Obama’s Slogan for Trade: “Displaced workers … Made in America”

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When I saw Obama’s pivot to creating Korean jobs on Tuesday, I actually thought he had mangled his script.

And I want Congress to pass a set of trade deals — deals we’ve already negotiated — that would help displaced workers looking for new jobs and would allow our businesses to sell more products in countries in Asia and South America, products that are stamped with the words “Made in America.”

As I noted, Obama adopted the phrase used to refer to those who had lost jobs in past trade deals, “displaced workers,” to refer to those who would get jobs out of these new ones.

And his suggestion that letting JP Morgan Chase and Goldman Sachs use trade deals to extend their financial gimmickry to South Korea and incorporate Panama’s secrecy regime into the US orbit constituted products stamped “Made in America”? That’s a cynical appeal to the nearly-unanimous call for the opposite: a move away from such financialized madness to actual manufacture.

But he didn’t mangle the script. That is the script. Obama said precisely the same thing in his weekly address yesterday:

It’s time Congress finally passed a set of trade deals that would help displaced workers looking for new jobs, and that would allow our businesses to sell more products in countries in Asia and South America – products stamped with three words: Made in America.

Shorter Obama: “Displaced workers … Made in America.”

Update: Here’s how the Administration uses the term “displaced” when it’s not trying to propagandize (this is from a statement Austan Goolsbee made on Friday).

Bipartisan action is needed to help the private sector and the economy grow – such as measures to extend both the payroll tax cut and unemployment insurance, as well as passing the pending free trade agreements with re-employment assistance for displaced workers, the patent reform bill, and a bipartisan infrastructure bill to help put Americans back to work. [my emphasis]

Goolsbee has used the same formula before, as in this statement on July 29. That is, elsewhere, the Administration admits that these deals will “displace workers,” not directly benefit those who have already been displaced by trade deals.

Update: And Obama admits that the trade deals create displaced workers in this press conference on July 15.

I’ve got three trade deals sitting ready to go.  And these are all trade deals that the Republicans told me were their top priorities.  They said this would be one of the best job creators that we could have.  And yet it’s still being held up because some folks don’t want to provide trade adjustment assistance to people who may be displaced as a consequence of trade.  Surely we can come up with a compromise to solve those problems. [my emphasis]

And Jay Carney on July 8:

Q    Speaker Boehner today rejected the idea of tying Trade Adjustment Authority to the free trade agreements.  He says four separate bills.  Do you want it attached because you feel it can’t pass on its own?

MR. CARNEY:  Well, the agreement that was presented was worked out in a bipartisan way.  Trade Adjustment Authority has been supported by members of both parties for years.  And we believe it is very important to provide that kind of assistance to workers who have been displaced by free trade agreements.  And that has been a notion supported, again, by members of both parties for a long time. [my emphasis]

 

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The End of the American Empire

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I write about our dying empire just about every day in my links posts. But given the debt limit debate and Friday’s S&P downgrade, I wanted to look at four pieces that examine where we are more closely (note, all of these are well worth reading in full–do click through to read them).

There are two issues to grapple with: first, with the undeniable evidence that our government has become a clusterfuck, we have become incapable of taking obvious steps–like taking the profit motive out of our health care system or taxing the wealthy that just got a giant government bailout–that we need for the well-being of the country. At this level, S&P’s downgrade makes sense.

But then there’s the question of why we let a thoroughly discredited entity like the S&P be the one to dictate whether we merit our world leadership position or not. That’s not just a question of letting one of the agencies that created the bubble retain any position of authority in the world afterwards (though, again, the fact we left the rating agencies in place after the crash is another sign our governance has failed), but also why a nation-state would let a corrupted entity like S&P do so in the first place.

Therein lies the paradox here: the downgrade is at once a real measure of the collapse of our governance, one of the best symptoms of it, and a key piece of evidence of why our governance is failing. So what’s going on?

This column at Spiegel Online looks on this as a problem of culture. It argues the US has left “the West.”

America has changed. It has drifted away from the West.

The country’s social disintegration is breathtaking. Nobel economist Joseph Stiglitz recently described the phenomenon. The richest 1 percent of Americans claim one-quarter of the country’s total income for themselves — 25 years ago that figure was 12 percent. It also possesses 40 percent of total wealth, up from 33 percent 25 years ago. Stiglitz claims that in many countries in the so-called Third World, the income gap between the poor and rich has been reduced. In the United States, it has grown.

Economist Paul Krugman, also a Nobel laureate, has written that America’s path is leading it down the road to “banana-republic status.” The social cynicism and societal indifference once associated primarily with the Third World has now become an American hallmark. This accelerates social decay because the greater the disparity grows, the less likely the rich will be willing to contribute to the common good. When a company like Apple, which with €76 billion in the bank has greater reserves at its disposal than the government in Washington, a European can only shake his head over the Republican resistance to tax increases. We see it as self-destructive.

The same applies to America’s broken political culture. The name “United States” seems increasingly less appropriate. Something has become routine in American political culture that has been absent in Germany since Willy Brandt’s Ostpolitik policies of rapprochement with East Germany and the Soviet Bloc (in the 1960s and ’70s): hate. At the same time, reason has been replaced by delusion. The notion of tax cuts has taken on a cult-like status, and the limited role of the state a leading ideology.

Now, it is true that America’s political culture has been hijacked, and that those who have hijacked it used hatred as a way to convince others to act against self-interest. But that’s what (perhaps) distinguishes us from Europe; that’s what explains why we, a country with our own currency, can be in as dire a situation as Europe with its common currency. Moreover, I’m skeptical whether, mere weeks after the terrorist attack in Norway, Europe should really be lecturing the US about hate.

Craig Murray looks elsewhere–at the military we feed at the expense of feeding our own people. Read more →

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The $100 Billion TeaBagger Tax

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Last week, when analysts were contemplating a debt downgrade, they put a price tag on it: $100 billion.

A downgrade of the United States’ AAA credit rating is a bigger risk than a default and could over time add up to 0.7 percentage point to bond yields, members of a U.S. securities industry group said on Tuesday.

“That’s on the order of $100 billion over time that we will add to our funding costs,” said Terry Belton, global head of fixed income strategy at JPMorgan Chase. He was speaking on a conference call organized by the Securities Industry and Financial Markets Association, also known as SIFMA.

Over time, he said Treasury yields could rise 60 to 70 basis points on a credit downgrade — “a huge number because we’re talking a permanent increase in borrowing costs.”

That would make it more costly for consumers and business to borrow money and could land the economy back in recession.

That’s a big number though.

A better way of thinking of it is how much every American will have to pay. That $100 billion among 310 million Americans works out to be $322 for every man, woman, and child to pay for the TeaBagger’s little temper tantrum.

To put that in perspective, that’s more than the 2008 Bush tax rebate gave to taxpayers (rebate checks started at $300/person).

So the TeaBaggers are now taking away whatever benefit we got from Bush’s last tax cut.

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“Sustainable Growth” Wasn’t

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There’s something that bugged me about this article (indeed, bugs me about most economic analyses of our current crash). Amidst a discussion that fairly lays out some of the problems with the global economy (all the while ignoring that one critical issue in the US is a gutting of manufacture and unions and therefore increasing inequality), it talks about how to rebalance the global economy so as to return to “sustainable growth.”

What it failed to create, however, was the kind of virtuous cycle of growing sales, growing profits and growing employment, all feeding off of one another, to keep the economy growing even as the stimulus wears off — “escape velocity,” to borrow a term from aerodynamics.

[snip]

The truth is we’re in something of a trap. Until imbalances are corrected, the U.S. and global economies are unlikely to return to robust and sustainable growth. And yet to the extent that we address these imbalances, the correction process will inevitably be a short-term drag on an already weak economy.

I mean, aside from Pearlstein’s blind reverence for the market, he’s right about the notion of balance. It is true, for example, that the newly rebalanced globe, America will play a smaller role as the consumer of last resort.

But it’d be nice if, at the same time as analysts think about rebalancing the global economy, they’d consider what their idea of “sustainable growth” meant in the past–and what it would mean in the future if it continued unchecked. After all, the sustainable-growth-that-turned-out-to-be-unsustainable of the last 60 years of a globalized economy caused climate change which will be an increasing drain on even a growing economy as disasters become worse and more frequent.

The spending on unnecessary consumer goods, the transportation miles driven, the dietary patterns, the waste. Those things caused climate change. Those are the things economists would like to return to, if slightly adjusted around the globe.

Since we’re going to be spending the next couple of years trying to find “sustainable growth,” do you think we could also keep in mind what would be truly sustainable for the globe?

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Buffalo Hangs Its Head In Shame as L’il Luke Laughs at Slaves and Dead Workers

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Susie linked to this clip.

And while she’s right to point to all the evidence that L’il Luke Russert is an ignorant toad about how many jobs Obama’s trade deals will send overseas, I’m more amazed by his arrogant response to being asked about slave and dead labor.

Here’s my take on the exchange, starting from where Dylan Ratigan first interrupts L’il Luke to call him on the claim trade deals will create jobs.

L’il Luke [reciting a script]: A few things where they could find common ground are free trade agreements that are pending with South Korea and Colombia and Panama. It’s unclear whether or not [overtalk]

Ratigan: Hold on, hold on.

[Luke adopts self-satisfied smile]

Ratigan: Are you referencing those free trade deals?

L’il Luke: I am referencing the free trade deals.

Ratigan: I mean, come on now Luke, let’s talk about that for a second.

[Luke bites his lips]

That Panama deal’s nothing but a bank secrecy haven–

[Luke bursts out laughing]

That’s basically what that Panama deal is.

[Luke finally manages to look serious]

The South Korean deal is a way to hire North Korean slaves to make South Korean products so that we can refund the North Korean government–

[Luke has lost it again, openly laughing]

–After giving them sanctions, I call that the “let’s give them a nuke anyway plan,”

[Luke looking down, trying to compose himself, looks up again, biting his lips]

You know, what are we talking about? [Relents]

I’m giving you a hard time.

L’il Luke: No, I know you are. [Laughs] You threw me off my game there a little bit.

Ratigan: Tell me the truth, Luke.

L’il Luke: Aw look, —

Ratigan: When they discuss the South Korean trade agreement around Congress, do they refer to it as “hey let’s give North Korea a nucl- anyway plan?”

L’il Luke [finally adopting his serious pundit face]: No they do not.

Ratigan: They don’t?

L’il Luke: They say it’s a job creator.

Ratigan: For who? For North Korean slaves?

L’il Luke: For the United States, no, they say for the United States. They say it’s a job creator, can immediately [create] thousands and thousands of jobs.

[finally finding comfort in the Village script again, but trying to move on]

You also heard today from President Obama–

Ratigan: How?

L’il Luke [completely sheepish look]: The [??] of free trade, you take the tariffs away, people, you know, build things here,

Ratigan: No, no no. But the tariffs are away, and if I’m exploiting the ability to access a rigged Chinese currency system and North Korean slave labor,

[L’il Luke furrows his brow slightly, affects to look concerned, bites his lips again, shifts his head]

Seems interesting.

L’il Luke: It does.

Ratigan: My Colombian, the Colombian deal’s my favorite. That’s a big job creator.

[L’il Luke looks worried. He hasn’t studied for this test.]

Whaddya say we do a deal with the only country in the world that openly murders all labor organizers–

[L’il Luke has just decided he’s not having fun anymore; juts out chin, peeved now that Dylan is making him play this game]

–to ensure that they will never ask for a raise ever.

L’il Luke [apparently grasping on something he read in college or heard at a cocktail wienie fest]: Well, Colombia, though, in all fairness, Colombia has had massive strides in improvement in terms of their security. I mean, you’re bringing up something that George Miller–

Ratigan: But I’m saying the murder rate of union organizers on a per capita–

[Juts out chin, affects his serious look]

L’il Luke: Well, that’s why there’s Democratic opposition in the House for it right now and they have to figure out that, you know, technicality there.

“That, you know, technicality.” That Democrats think maybe it’s a bad idea to open into unfettered competition with a country that kills labor organizers. But that slave labor in Korea, that cheap labor in China? That–that sounds interesting.

L’il Luke is only where he is because Daddy combined his down to earth Buffalo roots with actual knowledge and–in the years before his death–access, access, access.

But it’s L’il Luke’s smugness that makes me want to vomit. Ratigan is trying to talk about how working people die over this shit. And Luke, shaken for the moment off his tight Village script, not only doesn’t have the knowledge to engage with Ratigan, but doesn’t even have the respect for the subject to avoid laughing openly.

What do you think of your kid, now, Timmeh Russert? Laughing at the idea of slaves and dead workers?

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Tornadoes, Austerity, and Food Stamps

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In one of my posts on drones, I noted that we have had more deaths this year in AL (238) and MO (159) because of extreme tornadoes the severity of which is probably at least due partly to climate change than we have from terrorism.

But there’s something else that seems to have happened.

Meteor Blades has a post cataloging how many more people are relying on food stamps this month–45.8 million, or close to 15% of the country. He links to the state-level data, which reveals  a huge spike in AL’s use of food stamps. In April 2011, 868,813 Alambamans used food stamps–a worse than average but not abysmal 18% of its population. In May, that number spiked to 1,762,481, over 37% of the population, almost 900,000 new people getting food stamps.

Incidentally, the only people from AL’s congressional delegation to vote no on the debt ceiling vote this week–Martha Robey, Mo Brooks, Richard Shelby, and Jeff Sessions–did so from the right.

Assuming these numbers are right (the numbers reported for new applicants–100,000 from hard-hit Jefferson County–seem to support them), there’s still a good reason why so many Alabamans are relying on federal aid to feed themselves: the devastating tornadoes in April. In response, the state rolled out special sign-up processes, turning around applications in three days time. Though, at least from some quarters, there was skepticism about whether people were applying because of the tornado, or more generalized need.

At the very least, the reliance of over a third of Alabamans on food stamps, half of them in response to the tornadoes, suggests one more cost from this crazy weather.

But it will be interesting to see what happens to these numbers in subsequent months. Will these numbers return to “normal,” reflecting an appropriate and short term response to a disaster (even if it is one Alabama’s legislators all refuse to pay for)? Or are we seeing a poor state come to rely on the government for bare necessities once it becomes easy to apply?

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Mark Warner Thinks It’s Bold for a $200M Man to Cut Seniors’ Pensions

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I suggested the other day that Mark Warner’s position on the Gang of Six might bode poorly for SuperCongress being anything but a pre-gamed attack on Social Security and Medicare.

Well, it turns out he has already been running around to the press campaigning for the job, with a conference call and an appearance on Fox.

Sen. Mark Warner (D-Va.) would “love” to serve on the new, bicameral committee established by the debt-limit deal passed Tuesday by the Senate.

“My fear is that this could be made of a group that could be the more ideologically rigid in both parties, and I’m not sure that gets us to where we need to be,” Warner said in a conference call Monday, according to The Richmond Times-Dispatch.

[snip]

Warner said Tuesday on Fox News Channel that the new committee needs to address the two major components missing from the debt-limit deal: entitlements and tax reforms.

“The fact that I’m willing to do that probably means that I’m not actually going to get on the committee,” he said. “Chances are that there will be enormous pressure on leadership in both parties to put members that might not be willing to be as bold.”

Of the three Democrats who were on the Gang of Six–Warner, Durbin, and Conrad–Warner is most excited about cutting Social Security. Plus he’s gunning for things like the home mortgage deduction. And all that while he talks “tax reform,” not increased taxes on people, like him, who have far more than they’ll ever need.

Sure, it’s bold for someone who is worth $200 million to ask seniors and struggling families to make sacrifices to balance the budget.

But that doesn’t mean it’s smart.

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Obama’s Efforts to Create Korean–Not American–Jobs Gets More Cynical

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As I noted this morning, Obama plans to “pivot to jobs” by creating them in Korea. (This video came from his statement today after the deficit ceiling bill got through.)

But his call on Congress to pass trade deals with Korea, Panama, and Colombia just got even more cynical.

First, because he says these deals will “help displaced workers looking for new jobs.” That word–displaced–is often used to refer to those who have lost their manufacturing jobs because they got sent to, say, Mexico in an earlier trade deal. “Displaced” usually refers to just the kind of people devastated by these trade deals. It seems Obama is pretending that new trade deals will create jobs for the people who lost their jobs because of earlier trade deals. But of course, last we heard, the folks who just successfully held our economy hostage were refusing to pass these trade deals with Trade Adjustment Assistance attached. In other words, chances are good that if these trade deals pass, they’ll pass with nothing to help those who are displaced because of it.

And note Obama’s promise to export “products stamped, ‘Made in America’.” Aside from the fact that a lot of what we’ll be exporting will be American-style fraudulent finance, not manufactured goods, his use of the term is all the more cynical given the likely reason he used it: because of the polling showing near unanimity that the US should make things again–like the 94% of Americans polled who think creating manufacturing jobs here in America is important.That is, he’s trying to co-opt the almost complete opposition to this policy–which almost certainly wouldn’t create any new manufacturing jobs here in the US–as a way to try to claim that trade deals that will result in a net loss of jobs will instead create them.

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The “Pivot to Jobs” Will Be an Attempt to Sell Trade Deals

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A number of liberals are sitting around today puzzling through the deal that just happened yesterday. And one thing they’re asking is, “how will Obama pivot to jobs?” One of the many lame excuses the White House has offered for the urgency of this deal, after all, is that by clearing it off the table, it’ll allow the Administration to finally address jobs.

If the debt deal passed yesterday drastically cuts discretionary funding, they note, then there will be no funding for investments in jobs.

But that ignores one thing: Obama has told us how he plans to “pivot to jobs:” he plans to focus his attention on three trade deals–with Panama, Colombia, and Korea–as a central part of his program to address jobs.

Nevermind that these trade deals will send jobs overseas. Nevermind that these trade deals will result in fewer jobs.

Obama plans to, nevertheless, claim he wants these policies in the name of jobs.

Update: Obama made these comments on July 8, in response to last month’s crappy jobs report.

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Shock Doctrine International

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In the middle of the debt ceiling debate yesterday, Naomi Klein tweeted a link to this article, describing how the sovereign debt crisis in Europe is eroding democratic and labor rights.

The economic, and democratic, crisis in Europe raises questions. Why were policies that were bound to fail adopted and applied with exceptional ferocity in Ireland, Spain, Portugal and Greece? Are those responsible for pursuing these policies mad, doubling the dose every time their medicine predictably fails to work? How is it that in a democratic system, the people forced to accept cuts and austerity simply replace one failed government with another just as dedicated to the same shock treatment? Is there any alternative?

The answer to the first two questions is clear, once we forget the propaganda about the “public interest”, Europe’s “shared values” and being “all in this together”. The policies are rational and on the whole are achieving their objective. But that objective is not to end the economic and financial crisis but to reap its rich rewards.

[snip]

The troika (European Commission, ECB and IMF) has decided to improve the mechanisms designed to favour capital at the expense of labour, by adding coercion, blackmail and ultimatum. States bled by their over-generous efforts to rescue the banks, and begging for loans to balance their monthly accounts, are told to choose between a market-led clean-up and bankruptcy. A swathe of Europe, where the dictatorships of António de Oliveira Salazar, Francisco Franco and the Greek colonels ended, has been reduced to the rank of a protectorate run by Brussels, Frankfurt and Washington, the main aim being to defend the financial sector.

After which, we had this exchange:

Me: this entire year must feel like an awkward, sickening, “I told you so” for you.

Klein: if i had a magic riot wand, i would wave it now. #debtdeal

Klein: you did ask me how i felt earlier…

Because, after all, it’s not just in Europe where debt is being used as a cudgel to roll back workers’ and democratic rights. The big news of yesterday’s debt deal–one the Administration is crowing about–is an entity that will sidestep democratic processes so as to make it possible to cut back on Social Security and Medicare. (As I was watching the vote yesterday, probably more than half the calls coming into CSPAN were from people talking about how worried they were that this debt debate might interrupt disability or Social Security checks; I think CSPAN was confused that many of these came in on the Republican line.)

And that fact–the fact that this colossal stupidity is somehow happening on both sides of the Atlantic gets too little attention. As I noted the other night on BlogTalkRadio, we can’t attribute the debt deal just to the Tea Party. Not only has Obama been trying a variety of ways to set up a Catfood Commission that could cut Social Security since he got into office (as DDay points out, the Democrats were the first to try to hold the debt ceiling hostage to get a Catfood Commision), but Greece and France and the UK are all doing effectively the same thing, and they’ve got no Tea Party to blame. In fact, a week ago Saturday (July 23), in the middle of heated negotiations with the Republicans on the debt ceiling here, Obama checked in with Nicolas Sarkozy to see how austerity summer was going on his side of the pond.

The President and President Sarkozy of France spoke by phone today as part of their ongoing consultations on shared U.S.-French strategic priorities.  The two leaders reviewed the results of the July 21 meeting of the Heads of State or Government of the Euro area, agreeing that important steps had been taken to help ensure the stability of the Euro area and to sustain the economic recovery in Europe.

Obviously, there are international organizations where these conversations are designed to take place, all with a financial mandate that doesn’t care about democracy or workers rights. (Though to some degree, it would be churlish for those of us in the developed world to complain that the IMF subverts sovereignty, since we’ve been benefiting from the way it has subverted the sovereignty of developing nations for years.)

Now, you might attribute this seemingly magical obsession of the developed world with austerity to the financial crash: in Europe, these cuts arise directly from the banks’ unwillingness to eat the losses for the mistakes they made during the bubble. Except at the federal level, here in the US, that’s not the false urgency used to justify these cuts: it was two unfunded wars, a set of absurd tax cuts (cutting taxes beyond what governments needed to survive is also one of the main factors driving state-level cuts), and the refusal to institute some kind of national health care system. Ultimately, in the US we need to cut our social safety net because the cost of running a world empire has gotten to be too much to sustain.

But the effect is the same: the elite, particularly the financial elite, has used this crisis–a crisis that is either their own fault or artificially created–to roll back the social contract that has governed the developed world since World War II.

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