Since Franklin Delano Roosevelt’s New Deal, the Democratic Party has sought to frame itself as the party of the common man, the worker, the striver, the guy or gal who just needs a clean shot at success. Today, that takes the form of advocating for equal pay for women and minorities, non-discrimination against members of the LGBT community. It takes the form of supporting welfare for families down on their luck in a still weak economy, and it took the form of Obamacare in 2010. That’s the rhetoric anyway. (Skip all the way to the bottom for the TL;DR or take a deep breath now, true believer.)
But what you see — if you look closer and can remember what happened past last week — is that when it comes to selling things to the American worker that are bad for them, you call a Democratic president, not a Republican one.
President Obama has been trying to fast track approval of an enormous free trade agreement called the Trans-Pacific Partnership (TPP) in recent weeks. Trade agreements typically being dry things that no one wants to talk about, I haven’t seen the discussion I think we need to be having on this either on social media or in the mainstream press. The focus there, instead of being on whether this is good idea or a bad one, has been fixed almost solely on the politicking around the matter. Certainly, it’s easier to treat the issue like a case of Congressional gossip and point scoring than it is to actually ask any real questions. Infotainment, yo.
So, what is the TPP? Well, that’s a good question but it can’t be fully answered since the trade negotiations have been kept almost completely secret with details only coming out via leaks. What we do know is that it’s a free trade deal meaning it will eliminate tariffs on imports and exports. That’s supposed to mean cheaper goods. But it doesn’t just mean that.
Free Trade Agreements Cost Jobs And Wages
In case you don’t know, the U.S. is a signatory to two enormous free trade agreements already with nations in our backyards. The one that’s been around the longest is the North American Free Trade Agreement (NAFTA), which was signed into law by Democratic President Bill Clinton in 1994. At the time, he claimed it would open the floodgates for goods produced by actual Americans with jobs, wages, and…everything. In 1995, Bill Clinton said NAFTA would create 1 MILLION jobs over the next five years. Instead, the U.S. has lost over 1,000,000 jobs, mostly to Mexico. It also happened just as former third party Presidential candidate Ross Perot said it would.
What’s more, those were jobs for the people with the least options: People doing manufacturing work without college degrees. You know, the same people Democrats are advocating need more state help in the form of various kinds of federal welfare today. Additionally, Mexico barely imports anything from the U.S. at all. Our trade deficit with Mexico and Canada increased from $17.0 billion (in 1993) to $177.2 billion (in 2013). Mexicans and Canadians aren’t buying American. The average annual income in Mexico is just over $4,800. No one’s buying Fords there. They’re just making them more cheaply and shipping them back to us.
But I digress. Free trade is good for exactly one group of people: Multi-national corporations. The entire notion of free trade is built upon the rock bottom truth that driving down labor and production costs (worker and environmental protections) is good for profits.
Now, let’s take a look at the prospective TPP members.
TPP countries number 12: United States, Australia, Brunei Darussalam, Chile, Canada, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam…maybe South Korea, we’ll see.
So there’s literally only three countries on that list with standards of living and wages similar to our own: Australia, Japan, and Canada. The rest will become happy little factories under the TPP as companies from the more wealthy nations move their production to the cheaper nations, produce goods, and sell them back to consumers in the richer nations. This does not produce value for Australians, Japanese, Canadians, or Americans. It won’t even result in goods being cheaper because nothing ever gets cheaper. Why would things get cheaper when you’re already used to paying a certain amount for them? No, what you’ll get here is lower operating costs for companies and higher profits for the richest 10% of Americans who own 81% of all stocks. You won’t see one dime of those profits because your wages will be so frozen you couldn’t get in on the money party even if you wanted to.
That’s another effect of free trade. Since work gets outsourced to poor countries, there’s less competition here at home for wages. As a result, companies can tell you to stick it when it comes time for a raise even though they may be more profitable than ever. Small businesses that are trying to make their way now won’t be able to compete with even lower production costs than they’re already competing with, so say goodbye to a bunch of them under the TPP.
The average Joe or Jane gets zip, nada, zilch, out of free trade. Rich people, on the other hand, get a lot. The stock market soars, real profits soar, and U.S. wages stay stagnant. Good times.
The Case For The Free Trade As Made By Obama
But lets give President Obama a chance to explain why the TPP will be so absolutely great for everyone and we should completely trust him and fast track this thing ASAP.
We cannot stop global change. We cannot repeal the international economic competition that is everywhere. We can only harness the energy to our benefit. Now we must recognize that the only way for a wealthy nation to grow richer is to export, to simply find new customers for the products and services it makes…
…we know that over the long rim (run), our ability to have our internal economic policies work for the benefit of our people requires us to have external economic policies that permit productivity to find expression not simply in higher incomes for our businesses but in more jobs and higher incomes for our people. That means more customers. There is no other way, not for the United States or for Europe or for Japan or for any other wealthy nation in the world.
Good jobs, rewarding careers, broadened horizons for the middle class Americans can only be secured by expanding exports and global growth. For too long our step has been unsteady as the ground has shifted beneath our feet.
Oh, wait, that’s not from any speech President Obama has made. That’s Bill Clinton’s speech from when he signed NAFTA into law in 1994. You’ll see why it was so easy to mix them up in just a second.
Here’s Obama talking about the TPP at Nike headquarters because he either doesn’t understand irony or has no shame. Nike famously moved all their production to child labor-loving Indonesia over 15 years ago and justified it by claiming “Americans don’t want to make shoes.”
Here’s some choice quotes from an actual speech by President Obama in Oregon just five days ago. Parentheticals, mine.
We strive to make sure our own economy lives up to high standards, but in a lot of parts of the world, the rules are unfair. The playing field is uneven. That puts American businesses and American workers at a disadvantage. (Which is why we have tariffs, Mr. President, remember those things?). So the question is, what should we do about it?
We’re not going to be able to isolate ourselves from world markets. We got to be in there and compete…Because when they are, we win every time. When the rules are fair, we win every time. (He’s channeling George W. Bush here)
And this deal would strengthen our hand overseas by giving us the tools to open other markets to our goods and services and make sure they play by the fair rules we help write. The truth is, we have one of the most open markets in the world. Folks are already selling stuff here. We got to be able to sell there. (If they’re selling here then why is it we aren’t selling there? Oh, right, cause they don’t have any money). That requires us to enter into trade agreements to open up their markets.
So when you look at a country like Vietnam, under this agreement, Vietnam would actually, for the first time, have to raise its labor standards. It would have to set a minimum wage. (Vietnam already has a minimum wage. It’s lower than Cambodia’s.)
And the truth is that companies that only care about low wages, they’ve already moved. They don’t need new trade deals to move. They’ve already outsourced. They’ve already located in search of low wages. (Better just give up then!)
His sell on this is exactly the same as Clinton’s was and that last paragraph is especially ridiculous. China has quickly become more expensive to operate in than other, poorer countries, countries that would be TPP members, countries like Vietnam and Peru which are borderline authoritarian states.
So, Back To The Original Question
Why are Democratic presidents trying to sell out American workers? Because they can. Stagnant wages and little possibility of upward mobility meant that the Democratic Party could begin abandoning the interests of working people because what are they going to do, vote Republican? Well, yes, but only some of them because the GOP is even more pro-hollow out the middle class than the Democratic Party is. Strategically, it’s a pincer move and American working people have nowhere to go in a two party system that brooks no opposition candidates.
So, invest in Vaseline and prepare your body because this is coming. Both parties want it aside from a few patriots left in the Democratic Party and they won’t be enough to stop it.
I’m just kidding. Scream and shout about this. If you see where I’m coming from then get the word out, talk to your friends, speak with your parents (they’ll remember this stuff) and remember, this isn’t some new day Obama is selling. It’s the same old thing.
Meet the new boss
Same as the old boss
TL;DR – Free trade doesn’t work because poor countries can’t afford products made in richer countries which means that poor countries just become factories for richer countries and cause unemployment in these richer countries. The only people that make money are multi-national corporations who own these companies in poor countries and make money selling the goods to people in richer countries. There’s literally no way poor countries can buy goods from richer countries without money and they don’t have enough to do it without us giving them our money which makes us poorer. The Trans Pacific Partnership (TPP) sucks and you should fight it.