Why the Corporate and Political Elite Insist Population Growth Is Good; or Is the US Getting Set to Enter a Great Depression?

The answer to the title above is simple; constant population growth equals constantly growing corporate profits. That’s not necessarily a good thing for the 99 percent.

The US economy is dominated by a Ponzi Scheme known as Wall Street. As corporate earnings rise, stock prices generally rise. If aggregate corporate profits go down, as they always must in time, then that 15,000+ value we see today with the Dow Jones Industrials can drop to 8,000 or less, as it did during the Great Recession.

Now imagine what would happen if the economy never came out of the Great Recession, like during the Great Depression. In October 1929, the Dow Jones was close to 400, up from less than 100 in 1921. The Depression hit that month, the economy entered into a sustained decline, the Dow dropped and dropped until it was less than 50 in October 1932. That’s a lot of speculative profits that were wiped out. The Dow began climbing with the election of FDR on November 8, 1932. But what if FDR didn’t win and the US continued down the same path? There’s a good chance the Dow would’ve dropped to a value of zero.

One way to avert such a calamity is to have constantly increasing population. As population grows, there are more people to feed, which means constantly growing demand for goods and services, which helps corporate profits rise, which keeps the Dow growing. The government will even feed and house tens of millions of people in order to keep demand up.

If, however, the US population was to decline, especially in the long-run, so too would the demand for goods and services. That means corporate profits would begin a long term drop. The financial markets would plummet in the long run. Paper profits that have grown over decades would vanish like smoke.

The birth rates of US citizens began to slow a few decades ago, and to compensate, your government opened the floodgates of immigration to compensate for that. Of course, there were other factors for doing this, as well. More immigrants meant a downward push on wage growth. The difference between what wages would’ve been in the absence of higher immigration and what they became with greater immigration went into the already fat wallets of the super rich via higher corporate profits, share prices and rising dividends.

This is not to suggest that immigration is always a bad thing, especially if there is a rising tide of prosperity for all. However, immigration during a time when there has been a massive redistribution of income and wealth flowing from the 99 to the 1 percent probably isn’t a good thing for the 99 percent. But it is good for Wall Street and the 1 percent, and for the reasons cited above.

If population growth continues to slow, and last year it grew only 0.7 percent, and middle class income continues to stagnate, then the current record rise in the Dow Jones Industrials suggests it is a bubble caused by redistributing income from the 99 to the 1 percent.

In other words, it is possible the current pathetic economic expansion is ambling down a road that ends at a very steep cliff. This brings us to a question.

Was the Great Recession just a blip on the road to an even greater Depression somewhere down the road a few years from now?

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Amy Goodman on the US Corporate media

Amy Goodman on the US Corporate media

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Wall Street, US Political and US Corporate Press Corruption Are Obvious to the Rest of the World

Don’t you wish we had a real free press in the United States? All we’ve got are a bunch of corporate publications and television shows that are always trying to hide the truth from us. They helped to “fix” the facts in sending the US into war against Iraq, for example. In England, on the other hand, there is a free press, reporting not only the news, but the obvious. Check out an excerpt from the Guardian newspaper below.

“As the Cyprus crisis was unfolding last week, we also got to see the report of the Senate Permanent Subcommittee on Investigations (pdf) on JP Morgan’s losses at its “London Whale” trading division. The report chronicles a series of bad bets on derivatives that were compounded by traders doubling down their stakes. They concealed the size of their losses both to bank officers and regulators. The end result was a $6 billion loss.

JP Morgan is a huge bank and can swallow $6 billion in losses, but the incident showed as clearly as possible that the Dodd-Frank reforms are not working. The London Whale’s losing trades were all done in the Dodd-Frank era. The bill’s provisions did not prevent JP Morgan from making massive bets and misleading regulators about their nature and the risks involved.

If the regulators were not able to catch the London Whale’s huge gambles before they went bad, why would we think that they will catch the next crap shoot from the Wall Street gang? It’s time that we looked at this seriously: the regulators lack either the will or the competence to rein in the big banks. The big banks are going to get away with everything they want, regardless of the provisions of Dodd-Frank….As it stands, the leadership of both parties is too closely tied to the financial sector to take any steps that fundamentally threaten their interests.

This has nothing to do with political philosophy: the leadership of both parties is owned by the financial industry. However, if the outsiders in both parties can build up enough popular outrage over Wall Street’s shenanigans, the party leadership will follow.” Bold and Italics are mine.

Click the link below for the complete story.

There is no free press in the USA. We only have the corporate press, and they always prefer to curb freedom of the press

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Does Obama’a Secret Negotiations Aim to Destroy the Constitution and Redistribute Income and Wealth From the 99 to the 1 Percent

Obama’s plan

Labor, trade, health and environmental Advocates are urging open negotiations, protections for American workers as the Trans Pacific Partnership Trade Deal is being negotiated. The Guardian newspaper calls the trade pact the largest in history, “Nafta on Steroids” and “an end run around the US Constitution.”

On the eve of his fifth State of The Union Address, President Barack Obama was urged by the Communications Workers of America (CWA) and a broad coalition of progressive organizations to ensure that strong, enforceable labor, health and environmental protections are included as part of the largest “free” trade agreement ever negotiated by the U.S. The president most likely doesn’t care about these issues since the current negotiations will likely send 200,000 low paying textile jobs in El Salvador to lower paying Vietnam. This will cause tens of thousands of US textile workers to lose their jobs since many US textile workers manufacture thread, fabric and yarn and export them to El Salvador. About 2 percent of all US manufacturing exports are textiles. Vietnamese textile firms, on the other hand, get their thread, fabric and yarn from Chinese businesses. So Chinese workers will likely get American jobs, while Vietnamese workers get the jobs of 200,000 people in El Salvador. Good job President Obama! The difference between the old wages in El Salvador and the new lower wages in Vietnam will go into the pockets of rich shareholders. The same holds true of the US jobs that will be lost to China. In other words, the TPP is another income redistribution scam, just like all the rest.

The Trans-Pacific Partnership currently is being negotiated in secret among the United States, Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. Roughly 600 corporate lobbyists have access to the negotiations and nobody else does, not even Wall Street Senator Ron Wyden, Chairman of the Subcommittee on Trade, and one of Wall Street’s fiercest warriors in their financial plundering and rape of the middle class.

“Unless President Obama insists on strict standards of openness and iron-clad protections for American workers, the TPP will likely become the biggest and most destructive free trade agreement we’ve ever seen,” said CWA Chief of Staff Ron Collins. “This agreement will provide even more incentives for corporations to off-shore U.S. manufacturing and service jobs to countries like Vietnam which pay extremely low wages and suppress workers’ rights. Also, it could lead to lower wages and benefits in the U.S. as the remaining U.S. employers are forced to compete with these low wage countries. These same incentives will further erode labor rights, health and environmental protections among all participants. It would be part of a global race to the bottom that only benefits multi-national corporations.”

Collins noted that CWA and the other organizations support fair trade, but not the giveaway of jobs that has been the outcome of previous agreements, particularly the North American Free Trade Agreement (NAFTA), and the entry of China into the World Trade Organization. The current TPP process has given corporate lobbyists access to all negotiating documents, while the public is shut out of any discussion.

“We will only support trade agreements that secure fundamental labor rights for workers and fundamental protections for our health and environment in America and abroad,” Collins said.

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The Historical Lies of the Rich

The Historical Lies of the Rich

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Barack Obama’s War Against the Middle Class: Rising trade deficits with Japan illustrate problem with proposed Trans-Pacific Partnership

From the Economic Policy Institute:

“The U.S. trade deficit with Japan has increased steadily over the past four years, reaching $79.9 billion in 2012, an increase of $13.4 billion (20.2 percent). Last month, the United States and Japan agreed on language that could allow Japan to join negotiations to enter the Trans-Pacific Partnership (TPP), a proposed free trade agreement with 10 other Asia-Pacific countries (a new round of negotiations on the TPP began in Singapore last week ).

Exports support U.S. jobs but the larger volume of imports displaces even more jobs. Trade deficits such as the one we have with Japan have cost the United States millions of jobs, most of them high-paying jobs in manufacturing. Signing trade deals is an ineffective way to create jobs, in large part because they usually result in higher trade deficits. One of the biggest causes of our trade deficits is currency manipulation, which acts as an artificial subsidy to other countries’ exports and a tax on U.S. exports. Japan has a history of currency manipulation, and Japanese Prime Minister Shinzo Abe announced that he intended to weaken the yen when he was elected in December. The yen has declined 11.9 percent since then.”

The US also has a trade deficit with China, but that’s not quite the truth. The US has a trade deficit with US corporations that do their manufacturing in China, such as Nike, Apple and Microsoft. The worse thing is that the Obama man may force US textile manufacturers to move their facilities to China, as well. On the other hand, it should be pointed out that there are plenty of US textile manufacturers in China, already.

The TPP is being negotiated by officials from the Obama administration. Obama’s policy preferences, like George W. Bush before him, have been to redistribute income and political power from the 99 to the 1 percent, or at least the slice of the 1 percent that Obama represents, such as the Crown Brothers of General Dynamics. That’s what the TPP is all about.

The TPP will off shore more US jobs and continue a deadly race to the bottom in order to support the Ponzi Scam known as Wall Street. That’s because US corporations must experience long-term rising share prices, which means profits must continually rise, more or less. And the best way for that to occur is if wage rates are reduced more and more. And so the TPP is an engine not only to get around the US Constitution (That’s another story), but also to depress wages and other compensation worldwide. So naturally Obama is aiming to destroy US textile jobs and redistribute the wages of the people who actually do the work to the 1 percent via higher corporate earnings, rising share prices and surging dividends.

Within the framework of the Trans-Pacific Partnership Agreement, the government of Vietnam is demanding “preferential rules of origin to use raw materials from China.” This includes yarn, thread and fabric.

Central American textile businesses are also worried that Vietnam will get more flexible terms to import its apparel into the US, such as an end to tariffs on apparel goods. In which case, some estimates suggest El Salvador alone will lose 200,000 textile jobs. These jobs are located in large part within Maquila zones, which are zones in which US companies are allowed to assemble goods and then export them duty free to the United States.

Once these zones were established, US corporations sent jobs to Central America. The difference between the old wages in the US and the new lower wages in Central America went into the pockets of corporate CEOs and rich shareholders. The people whose jobs were shipped away as part of the Democratic and Republican Party’s war against the 99 percent were lucky if they got unemployment insurance. The Central America Free Trade Treaty (CAFTA) did the same thing, only on a grander scale.

Nowadays, every year, the 1 percent legislatively steal about 32 percent of the income of the United States compared to about 7-8 percent thirty-two years ago. That means the 99 percent have less money to burn, which creates less jobs. And guess what else? The 1 percent destroy jobs by pressuring the government to enact more and more free trade treaties because they wipe out American jobs and redistribute the income from the lost jobs into their own pockets.

It just so happens that textile workers in the El Salvador Maquila zones earn .78 cents per hour, compared to .60 cents of their Vietnamese counterparts. However, the Maquila Zones in Central America have a cost advantage over their Vietnamese rivals since there are no tariffs for their products exported to the USA. If Vietnam is allowed to ship their apparel products into the US duty free, El Salvador will have a labor cost disadvantage vis-a-vis Vietnam.

Now here’s the real problem.

“U.S. textile manufacturers produce yarn, thread, and fabric for apparel, home furnishings, and for various industrial applications. In 2011, the U.S. textile industry generated $53 billion in
shipments and directly employed about 238,000 Americans, accounting for 2% of all U.S. factory jobs. Approximately one-third of U.S. textile production is exported, with the bulk of the exports
going to Western Hemisphere nations that are members of the North American Free Trade Agreement (NAFTA) or the Central American-Dominican Republic Free Trade Agreement
(CAFTA-DR), like El Salvador and Honduras.

Both free trade agreements provide that certain exports from member countries may enter the U.S. market duty-free only if they are made from textiles produced in the region. This has encouraged manufacturers in Mexico and Central America to use U.S.-made yarns and fabrics in apparel, home furnishings, and other products. Exports to the NAFTA and CAFTA-DR countries contributed to a U.S. trade surplus of $2.5 billion in yarns and fabrics in 2011.”

So the TPP has the potential to affect U.S. textile exporters in at least two ways. As mentioned earlier, it could enable Asian apparel producers, principally Vietnam, to export clothing to the United States duty-
free.” Roughly 40 percent of Nike’s products are produced in Vietnam. Guess what corporation is lobbying US politicians to support the TPP and eliminate the import duties from Vietnam?

“This (TPP) would eliminate much of the advantage now enjoyed by Western Hemisphere apparel producers in the U.S. market and, because Vietnamese manufacturers make little use of U.S.-made textiles,” will likely “reduce demand for U.S. textile exports,” killing US jobs, and redistributing income from the 99 to the 1 percent in the process. Second, it is possible the TPP will allow Western Hemisphere apparel manufacturers to use yarn and fabric made in any TPP member nations, such as China, which is where Vietnam gets its yarns and fabrics.”

In other words, Vietnamese apparel makers could wipe out El Salvador apparel makers, and that’s how Obama’s scam would destroy a couple of hundred thousand textile jobs in El Salvador. But this process would eliminate tens of thousands of US jobs in the textile industry, since the jobs in El Salvador are dependent on yarn, thread and fabric made in the USA.

In other words, Obama’s TPP scam is intended to make the 1 percent richer at the expense of the 99 percent, precisely because all free trade treaties are negotiated with this as the intended consequence. And this is just one of the income redistribution scams hidden within the negotiations of the TPP.

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Another Big lie exposed: foreign high tech workers are not the best and the brightest, Americans are

High Tech/Wall Street Senator Orrin Hatch is pushing Congress to expand programs to attract skilled foreign workers. The high tech industry claims “that foreign students graduating from U.S. universities in science, technology, engineering, and mathematics are typically “the best and the brightest,” i.e., exceptionally talented innovators in their fields.” That’s a lie. There is no evidence supporting the claim of the industry, or of the lying Hatch.

According to a study by the Economic Policy Institute, “The assertion that the foreign graduates offer superior skills or ability relative to U.S. graduates is found not to be supported by the data:

On a variety of measures, the former foreign students have talent lesser than, or equal to, their American peers.
Skilled-foreign-worker programs are causing an internal brain drain in the United States.”

Hatch is simply engaging in class warfare on behalf of his corporate masters. There is no need to expand the H1B visa since most of the jobs offered by the top ten high tech firms that use those visas outsource or offshore the vast majority of the jobs filled by users of the H1B visa.

By the way, if somebody showed Hatch the lie of his position, he wouldn’t change it to reflect reality. That’s not what Wall Street and the High Tech Industry pay him for. They pay him to enact legislation that financially rapes the American people on behalf of the 1 percent. He does it well.

Click the link below for the full story.

Foreign tech students are not the best or the brightest, Americans are–Economic Policy Institute

Click link below for related story.

wall-street-senator-orrin-hatchs-war-against-americas-middle-class-high-tech-workers-the-weapon-of-choice

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Wall Street Senator Orrin Hatch’s War Against America’s Middle Class High Tech Workers: The Weapon of Choice?

Wall Street Senator Orrin Hatch and three other senatorial conspirators are launching another military style campaign to redistribute income from the 99 to the 1 percent. These leisure class warrior have proposed letting more and more high tech workers into the USA via the H1B visa. Their reasoning, regardless of the lies they tell us, is simple. Flood the market with workers, the supply of workers will exceed the demand, wages and salaries of those workers will drop, and the difference between the old wages and the new goes into the pockets of the 1 percent via higher dividends, share prices and soaring earnings.

These senators tell us there is a shortage of high tech workers in the USA and that we’ll be able to attract the best and the brightest in the world. These are lies. First of all, don’t assume that your well-being is dependent on US corporations getting these workers. There’s no connection, no livability symbiosis, between the health of publicly traded corporations and members of the 99 percent. Just look at the second great lie of these senators; There is no shortage of high tech workers in the US, but there is high unemployment among them, partially due to the H1B visa. The reality is that the biggest users of H1B visas are “all in the business of outsourcing and offshoring high-tech American jobs. Many of the jobs that went to H-1B workers should have instead gone to U.S. workers, but employers are not required to recruit them before applying for an H-1B, and can even replace their U.S. workers with H-1Bs. The top 10 H-1B employers were granted an astonishing 40,170 visas; nearly half the total annual quota. The table also shows each firm’s immigration yield: the ratio of permanent residence applications to new H-1B petitions for these companies. It is evidence of the companies’ intention to hire and keep their H-1B workers in the country permanently.

There are two reasons these firms hire H-1Bs instead of Americans: 1) an H-1B worker can legally be paid less than a U.S. worker in the same occupation and locality; and 2) the H-1B worker learns the job and then rotates back to the home country and takes the work with him. That’s why the H-1B was dubbed the “Outsourcing Visa” by the former Commerce Minister of India, Kamal Nath.

Rather than keeping jobs from leaving our shores, the H-1B does the opposite, by facilitating offshoring and providing employers with cheap, temporary labor – while reducing job opportunities for American high-tech workers in the process. The I-Squared Act does nothing to protect against this, while vastly expanding the size of a deeply flawed program that accelerates the offshoring of American high-tech jobs and reduces America’s future capacity to innovate.”

That’s precisely what Senator Hatch, the least patriotic of Americans, wants and he knows it. He want’s to lower the wages and salaries of most American citizens. On behalf of his Wall Street masters, like a well trained attack dog ordered to take a bite out of middle America, Hatch is proposing offshoring and outsourcing US jobs on behalf of the 1 percent. This is another one of his many income redistribution plans that redistributes income from the 99 to the 1 percent.

Top 10 users of H-1B guest worker program are all offshore outsourcing firms -Economic Policy Institute

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Obama and the Trans Pacific Partnership, the Middle Class Destroyer Free Trade Treaty

From Arthur Stamoulis of Fair Trade Campaign.

President Obama promoted the Trans-Pacific Partnership during his recent State of the Union address, saying that it will “boost American exports, support American jobs and level the playing field.” With that as the major public justification for the TPP, we need to arm ourselves with facts about the legacy of recent U.S. trade policy. Important talking points include that:

If you take oil out of the equation, the U.S. trade deficit in goods increased by six percent in 2012 to $628 billion. That’s the largest non-oil U.S. trade deficit since the financial crisis, and a clear sign that U.S. trade policy is not working as it should.

Nine months into the Korea-U.S. Free Trade Agreement — the largest trade pact passed to date during the Obama presidency — exports to South Korea have dropped by 10 percent. This was a deal that had been promoted as job-creating, when in actuality it has led to further increase in the deficit and a net loss of U.S. jobs.

The overall track record for U.S. trade policy in recent decades further points to the need for change. The aggregate trade deficit with all U.S. FTA partners has increased by more that $144 billion since the FTAs were implemented.

To prevent more-of-the-same under the TPP, only a more-grandiose and more-damaging scale, we need Members of Congress to assert their constitutional trade policymaking authority and intervene in the negotiations. They absolutely must not approve “Fast Track” for the TPP. Here are some critical immediate steps for sending that message.

TOP PRIORITY: Organizational Sign-on Letter to Congress

Citizens Trade Campaign is currently soliciting organizations to join a letter to Congress on the TPP, US-EU Free Trade Agreement and Fast Track. This is an extremely important response to a push on the Hill by the Chamber of Commerce and others for Congress to pass Fast Track legislation for the TPP and other trade pacts. Please sign on any organization you have the authority to add, and please urge organizations you are affiliated with to join. The deadline is Sunday, March 3 — just prior to the Singapore Round of TPP negotiations. Instructions for how to join are included in the link above, or by writing to info@citizenstrade.org.

Current signers include Americans for Democratic Action, American Medical Student Association, Communications Workers of America, Friends of the Earth, Global Exchange, Institute for Agriculture and Trade Policy, International Association of Machinists and Aerospace Workers, International Association of Boilermakers, International Brotherhood of Teamsters, International Union of Painters and Allied Trades, It’s Our Economy, National Farmers Union, National Family Farm Coalition, Progressive Democrats of America, Public Citizen, Rainforest Action Network, Sierra Club, United Steelworkers, Witness for Peace and many others. We need your local, state and national groups on as well!

Organizational Meetings with Member of Congress
Those who represent organizations should please contact Citizens Trade Campaign now at info@citizenstrade.org if you are willing to arrange a meeting with your Member of Congress for the upcoming spring Congressional recess in late March and early April (or any other time). We can provide talking points and timely asks, and potentially connect you with others in your area who may want to join you.

Online Action for Individuals (which Groups Can Also Promote!)
Individuals are encouraged to write to their Members of Congress about the TPP and Fast Track through this online action alert. Please also post the alert on Facebook, Twitter and other social media. Over 2,000 messages have been sent to Congress since the State of the Union, and want to make sure that every Member of Congress is hearing from multiple constituents about it.

Individuals can further voice their opinions about the TPP by writing a Letter to the Editor of their local newspaper using this online tool. A sample letter is provided, but the more you can personalize and localize your letter, the more likely it is to be published. Here’s one example of a letter that was published, provoking lots of positive responses in the paper’s comments section.

TPP Bird-Dogging Action Team

We need volunteers in every Congressional district throughout the country who are willing to keep an eye out for Town Halls and other public events held by U.S. Representatives and U.S. Senators. Please take a moment now to visit your Member of Congress’ websites and sign up for their email lists, so that you’re receiving invitations to their constituent events. Once you’ve done so, please let us know at by filling out the TPP Bird-Dogging Action Team sign-up form.

When you hear about an upcoming Town Hall or public event with your Members of Congress, please let us know at info@citizenstrade.org. Whenever possible, please attend the event yourself and ask a pointed question like:

“I am angry that U.S. trade negotiators have refused to tell the American public what they’ve been proposing in our names for the Trans-Pacific Partnership, while simultaneously giving hundreds of corporate lobbyists, including those from Walmart, Chevron and Cargill, access to the negotiating texts. We can’t afford for the TPP to become another back-room deal the enriches big corporations at the expense of working people. Will you commit to opposing Fast Track authority for the TPP?”

Please report back what the Representative or Senator says at info@citizenstrade.org — and please don’t hesitate to contact us if you want background on the Member’s past trade positions or if you need help crafting a Member-specific question or comment.

A new TPP negotiating round has been added for the month of July in Canada. Details are still forthcoming.

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Senator Jeff Merkley Calls for New Approach to Labor and Environmental Standards and Crackdown on Unfair Foreign Subsidies in Upcoming Trade Agreement

On February 15 2013, Oregon Senator Jeff Merkley urged President Obama to include in the upcoming Trans-Pacific Partnership (TPP) Agreement new, stronger provisions to ensure that responsible U.S. businesses that pay well and meet high labor and environmental standards are not disadvantaged and that middle class Americans benefit from trade, which is something that happens, but it’s an accidental by-product of free income redistribution of income from the 99 to the 1 percent treaties. This is a radical difference between Merkley and Oregon’s other senator, Wall Street Ron Wyden. Wyden has been using free trade treaties to redistribute income from the 99 to the 1 percent since he entered congress two decades ago. On the other hand, Merkley has been fighting for the middle class since he entered the senate in 2008. Nobel Prize Economist Paul Krugman nicknamed Wyden, the “Useful Idiot.” By the way, President Obama and Wyden are almost always on the same page when it comes to redistributing income as described above.

Merkley’s letter asks the President to negotiate for a new approach to labor and environmental standards that makes them meaningfully enforceable using existing trade remedies. This request is likely to go nowhere with President Obama, whose base is such characters as Goldman Sachs and JP Morgan Inc,. The letter also asks that the treaty crack down on the threats to U.S. businesses and workers from foreign industrial policies, such as subsidies from state-owned banks and forced technology transfers that disadvantage American businesses, especially manufacturers. In the president’s State of the Union address, President Obama prioritized destroying the middle class and eroding Constitutional protections for people of the 99 percent by finishing the negotiations for the TPP.

“When free and fair, trade can encourage competition in the market, offer consumers a wider selection of better quality products at lower prices, and raise living standards around the world,” wrote Senator Merkley. “The success of our trade policies, like our economic success more broadly, should be measured by whether they move America’s middle class forward and help advance a vibrant, diverse economy with a robust manufacturing sector. I look forward to working with you to make trade with Asia a source of economic strength for U.S. businesses and workers.” The president and Useful Idiot Ron Wyden want none of this. They want the opposite.

Ideas presented by Senator Merkley in his letter to President Obama to strengthen the upcoming TPP Agreement include:

* Specifically and powerfully addressing the multi-tiered industrial policies that are particularly prominent in the Pacific region and that pose a serious threat to a free and open global trading regime, including:
* trade-distorting subsidy programs and practices, such as major, inappropriate grants for cheap land and utilities, preferential loans from export development banks, and discriminatory or unaccountable tax rebates;
* broad-based industrial subsidies such as strategically misaligned currencies, discriminatory policies that favor state-owned enterprises, and artificially cheap financing from state-owned banking systems; and
* strategic non-tariff barriers, such as mandatory joint venture requirements, forced technology transfers, opaque approval processes, and discriminatory technology standards.
* Taking a new and creative approach to stopping the global “race to the bottom” on labor and environmental practices , specifically by setting benchmarks for fair labor and environmental practices, and making them enforceable using the same tools available for enforcing other provisions of trade agreements.

The full text of the letter to President Obama is included below.

The senator Oregonians can be proud of, Senator Jeff Merkley

Dear President Obama:

Without question, trade is an important part of our nation’s foreign and economic policies. Trade solidifies our relationships with other nations, establishes the rule of law internationally, and encourages international educational and cultural exchange. When free and fair, trade can encourage competition in the market, offer consumers a wider selection of better quality products at lower prices, and raise living standards around the world. Moreover, for America to be prosperous long-term, we must be able to export our goods and services to growing international markets. Oregon, in particular, has many jobs that depend on trade.

You have stated that our trade policies should be oriented towards strengthening the American middle class and building thriving export and manufacturing sectors. In your State of the Union yesterday, you prioritized concluding the Trans-Pacific Partnership (TPP). Given the strategic importance of the Asia-Pacific region economically, you have repeatedly emphasized the need to make it the gold-standard for a 21st century trade agreement. Although I have expressed concern about past trade agreements, I write today to emphasize my support for getting the TPP right. Late last year, I joined letters led by Senator Al Franken (on a range of issues) and Senator Ron Wyden (on the environment) that set forth a number of views I share. I would like to offer now several additional thoughts and suggestions for how to make the TPP an agreement I can support.

First, the TPP must specifically and powerfully address the multi-tiered industrial policies that are particularly prominent in the Pacific region and that pose a serious threat to a free and open global trading regime. Policies that should be addressed include:
· trade-distorting subsidy programs and practices, such as major, inappropriate grants for cheap land and utilities, preferential loans from export development banks, and discriminatory or unaccountable tax rebates;
· broad-based industrial subsidies such as strategically misaligned currencies, discriminatory policies that favor state-owned enterprises, and artificially cheap financing from state-owned banking systems; and
· strategic non-tariff barriers, such as mandatory joint venture requirements, forced technology transfers, opaque approval processes, and discriminatory technology standards.

The policies noted above are fundamentally at odds with U.S. economic and political traditions. Even when federal and state governments have attempted to match some of the industrial subsidies available abroad, basic democratic protections such as transparency and taxpayer accountability, as well as tight budgets, have tended to limit their scope. In contrast, some less democratic governments have been able to adopt policies that, although arguably wasteful in the short-run, have over time been able to achieve long-run shifts in supply chains and industrial competitiveness. Moreover, with companies from emerging markets increasingly investing abroad, including in the U.S., the subsidies they receive, especially in the form of beneficial financing arrangements, could put U.S. companies at a disadvantage even on U.S. soil. The TPP presents an opportunity to address the risks – and waste – from foreign industrial policies in forceful ways.

Second, the TPP should take a new and creative approach to stopping the global “race to the bottom” on labor and environmental practices by mandating enforceable minimum standards in these areas. Maintaining basic labor and environmental standards are fundamental to a fair and level playing field in trade and are at the core of what it means to live in a middle class society. Recent FTAs improved upon earlier agreements by including provisions relating to labor and environmental standards, but much more needs to be done. Instead of resting on past progress, the TPP should raise the bar by including clear and appropriate standards requiring adherence to basic labor rights, fair wages, and specific environmental protections, along with clear and appropriate new enforcement tools.

One approach to consider would be using our existing anti-dumping laws as a model to enforce minimum labor and environmental standards, an innovation that would take advantage of the ability for FTAs to go beyond WTO requirements.[1] In this scenario, if a TPP party exports goods that are produced by workers paid less than a “fair wage,” those goods could be subject to an enforcement action that would raise the price of the import to what it would have cost to produce if a fair wage had been paid. The “fair wage” could be determined according to an agreed-upon, reviewable formula that would take into consideration the local cost of living.[2] A similar approach could be used to implement minimum environmental standards.[3] Implemented properly, this novel approach would create a “race to the top” in global markets – leveling the playing field for U.S. manufacturers and workers, raising living standards for foreign workers, and stimulating consumer demand overseas for U.S. exports. It could even benefit U.S. corporations that already adhere to good labor and environmental standards overseas but are competitively disadvantaged relative to less scrupulous competitors.

As you enter the next and critical stage of TPP negotiations, I hope you can keep the priorities I have outlined in mind. In the end, the success of our trade policies, like our economic success more broadly, should be measured by whether they move America’s middle class forward and help advance a vibrant, diverse economy with a robust manufacturing sector. I look forward to working with you to make trade with Asia a source of economic strength for U.S. businesses and workers.

Sincerely,

Jeffrey A. Merkley
United States Senator

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