[CTC] Dean and Mark on TPP and elections

[Deborah James]

As we sift through the autopsies of the election and chart a path forward,
CEPR offers these two pieces looking at the influence of Democratic support
for a neoliberal economic and trade agenda, and the need to break from that,
and to develop leadership that will bring forth a progressive economic
message.

http://cepr.net/blogs/beat-the-press/the-high-price-of-the-trans-pacific-par
tnership

The High Price of the Trans-Pacific Partnership
Published: 09 November 2016By Dean Baker
It will be very hard to get used to the two words ³President Trump,² but
somehow we will have to figure out a way to survive and keep the country and
world intact for the next four years. There are many factors behind the rise
of Donald Trump. Clearly, a big part of Trump¹s appeal lay in his open
expressions of racism, xenophobia, and misogyny.
But this is not the whole story. Many of the white working class people who
voted for Trump yesterday voted for Barack Obama just four years earlier.
Their character was not transformed in the last four years.
Undoubtedly, part of the story is that some of these people could not bring
themselves to vote for a woman for president, even if they could vote for a
black man with a foreign-sounding name. There were endless accounts of open
and hateful displays of sexism directed against Hillary Clinton and her
supporters, many of them encouraged by the candidate himself.
However, even against this backdrop the election was still incredibly close,
with states like Wisconsin, Pennsylvania, and Michigan certainly well within
Clinton¹s reach. There were many factors that depressed Clinton¹s vote, most
obviously the endless drumbeat about e-mails, which were amplified in the
last days of the campaign by F.B.I. Director James Comey¹s bizarre
intervention into the race.
While many of these factors were beyond the control of Clinton and the
Democrats, one factor that was under their control was the decision to push
the Trans-Pacific Partnership (TPP). Needless to say, there is little public
knowledge of the details of the TPP. But the TPP symbolized a pattern of
trade that cost millions of manufacturing jobs in the prior decade and put
downward pressure on the wages of the workers without college degrees more
generally.
This pattern of trade has been an important factor in the wage stagnation of
the last four decades. If the wages of workers without college degrees had
kept pace with productivity growth since 1980, they would be more than 40
percent higher than they are today. This is a big deal to these workers and
their families. Even if trade was not the whole story of income inequality,
working class people are certainly correct to see it as a big part of the
picture.
The TPP probably would not have substantially contributed, at least
directly, to further depressing wages. We already have trade deals with six
of the 11 countries in the pact and have extensive trade relations with the
others. Rather the TPP was about putting in place a business-friendly
structure of regulation. It also increased patent and copyright protection,
with the goal of increasing the profits of the pharmaceutical, software, and
entertainment industry. In other words, the TPP was about further extending
a pattern of trade aimed at redistributing income upward.
It is important to understand that this is not some natural process of
globalization. We deliberately placed our manufacturing workers in direct
competition with low-paid workers in the developing world. The predicted and
actual effect of this policy is to lower their wages. At the same time, we
have left in place or even increased protections that benefit those at the
high end. Our doctors earn on average more than $250,000 a year, twice the
pay of their counterparts in other wealthy countries. This gap is in large
part because we prohibit foreign doctors from practicing in the United
States unless they complete a U.S. residency program. There is a similar
story of protectionism for dentists who must graduate a U.S. dental school
(or recently Canadian).
In addition, making patents and copyrights longer and stronger, both here
and around the world, redistributes income from the bulk of the population
to those in a position to profit from these protections. This is the story
of the Hepatitis C drug Sovaldi, which has a list price of $84,000. The free
market price is a couple hundred dollars. We will pay more than $430 billion
this year for drugs that would sell for 10­20 percent of this amount in a
free market.
There was nothing natural about the upward redistribution we have seen over
the last four decades, it was deliberate policy
<http://deanbaker.net/books/rigged.htm> . And the TPP was a symbol of this
policy. It was a trade pact that was crafted by and for major business
interests.
Although Clinton disowned the pact in the course of the campaign, few took
this disavowal seriously. After all, she had overseen much of the
negotiation process as Secretary of State and she has been closely
associated with backers of this pattern of trade over the course of her
political career.
President Obama¹s decision to push the TPP this year was in effect waving a
red cape in front of an angry bull. Trump made opposition to the TPP and
other trade deals a centerpiece of his campaign. While he has presented no
coherent alternative position, his explicit opposition likely appealed to
many working class voters in key states.
It is certainly possible that pushing the TPP created the margin of Trump¹s
victory in several key states. The irony of Obama¹s decision to push the
TPP, rather than just letting it drop, is that the deal now appears
genuinely dead. And as a side effect, we have President Trump.




November 09, 2016, 06:28 pm
Dems need alternative to four decades of neoliberal failure
By Mark Weisbrot, contributor

http://thehill.com/blogs/pundits-blog/economy-budget/305330-dems-need-altern
ative-to-four-decades-of-neoliberal-failure
The polls were wrong, the unthinkable has happened, and Donald Trump
<http://thehill.com/people/donald-trump>  has been elected the 45th
president of the United States, with a Republican Congress.

The swing voters, as in most presidential elections of the past few decades,
were white working-class voters. It would be worthwhile therefore to think
about how a large majority of this group ended up voting against their own
interests.

Many liberals will blame the voters themselves, seeing them as racist,
misogynistic and otherwise backward and ignorant.

There is no doubt that Trump voters are worse
<http://www.pewresearch.org/fact-tank/2016/10/20/6-charts-that-show-where-cl
inton-and-trump-supporters-differ/> than average in attitudes toward
non-white Americans, immigrants and women.

After all, most of them are Republicans; about 90 percent of Republicans
voted for Trump and that is the bulk of his base. The Republican Party,
since at least the civil rights movement and legislation of the 1960s and
its "Southern strategy," has been a white people's party. It has also
engaged in a "war on women"
<http://cepr.net/publications/op-eds-columns/republicans-qwar-on-womenq-back
fires>  before Trump took the stage to literally add a lot of insults to the
injuries.

So, no surprises there, even if he used a police whistle instead of just a
dog whistle.

The more important question is what moved the swing voters.

And here it must be acknowledged that while racism and sexism were factors,
there were also  
<http://www.huffingtonpost.com/lori-wallach/latest-tpp-peril-presiden_b_1288
3024.html> millions of protest votes. Trump posed as an outsider and many of
his supporters liked that he was giving the middle finger, so to speak, to
people they didn't like, including the mainstream media and politicians.

But to see how they might be angry enough to vote for someone like Trump ‹
whom many did not even like ‹ we have to look at the economic policies that
Democrats and Republicans alike have implemented, and how these have ruined
the lives and futures of so many Americans.

The media has focused on trade, partly because Trump opposed the
Trans-Pacific Partnership (TPP) and other trade agreements and attacked
Hillary Clinton <http://thehill.com/people/hillary-clinton>  for supporting
them.

Although Clinton took a position against the TPP in the campaign, she had
previously supported it and there was reason to believe that she would do so
after the elections.

It certainly didn't help that President Obama launched a serious effort
<http://thehill.com/blogs/pundits-blog/campaign/292039-obamas-tpp-campaign-c
ould-drag-down-democrats> , in the middle of the presidential campaign, to
pass the agreement ‹ aiming for the lame-duck Congress, where the swing
votes would be unaccountable and many would soon be taking new jobs as
lobbyists.

But the TPP and "trade" ‹ the quotes are necessary because the most
economically important features of the TPP agreement are not tariff
reductions, but rather rules that give corporations and patent and copyright
holders new rights and privileges ‹ are mostly stand-ins for a larger set of
neoliberal policies <http://deanbaker.net/books/rigged.htm>  that have hurt
the majority of Americans over the past few decades.

These include, for example, the country's most important macroeconomic
policies: fiscal, monetary and exchange rate policies.

Trade is a surrogate because people often do not understand these
macroeconomic policies. This is not their fault: the media does not tell
them that when the Fed raises interest rates, as it will likely do next
month now that the election is past, it is deliberately slowing job growth
and wage growth for workers in the bottom half of the wage distribution.

Or that the lack of job opportunities for millions of Americans could be
remedied by increasing government spending, with no real cost to society
since real interest rates are at zero.

Or that an overvalued dollar is responsible for many more jobs going
overseas than even the worst trade agreements.

Or that the U.S. Treasury can determine the value of the dollar, and
therefore our trade deficit, no matter what China does or wants.

So "trade" agreements and "globalization," as they are represented and
misrepresented in the media, take on an outsized importance.

Of course, they have played an important role in the past in
deindustrializing parts of the country and destroying good-paying
manufacturing jobs.

But today, they are the most visible manifestation of neoliberal economic
policies that have destroyed the livelihoods, hopes and dreams of millions.
The neoliberal structural reforms of President Bill Clinton
<http://thehill.com/people/bill-clinton>  ‹ NAFTA, the World Trade
Organization (WTO), welfare reform and financial deregulation ‹ did so much
damage that there wasn't much left for the next president, George W. Bush,
to do.

When center-left politicians ‹ in this case from the Democratic Party ‹
abandon much of their base in important ways, that base can end up voting
for right-wing demagogues.

We see this in other countries: in the Brexit vote
<http://thehill.com/blogs/pundits-blog/international/284220-brexit-might-be-
the-wake-up-call-europe-needs>  in the U.K., where Britain voted to leave
the European Union, or in France, where the right-wing National Front has
made large gains in recent years. This can create a vicious circle, where
the center-left dismisses such voters as "backward" or "xenophobic" and
pushes them further into the hands of the right, rather than looking at
their legitimate grievances and trying to do something about them.

Partly because of Sen. Bernie Sanders
<http://thehill.com/people/bernie-sanders> 's (I-Vt.) campaign for the
Democratic nomination, the Democratic Party produced its most progressive
platform ever this year. But this was not enough to convince swing voters
that Clinton, given her record, would implement it.

All this is not to ignore the fact that Republicans are reliant on voter
<http://www.slate.com/blogs/the_slatest/2016/11/09/republican_war_on_voting_
rights_may_have_helped_trump_win.html>  suppression
<http://www.democracynow.org/2016/11/7/this_is_voting_in_2016_armed> , and
gerrymandering  
<http://www.barnesandnoble.com/w/ratf-ked-david-daley/1123515748> for the
House of Representatives, in order to get the power they now have.

Without these anti-democratic tools, the Republicans would be
<http://www.huffingtonpost.com/mark-weisbrot/is-the-republican-party-a_b_112
70450.html>  a permanent minority party. Voting reform is essential to a
democratic transition for America.

But the Democrats will also need new leadership that is willing to provide
an alternative to the past four decades of neoliberal failure.

Weisbrot <http://cepr.net/about-us/staff/mark-weisbrot>  is co-director of
the Center for Economic and Policy Research <http://www.cepr.net/>  in
Washington and the president of Just Foreign Policy
<http://www.justforeignpolicy.org/> . He is also the author of the book
"Failed: What the 'Experts' Got Wrong About the Global Economy
<http://www.cepr.net/publications/failed-what-the-experts-got-wrong-about-th
e-global-economy> " (Oxford University Press, 2015). You can subscribe to
his columns here <http://org.salsalabs.com/o/967/t/9788/signUp.jsp?key=1013>
.


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