Nostalgia for NAFTA? Our Wealthy Will Have Plenty

Sam Pizzigati

Sam Pizzigati Editor, Too Much online magazine

NAFTA will soon be no more. The Trump administration has a new trade deal with Canada and Mexico — and a new name for the North American trade order.

Trade union and other fair-trade experts are now parsing the details of the new Trump agreement, and we don’t yet have a full sense of exactly how this new “USMCA” — the plodding shorthand for “United States-Mexico-Canada Agreement” — will play out politically over the next few months.

But we do know, no matter what happens with the new deal, that America’s most wealthy will always look back fondly at NAFTA’s 25-year run. For America’s richest — and the most financially favored of Canada and Mexico as well — NAFTA has been the gift that never stopped giving.

The NAFTA quarter-century, simply put, may well go down in history as the most lucrative quarter-century North America’s privileged have ever experienced.

Forbes magazine has just delivered the most up-to-date evidence of just how lucrative — for our wealthiest — the last 25 years have been. That evidence comes from the latest Forbes annual list of America’s 400 richest. Put this new list in a bit of historic perspective, and the picture we see would thrill even the most jaded of deep pockets.

In 1992, the year before Congress gave NAFTA the green light, America’s richest had to hold a personal fortune worth at least $373.7 million to make it into the lofty ranks of the Forbes 400.

To enter the just-announced Forbes 400 list for 2018, an American deep pocket needs at least $2.1 billion.

Adjust these numbers for inflation, and the results still come across as staggering. Over the past quarter-century, after taking inflation into account, the real net worth of America’s richest single individual has tripled and then more than quadrupled, rising 13.9 times in all.

The average Forbes 400 fortune over that same span, meanwhile, has doubled, then tripled — all at a time when average wages in the United States have generally stagnated.

Could America’s rich keep piling up riches at the rate of the last 25 years over the next 25 years? Hard to see how. If the NAFTA-era rate of wealth accumulation did somehow hold, the nation’s grandest personal fortune a quarter-century from now would total an unimaginable $2.2 trillion.

Other factors besides NAFTA, of course, have been concentrating North America’s income and wealth since the mid 1990s. But NAFTA has powerfully shaped our overall economic and political environment.

NAFTA, as a Public Citizen analysis noted earlier this year, has relentlessly “placed downward pressure on wages for the middle and lower economic classes by forcing decently paid U.S. manufacturing workers to compete with imports made by poorly paid workers abroad.”

NAFTA also let U.S. agribusiness interests dump subsidized corn into Mexico, and small Mexican farmers could not compete. Mexico would hemorrhage 900,000 farming jobs in the deal’s first decade alone. Those lost jobs devastated rural Mexican communities — and generated a huge spike of emigration into the United States. U.S. employers took full advantage, depressing wages even more.

We’re still feeling the political fallout from that depression. Faux “populists” led by Donald Trump have parlayed frustrations over NAFTA-induced economic insecurity into ballot-box triumphs that have served only to enrich our richest. The wealthy have done just swell since President Trump’s inauguration.

In fact, Forbes ever so thoughtfully points out, the United States now hosts 204 billionaires not “wealthy enough to crack the club” — the Forbes 400 — that has become America’s most exclusive.

NAFTA’s initial cheerleaders promised us prosperity. For the already prosperous, they delivered.

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Reposted from Inequality.org

Sam Pizzigati edits Too Much, the online weekly on excess and inequality. He is an associate fellow at the Institute for Policy Studies in Washington, D.C. Last year, he played an active role on the team that generated The Nation magazine special issue on extreme inequality. That issue recently won the 2009 Hillman Prize for magazine journalism. Pizzigati’s latest book, Greed and Good: Understanding and Overcoming the Inequality that Limits Our Lives (Apex Press, 2004), won an “outstanding title” of the year ranking from the American Library Association’s Choice book review journal.

Posted In: Allied Approaches

Union Matters

Charmer Has a Severe Case of Upper Class Angst

Sam Pizzigati

Sam Pizzigati Editor, Too Much online magazine

The business press has pinned the label “charming” on Iain Tait, the 40-something with an inside track at becoming the top banana at one of the UK wealthy’s top wealth managers. But Tait himself acknowledges that money managers can be “strongly opinionated” and “picky.” What these days has Tait at his prickly pickiest? The prospect of Labour Party leader Jeremy Corbyn becoming the UK’s next prime minister. His wealthy clients, Tait told one British journalist last week, are worrying themselves sick about Corbyn’s egalitarian, pro-worker leanings: “It is now, without a doubt, the first thing that clients ask us: ‘What can we do to protect our wealth against Corbyn?’” Fears about Corbyn, Tait adds, “have doubled over the past couple of weeks.” What are Tait and his wealthy pals not particularly worried about? The new stats showing that British workers have just experienced the weakest paycheck decade since the 1870s.

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