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« A final thought on escaping platitudes | Main | When protectionism was honest »

April 29, 2015

Comments

Peter G

So far so good. But you need to work on your universality. Goodies like government paid for dental and drug plans and such cannot just be for government employees. The people who pay for that but don't get it have noticed. Ditto for retirement pensions. It may be there are not enough resources to give everyone much but that is a pretty damn poor excuse for giving a few the most. It creates natural political divisions that are easily exploited. I think Webb gets this better than most, probably more so than Clinton. Attack poverty and not just black poverty. Create alliances of interest with common benefits and you might be surprised. Sure the special interests on the Democratic side will bitch but the alternative being eventual annihilation they'll probably see the light.
Sadly Bernie is just a hot air kind of guy. I think he has confused socialism with promising everything to everybody and mostly what he cannot deliver.

Bob

It's going to be exciting to see a real, live socialist on the US political stage. Bernie has the chops to make a case not entirely based on populism, but also on proven strategies for running a country. Take a look at the Human Development Index where the US ranks 5th behind four social democracies, or the World Happiness Index which ranks the US 15th; lower than Mexico or Israel. Some years ago Scientific American published a statistical analysis comparing the US to European social democracies and the US came up short in multiple ways. Sadly, the piece no longer seems to be in their archive.

The complaints against trade agreements are not all demagoguery either. The numbers are in and NAFTA has caused grave damage in many parts of the country, despite its results in places like New York City, Chicago, San Jose, and various research areas. Public Citizen has published a report on the details. In answer to some of the trade boosterism expressed on this blog, I'll use as example one small town typical of the damage wrought by NAFTA and the 2007 banking collapse. In contrast to Baltimore, where some reports indicate a 50% unemployment rate for black residents, Scottsburg, Indiana is 97% white. Unemployment there ranged from 4.7% in September 2007 to 14.2% in June 2009. The current unemployment rate is about 7%. However, the jobs lost were mostly in manufacturing and the largest employers in the area now are minimum wage paying fast food restaurants and chain retailers. Because some workers were too old to transition to the new economy and others that can't build wealth sufficient for a comfortable life on minimum wage, this has lead to hopelessness that has resulted in epidemic injectable drug abuse, which in turn has lead to the spread of HIV. Already in 2015 Scott county has seen around 140 new cases. This little area was featured on Germany's US Deutsche Welle news broadcast. The video was similar to anything I've seen in the Appalachians. As US Americans we should all be embarrassed.

Bernie should not try to play on race. It would rhetorically position one group against another. The point should be that trade agreements imply other government responsibilities. Letting banks make money by paper or bit shuffling exercises like using prime loans to buy T notes and high frequency trading rather than investing in new business and infrastructure improvements is obscene. The job training programs destroyed by both R's and D's since the 1980's need replacement. Our still corporate-driven scam of a health care system certainly does need replacement.

I have to share Larry Wilmore's comment of last night that Faux Noise viewers were served up a whining explanation of how "un-American" the whole scene in Baltimore is and of course how President Obama shares responsibility. He went on to point out that Faux is still in love with the oppressed colonists who vandalized a cargo of tea.

Peter G

I ask this question a lot Bob. Where are these numbers on NAFTA that people keep talking about? NAFTA initially included exactly three countries, Canada, the United States and Mexico. Canada lost jobs under NAFTA as tariffs were eliminated and branch plants that were only economically viable under tariff protection. You got those jobs. Mexico got some jobs but not many. That's why they kept trying to get into the US. Unemployment in neither Canada not Mexico went down. It's just not true. The massive job losses in the US occurred at the same time as NAFTA and they were entirely due to increased productivity leading to lower employment and losses to offshore, mostly Asian manufacturers in nations that were NOT part of NAFTA. This is easily verifiable in your own governments trade statistics. Canada was historically the largest US trading partner and was both your largest supplier of goods and customer. China and the rest of Asia was mostly a supplier. We weren't your problem. Neither was Mexico.

Bob

Apparently you decided not to read the Public Citizen report I linked a few days ago. Here's another from http://export.gov/FTA/nafta/eg_main_017794.asp that includes this:

Before and After NAFTA:

Overall Trade in Goods among the United States, Canada and Mexico has grown from $297 billion in 1993 to $883 billion in 2006, an increase of 198%.

U.S. goods exports to Canada and Mexico grew from $142 billion in 1993 to $364.6 billion in 2006, an increase of 157%.

U.S. goods imports from Canada and Mexico grew from $151 billion in 1993 to $500.7 billion in 2006, an increase of 231%.

U.S. services exports to Canada and Mexico have increased by 125 percent since 1993, reaching $61.7 billion in 2006 (preliminary estimate) and exceeding services imports from these two countries by $23.4 billion.

U.S. foreign direct investment (FDI) in Canada and Mexico has increased by 289 percent since 1993, reaching $331.2 billion in 2006 (latest data available) and exceeding Canadian and Mexican FDI in the United States (stock) by $166.1 billion.

As you can see the balance of trade did not favor the US, amounting to -74%. In services we did slightly better. There are many other reports you can find on the web. What's your opinion of Scottsburg, Indiana?

And please, please, please let me try to once again make clear that I don't see NAFTA as a zero sum proposition dividing the Americas. My complaint is that the agreement was wreckless and irresponsible - responsive almost exclusively to the big money players involved.

Peter G

Its looks appalling when you only count one side of the balance sheet and ignore the other. US direct investment in Canada has increased. And so has Canadian direct investment in the US. Also carefully not noted by your source is the huge amounts of raw materials and energy you buy from both Canada and Mexico. That's the principal source of the trade imbalance. Are we supposed to be punished for US appetites for those things and surrender our manufacturing jobs in return? The increase in trade goes both ways and speaks to the success of NAFTA and not its failings. The net job gains and losses in manufacturing were nearly a wash and if you ask why I, as a Canadian, supported it then and do now it is that by allowing each country to maximize its natural unprotected comparative advantages it made us all collectively stronger against other trading blocks. It made us all more competitive against Asia and Europe for example and created a larger aggregate market for everyone. It is not a zero sum game for that reason alone. That is the chief benefit.
Plans for renegotiating NAFTA are designed to correct what I ask? And why would we sign a new deal that is only intended to disadvantage us? When Bernie says he is going to get rid of it what does that mean? What will he replace it with? Tariffs? I get the sense that Bernie would like to see a new mercantilism where lesser nations provide raw materials and markets for American manufacturing. Arguments about the need to defend foreign worker's labor rights or environmental standards don't carry much weight with countries who know those are only going to take the form of trade barriers to cost them their jobs. Which is why the AFL-CIO isn't on the negotiating team. If they were there wouldn't be any negotiations at all. I see nothing wrong with the US defending their own interests but no other country in the world is going to let Richard Trumka look after theirs.

Once upon a time the sheer economic power and unique ability to manufacture certain goods like airliners allowed the US to lean on the scales. Especially when it came to market access to the US. Those days are passing quickly. There are other markets that are growing faster and will soon be bigger and access to the US market not as important. What does the US make that can't be purchased elsewhere? The only rational strategy is to make your trading block bigger. If you want to lean on your trading partners for better terms that favor only you I can pretty much guarantee the net result will be for them to join other trading blocks that offer better terms of exchange. And that don't include you. What it comes down to is that there is no way for you not to compete internationally for markets and resources. There is no way to have that cake and eat it too.

I agree with you so much of the time Bob that I hope you will not see this disagreement as being in any way hostile. It isn't intended that way. You're definitely one of the good guys but we have a very large difference of perspective on this issue.

Bob

Let me begin by stating plainly that my wife and I both love Canada and have considered moving to the Okanagan Valley in retirement. We have friends around Toronto and I had many friends in Hamilton I met through an expatriot high school class mate. I admire much about Canada and am often envious. Your government is much more high functioning than ours. Anyone who buys the description of your country as The States' attic is an ignoramus.

Now I quote you: "US direct investment in Canada has increased. And so has Canadian direct investment in the US. Also carefully not noted by your source is the huge amounts of raw materials and energy you buy from both Canada and Mexico. That's the principal source of the trade imbalance. Are we supposed to be punished for US appetites for those things and surrender our manufacturing jobs in return?"

Yes, investment and trade have increased, but examine the proportions. You also attempt a moralistic argument that the US is gluttonous - a deadly sin - and one with which I don't necessarily disagree as long as we're talking about dinosaur energy companies and other such organizations. Then you set up a zero sum argument that you will be punished by surrendering manufacturing while you're apparently fine with the US punishing itself in the same way. You have made part of my case for me.

I don't take your critique as hostile in any way. But since my work took me to and around many manufacturing towns across the country during the time NAFTA kicked in, I'm just much more aware of the damage done down here. Please express an opinion on Scottsburg.

Peter G

I am unfamiliar with Scottsburg but I will study up on it and get back to you. Are you familiar with the origins of the CAW. That's the Canadian Auto Workers, a union that has since folded into a larger entity. They used to be part of the international UAW which collected their union dues and represented them in negotiations with the big three auto makers. One fine economic downturn when contract time came around and the industry was collectively in the shithole the Canadian union leadership was participating by conference call in those contract negotiations. Then a funny thing happened. Their phones lines were literally disconnected and a new proposal was put forth by the UAW whereby Canadian auto plants would be closed and production relocated to US plants. As you can imagine this was not well received in Canada or by the Big Three either.

They enjoyed some rather impressive advantages in producing vehicles in Canada the most important of which were the differential in the value of the Canadian dollar but also, quite critically, the universal health care system in Canada which relieved them of some extremely burdensome health care costs. Amounting, as I recall, to about nine hundred dollars per vehicle in overhead. So it didn't really fly very well.
But what it did do was cause the Canadian members to leave the UAW and form their own union, the aforesaid CAW. The UAW kindly insisted on keeping all their Canadian member's dues. The CAW is now part of a union that dwarfs the UAW. Do I trust anyone in the American labor unions to look after the interest of Canadian workers? No I frankly do not. They don't do that even when they get paid to do that. Nor sadly do any of the workers in the numerous foreign vehicle assembly plants in the southern United States who are often reminded by the Canadian example about who gets thrown under the bus when times get tough. Yet the AFL-CIO rather insists that if they have union representation it must be by the UAW and not any other union. Why is that? Are they better off without any union?

In the end it all worked out. We buy, in Canada, about as many vehicles from the US as are sent to the US from Canada. Which seems fair. It was a good thing this massive industry was saved during the recent economic meltdown and credit is due to the four participating governments for providing the financing, the US federal government, the Canadian federal government, the State of Michigan and the Province of Ontario. All of whom profited nicely from the recovery of GM.The government of Ontario just sold their last shares for 3.5 billion. Not bad considering GM wasn't worth a plugged nickel when they made a somewhat risky investment. That's what we can do working together. Adversarially not so much. Now, in fairness I'm going to look into this Scottsburg thing. I might need a larger hint.

Peter G

Parenthetically one our largest exports to the US is good clean carbon pollution free hydro generated electricity and nuclear power as well. About fifty coal fired generating stations worth every year. How exactly are we supposed to balance trade if you get to buy stuff that requires virtually no workers to produce once the facilities are built if it isn't buying more American agricultural goods or manufactured goods? Especially if we can buy them cheaper elsewhere just like you do? What is this conception of free and fair trade supposed to mean in practical terms. The zero sum game where untariffed trade is limited to exchange balances is exactly what is being proposed by many writers on the left in the US. Great for you, lethal for us.

Bob

And we now see pretty much eye to eye. I actually brought up the auto assembly jobs moving to Canada because of health care costs some time ago in a comment here but didn't know about the CAW situation. As far as the UAW goes, I feel strongly two ways. One is that it helped keep my salary fair along with many others' employed by satellites because it set standards for the industry, not just assembly workers. The other is that, as you say, it is completely untrustworthy. About 10 years ago it agreed to a two-tiered wage system for workers in The States. Younger members now make half of what their parents did even though they generally require a higher skill set. And if I were you I'd trust them even less. Many US corporations obviously don't care who they have to kill to make a buck. They've proven this all over the world. I would not describe them as good citizens. Thus my displeasure with their overwhelming role in forming NAFTA. I just hope you'll just keep in mind that our government is currently controlled by a revolt of the elite. Noblesse oblige might last have been minutely detected in a few workings of Bush I. I'm sorry Canadians feel threatened by The States, but it's understandable.

You can easily find stories about Scottsburg on Yahoo or Google news. It's a recent cautionary tale that's gone somewhat international.

Marc McKenzie

While I give Senator Sanders a great deal of respect--and I don't mind the fact that he is running--I am still worried about something I've been seeing on sites that are putting up pieces praising his run.

It's this...a relentless attack on Hillary Clinton, glee that Sanders will take her down and then march into the White House and fix everything with a wave of his hand. I have no problem with honest criticism of Hillary (or Bernie, for that matter) but what is missing in this free-for-all on Hillary is the fact that the real target of our anger should be the GOP and their policies. I'm afraid that a good chunk of us are putting more time and effort in taking slams at Hillary while ignoring the bats**t crazy GOP policies that, should any of the GOP Klown Kar make it to the White House next year, will come down on us like a ton of bricks.

Do not accuse me of bringing up the "GOP Boogeyman" just as a scare tactic. Look over the past fifteen years, and especially since 2009. The GOP has become unhinged and sees no problem with gutting the social programs that have helped millions (including the ACA).

Let's keep things in perspective here and not forget who the real targets should be--it's not Hillary Clinton or President Obama.

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