes he will attempt to conflate to confuse the country which has turned sharply against his Administration and the Democratic Party.

One theme is income inequality.  Well good for him except that it’s highly unlikely after 6 years of policy specifically designed to increase it he has any meaningful remedies to suggest (to say nothing of their political viability).

The other theme is the Trans-Pacific Strategic Economic Partnership and that dear readers is a stone cold loser, not simply because it’s bad economic policy and a naked power grab by the Executive at the expense of Congress and the Courts, but the more voters learn about it the more they hate it and justifiably so.

And it’s not just here in the US.  The reason we don’t have an agreement today is that the vast majority of our proposed partners can see that it’s a terrible deal for them and the United States Trade Representative is arrogantly refusing to negotiate compromise, prefering instead threats, intimidation, and blackmail.

Obama: Give me fast track trade

By Amie Parnes, The Hill

01/21/14 06:00 AM EST

No House Democrats are co-sponsoring the bill, however, and Rep. Sandy Levin (D-Mich.), the Ways and Means Committee ranking member, and Rep. Charles Rangel (D-N.Y.), the panel’s former chairman, have both criticized it. They said the legislation doesn’t give enough leverage and power to Congress during trade negotiations.

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The Democratic opposition makes it highly unlikely the trade promotion authority bill, in its current form at least, will go anywhere.

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Senior congressional aides expect trade to be a part of Obama’s upcoming State of the Union address, since the White House has made clear that the trade bill is a priority and the TPP trade pact is a core part of the administration’s overall jobs agenda, in terms of increasing exports and opening markets.

“This is a priority of the president’s,” White House press secretary Jay Carney told reporters last week. “It’s part of a broad approach to expanding exports and, you know, creating more opportunities for our businesses to grow. And we’re going to continue to push for it.”

People Pressure Is Making Fast Tracking the TPP Politically Toxic

By Kevin Zeese and Margaret Flowers, Truthout

Tuesday, 21 January 2014 10:36

Leaks are sinking the TPP like the Titanic on its way to the bottom of the ocean. Ron Kirk, the former US Trade Rep said they were keeping it secret because the more people knew, the less they would like the TPP and it would become so unpopular it could never become law.

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This week, Wikileaks released the Environmental Chapter.  The bottom line – there is no enforcement to protect the environment. The TPP is worse than President George W. Bush’s trade deals.  Environmental groups are saying the TPP is unacceptable.

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When Fast Track was introduced there was a backlash, according to public reports, of angry Democrats. Rep. Earl Blumenauer (D-OR) told Huffington Post: “I’m a little disappointed that something’s dropped that was never discussed with Democrats in the House. As I understand it, it wasn’t actually discussed with Democrats in the Senate.”

Five members of the Senate Finance Committee told US Trade Representative Mike Froman they will not support the Baucus Fast Track bill because Congress needs to be involved throughout the process not just in an up or down vote after it is completed.

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Baucus says he will not be holding a mark-up of the bill because of the divisions on the Finance Committee. Sen Ron Wyden (D-OR) who will be taking Baucus’ place told Politico there was “broad frustration” with the lack of transparency. And. Majority Leader Reid said that he may not even bring the bill to the Senate Floor if it passes out of committee.

As bad as the senate sounds for the administration, the House is even worse.  Opposition has been building in recent months with Democrats and Republicans writing President Obama opposing Fast Track.

They could not find a Democratic co-sponsor and now Politico reports, that Speaker Boehner says he will not bring the bill to the floor for a vote unless 50 Democrats support it.

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The president’s TPA month is off to a bad start, so he has to make a big pitch in his upcoming State of the Union on January 28.  If he doesn’t, it is a sign he has given up and is distancing himself from defeat. He’s not only going to have to persuade almost every Republican to support him (that would be a first for his presidency), he’s going to have to convince every Democrat who has not taken a position, and change the minds of many who have already publicly said they oppose Fast Track.

The problem is Members of Congress know that if they get on the wrong side of corporate trade agreements, it will hurt them politically.

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Members of Congress have seen the research that shows 90% of Americans will see their income go down from the TPP while the wealthiest get wealthier.  Why would any Member of Congress want to sign on to something like that – especially in an election year.

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Under the Baucus-Camp Fast Track the president is also able to draft extensive implementing legislation to bring US law into compliance with the agreement. It is up to the president to decide what changes in laws or new laws are needed to comply with the TPP. Congress is not able to mark-up or amend the language of these bills.  And, these can be very significant laws.  For example, provisions like “Buy American” or “Buy Local” can be repealed as a restraint on trade. In all of these cases under Fast Track the president becomes the Congress and drafts legislation, totally destroying the checks and balances of the three branches of government.

Over at Naked Capialism a regular poster named Clive has done a translation from the original Japanese of a report by Fisco, “a financial analyst services provider” based in Japan.

It’s no longer publically available on their website but Clive thinks it’s merely been put behind a subscriber paywall.  There is a screen capture available from Excite if you happen to read Japanese, which I do not.

While I’ll not vouch for Clive’s translating abilities I think his analysis is spot on and I’m not the only one.  Joe Firestone (letsgetitdone from New Economic Perspectives) was also quite impressed and calls it a “very good post.”

Japan to US: You Can’t Railroad the Trans-Pacific Partnership

by Clive, Naked Capitalism

Posted on January 20, 2014

I would argue that Japan is ground-zero for TPP. Japan was a latecomer to the TPP party, the invitation being extended because without Japan, which is still after countless lost decades the world’s third biggest economy with a GDP almost 10 times the size of, for example, Malaysia. Without Japan, any resultant TPP would be a doughnut with a Japan-shaped hole in the middle.

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(W)hen, a fortnight after the official releases from the Singapore TPP negotiation round, off the record briefings started to appear I planned to translate these after the holiday season. Fisco is a financial analyst services provider in Japan and on the 24th December 2013 they put out a toughly worded assessment of where TPP was likely to go next in terms of Japan’s participation. The article didn’t cite official sources directly, but from my experience with the Japanese media, it was pretty obviously drawing on officials speaking off the record. In the US you typically get such articles prefaced by “Washington insiders say…”, “Obama aides report…” or “One source added that the president has…”. Here in the UK, the line “Sources close to the Prime Minister…” has become such a cliché for the Prime Minister’s press office that one wonders why journalists bother with the subterfuge. In Japan, readers don’t get their intelligence insulted with such banter. If a source is on the record, they are named. If it’s off the record, information simply is reported source-less.

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Diplomacy is just a nice word for cross-border politicking. And that is the nub of why, certainly as far as Japan is concerned and I’d venture too the other countries involved, the TPP talks are stalling. The deal is being worked on by politicians. These politicians have constituencies and need their constituents’ votes. Now, politicians the world over – and certainly Japan is no exception to this rule – can and do throw one set of voters under the bus if it means that another, larger, group of voters might provide support in return. TPP requires (or at least, the current US position requires) that Japanese agriculture takes a hit because the subsidies it receives are to be removed. To the LDP (Prime Minister Shinzo Abe’s party) in Tokyo, rural votes lost in Chiba prefecture because rice growers’ incomes drop might be made up for in Okinawa if the move of the resented US base there is expedited. Or at least if the crash-prone Osprey aircraft are removed. But who is Tokyo talking to at the TPP negotiations? The Office of the United States Trade Representative. What can Michael Froman bring to the table? Signed copies of Timothy Geithner’s memoirs?

This highlights a deeper malaise for the US. Due to its mismanagement of the South East Asia geopolitical arena, it doesn’t have much to offer either Japan or the other TPP countries. Japan would certainly appreciate some US muscle directed towards China over the Senkaku Islands territorial dispute. A bit of US help in dealing with North Korea wouldn’t go amiss either. Yet the US can deliver on none of these things. It certainly wouldn’t want to risk the overspill from any goading of China. And even lower impact offerings like the Okinawa base aren’t in the USTR’s gift.

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Even if the US had better goodies to offer Japan to sweeten the TPP pill it is asking it to swallow (and it’s a little short on tempting morsels in this regard) U.S. Trade Representative Froman is not in a position to offer them without State Department assistance.

All of which shows that the TPP is nothing more than a grubby political gambit. Economists like to dress up their theories in scientific costume, presenting them as somehow evidence-based and provable in a measurable, repeatable way. Yves has – literally and figuratively – written the book on this subject as it is covered in ECONNED.

Economists promoting the provisions of the TPP are caught in a bind. If the economic theory underpinning the TPP is self-evidently valid beyond all doubt, it doesn’t need to be “sold” to any of the participating countries. They’d only have to look at the unequivocal evidence of the merit and validity of the theory before making the logical decision to enact the TPP.

If the TPP is on the other hand merely the US government doing the bidding of one of its main vested interests and biggest group of political donors (the multinational corporations) and asking the respondent TPP countries in the Pacific Rim to go against their own vested interests (such as subsidised agricultural producers or State Owned Enterprises) then the US will have to buy off the politicians in those countries with some political favours. Only the State Department can really wheel and deal in those areas. The Office of the United States Trade Representative will need to call in the State Department to lubricate the negotiations – and in doing so dispel any notion this is anything to do with strategic economics.

The mask will slip and the true nature of the TPP will be revealed – which for me will always be that the TPP is only crass political payback by Obama for services rendered. Chief amongst those are the services supplied by the multinationals: significant campaign donations.