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We don’t feel better off, because we’re not

Stan Sorscher

Stan Sorscher Labor Representative, Society for Professional Engineering Employees in Aerospace

Earlier this year, trade experts explained to two audiences in Seattle how workers should adjust to the global economy. Workers displaced by global competition could learn computer skills and move to Boston, San Francisco, and Seattle.

One of the experts expressed disappointment at her failure in reassuring workers that our free-trade approach to globalization made us better off.

At a third meeting a few weeks later, two trade experts from Mexico said their country’s biggest problem was inequality. One, an economist, said he was “agnostic” about whether free trade made inequality in Mexico better or worse.

The level of faith regarding that question is probably stronger among the million Mexican farmers displaced from their homes by imports of U.S. corn, whose wages have gone down under globalization.

Let me take a short diversion.

A friend of mine knows that I grew up in Flint, Mich. She planned to drive through Flint, and asked me how she could catch a moment of the Flint experience. I recommended Angelo’s Coney Island at Franklin and Davison Road, which is actually in Wikipedia. Angelo retired long ago, and the current restaurant is not the Angelo’s I remember growing up.

My father’s office and a dry cleaning store were just up Davison Road, although both are gone now. Kitty-corner from Angelo’s, was Gil-Roy Hardware. That building is empty now. Across the street, the Franklin Pharmacy is also empty. A little west on Davison Road, the old Brown funeral home building is fire-damaged, and grass is growing up through the parking lot.

Zillow says my very nice childhood home sold in 2003 for $152,000. Zillow recently listed that house and others in good condition on that block at $39,000. Growing up, Flint had four big public high schools. One is enough now.

I told my friend she should see the historic General Motors factory on Hamilton and Industrial Avenue, where autoworkers staged the first sit-down strike. I sent her a picture of the site from Google Earth. The factory and Industrial Avenue are an open field, overgrown with tall grass.

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Trump's Tariffs Are Not Really the Point

Stan Sorscher

Stan Sorscher Labor Representative, Society for Professional Engineering Employees in Aerospace

SEATTLE (PAI)--We pay too much attention to GOP President Donald Trump’s tariffs. We’ve missed the point of what China is doing, and what we want.

When he was president, and before, Ronald Reagan told us that markets are good, government is bad, and we should let free markets solve all our problems. Winners will prosper, and gains will trickle down to workers and communities.

At the global level, this meant free trade policy that blurs national boundaries, and merges or integrates our economy into the global economy. This approach shifts power in favor of global corporations, while reducing policy space for governments, workers, communities, and the environment.

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Forget About Trump's Tariffs

Stan Sorscher

Stan Sorscher Labor Representative, Society for Professional Engineering Employees in Aerospace

We pay too much attention to President Trump’s tariffs. We’ve missed the point of what China is doing, and what we want.

Ronald Reagan told us that markets are good, government is bad, and we should let free markets solve all our problems. Winners will prosper, and gains will trickle down to workers and communities.

At the global level, this meant free trade policy that blurs national boundaries, and merges or integrates our economy into the global economy. This approach shifts power in favor of global corporations, while reducing policy space for governments, workers, communities, and the environment.

China has never accepted our free-trade free-market model. Zhang Xiangchen, China’s ambassador to the WTO, made this clear a few days ago.

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NAFTA should work for everyone – not just investors

Stan Sorscher

Stan Sorscher Labor Representative, Society for Professional Engineering Employees in Aerospace

In the 2016 election, Hillary Clinton, Bernie Sanders, and Donald Trump all recognized that workers and communities have lost trustin the NAFTA approach to globalization. They all said we should manage globalization differently.

Over the last few months, Canada, Mexico and the U.S. have had seven meetings to renegotiate NAFTA. To understand the renegotiations, we should know what was wrong with the original NAFTA, and what we want in a new one.

I’m 100 percent in favor of trade. I don’t think I’ve ever met anyone opposed to trade. We take pride when we export software, airplanes, apples, and wheat. That’s never been the issue.

The central question is, “who gets the gains from globalization?” The purpose of an economy is to raise living standards. Trade, more than most public policies, creates winners and losers.

The winners under NAFTA have done very well — global companies and investors who can move production to low-wage countries. But when workers, communities, and the environment are squeezed into decline, we are probably going in the wrong direction.

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Enforcing Trade Rules is Not a Trade War

Stan Sorscher

Stan Sorscher Labor Representative, Society for Professional Engineering Employees in Aerospace

Enforcing Trade Rules is Not a Trade War

The recent tariffs on steel and aluminum have been characterized as trade war. This is weird, because countries often enforce trade rules with targeted tariffs and sanctions, and markets adjust. What’s the real issue?

In the orthodoxy of free trade, tariffs are heresy. Any tariff suggests that the neoliberal free trade approach has failed and government intervention is required. Also, if we protect steel, then the “protectionist barbarians” all rush in and want import restrictions, too.

This begs the question, “Why have rules for globalization at all, if we won’t enforce them?”

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Renegotiating NAFTA Would Be a Lot Easier, If We Knew What We Wanted

Stan Sorscher

Stan Sorscher Labor Representative, Society for Professional Engineering Employees in Aerospace

The Trump administration just started the process of renegotiating NAFTA, the trade deal between the US, Canada, and Mexico that became the template for globalization in the 21st Century.

This would make more sense if we knew what we want to renegotiate.

In 2016, voters answered two simple questions,

  • “Who gets the gains from trade?” Not us.
  • “Who do you trust?” Not any politician who told us what a great idea NAFTA would be.

In the period following World War II, gains from productivity were shared broadly and our communities prospered. Not anymore. Since the mid-70’s gains from productivity and trade have gone almost entirely to the top 1%, while many communities declined dramatically.

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Where Are We Going Politically?

Stan Sorscher

Stan Sorscher Labor Representative, Society for Professional Engineering Employees in Aerospace

Donald Trump’s first few disorienting months leave many people wondering what governing looks like any more. It’s time to look away from the political spectacle, and take a deep breath.

Consider two opposing value statements.

“We all do better” Value Statement

  • The purpose of our economy is to raise our standard of living. Here, “standard” applies to our community and our country.
  • We value opportunity and fairness, stronger communities, shared prosperity, and investment in the future.
  • All work has dignity.
  • We are each other’s co-workers, neighbors, friends, relatives, and customers. We all do better when we all do better. My well-being depends on your well-being.

Under “we all do better” values, government plays a legitimate role – building social cohesion and promoting public interest.

Markets are powerful and efficient, but markets fail. Climate change and inequality are the two defining challenges of our time, and arguably the two biggest market failures in human history. Appropriate public policies prevent or correct market failures. We should manage national policies and globalization to strengthen Democracy and well-being at home and abroad.

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Restoring Trust After Our “Free Trade” Charade Ends

Stan Sorscher

Stan Sorscher Labor Representative, Society for Professional Engineering Employees in Aerospace

The 2016 elections threw a bucket of cold water into the face of free-trade orthodoxy. It’s no surprise that voters in Wisconsin, Michigan, Ohio, Pennsylvania, and elsewhere are deeply discouraged by decades of failed promises of boon from establishment leaders. The real surprise is, what took us so long?

We need a new approach to globalization that does as much for workers and the environment as it does for global investors.

Everyone I know wants trade and globalization. However, we have managed globalization badly.

Our failed “neoliberal” approach has been to manage globalization through trade deals, written by and for the interests of global companies. The neoliberal vision is a fully integrated global economy, where national identities are blurred, shareholder interests have top priority, public interests are devalued, and gains go almost entirely to investors.

Nothing in trade theory or history says global economic integration is a good idea.

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Restoring Trust in Our Trade Policy

Stan Sorscher

Stan Sorscher Labor Representative, Society for Professional Engineering Employees in Aerospace

I’m in favor of trade. I don’t know anyone opposed to trade. A better question is, “How should we manage globalization?”

We’ve lost trust in our approach to globalization. The Brexit vote in Europe was a vote of no confidence. Millions of voters in our presidential campaigns send a similar message. Globalization is not working for us.

We should rethink our approach to globalization if we hope to restore trust.

Strike one for trust in “free trade” - gains go to the top
Under our trade policies since NAFTA, the gains from trade have gone to a few at the top, while workers and communities have lost out - even after counting the cheaper goods we buy from low-wage countries.

The US has lost millions of good jobs, and entire industries have disappeared from our economy. This would be OK if we had created millions of new good jobs. But we haven’t.

Workers in Mexico, Honduras, Guatemala and Colombia are still waiting for their gains from trade. NAFTA, CAFTA and other trade deals disrupted their economies. Millions of workers lost their jobs, their social support structures were weakened, and violence increased. Thousands of workers and unaccompanied minors were forced to leave their villages and migrate in search of work.

The issue is not workers in the US versus workers in Central America. The issue is workers in every country versus the 1% in every country.

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How Low Would We Go for TPP?

Stan Sorscher

Stan Sorscher Labor Representative, Society for Professional Engineering Employees in Aerospace

The Trans-Pacific Partnership, the huge new 12-country trade deal, raises the question: How low would we go to get the next NAFTA-style deal?

The basic idea of a trade deal is that we will lower our tariffs, you will lower your tariffs, and trade goes up. That would be a trade deal.

TPP is much more than that. The tariff schedules in TPP are not controversial. Really, TPP will not pass or fail based on the tariff schedule.

Rather, the rules in TPP are very controversial because the rules define power relationships, and those power relationships determine who will take the gains from globalization.

President Obama wants us to set the rules, so China doesn’t. Good.

But “our” rules were written by and for global investors. Those rules are very favorable to corporations who want to move production to low-wage countries with weak social and political systems.

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Union Matters

No Money for Pensions, But Plenty for Parties

Sam Pizzigati

Sam Pizzigati Editor, Too Much online magazine

Private equity work has been sweet for Marc Leder, the numero uno at Sun Capital Partners. He’s parlayed his takeovers of troubled firms into a fortune big enough to make him a co-owner of the Philadelphia 76ers in basketball and the New Jersey Devils in hockey. New York’s tabloids, meanwhile, have come to dub the hard-partying Leder “the Hugh Hefner of the Hamptons.” The secret to his success? Private-equity firms, notes Center for Economic and Policy Research economist Eileen Appelbaum, plunder assets from the companies they buy, then send them into bankruptcy to sidestep their obligations to workers. Over the past decade alone, Sun Capital has bankrupted five firms and left their pension funds $280 million short. Leder, for his part, claims that the “vast majority” of Sun Capital deals have been successful. And he only parties hearty, the private-equity kingpin adds, 25 nights a year.

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How We Got Here

How We Got Here