In an op-ed in Bloomberg News, Lanhee Chen, the policy director of Mitt Romney’s 2012 presidential campaign and a fellow at the Hoover Institution at Stanford (right wing think tank), has some advice to President Obama on how to "save" his second term, and it's a doozy: work with Congress to pass "bipartisan" job-killing trade deals!
It was discouraging to hear Senate Majority Leader Harry Reid say this week that the Democratic-controlled Senate is unlikely to support President Barack Obama’s bid for trade promotion authority. There are few policy changes that could be better for job creation and economic growth, both in the short and long term, than an aggressive effort to open markets abroad. And it was one of the very few policy prescriptions unveiled in Obama’s speech that actually has bipartisan support.How to Save Obama's Second Term
Obama is already being called a lame-duck president, so the fight for free trade may be his last, best opportunity to show that he has some fight left in him. That will require him to buck the popular consensus within his own party -- in fact, more than 150 House Democrats recently signed a letter to Obama opposing TPA. (To be fair, there is bipartisan opposition to TPA; some protectionist Republicans don't like it either.)
Obama should follow through on the commitment he made in his State of the Union address on Tuesday and first work with free traders in Congress on both sides of the aisle to pass legislation restoring TPA. Then he should set out to quickly complete negotiations over the two pending trade deals.
It may be the only bipartisan victory Obama can claim during his time as president, but it would be an important one for the U.S.'s workers and economy.
Wow! It could be a bipartisan victory! But what about those workers who worry about losing jobs? No worry! It's good for them also. How do you know? Because he says so. Just as similar academic whores said so before NAFTA and China joining the WTO.
Democrats who oppose TPA and the pending free trade measures believe that American workers will be hurt by the increased competition from abroad -- where labor standards may be lower and therefore the cost of producing goods lower as well. They’ve also expressed concern about the somewhat secretive way in which negotiations over the TPP, in particular, have been conducted.How to Save Obama's Second Term
Those concerns are misguided and pessimistic. American workers and goods can win if we can compete on fair terms, and free trade will give a much needed boost to our economy and U.S. manufacturers, in particular.
That is known as "argument by assertion." Workers will be fine because I say so. Trust me. You don't need no stinking evidence. Don't look at what happened with NAFTA or China joining the WTO.
Contrast with former Congressman John Bonior's op-ed in the New York Times yesterday:
The companies that took the most advantage of Nafta — big manufacturers like G.E., Caterpillar and Chrysler — promised they would create more jobs at their American factories if Nafta passed. Instead, they fired American workers and shifted production to Mexico.NY Times, John Bonior: Obama’s Free-Trade Conundrum
The Labor Department’s Trade Adjustment Assistance program, which documents this trend, reads like a funeral program for the middle class. More than 845,000 workers have been certified under this one narrow and hard-to-qualify-for program as having lost their jobs because of offshoring of factories to, and growing imports from, Mexico and Canada since Nafta.
The result is downward pressure on middle-class wages as manufacturing workers are forced to compete with imports made by poorly paid workers abroad. According to the Bureau of Labor Statistics, nearly two out of every three displaced manufacturing workers who were rehired in 2012 saw wage reductions, most losing more than 20 percent.
The shift in employment from high-paying manufacturing jobs to low-paying service jobs has contributed to overall wage stagnation. The average American wage has grown less than 1 percent annually in real terms since Nafta, even as productivity grew three times faster.
But the decline in the wages of workers who lost a job to Nafta is only part of the story. They joined the glut of workers competing for low-skill jobs that cannot be done offshore in industries like hospitality and food service, forcing down real wages in these sectors as well.
And, for America’s remaining manufacturing workers, Nafta put downward pressure on wages by enabling employers to threaten to move jobs offshore during wage bargaining.
snip (data from Cornell study in 1997)
Some advocates of Nafta-style pacts acknowledge that they will cause the loss of some jobs, but argue that workers will win over all by being able to purchase cheaper imported goods.
But when the Center for Economic and Policy Research applied the data to the theory, they found that reductions in consumer prices had not been sufficient to offset losses in wage levels. They found that American workers without college degrees had most likely lost more than 12 percent of their wages to Nafta-style trade, even accounting for the benefits of cheaper goods. This means a loss of more than $3,300 per year for a worker earning the median annual wage of $27,500.
Evidence is so pesky. Easier to argue it is because I say it is.
Former Congressman Bonior (who voted against NAFTA) lays it on the line:
The Nafta data poses a significant challenge for President Obama. As he said on Tuesday, he wants to battle the plague of income inequality and he wants to expand the Nafta model with T.P.P. But he cannot have it both ways.When the Romney policy director praises your policy, but the Senate Majority leader says he may not even bring fast track to a vote, 150 House Democrats sign a letter opposing TPA (fast track), the AFL-CIO and Change to Win labor federations oppose it, and environmental groups oppose it, maybe your policy is not the right one, Mr. President.
Let's keep the pressure on. The President has had a blind spot on trade, but he also is capable of changing his views. When Dems oppose it and Big Business Rs want it, it's the wrong way forward.
Raising the minimum wage is a useful policy to help people, but pushing job-killing trade deals just creates more inequality. Reject fast track and the TPP!