Thursday, July 28, 2005

CAFTA passes, atrocious NPR report and Illinois hearing

The Central American Free Trade Agreement passed early this morning by a one-vote margin. One of the swing yes votes? Democrat Melissa Bean. What a downer. What's the point of electing Democrats if they protect Republican incumbents on the toughest vote of the year? Bad advice, in my view, to vote yes. Sure, the Tribune came down hard on her, but I don't think the district would have turned on her because of CAFTA.

I heard an NPR report on Marketplace yesterday and it was absolutey atrocious. Here was the storyline:

First, a Democratic Congressman (I think it was Carl Levin) articulated the opposition to CAFTA based on the lack of any significant worker rights in the Central American nations, and the inevitable pressure to lower wages with this agreement.

Then an economist said he was lying. Lying! He said that when Democrats say they oppose CAFTA because of downward pressure on wages, their noses grow.

Then the Democratic Leadership Council guy came on and said that Big Labor was lobbying hard for this agreement, and old-fashioned protectionism is the real reason why some unfortuate Democrats were still stuck in the past and voting against trade agreements.

Finally, the commentator for Marketplace simply suggested that the Democrats support for labor could come at a political price as Big Business is keeping track of who is against this agreement and will settle the score at the next election.

They basically said that Democrats who oppose the agreement were lying, out-of-touch, about-to-lose-their-next-election weasels.

And they say that NPR has a left-wing bias?

Finally, Senator Sandoval is the Chair of the Commerce and Economic Development meeting, and the Committee is holding a subject matter only hearing on CAFTA this Monday from 10 am to 1 pm for a discussion and debate on the role of trade agreements on the Illinois economy. The hearing is an opportunity to discuss ways to improve future trade agreements and opportunities that the CAFTA presents. The public is invited to participate and the posting is here.


So-Called Austin Mayor said...
This comment has been removed by a blog administrator.
So-Called Austin Mayor said...

"Marketplace" is actually a product of American Public Media, the distribution branch of Minnesota Public Radio, not National Public Radio.

But your "no left-wing bias" statement applies to both anyway.

Bill Baar said...

So when has the sugar lobby been the tribune of the people? Tell this to the unemployed Brach's workers put out of work by protection of high priced American sugar.

Lazerlou said...

Dan what is so bad about CAFTA? I mean I get that it allows businesses to go use cheap labor in central american countries, and sometimes that might result in exploitation and sweatshops, but most of the time it doesn't (I'm assuming with much ignorance about real facts), and I imagine that most of the time it provides good jobs and a possibility of a better life for people who are far poorer and worse off that the lowermiddle class and working poor in our country.
I get that it will cost American jobs and put downward pressure on wages here. But isn't international development a good thing? Isn't it better that peasants in developing country can earn wages? Isn't it inevitable? Shouldn't we encourage the inevitable and address those real factors which make CAFTA unappealing for working class AmericanS?

CAFTA only sucks in the context of the distribution of ownership of the means of production. What I mean is I don't like labor for the very reason that they seek to protect american jobs and the status quo at cost to real progress - they are anti globalization, they are often anti technology when such technology costs maunfacuring and service jobs, they are even anti-environmental if increased oil drilling provides more jobs. Ug.

What the left and those worried about the status of the lower middle class and the working poor should be concerned with is providing an equity and ownership to workers here so that they may enjoy the profits gained when their companies beome more profitable by engaing more competative global markets. We need to start requiring companies here to give employees equity in exchange for their labor, not just a meager wage. We must cut or eliminate taxes for workers and increase taxes on corporate income and captial gains.

But most importantly, we as a nation must start taking responsibilty and recognizing the harsh consequenes of market force on highly fungible labor. We need far better educationminour country for all. We need generous unemployment benefits and we have to stop blaming people and punishing them when hey lose tehir jobs for no other reason than free market efficiency. But most of all we need to provide generous incentives andprograms for retrainging and further education for anyone who needs to change careers.

We have a long way to go in this world in terms of creating wealth. Globalization is inevitable and should be encouraged to unflod in an ethical and equitable way, with proper protections for workers everywhere, and realopportunity to be upwardly mobile. In Honduras, that means going from peasant farmer to wage earner. Here that measn going from fungiblewage earner to skilled technician ormanager.

Again, let's talk about the real problem: not globalization itself, but the fact that we allow a bunch of lucky duckies to hoard all of the increased value and profit that results from more efficient and competative marketplaces.

n. y. krause said...

Dan, free trade (including CAFTA insofar as it really is free trade) drives down the wages of Americans because people in other countries are poorer than we are. Opposing free trade means denying jobs to poor people on the grounds that they were born in the wrong country. Why would a progressive left-winger like yourself want that?

Dan Johnson-Weinberger said...

The problem with the NAFTA and the CAFTA is that they are not just 'free trade' the way that Illinois and Indiana have free trade. They are thousand-page agreements that have clear winners and losers. The winners include those that get government protection (software makers, movie/music makers) through enforcement of intellectual property rights, and the losers include low-wage workers who do not get minimum wage or labor union organizing protections enforced. Then, these agreements give corporations a new right to sue local and state governments for passing regulations that lower their profits. Finally, they transfer decision making authority to appointed arbitrators instead of publicly-accountable government officials. Oh, and we don't have free trade for labor with open borders. The agreements just work on open borders for capital, so one can invest in any nation, but one can not work in any nation. I'm all for raising the living standards of everyone, especially the poorest of the poor, but don't fall into the trap to think that NAFTA or CAFTA or the WTO are the only ways to do that, or that those thousand-page agreements represent 'globalization' and those that dissent from those agreements are 'against globalization.' The world is more complicated and sophisticated that that. Try reading the agreements. You'll see what I mean.

Lazerlou said...

If that is the case, that our fucking governemnet took th etime to secure intellectual poperty rights for corporations but not at least guarantee basic working conditions is pathetic. Again, golbalization has to be done ethically. I'm not surprised our administraion was only concerned with rights to profit and not to have decent working conditions.

Have I menioned that I find our current administration a bit, well, evil?

Anonymous said...

Dan is essentially right here, we do want free and fair trade. The agreements that we have received so far, however, simply protect the big corporations (Wal-mart, etc.) in their exploitation of workers both here and abroad.

By the way, Dan, Bean also voted to extend the Patriot Act.

n. y. krause said...

I didn't really mean my comment to support CAFTA, which I don't know a lot about. Like I said, "free trade (including CAFTA insofar as it really is free trade)". But the point I was making is that, while Dan critiques the agreement on the grounds of "the inevitable pressure to lower wages with this agreement", in fact, any free trade agreement is going to tend to drive down U.S. wages. Dan implies that he wants, "free trade for labor with open borders", which would exert an even stronger downward pressure.

(Although, in fact this is probably untrue as a net effect in the long run, and possibly untrue even in the short run, because of the effects of economic growth. But, if you want to be agnostic about economic growth, and apply a static analysis, the pressure to lawer wages would be substantial and inevitable).

Dan Johnson-Weinberger said...

Then which is it, N.Y.? Are you arguing that free trade (defined any way you want) will raise or lower wages? If it will lower wages, how is that good? NAFTA quite clearly lowered U.S. wages and hastened the demise of manufacturing jobs. And as a libertarian, do you support or disagree with the much stronger provisions on intellectual property (far fewer generic drugs allowed in Central America, for example, which is essentially protecting the intellectual property of the pharmeceutical company over the interests of the Central American consumer).

Dan Johnson-Weinberger said...

Bill, what happened to the sugar provision in the end? That was one good thing about CAFTA -- Big Sugar which has kept a tight lid on imports into the U.S. which leads to U.S. sugar prices to rise to three times the level of the world price had to endure some more imports from Central America, which is great for the Chicago economy as we have lots of candy manufacturers.

n. y. krause said...

Sorry, let me clarify a little. I believe that free trade (and free immigration) will increase the incomes of all Americans (or the large majority of them) in the long run. In the short run, it might increase or decrease wages of Americans. However, any such increase can only happen because of the economic growth caused by free trade. This is a "dynamic analysis". However, I was figuring that, you being a green-pink liberal type (although a nice guy nevertheless), would prefer to avoid dynamic analyses (which, after all, are what the supply-siders use to claim their tax cuts will increase revenue). If you ignore economic growth, then there is no chance that free trade will do anything but drive down American wages.

Now, so far, I've been talking about the average wages of Americans. I do believe that free trade will immediately increase net world wages, as the wage losses of Americans are offset by greater wage increases in poorer countries. But this sort of result (which, as I said, ignores economic growth), is a tough sell to an American electorate.

Personally, I'm against intellectual property, root and branch, so I'm against the IP provisions in CAFTA. Libertarians are split on the subject, though, so I guess if there was a libertarian who supported intellectual property and who was comfortable with the enforcement mechanisms, then he'd be real happy with that part of CAFTA.