lee5 @ 46

of course, you actually have to have free trade for it to work and bring advantage to all partners. companies like walmart are very far from open markets — these are classic feudalistic, top-down command&control orgs. Ain’t no free market inside walmart or opertainig between walmart and its suppliers.

(please correct me where i have this wrong – no economist, i)

say there’s a trade deal that will increase the size of the pie by $100. sounds good, right? but what if this trad deal gives bill gates an extra $150, and you loose $50? are you going to be in favor of it? i don’t think so.

so, even if trade deals can increase the size of the pie (trade works), if the winners are unwilling to share with loosers – it could be a bad deal and eventually there will be a big backlash against trade.

(snip)

There are a number of different issues at play here. Wal-mart is sourcing goods in China and sellng them here. One presumes they try to buy goods over that are as cheap as they can find while still meeting spec. One also presumes that Chinese competition to serve Wal-Mart is fierce. At which point the issue of transfer pricing kicks in: within the whole, how much will Wal-Mart charge its Chinese subsidiary for the goods, and what will it sell them for at retail in the US? There is a great deal of scope for marking the goods up. The object of this game is to have an offshore entity in a low tax jurisdiction do as much of the markup as it can so that the tax liability is reduced to the minimum.

The second issue is, how do we compensate the losers in free trade so that we can maintain a free trade consensus? Sounds like a smart theoretical question. In reality we ram through the trade deals and forget to protect workers, just as Tula says. Compensating the losers is an afterthought we when be bother to do it at all… Trade Adjustment Assistance is difficult to qualify for in practice and doesn’t come close to making the losers whole.

My advice: balance the budget as we during the Clinton years, so that we don’t have to worry if the Chinese don’t show up for Treasury Bond auctions. (2) Decide if we are going to really have a car industry, a steel industry, a computer industry, and make it happen. Just like the Europeans or Japanese do. (3) Get serious about cutting oil imports and moving to energy conservation and to sustainable, renewable energy.

The main point here is: if balance the budget we don’t need to sell new Treasury Bonds, and the Chinese lose their leverage over us. They can’t sell the bonds they have, because if they were to start, so would everyone else and their existing holdings of US bonds would drop bigtime, handing them huge losses.

Balancing the budget while starting a new energy program would mean higher taxes (hopefully we’d start by restoring the inheritance tax and other Bush cuts that center on high bracket taxpayers). But if we were able to help restore indusrial capaciy in America while paying our own way we would begin to restore the power that Bush has thrown away.

Someone else may be able to talk about “free trade” according to the text book. I can only talk about it experientially. NAFTA did not have its origin under Clinton. It was already an entrenched system … under Reagan. It was popularized under Clinton with the acronym, NAFTA.

NAFTA was a formalization of the Reagan-era trade agreements aimed at Canada, USA and Mexico in particular. That’s where the “NA” for North America comes in.

… I found out about this little deal through my Chinese counterpart in Hong Kung who warned me my silk would increase at least 600% so large apparel companies manufacturing offshore could purchase silk at a reduced price and the increase in the price to smaller companies (like mine) would subsidize the large corporations. My government would never do such a thing, I said.

What do you think the government did? Wasn’t it just the corporations who played dirty?

…My small business was the first industry to bite the dust under Reagan’s foreign trade policy, … He withdrew the opportunity for women to get a small business loan under the classification, minority, established by Jimmy Carter. Reagan favored large corporations … .

Simply showing Democrats understand how to govern a nation whereas Republicans only know how to use government as a weapon to help their friends commit a mugging.

…

We don’t get nice clothes for a cheaper price. That’s the BIG lie and people repeat it. … If a product costs $1.50 landed. Wal-Mart sells it for $19.99. That is not its value and you didn’t get it at a deal. The way it used to work before 1981 was if the product landed at $1.50 you added 20% to replace goods that didn’t pass quality control, etc., and doubled that to the retailer. Basically you sold it to the retailer for $6.50 and if they bought in quantity for $6.25. The consumer was to get the benefit. That product would retail for $12.50 and the retailer made a lot of money. Who gets the benefit between $12.50 and $20.00 today? Wal-Mart. Not you. You just over paid for a poorly produced bad quality product. Wal-Mart just got the 100% profit plus the markup. You get zilch!

…

You paint a picture of your experience which many Americans are now facing. It’s tragic in particular since we know how to do much better, how to raise all boats with the rising tide.

What you point to most clearly is what happens when corporations have too much power to manipulate workers & trade and how the wealth doesn’t “trickle down”, but seems to end up in the pockets of Corporations and the Rich.

Republicans know only greed and the freedom of a mugger to steal.

Democrats know how to regulate and redirect some wealth to ensure a proper balance is maintained.

Perhaps the most difficult aspects of this world trade situation is new things we haven’t faced before here in America. How do we deal with corporations simply leaving? how do we overcome the loss of jobs to outsourcing? How do we protect American workers of companies moving overseas?

All these questions and more need to be dealth with by a Progressive President and not a DLC Dem or a Republican like Romney.

On the trade subject, I highly recommend the book, “When Corporations Rule The World.” It enlightened me to the way in which our current trade policies are contributing to more misery, health problems, higher mortality rates, and environmental disasters around the world.

Free trade is evil and only benefits corporations. Fair trade is good for everyone.

Right!

And, who better than a Progressive to write new law to overlap current trade law to improve on the current system without screwing it up?

WalMart, being a favorite punching bag,Is however a damn good example of what the evils of globalization actually look like.
Paying wages on less than 40 hrs a week so they aren’t considered full time.
They had many of their employees getting state aid. That kind of shit is what hurts communities while delivering the goods to the shareholders.

We need to change our concept from full-time or part-time work to something more flexible and yet safe for workers. People might have to find several part-time jobs to make ends meet, but they shouldn’t be denied the benefit of being a full-time worker.

People’s retirement funds should never be so available to corporations as they were in the 1980s. They were simply stolen.

We need to begin to separate the worker’s assets (retirement fund, healthcare benefits, etc.) from the corporation and bind them more tightly to the individual.

If corporations are going to become International, then it’s certainly not going to be safe for American workers to have their assets so far from home.

I know this is not normally a site where we discuss economic theory, but, it is important to understand that the standard theory says that free trade makes both trading partners better off. …

(2) Because the win-win result of free trade is so attractive intellectually (and had a lot of basis in fact when it was first promulgated) many economists believe in it to the point of religion, even though the benefits are no longer what they once were. …

It is very important to understand that some of the brightest stars in the profession, including Nobel Laureate Paul Samuelson, and past American Economic Association President William Baumol, have had — and published — second thoughts on trade as it is now practiced, even if the rest of the profession has yet to catch up.

…

Thanks for the book tip.

The political system we have moves like molasses and if it’s done well it makes incremental improvements, so we don’t take 1 step forward and 3 steps back.

Ideally you start, as did America, with freedom — that’s the Free Trade idea — and then you begin to regulate — that’s where our next brilliant President comes in — to protect workers and businesses and national security of all parties. Then, if you’re lucky you finally get an international infrastructure which manages all the governance impartially, so you don’t have to have a zillion international treaties which each say something different. We are a long way from that.

So, one of the biggest reasons we need to elect someone who is Progressive to the Presidency is to enable another step forward (following on Clinton’s work) and this step would be to extend the free trade to new areas and to begin negotiating within the frameworks of NAFTA and CAFA regulations on worker safety, child labor, food safety, and so on. You don’t want that being done by a Republican, so we need Gore or Edwards or Richardson to ensure it’s done well.

Yes, I know businesses aren’t interested in this kind of stuff. At least they say they aren’t. But, you know the pet food retailers would’ve loved for the crap they got to have been better regulated and inspected. They just don’t know they love Progressive law until they’ve had it for a while.

Democrats are interested in economics and have made some big steps forward from Carter to Clinton and we need to continue to offer our kind of Liberal economic system to the world. It made America great and raised a lot of boats with the rising tide.

Anyone who doesn’t believe that the ‘yellow horde’ will be the end of America, as we have known it (arguing with myself right now, as I don’t really recognize America right now anyway) is not looking at Reality. Every year, they grow stronger. If military action ever unfolds, China WANTS to lose at least half of their population. We’d be in a really horrid place, and are now, but everyone’s focusing on Iran.

Yeah yeah, yellow horde, international jewish conspiracy. I find that offensive. China wants to get rich, o.k.? And quite frankly they deserve better living standards.

Even Newsweek in recent days has noted the hypocrisy of U.S. corporations when it comes to labor standards in China. Seems Big Business interests are lobbying China’s officials to weaken a draft labor law—after years of claiming that by moving jobs to China, their presence has helped improve labor standards and even forward democracy

This is what drives me nuts. If U.S. corps were forced to stick to rules and regulations that U.S. workers would be satisfied with it would be a great leap forward. But instead they make the situation worse. And the Chinese in general– believe it or not– have looked up to the U.S.. The fabled good behavior of the U.S. during the opium wars is just one example of how the Chinese differentiate U.S. from other countries. It makes me sick to my stomach that the U.S. corps are moving backwards into the Industrial Age in this country and exploiting the conditions in other countries.

The AFL-CIO and our affiliated unions across the board have tackled these issues on many fronts—including urging the administration to get tough on China’s currency manipulation and human rights’ abuses

One idea that I have is that this government must come up with a model agreement for businesses with manufacturing in China. One that respects the environment and labor among other things. Chinese gov. tends to blow when confronted with abuses because they regard it an attack on their sovereignty (seriously.) But taking actions in Washington like regulating US businesses doing manufacturing would be a different story. Right now the US looks all words. Paper tiger.It’s a dilemma.
Just my ideas.