Domestic manufacturers urge Congress to pass stronger trade countermeasures

U.S. Business and Industry Council -- Manufacturing Business Technology, 6/17/2008

http://www.mbtmag.com/article/CA6570709.html?rssid=231

WASHINGTON, D.C.: As the latest round of the Chinese-American Strategic Economic Dialogue begins, the U.S. Business and Industry Council (USBIC) urged Congress on Monday to de-fund future U.S. participation in the two-year-old talks and immediately pass a series of hard-hitting measures to combat what USBIC calls China’s damaging trade cheating, and protect Americans from China’s unsafe products.

According to USBIC President Kevin L. Kearns, whose organization represents 1,550 domestic manufacturers and other companies, “Any presidential candidate genuinely concerned about America’s working families and the beleaguered domestic industries employing them will endorse these actions as well. Instead of providing rebate-check handouts, our political leaders must give the American people their factories, labs, and jobs back.”

Kearns called China “an economic rogue state—one that keeps stealing production, revenue, R&D, and jobs from our domestic manufacturers and their employees. Beijing’s American victims need their government’s help now. They can’t wait for a new president and Congress.” Since the Bush administration won’t act, Kearns adds, “Congress needs to wake up and take responsibility. It’s time for House and Senate leaders to display some legislative competence and build majorities for effective unilateral action on unfair and dangerous Chinese practices.”

The Council urged Congress to:
Immediately pass a resolution formally declaring the Strategic Economic Dialogue a failure, plus legislation to prevent the administration from spending any funds to prepare for or participate in the Dialogue’s next session, at year’s end;

Pass the House and Senate bills that would make currency manipulation a countervailable subsidy under U.S. trade law. This three-year-old legislation has a long list of bipartisan cosponsors in the House, but House leaders refuse to act, and the Senate has dawdled;

Pass an immediate ban on all imports of toys and other children’s products from China;
Pass legislation requiring detailed labeling for imported processed food and drug products that would specify their ingredients and levels of content from China; and other countries lacking effective domestic regulatory systems;

Pass legislation banning U.S. sales of internet surveillance hardware and software to China; and
Significantly expand funding and staffing for China-specific counterespionage programs and anti-hacking efforts throughout the U.S. government.

Concludes Kearns, “Forcing the current president to veto such measures would send a powerful message to China’s leadership—and to the next occupant of the White House. The time is past for talk on China’s flagrant trade cheating and egregiously unsafe industrial practices. Now it’s time for action."

http://www.americaneconomicalert.org/

* SHORT TAKES

AFL-CIO: McCain's trade policy is a third Bush term

http://blog.aflcio.org/2008/06/20/mccains-trade-policy-is-a-third-george-bush-term

A Dead Heat in Georgia: Peach State could be decisive in '08
http://www.southernpoliticalreport.com/storylink_619_445.aspx

House passes bill to extend jobless benefits
http://www.macombdaily.com/stories/062008/loc_local03.shtml

Non-partisan analysis shows McCain tax plan favors rich
http://www.taxpolicycenter.org/publications/url.cfm?ID=411693

Webb calls for drug policy revamp
http://news.yahoo.com/s/thenation/20080620/cm_thenation/7331478

Obama needs Nunn
http://www.ajc.com/opinion/content/shared-blogs/ajc/thinkingright/entries/2008/06/18/obama_needs_nunn_we_need_oil.html

CEO's pay rises as economy struggles
http://www.detnews.com/apps/pbcs.dll/article?AID=/20080616/BIZ/806160378/1148

Colorado: Obama 43%, McCain 41%
http://www.rasmussenreports.com/public_content/politics/election_20082/2008_presidential_election/colorado/election_2008_colorado_presidential_election
Democrats must counter race with class
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/06/20/EDMP11C0VN.DTL

Obama endorses John Barrow
http://www.jacksonville.com/tu-online/stories/062008/geo_292935433.shtml
Excellent analysis on the myth of Barrow as a "Bush Democrat"
http://www.southernpoliticalreport.com/storylink_429_365.aspx

Parties need to end energy stalemate
http://www.washingtonpost.com/wp-dyn/content/article/2008/06/19/AR2008061903488.html?hpid=news-col-blog

Perhaps 60% of today's oil price is pure speculation
http://globalresearch.ca/index.php?context=va&aid=8878

GAO criticizes tanker contract
http://www.cnn.com/video/#/video/bestoftv/2008/06/18/ldt.sylvester.outsourcing.cnn

Is Obama going soft on "free trade" ?
http://www.thenation.com/blogs/thebeat/330911

Just 47% oppose nationalization of oil industry
http://www.rasmussenreports.com/public_content/business/general_business/just_47_oppose_nationalizing_oil_industry
Taiwan and preserving U.S. options in the Pacific
http://www.heritage.org/Research/AsiaandthePacific/bg2146.cfm

Racism not dead, but socioeconomics is a bigger issue
http://www.ajc.com/opinion/content/opinion/tucker/stories/2008/06/06/tucked_0608.html

First law of practical economics replaced by greed and trickle down dogma
http://www.opednews.com/articles/Reverse-Henry-Fordism-by-Ernest-Partridge-080618-500.html

Democrats Sneak up on Red Districts
http://blogs.tnr.com/tnr/blogs/the_stump/archive/2008/06/16/democrats-sneak-up-on-red-districts.aspx

Bush-McCain trying to steal credit for Webb's GI Bill
http://thinkprogress.org/2008/06/19/mccain-bush-gi-bill/

Webb shows independence on energy issues
http://thehill.com/leading-the-news/webb-splits-with-obama-over-drilling-2008-06-19.html

Michigan District 11 Democratic House contenders lean right on some issues
http://hometownlife.com/apps/pbcs.dll/article?AID=/20080619/NEWS13/806190572/1030

Working Families Vote 2008

http://www.aflcio.org/issues/politics/

Senator Mary Landrieu welcomes President of fight for offshore energy
http://landrieu.senate.gov/~landrieu/releases/08/2008618540.html

Dennis Oxley expected to help Indiana's state Democratic ticket
http://www.indystar.com/apps/pbcs.dll/article?AID=/20080618/NEWS08/806180411/1101/NEWS08

Economic Policy Institute presents evidence of growing income inequality
http://www.epi.org/content.cfm/webfeatures_snapshots_20080618

Will Congress put African-American students in the back of the bus ?
http://www.cascadepolicy.org/2008/06/18/back-of-the-bus/

Nuclear power expansion gaining support
http://blogs.wsj.com/environmentalcapital/2008/06/17/nuclear-option-its-not-verboten-anymore/

Democrat Bob Conley offers South Carolina voters a real choice in November
http://www.charlestoncitypaper.com/gyrobase/Content?oid=oid%3A47105

Anger is no reason to disqualify Webb
http://www.dailyastorian.info/main.asp?SectionID=23&SubSectionID=392&ArticleID=52162&TM=48152.31

The Case for Webb as Obama's VP
http://blogs.wsj.com/politicalperceptions/2008/06/17/the-case-for-webb-as-obamas-running-mate/?mod=googlenews_wsj

It's time to improve U.S. education
http://www.latimes.com/news/education/la-na-educate16-2008jun16,0,2554838.story?page=1

McCain, Obama in economic trap
http://www.palmbeachpost.com/opinion/content/opinion/epaper/2008/06/16/a14a_blackburncol_0616.html

The American Prospect: Close of an Era
http://www.prospect.org/cs/articles?article=close_of_an_era

Is Sam Nunn the best choice for Obama ?
http://www.boston.com/news/nation/articles/2008/06/16/some_call_georgian_a_good_fit_for_obama/?page=1

The Falconist Party ? Is this the beginning of a social traditionalist-economic populist third party ?
http://profile.myspace.com/index.cfm?fuseaction=user.viewprofile&friendid=219614695

Video from the Gun Owners Caucus of Texas Democratic Party
http://www.youtube.com/watch?v=mKXPVmKnqwk
http://www.youtube.com/watch?v=gcbvkH3E0zw&feature=related
http://www.youtube.com/watch?v=HmFopUZ3KLQ

Is Democratic nominee Bob Conley the real conservative in the South Carolina U.S. Senate race ?
http://www.youtube.com/watch?v=CWqxvgxDHDI

Obama must now win the hearts of Middle America
http://www.sbpost.ie/post/pages/p/story.aspx-qqqt=GUEST+WRITER-qqqs=commentandanalysis-qqqid=33506-qqqx=1.asp

South, West hit hardest by rising gas prices
http://www.nytimes.com/interactive/2008/06/09/business/20080609_GAS_GRAPHIC.html
Will Democrats gain support among evangelicals ?
http://www.christianitytoday.com/ct/2008/july/4.13.html

Fritz Hollings gives his take on what is wrong with Washington
http://www.greenvilleonline.com/apps/pbcs.dll/article?AID=/20080614/NEWS01/806140331/1001/NEWS&referrer=NEWSFRONTCAROUSEL

UK Prime Minister Gordon Brown calls for worldwide expansion of nuclear power
http://www.independent.co.uk/news/uk/home-news/brown-says-world-needs-1000-extra-nuclear-power-stations-846238.html

The Rising Instability of American Family Incomes
http://www.epi.org/content.cfm/bp213

China is rapidly acquiring Africa's resources
http://www.fastcompany.com/magazine/126/special-report-china-in-africa.html

Economist warns that trade deficit could double
http://www.upi.com/Business_News/2008/06/08/Economist_warns_trade_deficit_could_double/UPI-72261212931555/

Michael Lind on winning over the values voters
http://www.newamerica.net/publications/articles/2008/winning_over_values_voters_7098

67% favor building more nuclear power plants in the U.S.
http://www.zogby.com/news/ReadNews.dbm?ID=1515

Daniel Harrop makes case against same sex marriage
http://www.projo.com/opinion/contributors/content/CT_harrop26_05-26-08_U3A52BC_v8.39c4c82.html

Would Karl Rove plead the Fifth ?
http://politibits.tuscaloosanews.com/default.asp?item=2211907

Conservative Dem Donald Cravins Jr. running for Congress in Louisiana's 7th District
http://www.theind.com/index.php?option=com_content&task=view&id=2639&Itemid=1&ed=1028

Short takes 05/24/08

Honoring Our Veterans On Memorial Day
http://www.americanprogress.org/issues/2008/05/memorial_day.html

A great Republican President's words stand in stark contrast to the modern day GOP
http://patriot.net/~bmcgin/capitalismanddemocracy.html

Stop Price Gouging by Big Oil
http://action.citizen.org/campaign.jsp?campaign_KEY=5146

Kevin Phillips suggests that the days of the U.S. as a leading economic power may soon be over
http://www.washingtonpost.com/wp-dyn/content/article/2008/05/16/AR2008051603461.html

U.S. trade gap reduced by import slowdown not export boom
http://americaneconomicalert.org/view_art.asp?Prod_ID=2993

Unemployment Compensation Extension Passes Senate, 75 to 22
http://www.epi.org/content.cfm/pm125

Hamilton Jordan: Architect of Carter Presidency dead at 63
http://www.washingtonpost.com/wp-dyn/content/article/2008/05/20/AR2008052002286.html?hpid=topnews

Baucus, administration debate trade enforcement
http://www.billingsgazette.net/articles/2008/05/24/news/state/46-tradeenforcment.txt

Nukes are the most climate friendly industrial-scale form of energy
http://www.wired.com/science/planetearth/magazine/16-06/ff_heresies_08nuclear

Big Tent to Get Bigger If Democrats Want to Expand House Majority

http://thehill.com/campaign-2008/big-tent-to-get-bigger-if-democrats-want-to-increase-house-majority-2008-05-22.html

Jim Webb's Time To Fight
http://news.yahoo.com/s/thenation/20080520/cm_thenation/7322265

Executive Pay Watch Database
http://www.aflcio.org/corporatewatch/paywatch/ceou/database.cfm

Conservative Democrats in a strong position to win open Alabama seats
http://blog.al.com/live/2008/05/gop_election_setbacks_could_sp.html

Votes of working-class Democrats uncertain
http://www.billingsgazette.net/articles/2008/05/20/news/local/23-obama_s.txt

Webb would be bold choice for VP
http://www.washingtonpost.com/wp-dyn/content/article/2008/05/20/AR2008052002346.html

Young Voters Favor Activist Role by Government
http://www.americanprogress.org/issues/2008/05/progressive_generation.html

Main Street Squeeze
http://www.inthesetimes.com/article/3690/main_street_squeeze/

The Taxpayer Costs of Divorce and Unwed Child-Bearing
http://www.marriagedebate.com/pdf/ec_div.pdf

Turn Around America Video Contest - grassroots Americans submit their ideas to the AFL-CIO
http://www.turnaroundvideocontest.com/steve_video.php

SAVE Act gets another hearing, sort of
http://www.statesman.com/blogs/content/shared-gen/blogs/austin/immigration/entries/2008/05/22/save_act_gets_another_hearing.html

McCain defends 'Enron Loophole'
http://atlanticfreepress.com/content/view/3951/32/

Unlike Bush-McCain, Obama Gets The Farm Bill Right
http://news.yahoo.com/s/thenation/20080522/cm_thenation/1322762

How Sam Nunn Fit A Democratic Southern Strategy
http://www.ajc.com/metro/content/shared-blogs/ajc/politicalinsider/entries/2008/05/22/how_nunn_could_fit_into_a_sout.html

Musgrove Leads Wicker in Mississippi U.S. Senate Race
http://www.musgroveforsenate.net/news/new_poll_shows_musgrove_leadin.html

Florida Today: Our New G.I. Bill
http://www.floridatoday.com/apps/pbcs.dll/article?AID=/20080524/OPINION/805240313/1004&referrer=NEWSFRONTCAROUSEL

New pro-life country song hits the airwaves (hat tip - Democrats for Life http://www.democratsforlife.org/)

http://www.myspace.com/bluefieldband

Economic Snapshot for May 2008
http://www.americanprogress.org/issues/2008/05/econ_snapshot.html

Al Shanker's Tough Liberalism - Interesting article about a labor leader who challenged political correctness on the Left
http://www.forward.com/articles/13438/

Jim Webb on MSNBC's "Morning Joe"
http://www.ajc.com/metro/content/shared-blogs/ajc/politicalinsider/entries/2008/05/21/jim_webb_on_the_coolness_of_wo.html

Support for school vouchers is growing
http://www.tampabay.com/news/education/k12/article510630.ece

Amendment 2: Critical to Florida's Families

I urge the voters of Florida to support Amendment 2 which would place a ban on same sex marriage in the Florida Consitution. While it is important to treat our gay and lesbian brothers and sisters fairly, the traditional family must be recognized as a source of strength. The vast majority of Floridians across party lines oppose gay marriage and do not want to redefine the institution of marriage.

As a labor Democrat who has spent his whole life fighting for the fair treatment of the poor and minorities, I see no inconsistency with my endorsement of Amendment 2. We should certainly consider some form of statewide domestic partnership legislation for same sex couples. Matters like inheritance rights and hospital visitation can be addressed without tampering with the institution of marriage. Gay bashing and employment discrimination against gays must be vigorously opposed but we must also recognize that the traditional family unit is the basic building block of our society.

As explained in the video link, Amendment 2 will not invalidate local domestic partnership laws. http://www.youtube.com/watch?v=l6cT2Fxo-7s The recent California Supreme Court ruling shows the importance of Florida putting a ban on same sex marriage into the state constitution.

Full Text of Florida Marriage Protection Amendment

“Inasmuch as marriage is the legal union of only one man and one woman as husband and wife, no otherlegal union that is treated as marriage or the substantial equivalent thereof shall be valid or recognized.”

Why do we need a constitutional amendment to protect marriage in Florida?

* Natural Marriage is Under Attack

Gay and lesbian political groups and activist judges nationwide are trying to overturnstate Defense of Marriage Act (DOMA) laws which define marriage as the union of one man and one woman. This is what happened in California and Massachusetts to legalize “gay” marriages. It is only a matter of time before an activist judge will take a case that challenges Florida’s DOMA and rules that our state law is “unconstitutional.” This is why Florida is following the lead of 27 other states who have expressly defined marriage as the union of a man and a woman in their state constitution.

* Marriage is Beneficial to Florida

The institution of marriage provides the foundation for every humancivilization. Florida has a fundamental and compelling interest in protecting and preserving marriage as the union of a man and a woman. Our communities flourish socially, economically and in many other ways due to the stability and strength that marriage provides to children, families, communities and our state as a whole. Marriage benefits the common good of society in unique and lasting ways that same sex coupling does not.

* Same Sex Marriage Subjects Children to a Vast, Untested, Social Experiment

When you create a same sex marriage, you are simultaneously creating a same sex family. Our responsibility is to always ask, “What is in the best interest of children?” When it comes to marriage, children always do better when they grow up with a married mother and father. A massive body of social science literature over the past three decades, has empirically demonstrated this fact. Children raised with a married mom and a dad are protected from a host of social maladies.

* Opponents of the marriage amendment are waging a campaign of pure deception and deliberate misrepresentation

Our opponents know they will loose if they try and argue the policy merits of so called “gay” marriage. So they have resorted to a pathetic and dastardly tactic, namely trying to scare senior citizens into thinking that their “benefits” will be taken away. Amendment 2 is about one thing, and one thing only-- it defines marriage as the union of a man and a woman and does not interfere with anyone’s benefits. Detailed legal documentation proving this point is available at at http://www.florida4marriage.org/, under “Opponent’s Arguments.

Amendment 2 deserves the support of all Floridians who are concerned about the well-being of families. This is not a partisan issue and Amendment 2 needs the support of Democrats, Republicans and Independents.

Short takes 05/15/08

Republicans running scared after special election losses
http://www.nytimes.com/2008/05/15/us/politics/15repubs.html?em&ex=1210996800&en=5cb3725262e6dd07&ei=5087%0A

Childers thanks God, family
http://www.djournal.com/pages/story.asp?ID=273360&pub=1&div=News

AFL-CIO reveals McCain voting record on issues related to working families
http://www.aflcio.org/issues/politics/mccain.cfm

April sees sharp rise in food prices
http://www.americanprogress.org/issues/2008/05/food_prices.html

What are Democrats doing right ? Recent elections wins prove the viability of socially conservative Democrats
http://www.getreligion.org/?p=3504

Edwards supporters swinging to Obama
http://blog.washingtonpost.com/the-trail/2008/05/15/edwards_supporters_start_to_sw.html

America's fading military industrial base
http://www.americaneconomicalert.org/news_item.asp?nid=3205426

Progressive Prescriptions for a Healthier America
http://www.americanprogress.org/projects/healthprogress/pdf/prog_prescriptions.pdf

Winning the White Working Class
http://www.inthesetimes.com/article/3682/winning_the_white_working_class/

Jim Webb's new book
A Time to Fight: Reclaiming a Fair and Just America "presents a clear-eyed, hard-hitting plan of attack for putting government to work for the people, rather than special interests, and for restoring the country's standing around the world."
http://politicalwire.com/archives/2008/05/14/a_time_to_fight.html

Bloggers view Webb as leading VP possibility
http://www.slate.com/id/2191477/

Baptist Press interview with Congressman Heath Shuler D-NC

http://www.bpnews.net/BPnews.asp?ID=28033

California Supreme Court ruling likely to impact 2008 election
http://weblogs.baltimoresun.com/news/politics/blog/2008/05/gay_marriage_ruling_is_electio.html
Good News for Gays, Bad News for Democrats
http://blogs.chicagotribune.com/news_columnists_ezorn/2008/05/good-news-for-g.html

Hat tip to Gruntled Center http://gruntledcenter.blogspot.com/ - The link below has nothing to do with politics but rather a study of generic names for soft drinks by county. A really useful collection of survey data !
https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgigYuaaehs8EV11dO8gYN2_GPALgPuLYj7Rljv-RphAWgRgvpWlcJO6miqD5C1SmD6r8Y_0ZfQILKLjhqlM1PlEMd0wYyQ9_uVoXHba5c1ACKRBMOBKukGku2gYEFngm6uEBRD/s1600-h/total-county.gif

Still timely America First video from last year by country great Merle Haggard. Let's fix America first ! http://www.youtube.com/watch?v=6jrHPjm4qKM

Short takes 05/13/08

Robert E. Wright, Ph.D., historian and curator for the Museum of American Finance, reveals in ONE NATION UNDER DEBT: Hamilton, Jefferson and the History of What We Owe (McGraw-Hill: March 2008) the political and economic battle behind early America’s first national debt and its continued legacy today.

http://www.mhprofessional.com/?page=/mhp/content/press_room/releases/products/One_Nation_Under_Debt.html

Republican panic in Mississippi - will Democrats take open Congressional seat ?
http://www.philly.com/philly/blogs/americandebate/18891229.html

American Legion backs Webb G.I. Bill: This Would Encourage Young People to Join Our Military
http://thinkprogress.org/2008/05/12/american-legion-webb/

Florida Democratic lawmakers warm up to vouchers
http://www.tampabay.com/news/education/k12/article500372.ece#

Australian writer John Heard argues that gays and lesbians in his country are disinterested in the idea of same sex marriage.
http://www.news.com.au/heraldsun/story/0,21985,23687597-5000117,00.html

Kevin Phillips explains how the decline of manufacturing and the growth of the financial services industry has hurt the American economy.
http://www.prospect.org/cs/articles?article=bubble_and_bail

Don't fuel the anti-ethanol bandwagon
http://www.mlive.com/business/grpress/index.ssf?/base/business-0/1210485904188750.xml&coll=6

Immigration enforcement bill splits Democrats
http://www.azcentral.com/news/articles/2008/05/09/20080509immig0509.html

How Obama can connect with grassroots values
http://online.wsj.com/article/SB121055622112284133.html?mod=googlenews_wsj


Support Congressman Heath Shuler's SAVE ACT to remove the illegal alien job magnet.
http://www.numbersusa.com/interests/attrition.html

All 3 major Presidential candidates back nuclear power

http://www.iht.com/articles/2008/05/07/business/nuke.php

Democratic leaders call for Cabinet-level authority to fight life-threatening diseases
http://www.commercialappeal.com/news/2008/may/08/democratic-leaders-could-cure-what/

Chinese nuclear base causes international concern

http://economictimes.indiatimes.com/Chinese_nuclear_base_causes_global_concern/articleshow/3026625.cms

Democrats for Life celebrate pro-life win in Louisiana
http://www.democratsforlife.org/index.php?option=com_content&task=view&id=355&Itemid=2

The Evangelical Manifesto
Restoring the good name of American evangelicals
http://www.anevangelicalmanifesto.com/index.php

Remembering Frank Sinatra - 10 years later
http://www.youtube.com/watch?v=438v-0z4IvE

Diana Krall video - one of the most talented singers in America today
http://www.youtube.com/watch?v=eBvyJyzSGCE

Are public fears about "free trade" and globalization justified ?

Josh Bivens of the Economy Policy Institute http://www.epi.org/ takes a look at the impact of globalization on U.S. jobs and wages. Despite all of the propaganda from the corporate media about the benefits of "free trade," Bivens concludes that public fears about the impact of globalization are justified.

Bivens writes in a newly released issue brief from EPI:


A wide gulf exists today in American politics. On one shore are voters increasingly anxious about globalization and its effect on their jobs and communities. On the other are economists, policy makers, and pundits who maintain that trade is good for the economy, that the wider public is simply misguided about its benefits, and that politicians who sympathize with those concerned about globalization are pandering to special interests at the expense of the wider economy. This latter group relies heavily on the suggestion that “all economists believe” globalization is good for the vast majority of American workers.

This reliance is odd given that mainstream economics actually argues that there are plenty of reasons for concern about globalization’s effect on the majority of American workers. This primer highlights two issues in particular that should worry American workers about globalization: job losses stemming from growing trade deficits; and downward wage pressure for tens of millions of American workers. These problems are not unexpected consequences of expanded trade; quite the opposite, they are exactly what standard economic reasoning predicts.

Trade and jobs

Job loss is by far the most visible and easily understood way that international trade can affect American living standards. The effect of trade flows on American jobs is actually pretty complicated and so requires a bit of untangling. First, trade creates new jobs in exporting industries and destroys jobs when imports replace the output of domestic firms. Because trade deficits have risen over the past decade, more jobs have been displaced by imports than created by exports.

THE TRADE DEFICIT AND FUTURE AMERICAN LIVING STANDARDS

In a sense, a trade deficit is the difference between a country’s production (exports) and its consumption (imports). Each year that the United States runs a trade deficit is a year that it must borrow from abroad to finance this excess of consumption over production. This borrowing leads to growing foreign debt that must be paid, with interest. In 2007, U.S. borrowing was on the order of $2 billion every day.Australia provides a cautionary tale on the consequences of such borrowing. In recent years, the Australian trade deficit has averaged around 2% of gross domestic product, yet Australia’s total deficit of international credits over debits reached 6% of GDP. The 4% gap between the trade and total deficitwas debt service (i.e., interest) paid on the borrowing to cover previous years’ accrued trade deficits. This large income flow leaving Australia to pay interest on accumulated foreign debts should be a red flag for the future of the U.S. economy.

There are, however, some possible offsets to this job loss resulting from trade flows. As the trade deficit grows, dollars piled up by our trading partners come back to the U.S. economy, and this increases the supply of funds available for U.S. business and households to borrow. This increase drives down the price of borrowing (interest rates), just as an increase in supply in any other market drives down prices. Lower interest rates spur job growth in interest-sensitive industries (like housing); and these can offset some of the job losses from trade. Can these jobs created through capital inflows completely balance jobs lost to growing trade deficits? It is possible, but unlikely.

Of course, other macroeconomic influences may push an economy to full-employment even in the face of trade deficits. In the late 1990s, for example, manufacturing jobs were lost to trade while construction jobs (at least partially spurred by foreign capital inflows) boomed. In the early 2000s, conversely, manufacturing hemorrhaged jobs due to trade faster than any other industry (even interest-sensitive industries) could replace them.

The Economic Policy Institute and other researchers have examined the job impacts of trade in recent years by netting the job opportunities lost to imports against those gained through exports. One criticism of these studies is that they do not try to estimate the jobs gained from capital inflows. However, this criticism misses the point of these studies: estimates of jobs displaced by growing trade deficits are not a declaration of exactly how many more jobs the economy would have today if these deficits had not grown. Rather, they are a conservative measure of the involuntary job displacement caused by these growing deficits and an indicator of imbalance in the U.S. labor market and wider economy. These studies also provide an indicator of how trade has affected the composition of jobs in the U.S. labor market.

Economists may cheerfully label it a wash when the loss of a hundred manufacturing jobs in Ohio or Pennsylvania is offset by the hiring of a hundred construction workers in Phoenix, but in the real world these displacements often result in large income losses and even permanent damage to workers’ earning power. Lastly, and importantly, even if trade deficits and capital inflows were to fight to a draw and there was no effect on the total number of jobs, job quality could still suffer. Manufacturing jobs (disproportionately lost to trade) tend to pay more and have better benefits, especially for workers without a four-year degree.

Trade and wages

While job-loss caused by rising trade deficits is the most visible effect of globalization, its impact on wages is a concern to an even much larger number of workers. Even if trade flows begin to balance and there is less job loss in the future, the integration of the U.S. economy with those of its low-wage trading partners will pull down wages for many American workers, and will contribute to the ever rising inequality of incomes in the U.S. economy.

TRADE AGREEMENTS AND AMERICAN JOBS

The ongoing dispute over the effects of the North American Free Trade Agreement (NAFTA) on the U.S. economy raises a narrower issue than addressed above: do trade agreements (and not just trade flows) impact American jobs and wages? As described in this overview, increased trade flows affect jobs and wages in the United States. Given that a key purpose of trade agreements (like NAFTA) is to increase these trade flows—and all evidence indicates that they have succeeded—it is safe to say that trade agreements have indeed increased pressure on American jobs and wages by increasing trade flows.

It is, however, hard to disentangle the precise influence of trade agreements apart from all othereconomic influences. Given this difficulty, researchers (and editorialists) frequently compare trade levels and other economic outcomes in periods before and after the implementation of trade agreements to assess their impact. While these “before-and-after” comparisons are assessments of the impact of increased trade generally, not trade agreements alone, this general method of assessing the outcomes of trade agreements is essentially an industry standard employed by nearly all commentators in the debate over trade agreements.

While global integration is usually “win-win” between countries, it can still translate into steep losses for tens of millions of workers in the U.S. economy. Crucially, this wage-loss is not restricted to just workers in sectors exposed to trade, but is experienced by all workers who resemble those displaced by imports in terms of education, skills, and experience. Many of these workers probably do not even know that they are being affected by globalization, but they are. Landscapers may not get displaced by imports, but their wages do indeed suffer from job competition with import-displaced apparel workers.

Take the case of China and the United States. Reducing trade barriers allows each to specialize in what they do more efficiently, and this specialization generally leads to national-level gains for both countries—that is, increased efficiency, worldwide production, and total consumption. This is essentially chapter one in trade textbooks. However, a later chapter in the textbook points out that, when the United States exports financial services and aircraft while importing apparel and electronics, it is implicitly exchanging the services of capital (physical and human) for labor. This exchange bids up capital’s price (profits and high-end salaries) and bids down wages for the broad working and middle-class, leading to rising inequality and wage pressure for many Americans.

In the textbook’s index, this is called the Stolper-Samuelson Theorem. (For those more convinced by appeals to authority, the text box Interpreting Wage Impacts provides some quotes from standard economics texts.) How big is this impact on wages? A reasonably cautious estimate is that between 1973 and 2006, global integration lowered the wages of U.S. workers without a four-year college degree (the large majority of the U.S. workforce) by 4%. College-educated workers saw 3% gains from trade, so inequality increased in this time as well.

Four percent might not sound like that big a deal, but to put it in some perspective, wages of workers without a college degree rose by only 2% over the entire 1973-2006 period. If not for the effects of trade, then this group’s wage increase could have been 100% larger. An honest debate on globalization American workers are perfectly rational to worry about what globalization means for their living standards, and actually have a much better grasp of the underlying economics than do the elite policy making class who routinely tells them otherwise.

Furthermore, the globalization status quo is at least as stingy to the poor trading partners of the United States as it is to American workers. It is time we had a national debate that acknowledged these facts and treated views dissenting from the elite consensus on globalization with the respect they deserve. This debate needs to include responses to globalization that match the scale of the economic insecurity, the wage losses, and the re-distribution it leaves in its wake. Simply put, this scale is not appreciated or acknowledged in today’s globalization debate, and policy responses reflect this failure.

INTERPRETING WAGE IMPACTS

The first thing to note is that the losses described above are not the unemployment spells suffered byworkers displaced by imports. These unemployment costs are not even considered in most trade theory, although in the real world they obviously should be. Rather, the biggest losses are the permanent wage cuts resulting from America’s new pattern of specialization made possible by globalization. These wage losses, it should be reiterated, are suffered by all workers who resemble import-displaced workers in education, skills, and experience.Second, the wage losses discussed in this overview factor in the ability of all workers to buy cheaperimports or find new job opportunities in expanding export sectors. Too often even professional economists imply or even state outright that cheaper imports or expanding opportunity in export sectors make the net outcomes of globalization for American workers impossible to predict. This is wrong. Third, the channels described above are, of course, not the only way trade affects U.S wages.

Just the threat of substituting foreign labor and imports for U.S. workers (made more credible as globalintegration proceeds) reduces the bargaining power of U.S. workers—even of high-wage, high-education workers who are generally helped by the effects described above (e.g., college-educated accountants buying cheap imported shirts at Wal-Mart). These threat effects are all but impossible to measure, but are nevertheless important. Finally, for those more convinced by appeals to authority on the issue of trade and wages, below are two quotations, one from Kenneth Rogoff, economics professor at Harvard and former chief economist for the International Monetary Fund (IMF), and another from a standard undergraduate international trade textbook authored by Paul Krugman and Maurice Obtsfeld:

“From a policy perspective, the major result of [the SST] was to confirm the intuitive analysis of Ohlin about who wins and who loses when a country opens up to trade. The answer, as we now well understand, is that the relatively abundant factor gains, and the relatively scarce factor loses, not only in absolute terms but in real terms. Thus if capital is the relatively abundant factor (compared to the trading partner), then an opening of trade will lead the return on capital to rise more than proportionately compared to the price of either good, whereas the wage rate will fall relative to the price of either good. International trade has a powerful effect on income distribution….This means that international trade tends to make low-skilled workers in the United States worse off —not just temporarily but on a sustained basis.”


http://www.epi.org/content.cfm/ib244

How Obama can bridge the racial divide

Richard Kahlenberg presents a strong argument in the May 12 edition of Inside Higher Ed http://www.insidehighered.com/ that Barack Obama could bridge the racial divide, win the Presidential election and unify working class America by embracing economic class-based affirmative action.

Kahlenberg writes:

Affirmative action is a highly charged issue, which most politicians stay away from. But nothing could carry more potent symbolic value with Reagan Democrats than for Obama to end the Democratic Party’s 40 years of support for racial preferences and to argue, instead, for preferences — in college admissions and elsewhere — based on economic status.

Obama needs to do something dramatic. Right now, while people inside and outside the Obama campaign are making the RFK comparison, working-class whites aren’t buying it. The results in Tuesday’s Indiana primary are particularly poignant. Obama won handily among black Hoosiers, but lost the non-college educated white vote to Hillary Clinton by 66-34 percent. Forty years earlier, by contrast, Kennedy astonished observers by forging a coalition of blacks and working class whites, the likes of which we have rarely seen since then.

On May 6, 1968, the day before the Indiana primary, Kennedy participated in an iconic motorcade through industrial Lake County, with black mayor Richard Hatcher sitting on one side of Kennedy and boxer Tony Zale, the native son hero of Gary’s Slavic steelworkers on the other. On primary election day, running against Eugene McCarthy and a stand in for Hubert Humphrey, Kennedyswept the black vote but also white working-class wards which four years earlier had supported Alabama Governor George Wallace’s presidential bid. Author Robert Coles told Kennedy, “There is something going on here that has to do with real class politics.”

Of course, Obama’s skin color may have made it more difficult for him to attract these voters than it had been for Kennedy. But in some ways RFK had it harder: The May 1968 primary came on the heels of widespread urban rioting spawned by Martin Luther King Jr.’s assassination in April. Bluecollar whites and blacks were at each others throats, and Kennedy was the one national politician most closely associated with black America.

In Obama’s campaign to win over working-class whites, pundits have pointed to two key obstacles: his 20 year association with the angry and race-obsessed Rev. Jeremiah Wright, and Obama’s condescending comments about the bitterness of small-town white working-class voters. Some working-class whites appear to believe that Obama is not on their side — worried that he may favor black interests over theirs, and at the same time that he looks down his nose on people like them. The image may be unfair, the result of a single comment he made, played up by his political opponents, but the notion could stick nonetheless.

Obama is right to talk about shared concerns of all working people, such as better health care and schools. But to catch the attention of working-class whites, he needs to do something striking, which further distances himself from the Rev. Wrights of the world, who view life through the lens of race, and also signals to working-class whites that he understands that they deserve a helping hand too. Switching the basis of affirmative action policies from race to class would do just that.

Thus far, Obama has hinted that he’s ready for the shift. While Obama has in the past been a strong supporter of race-based affirmative action, in his debate in Philadelphia with Hillary Clinton, he said in response to a question that his own privileged daughters do not deserve affirmative action preferences, and that working-class students of all colors do. He needs to make this explicit, to spell out the new policy, and explain why he is shifting away from his traditional reliance on race-based policies.

Supporting a shift to class-based affirmative action would be the logical policy manifestation of his well received speech on race in Philadelphia back in March. In the address, Obama made clear that this nation needs some form of affirmative action to address the legacy of discrimination in America. He noted that legalized discrimination in FHA loans, for example, prevented blacks from borrowing to purchase homes, leaving older blacks with little accumulated wealth to pass down to today’s generations. And he observed that many African Americans continue to attend to attended inferior segregated schools, to live in neighborhoods with concentrated poverty, and to grow upin single parent households, all of which are connected to some degree to discrimination.

On the other hand, Obama acknowledged many of the arguments made by opponents of affirmative action, who say that while such policies might have once made sense, it is now time to move on. Obama faulted Rev. Wright for failing to recognize that significant racial progress has been made, and he urged the country to “move beyond our old racial wounds.” Then, amazingly for a Democratic politician, he observed: “Most working- and middle-class white Americans don’t feel they have been particularly privileged by their race.... As far as they’re concerned, no one handed them anything.”

Resentment builds, Obama said, “when they hear that an African American is getting an advantage in landing a good job or a spot in a good college because of an injustice that they themselves never committed.” These resentments, he said are not “misguided or even racist,” but rather are “grounded in legitimate concerns.”

Class-based affirmative action reconciles both points of view. It avoids the explicit use of race that working-class whites resent, moving us beyond the “racial stalemate” Obama described. But a carefully conceived economic affirmative action program would also try to capture the full legacy ofdiscrimination of which Obama spoke. It would be colorblind but not blind to history. Discrimination has economic manifestations, and college admissions officers could give a leg up to smart students who overcome various obstacles which disproportionately affect African Americans: growing up in a low-income household, one headed by a single-parent, a family lacking in accumulated wealth, and residing in neighborhoods with concentrated of poverty, and attending low quality schools. Under such a program, low-income and working-class kids of all races would benefit — people like the young Barack Obama or John Edwards — but not students like Barack Obama’s own children.

Moving to class-based preferences would at once remove a terrible source of division and instead reinforce the common interests of working-class voters. And it would do more than just help Obama get elected. Reviving the old RFK coalition would give Obama a mandate to enact the type of far reaching change than hasn’t been fully entertained since Kennedy’s death.
Richard D. Kahlenberg, a senior fellow at The Century Foundation, is author of The Remedy: Class, Race, and Affirmative Action.

http://www.insidehighered.com/views/2008/05/12/kahlenberg