Posts from Stan Sorscher

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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Sentiment on Trade Policy is Shifting: TPP is Bad Policy, After All

Stan Sorscher

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

This year’s political campaign has forced the economics profession to reconsider the fraying orthodoxy of free trade.

 

Last week, Martin Khor documented the shift in thinking by several economists. In particular, the new NAFTA-style trade deal - the Trans-Pacific Partnership, is in deep trouble. Khor makes the key economic point:

“[free] trade ... can cause net losses under certain conditions. The gains from having cheaper goods and more exports could be more than offset by loss of local businesses, job retrenchments and stagnant wages.”

One economist from the Obama administration, Jared Bernstein, says the end of the free trade era is a good thing.

“We should no longer buy the statistically strained arguments about [free trade policies] delivering growth and jobs. The evidence just isn’t there, a fact not lost on those campaigning for president.”


He then faces a fundamental political fact that is hard for economists to see, but is pretty obvious to opponents of NAFTA-style trade deals. It is increasingly obvious to voters: Trade deals are more about politics than economics.

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Union Matters

Your Vote is the Last Line of Defense Against One-Party Control

Hugh J. Campbell

Hugh J. Campbell Son of a steelworker, Philadelphia, Pa.

The bottom line of Adam Serwer’s The Guardrails Have Failed is: “As for Kavanaugh, every opinion he writes, every decision he joins, and every day he sits on the bench will be tainted with illegitimacy.” Senators who represent a shrinking portion of the population confirmed a justice more Americans oppose than support. He was nominated by a president for whom most of the electorate did not vote. Republican control of the three branches of government is countermajoritarian. With the guardrails of separated powers broken, the last remaining defense for American democracy and the rule of law is the electorate itself.

Since April 8, 2017, when Neil Gorsuch became Associate Justice of the U.S. Supreme Court, the United States Government has been controlled by one political party. Why is this important?

In his Oct. 15, 2011 Senate Judiciary Committee testimony on separation of powers, Justice Antonin Scalia tells us: The real constitution of the Soviet Union, that constitution did not prevent the centralization of power in one person or in one party. And when that happens, the game is over, the Bill of Rights is just what our Framers would call a “parchment guarantee.”

Unless the Republican party ceases to control the legislative branch of the U.S. government in January, 2019, centralization of power will continue in one party, the Republican Party, for another 24 months, and if Donald Trump has his way, that centralization of power will be in one person.

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Unions for All, Unions for 15

Unions for All, Unions for 15