NAFTA passed on Nov. 20, 1993, on the promise of jobs. Oddly enough . . .

[ucrdem]

. . . for the next 6 years, from 1994 to 2000, US employment steadily ROSE and unemployment steadily FELL :

US employment,1990-2014:



source: http://www.statista.com/statistics/192398/employment-rate-in-the-us-since-1990/
................................................
US unemployment,1990-2014:



source: http://www.statista.com/statistics/193290/unemployment-rate-in-the-usa-since-1990/

.....................................

So maybe Bill Clinton wasn't lying when he promised that NAFTA would bring jobs? And maybe, just maybe, our current Trojan-in-Chief isn't lying either?

[JaneyVee]

1. NAFTA gets a bad rap, and it wasn't great, but...

Most of manufacturing jobs were wiped out due to technological advancements that emerged after a recession.

[ucrdem]

2. After seeing the ridiculous distortions launched here daily for the last 6 months

over TPP I'm beginning to wonder if Bill Clinton didn't get swiftboated in exactly the same way over NAFTA.

[JaneyVee]

3. Ironically, the TPP is a repeal of NAFTA...

So by blocking tpp we're de-facto sticking with nafta. That being said, I will reserve judgement of all policy until I read it when made public.

[ucrdem]

5. Seems like that would make passing TPA a no-brainer

so to speak . . .

But I'm with you and officially reserve judgment on the deal until the final TPP draft has been released to the public. I am however unequivocally supporting passage of TPA as that's a requirement to getting a final TPP draft.

[rhett o rick]

48. Where does it say that the TPP will repeal NAFTA? nm

[Recursion]

144. Wow, you don't even know what TPP is?

It's a proposed trade treaty to govern trade among multiple countries, including the current participants of NAFTA, the US, Canada, and Mexico. If TPP passes then NAFTA by definition is no longer in effect.

[rhett o rick]

169. But you keep telling us that we don't know what's in the TPP. I asked where the information

comes from that says that the agreements in the TPP will supersede those in NAFTA. I hadn't read that anywhere. And even if they do, what makes you sure they will an improvement. Those that issued NAFTA made promises just like now. It's like Charlie Brown trying to kick the football. Lucy says, "Trust us Charlie Brown, this secret trade agreement won't be as bad as the last one."

Pres Obama is saying "Trust me. This time your government won't frack you." How can we trust big corporations?

[Recursion]

172. You've obviously confused me with someone else

I've never claimed that. We've all more or less known what the US's negotiating positions are the whole time.

Pres Obama is saying "Trust me. This time your government won't frack you." How can we trust big corporations?

Well, clearly a square like me can't possibly compete with an insightful rebel like you.

[OrwellwasRight]

88. TPP will not repeal NAFTA.

What's your source for that?

[Recursion]

145. What are you talking about? Of course TPP would repeal NAFTA. Or "replace" if you prefer.

You do realize that the three participants of NAFTA are parties to the proposed TPP, right?

[OrwellwasRight]

189. You do realize that there is no such concept as "implied repeal" in international law, don't you?

Or do you not know what you are talking about?

This USTR mentions that the parties to the TPP discussed during one round: "the relationship between the TPP and existing FTAs among the negotiating partners."

https://ustr.gov/tpp-san-francisco

If there is a relationship, the other FTAs won't be repealed. You can't have a relationship with an FTA that does not exist.

Where is your evidence? Or do you prefer to just blindly assert facts not in evidence?

[myrna minx]

105. Please cite your source for this assertion. Thanks.

[Recursion]

146. Not enough desks to bang my head against

Of course TPP would replace NAFTA if it passed. TPP would replace the existing trade agreements among the US, Mexico, and Canada, which is NAFTA.

[ucrdem]

149. LOL, thanks Recursion!

Glad to see you back!

Not enough desks lol . . .

[OrwellwasRight]

87. You do know that the "unemployment rate"

has really very little to do with whether actual jobs were gained or lost as a result of increased trade and investment with out countries, right? "Unemployment rates" have to do with very specific categorizations that count people with part time jobs as "employed" but don't count discouraged workers as "unemployed." A better comparison would look at the trade deficit between the US and Mexico and look at what we are importing that we no longer make--that shows you actual lost jobs and lost opportunities for jobs (economists count opportunity costs the same as actual losses). If a trade deal worked well, we would not have a long term deficit with a country year after year. Losses and gains would eventually balance. That has not happened with NAFTA.

And if "technological advances" were wiping out all manufacturing jobs, how come manufacturing employment is growing in China, Thailand, Vietnam, Bangladesh, and other places? Yes, people are still needed to make things. Just not American people who won't work for $1 an hour. Life is a lot more complicated than the simplistic "the technology stole our jobs" argument.

[pampango]

4. I've heard all the good stuff after NAFTA was either unrelated or just good luck. All the bad stuff

was directly the fault of NAFTA (and Clinton) not anything else and that Ross Perot was a republican genius.

If nothing else, your charts reflect well on Clinton and Obama (though republicans would say they are just lucky) and very poorly on Bush I and II (most Democrats would say deservedly so).

[ucrdem]

7. Amazing how the pattern repeats isn't it.

Bush I drives economy into the weeds, Clinton pulls it out and adds turbo. Bush II drives economy over a cliff, and Obama patches it up and gets it rolling if not speeding at its former rate. Yet.

[brush]

103. The dot com boom, remember that, was the reason for the rise in jobs in the 90s. . .

once that was over the damage done by NAFTA's exportation of jobs became evident.

[pampango]

125. So "all the good stuff after NAFTA was either unrelated or just good luck"?

And all the bad stuff "was directly the fault of NAFTA (and Clinton) not anything else"? Lucky Clinton? Unlucky Bush? That's a campaign slogan that republicans can run with.

[kenfrequed]

127. Well..

The emerging tech boom temporarily alleviated some of the woes of NAFTA until the tech industry started getting outsourced. These trade treaties sometimes take years to shake out. It would help if they were negotiated publicly with participation of the American people and labor.

[pampango]

130. Got it. When things go well under a Democratic president after NAFTA, he's just lucky there was

something else (which he gets no credit for, of course) driving the economy. When the economy dives after the Democrat leaves office, that's because the 'woes' of his misbegotten policy got dumped on his republican successor.

What if manufacturing employment had been declining for 15 years by the time of NAFTA? That decline was reversed temporarily after NAFTA only to resume when Bush II came into office. Is the decline in manufacturing under Bush II the fault of NAFTA? How about the decline from the 1980 until the mid- 1990's? Was that the fault of NAFTA, too?

Manufacturing jobs have been declining since the 1980 in the US and in every other developed country. Since the 1980 the only periods of increase in manufacturing employment was during the Clinton administration after NAFTA and under Obama starting in 2011. They had declined steadily for 12 years before Clinton and for 10 years afterwards, just increasing again starting in 2011. To blame a 35-year decline in manufacturing employment on NAFTA seems to be searching for a boogeyman.

[kenfrequed]

131. *sigh*

Yes, why would business trends be affected by things like money and trade deals.

You are oversimplifying and I am done with this conversation.

[pampango]

134. The trend existed for 15 years before NAFTA, reversed course after it, then resumed the pre-NAFTA

trend when Bush came into office.

You seem to be implying a belief that the increase in manufacturing employment under Clinton would have continued under Bush if it were not for Clinton's NAFTA. That shows a lot more faith in Bush's 'trickle-down' economics than I have.

To me it looks like the decline in manufacturing employment under the regressive economic policies Reagan and Bush I looks exactly like the decline under the same economic policies of Bush II. Could it be that regressive economic policies (cutting taxes on the rich, deregulation, anti-union policies) are actually bad for workers in the manufacturing sector which sells most of its products to the middle class?

If the same trend exists before and after an event, that is not proof that the event caused the trend. Indeed many might figure that something else was the cause of the trend. Blaming NAFTA for our problems rather than Reagan and the Bushes is popular but seems to miss the point when you look at longer term trends.

Have a good one.

[Recursion]

147. This is the most shame-faced lie of them all. The dot-com boom destroyed *millions* of jobs

More jobs than any trade agreement could ever hope to.

Remember how there used to be travel agents? Typing pools? Telephone operators?

It wasn't trade that destroyed those career fields, it was technology.

[brush]

168. Were you there in the late 90s?

Everyone was working. You don't remember that. The economy was booming during the Clinton era

And the rise of tech jobs spurred a lot of that. Sure some jobs went away but more were created.

[Recursion]

171. Was I where?

I was certainly working then.

[Spazito]

6. Trade agreements, whether bilateral or multinational, are mixed bags as to...

benefits vs detriments. In order to begin to understand the complexity of trade agreements, one must go back to the genesis and follow the evolution to the current multitude of agreements currently in force as well as those still in negotiation, imo.

Here is a good analysis of U.S. trade agreements beginning in 1934. Fair warning, it is 65 page pdf but well worth reading if one really wants to understand why they exist, the pros and cons, etc.

http://www.usitc.gov/publications/332/us_trade_policy_since1934_ir6_pub4094.pdf

[ucrdem]

8. hey thanks.

[Spazito]

9. You're very welcome!

As to NAFTA, specifically, I find it interesting some of the populace in all three countries, Canada/US/Mexico believe each of their countries got the short end of the stick in the deal. It is realistically unlikely that is true although on some things, as with all mixed bags, there is some good, some bad, imo.

[ucrdem]

11. Yes, there will be some displacements, but a lot of what NAFTA gets blamed for

gutting Detroit for example was well underway long before NAFTA. Toyotas and Datsuns started arriving on our shores in big numbers in the early 70s and that's what crippled Detroit.

[Spazito]

14. Yes, the big three were late to the 'game, complacent in their supremacy in the US market...

figuring the American public would be prepared to pay more for their vehicles, vehicles technologically behind the Japanese vehicles. They were wrong in so many ways.

Without NAFTA, the American public would be paying far, far more for their imported oil, gas, water, electricity, automobiles, etc. There are those who say the cost should be higher forcing research and investment in alternative energy. That's all well and good for those who can afford the higher prices, not so much for the poor who can't afford even the reduced costs that exist today.

Trade agreements are trade offs, you give to receive, you don't get it all and give nothing which seems, for some, a hard concept to accept.

Corporations used to be national, no longer, they are multinationals, with NO allegiance to any country, they will go where the costs are lower, the profits higher. Isolationism will not change that, corporations will find other markets...China, India...where the market is 'richer' due to the vastly larger population to whom they can market their products, imo.

[ucrdem]

16. I haven't looked at the details of NAFTA

but from what I've seen of TPP it's an effort to consider the actual tarriff agreement in a wider context of concomitant effects and thereby mitigate some of the deleterious consequences of NAFTA. The sales job has been lousy as usual and I don't think Obama counted on having a member of his own party lay siege on the White House, so we might never get to see it, but if it does get through I'm betting that it will have the good effects of NAFTA with a lot fewer downsides. Hope so anyway.

[Spazito]

20. The TPP is much, much bigger than NAFTA, it is actually...

more an expansion of the Trans-Pacific Strategic Economic Partnership Agreement in 2005, an agreement the US signed onto in 2008.

The roots of the TPP are actually from APEC rather than NAFTA.

Here is a good synopsis about the TPP, imo. It is from Canada's perspective but the facts in it relate to the US as well. I found it very informative along with the pdf I linked to in my previous post.

http://www.cbc.ca/news/world/what-is-the-trans-pacific-partnership-1.1147888

[ucrdem]

30. thanks Spazito . . .

good stuff!

[Spazito]

37. Thank you for providing a thread where some depth can be introduced...

to the complex issue of trade!

[1StrongBlackMan]

108. Thank you for this post. Fact are always good.n/t

[Spazito]

113. You're welcome...

Facts are crucial, imo, when trying to get one's head around complex issues, especially at times like this.

[OrwellwasRight]

92. Baloney.

"Trade agreements are trade offs, you give to receive, you don't get it all and give nothing which seems, for some, a hard concept to accept."

Yes, trade-offs should involve the US lowering sugar tariffs and eliminating sugar quotas in exchange for country X eliminating its tariffs on pork and beef -- two popular US exports. They DO NOT need to involve trading away your right not to compensate corporations for regulations they don't like or agreeing to refrain from engaging in certain kinds of financial regulations. Those are not rules that involve tradeoffs between countries. Those are tradeoffs that hurt those helped by regulations (average people) and benefit those who don't like regulations (corporations). This is not a required tradeoff, and yet the US keeps making it.

"Without NAFTA, the American public would be paying far, far more for their imported oil, gas, water, electricity, automobiles, etc. "

Again, false. We could have dropped tariffs with Mexico and Canada unilaterally or engaged in a tariff-only agreement. We did not need to agree to the harmful rules of NAFTA to get "cheap gas," which, by the way, is arguably a bad thing since it has induced us to overuse it.

"Corporations used to be national, no longer, they are multinationals, with NO allegiance to any country, they will go where the costs are lower, the profits higher."

Exactly, which is why the smart trade policy would be for governments to get together to regulate the behavior of corporations. To force them to behave responsibly toward the environment and their employees instead of giving them carte blanche to invest anywhere without any responsibilities and the freedom to challenge any policy they don't like.

"Isolationism will not change that . . ."

Straw man. Who is advocating isolationism? Why do you interpret calls to do trade in a progressive way "isolationism"? To undermine the other side? To get readers to write off critics? To paint yourself as the smart one and critics as neanderthals? It won't work. Demanding rules that work for people and not just kowtowing to corporate greed isn't isolationism. It's the exact opposite. It's global solidarity.

[Spazito]

106. There is almost an insular thinking when it comes to discussion of trade agreements...

Countries enter into trade agreements because each country wants something from the other. One country does not get all they want without concessions to the other countries. The US is only one player in an increasingly global trading economy, it is less influential than it once was.

There is no global solidarity. At best there is mutual self interest.

It is important, imo, to learn about the evolution of trade agreements and not look at each one in isolation.

[OrwellwasRight]

114. You didn't even read my post.

Tell me which country "wants" to have to extend its patent terms, to subject itself to ISDS lawsuits, to restrict its ability to engage in financial regulations as it pleases? None. These are things corporations want -- and when those corporations have too much influence over governments, they get written into trade policy. The US is the party asking for the bad terms -- the pro-corporate terms, they are not being thrust upon us by the 4 million people of New Zealand or the $1700/yr income workers of Vietnam. This isn't about the US dropping tariffs on cotton or tobacco. It is about writing rules that enshrine corporate power. That isn't a "trade-off" anyone needs to engage in.

"There is no global solidarity. At best there is mutual self interest."

What is this even supposed to mean? I think it would be news to the International Trade Union Confederation. http://www.ituc-csi.org/

If it is supposed to be some kind of statement about economics, you are also wrong. Here is a sampling of the wide and vast literature analyzing whether and why people act out side of their self-interest:
http://www.pnas.org/content/112/6/1727
http://press.princeton.edu/titles/9338.html
http://www.scientificamerican.com/article/are-people-naturally-inclined-to-cooperate-or-be-selfish/
http://pubs.aeaweb.org/doi/pdfplus/10.1257/jep.7.2.159

"It is important, imo, to learn about the evolution of trade agreements and not look at each one in isolation."

Again, I have no idea what you are saying. Yes, we should look at all of them, figure out which of the rules are unbalanced and rigged for corporations, and fix them. We don't. They have not evolved much, even though our tax, labor, and other economic policies have evolved in very negative ways for working people and trade policy should be adjusted to correct for these shortcomings. Instead, we repeat virtually the same trade agreement over and over and over, each time, without much learning from experience. Read the deals for yourself if you don't believe me: https://ustr.gov/trade-agreements/free-trade-agreements

[OrwellwasRight]

91. It's not unlikely. It's a fact.

NAFTA benefitted the elites in all three countries and screwed the workers in all three countries. Corporate driven trade rules are no different than corporate driven tax rules or corporate driven environmental rules == and they yield the same result. The fact that US companies used the threat of "moving to Mexico" to thwart organizing drives and force workers to take pay and benefit cuts is no accident. It was by design. It's no coincidence that inequality and union density in all three countries has worsened since NAFTA while wages have stagnated and poverty rates have grown.

I find it bizarre that so many progressives see exactly what the corporations are doing to rig our economy when it comes to paying no taxes, trying to undo Dodd-Frank, screwing college students, underfunding infrastructure, etc. But pretend those same corporate motives are entirely benign when it comes to the desire to make more shoes in Vietnam and sell them to more Americans who can't afford to shop anywhere but large discount stores that pay poverty wages.

[Spazito]

98. NAFTA was a mixed bag, some good, some bad

NAFTA is a flawed agreement there is no doubt. The labor and environmental protection standards were contained in a side agreement instead of being written into the agreement itself thus they aren't enforced and are easily bypassed. That should not have happened, imo.

You seem to have the mistaken impression I favor corporations and see their actions as benign. I do not. My points about corporations having no allegiance to any one country is simply a fact not supportive commentary.

[OrwellwasRight]

104. Well, then why do you support

trade deals like NAFTA and the TPP, which increase corporate power to seek reimbursement for laws and regulations they don't like in private arbitration panels?

That makes corporate power worse, not better. Seriously.

Read this: http://www.thenation.com/article/right-and-us-trade-law-invalidating-20th-century

And yes, some always benefit from trade. In the case of NAFTA, because of the rules written into in, and not JUST the labor and environment provisions, the primary beneficiaries are large corporations and their shareholders. To change that requires very different trade rules, not vague promises of "best labor chapter ever!" TM

To create a just society, we need a just economy. That means new economic rules, including trade rules.

[Spazito]

109. I am for fair trade, there is no free trade in reality...

I was not in favor of NAFTA at it's inception, did not and still do not think it reflects fair trade. The decision to include trade and environmental standards only in a side agreement as well as the right of foreign corporations to sue State/Provincial governments for compensation when their environmental protection laws prohibit or limit their actions. Two examples I recall off the top of my head was Barrick Gold (Canadian company) vs the State of California and Lone Pines Resources (Delaware) vs Canadian government due to a Quebec ban on fracking.

As to the TPP, I have concerns very much mirroring the ones I list above. I look forward to actually reading the draft before ratification knowing, unfortunately, my response pro or con carries no weight.

[OrwellwasRight]

115. So your answer is to sit around and do nothing and just hope for the best?

Great plan.

Or, you could get involved in the effort to release the text before it is finalized when we can still influence it and fix the harmful parts.

[Spazito]

117. Wow, I have tried to have a reasonable, polite discussion with you...

it seems that was a waste of time. Vitriol and attacks aren't my thing so it is clear we have nothing further to discuss.

[OrwellwasRight]

190. Saying there is no such thing as global labor solidarity

isn't particularly reasonable or polite. But suit yourself.

[Joe Turner]

112. NAFTA is a failed deal

Our trade deficit with Mexico plunged into red ink and has stayed there ever since the deal was inked. It created, like in China, corporate worker/slave farms and when China came into the picture some of that production went to China and elsewhere in a constant search for the lowest costs. So millions of Americans lose their good paying jobs never to get anything like that again while our government encourages China, Mexico et al to swamp our country with cheap products as our workers go on welfare. Does that sound like a good deal to you? To believe TPP would be anything other than the final coffin nails in American's once proud middle class is complete naivete.

[Spazito]

116. Nowhere will you find I stated NAFTA was a good deal, nowhere...

I stated repeatedly it was flawed. I made no statement on the TPP at all until asked in another post wherein I stated my concerns with both NAFTA and what may or may not be in the TPP.

[Joe Turner]

118. I am saying NAFTA failed

Failed by producing results exactly opposite of what the supporters led by BUSH/CLINTON claimed. To say it is flawed is a gross understatement. But that is my opinion.

[Spazito]

120. We will have to agree to disagree then n/t

[Rilgin]

93. Actually It is Very Possible

It is not at all unlikely and is exactly what happenned. Most (currently referred to as the 99%) of the population of each country gets the short end of the stick and a very few rich people in each country benefit.

This is the exact issue of the current Trade Deals. It is good for the Investor Class since their profits are protected. It is bad for the rest of us.

[Spazito]

99. Am I to understand you believe there should be no trade agreements...

that the populace would be better off without any or are there some you think would be beneficial?

[Joe Turner]

110. Why do we have to have trade agreements?

When America was on the rise, which in not now, we had no overarching trade agreements and yet traded with every country on the planet. So why do you imply otherwise? American also had a huge TRADE surplus and a rising standard of living which has since passed with era of trade agreements. It seems the free "corporate" trade crowd likes to throw out red herrings that without job outsourcing, industry destroying corporate written trade deals there is no trade, which is laughable given little things like history. Honestly I have a hard time believing any Democrat, given the destructive trail of corporate trade deals can support such bad trade legislation.

[Spazito]

111. That was a time when countries like India, China, Japan, etc, were not competative...

and protectionist. Times have dramatically changed and the US now has to compete with many other countries to be able to export their goods and services. Without trade agreements, the US goods and services will simply not be the import choice as there are other countries wanting to export goods and services comparable with the US products willing to enter into agreements.

The US is no longer the dominant partner, it is simply one player among many. Times have changed.

[Joe Turner]

122. Those very same countries you mentioned all are protectionist

They, like America pre-1980s have enacted trade polices that encourage domestic production; understanding that without some kind of trade barriers be it tariffs or import quotas it is impossible to keep and build important manufacturing and technological industries. It's a simple rule of the jungle. So while globalists in this country throw out the red herring that unless America enacts yet another job killing corporate trade deal we are ignoring the realities of global trade. Let me submit to you this: America is the only country in this world that follows this upside down reasoning. The rest of the world is building new industries , creating new jobs and most definately have trade policies designed to protect their interests.

[jberryhill]

132. "When America was on the rise"

You mean after the industrial capacity of Europe and Asia were gutted by WWII?

[Joe Turner]

133. America was already the industrial superpower prior to WWII

And we got there largely because tariffs were used to encourage domestic production. Just like Germany, most of Europe and virtually all of Asia does today. You need to check out our trade statistics and see where the rest of the world is at. It's an eye opener. And good place for that is the CIA website. Bottom Line: Crony corporate trade deals have eviscerated our industrial base....and there is no way of getting around that.

[pampango]

135. The only period of high tariffs in the US in the 20th century was under republicans from 1920-1932.

The middle class suffered greatly under that period of high tariffs during the 1920's. By the end of the decade income inequality was at historically high levels; levels so bad that we still have not equaled them in our modern era of tremendous inequality.

It is no surprise that FDR sought to lower those tariffs starting in his first term. republicans, predictably, accused him of "secretly has made tariff agreements with our foreign competitors, flooding our markets with foreign commodities." FDR would not have done that if he thought it weakened our country and its economy.

Just like Germany, most of Europe ... does today.

No. Germany and all of Europe has tariffs as low or lower than the US has.

Imports are more than 30% of Germany's economy. Hardly a sign of a country with 'high tariffs'. In the US imports are 14% of our economy. From that which would you think has higher tariffs? The country with a high level of imports? Or the one with less than 1/2 as much in imports?

[Joe Turner]

136. Tariffs being blamed for the great depression

is a great deception wall street has repeated so often most people take it at face value today. Back then imports were are very small part of the economy compared to today. No, insane financial speculation and over production was the culprit there...but wall street wants everyone to forget that. Also please research America's history of tariff policy. We always had tariffs at various levels since the beginning of the country. Regarding Europe they have a 15% VAT tax on all imports, effectively a tariff. As regards to Germany, its own record of fantastically high exports and trade surpluses speaks for itself. They have a myriad of trade protections as do most of Northern europe to assure that they keep their industrial base. IOWs, they don't buy off on ridiculous notions of Globalism like we do.

[pampango]

137. Agreed. Tariffs did not cause the depression. They caused tremendous income inequality but not

the Depression.

We always had tariffs at various levels since the beginning of the country.

And the working class hated them.

The Hidden Progressive History of Income Tax

Everyday Americans hated the tax system of the Gilded Age. The federal government gathered taxes in two ways. First, it placed high tariff rates on imports. These import taxes protected American industries from competition. This allowed companies to charge high prices on products that the working class needed to survive while also protecting the monopolies that controlled their everyday lives. Second, the government had high excise taxes on tobacco and alcohol, two products used heavily by the American working class.

The income tax was the most popular economic justice movement of the late 19th and early 20th century. This truly grassroots movement forced politicians to act in order to stay in office, leading to the 16th Amendment to the Constitution in 1913. That’s right, the income tax was so popular that the nation passed a constitutional amendment so that the right-wing Supreme Court couldn’t overturn it.

http://www.alternet.org/labor/hidden-progressive-history-income-tax?akid=9361.277129.2KDGDd&rd=1&src=newsletter706781&t=14

The rise of the income tax (which taxed the wealthy) and the demise of the tariff (which taxed the middle and working classes) was a progressive victory though it was reversed in the 1920's by republican presidents and congresses that slashed income taxes and restored high tariffs. Thankfully, under FDR income taxes were raised on the rich and tariffs were cut.

Regarding Europe they have a 15% VAT tax on all imports ...

The VAT is not a tariff since it applies the same to imports and domestically-produced goods. The VAT increases the cost to consumers of German-made goods so it is fair to apply the same VAT to imports. That's also why it does not reduce imports. If the US wants to adopt a 15% VAT we can do that. It will raise the cost of stuff we make here by 15% when we buy it, but we will be able to then apply a 15% VAT on imports so they don't have an artificial advantage from us adopting a VAT.

They have a myriad of trade protections ...

If they do, they are not very effective 'trade protections' since Germany imports twice as much as we do and every other European country comes close to that. How is it that countries with 'trade protections' import at a much higher rate than the US (which does not have such 'protections')?

IOWs, they don't buy off on ridiculous notions of Globalism like we do.

Any country in which trade is 70% of the economy is more into "globalism" than is a country in which trade is 23% of the economy. A country that was 'anti-globalism' would trade very little and believe more in national self-sufficiency, e.g. the US under republicans from 1920 to 1932.

[Joe Turner]

138. The beautiful quality of "net balances"

if that it takes a lot of the noise out of the equation like "Germany imports more then we do". Germany's trade surplus with the rest of the world is at the top of all nations, meaning whatever they import, (and a lot comes from the European union) the exports are much much higher. You have to ask yourself "how can this be" when our experience with free trade has had the exact opposite result. Clue: they find ways of protecting their industrial base. And yes the VAT tax certainly does help in that regard, your opinion to the contrary. And the secret is, yes, products do cost more but high paying jobs become much more plentiful unlike our trade polices that have gutted once great cities like Detroit. Finally, you argue against history with our tariff policy which was in place for 200 years as this country grew into the greatest industrial might ever. That at certain periods some people may have whined about tariffs is ridiculous on its face and a case study of using selected antidotes to spin a larger point. Ain't flyin.

[pampango]

139. I think a VAT has a lot to offer. While it raises the cost to consumers of all goods, imported and

domestically produced, it is used to fund social programs and the safety net in the countries that have it. Of course, some fear that a VAT in the US would go to fund the military and national security industry so we have to be careful about that.

Clue: they find ways of protecting their industrial base. And yes the VAT tax certainly does help in that regard ...

If the VAT raises the cost of German-made cars and imports from Japan or the US by the same 15%, how does that "protect" the German auto industry? A German car that would cost $20,000 without a VAT costs $23,000 with it. An imported car that would cost a German consumer $20,000 without a VAT, costs that consumer $23,000 with it.

As I said, I kind of like the idea of a VAT here, as long as the proceeds are used in a progressive way, but I don't anticipate that it will 'protect' domestic industry.

That at certain periods some people may have whined about tariffs is ridiculous on its face and a case study of using selected antidotes to spin a larger point.

The end of the 19th century saw corporations at their height of influence and power, with plutocrats literally buying off legislatures to elect their men to the U.S. Senate and individuals like John D. Rockefeller and J.P. Morgan having more money than the entire federal government.

How did they take power from the rich in the early 20th century, a time when the plutocrats had even more power than the present? After much debate, they settled on a solution that went a long way toward making the United States a more fair country. Income taxes.

The income tax was the most popular economic justice movement of the late 19th and early 20th century. This truly grassroots movement forced politicians to act in order to stay in office, leading to the 16th Amendment to the Constitution in 1913. That’s right, the income tax was so popular that the nation passed a constitutional amendment so that the right-wing Supreme Court couldn’t overturn it.

The income tax became such an overwhelming political movement during the 1890s that Congress, despite so many members' close relationship with the plutocracy, passed an income tax law that would have forced the rich to begin paying income taxes for the first time since 1870. Corporations immediately organized against this. In a strategy we can recognize today, the Chamber of Commerce distorted the bill’s purpose, telling the public that the income tax would drive them into poverty, even though the bill did not affect working-class people. Yet the Chamber made little headway in the face of this overwhelmingly popular movement.

But the Supreme Court in 1895 declared the federal income tax unconstitutional in the case of Pollock v. Farmers’ Loan & Trust Company. This was the same set of judges who ruled segregation constitutional in the case of Plessy v. Ferguson ...

Yet the income tax movement continued, now with the goal of a constitutional amendment to overcome a hostile Court. Over the next 15 years, a variety of reform movements, including farmers, organized labor, and, increasingly, middle-class reformers known as Progressives, pushed for the income tax to alleviate America’s stubborn inequality and to provide the government more money in order to function as modern 20th-century state. Despite continued corporate opposition, Congress presented a constitutional amendment to the states in 1909, which finally achieved ratification in 1913 as the 16th Amendment.

It was not "some people" who "whined" about tariffs. It took millions of people, including "farmers, organized labor and progressives", to fight back against corporations and a 'hostile Supreme Court' to pass the 16th Amendment. The 'whining' from progressives went on for 20 years from the 1890's to 1913. If you view the 20-year effort by progressives to pass the income tax as 'whining' by 'some people', you are entitled to your opinion.

... using selected antidotes to spin a larger point. Ain't flyin.

Apparently it 'flew' with FDR since he reversed the high tariffs and low income taxes that he inherited from Herbert Hoover. And republicans did not like it one bit.

[Joe Turner]

140. "The end of the 19th century saw corporations at their height of influence and power"

Only to be eclipsed by today's Wall Street power machine that literally owns our government along with mega-corporations many of which have more wealth than a lot of countries. Guilded Age? True then but nothing compared to the smothering web of corporate power today. Also, note, tariffs remained high at around 13% during FDR's presidency compared to 1% today. You think FDR would be bought off by the wall street crowd if he were alive today like most politicians. I don't think so. And again you have to get your mind around how most of Europe and virtually off of Asia can run trade surpluses and expand their industrial base while ours shrinks. Must be something in the water here. Let me submit to you, Europe and Asia think we are stupid for enacting our corporate written trade polices. And they are right. Again see history of tariffs - it explains a lot.

[Art_from_Ark]

159. That's not true

The history of the US is replete with controversies about tariffs. In fact, the Dingley Act of 1897 (and which remained in effect until 1909) was the highest tariff in US history. It was replaced with the Payne–Aldrich Tariff Act, which also contained high tariffs. Tariffs were greatly reduced by the Underwood Tariff Act of 1913, but to compensate for the loss of tariff monies, the income tax was imposed.

[pampango]

162. Good point. Republican administrations tended to raise tariffs (as with the Dingley Act of 1897)

while Democratic ones tended to lower tariffs (as with Woodrow Wilson's Tariff Act of 1913). That pattern repeated itself with Harding, Coolidge and Hoover who raised tariffs 3 times in 10 years (1921, 1924 and 1930) only to see them undone by FDR in his first term.

Thanks for the information. I had forgotten about the Dingley Act and "following the election of 1896, William McKinley (R) followed through with his promises for protectionism."

[kenfrequed]

129. There is a reason for this.

This is because NAFTA, like most modern trade deals was more about servicing multinationals than it was about the countries involved. It allowed the exportation of labor to where labor was cheaper which Americans and Canadians would have thought benefited Mexicans to their detriment. It also allowed corporations to go to Mexico with very bad environmental practices that Mexicans probably felt benefited Americans and Canadians to some degree. Again, savings for the corporations.

These treaties are not about benefiting people.

The TPP is clearly indicative of this because of what it seems to be promoting:

An international panel that can assess business losses do to governmental laws and fine governments for passing said laws.

Increased protection for the copyrights of the entertainment industry

Increased protection of the patents of the pharmaceutical industry.


I haven't seen anything in this trade agreement that assures the protection of rights to organize unions in all of the signatories as a means to prevent this being a race to the bottom. I also haven't seen anything that provides for a minimum standard of environmental protection which would protect all signatories from ending up as toxic dumping grounds. Had this been a treaty concerned with nations and with their peoples these would be the primary concerns of such a treaty,

[1StrongBlackMan]

107. Thank you ... historical facts are always good. n/t

[ucrdem]

10. If past is prologue I'd say this is a pretty good argument for nominating Clinton this time around.

It's the economy . . .

[ucrdem]

12. And speaking of downsides does anyone remember these:

[sufrommich]

13. I think a lot of trade bashing is human nature.

Most Americans (myself included) don't like to admit that our own purchasing decisions contributed far more to the loss of manufacturing jobs here than trade agreements did. We chose cheaper Chinese made products over American jobs,we feel guilty about that and look for a scapegoat.

[ucrdem]

15. Yeah there's that, but I think policy plays a huge role.

People buy what's cheap I suppose myself included but a ton of policy goes into making that stuff available at those prices. I live in a town that tanked after a local military base closed in the 90s and now it's coming back based on gigantic distribution centers built on the old base, including a humongous Amazon "fulfillment" center. That's a lot of policy to make that happen including endless street improvements which I have to say are a little annoying. Still I welcome the jobs even if there hasn't been an independent bookstore downtown the whole time I've lived here. Not counting the porn stores of course. But come to think of it they've mostly gone away too. That's progress for you. Mixed bag but like or not here it is.

[rhett o rick]

50. Other countries don't have that problem. They have tarriffs to protect their products.

The USofA can't undersell Chinese products in China. Too bad the opposite isn't true. And I think the TPP is going to outlaw "Buy American" clauses in government contracts.

[eridani]

90. People are bashing TPP, not trade

TPP is about the mass murder of people whose access to generic drugs will be heavily restricted. It is about corporations bypassing our court system to attack government initiatives to protect people and the environment.

[ucrdem]

17. Long and short: the talking point that NAFTA gutted US employment appears to be unsubstantiated. nt

[Mnpaul]

74. Your claim that NAFTA created these jobs is also unsubstantiated

Last edited Wed May 20, 2015, 11:38 PM - Edit history (1)

You neglected to mention that our trade deficit also skyrocketed after NAFTA was passed. If these jobs were due to NAFTA, we would see the opposite. We went from a trade deficit that was under 200 billion in '94 to a deficit of around 450 billion in 2000. It is currently over 800 billion.

Short on facts just like your car sales claim.

[newfie11]

18. If it is such a great deal why is it a secret?

The fact that one must have a high security clearance to view it makes me very concerned.
Also the reactions of those that have seen it is enough for me.

[ucrdem]

19. I suppose it comes down to credibility.

Multi-party international treaties are distinct from domestic legislation and the process of ratification is different. So I'm content to accept that explanation on its face, and I strongly feel that the parties complaining about secrecy are playing political games for their own purposes. Whether you agree with those purposes or not I think the ends do not justify the means and they are effectively destroying their credibility. Anyway that's my view. Incidentally NAFTA was also negotiated under tight security.

[AZ Progressive]

21. Not really...

http://www.democraticunderground.com/10026697556

[ucrdem]

22. Really.

http://www.democraticunderground.com/?com=view_post&forum=1002&pid=6693424

(same article, different thread, link to my summation of its merit)

[zipplewrath]

33. So you're biased

You're willing to accept the explanation "on its face" but not the criticism. Kinda the working definition of biased.

[OrwellwasRight]

94. No, other parties want to have a say in the outcome of the deal.

Not all rules are equal in trade deal, just like not all rules are equal in health policy. The public should be allowed to help shape the rules that we will live under. That's why it is called a democracy.



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Five arguments against the self-defeating secrecy of the Trans-Pacific Partnership
Alan Beattie | May 19 12:01 | 7 comments | Share
If you think that getting fast-track authority from Congress to negotiate trade agreements is hard, just wait for the deal that it is designed to pass.

The Trans-Pacific Partnership (TPP) between the US, Japan and 10 other economies in Asia and Latin America has run into a barrage of criticism. Some of it is probably justified; some of it is not. The problem is that we don’t really know.

The governments involved, and particularly the US administration, have gone to extraordinary lengths to keep the negotiating texts secret. Even senators and congressmen are only allowed to look at them in a secure location without taking away notes.

Most of the Washington trade establishment seems to think this secrecy is justifiable, an attitude I find baffling. Here are various arguments I have heard against publishing the negotiating texts, and why I think are mistaken.



1. You shouldn’t show your hand in a negotiation with other countries.

This would be a valid objection to publishing individual countries’ internal negotiating strategies in great detail, but not to releasing the draft negotiating texts already shared between the different governments. There are no secrets from each other in there: check out the detailed statements of each country’s current stance in the intellectual property (IP) rights chapter obtained by Wikileaks. It’s the public that are being kept in the dark. Who, or what, has been harmed by that text being leaked? Have the IP talks collapsed because it was published? No.



2. You don’t let the public into other negotiations e.g. the nuclear deal with Iran.

Not at all analogous. Nuclear weapons negotiations involve national security secrets about technology and deployment that can never be revealed lest terrorists and rogue states get hold of them. Senator Barbara Boxer put it well: the TPP is a matter of commerce, not national security. Neither North Korea nor Isis is going to try to undermine the US by setting up a patent regime for pharmaceuticals copied and pasted from the TPP.



3. Interim texts aren’t published for other important negotiations.

Yes they are. Here is the draft text for this year’s climate change conference in Paris (and I submit the future of the planet is more important than the US getting a 0.4% increment to GDP after ten years). Here is a draft text for the Doha round: Doha had a whole bunch of problems and collapsed, but I never heard anyone claim excessive transparency was one of them. And here is a draft text proposed by the EU in the EU-US Transatlantic Trade and Investment Partnership (TTIP) negotiations.

Source: http://blogs.ft.com/the-world/2015/05/five-arguments-against-the-self-defeating-secrecy-of-the-trans-pacific-partnership/

[Rex]

23. So the unemployment rate is higher now than over 20 years ago!?

Well that sucks.

[ucrdem]

25. Yes, but Bill left office in Jan. 2001.

And then there was 911, a few disastrous wars, and a stock market crash. So far Obama has patched things up enough to hand off a hot economy to Hillary who will hopefully have as much success in that department as Bill.

[Rex]

43. True he left us with a surplus, something it seems only modern Dem POTUSes can do.

While it is just the opposite for the GOP. Still, I was expecting to see lower unemployment after 6 years of clean up.

[Recursion]

148. It's roughly at 1993 (ie, pre-NAFTA) levels

The U3 and U4 fell after NAFTA passed; I expect something similar would happen after TPP, though it will probably be a much smaller boost this time.

[Hell Hath No Fury]

24. Uh yeah...no.

Clinton was a broken record on claiming that tech jobs were the high-paying "jobs of the future" that would make up for the loss of manufacturing jobs NATFA would (and did) facilitate. And they were, until tech companies -- and many other industries and services -- discovered they could easily offshore jobs. Also, that was the beginning of the rise of lower-paying service industry jobs that became the majority of the new jobs created.

The trade off of good paying manufacturing jobs for low-paying service jobs was the start of the fall of the middle class in America.

[ucrdem]

26. Blaming decades of bad policy on NAFTA is unrealistic.

Clinton didn't invent globalization and it was well underway by the 70s. Remember Datsuns? Clinton promised jobs and a go-go economy and that's what he delivered. Obama is promising jobs with enforcible labor and environmental protections and I have no doubt that that's what TPP will deliver if it ever gets off the starting block.

[moondust]

34. +1

[zipplewrath]

27. Now plot real wages

Now plot real wages (i.e. adjusted for constant dollars) and see how much you like the outcome.

[whatchamacallit]

28. Boom!

[ucrdem]

29. Possibly but I can't find anything showing real wages over the same span.

But if you find what you're looking for please post it.

[Hell Hath No Fury]

38. Took me less than one minute -

http://www.pewresearch.org/fact-tank/2014/10/09/for-most-workers-real-wages-have-barely-budged-for-decades/

[ucrdem]

40. Wages in current and constant $ appear to have risen in the period 1994-2000.

Anyway thanks for finding that. Don't see how it changes a darn thing but at least you made someone happy.

[OrwellwasRight]

95. You do realize that NAFTA didn't end in 2000, right?

Neither did the WTO. So arguing that wages rose from 1994-2000 "because of NAFTA" but fell after 2000 totally unrelated to NAFTA is totally spurious, right?

The real answer is the NAFTA + other trade policies + economic policies affected economic performance, including wages, job creation, working conditions, economic mobility, income distribution, and more from 1994 onward, including today.

Doing more trade deals that increase corporate power and are full of corporate giveaways will exacerbate these trends. Creating new, people-centered trade policies that omit ISDS, address currency manipulation and tax evasion, shun PHARMA's attempts to raise drug prices paid by government-run health care systems, ensure infrastructure investment, etc. could start to curb these trends. The President has said nothing about the TPP that would make anyone believe the TPP will be a transformation of corporate trade policies of the past. And if he wants to show us that it is, he needs to show the text.

[Marr]

101. +1

[Recursion]

150. Here you go

So, they rose after NAFTA and fell after Bush's tax cuts made finance more profitable than employing people. They're on an "up" swing again right now.

(NB: I'm pretty sure the AHETPI line is cumulative and nominal, so it's negative in real terms any time it's below about the 2 mark or so, depending on the year in question.)

[ucrdem]

151. Yep. That's the real pattern in the carpet.

Fack the RW haters blaming Dems for Junior's train wreck.

[zipplewrath]

178. Try this place

Nice try, but you should really compare this to these charts.

http://www.epi.org/publication/charting-wage-stagnation/

And do please consider the statistical reality of "lag" in data.

[NCTraveler]

31. So much of what is blamed on NAFTA today was a direct result of technological advance.

That includes manufacturing. I am not opposed to trade agreements. They just need to protect workers. Not just American workers. I think trade agreements are important in order to raise living standards in other areas of the world all while protecting US workers. Even the playing field. Unfortunately, that won't happen when the emphasis is on corporate success alone. These agreements can be written with an emphasis on corporations and labor.

[ucrdem]

32. Yes, that's a very good point.

NAFTA became a one-stop punching bag and I think the lesson was not lost on Barack who tactfully scheduled this vote for his last quarter thus avoiding the election-year swiftboating that dogged Clinton. And I think the US negotiators who are under the purview of John Kerry are serious about creating enforceable labor and environmental standards. But the devil is in the details and the necessity of passing TPA before a public draft can be issued is a problem. I'm not sure how it could have been gotten around.

[zipplewrath]

35. No it's not

Yes, NAFTA is a general punching bag for much of what has happened in a larger sense to the US economy. But technological advancement has very little to do with it. The American worker is vastly more productive today than prior to NAFTA and yet their wages have not grown proportionally.

There is very little the TPP can do to achieve its goals without contributing to the larger problem of the race to the bottom on wages. There are virtually no "protections" for American workers in this bill (at least the public parts). There are protections for foreign workers (which is why they say it raises working standards) but Warren's concern is that we won't particularly enforce those because we aren't enforcing protections that already exist in current trade agreements. So we'll lower wages here, change nothing about working standards here, and we agree to raise them elsewhere, but never take action to actually accomplish that.

Now there's one heck of an agreement.

[ucrdem]

36. Technically there are no public parts

because none of it has been ratified by the signatories and until a final draft is released we won't know exactly what the enforcement provisions are. As far as Warren's criticisms go, without getting into the honesty issue, I think that if she were seriously concerned about this treaty she'd be working closely with the US negotiators to make sure her concerns are addressed instead of running to the press. It's not like Kerry isn't practically her next door neighbor.

[zipplewrath]

47. Again you presume

You presume that Warren is an dishonest critic, and her opposition is credible "on it's face".

It is a very real possibility that she has:

1) Tried and been rebuffed

2) Doesn't believe that you can have a trade treaty with this group and not contribute to the race to the bottom on wages.

[ucrdem]

49. She says she's read it. So there goes the secrecy claim.

What does that do to the rest of her claims?

[zipplewrath]

51. It is a secret

The fact that she's in on the secret doesn't mean that it's not a secret. Furthermore, it isn't clear the "currency" of the information with respect to what is being agreed to currently.

[rhett o rick]

53. Are you sure that Sen Kerry is free to discuss it with her? And even with no "public parts"

many, many individuals and organizations are lining up against this potential monster.

http://www.democraticunderground.com/12807710

And no one but the big corporations, Pres Obama and most if not all Republicons in Congress are the only ones in favor.

And yet some insist on standing on the train track saying, "I will believe it when it runs over me."

[Demeter]

39. Somebody cannot read English OR Graphs

[madokie]

41. Be careful now

you're liable to upset the haters and disillusioned with factual info. Many times facts are followed by the sound of crickets

[ucrdem]

45. Facts? We don't need no facts.

I don't have to show you any stinkin facts.

[sabbat hunter]

42. free trade

between countries that have fairly equal costs over all is a no-brainer. It makes sense, like with the EU. What one country might make one thing better, another makes another item better. Or is a draw for tourists (like greece has been historically).
The problem arises when it really isn't free trade, or the sides are un-equal. Like Japan trying to keep quotas on rice and cars in TPP. Or with China/Vietnam, etc with ridiculous unbalanced labor costs advantages.

[Rex]

44. Look at unemployment skyrocket after the Wall Street thefts of 2008.

Sad that no CEO will ever be held responsible for almost destroying the world economy.

[kentuck]

46. Unemployment rate went down in spite of NAFTA...

Even though many companies were moving overseas, we still had a tight labor market, mostly because of the computer revolution.

But, of course, producers of hard drives were more or less a one-time shot. After they were sold, there was not a whole lot of demand, as it was when everyone had to have a computer. Instead of a "car in every garage", it was a computer in every house. The tech revolution lasted for a good while. Actually, we are probably near the end of the tech revolution that happened in the 1990's? Who knows?

But, when the tech revolution slowed, the movement of jobs overseas did not. These were the better-paying jobs. Even customer service jobs, not high paying at all, started to move to India and such places. Wages began to fall in our country, as more of our workers had to take fast food-type jobs when they lost theirs...

Just because the rooster crows, and then the sun comes up, does not mean that the rooster caused the sun to come up. Some confused logic there somewheres...

[Elwood P Dowd]

54. In his world, NAFTA created over 20 million new jobs.

These people are digging deep to find the feces to throw on the wall for their Wall Street handlers. Like you said, using their logic the rooster crowing caused the sun to come up.

[ucrdem]

55. Look, jobs AND real wages steadily rose for six straight years after NAFTA,

and unemployment declined, up until the very moment Dick and Junior stole election 2000. Then a nine-year slide, then Obama. Are you really trying to claim it was all just a coincidence and jobs actually DECLINED in those six years? Despite the evidence that they didn't?

Really?

[kentuck]

59. Are you saying the computer/tech revolution had nothing to do with jobs being created?

Those were good jobs under Clinton until 50,000 plus manufacturers decided to move their jobs overseas. And when they moved, former workers moved into lower-paying jobs. Do you think that did not happen? And is still happening?

Do you think NAFTA created all those jobs in this country??

Really?

[ucrdem]

61. I don't believe that six year run of good times was a coincidence, no.

Jobs moved around sure, some were created some were lost, but the overall trend was more jobs and higher wages for six straight years, until Darth and Junior took over. And now they're heading up steadily again. If TPP is part of the picture, as NAFTA clearly seemed to be, hell let's get it done.

[kentuck]

102. No, it wasn't a coincidence.

It was a technological revolution. Do you remember when you got your first computer? Most folks got theirs during the 1990's. It was a huge boom to our economy, at least for a few years. Overtime, a lot of labor-intensive jobs were replaced by technology and robots. A lot of good-paying jobs were lost and companies continued to move jobs overseas.The tech revolution is no longer creating jobs as it once did and NAFTA and other trade treaties no longer have the cushion of an economy creating good jobs. Wages are stagnant. That is why there is such a demand to increase the minimum wage. We were healthy enough to survive NAFTA but it is doubtful we can survive the TPP.

[Recursion]

158. Nope. Technology destroyed jobs. By the trainload. No more travel agents.

No more typing pools. No more phone operators. No more of a whole lot of categories of jobs. That's the technological revolution right there; more destructive of jobs than any trade deal could be.

And don't even get me started on wheat threshers -- they put about 80% of the country out of work in just a couple of years.

[Mnpaul]

119. producers of hard drives were more or less a one-time shot

Unless you bought a IBM "Deathstar" drive. 50% failure rate not a problem.

In 2000 I did do machining on Seagate hard drive frames before production was moved offshore. That job wasn't lost to technology, it was lost to lower labor costs. We had some of the most advanced CNC equipment at the time. Some worked too good. It was hard to keep up with the machines.

[Recursion]

163. Did the job go to Mexico or Canada?

Agreed about those IBM drives....

[Mnpaul]

176. I think the frame production went to Mexico for a couple of years

and then around 2006 Seagate moved everything to Thailand. This wasn't the only thing done in this machine shop so they didn't move.

[arcane1]

52. How many of those jobs were temporary, contract, or low-wage?

Walmart grew a lot during that time too, and surely added "jobs". Employed, per the graph, is for "any" paid work.

[ucrdem]

56. There's a bazillion ways to deny it but it happened. US jobs went up for 6 straight years

after NAFTA was signed, right up until the 2000 election. Then they started falling.

[arcane1]

62. Replacing one union job with two Walmart part-time jobs is still an "increase"

[Cha]

57. K&R.. thanks ucr

[ucrdem]

58. Thanks Cha!

I hope everyone finds this as encouraging as I do as it looks we weren't being lied to after all, not by the President anyway. Barack was right all along!



But for some reason there's not a lot of joy here. Can't think why...

[Dont call me Shirley]

60. Yeah, all those great paying service jobs in the new service economy.

[ucrdem]

63. Average hourly wages also rose steadily in that period, in current and constant $:

Dramatic, maybe not, but there was clearly was no mass pauperization happening in the shadow of the job boom.

[arcane1]

64. Apparently, we're supposed to accept quantity over quality now.

Now eat your peas!

[Dont call me Shirley]

65. I love peas, but not the constant pay cuts we've been forced to swallow

[arcane1]

66. Fine, we'll replace you with an H1B visa applicant and call it "growth"

[ucrdem]

67. Employment went up, average hourly wages went up, unemployment went down.

Clearly those are good things. If union membership declined in the same period, which I'll agree it probably did, let's look at the details and see what if anything it actually had to do with NAFTA.

[Dont call me Shirley]

68. Not for us, barely a rise in early 2000, then cuts cuts cuts cuts cuts since the crash

[ucrdem]

69. Yes that's been the pattern, but the crash happened after Bill had left office.

As I recall the economy kind of flatlined in 2000 and started stumbling in early 2001 and then 9/11 came along and things really went to hell but with a handy new villain to blame it all on.

[Dont call me Shirley]

70. Nafta, the repeal of key financial safeguards, CFMA, Cafta, they all have caused the financial

demise of the middle class. Then the destruction of labor unions, the stagnating wages, the endless wars and security state, the welfare for corporations and the rich, the cutting of SS, the cutting of social services.

The crash was directly related to the laws passed which legalized the criminal acts of Wall Street, many which were passed in the Clinton days. Then bush put all that on steroids, 60,000 factories and jobs shipped overseas, this was all because of nafta, the giant sucking sound.

[bravenak]

76. Yes.

Welfare for the rich, welfare reform for the poor. Many of those getting shitty jobs were single mothers on welfare who timed out of the program and could no recieve benefits unless they took a mcjob and put their kids in daycare. And daycare costs more than they make so we hav to subsidized childcare rather than giving the money to the mother. It led to jail and licenses revoked for poor father like Walter Scott who were working class but could not pay the required amounts. We started punishing people for being poor while rewarding the rich.

[Dont call me Shirley]

78. Here is what the working poor look like, bravenak. Breaks my heart.

http://www.democraticunderground.com/?com=view_post&forum=1002&pid=6703272

I lived this way as a single mom, but in the 1980's my dollars went a lot farther. Hugs for the hard working moms.

[bravenak]

80. It is a tragedy that we live like this. These are the jobs that we create.

The lives we ruin. Hugs
I say we deserve better.

[Dont call me Shirley]

82. Time for a progressive mass movement creating democratic workplaces. Make the rich obsolete.

[bravenak]

85. The rich are unnecessary.

I see them as a destructive force. We jus have to wake people up one at a time.

[Mnpaul]

121. I agree that the 80' dollars went a lot further

and they were easier to come by. Anyone willing to do a little hard work could make $12hr straight out of HS.

I like to illustrate it like this: $20 in the early 80's/late 70's would buy you 3/4th a tank of gas, a case of beer and a pack of smokes. You would even have a few bucks left over. Today it would cost $60-$70. Politicians have hid the true inflation rate by not counting items that are skyrocketing in cost.

[Taitertots]

71. OK. Now you only need a model of the economy that explains why...

There is causation between The terms in NAFTA and the decrease in unemployment.

It's the old "my coffee causes the sun rise" argumen). You need a model that explains the mechanism that causes the correlation.

[ucrdem]

72. I don't for my purposes here, which are to show that Bill delivered on his promises

and that NAFTA didn't produce the giant sucking noise predicted by Ross Perot, not while Bill was in the Oval Office anyway. But you wouldn't know it from the media. Even Harry Reid cited the mythical NAFTA-induced job collapse today as a reason for postponing a vote on TPA. Well, the facts suggest otherwise.

[Taitertots]

73. You havent shown anything non-trivial

Correlation doesn't imply causation.

[ucrdem]

75. I've shown that passing NAFTA didn't lead to a net job loss, and that the US economy grew

exactly as Bill had predicted it would. That seems like a respectable accomplishment, trivial or no.

[Taitertots]

77. You didn't show that at all.

Correlation doesn't imply causation.

There is no reason to believe that NAFTA didn't cause job loses, which are over shadowed by other factors.

[Rex]

81. I think your post is going over the OPs head by a mile.

I was going to mention that, but what is the point!? Not like the OP was meant to be objective in the first place, so why bother imo.

[ucrdem]

86. So the stats are wrong and the secret hidden invisible truth contradicting them is sacrosanct?

Really?

[Taitertots]

89. Yeah. I had high hopes 3 or 4 posts ago. But in all fairness...

Econometrics/statistics/Economic modeling are really difficult topics.

[Recursion]

157. You seem to forget that lack of correlation precludes causation, which is all OP's argument needs

OP is examining the claim: "NAFTA caused an increase in unemployment in the US".

OP's counterargument is to demonstrate that NAFTA's passage was not correlated with an increase in unemployment in the US (it passed and unemployment went down, not up).

Since there was no correlation to begin with, OP has shown the claim of causation to be specious, ie, NAFTA cannot be said to have caused an increase in unemployment.

You're arguing that OP hasn't shown that NAFTA caused a decrease in unemployment, which is true, but that isn't the argument OP is making. OP is saying that the claim that "NAFTA destroyed our economy" is a causal argument, and causal arguments require correlation (correlation is a necessary but not sufficient indicator of causality), and the correlation required for that argument doesn't exist.

[Taitertots]

165. If and only if the statistical model is coherent.

Saying "Well unemployment didn't spike after NAFTA (ignoring the Great recession and 2001 recession), so there is no relationship/positive relationship between the two" is a foolish method of analysis.

The reasonable way to look at NAFTA starts with a coherent model (Modified IS-LM*) for how the economy works. Then you use analysis to determine if the changes from trade policy match the outputs of your model.

[Recursion]

167. Well, those words clearly mean different things in your field than in mine

Correlation is simply a property of the signal, and the causation in the inferred system necessarily depends on it. If economics is different (and I take your word on that), I concede the point.

[Taitertots]

175. It's statistical correlation. The measure of the accuracy of a numerical relationship between...

variables.

[Recursion]

177. Sort of. It's a moment of a random variable derived from two random variables.

(I'm assuming at least that "covariance" and "correlation" have the same meaning in economics as everywhere else). What surprised me was your claim that the underlying statistical model matters in determining that; in signal processing, the correlation is simply a property of the signals as sampled and can be used to develop a statistical model, but doesn't depend on one.

[Recursion]

153. Sigh. More people should take stats. Correlation does not imply causation

but lack of correlation precludes causation.

Unemployment did not go up after NAFTA passed, so it is not possible to say that NAFTA caused an increase in unemployment.

[Taitertots]

164. I've taken graduate econometrics. Have you?

Lack of correlation precludes causation if and only if the statistical model is coherent. The model is flawed and the correlation (Or lack thereof) is trivial.

Have you taken a statistics/econometrics course? You are suggesting that we can look at the impact of NAFTA without controlling for other variables. The analysis is flawed and the results should be disregarded.

[Recursion]

166. You caught me. I got a masters in EE but skipped prob & stats

Maybe economists use the term differently, but in engineering a causal chain is necessarily a correlated chain.

[ucrdem]

174. The problem with your argument is, this is the same data used to indict NAFTA as a job killer.

But it turns out that if you look at the numbers that conclusion cannot be drawn from it without ignoring the changes of administration that have followed its implementation.

[WestSideStory]

79. A lot of the opposition to NAFTA was steeped in anti-Latino bigotry

Generally, the anti Mexican immigration advocates are the same people who oppose NAFTA. Not everybody who opposed NAFTA is a racist, but many were, specifically including Ross Perot.

[ucrdem]

84. Yes there was that, I'd forgotten about that too.

The funny thing is that I've assumed NAFTA was a job killer for two decades and never bothered to check the actual stats until this morning. But at this point I have no trouble whatsoever dumping the media narrative because the media basically lie about everything, big and small, and I have no loyalty to the conventional wisdom peddled by pundits who probably don't even realize they're selling baloney.

[OrwellwasRight]

97. Yes, that's a great way to shut down

NAFTA critics -- label us racists! The qualifier "not everybody who opposed NAFTA is a racist but . . ." is no defense. It's flame bait pure and simple.


Making friends and influencing people are we?

[Mnpaul]

123. NAFTA was a disaster for the Mexican workers as well

why do you think they are coming here? Their jobs were short lived when cheaper labor was found elsewhere. Their agriculture was decimated by cheap, government subsidized crops from the US.

Nafta has cut a path of destruction through Mexico. Since the agreement went into force in 1994, the country’s annual per capita growth flat-lined to an average of just 1.2 percent -- one of the lowest in the hemisphere. Its real wage has declined and unemployment is up.

As heavily subsidized U.S. corn and other staples poured into Mexico, producer prices dropped and small farmers found themselves unable to make a living. Some two million have been forced to leave their farms since Nafta. At the same time, consumer food prices rose, notably the cost of the omnipresent tortilla.

As a result, 20 million Mexicans live in “food poverty”. Twenty-five percent of the population does not have access to basic food and one-fifth of Mexican children suffer from malnutrition. Transnational industrial corridors in rural areas have contaminated rivers and sickened the population and typically, women bear the heaviest impact.
http://www.nytimes.com/roomfordebate/2013/11/24/what-weve-learned-from-nafta/under-nafta-mexico-suffered-and-the-united-states-felt-its-pain

[cherokeeprogressive]

83. A whole lotta McJobs.

[Recursion]

154. Then why did median wages go *up*?

McJobs pay less, right? How did these McJobs increase median wages in all quintiles?

[pa28]

96. Your chart says the employment rate has gone from 61% to 59% since NAFTA.

You seem to be claiming that's a good thing.

[Recursion]

155. In the context of the baby boom retiring? It's damn good news

The labor participation rate has ticked down (though it shot up after NAFTA), but remember only 0.5% of the US population over the age of 15 wants to work but has given up looking. The employment rate is lower now because we're an older population.

[MFrohike]

100. Cool

Did you account for loose monetary policy over the same time period? I'm going to go out on a limb and say no. Why? If you had, you wouldn't trumpeting NAFTA at all.

Since the passage of NAFTA, we've lived through 2, yes 2, bubbles in the United States. Both were directly aided, if not caused, by combination of loose monetary policy, the Great Moderation, and a severe lack of regulation. If you don't account for that, your conclusions aren't worth the time you took to type them.

[LittleBlue]

124. It was offset by the dotcom bubble and Greenspan monetary pumping

A trillion dollar new industry was created overnight in the early to mid 90s. It was a more sudden jolt to the economy than even the invention of the automobile industry. Look what happened after the tech bubble burst.

Cheap money also inflated employment beyond its natural level, for which we paid later.

[ucrdem]

142. Six years of steady job and wage increases is not a "sudden jolt."

Clinton ran on the economy, focused on it, invested a lot of political capital in it, and apparently it paid off. I know others may have had different personal experiences but I remember 1998 and 1999 as very good years for the country and myself, Congressional obsession with the Clenis aside. The media counter-narrative is unbelievably persuasive and pervasive but the facts suggest that surprise, they're wrong. That shouldn't come as a shock but I'll admit to being surprised myself on this one.

[Recursion]

156. The tech boom destroyed *MILLIONS* of jobs. MILLIONS.

I'm not talking about the bubble popping, I'm talking about the boom itself.

Travel agents. Typists. Phone operators. Bookstore employees. These used to be jobs in the US, and aren't anymore (or nearly so) because of the tech boom.

[kenfrequed]

126. Right...

But the manufacturing jobs were replaced gradually after that by lower paid service industry work. I don't really see taking away twenty dollar an hour jobs and replacing them with seven dollar an hour jobs as good for the working people of this country.

[alarimer]

128. The purpose of NAFTA was to free corporations from labor and environmental laws.

According to the Economic Policy Institute, NAFTA caused wages to stagnate and undercut the bargaining power of US workers, far more important than the "McJobs" created by this abomination. To say nothing of the way it undercut Mexican farmers, especially. It was "socialism for capital and free markets for labor." There's a whole lot more at the article.

NAFTA affected U.S. workers in four principal ways. First, it caused the loss of some 700,000 jobs as production moved to Mexico. Most of these losses came in California, Texas, Michigan, and other states where manufacturing is concentrated. To be sure, there were some job gains along the border in service and retail sectors resulting from increased trucking activity, but these gains are small in relation to the loses, and are in lower paying occupations. The vast majority of workers who lost jobs from NAFTA suffered a permanent loss of income.


Second, NAFTA strengthened the ability of U.S. employers to force workers to accept lower wages and benefits. As soon as NAFTA became law, corporate managers began telling their workers that their companies intended to move to Mexico unless the workers lowered the cost of their labor. In the midst of collective bargaining negotiations with unions, some companies would even start loading machinery into trucks that they said were bound for Mexico. The same threats were used to fight union organizing efforts. The message was: “If you vote in a union, we will move south of the border.” With NAFTA, corporations also could more easily blackmail local governments into giving them tax reductions and other subsidies.

Third, the destructive effect of NAFTA on the Mexican agricultural and small business sectors dislocated several million Mexican workers and their families, and was a major cause in the dramatic increase in undocumented workers flowing into the U.S. labor market. This put further downward pressure on U.S. wages, especially in the already lower paying market for less skilled labor.

Fourth, and ultimately most important, NAFTA was the template for rules of the emerging global economy, in which the benefits would flow to capital and the costs to labor. The U.S. governing class—in alliance with the financial elites of its trading partners—applied NAFTA’s principles to the World Trade Organization, to the policies of the World Bank and IMF, and to the deal under which employers of China’s huge supply of low-wage workers were allowed access to U.S. markets in exchange for allowing American multinational corporations the right to invest there.

http://www.epi.org/blog/naftas-impact-workers/

[ucrdem]

141. Well, they're wrong about average US wages, which rose, and blaming offshoring on NAFTA is dumb.

First, it caused the loss of some 700,000 jobs as production moved to Mexico.

Remember maquilladoras? Those US factories moved to Mexico in the seventies? Pretending that NAFTA " caused" that trend is pure bullsh#t and calls the credibility of the rest of the report into serious question. And let's not forget that Clinton sold NAFTA as a job creator and for the remaining six years of his term, that's what it did. That's the point of the OP. So whoever or whatever EPI is they appear to be selling you a bill of goods.

[ucrdem]

143. Better view:

Notice the pattern?

[Johonny]

170. Not to be mean but your graph doesn't really help your case

It isn't like NAFTA magically went away in 2000. You simply cherry picked your data for the first 6 years of NAFTA. The economy had an increasing employment rate before its start. Look at your graph. The highest year to year positive slope was actually 1 year prior to the signing. The overall 20 year trend post NAFTA is rather negative. It is rather hard not to notice it. The employment rate overall has decreased in the past roughly 20 years! That's what your graph shows. Now you can argue the overall trend doesn't reflect cause and effect of NAFTA alone, but as most people state in this thread, the cherry picked zone doesn't either. This is just like climate deniers that cherry pick global temperatures from 1998 to 2010 and say look climate change is over. It is a weak argument you are making and more to the point one actually refuted by the data your represent. Going by employment rate post NAFTA... NAFTA looks like crap! There are, of course, real disciplined research into the real effects NAFTA had on the economy trends of the US, Canada, and Mexico. It is almost certainly better for any DUer to read those reports than pretend your cherry picked data means... anything at all. Sorry, but anyone supporting TPP based on your graph is being silly. Just like anyone supporting climate denial based on cherry picked data is being rather silly.

[Drunken Irishman]

152. Even the AFL-CIO says it only cost the U.S. 700,000 jobs.

That's a good amount of jobs on its face - but the recession cost us that amount in just one month during the height of it. It both created and lost us jobs - but I don't think it took down the economy near the level many suggest. The U.S. economy was transitioning prior to the 90s away from manufacturing, anyway.

[ucrdem]

160. Very revealing.

Looks like farming fifty years earlier doesn't it? No, NAFTA didn't start or exacerbate that trend and if Obama thinks he can turn it around with TPP, which he clearly does, more power to him. He might be right. But we'll never know if the wingers get their way.

[Recursion]

161. Everybody needs a scapegoat, and here it's "trade". On other sites it's "immigrants"

People don't like addressing the fact that the economy fundamentally restructures every couple of generations, and that we're seeing that right now.

[Romulox]

179. Oh nonsense. The banking sector hasn't "restructured" (read: been gutted.)

That's because now, more than ever, policy determines winners and losers, and this administration has a policy of propping up the banks and other wealthy benefactors at the expense of regular people.

We've spent trillions shaping this economy. Trillions. It didn't "just happen". It's the result of policy choices.

[Stellar]

173. Trojan-in-chief?

Do we know that for certain and Bill isn't.

[Romulox]

180. That first chart looks horrifying. What years after NAFTA is NAFTA not responsible for?

It looks like the trajectory of a junky's fix: a short, euphoric high, followed by a massive, long-term crash.

[ucrdem]

181. 2001-2009. The notes I added make that clearer:

[Romulox]

182. Your "notes" make nothing clear. It's just a naked assertion with no facts or reason to back it up.

NAFTA was in effect from 2001 to 2009, so it's nonsensical to rule it out as one of the causes of the precipitous declines in labor participation after its passage. The natural conclusion is that NAFTA has overall been bad for workers, as evidenced by your own chart. You'll have to do a lot more heavy lifting than that to negative this natural and logical inference.

[ucrdem]

184. The point is that NAFTA didn't wreck the economy 2001-2009. Bush and Cheney did. nt

[Romulox]

185. That's just too simplistic and facile. NAFTA was a policy pushed by Republicans, in the first place.

Nor did Bush sign a repeal of NAFTA, which remains in effect to this day. So your argument doesn't work.

[ucrdem]

187. Bush and Cheney crashed the economy, not NAFTA.

That's what the employment numbers show at least.

[Romulox]

188. Just a naked assertion. Failure has many fathers. nt

[treestar]

183. International trade is simply going to happen

And the attempts to regulate it by treaty cannot be bad.

Useless internet outrages notwithstanding.

[ucrdem]

186. Yes and the interesting thing is that killing TPP kills a big batch of new regulations.

And we know which party hates regulations.