03/30/2015 archive

What makes this piece by Joe Firestone so interesting is that it is full of reasons why your Republican Representatives should vote against TPP, especially if they’re crazy Tea-Baggers (don’t tell them I called them that of course, use ‘populist conservatives’ instead).

The New York Times Covers the TPP: A Commentary

by Joe Firestone, New Economic Perspectives

Posted on March 27, 2015

Wikileaks did us all another service yesterday by releasing the “Trans-Pacific Partnership Agreement (TPP): Investment Chapter Consolidated Text,” and collaborating with the New York Times to get the word out. Jonathan Weisman wrote the story for the New York Times.

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Why are we negotiating the TPP at all? Why is it the business of the Representatives of the people of the United States in Congress to support agreements that will mitigate the political risks borne by American businesses who chose to invest in other nations, as well as the political risks borne by foreign corporations, who choose to invest in the United States? Why is it their business to provide protection against such risks to foreign corporations beyond the protections we provide to our own corporations?

The “expectations” of business investors are their own business, not the public’s business; and there’s no reason why either the government of the United States or the governments of other nations should have to accommodate themselves to these expectations. If it is the will of the people of a nation as expressed through their representatives to pass legislation that destroys the “expectations” of business investors, then that’s just too bad for the investors.

Private businesses have no right to expect that their governments will protect them against risks that they alone choose to take, and that they alone will profit from. Risk is part of the game of investing. It’s business.

In free market ideology businesses are supposed to shoulder their risks. They’re not supposed to manipulate their political systems to get legislation providing them with financial protection at the expense of the public. That’s not capitalism, it’s lemon socialism; and it is also one of the key components of fascism.

How have we come to this pass that we view it as legitimate for American businesses to demand that the American public ought to ensure them against the business risks they take abroad? When did it become acceptable to insulate large multinational corporations against the hazards of their folly?

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The TPP provides for three-judge “courts” to conduct the dispute settlement proceeding. One of the judges is actually selected by the corporate plaintiffs. All of the judges are private attorneys who in other disputes may have represented corporate plaintiffs, and it is common for attorneys to be shifting roles from “corporate advocates” in one case to “judges” in another. Of course, the advocates get paid far more than the judges.

Can anyone imagine a more criminogenic environment than this, where all the incentives are aligned in such a way as to extract funds from state treasuries for the benefit of corporations and corporate attorneys alike? Where are the representatives of the various nation-states in these tribunals?

To add to the travesty, there are no limits on the tribunals in the size of the awards they can mandate. So, let’s get this straight, according to the TPP, tribunals staffed by private attorneys who frequently advocate for the very corporations whose complaints they are deciding upon have unconstrained authority to award damages of unlimited size to these same corporations and then the governments of the nations would be obligated to pay these awards. So, assuming present policies in effect for government financing in most nations including the United States, the governments would increase taxes or increase borrowing to pay these awards.

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So, tell me do we really want an international “trade agreement” that will expose the United States to unplanned levies from multinational corporations that would create budgetary political crises in the United States? Would any sane citizen want to take this risk, to mitigate the risks American investors take when they choose to invest overseas? Where does this craziness come from?

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“We’ve done this before” is no defense of a proposed agreement among 12 nations that would expose the citizens of each of them to the risks that properly belong to foreign corporations, or American corporations operating in foreign nations for their own profit. Such corporations are guests in the nations they do business in. They should not be given advantages that aren’t enjoyed by domestic businesses.

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With the TPP Congress is being asked to buy the proverbial pig in the poke. Well, they’ve previously bought three highly touted free trade agreements, and none of them has delivered net benefits to the American people in terms of net jobs created, or a higher standard of living for most of the population, or greater economic equality. So, I think the Administration, really needs to answer the question “What’s in it for us?” in concrete terms without delivering the glittering and deceptive generalities this President is so skillful at offering.

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Free trade is an ideological commitment for many. But there’s no doubt that general implementation of free trade rules would prevent the government from legislating industrial policy, and more specifically would limit the policy space of the government in nurturing industries that it viewed as vital to the American future or to American national security. In view of this, I would never approve any agreement prohibiting the government favoring the products of American companies, if the government wanted to follow such a policy.

Being able to “Buy American” is an essential aspect of the sovereignty of the United States. And in my view Congress and the President have no right to give away this aspect of our sovereignty.

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In my view, this trade-off isn’t in accord with public purpose, and it gives away key aspects of the sovereignty of the United States. In addition, it undermines American democracy and takes another step down the true road to serfdom.

Emphasis mine.

Nothing wrong with a little Mobying and Bi-partisanship say I.

“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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New York Times Editorial Board: Stronger Dollar in a Weak Global Economy

In the last several months, the dollar has strengthened tremendously against other currencies like the euro, the pound and the yen. This largely reflects the realization among investors that the American economy will do much better than other major economies in the coming months. [..]

For the United States, a stronger dollar will serve to dampen growth, though by how much nobody can accurately predict because the relative values of currencies are hard to forecast. Some American manufacturers have said they are losing orders or seeing their profits decline as they are forced to cut prices to compete with the lower prices offered by European and Japanese businesses.

The appreciation of the dollar is a good reason for the Federal Reserve to hold off on raising interest rates this summer. But more than anything else, the stronger dollar serves as a reminder that the world is still far too reliant on the United States, which itself has not yet fully recovered from the financial crisis. That does not augur well for sustainable global growth.

David Cay Johnston: No, the estate tax isn’t destroying family farms

The latest pitch for an estate-tax repeal repeats a long-discredited lie

Congress is voting this week on whether to repeal the estate tax. The step would be a huge boon to billionaires and others whose fortunes would forever escape taxation, creating an even larger dynastic class of inheritors who owe their riches to their skill at picking their parents.

But that’s not what was heard at a House Ways and Means Committee hearing last week. Instead the theme was how the tax was eviscerating American farmers. [..]

The fact is that any claim that the estate tax is killing family farms is a lie.

How many of America’s 2.2 million farms have been sold to pay estate taxes? None. [..]

We need to reform the estate tax system. I would start by changing the code to tax capital gains at death, as Canada does, and to limit the estate tax to huge concentrated fortunes – say, of $1 billion or more. But we should all agree to reform it on the basis of facts, not lies.

I have 3 articles for you this Monday morning!

First, cars are getting a lot better:

EPA: New Cars Are More Efficient Than Ever, Beating Standards By A ‘Wide Margin’

Vehicles from 2013 achieved an all-time record fuel economy of 24.1 mpg, a 0.5 mpg increase over 2012 and an increase of nearly 5 mpg in the last decade. The CAFE standards covering vehicles made between 2012 and 2025 are projected to save 12 billion barrels of oil, cut 6 billion metric tons of greenhouse gases and save drivers more than $8,000 in fuel costs, according to the EPA.

The standards also help protect consumers from the pocketbook pain that can come from volatile gas prices.

Jump!

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.

March 30 is the 89th day of the year (90th in leap years) in the Gregorian calendar. There are 276 days remaining until the end of the year.

On this day in 1867, U.S. Secretary of State William H. Seward signs a treaty with Russia for the purchase of Alaska for $7 million. Despite the bargain price of roughly two cents an acre, the Alaskan purchase was ridiculed in Congress and in the press as “Seward’s folly,” “Seward’s icebox,” and President Andrew Johnson’s “polar bear garden.”

Alaska Purchase

Russia was in a difficult financial position and feared losing Russian America without compensation in some future conflict, especially to the British, whom they had fought in the Crimean War (1853-1856). While Alaska attracted little interest at the time, the population of nearby British Columbia started to increase rapidly a few years after hostilities ended, with a large gold rush there prompting the creation of a crown colony on the mainland. The Russians therefore started to believe that in any future conflict with Britain, their hard-to-defend region might become a prime target, and would be easily captured. Therefore the Tsar decided to sell the territory. Perhaps in hopes of starting a bidding war, both the British and the Americans were approached, however the British expressed little interest in buying Alaska. The Russians in 1859 offered to sell the territory to the United States, hoping that its presence in the region would offset the plans of Russia’s greatest regional rival, Great Britain. However, no deal was brokered due to the American Civil War.

Following the Union victory in the Civil War, the Tsar then instructed the Russian minister to the United States, Eduard de Stoeckl, to re-enter into negotiations with Seward in the beginning of March 1867. The negotiations concluded after an all-night session with the signing of the treaty at 4 a.m. on March 30, 1867, with the purchase price set at $7.2 million, or about 2 cents per acre ($4.74/km2).

American public opinion was generally positive, as most editors argued that the U.S. would probably derive great economic benefits from the purchase; friendship of Russia was important; and it would facilitate the acquisition of British Columbia.

Historian Ellis Paxson Oberholtzer summarized the minority opinion of some newspaper editors who opposed the purchase:

   “Already, so it was said, we were burdened with territory we had no population to fill. The Indians within the present boundaries of the republic strained our power to govern aboriginal peoples. Could it be that we would now, with open eyes, seek to add to our difficulties by increasing the number of such peoples under our national care? The purchase price was small; the annual charges for administration, civil and military, would be yet greater, and continuing. The territory included in the proposed cession was not contiguous to the national domain. It lay away at an inconvenient and a dangerous distance. The treaty had been secretly prepared, and signed and foisted upon the country at one o’clock in the morning. It was a dark deed done in the night…. The New York World said that it was a “sucked orange.” It contained nothing of value but furbearing animals, and these had been hunted until they were nearly extinct. Except for the Aleutian Islands and a narrow strip of land extending along the southern coast the country would be not worth taking as a gift…. Unless gold were found in the country much time would elapse before it would be blessed with Hoe printing presses, Methodist chapels and a metropolitan police. It was “a frozen wilderness.

While criticized by some at the time, the financial value of the Alaska Purchase turned out to be many times greater than what the United States had paid for it. The land turned out to be rich in resources (including gold, copper, and oil).

Senate debate

When it became clear that the Senate would not debate the treaty before its adjournment on March 30, Seward persuaded President Andrew Johnson to call the Senate back into special session the next day. Many Republicans scoffed at “Seward’s folly,” although their criticism appears to have been based less on the merits of the purchase than on their hostility to President Johnson and to Seward as Johnson’s political ally. Seward mounted a vigorous campaign, however, and with support from Charles Sumner, chairman of the Senate Foreign Relations Committee, won approval of the treaty on April 9 by a vote of 37-2.

For more than a year, as congressional relations with President Johnson worsened, the House refused to appropriate the necessary funds. But in June 1868, after Johnson’s impeachment trial was over, Stoeckl and Seward revived the campaign for the Alaska purchase. The House finally approved the appropriation in July 1868, by a vote of 113-48.

It wasn’t that hard when I was a grunt. As long as my job was constructive, something that made the world suck less, a regular job was OK. I was a working class guy, the Man was the Man, and never the twain would meet.

Now, I’m the boss. Sure, it’s a non-profit, but I’m still in a position to hire, fire, and order people around. It’s also important to note that “non-profit” doesn’t mean nobody is taking home too much money. It doesn’t mean the work really helps anyone. Non-profits are, if anything, more worried about their reputation than for-profit businesses, who don’t need to appeal to the goodwill of the bourgeoisie for sustenance. I have confidence in the decency and mission of the outfit I work for, but as anyone who has spent time in the non-profit/NGO world understands, organizations change and non-profits can be quite ruthless. They are every bit as flawed as the human beings who run them.

For better or worse, I help run this one.

Now, instead of separating myself from the Man, I find I am the Man. I manage several dozen employees who depend on me to be competent and fair in my decisions, which critically effect not just their working life, but their homes and families, and even their long-term employability anywhere.

What’s a good socialist to do?