Trick question. Answer is both. The inestimable Patrick Buchanan explains why: Derail Fast Track! Friday - January 30, 2015 at 2:02 am By Patrick J. Buchanan Last November, Republicans grew their strength in Congress to levels unseen since 1946. What united the party and rallied the nation was the GOP’s declared resolve to stand up to an imperious president. Give us powerful new majorities, said John Boehner and Mitch McConnell, and we shall halt these usurpations of Congressional power. And, so, what is the first order of business now in the Ways and Means Committee of Paul Ryan and Senate Finance Committee of Orrin Hatch? “The first thing we ought to do,” says Ryan, “is pass trade promotion authority.” Trade promotion authority, or “fast track,” is a synonym for Congress’s surrender of all rights to amend trade treaties, and a commitment to confine itself to a yes or no vote on whatever deal Obama brings home. Watching the GOP’s reversion to form calls to mind the term the neocons gave the French for refusing to join Bush II’s big march to Baghdad: “cheese-eating surrender monkeys.” With the huge Trans-Pacific Partnership in negotiations, Obama wants Boehner and McConnell to agree in advance not to tamper with it. “Hands off!” he demands. If this GOP agrees to this, it will, in its first great decision, be engaging in an act of self-castration. Why would they do this? Has Obama’s record been so impressive the GOP should give up its constitutional power to amend trade treaties? As the liberal group Public Citizen notes, the biggest trade deal of Barack’s term, the U.S.-Korea trade pact modeled on NAFTA, has been another job-killer for American workers: “Since the Obama administration used Fast Track to push a trade agreement with Korea, the U.S. trade deficit with Korea has grown 50 percent — which equates to 50,000 more American jobs lost. The U.S. had a $3 billion monthly trade deficit with Korea in October 2014 — the highest monthly U.S. goods trade deficit with the country on record.” Everywhere we hear that the issue of our time is the wage stagnation of the middle class. But what has caused U.S. wages to stop rising for longer than any period in our history? What caused the inexorable growth of U.S. wages, from the Revolution to Reagan, to stop dead? Like Poe’s “Purloined Letter,” the answer is right in front of us. Wages are the price of labor, and price is determined by supply and demand. Wages have fallen because the supply of labor has exploded. Following the Immigration and Nationality Act of 1965, we threw open America’s doors to a flood of immigrants, legal and illegal. Some 40-50 million have poured in, an unprecedented expansion of the labor force. As these immigrants — many uneducated, unskilled, unable to speak English well — entered the labor pool, they were willing to work for less than native-born Americans who needed higher wages to sustain their standard of living. In the service industries, manufacturing, construction, U.S. employers found themselves in a buyers’ market for workers right here in the USA. Yet, over a million new low-wage workers pouring into the USA every year was not enough for our banksters and corporatists. Thus, “free-trade” Republicans and their collaborators in the Business Roundtable and U.S. Chamber of Commerce decided to drop the U.S. labor force into a worldwide labor pool where the average wage was but a tiny fraction of an American living wage. Like Dr. King, our transnational corporations had a dream — a dream of bypassing all U.S. regulations on wages and hours, health and safety, and the environment — a dream of getting rid of all those high-wage U.S. workers and their unions. How to realize this dream? Move production out of the United States, out from under the jurisdiction of U.S. law, into the Third World, and then bring your products back free of charge. To these folks, America is the best market to sell into, but, as a place to produce, give us China! Mexicans, Latin Americans, East and South Asians, Chinese would all work for less than Americans, thus enabling corporate executives to take home fatter shares of far larger profits, in salaries, bonuses, benefits, stock options and soaring equity prices. Like NAFTA and GATT, the Trans-Pacific Partnership is an enabling act for multinationals to move freely to where it is cheapest to produce while securing access to where it is most profitable to sell. A new Magna Carta — for the billionaires’ boys club. For 40 years, U.S. workers have seen factories close, jobs disappear and company towns become ghost towns, the “creative destruction” of Joe Schumpeter’s felicitous phrase. Only the wholesale destruction was no accident, it was planned. For scores of millions, the American dream is gone, sacrificed to the gods of the global economy — a new world economic order created by and for an elite whose 1,700 corporate jets were parked wingtip-to-wingtip last week while they partied in Davos. That is why there may be a Syriza in all of our futures.
Now that the Obama Administration has defined rich as being a family income of $120,000 or above - he has declared war on most hard-working two-income American families by pushing tax policies to ruin the upper middle class -- like the elimination of 529 plans for tax-free college savings. Let's see what Slate has to say in support of Obama's war on the middle class... The Upper Middle Class Is Ruining America http://www.slate.com/articles/news_...g_all_that_is_great_about_america.html?hi.hym and see what Obama's envy tax policies entail... Obama’s $4 Trillion Tax-the-Rich Budget Called ‘Envy Economics’ Funding for these benefits would come, in large part, from increases on the taxes paid primarily by the wealthy http://finance.yahoo.com/news/obama-4-trillion-tax-rich-194500734.html
I agree with Buchanan on the illegal aliens part. There is no way illegals should be streaming in here and working. That's a travesty. As to free trade, I believe Buchanan is wrong. It is not a fight between mostly union labor and corporate honchos. It's a fight between mostly union labor and consumers. When a few million union jobs are saved by taxes and regulation, 300 million consumers get screwed. As a consumer, I don't like having the gov't tell me or tax me into buying something that an American union worker made. Why should 300 million consumers have their freedom to buy whatever they want taken away from them to protect a few million union workers? The device of making it seem like it's corporate honchos that are the ones benefiting from free trade is just political rhetoric. It's the politics unions use because they want to get sympathy for their position and they know they won't get it if the truth is told that it's American consumers who'll get the shaft if unions get what they want. So they try to shift the blame to ceo's. I've like Buchanan ever since Crossfire twenty some years ago and I always read his artlcles, but a few of his positions don't cut it with me.
Obama, The Very Worst Deficit President http://newsbusters.org/blogs/tim-gr...ham-column-obama-very-worst-deficit-president
I'm in complete agreement with the FTA argument; the "the unions done it" bit was always BS. But one could point to rising productivity as a partial cause of surplus labor as well. Couple it with the fact that when your customers are broke you can't make sales (so you don't need to hire), and you have a recipe for lower employment. But Obama should have acted on that decoupling of productivity and wages (it's about ownership) 30 years or more ago, when it really started happening.
It's not just union workers. It is the entire manufacturing base. If it is such a great idea to run huge trade deficits and let your industrial base be hollowed out, why are we the only country following that model? We have a bizarre reverse merchantilist policy. How did Great Britain, Japan, Germany and China get rich? They did the opposite of what we are doing. They protected domestic manufacturers and exploited export markets. Britain did it via their Empire. Their standing in the world has plummeted since the Empire died. Japan and china protect their home markets. Germany uses currency manipulation via the euro. We have the world's largest market. We could enforce basic principles of reciprocity in trade, yet we have outsourced our sovereignty to organizations like the WTO. Somebody is making money off it and it sure isn't the American middle class.
amen.. 1. I voted for Perot and for years I have wondered how not having jobs is good for our economy. Every big economy I have researched has grown up while protected. We can't all be info age workers in an age where info tech makes your jobs less and less valuable and secure. In my opinion, our standard of living has been decreasing as we allowed our jobs to go overseas and our dollar to be debased.
If it makes you feel any better, Canada is also running a current account deficit, and has even lower tariffs (overall) than the US.
It's a question of how you go about increasing your manufacturing base. Whether it's by competitive advantage or coercion. My contention is that China built their manufacturing base by making cheap products and Germany became a manufacturing power by making better quality products. Why does anyone think that the value of the euro is the reason for Germany's success? It's the same euro that Greece and Spain and others in the EU use that can't seem to sell anything. If you compete on price and quality to sell goods and succeed, that's the kind of success that will make your country rich. If you don't want to compete, but rather attempt to build your manufacturing base by taxes, regulations and debasing the currency, that's the kind of tactics that will make your country poorer. The consumer class gets screwed. There are countries all over the world, just like you say, that use all of these coercive tactics to try to build their economies. Isn't it a coincidence that China and Germany are the only ones that are powerful and they just happen to have a price and quality advantage. Other countries that try to protect their mkts or debase their currencies have included among them some of the poorest countries in the world. It's having a competitive advantage that works.
how did germany become a manufacturing powerhouse? it part they manufacture high end brands with have good profit margins and they have a mispriced currency. http://www.foreignaffairs.com/articles/67899/steven-rattner/the-secrets-of-germanys-success The eurozone's weak economic performance and the simmering sovereign debt crises in several peripheral eurozone countries have kept the value of the euro well below what the deutsche mark would be worth today if it still existed. (According to some estimates, if Germany abandoned the euro, its currency would immediately appreciate by 30 to 40 percent.) This gives Germany an enormous competitive trade advantage over countries with their own, more expensive currencies, such as the United Kingdom and the United States. The economic stimulus from the undervaluation of the euro has been so powerful that the biggest economic worry in Germany today is that the economy will overheat and trigger inflation.