Friday, April 4, 2014

NAFTA At 20: A $1.2 Trillion Dollar Mistake That Only Enriched Corporations/Connected Individuals (Middle Class Has Been Scheduled for Devastation for Decades)

I'm a little behind in publishing this essay.

Forgive me, but it's all good.

(And, yes, it's long, but worth your while - and the selected readers' comments show quite a bit of pizzazz!)

March 28, 2014

Campaign for America's Future Blog

NAFTA At 20: “A Vehicle To Increase Profits At The Expense Of Democracy”

by Dave Johnson

Thursday the AFL-CIO released a new report, NAFTA at 20. The report makes the point that, “On the whole, NAFTA-style agreements have proved to be primarily a vehicle to increase corporate profits at the expense of workers, consumers, farmers, communities, the environment and even democracy itself.”

In a press release accompanying the report AFL-CIO President Richard Trumka says that working people and democratic governance on all sides of NAFTA’s borders are now worse off, and Congress should recognize this before approving any more “NAFTA-style” trade agreements.

There is no success story for workers to be found in North America 20 years after NAFTA,” said Trumka.

“The NAFTA model focuses on lifting corporations out of reach of democratic governance, rather than solely reducing tariffs. This report should serve as a cautionary tale to the Obama Administration and Congress as they consider negotiating and implementing new trade deals.”

Trade Agreements Should Stop Following The NAFTA Model

Preceding the report, Trumka gave a major speech on trade at the Center for American Progress. He talked about the history of “a disastrous, outdated, failed model of global economic policies.” He said that trade agreements should abandon the NAFTA model and instead offer a “global new deal … to bring the basic infrastructure of modern society—electricity, water, schools, roads, internet access—to everyone on Earth.”

The Report

A summary of the report contains these points about NAFTA:

  • It’s a flawed model that promotes the economic interests of a very few and at the expense of workers, consumers, farmers, communities, the environment and even democracy itself.
  • While the overall volume of trade within North America due to NAFTA has increased and corporate profits have skyrocketed, wages have remained stagnant in all three countries.
  • Productivity has increased, but workers’ share of these gains has decreased steadily, along with unionization rates.
  • NAFTA pushed small Mexican farmers off their lands, increasing the flow of desperate undocumented migrants.
  • It exacerbated inequality in all three countries.
  • And the NAFTA labor side agreement has failed to accomplish its most basic mandate: to ensure compliance with fundamental labor rights and enforcement of national labor laws.
The NAFTA architecture of deregulation coupled with investor protections allowed companies to move labor intensive components of their operations to locations with weak laws and lax enforcement.

This incentivized local, state and federal authorities to artificially maintain low labor costs by ignoring – or in some cases actively interfering with – such fundamental rights as the rights to organize, strike and be free from discrimination.

This dynamic undermined organizing and bargaining efforts even in areas with relatively robust labor laws.

Today, it is commonplace for employers to threaten to move south — whether to South Carolina or Tijuana — if workers do not agree to cuts in wages and benefits.
See the report at NAFTA at 20.

The Speech

In his speech Trumka began by outlining how NAFTA failed regular people by killing jobs and keeping wages down, which enriching an already-wealthy few – setting the stage for the 2008 financial collapse.

Excerpts of the speech follow, but please try to see or read the whole thing:

Back then, nobody really knew what the results of NAFTA would be. Today we do. They’re bad.”

You see, NAFTA put corporations in charge of America’s economic strategy — with the goal of shipping jobs off-shore to lower labor costs.

The big trade deals since then used NAFTA as a starting blueprint — from the World Trade Organization to our bilateral relationship with China to the recent agreements with Korea, Colombia and Panama.”

The big problem: “NAFTA put corporations in charge of America’s economic strategy — with the goal of shipping jobs off-shore to lower labor costs.”

Over all – this model is simply not working, not here in the United States, not in most of our trading partners.”

The Damage

No other country pursues trade deals like we do. Nobody else — not India or Germany, Sweden or China — uses these deals to get rid of good jobs.

We have lost more than 60,000 factories in the last dozen years, as major companies created more jobs offshore than at home, and imports outstripped exports year after year.

Our current account deficit in 1993 was 1 percent of GDP. In 2012 it was almost three times that.

We run our biggest trade deficit with China — the bulk of those imports is electronics. Many of our top 10 exports to China are basically trash – things like scrap metal and waste paper.”

This Damage Was Done On Purpose

“We pursued the strategy that led to structural trade deficits on purpose, because it pitted the workers of our trading partners against our own, and against each other.

For their part, our trading partners short-changed their domestic markets in favor of supplying America, so they, too, pushed weak unions, low wages, artificially cheap currency and subsidies for foreign investment like tax-free export zones.”

The Damage Helped Cause The 2008 Collapse

This trade-fueled imbalance fed a glut of global savings.

That savings glut in turn funded a bloated global financial system, which gave us the global economic crisis of 2008 and today continues to fuel rising inequality around the world.”

For business, NAFTA – and the tax, deregulation, and austerity policies that went with it — seemed great.

But 2008 revealed how destructive these economic policies truly are. The model chronically starves the productive sector and working families, while it fuels financial bubbles and busts, after which working people everywhere struggle to provide for ourselves and our families.

Economists call it a crisis in global demand.”

Global New Deal

“We need a global New Deal, a worldwide program to bring the basic infrastructure of modern society — electricity, water, schools, roads, internet access — to everyone on Earth. It’s the right thing to do, and it would build our economies by giving us more customers.”

“We know what we’re looking for in these agreements. We want trade agreements to contribute to democratic global economic governance and to promote good jobs, full employment and rising wages.

A key element, of course, is strong labor rights protections so that every worker in every country can exercise fundamental human rights on the job – without fear.”

“We live in a globalized economic environment, and one where the need for rules that protect people and the planet is growing.

We simply cannot afford trade rules that push in the other direction, that make the global economy a free fire zone for corporate power, or make it impossible to act effectively to address profound challenges like climate change.

All of these ideas together would put our democratic rights at the center of our economic policies and our trade agreements. Otherwise, we have the NAFTA model thinly disguised tools to increase corporate profits by poisoning workers, polluting the environment and hiding information from consumers.”

“If there is one thing we have learned in the 20 years since NAFTA and the original Fast Track, it’s that to achieve any of these measures, trade agreements must be negotiated in an open, democratic and accountable manner.

Trade deals that affect jobs and wages, health care and food security and electricity rates affect us all, and we need to be able to engage citizens to promote, amend or defeat them.”

“But we need a complete change in approach to trade deals, globalization, and our own domestic policies to achieve that. Trade deals should not be used to make offshoring investments less risky and more profitable, or to gut consumer and environmental protections — any more than our tax code should be used to reward moving jobs overseas.

Instead, we need to put good jobs at the center of our trade policy – in terms of currency, procurement, and rules of origin — just as we recommit to invest in the infrastructure and the skills of the future.

We are ready to stand with President Obama in realizing the vision of global economic growth and equity.

But first he has to decide if that is the vision that will animate his trade policies.’

(Dave Johnson is a contributing blogger for the Campaign for America's Future.)

I'm sorry, but it was FREAKING OBVIOUS at the time what was going to happen. I'm NO economist, and I remember clear as day hearing the description of it on NPR, and knowing IMMEDIATELY that it was going to fuck US and every worker in the world for the benefit of the corporations and the very rich. I remember thinking that there was NO other way for this to turn out, and that we were in for a REALLY bad time from then on.

They described it rather clearly, and it was clear to me that jobs were going to go away, replaced with what I had NO idea because there isn't anything TO replace them, wages were going to drop, environmental issues were going to be destroyed, and there was NO way to do anything about it because of this stupid thing writing it's own protections for itself inside. It was written BY big business FOR big business and to benefit big business at the expense of EVERYONE else.
It's NONSENSE that no one knew what would happen. ANYONE who actually THOUGHT about it and projected just a LITTLE bit could figure it out. Those who put it in place sure as hell knew it. *I* figured it out, so it HAD to be obvious.

Now the question is what do we DO about it? How do we GET RID of that monstrosity? It HAS to go or the whole world is screwed PAST the gills.

In answer to your question, I think we'll not get rid of the monsters that produce such monstrosities as NAFTA and TPP by helplessly asking them not to persist in devouring us and everything our children will need to live.

They are doing just that with cold and merciless premeditation. The AFL-CIO posture invites them to continue:

"We are ready to stand with President Obama in realizing the vision of global economic growth and equity. But first he has to decide if that is the vision that will animate his trade policies."

AFL-CIO officers, you're ready to stand with the puppet who has long been championing fast-track of TPP, as if he hadn't already decided? What are you thinking, that upon the writing of "TPP at 20" your own children will inherit enough from your personal stash to be okay, so all you have to do now is make a little fuss and preserve your personal positions?

I was so glad I had my barf bag handy when I read Johnson's delusional closing paragraph that you quoted, greghilbert !
Obama's acceleration of Colombian, Korean and Panamanian "trade deals" (in response to OWS September 2011 mobilization) made it perfectly clear where Obama and the Democratic Party stand on trade deals...bend over and grip your ankles tightly 99%!

Easy solution first begin with public control of all banking by order of the public to bring about real social change by control of capital. End the crony network of banking interests currently using public resources to restrain or control public by poverty and scarcity. Problem though treasury then military then resources and ownership. This circle of finance must be broken by force no owner or military will make the change without a vested interest.

The U.S. has endured 35 years of "free" trade policies, supported by both parties...

In 1979, Ronald Reagan started the idea of a North American Union, which led to NAFTA

In 1992, President George H.W. Bush ceremonially signed NAFTA, along with Mexican President Salinas and Canadian Prime Minister Mulroney.

The administration of President George H.W. Bush conducted the NAFTA negotiations.

In 1993, President Clinton signed NAFTA after it was ratified.

In 2004, the Bush administration (N. Gregory Mankiw) stated that the off-shoring of blue-colla­r AND white-coll­ar jobs would enrich the U.S. (Link available upon request).

In 2011, the Obama administration selected Jeff "I'm a nut on China" Immelt, GE's CEO, a high priest of the offshoring cult, to be the chairman of the administration's jobs commission , which never had a meeting.

It was disbanded on January 31, 2013, when its charter expired.

In 2012, President Obama AND Mitt Romney both supported the Trans-Pacific Partnership trade agreement, described by the Congressional Progressive Caucus as NAFTA on steroids.

Get ready for Ross Perot's "giant sucking sound" to get louder.

Don't forget Obama's immediate response to OWS mobilization in 2011 was to accelerate the ratification of Colombian, Panamanian and Korean NAFTA style "trade deals", Old Tulsan!

The idea was to create capital allegiance to international trade to control worlds resources so as to starve Communism - like an ancient siege of a castle fortress.

However with the fall of Communism the beast then continued its march but its target bec(a)me worldwide control over earth by capitalists' hidden government accountable to nothing or no one.

As the advantage seeking continues in the 21st century the world is waking up but is it too late? In former Communist countr(ies) capitalism has taken off the kid gloves and therefore around the world creating scarcity by demanding austerity even though worldwide demands for economic justice increase. Corporate and banking response (for) greater and greater austerity to break the will of the majority seems (like) the Cold War never ended, just shifted its focus from Communism to consumeris(t) control for permanent capitalist extraction by capital power fueled ironically by public treasury funding. . .

In 1974, the Council on Foreign Relations published The Hard Road to World Order, by Richard N. Gardner.

Here's an excerpt:

"In short, the "house of world order" will have to be built from the bottom up rather than from the top down. It will look like a great "booming, buzzing confusion," to use William James' famous description of reality, but an end run around national sovereignty, eroding it piece by piece, will accomplish much more than the old-fashioned frontal assault. Of course, for political as well as administrative reasons, some of these specialized arrangements should be brought into an appropriate relationship with the central institutions of the U.N, system, but the main thing is that the essential functions be performed."
Note: "an end run around national sovereignty, eroding it piece by piece"
NAFTA's Chapter 11 on investor-state disputes is one example. TPP will have more investor-state dispute regulations.

The Hard Road to World Order

A search for "Richard N. Gardner" turned up an article by Andrew Gavin Marshall that describes the plan for a global corporate government without middle classes.

Forging a "New World Order" Under a One World Government | Global Research

"By Andrew Gavin Marshall

To achieve these ends, however, all classes must be transnationalized, not simply the ruling class. The ruling class is the first class to be transnationalized, because transnationalization was the goal of the ruling classes based in the powerful Western European nations, (and later in the United States), that started the process of transnationalization or internationalization.

Now that there is an established “Superclass” of a transnational composition, the other classes must follow suit. The middle class is targeted for elimination in this sense, because most of the world has no middle class, and to fully integrate and internationalize a middle class, this would require industrialization and development in places such as Africa, and certain places in Asia and Latin America, and would represent a massive threat to the Superclass, as it would be a valve through which much of their wealth and power would escape them.

Their goal is not to lose their wealth and power to a transnational middle class, but rather to extinguish the notion of a middle class, and transnationalize a lower, uneducated, labour oriented class, through which they will secure ultimate wealth and power.

The economic crisis serves these ends, as whatever remaining wealth the middle class holds is in the process of being eliminated, and as the crisis progresses, or rather, regresses, and accelerates, the middle classes of the world will suffer, while a great percentage of lower classes of the world, poverty-stricken even prior to the crisis, will suffer the greatest, most probably leading to a massive reduction in population levels, particularly in the “developed” or “Third World” states..."

One telling thing about the TPP is that of its 29 sections only 5 have to do with trade. The rest are about supposed corporate rights and how to deal with countries, cities and organizations that stand in the way of maximum corporate profits. It seems that it is time for someone to write a book called When Corporations Ruled the World. That threat is here and now and being aided and abetted by Obama and his fellow whores in DeCeit.
Although TPP is disguised as a "trade deal", it is actually a transfer of legislative and judicial authority to global corporations with some "trade deal" window dressing tossed in.

Yes, investor state dispute settlement... System

Yet people are still debating about Democrat vs. Republican.

“Back then, nobody really knew what the results of NAFTA would be."
Yes... yes they did. It is just that nothing else matters when it comes to enlarging corporate profits for the few on the backs, bodies and misery of the many...

Job #1 for every US President is to make the world safe for corrupt crony, predatory, monopolistic capitailism and maximum wealth extraction for the ruling elite while destroying ALL alternatives at every opportunity.... ALL other considerations of the people in the US, the people in the rest of the world, and the environment are subordinate to this simple truth...

After their resounding success buying the US government during the fourth quarter of the 20th century, the 1% are rapidly buying governments on every continent. By the end of the first quarter of the 21st century the 1% will own every government on earth and the 99% will own very little.

Ray - I'm sure you will (be)interested to know that Credit Suisse came out with an estimate recently that by the end of this century there will be a dozen trillionaires in the world. I said at the time that since these jackals will make their money by devastating what is left of the Earth that the scenario for the Matt Damon film "Elysium" might come true after all. The super elites might live on a luxurious space wheel in orbit while we 99.9% struggle with what is left.
“Back then, nobody really knew what the results of NAFTA would be.

Today we do. They’re bad.”

Back then 'black ops' proponents were beginning to realize the necessity of vastly expanding by 'privatizing' strategies and 'growing' the armed mafia forces used by 'corporations' not subject to Constitutions constraints. Because people were beginning to wise up to the fact that that the 'economy' is based on a centuries old 'discovery doctrine' (of raw materials, intellectual property, and - fundamentally - discovering the truth about the dynamics of material and social enslavement/control = 'scarcity', fractional reserve banking).

The argument seems to go that acquiring what is necessary for this heaven-on-earth-American-Dream (TM), requires the amoral muscle of 'titans of industry' willing to kill, the collusion of information vehicles hiding the truth/history (why else is it 'so necessary' for there to be monopolies in media?), maintaining pressure strategies (terrorism, war on drugs, privatization of prisons etc.)
Few people even KNOW about the TPP or TTIP. Media does not cover it. The logic follows that of Abe disallowing coverage of "progress" at Fukushima, or Exxon or Mobil or BP disallowing photojournalists into areas that they foul.
It's the logic of cover-up, that if the public does not know something, it's easier to pass as policy. And note how the morality runs along the lines of the entire Stasi State's spying operations in that the public was intended NOT to know anything about these protocols. Clapper and others lied about the extent of this illegal program; and when Snowden let this cat out of the bag, they went for his head.
THAT is what's running things. And because it is as much about secrecy and covert operations as the CIA, it's ludicrous that so many C.D. posters push the meme that all that happens is the voters' fault.
This Talking Point is heard constantly and it protects Power.
That's why I suggest that persons who keep repeating it do so because their paychecks depend upon that species of loyalty.
When Johnson says, “We live in a globalized economic environment..." he shows he's a free trade Kool-Aid drinker who believes that by tweaking the monster's gate a bit it can be made to run smoothly.
In reality the monster must be slain to allow re-localization of production and trade to re-create the self-sustaining communities that built both Canada and the US's economies in the first place.
From Yves Smith, Naked Capitalism...

Yes Virginia, Obama and the Democrats Are Mussolini-Style Corporatists, Just Like the Republicans

"...Similarly, Carter appointee and Obama advisor Paul Volcker is if anything more extreme in his views. He saw it as necessary and desirable to break labor bargaining power in order to tame the inflation of the 1970s; Bill Greider reported in his book Secrets of the Temple that Volcker carried an index card where he kept track of weekly construction worker wages and regarded them a key indicator of whether his effort was working. Just last year, at a March conference organized by the Atlantic, Volcker spoke before a left leaning (by DC standards) group, and again inveighed against the dangers of tolerating any inflation. So these differences are no where near as pronounced as the Democratic party loyalists would have you believe.

And Konczal airbrushes out of the picture that Obama was hoping to secure as the crowning accomplishment of his second term the “reform” of Social Security and Medicare. Even the Republicans came to recognize that going after these programs was a political third rail. And Obama is completely on board with neoliberal, meaning austerian thinking, particularly the “need” to “live within our means”. By contrast, he’s been complacent even as unemployment has languished at levels higher than those that led Ronald Reagan to decide he needed to take more aggressive action (the 1985 Plaza Accord, among other things). And the idea that the Republicans are somehow trying to steal the populist mantle from its presumed rightful owners, the Democrats, is more than a tad peculiar given that income inequality has widened more under Obama than in the Bush Administration, as shown in the work of Emmaunel Saez:
And finally, how can we forget the ultimate reward to large corporations, that of allowing them to substantially circumvent nation-based regulation by appealing to secret panels that can impose fines on governments? Obama has been pushing hard to get the Trans-Pacific Partnership and the Trans-Atlantic Trade and Investment Partnerships concluded, which also would greatly enrich American drug, technology, and entertainment companies through stronger (more accurately, overreaching) intellectual property provisions..."

And the right-wing TV hacks are on the move!

Against the rapidly dwindling middle class (and everybody else except their funders).

Our man from J.U.S.T.I.C.E., Rep. Alan Grayson, is on the scene!

Dear Cirze:

Recently, ABC infohack Cokie Roberts, doyenne of the D.C. Establishment, attacked me in her nationally syndicated column. Why? Because I dared to speak the truth about the Trans-Pacific Partnership (TPP), a so-called "free trade agreement" that has lobbyists and Washington insiders alike clamoring to stuff their pockets with corrupt corporate cash. And because I dared to speak the truth about "Fast Track," legislation whose sole purpose is to cram TPP and other corporate rip-offs down our throats.

By attacking me, Cokie Roberts unintentionally has provided a fascinating case study in how Washington, D.C. really works. Her attack on me was really an attack on the American middle class. Her attack on me was an attack on you.

Let's look at the facts. Our corporatized "free trade" policy has been an abject failure. It began with NAFTA, which impoverished workers in both the United States and abroad, solely for the benefit of wealthy corporate special interests. So has every "free trade" deal since. For the past dozen years, every year, the United States has run the largest trade deficits of any country, anywhere in the world, at any time in history. Since NAFTA went into effect, our trade deficits total $10,000,000,000,000.00, or one-sixth of our national net worth. We are buying foreign goods and assets, putting foreigners to work. Instead of buying our goods and services, they are buying our assets, driving us deeper and deeper into debt. We lose - twice.

For five years now, our so-called "Trade Representative" has conspired in secret with multinational corporations to give away our sovereignty, refusing even our elected representatives access to negotiations. "Fast Track" legislation simply is a ploy to jam the resulting surrender to multinational corporations through Congress, without hearings, without mark-ups, without amendments and even without significant debate. The real problem today is our towering trade deficit, and both "Fast Track" and TPP would make that worse.
But that's not how Cokie Roberts, the daughter of two Members of Congress and a consummate Washington insider, sees it. She quoted some of what I've said, and then she said: "Liberal ideologues like Grayson are flat-out wrong."

Let's take a look at the evidence that Cokie Roberts offers to try to prove that she's right and I'm wrong. She touts the fact that the United States exports $2 trillion in goods and services each year. While she ignores the fact that the United States has been importing nearly $3 trillion in goods and services each year. (Note to Cokie: three is more than two.) She touts the "fact" that trade supposedly "supports" almost 10 million jobs in the United States. While she ignores the fact that imports cost us even more jobs; in fact, we've lost five million manufacturing jobs to "free trade" during the past two decades.
Are you disgusted by this crooked and underhanded attack by Cokie Roberts? Do you oppose "free trade" giveaways? If so, please pledge $10 per month to our campaign now, to "honor" of the "almost 10 million jobs" that Cokie Roberts claims "free trade agreements" support in the imaginary world that she lives in.

To top it all off, Cokie Roberts then quoted this vapid and inane remark by the U.S. Trade Representative: "Trade is critical to America's prosperity." It would be far more accurate to say that trade is critical to the prosperity of America's lobbyists. Lobbyists like Cokie Roberts's brother, for instance.

And now we get to the heart of the matter, today's lesson in how Washington, D.C. works - for people like Cokie Roberts. And her brother.

Why is Cokie Roberts ignoring the trade deficit, that 800-billion-pound gorilla in the room? Could it possibly be because her brother's law firm represents a slew of multinational corporations and foreign governments who stand to benefit from the TPP? In just the Middle East, that firm's client list includes Egypt, Saudi Arabia, the UAE, Bahrain, Qatar, Oman and Kuwait. That was good enough for Cokie's brother's firm to take in a whopping $40 million in lobbying fees in 2013 alone.

Cokie's brother's firm has represented scads of multinational corporations who just can't get enough of "free trade agreements." Last year alone, Goldman Sachs poured $480,000 into the coffers of that firm. Citigroup tossed in another $300,000. And Halliburton and Exxon Mobil shelled out tens of thousands of dollars, too.

(If you question whether Cokie Roberts would bend over backwards to help her brother's lobbying firm, then consider this: Dianna Ortiz is an American nun who was tortured and raped by the Guatemalan junta. Cokie Roberts's brother's law firm represented the Guatemalan junta. Cokie Roberts claimed on the air, with no basis whatsoever, that Ortiz had fabricated her story. Ortiz then proved it in court, and won a $5 million judgment.)
Cokie Roberts's attack against me is designed to discredit not only me, but also to discredit the concerns of ordinary Americans -- like you -- in order to protect the Washington elite: corporate lobbyists, corrupt insiders, millionaires and billionaires, multinational corporations, big banks, the Halliburtons and Exxon Mobils of the world, and other economic aristocrats who would benefit from these "free trade" giveaways. In short, the people who think that they own us.

The D.C. Establishment doesn't know what to do about me, because I am unbossed and unbought. Lobbyists don't like me, because I stand against their "free trade" giveaways, their bailouts, their no-bid contracts and their tax breaks. Billionaires fund my opponents' campaigns. Not mine.

If you don't like the TPP and other "free trade" giveaways, then invest in our campaign right now. If you don't like multinational corporations who try to buy laws that benefit them, then invest in our campaign now.

Washington's corporate elite relies on people like Cokie Robert to attack people like me, because I'm speaking for people like you. If you think that Cokie Roberts is wrong, that the way that the Washington, D.C. elite do business is wrong, then invest in our campaign now.

With only $10 or $25 or $50 from you, every month, I can afford to keep standing up for us.
Monday marks our Federal Election Commission report cut-off date. We are under attack. And when I say "we," I don't just mean "me." I mean that the American middle class is under attack. I mean that you're under attack. When I say "we," I mean you and me. We are fighting for justice, equality, and peace.

We are paying attention, we are working hard, and we are getting things done. And because of that, I am under attack. I need your help, and I need it today. Every dollar counts. Our deadline is midnight on Monday. Please contribute today.


Rep. Alan Grayson 

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