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Omnibus: Sanders and Free Trade, from Peter Myers | ODS

Sanders is a Protectionist - he rejects the TPP, and voted against Free Trade Agreements

(1) Sanders a Socialist but not a Trotskyist - Eric Walberg
(2) Sanders stood as a candidate for the Trotskyist SWP, but says he was not a member
(3) Sanders rejects TPP & other Free Trade Agreements; he voted against NAFTA
(4) Sanders' opposition to Free Trade is winning votes; Trade is the key issue in the election
(5) So-called 'free trade' policies hurt US workers every time we pass them - Bernie Sanders
(6) Globalization destroys National Sovereignty - Dani Rodrik
(7) Michigan voters reject Hillary's Free Trade policies and record
(8) Bernie Sanders' Rust Belt rebellion: Free Trade is the issue
(9) Paul Krugman asks if Sanders & Trump would really tear up Free Trade Agreements
(10) Paul Krugman admits that Protectionism does NOT cause Depressions
(11) US political system has lost legitimacy; Journalists identify with the Elites

(1) Sanders a Socialist but not a Trotskyist - Eric Walberg

Date: Mon, 28 Mar 2016 20:46:38 +0000 (UTC) From: Eric Walberg
<> Subject: re saunders a trot

He was not in the socialist workers league. and he has always worked
with the liberal dems, and worked out a modus vivendi as an independent
senator, a longtime vermont tradition. he is also the most popular
senator (67% approval), so he could easily outmaneuver trump. it's just
the banksters who are scared.

While at the University of Chicago, Sanders joined the Young People's
Socialist League (the youth affiliate of the Socialist Party of America
[eugene debs]) ... Sanders began his electoral political career in 1971
as a member of the Liberty Union Party, which originated in the anti-war
movement and the People's Party.

... Sanders was the first independent elected to the U.S. House of
Representatives since Frazier Reams' election to represent Ohio 40 years
earlier.[78] He served as a representative for 16 years, winning
reelection by large margins except during the 1994 Republican
Revolution, when he won by 3.3%, with 49.8% of the vote > In 1991,
Sanders co-founded the Congressional Progressive Caucus, a group of
mostly liberal Democrats that Sanders chaired for its first eight years.

... Chuck Schumer, chairman of the Democratic Senatorial Campaign
Committee, endorsed Sanders, a critical move as it meant that no
Democrat running against Sanders could expect to receive financial help
from the party. Sanders was also endorsed by Senate Minority Leader
Harry Reid of Nevada and Democratic National Committee chairman and
former Vermont governor Howard Dean. Dean said in May 2005 that he
considered Sanders an ally who "votes with the Democrats 98% of the
time".[106] Then-Senator Barack Obama also campaigned for Sanders in
Vermont in March 2006.[107] Sanders entered into an agreement with the
Democratic Party, much as he had as a congressman, to be listed in their
primary but to decline the nomination should he win, which he did

... Sanders was only the third senator from Vermont to caucus with the
Democrats, after Jeffords and Leahy. His caucusing with the Democrats
gave them a 51–49 majority in the Senate during the 110th Congress in
2007–08. The Democrats needed 51 seats to control the Senate because
Vice President Dick Cheney would have broken any tie in favor of the
Republicans.[112] When he officially announced his intention to seek the
Democratic nomination for president, Sanders set himself on a path to
become only the second Democrat to represent Vermont in the Senate, the
other being Leahy.

(2) Sanders stood as a candidate for the Trotskyist SWP, but says he was not a member

Bernie’s Past With the Far Far Far Left

01.30.16 5:00 AM ET

Bernie’s militantly socialist past hasn’t seemed to bother Democratic
voters, but the question remains if they know how deep his radical left
roots go.  [...]

Sanders’ association with the radical left is varied—over many years of
political development he came to be associated with the youth section of
the Socialist Party; the Trotskyist Socialist Workers’ Party; the
anti-war Vermont Liberty Union Party, and the left-wing People’s Party.

As a student at the University of Chicago, Sanders was involved in the
Young People’s Socialist League, or ‘Yipsel’ and picketed President
Lyndon B. Johnson aide Sargent Shriver when he visited campus in
Sanders’ senior year, according to Mother Jones: "[We] will not serve as
a front for your capitalist system," the group wrote in an open letter.

In the 1970s, Sanders became involved with the Liberty Union, an
anti-war political party in Vermont. In 1971, Sanders’ platform involved
the legalization of all drugs, while in the following year he wrote in
an op-ed that Congress should "institute public ownership, with worker
control, of the major means of production." Several years later, in
1976, Sanders told the Bennington Banner that a "sane society" required
that "capital has to be controlled by the people."

Sanders ran twice for governor and twice for Senate under the party's
banner before ultimately leaving the party.

"He was never really a party guy," Guma told The Daily Beast, calling
Sanders' association with the party merely "tangential…. his career was
to be a voice and a candidate… he was an idealistic young person, that's
what he was."

Still, Sanders was involved enough that he served as the chairperson of
the party for several years in the 1970s. In 1972, Sanders backed
Benjamin Spock as a presidential candidate over the Democratic
candidate, George McGovern.

Spock was the candidate for the People’s Party, a now-defunct political
party than ran in two presidential elections. Spock called for a maximum
income of $55,000 and a minimum annual income of $6,500 for a family of
four. Spock’s ideas were more in line with Liberty Union, as compared to
McGovern’s ideas, Sanders said at the time.

Sanders also served as a presidential elector for the Socialist Workers’
Party in 1980, something that he acknowledged in a 1988 television
appearance. The group at the time was a Trotskyist party that pressed
for the abolition of capitalism and the peaceful establishment of socialism.

"I was asked to put my name on the ballot and I did, that’s true,"
Sanders said, in the 1988 appearance. But he insisted he was never a
member of the Trotskyist party. [...]

(3) Sanders rejects TPP & other Free Trade Agreements; he voted against NAFTA

Bernie Sanders on Free Trade

Does not support ANY free trade agreements

Q: What do you think about the new TPP trade deal, the Trans-Pacific

SANDERS: I voted against NAFTA, CAFTA, PNTR with China. I think they
have been a disaster for the American worker. A lot of corporations that
shut down here move abroad. Working people understand that after NAFTA,
CAFTA, PNTR with China we have lost millions of decent paying jobs.
Since 2001, 60,000 factories in America have been shut down. We're in a
race to the bottom, where our wages are going down. Is all of that
attributable to trade? No. Is a lot of it? Yes. TPP was written by
corporate America and the pharmaceutical industry and Wall Street.
That's what this trade agreement is about. I do not want American
workers to competing against people in Vietnam who make 56 cents an hour
for a minimum wage.

Q: So basically, there's never been a single trade agreement this
country's negotiated that you've been comfortable with?

SANDERS: That's correct. Source: Meet the Press 2015 interview moderated
by Chuck Todd , Oct 11, 2015

China trade has led to loss of 3M American jobs so far Q: What does
Bernie's track record look like with regard to Chinese trade policy?

A: Time and time again, Bernie has voted against free trade deals with
China. In 1999, Bernie voted in the House against granting China "Most
Favored Nation" status. In 2000, Bernie voted against Permanent Normal
Trade Relations with China which aimed to create jobs, but instead lead
to the loss of more than 3 million jobs for Americans.

Q: Maybe these trade agreements aren't all great for Americans, but
don't they provide millions of jobs for Chinese workers?

A: Bernie firmly rejects the idea that America's standard of living must
drop in order to see a raise in the standard of living in China.

Q: So what does Bernie propose we do?

A: Instead of passing such trade deals again and again, Bernie argues we
must "develop trade policies which demand that American corporations
create jobs here, and not abroad." Source: 2016 presidential campaign
website, "Issues" , Sep 5, 2015

Priority of trade deals should be helping American workers Bernie
Sanders believes that the top priority of any trade deal should be to
help American workers. Unfortunately, as Bernie has warned year after
year, American trade policy over the last 30 years has done just the
opposite. Multinational corporations- who have helped to write most of
these trade deals--have benefited greatly while millions of American
jobs have been shipped overseas. American trade policy should place the
needs of American workers and small businesses first. Source: 2016
presidential campaign website, "Issues" , Sep 5, 2015

Base trade policy on working families, not multinationals Q: The
president says that expanding trade helps service industries & opens new
markets. You talk about workers that would lose their job from trade.
They say this will open up markets that will increase jobs.

SANDERS: I have been hearing that argument for the last 25 years. I
heard it about NAFTA. I heard it about CAFTA. I heard it about permanent
normal trade relations with China. Here is the fact. Since 2001, we have
lost almost 60,000 factories and millions of good-paying jobs. I'm not
saying trade is the only reason, but it is a significant reason why
Americans are working longer hours for low wages and why we are seeing
our jobs go to China and other low-wage countries. And, finally, what
you're seeing in Congress are Democrats and some Republicans beginning
to stand up and say, maybe we should have a trade policy which
represents the working families of this country, that rebuilds our
manufacturing base, not than just representing the CEOs of large
multinational corporations. Source: CBS Face the Nation 2015
coverage:2016 presidential hopefuls , Jun 14, 2015

Wrong, wrong, wrong that trade deals create jobs here Q: As secretary of
state, Clinton said she favored a trade deal with our 11 Pacific
partners & fast track authority to make that happen. Is that an issue
for you?

SANDERS: In the House and Senate, I voted against all of these terrible
trade agreements, NAFTA, CAFTA, permanent normal trades relations with
China. Republicans and Democrats, they say, "oh, we'll create all these
jobs by having a trade agreement with China." Well, the answer is, they
were wrong, wrong, wrong. Over the years, we have lost millions of
decent paying jobs. These trade agreements have forced wages down in
America so the average worker in America today is working longer hours
for lower wages.

Q: So, is that a litmus test for you, to see whether or not Clinton is
going to come out against the TPP?

SANDERS: I hope very much the secretary comes out against it. I think we
do not need to send more jobs to low wage countries. I think corporate
America has to start investing in this country and create decent paying
jobs here.

Source: Fox News Sunday 2015 coverage of 2016 presidential hopefuls ,
Apr 19, 2015

End disastrous NAFTA, CAFTA, and PNTR with China Since 2001 we have lost
more than 60,000 factories in this country, and more than 4.9 million
decent-paying manufacturing jobs. We must end our disastrous trade
policies (NAFTA, CAFTA, PNTR with China, etc.) which enable corporate
America to shut down plants in this country and move to China and other
low-wage countries. We need to end the race to the bottom and develop
trade policies which demand that American corporations create jobs here,
and not abroad. Source: 2016 presidential campaign website, , Mar 21, 2015

Stop TPP, the Trans-Pacific Partnership

Trade Policies that Benefit American Workers:

Since 2001 we have lost more than 60,000 factories in this country, and
more than 4.9 million decent-paying manufacturing jobs. We must end our
disastrous trade policies (NAFTA, CAFTA, PNTR with China, etc.) which
enable corporate America to shut down plants in this country and move to
China and other low-wage countries. We need to end the race to the
bottom and develop trade policies which demand that American
corporations create jobs here, and not abroad.

[We should also] sign the petition to stop the Trans-Pacific
Partnership--another trade deal disaster. Source: 12 Steps Forward, by
Sen. Bernie Sanders , Jan 15, 2015

US trade policies represent interests of corporate America

I am certainly not a big fan of Bill Clinton's politics. As a strong
advocate of a single-payer health care system, I opposed his convoluted
health care reform package. I have helped lead the opposition to his
trade policies, which represent the interests of corporate America and
which are virtually indistinguishable from the views of George Bush and
Newt Gingrich. I opposed his bloated military budget, the welfare reform
bill that he signed, and the so-called Defense of Marriage Act, which he
supported. He has been weak on campaign finance reform and has caved in
far too often on the environment. Bill Clinton is a moderate Democrat.
I'm a democratic socialist.

Yet, without enthusiasm, I've decided to support Bill Clinton for
president. If Bob Dole were to be elected president, there would be an
unparalleled war against working people. Source: Outsider in the House,
by Bernie Sanders, p. 24 , Jun 17, 1997

Agreed with Ross Perot's critique of trade policy

Although I agree with his critique of American trade policy and his
opposition to NAFTA, I am no great fan of Ross Perot. There's no way he
would be a major political leader if he weren't a billionaire. But I
think that he is getting a bum rap from the media when they refer to his
half-hour speeches as "infomericals" and make fun of his use of charts.
Instead of putting 30-second attack ads on the air, he is trying to
seriously discuss some of the most important issues facing the country.
You may not agree with his analysis or his conclusions, but at least
he's treating the American people with some respect. What's wrong with
that? Source: Outsider in the House, by Bernie Sanders, p.168 , Jun 17, 1997

NAFTA was a sellout to corporate America At the very same time as health
care was on the congressional agenda. Clinton pushed another issue to
the forefront. And on the major initiative, Clinton was just plain
wrong--very wrong. His support for the North American Free Trade
Agreement (NAFTA) was a sellout to corporate America. Pure and simple,
it was a disaster for the working people of this country.

The US currently has a trade deficit of $114 billion. Economists tell us
that $1 billion of investment equates to about 18,000 (often
decent-paying) jobs. Connect the dots. Our current trade deficit is
causing the loss of over 2 million jobs. Over the last 20 years, while
the US has run up over a trillion dollars in trade deficits, millions of
American workers have been thrown into the streets.

The function of trade agreements like NAFTA is to make it easier for
American companies to move abroad, and to force our workers to compete
against desperate people in the Third World. Source: Outsider in the
House, by Bernie Sanders, p.179-80 , Jun 17, 1997

NAFTA, GATT, and MFN for China must be repealed

What about the hemorrhage of jobs abroad? Can we do anything about the
disastrous effects of the global economy on American workers? According
to the experts, no. But the experts echo the message their employers
want us to hear.

We need to address the issue of trade forthrightly and understand that
our current trade policy is an unmitigated disaster. Our current
record-breaking merchandise trade deficit of $112 billion is costing us
over 2 million decent paying jobs. NAFTA, GATT, and Most Favored Nation
status with China must be repealed, and a new trade policy developed.

Let's look at some of the components of a sensible trade policy.

First, we must recognize that trade is not an end in itself. The
function of American trade policy must be to improve the standard of
living of the American people. America's trade policy must be radically
changed, by committing ourselves to a "fair" rather than "free" trade

Source: Outsider in the House, by Bernie Sanders, p.237 , Jun 17, 1997

Voted NO on promoting free trade with Peru.

Approves the Agreement entered into with the government of Peru.
Provides for the Agreement's entry into force upon certain conditions
being met on or after January 1, 2008. Prescribes requirements for:

     enforcement of textile and apparel rules of origin;     certain
textile and apparel safeguard measures; and     enforcement of export
laws governing trade of timber products from Peru.

Proponents support voting YES because:

Rep. RANGEL: It's absolutely ridiculous to believe that we can create
jobs without trade. I had the opportunity to travel to Peru recently. I
saw firsthand how important this agreement is to Peru and how this
agreement will strengthen an important ally of ours in that region. Peru
is resisting the efforts of Venezuela's authoritarian President Hugo
Chavez to wage a war of words and ideas in Latin America against the US.
Congress should acknowledge the support of the people of Peru and pass
this legislation by a strong margin.

Opponents recommend voting NO because:

Rep. WU: I regret that I cannot vote for this bill tonight because it
does not put human rights on an equal footing with environmental and
labor protections.

Rep. KILDEE: All trade agreements suffer from the same fundamental flaw:
They are not self-enforcing. Trade agreements depend upon vigorous
enforcement, which requires official complaints be made when violations
occur. I have no faith in President Bush to show any enthusiasm to
enforce this agreement. Congress should not hand this administration yet
another trade agreement because past agreements have been more efficient
at exporting jobs than goods and services. I appeal to all Members of
Congress to vote NO on this. But I appeal especially to my fellow
Democrats not to turn their backs on those American workers who suffer
from the export of their jobs. They want a paycheck, not an unemployment
check. Reference: Peru Trade Promotion Agreement Implementation Act;
Bill H.R. 3688 ; vote number 2007-413 on Dec 4, 2007

Voted NO on implementing CAFTA, Central America Free Trade.

To implement the Dominican Republic-Central America-United States Free
Trade Agreement. A vote of YES would:

     Progressively eliminate customs duties on all originating goods
traded among the participating nations

     Preserve U.S. duties on imports of sugar goods over a certain quota
     Remove duties on textile and apparel goods traded among
participating nations

     Prohibit export subsidies for agricultural goods traded among
participating nations

     Provide for cooperation among participating nations on customs laws
and import licensing procedures

     Encourage each participating nation to adopt and enforce laws
ensuring high levels of sanitation and environmental protection

     Recommend that each participating nation uphold the International
Labor Organization Declaration on Fundamental Principles and Rights at Work

     Urge each participating nation to obey various international
agreements regarding intellectual property rights

Reference: CAFTA Implementation Bill; Bill HR 3045 ; vote number
2005-443 on Jul 28, 2005

Voted NO on implementing US-Australia Free Trade Agreement.

United States-Australia Free Trade Agreement Implementation Act:
implementing free trade with protections for the domestic textile and
apparel industries.

Reference: Bill sponsored by Rep Tom DeLay [R, TX-22]; Bill H.R.4759 ;
vote number 2004-375 on Jul 14, 2004

Voted NO on implementing US-Singapore free trade agreement. Vote to pass
a bill that would put into effect a trade agreement between the United
States and Singapore. The trade agreement would reduce tariffs and trade
barriers between the United States and Singapore. The agreement would
remove tariffs on goods and duties on textiles, and open markets for
services The agreement would also establish intellectual property,
environmental and labor standards.

Reference: US-Singapore Free Trade Agreement; Bill HR 2739 ; vote number
2003-432 on Jul 24, 2003

Voted NO on implementing free trade agreement with Chile.

United States-Chile Free Trade Agreement Implementation Act: Vote to
pass a bill that would put into effect a trade agreement between the US
and Chile. The agreement would reduce tariffs and trade barriers between
the US and Chile. The trade pact would decrease duties and tariffs on
agricultural and textile products. It would also open markets for
services. The trade pact would establish intellectual property
safeguards and would call for enforcement of environmental and labor

Reference: Bill sponsored by DeLay, R-TX; Bill HR 2738 ; vote number
2003-436 on Jul 24, 2003

Voted YES on withdrawing from the WTO.

Vote on withdrawing Congressional approval from the agreement
establishing the World Trade Organization [WTO].

Reference: Resolution sponsored by Paul, R-TX; Bill H J Res 90 ; vote
number 2000-310 on Jun 21, 2000

Voted NO on 'Fast Track' authority for trade agreements.

Vote to establish negotiating objectives for trade agreements between
the United States and foreign countries and renew 'fast track' authority
for the President.

Reference: Bill introduced by Archer, R-TX.; Bill HR 2621 ; vote number
1998-466 on Sep 25, 1998

Rated 33% by CATO, indicating a mixed record on trade issues. Sanders
scores 33% by CATO on senior issues

The mission of the Cato Institute Center for Trade Policy Studies is to
increase public understanding of the benefits of free trade and the
costs of protectionism.

The Cato Trade Center focuses not only on U.S. protectionism, but also
on trade barriers around the world. Cato scholars examine how the
negotiation of multilateral, regional, and bilateral trade agreements
can reduce trade barriers and provide institutional support for open
markets. Not all trade agreements, however, lead to genuine
liberalization. In this regard, Trade Center studies scrutinize whether
purportedly market-opening accords actually seek to dictate marketplace
results, or increase bureaucratic interference in the economy as a
condition of market access.

Studies by Cato Trade Center scholars show that the United States is
most effective in encouraging open markets abroad when it leads by
example. The relative openness and consequent strength of the U.S.
economy already lend powerful support to the worldwide trend toward
embracing open markets. Consistent adherence by the United States to
free trade principles would give this trend even greater momentum. Thus,
Cato scholars have found that unilateral liberalization supports rather
than undermines productive trade negotiations.

Scholars at the Cato Trade Center aim at nothing less than changing the
terms of the trade policy debate: away from the current mercantilist
preoccupation with trade balances, and toward a recognition that open
markets are their own reward.

The following ratings are based on the votes the organization considered
most important; the numbers reflect the percentage of time the
representative voted the organization's preferred position. Source: CATO
website 02n-CATO on Dec 31, 2002

Extend trade restrictions on Burma to promote democracy. Sanders
co-sponsored extending trade restrictions on Burma to promote democracy

A joint resolution approving the renewal of import restrictions
contained in the Burmese Freedom and Democracy Act of 2003. The original
act sanctioned the ruling military junta, and recognized the National
League of Democracy as the legitimate representative of the Burmese people.

Legislative Outcome: Related bills: H.J.RES.44, H.J.RES.93, S.J.RES.41;
became Public Law 110-52. Source: S.J.RES.16 07-SJR16 on Jun 14, 2007

Review free trade agreements biennially for rights violation.

Sanders signed H.R.3012

     Trade Reform, Accountability, Development, and Employment Act or
the TRADE Act:

     review biennially certain free trade agreements (including Uruguay
Round Agreements) between the US and foreign countries to evaluate their
economic, environmental, national security, health, safety, and other
effects; and

     report on them to the Congressional Trade Agreement Review
Committee (established by this Act), including analyses of specified
aspects of each agreement and certain information about agreement
parties, such as whether the country has a democratic form of
government, respects certain core labor rights and fundamental human
rights, protects intellectual property rights, and enforces
environmental laws.

     Declares that implementing bills of new trade agreements shall not
be subject to expedited consideration or special procedures limiting
amendment, unless such agreements include certain standards with respect to:

     labor;     human rights;     environment and public safety;
food and product health and safety;     provision of services;
investment;     procurement;     intellectual property;     agriculture;
     trade remedies and safeguards;     dispute resolution and
enforcement;     technical assistance;     national security; and

Requires the President to submit to Congress a plan for the
renegotiation of existing trade agreements to bring them into compliance
with such standards. Expresses the sense of Congress that certain
processes for U.S. trade negotiations should be followed when Congress
considers legislation providing special procedures for implementing
bills of trade agreements.

Source: TRADE Act 09-HR3012 on Jun 24, 2009

Impose tariffs against countries which manipulate currency.

Sanders signed Currency Reform for Fair Trade Act

     Amends the Tariff Act of 1930 to include as a "countervailable
subsidy" requiring action under a countervailing duty or antidumping
duty proceeding the benefit conferred on merchandise imported into the
US from foreign countries with fundamentally undervalued currency.

     Defines "benefit conferred" as the difference between:

         the amount of currency provided by a foreign country in which
the subject merchandise is produced; and         the amount of currency
such country would have provided if the real effective exchange rate of
its currency were not fundamentally undervalued.

     Determines that the currency of a foreign country is fundamentally
undervalued if for an 18-month period:

         the government of the country engages in protracted,
large-scale intervention in one or more foreign exchange markets
  the country's real effective exchange rate is undervalued by at least
5%         the country has experienced significant and persistent global
current account surpluses; and         the country's government has
foreign asset reserves exceeding the amount necessary to repay all its
debt obligations.

[Explanatory note from "Exchange Rate"]:

Between 1994 and 2005, the Chinese yuan renminbi was pegged to the US
dollar at RMB 8.28 to $1. Countries may gain an advantage in
international trade if they manipulate the value of their currency by
artificially keeping its value low. It is argued that China has
succeeded in doing this over a long period of time. However, a 2005
appreciation of the Yuan by 22% was followed by a 39% increase in
Chinese imports to the US. In 2010, other nations, including Japan &
Brazil, attempted to devalue their currency in the hopes of subsidizing
cheap exports and bolstering their ailing economies. A low exchange rate
lowers the price of a country's goods for consumers in other countries
but raises the price of imported goods for consumers in the manipulating

Source: HR.639&S.328 11-S0328 on Feb 14, 2011

No MFN for China; condition trade on human rights. Sanders adopted the
Progressive Caucus Position Paper:

The Progressive Caucus opposes awarding China permanent Most Favored
Nation trading status at this time. We believe that it would be a
serious setback for the protection and expansion of worker rights, human
rights and religious rights. We also believe it will harm the US
economy. We favor continuing to review on an annual basis China’s
trading status, and we believe it is both legal and consistent with US
WTO obligations to do so. The Progressive Caucus believes that trade
relations with the US should be conditioned on the protection of worker
rights, human rights and religious rights. If Congress gives China
permanent MFN status, the US will lose the best leverage we have to
influence China to enact those rights and protections. At the current
time, the US buys about 40% of China’s exports, making it a consumer
with a lot of potential clout. So long as the US annually continues to
review China’s trade status, we have the ability to debate achievement
of basic worker and human rights and to condition access to the US
market on the achievement of gains in worker and human rights, if
necessary. But once China is given permanent MFN, it permanently
receives unconditional access to the US market and we lose that
leverage. China will be free to attract multinational capital on the
promise of super low wages, unsafe workplace conditions and prison labor
and permanent access to the US market.

Furthermore, giving China permanent MFN will be harmful to the US
economy, since the record trade deficit with China (and attendant
problems such as loss of US jobs, and lower average wages in the US)
will worsen. For 1999, the trade deficit is likely to be nearly $70
billion. Once China is awarded permanent MFN and WTO membership, the
trade deficit will worsen.

Source: CPC Position Paper: Trade With China 99-CPC1 on Nov 11, 1999

(4) Sanders' opposition to Free Trade is winning votes; Trade is the key issue in the election

Trade policy is no longer just for political nerds: it matters in the UK
and US

Rise of outsiders such as Bernie Sanders, Donald Trump and Jeremy Corbyn
reflects sense of being left behind by globalisation

Larry Elliott Economics editor

Monday 28 March 2016 01.44 AEDT Last modified on Monday 28 March 2016
08.00 AEDT

Donald Trump and Bernie Sanders have something in common. Both are
hostile to the free trade deals that Barack Obama has been negotiating,
and both have been campaigning on a platform of putting American workers

One thing is certain: if either of these two political insurgents makes
it to the White House, there will be no great rush to provide easier
access to the world’s biggest market. The agreement that Obama has been
seeking with the European Union, the Transatlantic Trade and Investment
Partnership (TTIP), will be dead in the water.

Hillary Clinton has been more supportive of trade deals in the past but
has grown noticeably less enthusiastic as it has become clear that the
tougher line adopted by Sanders resonates with many Democrats. What is
TTIP and why should we be angry about it? Read more

Trade has turned into a political issue in the US. Presidential hopefuls
are expected to have a view on the transpacific partnership, imposing
sanctions on China for currency manipulation and whether the US should
have signed the North American Free Trade Agreement with Mexico and
Canada in the early 1990s.

The same applies in the UK, where the Brexit debate has forced both
sides to develop an instant expertise in the different sort of trade
regimes that exist between the EU and the rest of the world. There are
intense debates about the merits – or otherwise – of the Norwegian
model, the Swiss model and the World Trade Organisation (WTO) model, and
detailed forecasts about the economic costs and benefits of each.

An early sign that trade policy was no longer merely the preserve of
political nerds came with the groundswell of opposition in Europe to
TTIP. This was billed originally as something largely apolitical: an
attempt to harmonise rules and regulations in the US and the EU so there
were fewer barriers to trade.

Yet the TTIP is deeply contentious. Opponents say "harmonisation" is not
some boring, technocratic exercise, but rather a race to the bottom that
will dilute quality controls and safety standards. But it has been the
idea of an investor state dispute settlement (ISDS) system, under which
corporations could challenge decisions made by governments, that has
proven particularly toxic.

It was not that long ago that freer trade was thought to be a good
thing. The WTO was set up at the end of the Uruguay round of trade
liberalisation talks, which ended in late 1993. At that point, it was
assumed that there would soon be further global agreements to cover
unfinished business in areas such as agriculture and services.

Few imagined that it would take until 2001 to begin another round of
talks and that these would drag on for 14 years before being abandoned.
The assumption in the early 1990s was that the world was entering a new
era of globalisation, to match that of the late 19th century, in which
there would be free movement of capital, people and goods.

The first world war put paid to what has been dubbed one era of
globalisation. Brexit, rows over TTIP, Europe’s attempts to halt the
flow of migrants and the "America first" approach adopted by Trump and
Sanders all send out the same message: the retreat is underway from
another period of globalisation.

This process has had a number of phases. It was always obvious that
there would be winners and losers from globalisation, since it involved
companies moving production from high cost to low-cost parts of the
world. Factories in the west closed, but consumers benefited from
cheaper goods. Initially, the winners easily outnumbered the losers,
although the losses suffered by the losers were bigger than the gains
for the winners.

But the last period of globalisation was a lot more fragile than it
looked. It was built on the availability of easy credit, as became
painfully apparent in 2007, when the financial markets froze up and
trade collapsed on a scale not seen since the Great Depression of the 1930s.

There has been no return to pre-crisis days. Recovery has been much more
modest than in previous economic cycles and world trade is barely
growing. Unemployment has remained high in the eurozone and even in
those developed countries where it has come down – the US and the UK –
wages have remained under pressure.

The recession and its aftermath have meant an increase in the number of
people who think that the economic system may be working for the owners
of multinational corporations and the global super rich, but is not
working for them.

The sense of unhappiness has been fanned by two other factors. First,
the recovery has been skewed in favour of the haves rather than the have
nots, largely because while earnings have been depressed, asset prices
have been going up fast. Second, the traditional parties of the centre
appear to have nothing to offer other than a return to the debt-sodden,
finance-driven world that led to the crisis in the first place.

As in the retreat from the globalisation era that ended the first world
war, voters are turning their backs on mainstream politicians and
looking instead to those that can articulate their sense of being
ignored or left behind. Hence the support for Trump, Sanders, Jeremy
Corbyn, and Marine Le Pen in France, all of whom come from outside the

Politics is grappling with what the economist Dani Rodrik has called an
"inescapable trilemma": the ability to have any two of democracy, global
integration and the nation state, but not all three simultaneously.

One solution, according to Rodrik, would be global federalism, an
attempt to align the scope of politics to that of global markets. The EU
could be considered an attempt to test out the viability of this
approach. Europe’s current difficulties suggest that a global polity
remains some way off.

Another answer, he suggests, would be to put global economic integration
ahead of domestic objectives. This would mean a return to the pre-1914
world of the gold standard, unfettered capital flows and unchecked
migration. Incompatible with mass democracy and the growth of welfare
states, it risks intensifying the backlash against globalisation.

Finally, Rodrik says there could be a recognition that there can only be
so much global integration, with controls on the free movement of
capital, people and goods. This was pretty much the settlement that was
brokered after the second world war, but unpicked from the mid-1970s

If history is any guide, this process has further to run. It took more
than three decades, which included two world wars and the Great
Depression, for a new economic order to emerge. Efforts to turn the
clock back failed, old solutions to economic problems no longer seemed
to work, banks failed, deflation set in, and free trade was replaced by
protectionism and economic nationalism. This all seems worryingly
familiar from the perspective of 2016.

(5) So-called 'free trade' policies hurt US workers every time we pass them - Bernie Sanders

America’s trade agreements benefit large multinational corporations and
Wall Street, but are a disaster for working families. We must defeat the TPP

Wednesday 29 April 2015 20.15 AEST

Albert Einstein said that the definition of insanity is doing the same
thing over and over again and expecting a different result. As the
middle class continues to decline and the gap between the very rich and
everyone else grows wider, we should keep that in mind as Congress
debates the Trans-Pacific Partnership (TPP), the largest trade agreement
in American history.

Trade deals like the North American Free Trade Agreement (Nafta), the
Central American Free Trade Agreement (Cafta) and the granting of
Permanent Normal Trade Relations to China have been abysmal failures:
they allowed corporations to shut down operations in the US and move
work to low-wage countries where people are forced to work for pennies
an hour; and they are one of the reasons that we have lost almost 60,000
factories in our country and millions of good-paying jobs since 2001.

The TPP is simply the continuation of a failed approach to trade – an
approach which benefits large multinational corporations and Wall
Street, but which is a disaster for working families. The TPP must be
defeated, but our overall trade policy must also change for corporations
to start investing in America and creating jobs here again, and not just
in China and other low wage countries.

Before even Congress votes on any final trade agreement, the President
has asked for "fast track authority" (also called Trade Promotion
Authority or TPA) to complete TPP negotiations with 11 other countries.
Fast track would relinquish Congress’s constitutional authority to the
President to "regulate commerce with foreign nations", limit our debate
and prevent members of Congress from improving trade agreements to
benefit the American people. Which issue do you want US election
candidates to discuss? Read more

I intend to do everything I can to defeat both fast track and the
overall TPP agreement. Our goal in Congress must be to make sure that
American-made products, not American jobs, are our number-one export.
We’ll never be able to do that if we enact the TPP and continue
negotiating other treaties based on the same failed policies.

For instance, two of the countries in the TPP are Vietnam and Malaysia.
In Vietnam, the minimum wage is equivalent to 56 cents an hour,
independent labor unions are banned and people are thrown in jail for
expressing their political beliefs or trying to improve labor
conditions. In Malaysia, migrant workers who manufacture electronics
products are working as modern-day slave laborers who have had their
passports and wages confiscated and are unable to return to their own
countries. American workers should not have to "compete" against people
forced to work under these conditions. This is not "free trade"; it is a
race to the bottom.

And this "free trade" agreement focuses on much more than just buying
and selling goods. It is part of an effort to boost the profits of large
corporations and Wall Street by offshoring jobs, undercutting worker
rights, and dismantling labor, environmental, health, food safety and
financial laws. Under TPP, for instance, Vietnamese companies would be
able to compete with American companies for federal contracts funded by
US taxpayers, undermining "Buy American" laws.

The TPP would also threaten US sovereignty by giving foreign
corporations the right to challenge before international tribunals any
law that could reduce their "expected future profits". This provision,
known as the Investor State Dispute Settlement (ISDS), has allowed
Phillip Morris to sue Uruguay from its headquarters in Switzerland over
the former’s laws designed to discourage children and pregnant women
from smoking. The French utility, Veolia, is suing Egypt under these
same provisions over an increase in the national minimum wage.

In addition to harming American workers, the TPP would increase the
price of life-saving prescription drugs in poor countries by making it
harder for them to obtain affordable generic drugs. That’s why Doctors
without Borders has said: "the TPP agreement is on track to become the
most harmful trade pact ever for access to medicines in developing

Supporters of the TPP claim that this treaty will create good-paying
jobs in the United States and reduce the trade deficit – but that’s
exactly what they said about Nafta, PNTR with China, and the South Korea
trade agreement, among others, and they have been proven dead wrong each
and every time.

In 1993, President Clinton promised that Nafta would create 200,000
American jobs in two years; instead, Nafta has led to the loss of more
than 680,000 jobs. In 1999, we were promised that PNTR with China would
open up the Chinese economy to American made goods and services;
instead, it led to the loss of more than 2.7m American jobs. In 2011,
the US Chamber of Commerce told us that the South Korea free trade
agreement would create some 280,000 jobs; instead, it has led to the
loss of some 60,000 jobs.

Enough is enough! If we are serious about rebuilding the middle class
and creating the millions of good paying jobs we desperately need, we
must fundamentally rewrite our trade policies. We must not give the
president – let alone the next one –fast track authority, and we must
defeat the TPP.

(6) Globalization destroys National Sovereignty - Dani Rodrik

June 27, 2007

The inescapable trilemma of the world economy

Sometimes simple and bold ideas help us see more clearly a complex
reality that requires nuanced approaches.  I have an "impossibility
theorem" for the global economy that is like that. It says that
democracy, national sovereignty and global economic integration are
mutually incompatible: we can combine any two of the three, but never
have all three simultaneously and in full.

To see why this makes sense, note that deep economic integration
requires that we eliminate all transaction costs traders and financiers
face in their cross-border dealings. Nation-states are a fundamental
source of such transaction costs. They generate sovereign risk, create
regulatory discontinuities at the border, prevent global regulation and
supervision of financial intermediaries, and render a global lender of
last resort a hopeless dream. The malfunctioning of the global financial
system is intimately linked with these specific transaction costs.

So what do we do?

One option is to go for global federalism, where we align the scope of
(democratic) politics with the scope of global markets. Realistically,
though, this is something that cannot be done at a global scale. It is
pretty difficult to achieve even among a relatively like-minded and
similar countries, as the experience of the EU demonstrates.

Another option is maintain the nation state, but to make it responsive
only to the needs of the international economy. This would be a state
that would pursue global economic integration at the expense of other
domestic objectives. The nineteenth century gold standard provides a
historical example of this kind of a state. The collapse of the
Argentine convertibility experiment of the 1990s provides a contemporary
illustration of its inherent incompatibility with democracy.

Finally, we can downgrade our ambitions with respect to how much
international economic integration we can (or should) achieve. So we go
for a limited version of globalization, which is what the post-war
Bretton Woods regime was about (with its capital controls and limited
trade liberalization). It has unfortunately become a victim of its own
success. We have forgotten the compromise embedded in that system, and
which was the source of its success.

So I maintain that any reform of the international economic system must
face up to this trilemma. If we want more globalization, we must either
give up some democracy or some national sovereignty. Pretending that we
can have all three simultaneously leaves us in an unstable no-man's land.

Posted at 08:49 AM in Globalization at work

(7) Michigan voters reject Hillary's Free Trade policies and record

Saturday, Mar 19, 2016 04:13 AM EST

Hillary Clinton doesn’t get it: Paul Krugman, Bernie Sanders and the
truth about the free trade scam

Trade has been a disaster for Democratic voters, but a boon for
Democratic politicians -- especially the Clintons

Paul Rosenberg

In the wake of Bernie Sanders stunning upset victory in the Michigan
primary, there’s a renewed recognition that the negative impacts of
global trade matter—a  lot. There’s still a broad assumption Clinton
will easily win the nomination, but there’s been some talk that she
might consider Sherrod Brown, Ohio’s staunchly anti-"free trade" senator
as her running mate. And of course, as the New York Times dwells on,
Clinton is "sharpening" her "message on jobs and trade."

But Michigan matters not just for Clinton, but for the Democratic Party
as a whole. And it’s going to take much more than sharper messaging to
actually make a difference in people’s lives. It’s not just a matter of
changing policies around the edges—as Clinton now says that she wants to
do—the entire corporate-dominated policymaking process that produces
such deals needs to be done away with, and replaced with something far
more open, democratic and informed by long-term realism. And that can
only happen through a mobilization of political will—or as Sanders would
call it, "a political revolution."

Clinton’s messaging shift is a good indication of how far the
establishment is from grasping what’s actually needed. As the Times
notes, she’s always been upbeat in the past, stressing "inclusiveness,"
as the neoliberal lexicon would have it:

     "I want to be the president for the struggling, the striving and
the successful," she often said.

But now, she’s signaled a change:

     Stung by the bad showing, Mrs. Clinton was already recalibrating
her message, even altering her standard line before the Michigan race
had been called. "I don’t want to be the president for those who are
already successful — they don’t need me," she said at a rally Tuesday
night in Cleveland. "I want to be the president for the struggling and
the striving."

It’s a characteristically breathtaking move on Clinton’s part. It sounds
great, of course. But how can she be a president for the struggling and
striving when she’s so out of touch with them that she’s been blindsided
by the brokenness of their dreams? There’s so much more than messaging
that needs to be adjusted here. As Paul Krugman now admits, "much of the
elite defense of globalization is basically dishonest…. So the elite
case for ever-freer trade is largely a scam."

Just as Clinton, the candidate, was so disconnected from public anger,
and the objective suffering it springs from, the entire policy apparatus
around trade has for years been totally disconnected from virtually
anyone outside of the corporate sector.

That might sound hyperbolic, but it’s quite literally true. Last year,
when an early Senate vote on the Trans Pacific Partnership was about to
be held, the Intercept explained that "Even members of Congress can only
look at it one section at a time in the Capitol’s basement, without most
of their staff or the ability to keep notes." Hence, the only way the
public knew what was in the TPP ahead of time was through Wikileaks.
Things were different for our corporate overlords, however:

     But there’s an exception: if you’re part of one of 28 U.S.
government-appointed trade advisory committees providing advice to the
U.S. negotiators. The committees with the most access to what’s going on
in the negotiations are 16 "Industry Trade Advisory Committees," whose
members include AT&T, General Electric, Apple, Dow Chemical, Nike,
Walmart and the American Petroleum Institute.

As an illustration of how this works, the Intercept noted:

     [T]he Energy and Energy Services committee includes the National
Mining Association and America’s Natural Gas Alliance but only one
representative from a company dedicated to less-polluting wind and solar

The fundamental problem here is not the trade deals
themselves—horrendous as they may be (more on that below)—but the
super-secretive policy apparatus that produces them, the norms by which
it functions, and the comfortable cluelessness with which it’s accepted
as perfectly normal, if not axiomatically unquestionable, by our
governing elites—both here in America and around the world.  It’s all
done in the name of "free trade," of course, but the corporate-dominated
reality just described is closer in spirit to the mercantilism of the
pre-Adam Smith era..

To see just how ludicrous the "free trade" label is, consider the
beginning of this brief post from economist Dean Baker, writing at the
world’s oldest blog:

     Hey, can an experienced doctor from Germany show up and start
practicing in New York next week? Since the answer is no, we can say
that we don’t have free trade.

Protectionism is the rule when it comes to high-income professions, as
Baker has been pointing out for years. In fact, it’s gotten stronger.
And not just for professions, of course:

     We also have strengthened patent and copyright protections, making
drugs and other affected items far more expensive. These protections are
also forms of protectionism.

The thing is "free trade" sounds so good … so free!  It’s definitely
good messaging. No? Well, not if you’re trying to think straight, in an
effort to design policies that actually work. And that’s the real
challenge that Democrats face—whichever candidate’s side they are on
just now. Because the problem’s not going to go away any time soon. That
problem is much harder for Clinton precisely because she’s so deeply
wedded to the system as it currently exists. Even if she genuinely
wanted to start fixing things, how could she possibly proceed? But given
the sorry state of Democratic Party as a whole, it’s going to be very
challenging for Sanders as well.

After Sanders’ upset win in Michigan, there were a number of predictable
responses, portraying Sanders’ views as simplistic—much like Donald
Trump’s, get it?—such as this from Washington Monthly‘s blog, pointing
out that Michigan’s industrial decline started well before NAFTA—as
anyone who’s seen "Roger and Me" knows very well. But this kind of
analysis, though historically well founded, is nonetheless off-base: The
real-world challenge is not uprooting historic wrongs, but struggling
against current wrongs and preventing future ones. NAFTA still matters
because the damage it’s done is still ongoing, it’s been replicated, and
the mechanisms driving it have spread, not because anyone thinks it’s
the sole source of problems in Michigan or anywhere else.

In late 2013, just before NAFTA turned 20, Jeff Faux, founder of the
Economic Policy Institute, wrote an assesment of what NAFTA had meant.
He called it "A Template for Neoliberal Globalization," and highlighted
four main ways it had impacted American workers:

Why would President Obama put so much of his legacy at risk? The simple
answer is, we don’t know. Perhaps he doesn’t think the threats are
real—unlike those who are most directly endangered by the risks. If the
TPP process were open and democratic, there would have been an
opportunity to dialog, and at the very least gain some understanding of
Obama’s thinking. At most, his thinking could have been fundamentally
changed. But neither possibility existed in the secretive backroom
process that’s been normalized under neoliberalism’s rules. And that’s
what’s got to end.

This profound disconnect gets to the very heart of what America’s trade
problems are all about—a fundamental lack of democratic governance over
a realm of law and policy that increasingly shapes the landscapes of our
daily lives as the world grows ever smaller, ever more interconnected.

It’s not just Obama, of course. Most of the Democratic Party
establishment seems to accept this situation, even if they may not go
along with any one particular trade deal. Hillary Clinton now says that
she opposes the TPP, whereas she previously referred to it as "the gold
standard." What’s changed? Who knows? No one, apparently, has asked her.
But she clearly didn’t have a problem with the process, or she would
have objected to it long ago—just as Bernie Sanders did.

Clinton tries to spin her late decision as more thoughtful, more
nuanced, more deliberative. But given that the process itself is so
profoundly flawed—secretive, anti-democratic, dominated by corporate
special interests—there’s every reason to see Sanders’ position as being
both more principled and more thoughtful, more penetrating in terms of
grasping what the real issues and problems are.

One further point needs to be added here. In describing why elite
defenses of globalization were a scam, Krugman noted:

     [T]he conventional case for trade liberalization relies on the
assertion that the government could redistribute income to ensure that
everyone wins — but we now have an ideology utterly opposed to such
redistribution in full control of one party, and with blocking power
against anything but a minor move in that direction by the other.

In short, you need Bernie Sanders-style democratic socialism in order
for honest pro-globalization arguments to work!

This is not just a primary campaign question between these two
candidates. The entire Democratic Party needs to fundamentally rethink
what its trade policy should be. As it now stands, the party simply
accepts that trade agreements are written secretly behind closed doors
by government officials from different countries consulting with lawyers
and lobbyists from (mostly transnational) large corporations. The
interests of the American public in general (or any other public around
the world) simply don’t enter into the process. There are no labor,
environmental, public health or consumer advocates involved. It’s
understandable why the GOP might like such a system. It’s beyond belief
that the Democratic Party has never even seriously questioned it. The
time to start questioning it—seriously—has finally arrived. And the time
for action is next. Paul Rosenberg is a California-based
writer/activist, senior editor for Random Lengths News, and a columnist
for Al Jazeera English. Follow him on Twitter at @PaulHRosenberg.

(8) Bernie Sanders' Rust Belt rebellion: Free Trade is the issue

Bernie Sanders' Rust Belt rebellion: Is trade a winning issue?

By Jessica Lussenhop BBC News

     10 March 2016

Bernie Sanders pulled off a surprise upset of Hillary Clinton in the
Michigan primary. What does this say about Americans' attitudes toward
trade in the so-called Rust Belt states?

Going into primary day in Michigan, Democratic campaign consultant Joe
DiSano was so confident that Hillary Clinton would win - as were all the
polls - that he nearly voted for a Republican.

In the Michigan primary, voters can request either party ballot on
election day, allowing them to cast their vote regardless of party
affiliation. In past years when the Democratic nomination was all but
certain, DiSano has used his vote to try to meddle with the outcome of
the Republican nomination.

But on Tuesday morning, he got a bad feeling and decided not to play
games - he voted for Clinton.

It turned out his bad feeling was right. Senator Bernie Sanders pulled
off a victory that the analytics website FiveThirtyEight called "one of
the greatest upsets in modern political history".

One possible reason: trade and jobs. According to the Washington Post,
"Fifty-eight percent of Democratic voters said that trade 'takes away
U.S. jobs', and 56% of them voted for Sanders".

If true, that would not bode well for Clinton in other states that were
once hubs of American manufacturing - the so-called "Rust Belt" states,
which includes Ohio, Indiana, Illinois and Pennsylvania.

"Historically, Michigan and the surrounding states built cars, and free
trade policies contributed to the destruction of America's manufacturing
base," says DiSano. "The result is you have a generation of people who
have had stagnant incomes and are having a real tough time in
retirement, preparing for retirement and finding jobs. That's resulted
in a rage among people that has been building for 35 years." Image
copyright Getty Images Image caption Clinton speaks on the floor of a
Detroit manufacturing plant

Sanders appealed to that simmering rage when he answered a question
during the 6 March Democratic debate in Flint, Michigan, from a factory
worker who could not find employment.

"Secretary Clinton supported virtually every one of the disastrous trade
agreements written by corporate America," Sanders said. "Nafta,
supported by the Secretary, cost us 800,000 jobs nationwide, tens of
thousands of jobs in the Midwest. Permanent normal trade relations with
China cost us millions of jobs."

The North American Free Trade Agreement, or Nafta, was one of the
signature deals of Bill Clinton's presidency in the 1990s, and
eliminated many tariffs on goods traded between the US, Canada and
Mexico. As First Lady, Hillary Clinton was supportive of the deal,
though she has since changed stance.

Many strongly believe Nafta has drained up to 1m jobs from US
manufacturing by incentivising companies to move factories to Mexico,
where the labour is cheaper. There is plenty of debate about whether or
not Nafta truly caused the bottom to fall out of labour, but Edward
Alden, a senior fellow at the Counsel on Foreign Relations, says that's
not even the point anymore.

"I honestly think Nafta at this point is almost symbolic," he says. "It
was the first big US trade agreement with a country where wages were
much lower. Image copyright Getty Images

The beginning of the decline of American manufacturing began decades
before Nafta, and Alden says that factors like better technology and the
Great Recession have contributed in addition to the rise of globalisation.

But candidates like Sanders and Donald Trump have capitalised on the
desire to clamp down on trade deals that favour the exodus of American
jobs, though they offer dramatically different perspectives on
solutions. Martha Bayne, editor in chief of Belt Magazine, says that
coastal pundits underestimated the success of that kind of populism
going into Midwestern primaries.

"Everything becomes about the bottom line. Everything in the Rust Belt
on the policy level seems to be about economic recovery," she says. "It
impacts education, it impact health, all these other things...I think
that that's why trade specifically and the loss of jobs overseas has
become such a focal point - it speaks to everything else." Image
copyright Getty Images Image caption Ford factory workers in Detroit in 1930

So, could a President Trump or Sanders really resurrect manufacturing
by, say, rejecting the Trans-Pacific Partnership?

Alden says nothing is going to bring back the halcyon days of
manufacturing, but that the president does have a great deal of power
when it comes to trade deals and tariffs, and there is lots at stake for
the US as it tries to forge a new trade agreement with Japan with the TPP.

He also argues there are lots of ways beyond trade that the government
could help middle class workers, but that hasn't happened. For that, he
blames both parties.

"We have one of the weakest social safety nets in the developed world,
our education system is losing ground and failing to train people for
the jobs of the future, we're not investing in modern infrastructure,"
he says. "We're doing none of these things, then Washington is surprised
when voters in the Rust Belt states are unhappy.

"They have a right to be unhappy, because they've been failed by their
political leaders."

(9) Paul Krugman asks if Sanders & Trump would really tear up Free Trade Agreements

A Protectionist Moment?

March 9, 2016 4:32 pm March 9, 2016 4:32 pm

Busy with real life, but yes, I know what happened in the primaries
yesterday. Triumph for Trump, and big upset for Sanders — although it’s
still very hard to see how he can catch Clinton. Anyway, a few thoughts,
not about the horserace but about some deeper currents.

The Sanders win defied all the polls, and nobody really knows why. But a
widespread guess is that his attacks on trade agreements resonated with
a broader audience than his attacks on Wall Street; and this message was
especially powerful in Michigan, the former auto superpower. And while I
hate attempts to claim symmetry between the parties — Trump is trying to
become America’s Mussolini, Sanders at worst America’s Michael Foot —
Trump has been tilling some of the same ground. So here’s the question:
is the backlash against globalization finally getting real political

You do want to be careful about announcing a political moment, given how
many such proclamations turn out to be ludicrous. Remember the
libertarian moment? The reformocon moment? Still, a protectionist
backlash, like an immigration backlash, is one of those things where the
puzzle has been how long it was in coming. And maybe the time is now.

The truth is that if Sanders were to make it to the White House, he
would find it very hard to do anything much about globalization — not
because it’s technically or economically impossible, but because the
moment he looked into actually tearing up existing trade agreements the
diplomatic, foreign-policy costs would be overwhelmingly obvious. In
this, as in many other things, Sanders currently benefits from the
luxury of irresponsibility: he’s never been anywhere close to the levers
of power, so he could take principled-sounding but arguably feckless
stances in a way that Clinton couldn’t and can’t.

But it’s also true that much of the elite defense of globalization is
basically dishonest: false claims of inevitability, scare tactics
(protectionism causes depressions!), vastly exaggerated claims for the
benefits of trade liberalization and the costs of protection,
hand-waving away the large distributional effects that are what standard
models actually predict. I hope, by the way, that I haven’t done any of
that; I think I’ve always been clear that the gains from globalization
aren’t all that (here’s a back-of-the-envelope on the gains from
hyperglobalization — only part of which can be attributed to policy —
that is less than 5 percent of world GDP over a generation); and I think
I’ve never assumed away the income distribution effects.

Furthermore, as Mark Kleiman sagely observes, the conventional case for
trade liberalization relies on the assertion that the government could
redistribute income to ensure that everyone wins — but we now have an
ideology utterly opposed to such redistribution in full control of one
party, and with blocking power against anything but a minor move in that
direction by the other.

So the elite case for ever-freer trade is largely a scam, which voters
probably sense even if they don’t know exactly what form it’s taking.

Ripping up the trade agreements we already have would, again, be a mess,
and I would say that Sanders is engaged in a bit of a scam himself in
even hinting that he could do such a thing. Trump might actually do it,
but only as part of a reign of destruction on many fronts.

But it is fair to say that the case for more trade agreements —
including TPP, which hasn’t happened yet — is very, very weak. And if a
progressive makes it to the White House, she should devote no political
capital whatsoever to such things.

(10) Paul Krugman admits that Protectionism does NOT cause Depressions

The Mitt-Hawley Fallacy

March 4, 2016 9:32 am March 4, 2016 9:32 am

There was so much wrong with Mitt Romney’s
Trump-is-a-disaster-whom-I-will-support-in-the-general speech that it
may seem odd to call him out for bad international macroeconomics. But
this is a pet peeve of mine, in an area where I really, truly know what
I’m talking about. So here goes.

In warning about Trumponomics, Romney declared

     If Donald Trump’s plans were ever implemented, the country would
sink into prolonged recession. A few examples. His proposed 35 percent
tariff-like penalties would instigate a trade war and that would raise
prices for consumers, kill our export jobs and lead entrepreneurs and
businesses of all stripes to flee America.

After all, doesn’t everyone know that protectionism causes recessions?
Actually, no. There are reasons to be against protectionism, but that’s
not one of them.

Think about the arithmetic (which has a well-known liberal bias). Total
final spending on domestically produced goods and services is

Total domestic spending + Exports – Imports = GDP

Now suppose we have a trade war. This will cut exports, which other
things equal depresses the economy. But it will also cut imports, which
other things equal is expansionary. For the world as a whole, the cuts
in exports and imports will by definition be equal, so as far as world
demand is concerned, trade wars are a wash.

OK, I’m sure some people will start shouting "Krugman says protectionism
does no harm." But no: protectionism in general should reduce
efficiency, and hence the economy’s potential output. But that’s not at
all the same as saying that it causes recessions.

But didn’t the Smoot-Hawley tariff cause the Great Depression? No.
There’s no evidence at all that it did. Yes, trade fell a lot between
1929 and 1933, but that was almost entirely a consequence of the
Depression, not a cause. (Trade actually fell faster during the early
stages of the 2008 Great Recession than it did after 1929.) And while
trade barriers were higher in the 1930s than before, this was partly a
response to the Depression, partly a consequence of deflation, which
made specific tariffs (i.e., tariffs that are stated in dollars per
unit, not as a percentage of value) loom larger.

Again, not the thing most people will remember about Romney’s speech.
But, you know, protectionism was the only reason he gave for believing
that Trump would cause a recession, which I think is kind of telling:
the GOP’s supposedly well-informed, responsible adult, trying to save
the party, can’t get basic economics right at the one place where
economics is central to his argument.

(11) US political system has lost legitimacy; Journalists identify with the Elites

{Remember what the French Revolution was all about: the Legitimacy of
the political system. This was the question Rousseau posed in The Social
Contract. Another such revolution is under way - Peter Myers}

America's Ceausescu Moment: Will Election 2016 Boil Over?

  David KERANS | 27.03.2016

What is a Ceausescu moment? Politically aware people above a certain age
know immediately what I mean. They can remember the shock on the face of
the Romanian dictator when a horde of workers broke from decades of
placid obeisance and interrupted his year-end 1989 speech with jeers...

The Ceausescu regime had lost all legitimacy in the eyes of the Romanian
people, who soon showed they were ready to risk confrontation with
heavily armed secret police forces to carry out a revolution. Something
akin to this moment is playing out before the world's eyes in the US
presidential election. Whatever the outcome may be, its consequences
will stretch across the globe.

In no society should we expect anything close to fully rational
political behavior, in the sense of all individuals understanding their
fundamental interests and acting accordingly. All politicians cultivate
the arts of suasion to a greater or lesser degree, and other
institutions (the state, the media, the church, civil associations,
etc.) play a weighty role in shaping public opinion on political
questions. The public, for its part, is not necessarily aware of the
extent to which its political opinions and sensibilities are being
manipulated. Perceiving this manipulation – this «manufacturing of
consent» as it is often described – requires a certain level of
political consciousness. However, when the manipulation is clumsy and
transparent, and when the manufactured consent is exposed to be grossly
out of line with society's fundamental interests, then the stage is set
for a sharp, even radical repudiation of the status quo. Further, if we
add to this mix a political and media establishment that is complacent
and incautious, then a Ceausescu moment is in the cards, when the
establishment is caught off guard and cannot control the political
upheaval from below.

The United States is experiencing a political upheaval of this kind
right now. The escalating ascendance of three full-throated
anti-establishment campaigns in the 2016 presidential race – behind
Donald Trump, Ted Cruz, and Bernie Sanders – provides the clearest
testimony yet to the collapse of popular allegiance to the current
political system in the US. None of these campaigns has more than the
barest fringe of endorsements from standing politicians. Each of them is
fighting steeply uphill against belittlement, ridicule, and hostility
from the media, even from the outlets that one would expect to provide
sympathy – right-wing Fox News is uniformly disparaging of Trump, and
the purportedly liberal MSNBC is unmistakably and embarrassingly tilted
towards Hillary Clinton against Sanders.

Moreover, none of the guardians of the status quo seems to have been
prepared for the insurgent candidacies. Yes, highly-placed officials,
politicians, and media barons, and political commentators are mustering
arguments to malign the three unwelcome campaigns, and are raining
derision on them (the Washington Post recently published 16 attacks on
Sanders in 16 hours, to cite the most glaring example). The goal,
clearly, is to starve the populist campaigns of oxygen, so as to restore
the traditional, narrow boundaries of political discourse. These
boundaries exclude serious conversation about reforming the nation's
corrupt campaign finance system (pay-to-play politics), or resisting
epic corporate-friendly trade deals (the TPP and more), or protecting
Social Security from dilution, or sharply clarifying immigration policy
(whether that be normalization or deportation of undocumented
residents), and so on.

If the traditional boundaries of political discourse could be restored,
the media could easily enough resume its role of manufacturing consent
around presidential candidates that will not rock the boat – Hillary
Clinton for the Democrats, and John Kasich or a late arrival (such as
Speaker of the House Paul Ryan) at a brokered nomination convention for
the Republicans. But the counterattack on the insurgencies isn't working
very well. Trump and Cruz are running roughshod over all other GOP
comers, and Sanders has piled up meaningful pressure on Clinton, winning
many state primary elections, lifting his favorability ratings, and
generating increasing momentum. His campaign raised $42 million in small
donations in February, then $5 million more in the 28 hours following
his eye-opening victory in Michigan on March 8th. Moreover, his voter
outreach apparatus is now the largest in history, for any nation (per an
internal conference call on March 9th to update and orient volunteers).

So why is the establishment counterattack not more effective?

 From Fraud to Desperation

«Elites may hold on for one last round, but these insurgencies threaten
their long term survival. Since their survival threatens ours, that's
great news». – Bill Curry

To begin with, the mainstream media itself is a different animal now
than it was in the recent past. As John Nichols put it recently: «The
past 20 years have seen radical changes in the American media: the
pandemic downsizing of newsrooms, sweeping layoffs of journalists, and a
desperation for clicks and ratings that guarantees that civic and
democratic values will always be trumped by commercial and entertainment
demands». By extension, as Bill Curry pointed out, the major news
networks are almost incapable of delivering meaningful analysis of the
stakes in American politics:

«For two years the media has swallowed and peddled the Clinton
inevitability line. For two weeks it has said Trump's nomination is
inevitable; this after eight months of saying it was impossible. It is
so clueless on both counts because it is so much a part of the system
that is under attack and because it relies so heavily on its useless
tools and discredited methods... Even if they get it right, they add
nothing of value».

And here,

« one's helped Hillary more than the media... One way it helps is
just by sharing her ideology.... (The journalists) are mostly very
bright people who see the world just as Hillary does... They identify
with elites, even know a few power couples and view the current corrupt
rules of the game as laws of nature. It's one reason why not one of them
saw any of this coming. But it's not the only reason. Their employers
put horse-race journalism ahead of all else, so nothing ever gets
illuminated. When Hillary sweeps vital differences under the rug to be
replaced with stale tactical arguments, the reporters are perfect
patsies – because all they know are tactics».

Put simply, mass media, the establishment's traditional tool for
stifling discontent with the status quo, is deeply compromised and less
capable than it used to be.

More important, the terrain on which the establishment is struggling
with the insurgencies is decidedly unfavorable. As we have detailed in
many pieces in this forum, including our most recent, the whole US
political system has sacrificed its legitimacy in many ways, including
decades of stripping productivity away from the working and middle
classes (had wages kept pace with labor productivity since the 1970s,
the average worker would be earning an astonishing $45,000 more per year
these days, by one calculation). Many other trends discredit the system,
most notably the ongoing series of rapacious foreign wars (that enrich
defense industry contractors, torment foreign nations, and fuel
extremist antagonism against the US) and the deeply corrupting campaign
finance system, wherein donors sponsor candidates and subsequently
exercise control over them.

It is very difficult for any establishment candidate to bridge the gulf
between Washington's policies and the nation's needs, and the challenge
is especially daunting for Hillary Clinton, «the living avatar of
pay-to-play politics» in Bill Curry's apt characterization. Clinton has
resorted to all manner of fraud, unsurprisingly, ranging from
obfuscation (such as the tortured position on fracking she gave at the
Miami debate), to concealment (refusing to release transcripts of her
paid speeches to Goldman Sachs), to posing (attempting to mimic the
positions of Sanders on TPP, Keystone XL, etc.). The wholesale fraud
ought to be enough to damn her campaign by itself, but the ruse is still
worse, in several ways.

First, Clinton has willfully distorted many of her opponent's positions
in desperate attempts to confuse the public and separate Sanders from
some of his support. She has accused him of preparing to abolish
Obamacare, opposing the 2009 auto industry bailout, supporting the
Minutemen vigilantes on the Mexican border, delaying action against
climate change, and more (we could add quite a few). The Clinton
campaign has been a grotesque performance, made all the worse by the
willing connivance of the Democratic National Committee – which tried to
minimize Sanders's exposure, has packed the debate halls with Hillary
supporters while moving to silence Bernie supporters, and has subtly
warned officials of retribution should they express support for Sanders
(as Tulsi Gabbard explained, when she resigned as Vice Chair of the DNC).

Second, the mass media has done much to assist Clinton in torpedoing
Sanders. They do not castigate Clinton for her serial smear campaigns,
and even pile on more misinformation. More important, perhaps, they
maintain a studious silence on all sorts of key issues that would put
Clinton and the status quo in a poor light. To give just a few glaring
examples here, they do not inquire about Clinton's fomenting of US
military aggression, or her role in fueling the Mexican drug war, or her
public corruption via the Clinton Family Foundation – «the most
audacious influence peddling operation in our nation's history», as
reader «James Dusel» phrased it.

Nor will the media alert the public to the fact that the Sanders agenda
is far more than a cry for moral justice, that it is actually very
promising for the economy and the environment. Contemplate for a moment
that even Bruce Bartlett, a moderate conservative economist from the
Reagan cabinet, is very sympathetic to Sanders's economic platform. And
notice that the media makes no mention of the cathartic benefits that
would flow from an honest administration of the executive branch, an
administration that would hold government officials accountable for
torture, that would restore civil liberties restricted after 9/11, would
rein in the depredations of the financial sector, would raise
environmental standards, would crack down on corporate crime and so much
more. Even Senator Elizabeth Warren, one of the nation's most prominent
politicians, got no traction with the media when she made these arguments.

Thanks only to the internet, Clinton is being exposed. Reliance on the
internet for news has mushroomed, and support for Sanders correlates to
this. It explains why support for Sanders recedes with age, and why his
campaign did relatively poorly in the South (where only a bit over half
of the population even has internet access at home). Word is getting
out, however. Sanders continues to poll above 40 percent nationally
among Democrats, and his refusal to suspend his campaign despite
trailing Clinton halfway through the primary election marathon promises
to unmask her dubious record to ever more voters and embarrass her with
more defeats.

Clinton and her surrogates in the media and the upper reaches of the
Democratic party perceive the threat, and so they have taken to ever
more desperate slanders against Sanders. Hillary slandered him
throughout the Miami debate, and threw her wildest punch yet on March 12
when she accused Sanders of shirking responsibility to fight for
universal health care in the early 1990s. In the new information age,
this isn't playing very well. We could multiply these responses endlessly:

«I wouldn't believe the Clintons if they were standing on a stack of
Bibles». – reader «Biker1288».

«At some point, though, you just feel so repulsed by a politician that
your emotions take over and you just can’t imagine yourself voting for
them under any circumstances». – reader «Elmo».

And then to The Donald

«The Problem with Hillary, Chez, is I don't vote Republican»

– Russ Belville, outlining 25(!) broad issues on which Clinton is allied
with mainstream Republicans

Political bookmakers currently give Hillary Clinton a two-thirds chance
of becoming president, so America's Ceausescu moment is far from
complete. But the shabbiness of the political system is becoming evident
to more and more people every day. It is mendacious, morally bankrupt,
and hypocritical, and performs dubiously to dreadfully on the economic
and foreign policy fronts as well. The establishment's suppression of
the Sanders movement looks like a Pyrrhic victory, at best. The younger
segments of the population are rejecting Clinton and the DNC in
resounding fashion – ages 18-45 chose Sanders by 70-29 in Illinois on
Tuesday, for instance, and Sanders's margins among those under 30 have
been even higher in most of the states contested thus far (cumulatively,
he has 1.54 million votes from them, to 626,000 for Clinton). People's
political sensibilities do not shift easily, so the future looks dark
indeed for the Democratic elites.

And that darkness could come very soon, in the shape of a squandered
presidential election. More than half of those who voted for Sanders on
March 15th (five states voted) said they would be dissatisfied with
Clinton as the Democratic nominee. A national poll earlier this month
found that 7% of Sanders supporters are ready to vote for Trump, and
fully 33% do not see themselves voting for Clinton. They have a
superabundance of reasons, which means it will not be easy for anyone to
change their minds. A Trump-Clinton matchup would serve up the two
presidential candidates with the highest unfavorable ratings of any in
history. And the closer one inspects it, the more plausible it becomes
to forecast The Donald in the White House. A wholesale humiliation of
the two party duopoly is in sight.

Peter Myers