Can We Talk About Trade? Probably Not.

When I teach policy analysis, certain barriers to sound analysis tend to recur. At least three of those barriers are pertinent to the current debate about America’s trade policies.

  • Americans tend to be inappropriately “bipolar.” Too many partisans, Left and Right, approach complex policy issues with a “bright line” ideology–doing X is either good or bad. Period. Their world is divided between good guys and “evil-doers,” (to use Bush the Second’s terminology) and there is no middle ground.
  • Although there are certainly some policies that are simply wrong, in most cases, the proper approach to analysis is to ask “how,” not “whether.” That’s because, in most cases, the devil really is in the details; otherwise good policies can fail because they are not properly developed or implemented, and otherwise problematic approaches can be rescued by careful development and thoughtful application.
  • In today’s America, increasing numbers of policy domains are complicated and highly technical. Even well-informed citizens are unable to make independent judgments about the best approach to such matters–examples include telecommunications, arms control, tax policies and multiple other areas. We are increasingly dependent upon experts in the field to assess proposed laws and regulations–and we are increasingly suspicious of the bona fides of those experts.

These challenges to sound policy analysis are front and center in the arguments about trade agreements like the TPP.

On the Left, we have a number of activists who believe that trade agreements inevitably cost American jobs, no matter what their content. This is demonstrably false. Outsourcing and poorly drafted agreements certainly undermine both domestic employment and compensation, but trade also generates jobs and economic growth. According to the U.S.Department of Commerce, in 2008 the United States exported nearly $1.7 trillion in goods and services, exports that supported more than 10 million full- and part-time jobs and accounted for 12.7 percent of gross domestic product (GDP). (If I find more recent data, I’ll update this post.)

On the Right, we have proponents who support any and all “free trade” proposals, no matter whether the agreements safeguard workers or the environment, and no matter how unbalanced the agreement, because “all trade is good.”

I haven’t followed all of the pronouncements, pro and con, about TPP, but in those I have heard, not one person on either side has identified provisions of that proposed agreement with which he or she agreed or disagreed. It was all or nothing–good or bad.

International trade is complicated, and the negative consequences that partisans cite aren’t necessarily the result of trade itself: the Economic Policy Institute, a progressive think-tank, attributes a significant amount of manufacturing job loss to currency manipulation. EPI says that “Global currency manipulation is one of the most important causes of growing U.S. trade deficits, and of unemployment and slow economic growth in the United States and Europe.”

Like technology, trade both displaces workers and creates new kinds of employment.

My point is not to weigh in on the merits of the TPP. Like most Americans, I simply do not know enough–about the terms of the proposed agreement, about the likely cost-benefit ratio, about the context within which the agreement would be implemented–to come to a reasoned conclusion. Like most Americans, I must rely upon the evaluations of people whose expertise and knowledge I trust.

Which brings me to what I have come to identify as one of the most serious problems America faces: a public in which skepticism, cynicism, and a pervasive lack of trust is rampant. We don’t trust the media (or more accurately, we trust only the media sources that confirm our pre-existing biases), we don’t trust government (the result of thirty-plus years of anti-government rhetoric), we don’t trust members of that “other” political party, and increasingly, we don’t trust each other. We sure as hell don’t trust the experts–those elitists!

It’s hard to make policy in that sort of environment.

40 Comments

  1. Question: Has the language in the TPP ever been posted on line (or anywhere) so that we the people can look at it? It is hard to have an opinion on something we have not seen.

  2. To: Patmcc,
    Why hard? It must be easy if Congress does it all the time. The Donald doesn’t read anything.

  3. Yes, its hard to make policy in that sort of environment… in fact it is hard to move forward as a nation, or as a corporation, or as an individual… much less as a politician.
    Sort of leads to isolation rather than creativity.

  4. It seems to me that this is another instance where “The Audacity of Hope” comes into play…or should. Full information is needed to make a sound decision and expectations of all needs being met through one agreement needs to be recognized as an impossibility. The current trade agreement situation appears to have the “players” either cowering on the diving platform, clinging to a support or diving off head-first hoping there is water below.

    Regarding TPP; is the hesitation and arguments against because of too many American businesses being shipped out of the country leaving us with more people being jobless or is it tied to the low wages here which prevent earnings from going into the economy to support this country? “Buy American” is more expensive in most cases; which is how the foreign market got such a strong foothold here. Using Carrier as an example; I do not have air conditioning, cannot afford it and it is still to many middle Americans a luxury item. What happened to the man from Mexico (I have forgotten who he was and his connection) who stated the business owners and workers in the area where Carrier is moving were not happy with the arrangement. The $3 hourly wage is not enough to improve their economy to a beneficial level. Another case of only the business owners benefiting (eventually) from the move…and they also have that expensive move to pay for. They must find that money somewhere, anywhere but from their own overflowing coffers.

    ” Like most Americans, I must rely upon the evaluations of people whose expertise and knowledge I trust.”

    Regarding the above quote from Sheila; we learned last week from the Republican National Convention lack of substance that they are NOT the ones to be trusted. This week we are learning via the Democratic National Convention that they are the ONLY ones to be trusted. Is a puzzlement!

  5. Sorry Shelia, but the TPP hasn’t been vetted by the American people or the press. In fact, President Obama tried to fast-track TPP through congress – just a vote.

    Can you imagine an outgoing Wall Street backed democrat forcing through a major trade document through a republican congress when the press wasn’t even allowed access?

    When it comes to public policy, all branches of our federal, state and many local governments are controlled by actors with money/influence. Our “free and independent press”, our fourth branch of government, is now controlled by 5 major corporations.

    Under this environment, it is extremely hard to trust. Obama trying to jam through the TPP took very poor judgment, considering you have Midwestern communities which look like Ghost towns due to NAFTA.

    Considering the news headlines this past week, it’s ironic since Wikileaks posted documentation of TPP showing one of the most controversial clauses of it – the arbitration mechanism where multinational corporations were granting themselves more power than states. This further compounds the lack of trust.

    Until we realize as a country, competitive models of economics based on unlimited growth, on a planet with finite resources is unachievable and unsustainable, than these trade agreements are just the monied actors doing what’s best for themselves. The planet and its inhabitants suffer the consequences. We can no longer afford to work against other countries in imperialistic fashion. We need to work with them and collaborate. No more winners and losers. Create win-win-win arrangements.

  6. The one thing that I recall reading and hearing about the TPP more than a year ago is that it would allow foreign corporations to challenge our regulations and court rulings. That it would allow them to sue our country over regs or rules that they feel harm their ability to access free trade. If this is correct, it would be another blow to workers and citizens and would ultimately empower corporations to protect their own interests both here and abroad, as if they don’t already have enough power.

    If the above is true, then I believe any part of a trade agreement that allows corporations (ours or foreign) to sue governments over rules or regs that they don’t like would be opening up a can of worms and should not be a part of any agreement.

    My greatest fear is that the fine print in this agreement would empower corporations over the safety and security of the general public – in any country that would sign on.

  8. It seems likely that, when Congress reconvenes in September, they will give the President the fast track authority.

  9. We don’t trust Congress to take care of American workers. And they’ve spent 8 long years voting down or refusing to consider things that would help even the most vulnerable of our citizens, so why would we?

    Most of the criticism that I have seen is about the forced arbitration provisions, as Nancy said. Big multi-national corporations already have too much power, which hurts workers, small businesses (which are the lifeblood of our economy, and those of every other country on the planet), and on the environment.

    And it’s impossible for most of us to trust something which may affect our lives so profoundly yet is shrouded in secrecy. If it’s such a great deal, why are the economists, trade specialists, policy analysts and just plain smart people among us not allowed to see it? How do we tweak those devilish details if the experts have no opportunity to evaluate it and comment?

  10. Johnny Hinterland doesn’t know TPP from TP. What he does know is that he worked for fifteen years in a factory that produced parts for washing machines. He made a decent wage but the factory closed. After a year of looking for work he finally found a job in another plant. It didn’t pay as and the benefits weren’t great. It was 80 miles from where he lived but it was a job. He stayed there for six more years until that plant closed. Now he works two part time jobs and he is pissed. The policy people don’t understand and don’t make provision for people like Johnny. When the country has a lot of unemployed or under employed people and these people see the vast majority of income going to the top you get the kind of anger that produces a candidate like trump.

  11. Many years ago, when Western Electric on Shadeland Avenue closed, they gave employees options. Transfer to plants in Florida or Oklahoma, moving expenses paid, lower salaries. OR…Hong Kong where they would have government housing, only minimum wage but a free bicycle.

    Just thought I would pass that along in case anyone thinks these business closings and relocations are a recent movement our government sanctions

  12. Sheila,another backhanded condescending post. If the public doesn’t believe the “experts” then the public must be ignorant and feel the “experts” must be elitists. Unfortunately that is false. Because even the so-called experts do not always agree. Just who do we consider as the experts? As far as the topic of climate change,do we believe individual scientists or scientists dependent upon the fossil fuel industry for their sustenance? When it comes to healthcare reforms,do we believe the experts actually working in the field? Or the experts from Insurance industry funded think tanks?

    Hell,even congress isn’t allowed to take notes wrt the TPP. No one is hardly allowed to view it. From what I’ve gathered,The TPP is probably the ultimate legislation to be written for those ascribing to the tenets/views expressed by the Powell Manifesto.

    And,as always,support for particular trade agreements always invariably comes from those whose livelihoods are not negatively affected. Frankly,it seems to be a race to the bottom for the benefit of a few. Trade policies are disruptive. If some on this forum were willing to leave the safe confines of their gentrified/gated/comfortably ensconced neighborhoods and view the carnage/towns where this trade has had an effect,perhaps one would view them differently. Perhaps not?

    Perhaps we should start jettisoning professors over 45 yrs old because their world views are dated and no longer current? Older people have more ailments and that costs the company/enterprise in profits. We can hire a younger professor for much less. I don’t believe in doing that,of course. But I don’t see the argument for discarding millions of workers for the benefit of the investor class as being any different. There’s no benevolent reason for many of these agreements,this is simply an effective method for raising profits for the investment class and lowering wages of the hoi polloi simultaneously. Nevermind the impact these policies have on communities.

    As far as the TPP,I believe it’s in Australia where the tobacco companies are suing the government for having the industry place warnings on the cigarette packs–just as they do here in the US. The tobacco companies are suing on the grounds that these warnings have an impact on their profits. If this is the best the “experts” can come up with…..Just as the “experts” came up with the ACA……And you can bet those very same “experts” have the best means of affording the best healthcare without using the ACA…..Then yes,some experts are indeed paid shills,tools and elitists.

    Let me ask …will anyone here be willing to buy beef from China? What do you think of Donnelly voting against the consumer and allowing the origin of one’s food to be unknown by the consumer?

  14. I have heard or seen a variety of articles and videos about TPP, with the most common specific complaint being about the arbitration clause. But the other complaint that I have heard that resonated with me came, I believe, from the book Hope in the Dark, by Rebecca Solnit, a historian and activist who writes about activist history. Her complaint is that there was no one representing the consumer in the creation of TTP. Incidentally, I highly recommend Solnit’s book; also John Oliver’s show Last Week Tonight (even better than The Daily Show when John Stewart was on it in my opinion – more focused and detailed) did a really good show on TPP – https://www.youtube.com/watch?v=6UsHHOCH4q8. Another great show from Last Week Tonight was his interview with Snowden – yes he actually went to Russia to interview Snowden) – https://www.youtube.com/watch?v=XEVlyP4_11M

  15. This will be my last post on the subject. There has been talk of fear on this very forum with regard to fascism. If fascism is the consolidation of government and corporate influence,then one should be really scared of the TPP .

    I await the usual suspects to post and scold me again,Ha! ; )

  16. From Netivist, a website devoted to debate.

    “The Trans-Pacific Partnership or TPP has created huge debate about whether an international agreement like this has been done in an open and transparent way or whether it has been done behind closed doors and in the interest of multinational corporations at the expense of citizen democracy.”

    Interesting pros and cons. Interesting comments.

    https://netivist.org/debate/tpp-pros-and-cons

  17. There is, I believe, a parallel between some these thoughts of Sheila’s and some of my first hand experience teaching climate science.

    The blunt truth is that the average Jane or Joe knows almost nothing about how the Universe and matter and energy and spacetime interact to produce reality all around us. Humanity collectively knows a lot. People who haven’t invested years, lifetimes being educated about what is known of the reality of the earth’s energy balance are literally as blind as bats.

    They don’t know, in fact have no comprehension of what they don’t know. And as Dunning and Krugar demonstrated the less one knows the more certain they are.

    When climate scientists say that we are creating for ourselves a new world incompatible with life as we know it now, that is a proven and provable certainty. But the proof requires a level of science beyond the education of the average person. What I do in my classes largely is to demonstrate how little the average us knows and therefore how necessary it is to trust experts. I teach the realities of science without the abstraction of the math necessary to apply the science. (You can get a free sample at http://zuris.us )

    As Sheila points out, the same with trade agreements. The public are as blind as bats there too.

    That’s a very uncomfortable place to be but for the vast majority of people not uncomfortable enough to inspire the learning that it would take to be even the one eyed king in the valley of the blind.

    The problem is that we all know that the world is full of pseudo experts out to bamboozle the rubes for profit. Donald Trump for instance. How does the average person defend against that? Great question.

    Unfortunately many people retreat into cynicism in response to that question. That’s understandable but dysfunctional because of what experts can tell us about the upcoming reality that we must actively be adapting to.

    Someone here suggested understanding TPP better by reading it. I think that’s an essential but tiny step forward. I know because I regularly read scientific papers that are literally incomprehensible to me. So, in addition to reading TPP one has to also become educated in many fields like macro and micro economics, global supply chain management, inter modal logistics, demographics, statistics, and (bow to Sheila) public policy theory.

    None of us can learn all we need to know. The magnitude of our collective knowledge assures that. We are left nearly defenseless by that reality. The only thing we can do is to be skeptical assigners of credibility. Show me the data. What is your truth track record? And most importantly, tamp down the ego and accept that the Universe doesn’t care about what you want, you’re very likely to have to adapt to reality because it will not ever adapt to you.

  18. BTW, a problem with Internet forums is that largely they are debates among people inadequately educated to advance understanding. Just a fact.

  19. “If fascism is the consolidation of government and corporate influence”

    I’ve never heard of Facism defined to be that. If it was the US has been purely Fascist since the beginning of the Industrial Revolution.

  20. I think it is meaningful to look at: Who is in favor of a particular item of legislation? For instance; ALEC, the Koch Bros., Republicans, Big Business, Wall Street, etc. If all of these entities are are “for” a piece of legislation, there must be something wrong with it. They all want to make more and more profits and let the rest of us pay.

  22. William 1
    I looked at several definitions of facism. None of them referred to government collusion with corporations. however at least one mentioned corporations being under control of the government.

  23. Here’s some comprehensible insight into TPP.

    http://www.vox.com/cards/trans-pacific-partnership/whats-isds-and-why-is-elizabeth-warren-so-upset-about-it

    It seems that much of the controversy is based on speculation about possible consequences. Some people think that the positive consequences for the US will predominate others that the negative ones will.

    Nobody knows for sure.

    Sounds like the stuff for a good debate. Or maybe it’s impossible to be sure of the two possible futures; the one with it and the one without it.

  24. To clarify:

    It’s always tempting but rarely true to assume that doing nothing will result in no change from today. Of course reality is that the world is always changing so often what works like this today will work differently after today.

  25. Fascists have an agenda that is primarily economic. As the Free Dictionary (www.thefreedictionary.com) notes, fascism/corporatism is “an attempt to create a ‘modern’ version of feudalism by merging the ‘corporate’ interests with those of the state.”

    And:
    Feudalism, of course, is one of the most stable of the three historic tyrannies (kingdoms, theocracies, feudalism) that ruled nations prior to the rise of American republican democracy, and can be roughly defined as “rule by the rich.”

    Thus, the neo-feudal/fascistic rich get richer (and more powerful) on the backs of the poor and the middle class, an irony not lost on author Thomas Frank, who notes in his book What’s The Matter With Kansas that, “You can see the paradox first-hand on nearly any Main Street in middle America—’going out of business’ signs side by side with placards supporting George W. Bush.”

    The businesses “going out of business” are, in fascist administrations, usually those of locally owned small and medium-sized companies. As Wallace wrote, some in big business “are willing to jeopardize the structure of American liberty to gain some temporary advantage.”

    Also:
    “But American fascists who would want former CEOs as president, vice-president, House Majority Whip, and Senate Majority Leader, and write legislation with corporate interests in mind, don’t generally talk to We The People about their real agenda, or the harm it does to small businesses and working people.”

    “With a fascist the problem is never how best to present the truth to the public but how best to use the news to deceive the public into giving the fascist and his group more money or more power.”

    Pete and his mini-me have not been looking hard enough…From Giovanni Gentile himself.

    In this, Wallace was using the classic definition of the word “fascist”—the definition Mussolini had in mind when he claimed to have invented the word. (It was actually Italian philosopher Giovanni Gentile who wrote the entry in the Encyclopedia Italiana that said: “Fascism should more appropriately be called corporatism because it is a merger of state and corporate power.” Mussolini, however, affixed his name to the entry, and claimed credit for it.

    Here is a link…But I’m sure Pete knows all of the info already! ; )

    http://www.nakedcapitalism.com/2015/11/mussolini-style-corporatism-aka-fascism-on-the-rise-in-the-us.html

    And of course,perpetual war:

    “Fascism, the more it considers and observes the future and the development of humanity quite apart from political considerations of the moment, believes neither in the possibility nor the utility of perpetual peace. It thus repudiates the doctrine of Pacifism – born of a renunciation of the struggle and an act of cowardice in the face of sacrifice. War alone brings up to its highest tension all human energy and puts the stamp of nobility
    upon the peoples who have courage to meet it.” —Mussolini

    https://en.wikipedia.org/wiki/The_Doctrine_of_Fascism

  26. GAL, I assume that corporations under the control of government is a universal given. I guess that I can’t think of an exception in the world that I know.

    I’ve always associated Facism with cultism. Extremists following a charismatic leader.

  27. Someone from the ‘other’ political party once asked me to critique an article he was about to submit to a publication. After reading it the first time, I was inflamed. I asked a colleague to read it too. He correctly noted that the article had one sentence that was inflammatory, but the rest of it was very good. Re-reading it, I saw that he was right and asked the author to re-frame the inflammatory sentence positively rather than negatively. It changed the tone of the entire article but taught me a valuable lesson too.

    As Sheila notes, details and context matter – A LOT. Our fast food, sound bite conditioning have made us more impatient with detailed explanations and comprehension of the various situations and tradeoffs the details must address. That’s why I SO value people like Sheila who take the time to research and read and then explain complicated and deep issues in comprehensible fashion. Thank you Sheila. You set a high standard for all of us.

  28. “I’ve always associated Facism with cultism. Extremists following a charismatic leader.”

    Pete, Pete, Pete; Hitler was the leader of a cult and Bin Laden was charismatic???????????????

  29. In this, Wallace was using the classic definition of the word “fascist”—the definition Mussolini had in mind when he claimed to have invented the word. (It was actually Italian philosopher Giovanni Gentile who wrote the entry in the Encyclopedia Italiana that said: “Fascism should more appropriately be called corporatism because it is a merger of state and corporate power.” Mussolini, however, affixed his name to the entry, and claimed credit for it.)

    More here:
    http://www.nakedcapitalism.com/2015/11/mussolini-style-corporatism-aka-fascism-on-the-rise-in-the-us.html

    From the book by Thom Hartmann, an author and nationally syndicated daily talk show host. His newest book is “The Crash of 2016: The Plot to Destroy America — and What We Can Do to Stop It.”

    I had another response, but my posts as of late are becoming surreptitiously eaten by gremlins. If I am unwelcome here, then I will leave and this will be my last contribution here.

  30. BSH, an interesting list you provided note the number of Democrats voting for TPP Fast Track includes -Drum Role please Kaine D-VA.

    We have Corporatism. Per Wiki – Corporatism may also refer to economic tripartism involving negotiations between business, labour, and state interest groups to establish economic policy. In the case of the USA tripartism has lost labor. Perhaps more correctly labor is no longer invited to participate. Labor was represented by Unions. The state or least some portions of it in the form of elected officials had to make certain Labor (Unions) had a voice as the Unions represented a significant voting block.

    The destruction or neutering of Unions removed the labor (union) chair from negotiations. Now the only chairs are for business and state interest groups represented by our elected officials. Given the need for money too be viable candidate for elected office, business in the form of lobbying and campaign contributions can select who will be funded and who will not.

    But wait a new chair was added and it for the 1%. So we have the business chair, the state interest groups chair and the 1% chair. I think these are the chairs that will negotiate the trade treaties on our behalf.

  31. Louie, you bring up some interesting points.

    I think in the original concept of democracy the government was expected to represent the entire country, all interests, because the needs of the whole shebang need to be integrated and balanced.

    It seems to me that, conceptually at least, is the perspective that must be honored in any treaty.

  34. BTW Louie, I think that Unions play an important role in corporations making sure that labor is treated equally with all other employees of the corporation including executive management in compensation, benefits, health, safety and environment.

  35. “If I am unwelcome here, then I will leave and this will be my last contribution here.”

    William1, I am made to feel unwelcome here too from time to time but frankly don’t feel like I need supervision. I am a capable adult.

    Even though you and I rarely agree the benefit to others is that people get exposed to both sides and can decide on credibility themselves.

  36. Much of what I object to within the TPP was injected into the treaty by corporate negotiators. Extension of patent protection that artificially increased profit ability to arbitrate legislation that cuts into corporate profit with mediators that corporations regularly use and rarely lose cases. These type of terms and the manner they were included is a problem for me

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