US President George W. Bush lost his special trade power at midnight Saturday as opposition Democrats flexed their new grip on Congress and refused White House appeals to renew it.
Democrats, who wrested control of Congress from Republicans in January, were eager to reclaim the constitutional trade authority and set their own stamp on trade policy.
Under the TPA, Bush negotiated trade agreements that could only be approved or rejected by the legislature, but not amended.
I’ve never been surprised when Congress sticks all 4 feet in the air for corporate interests. After all, fast-tracking started back in 1975 under Gerald Ford’s Nixon-Era Frontera.
The end of TPA also highlighted a waning appetite for free trade among Americans in the face of a burgeoning trade deficit. Critics blame a swelling multi-billion-dollar trade gap with China and others for the loss of thousands of US manufacturing jobs.
Among the steps to be taken is the introduction soon of legislation to address the growing US trade imbalance with China and strengthen overall enforcement of US trade agreements and US trade laws.
No one seems to notice that some industrial nations never found it necessary or useful to roll over for the sort of trade imbalance that the Washington Junta finds perfectly acceptable.
Of course, our government’s track record for protecting American jobs or small business is a perfect match for law enforcement guarding our borders or indicting employers of illegal migrant labor.
Yeah, those Democrats are really standing up for workers, importing low-wage Mexicans to take their jobs and all. Good thing Republican Senators voted 3-1 against to keep it from happening.
1–Right you are. The corptheftocracy has fully hooked both parties on their “campaign contributions” and the Dems pander for votes thus creating the imbalance.
Ending of TPA probably not significant given the above. TAX BREAKS to corps offshoring their business is still in place FOR GODS SAKE! Talk about a suicide pact==our government with Big Business.
Kucinich was the only candidate to suggest revoking NAFTA and such==bold idea. Probably get him assassinated quicker than Obama.
I wonder what his position was on amnesty and guest worker program.
The problem with free trade is nothing’s free.
3—Nice catch. Evidently Kucinich has very complicated views on the subject as basically he supports amnesty and prevents border enforcement per
http://tinyurl.com/32nl5k
Good, I was starting to think he might be a viable incumbent. But no, the golden rule applies======VOTE ALL ENCUMBENTS OUT OF OFFICE.
I’m not real up on trade intricacies…..but my Dad says this could be bad for us or good depending on congress….he said it used to take months to years to work out even a small trade agreement when congress had oversight in the past. This usually cost the U.S. workers jobs and business, business.
He said since the Democrats went isolationist, trade went to hell. And this is just Democrats pandering to the Unions who no longer represent the vast majority of workers. The Unions discovered people would respond favorably if they played the worker abuse and green issues to stop trade that hurt them.
While working conditions may be bad(they are) in many places, the huge increase in trade for those nations has led to better overall living conditions and that is leading to improved working conditions(look at China recently and others), even the green picture is improving as these countries find they now have the money to build better and more clean manufacturing plants. But if we stop trade based on the conditions the Unions have got the Democrats to impose, then these people will have NO wage, NO jobs and we have NO leverage to try to improve things. Remember folks, Bush and his cronies won’t be there forever, the next President may wish he had fast track.
As to the loss of manufacturing jobs….seems Democrats and Unions have short memories…..we killed the steel and auto industries in this country with Unions demands for outragous wage and benifit plans that just escalated with each contract. The steel industry couldn’t compete with cheap imports….due to wage demands and then enviromental demands. We are all guilty of killing off the golden goose.
6—Nobody is up on trade intricacies but some “macro” issues are clear.
No country can exist for long if it doens’t remain economically competitive. You can’t offshore all manufacturering and run trade deficits forever.
To that end, maybe alot of manufacturing will be lost to overseas no matter what USA does, but that doesn’t mean tax credits should be given to encourage manufacturers to go overseas. Bilateral trade policies using tariffs to offset environmental pollution, slave labor, child labor, etc are VERY problematic but issues like univeral health care instead of employer based coverage would make USA products more competitive. etc.
In view of legitmate competitive pressures, the USA has too much hastened our decline by “giving in” rather than fighting for. There is some truth to what you say, but its not the whole picture.
I don’t think the bettering of foreign workers conditions should be any part of USA trade policies except as they make USA good more competitive. Good post though.
It’s not Bush per se but the so called “Fast Track” legislation that went into effect in the 70’s regarding trade. It more or less worked in our favor until we were railroaded by NAFTA (Clinton era). It’s been downhill ever since. What’s more, alot of people think there is no stopping any of this regardless of who gets voted in next year. There isn’t enough angst out there to catch Washington’s attention.
NAFTA and Fast Track should be thrown out as basically outmoded law.
#6, joshua, one again your short sightedness betrays you.
As to the loss of manufacturing jobs….seems Democrats and Unions have short memories…..we killed the steel and auto industries in this country with Unions demands for outragous wage and benifit plans that just escalated with each contract.
I guess Home Schooling didn’t teach you that when America’s Union environment became common place, the standard or living soared. While the anti-union crowd always like to call the unions greedy and blame them everything, NEVER do they ever decry the greedy companies that shut down American operations, move their manufacturing off shore then sell the cheaper goods at the same price as if they were made here.
The anti-union crowd love to scream about how the unions want too much money. Never explaining how much is too much. Only if a union member gets it, then it’s too much. Yet Doctors, Lawyers, Accountants, Engineers, and other professionals not only restrict their memberships, there is little restraint on their fees. Those well paying union jobs fueled the middle class. It was the middle class that supported this country. Without them we have deficit budgets.
I am reminded of a cartoon I saw around 1980. It had an auto worker asking his boss,
“You supply the parts, you supply the specifications, you supply the drawings, you supply the tools, you supply the supervision, you supply the assembly line, and you supply the manufacturing methods, so please explain how poor quality is my fault”.
Please note. I didn’t ask my father for his opinion. I give my own. If I don’t know or have something myself to say, I don’t say anything.
9–Fact is we know thing only 3 ways
1. Someone told us
2. We read it
3.. Figure it out based on 1& 2 and what we experience.
Just because Josh can remember where he heard it, doesn’t make it less his own ideas. For instance, I can remember my own dad saying most people are assholes. Course, I think he was speaking of himself only.
I heard a good Ayn Rand quote this week, “Congress shall make no law that interferes with the production and exchange of goods and services.” This certainly seems to do that. Putting an end to fast-track authority is an inefficient use of legislative time. During the debate on NAFTA, several congressmen, business leaders, and trade/craft representatives had time to impact the legislation during the drafting period. However, when the bill went to the floor the process was expedited because each legislator couldn’t sell his vote for an additional earmark and pork-spending project. Fast-track authority worked extremely well for the recently approved CAFTA-DR and the controversial Korean FTA.
#6 – Your dad’s analysis is pretty dead on. Fast-tracking FTAs does have implicit advantages over the traditional system. You touch on the impacts of FTAs and there are always winners and losers. The winners are the consumers in the importing country and the producers in the exporting country, while the losers tend to be in the import competing sector (cars, steel, textiles, and shoes). By and large these gains outweigh the costs and makes the trading countries better off. U.S. consumers have seen their purchasing power increase dramatically because of cheaper imports, while at the same time Chinese exporters have been able to lift millions out of poverty in coastal China. The Asian Tigers are probably the best example of a nation becoming rich due to the world’s demand of their exported goods.
Also, U.S. manufacturing sector is far from killed off.
#7 – The best way for a country to remain economically competitive is to sign and participate in FTAs. America’s comparative advantage does not lie in “Sisyphus-esk” jobs such as standing on an assembly line assembling toys and iPods, but instead on designing, marketing, and selling those products. I heard that Sisyphus line the other day from an economist at George Mason University, who makes the case that Sisyphus was fully employed, nor did he ever have to worry about a foreigner stealing his job. The French philosopher Frédéric Bastiat, wrote sarcastically that every French household should paint their windows black in order to increase the demand for French candles, a sector that was struggling against cheap British imports in the 19th century. Again it is hard to make a case that we would be better off to stop less expensive goods from entering the country to help producers who constitute a minority in the aggregate economy.
A second thing you raise, while it may not be the goal of U.S. trade policy to make foreign people better off (although that is the effect) it should be a goal of every human being.
Finally, I have yet to see a scholarly article that makes the case for Universal Health Care as the best option for making U.S. producers better off, and the aggregate consumer better off.
#9 – I guess Home Schooling didn’t teach you the economics of international trade and labour relations. You point out a correlation between the rise of wealth and unions but you have yet to prove causality. I would offer this instead from John Steele Gordon’s “An Empire of Wealth.”
“By 1992, of course, the economic universe that had brought the modern labour movement into being was rapidly vanishing. The percentage of the workforce that was unionized peaked in 1945 at 35.6 percent and has been declining ever since. By 1960 it was only 27.4 percent of the nonfarm workforce. Today it stand at only 14 percent and would be lower than it had been in the 1900 were it not for the spread of unionization among government workers, which began only in the 1960’s.” So actually, I would point out that the amount of unionized labour has decreased since 1945 while the wealth of this nation has increased about 250-300%. I think that would point to a negative correlation and not a positive as you claim.
Gordon closes this section, “The heart of the old union movement had been in manufacturing among the everybody-does-the-same-job assembly line workers (Sisyphus—added). But just as agriculture, the country’s first great economic sector, has continually increased output while using an ever-declining percentage of the workforce, so has the country’s second great economic sector, manufacturing. The age-old American drive to increase productivity and thus minimize labour continues unabated.”
The next step that needs to occur is the passage of the Doha Trade Agreement and I hope the President will have fast-track authority for that piece of legislation.
#9…Fusion….your right, Home Schooling didn’t teach me a lot about union activities, since they weren’t all that relevant by the time I was old enough to read. But, my Mother’s older brother did teach me one hell of a lot about Unions. He was the local leader of a small but powerful local Union of the Transport Workers Union, for the old Pennsylvania Railroad(and later the Penn Central Railroad). He was also an Executive Vice President under Mike Quill of the Transport Workers Union International. The union represented the subway workers in New York, and the bus drivers of almost every major city in the East as well as the non-drivers(firemen, etc.) of the Pennsy and New York Central railroads.
He fought(literally) in many union stikes and anti-scab picketing’s throughout the East. He was involved in the organising of the Pittsburgh Cab drivers in the early 50’s(he was beaten by scab cab drivers and driven into the Allegany River from an old bridge in a cab and almost drowned). He participated in actions against almost every steel mill along the Allegany and Susquhana and Ohio Rivers, from the Homestead Plant in Pittsburgh to the Jones and Laughlin plant in Aliquippa PA. during the 50’s and 60’s. So, you might say I had a pretty good teacher of union politics.
My Uncle is 81 now and will tell you upfront that the Unions and their demands of the late 60’s and 70’s were one of the major causes of the fleeing of manufacturing to other countries in many industries.(he will also tell you that the goverment and the corporations were also right up there with the Unions in this) He felt that after the old leaders started retiring and dying off, the new leaders forgot that it took people to make a Union and made demands that were bound to hurt the very workers the Unions were formed to help.
Why is it that an 81 y/o union firebrand, who was a Democrat through and through(met and was friends with Truman, and Stevenson, and even Kennedy(who came to the small town my Uncles union local was in and he was Mayor of to campiegn with my Uncle and the Mayor of Pittsburgh in the 1960 election), can see the truth, but you can’t???
Unions had their place and still do for many reasons, but they aren’t the Unions that did all those things you mention.
Please note. I didn’t ask my father for his opinion. I give my own. If I don’t know or have something myself to say, I don’t say anything.
I’ll stick up for Joshua here, even though I may or may not agree with what he’s saying.
There’s nothing wrong with quoting your dad’s opinions. I don’t imagine your opinions differ ALL that much from your old man’s.
Here’s to dads. Including me.
I can buy that unions killed off their own jobs, but wouldn’t higher tariffs have prevented that foreign competition. Sure everyone gets stuck with crappy cars, but the jobs would still be there right?
#1 – MikeN,
No one has been sticking up for workers for a long time. The Dems gave up that ruse in the same way and around the same time that the Reps gave up the ruse of being for small government.
Free trade will never be the answer. Francoise Mitterand had a good idea about trade. I doubt anyone has actually tried it. The idea was to tie the import tariffs of the nation to the standard of living of the workers who produced the goods. I’m not sure whether it would be better to tie this to the standard of living of the nation or of the corporation. The latter seems better to me, but much harder to implement.
So, if we could even consider putting this idealistic plan into effect, goods from China where the workers make dramatically less than workers in the U.S. would be taxed at a much higher rate. Goods from areas where the workers are paid more, would pay less in tariffs.
This would result in relatively equal costs for goods produced around the world. It would also take away the corporate profit incentive for producing goods in nations with horrific living standards and low wages. It would even encourage the companies to lower their taxes by paying a fair wage to their workers.
And then I woke up.
#14- The Smoot-Hawley tarriff had its 70th birthday not to long ago, and that tarriff did exactly what you claim. Execpt it was one of the forces that made the Great Depression..well greater. Ignoring the consumer gains from trade in favor of saving a few jobs is not an effective means to make a society wealthier.
#15 – That entire tarriff policy erodes the gains from trade.
“This would result in relatively equal costs for goods produced around the world.” That is what makes trade work in the first place, e.g. differentials in relative prices.
Here is something from Donald J. Boudreaux :
Dear Editor:
It is unfortunate that Congress refuses to renew the President’s fast-track trade authority (“End Nears for Era of Presidential Trade Authority,” June 30). And it is insulting for protectionists, such as Kevin Kearns, to justify this refusal with the argument that freer trade has encouraged “footloose multinational companies” to flee the U.S. for “penny-wage, regulation-free foreign production sites like Mexico and China.”
The facts are difficult to square with this claim. In 2006, per capita foreign direct investment in Mexico was $174; in the U.S. it was $612 – three and a half times as much as in Mexico. 2006 figures for China are unavailable, but in 2005 per capita FDI in that country was just shy of $60 – less than one-tenth of 2006 per capita FDI for the U.S.
Sincerely,
Donald J. Boudreaux
George Mason University
He follows the letter to the editor with this comment:
Two-thirds of FDI flows in 2006, at US$ 800 billion, were to developed countries (up from three-fifths in 2005). This represents an exceptional 48 per cent estimated increase over the US$ 542 billion flows into developed countries in 2005.
If high-wage, developed countries are less attractive places to earn profits than are low-wage, developing countries, investors worldwide have yet to learn this alleged fact.
Smoot Hawley tariffs were relatively minor, and the goods affected were a small part of the economy. The depression probably has other roots. Consider the tariffs that were put in place throughout US history. Why didn’t Fordney McCumber cause a depression? Abe Lincoln and his predecessors had huge tariffs on many goods. Sure this caused a civil war, but the economic devastation wasn’t there.
Ye, there is consumer savings. But the consumer savings can only be as much as the wage savings for the companies that make the goods, and this will be dampened by transport costs. At the same time, the displaced workers are losing income, and this money is coming off the top.
#16 – mxpwr03,
Yup. That’s what makes trade work in the first place. True. However, we have traded so much that we are now incapable of producing stuff. We should just make our entire education system teach children to say “Would you like fries with that?”
We invented the television and can’t build one. We invented the VCR and probably never built a single one.
Perhaps adjusting the tariffs to be so high that all costs are exactly equal is going too far. But, how about leveling the playing field a little? How about caring that children are producing our goods? How about caring that the children, who should be in school instead of working, are working in conditions that aren’t fit for anyone of any age?
Do you think that perhaps we should encourage better business practices than that? I do. And, I would be willing to pay more for my TV to get it.