May 10, 2015

TPP and the 99%

Instead of labor unions blocking a trade agreement with 10 other nations of the world, the unions should look for ways to empower our workers. The best way to do this is through education and President Obama had a good idea in his recent state of the union address. Provide the first two years of college free to any citizen who qualifies. This provides an opportunity for the 99% who are being left behind. By doing this everyone wins except maybe union management. Unions will need to find a different role in an educated world.

There is much discussion concerning the wisdom of the United States entering into the Trans-Pacific Partnership Agreement (TPP) with nations in South America and Asia. Labor unions are at the forefront of the opposition. Their message is TPP will put the working class and the unemployed here at home at a competitive disadvantage to their  counterparts in Asia who work for much lower wages. As a result the multinational companies will continue to transfer less skilled, lower paying jobs from the United States and put added pressure on the need to keep wages low at home. This kind of thinking resulted in China's "Lost Century" from 1850 until 1950.

Up until the mid 1800's China was considered a major power, if not the major power in the world. The Chinese referred to their country as the "Middle Kingdom", meaning they were the center of power and progress. Their culture was thought to be far superior than any other on earth, Therefore there was no interest on the part of China's leadership to conquer other nations. It was their belief that since they were this Middle Kingdom they had nothing to learn or fear from other cultures. When the Chinese nation was attacked by western powers with steam powered ships and modern weaponry, the Chinese were no match with their swords,  spears and knives.

Just like the Chinese 150 years ago the unions have their heads buried in the past.  It is not realistic to think unions can shape the market for wages. They need to find better ways to help the worker and one of the best ways is to help the American worker improve his skills to meet the challenges of the future. What better than education?

China was wrong with the result being they lost control of their nation with many countries from 1850 through 1950 because of an arrogant belief that they need not pay attention to the progress being made by the rest of the world. In 1950 things changed. World War II ended and china, under the leadership of Chairman Mao Zedong China was determined to return to a position of world dominance. The Chinese are long term planners and they are making great strides.

I have much to be thankful towards the AFL/CIO. I grew up in Flint, my Dad worked for Buick and if it wasn't for the union I may have never went to college. That was then and this is now. Times have changed and we must adjust.

We have much to learn from the Chinese.. We are no longer the last major power standing after World War II. We must not pretend we can do whatever we want and the remainder of the world will adjust to our desires. The world once again is a competitive place. If we desire to continue to lead we must adapt. The key is to improve opportunity for the 99%.

4 comments:

  1. Stephen, I agree with you that we need international trade. However, a secretive TPP is not the way to do it. The devil is in the details. Are you aware of the huge problems with FPP that relate to regulations, banks, worker safety, and the environment? Do you want the US (or any other country) to be sued for good environmental, safety, or banking regulations by mega-corporations who care only about maximizing profit?

    See, for example, http://www.alternet.org/economy/how-trans-pacific-partnership-signals-death-republic

    “The most controversial provision of the TPP is the Investor-State Dispute Settlement
    (ISDS) section, which strengthens existing ISDS procedures. ISDS first appeared in a bilateral trade agreement in 1959. According to The Economist, ISDS gives foreign firms a special right to apply to a secretive tribunal of highly paid corporate lawyers for compensation whenever the government passes a law to do things that hurt corporate profits — such things as discouraging smoking, protecting the environment or preventing a nuclear catastrophe…

    In an article posted by Yves Smith, Joe Firestone poses some interesting hypotheticals:

    Under the TPP, could the US government be sued and be held liable if it decided to stop issuing Treasury debt and financed deficit spending in some other way (perhaps
    by quantitative easing or by issuing trillion dollar coins)? Why not, since some private companies would lose profits as a result?

    Under the TPP or the TTIP (the Transatlantic Trade and Investment Partnership under negotiation with the European Union), would the Federal Reserve be sued if it
    failed to bail out banks that were too big to fail?

    Firestone notes that under the Netherlands-Czech trade agreement, the Czech Republic was sued in an investor-state dispute for failing to bail out an insolvent bank in which the complainant had an interest. The investor company was awarded $236
    million in the dispute settlement. What might the damages be, asks Firestone, if the Fed decided to let the Bank of America fail, and a Saudi-based investment company decided to sue?..

    Public Citizen observes that the TPP would provide big banks with a backdoor means of watering down efforts to re-regulate Wall Street, after deregulation triggered the worst financial crisis since the Great Depression…”

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  2. If it is secretive, how do you know the details?

    You don't: you provide an illusition of facts build an analysis on it. Attitude trumps your analysis, not facts.

    My hypothesis is different. When a government says it's classified, it usually means military information. I would be more concerned about selling protection to seal the deal. Then again, maybe that is okay: it worked for Al Capone.

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  3. The analysis is based on leaked documents and the history of ISDS in past agreements. See also Michael Wessel's comment in Politico. Wesselis a member of the US-China economic and security commission.

    an
    original member of the U.S.-China Economic and Security Review
    Commission - See more at:
    http://www.uscc.gov/Commission_Members/michael-r-wessel#sthash.sgPaNl9s.dpuf
    an
    original member of the U.S.-China Economic and Security Review
    Commission - See more at:
    http://www.uscc.gov/Commission_Members/michael-r-wessel#sthash.sgPaNl9s.dpuf http://www.politico.com/magazine/story/2015/05/tpp-elizabeth-warren-labor-118068.html#.VVzAfkZLUg4

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  4. The Politico article you cite is interesting because of the controversey in it.

    As an advisor you have input, not decision-making power. Evidently, your persuasion skills are not good enough or the advise is understood but not potent enough to be a deal breaker. I believe you suggested that in your remarks.

    ReplyDelete