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The near miss of Bernie Sanders in the Democratic primary this year against the Wall Street Establishment candidate, Hillary Rodham Clinton, should’ve sent a clear message to the Democratic Party Establishment, but it didn’t.

It’s business as usual in the white house, and business as usual within the US House and Senate. President Obama and Wall Street’s favorite senator, Wall Street Senator Ron Wyden (sometimes known as US Nike Senator Ron Wyden), are plotting to fool the grassroots of the Democratic Party by waiting until the election is over before throwing all of their energies into passing the Trans-Pacific Partnership (TPP) through congress. Obama has already signed it.

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The TPP is a massive income and political power redistribution scam promoted by Obama, Wyden, a few other Democrats, and most of the Republican Party, and, of course, Wall Street investment firms, hedge funds and major corporations. The TPP will redistribute trillions of dollars and large chunks of political power from the 99 to the 1 percent. The TPP will also steal many of your voting rights.

In a recent Harvard/Politico poll 54 percent of Democrats, compared to 85 of Republicans, believe trade scams such as the TPP have cost the USA more jobs than they create. A quick look at the US trade deficit bears this out. Millions of jobs are being exported from the USA every year, which is why Obama, Wyden, Wall Street and the Republican Party want to pass this scam.

When US jobs are exported to low wage nations, the difference between the old higher US wages and the new lower third world nations goes straight into the already fat wallets of the superwealthy via higher corporate profits, rising share prices, and surging dividends. Wyden and Obama know this. They’re not the dummies they’re pretending to be on this issue. That’s why we have record share prices along with an historically weak economic expansion.

Had 85 percent of Democrats believed trade scams like the TPP cost more jobs than they create, Bernie Sanders would likely be the Democratic Party nominee rather than the Wall Street jobs-exporter Hillary Clinton. Likewise, if 54 percent of Republicans believed trade scams exported more US jobs than they created here, Donald Trump would likely not be the Republican Party nominee.

The day of reckoning within the ranks of the Democratic Party is coming sooner than later. The next recession is already on its way in, and the tepid economic expansion of 2009-17 is nearly over. If I am correct, and this recession will be the worst since the Great Depression, the result of the destructive economic policy of redistributing income and wealth from the 99 to the 1 percent by the Wall Street supported Democratic Establishment and the Republican Party is almost at an end. The coming of this recession may bring about the end of Wall Street’s control of the Democratic Party. For more on this coming recession, click  The New Recession is Knocking at the Door–JohnHively.Wordpress.com

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Let’s assume that tariffs are raised in the near future to 35 percent on the goods US corporations export to the United States from their manufacturing facilities abroad. What would happen? Think Nike, Ford, United Technologies, Microsoft, Dell, Campbell’s Soups and thousands of other corporations.

The corporate news media will lie to you and say prices would go up, or the economy would tank. Totally wrong. Lies.

If select tariffs were enacted, the stock market bubble would deflate since corporate profits would decline. On the other hand, the Parasites of Wall Street are now so big that they are sucking the life out of the 99 percent. This means the stock markets are going to tank anyway, and sooner than you might expect. See The New Recession Is Knocking at the Door, and It’s Going to Be Worst Than the Last One–JohnHIvely.Wordpress.com.

The things that make up the wealth of nations are the things that are manufactured. The stock markets are a tool to redistribute income from those who actually produce the wealth of nations to those who produce nothing save for political and financial power. A vast decline in the stock markets would redistribute economic and political power back to those who produce the wealth of the United States.

The bond markets would tank too, if select tariffs were enacted. That means wealth inequality would decline in the USA. Currently, the top 1 percent own more wealth than the bottom 90 percent. Wealth are the things that you own, like houses, stocks, bonds, gold, cars, toys, smart phones, etc…. The video above was made years ago and the statistics the moderator uses are skewed even more to the ultrarich now than when the film was produced.

US manufacturing jobs would come home, probably by the millions. Wages would be forced up with so many jobs coming home. Demand for goods and services would accelerate and power the economy forward. The days of the bubble economies would be over. In other words, it would give life to the host that the Parasites of Wall Street, including all those hedge fund managers, have been sucking dry.

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Income inequality would decrease because more people would have decent paying jobs, while the rich would see their share of income decline. The rich now steal roughly 36 percent of all the income created every year in the United States, up from 8 percent in 1980. That’s precisely why the current economic expansion is the worst in modern US history in terms of job and wage growth, as well as growth in the Gross Domestic Product.

Our social safety nets, such as social security, medicare and medicaid, as well as our roads, schools, and other infrastructure would be financially strengthened.

The rich would have less money to corrupt government and both political parties. Let’s face it. Income and wealth inequality is produced by political inequality.

Foreign governments would not need to retaliate since the products of their nation’s businesses would not be subject to the tariffs.

The time has come for placing tariffs on the goods of US corporations which have exported jobs to China, Mexico and elsewhere, and then exported the goods those jobs produce to the USA.

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According to the US Bureau of Labor Statistics (BLS), the U.S. manufacturing sector lost 14,000 jobs in August and has now lost 57,000 jobs since January of this year. This job loss is, according the Economic Policy Institute (EPI), in part, a consequence of the sharp rise of the dollar in 2014 and 2015, which has gained nearly 20 percent on a broad, trade-weighted basis, as shown below.

According to the EPI, these job losses are brought about by Chinese currency manipulation.

“The rising dollar has reduced the cost of imports,” according to EPI, “increased the cost of U.S. exports resulting in growing trade deficits. Growing exports support U.S. employment, but growing imports cost U.S. jobs, so the manufacturing decline was entirely predictable from the expected increase in the U.S. trade deficit, which responds to changes in the dollar with a lag of one to two years. Yet the U.S. government continues to do nothing about destructive exchange rate movements, whether they are caused by intentional currency manipulation or more recent, market-driven misalignments.” Italics mine. 

This is all true, but there’s a reason why the US government and the Federal Reserve do absolutely nothing but cry foul over this manipulation. The government and the Fed could easily counter Chinese manipulation of its currency vis-a-vis the US dollar by simply buying the Chinese Yuan on the open market, but neither will, because they won’t.

That’s because US corporations have exported millions upon millions of US jobs to China. When these corporations, such as Apple, Microsoft and Nike, manufacture things in China and then export their products to the US, their profits increase every time China manipulates its currency. That’s right! US corporate profits grow when China manipulates its currency. So for example, when the Chinese manipulate their currency via the dollar by 15 percent, it increases the profits of their goods made in China and exported to the US by roughly 45 to 225 percent. What corporate CEO would want the US government to counter Chinese currency manipulation under these circumstances? For more on this, click The Trans Pacific Partnership: The Op-ed the Liberal and Conservative Corporate Media Doesn’t Want You to See–JohnHively.wordpress.com.

That’s how corrupt your government is. It will do nothing to save US jobs from being exported because the difference between the old higher US wages and the new and lower Chinese wages goes straight into the pockets of the super wealthy via higher corporate profits, surging dividends and skyrocketing share prices. The super wealthy take billions of those stolen dollars and put them right in the hands and campaign coffers of corrupt politicians.

The Trans Pacific Partnership (TPP) is the latest scam in redistributing income and wealth from the 99 to the 1 percent. Don’t let it happen. Call your congressional representatives. They do not want an aroused public.

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Below is an email Oregon’s US Senator Jeff Merkley. It’s his position on the Trans Pacific Partnership. He’s against it. Wall Street Senator Ron Wyden is supposed to represent the people of Oregon, but he wants us to compete against Vietnamese labor, people who earn .30 cents an hour or less. That doesn’t sound like a senator who represents all Oregonians. Wyden represents only the rich ones, like Phil Knight of Nike, as well as Wall Street investment banks and hedge fund managers in their against the middle class. Thank God we have one honest senator in Oregon. Merkley’s email is below.

Dear John,

Thank you for contacting me to express your concerns about the Trans-Pacific Partnership (TPP) trade agreement. I have heard from many Oregonians who oppose this deal. I appreciate hearing from you on this important issue and I share your concerns.

I do not support the TPP because it would put American workers in direct competition with people earning a dollar per hour or even less overseas. Such an unbalanced trade agreement would be devastating for many workers, families, and communities and put an inevitable downward pressure on incomes for ordinary Americans. (Only Wyden’s Wall Street and other corporate masters benefit from this).

Past trade agreements created an unfair advantage for other countries that incentivized a global race to the bottom on labor practices, environmental protections, and human rights. The TPP has not meaningfully changed from past trade deals that have cost Americans good-paying jobs in several important areas.

Trade agreements need real labor and environmental standards and those standards need tough enforcement. The TPP has not meaningfully changed from past trade deals that have costs Americans good-paying jobs in several important areas.

All free trade agreements since NAFTA have allowed foreign companies to sue local, state, and federal governments if they claim our public health, environmental, or other laws cost them money. These cases are decided by international tribunals, by lawyers who rotate between representing companies and deciding cases. That’s a violation of our sovereignty, and a deeply flawed system. The TPP does not protect consumer, public health, and environmental laws from being challenged in this Investor State Dispute Settlement (ISDS) process. (Wyden is 100 percent for ending our sovereignty and also ending many of our voting rights, because his corporate masters will prosper at our expense.)

The U.S. should not be engaging in a major expansion of trade relations with countries that have an abysmal record on human rights. The TPP does not have appropriate measures to end human rights abuses with trade partner countries.

As you know, Congress must approve any trade agreement before it can become law. I will vote against the TPP should it come before the Senate. Please know that I am committed to fighting for trade agreements that create good jobs and prioritize improving the lives of working Americans.

Thank you, again, for sharing your thoughts. I hope you will continue to send me your views and ideas.

All my best,

Jeffrey A. Merkley
United States Senator

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Elizabeth Warren is a rarity nowadays. She is a US senator, unlike most senators, such as Ron Wyden, who is clearly a tool and senator of Wall Street and of perhaps even Phil Knight, the founder of Nike. In a new report prepared for Warren, called Rigged Justice, several not so shocking things are clearly illuminated which prove how corrupt the US government has become, and let’s face it, this government is one of the most corrupt in the world, at least among the so-called Democratic nations.

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“The Obama Administration,” the reports says, “has made repeated promises to strengthen enforcement and hold corporate criminals accountable, and the Department of Justice (DOJ) announced in September that it would place greater emphasis on charging individuals responsible for corporate crimes. Nonetheless, both before and after this DOJ announcement, accountability for corporate crimes is shockingly weak.”

This is because both the Democratic and Republican establishments are completely reliant on money from the CEOs and corporations that commit these crimes. Most of the penalties faced by these CEOs and their corporations were so paltry that the report stated, “The examples (from this report) raise the disturbing possibility that some giant corporations—and their executives—have decided that following the law is merely optional. For these companies, punishment for breaking the law is little more than a cost of doing business.

There is a simple set of rules governing how US laws are applied. If you are rich, and you have used your money to corrupt the political system, the DOJ doesn’t look at you after it has caught you. The report goes on.

“When government regulators and prosecutors fail to pursue big corporations or their executives who violate the law, or when the government lets them off with a slap on the wrist, corporate criminals have free rein to operate outside the law. They can game the system, cheat families, rip off taxpayers, and even take actions that result in the death of innocent victims—all with no serious consequences.”

According to Warren, in an editorial in the New York Times, in 2015, “in case after case, federal agencies caught big companies breaking the law, defrauding tax payers, covering up deadly safety hazards, even precipitating the financial collapse of 2008, and let them off the hook with barely a slap on the wrist.” And to think that financially ordinary people go to prison for far less crimes than ripping off billions of dollars from taxpayers and investors, or knowingly selling products that kill.

“The failure to punish big corporations, the report went on, “or their executives when they break the law undermines the foundations of this great country: If justice means a prison sentence for a teenager who steals a car, but it means nothing more than a sideways glance at a CEO who quietly engineers the theft of billions of dollars, (not to mention the theft of the government and their regulatory agencies) then the promise of equal justice under the law has turned into a lie.” That promise died decades ago. “The failure to prosecute big, visible crimes has a corrosive effect on the fabric of democracy and our shared belief that we are all equal in the eyes of the law.

Some of the crimes committed included:

1 “The Cartel”: Citigroup, JPMorgan Chase & Co, Barclays, UBS AG, and Royal Bank of Scotland. In May 2015, Citigroup, JP Morgan Chase & Co, Barclays, UBS AG, and Royal Bank of Scotland (RBS) agreed to pay a combined $5.6 billion settlement to the DOJ. Bank traders from Citicorp, JP Morgan, Barclays, and RBS created a secret group known as “The Cartel,” which for more than five years manipulated exchange rates in a way that made the banks billions of dollars at the expense of clients and investors. And, the fifth bank, UBS, separately agreed to plead guilty to wire fraud charges in connection with interest rate manipulation. Although DOJ required admissions of guilt as part of the settlement – a reflection of the severity of the charges – not one single individual faced any criminal prosecution. Moreover, the SEC granted waivers to each bank so that the banks could avoid the collateral consequences that were supposed to accompany a guilty plea. Those waivers meant that the banks’ much-hyped guilty pleas were ultimately “likely to carry more symbolic shame than practical problems.”

2. Novartis. In November 2015, DOJ announced a $390 million settlement of a civil fraud lawsuit with Novartis Pharmaceuticals over allegations that the company engaged in a kickback scheme with pharmacists to increase sales of their drugs to Medicare and Medicaid patients. These kickbacks allegedly were paid even as Novaris was already under a corporate integrity agreement for previous violations of the law. This $390 million represented just over 10% of the damages sought by the government. It placed no further restrictions on Novartis’ participation in federal government healthcare programs, included no admission of wrongdoing, and did not include an indictment of any individual responsible for the kickbacks. The settlement was so paltry that after it was announced, Novartis’s CEO candidly noted that “whether we change our behavior …[in response to the settlement] remains to be seen.”

3. Education Management Corporation (EDMC). In November 2015, DOJ settled a civil case with EDMC, the second-largest for-profit education company in the country. EDMC illegally paid high-pressure recruiters to enroll students and violated the False Claims Act by falsely certifying that it complied with Title IV of the Higher Education Act. EDMC received $11 billion in payments (90% of it via federal student grants and loans) from 2003-2011 as a result of these efforts. But the settlement recovered only $95 million –less than one percent of this total. The DOJ settlement did nothing to resolve federal student loan debts owed by those who were victims of the illegal recruitment, held no individual executives at EDMC accountable, required no admission of wrongdoing, and did nothing to prevent EDMC from receiving federal funds in the future.

What the report doesn’t mention is that US banks have been caught openly laundering money for Mexican drug cartels. They’ve been fined, and then were caught again, and not a soul has been charged with a crime.

For the complete report click the link below. http://www.warren.senate.gov/files/documents/Rigged_Justice_2016.pdf

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According to a new report by the Oxfam Institute, An Economy for the 1 Percent, the richest 62 people in the world own more wealth than the bottom 50 percent of the world’s population.

According to Oxfam, “The gap between rich and poor is reaching new extremes. Credit Suisse recently revealed that the richest 1% have now accumulated more wealth than the rest of the world put together. 

Meanwhile, the wealth owned by the bottom half of humanity has fallen by a trillion dollars in the past five years. This is just the latest evidence that today we live in a world with levels of inequality we may not have seen for over a century. An Economy for the 1% looks at how this has happened, and why, as well as setting out shocking new evidence of an inequality crisis that is out of control. Oxfam has calculated that:

1.  In 2015, just 62 individuals had the same wealth as 3.6
 billion people at the bottom half of humanity. This figure is down from 388 individuals as recently as 2010.
2.  The wealth of the richest 62 people has risen by 44% in the five years since 2010that’s an increase of more than half a trillion dollars ($542 billion), to $1.76 trillion.
3.  Meanwhile, the wealth of the bottom half fell by just over a trillion dollars in the same perioda drop of 41%.
4.  Since the turn of the century, the poorest half of the world’s population has received just 1% of the total increase in global wealth, while half of that increase has gone to the top 1%.
5.  The average annual income of the poorest 10% of people in the world has risen by less than $3 each year in almost a quarter of a century. Their daily income has risen by less than a single cent every year
The Oxfam report doesn’t mention everything the rich have been able to purchase with their ill-gotten robberies, such as both major political parties in the USA, as well as in most other nations. Most government regulatory agencies throughout the world, such as the USDA, and the Securities and Exchange Commission, have also been bought and  managed by the 1 percent.
This corruption of governments is precisely why President Obama and Wall Street Senator Ron Wyden want to continue to redistribute income and wealth from the 99 to the 1 percent, a process that has been ongoing in the United States since Ronald Reagan became president.

Every US senator, President Obama, and most members of the US house of representatives know, or example, that the Trans Pacific Partnership (TPP) will force China to manipulate its currency vis-a-vis the US dollar by 15 percent, if this income redistribution agreement is rammed through congress. This will roughly double the profits of US corporations manufacturing things in China who happen to export these items to the United States, such as Dell, Microsoft, Nike, Adidas, Black and Decker, Gerber, and hundreds of others.

By the same process, this will make US exports to China profit losers, costing millions of US export jobs. But this forced currency manipulation will also encourage US companies who manufacture things for sale in the USA, as well as for export to nations other than China, to export millions of US jobs to China. What Corporate Chief Executive Officer wouldn’t export whatever jobs they could to China if their profits would double by doing so?

Every manufacturing job supports three other jobs, like the local waitress, teacher, plant manager, fire fighter, accountant, bookkeeper, retail clerk, plumber, contractor, and more. So that the exportation of say 5 million jobs will result in the loss of another 15 million. However, it is more than likely that the TPP will gut most of whatever is left of the US middle class by tens of millions.

Right now, 50 percent of US adults are considered middle class, down from 61 percent in 1970. Within three years of the enactment of the TPP, only 30-40 percent, or less, of US adults will be considered middle class. And that’s how the rich get richer.

When a corporation exports jobs, the difference between the old higher US pay and the new lower Chinese or Vietnamese pay goes straight into the pockets of the 1 percent via higher corporate earnings, rising share prices and surging dividends. The job losers might get several months of unemployment checks, if they’re lucky.

In other words, the TPP is a massive scam to force US companies to ship millions of US jobs to China, and gutting what remains of the US middle class, in the process. Wall Street senator’s such as Ron Wyden, Orrin Hatch and Mitch McConnell, as well as President Obama, are 100 percent behind this scam.

According to Oxfam, “The global inequality crisis is reaching new extremes. The richest 1% now have more wealth than the rest of the world combined. Power and privilege is being used to skew the economic system to increase the gap between the richest and the rest (such as the TPP). A global network of tax havens further enables the richest individuals to hide $7.6 trillion. The fight against poverty will not be won until the inequality crisis is tackled.”

The TPP will make income and wealth inequality grow. That’s what it’s all about. That’s what is has been negotiated to do.

 

 

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A new  study by the Social Security Administration shows that in 2014, slightly more than 51 percent of Americans made less than $30,000, and nearly 63 percent made less than $40,000. In other words, the middle class is dying and its being sucked dry by a parasite known as the 1 percent. At a time when the cost of living continues to rise across the country even as salaries have stagnated for years, it’s sobering—though not unexpected—news about the economic challenges facing a number of American families. The Trans-Pacific Partnership (TPP) is the latest assault to destroy the middle class. This middle class destroying accord has been ushered through the senate by Wall Street Senator Ron Wyden. Here’s how Wyden’s scam works.

Enactment of the Trans-Pacific Partnership (TPP) will force China to manipulate its currency more than is currently the case, and this will enrich wealthy US corporations that have shipped hundreds of thousand and millions of jobs to China, such as Nike, Microsoft, and Apple, as well as their rich shareholders, and CEOs, while destroying US export jobs, and redistributing massive amounts of income from the 99 to the 1 percent. The TPP will also send millions of undocumented immigrants into the USA, driving down wages here. But let’s begin with currency manipulation.

Vietnam is one of the nation’s involved in negotiating the Trans Pacific Partnership. China’s annual minimum wage is nearly twice that of Vietnam. The wages in China at those Nike and Microsoft and Apple and Hewlett-Packard factories and their suppliers and contractors and subcontractors have been going up rapidly over the past fifteen years. Those labor costs have been able to go up because the Chinese government has increased the profit margins of its US manufacturers by manipulating its currency. But there’s another reason why China needs to manipulate its currency vis-a-vis the dollar.

There are nearly 313,000 Nike workers in Vietnam, and nearly 250,000 in China. Vietnam has lower labor costs than those in China. The Chinese government, however, has been able to offset its labor cost disadvantage by manipulating its currency. So it can keep those jobs in China, and still allow the wages of Chinese workers to expand. But that might not be the case should the Trans Pacific Partnership (TPP) become reality.
Tariff is another word for tax. When a US company like Nike manufactures its products in Vietnam, and then exports them to the US, a tariff is charged against the products of between 10 and 15 percent. So another $10 to $15 dollars is added to the cost of a $100 pair of Nike’s Vietnamese made shoes exported to the USA. That means less profits, lower dividends, and lower share prices than would otherwise be the case without tariffs. The US tariffs on US corporate goods manufactured in Vietnamese factories helps to offset some of the Vietnamese labor cost advantages vis-a-vis the cost of Chinese labor.
Under the TPP, those tariffs will be gone, giving Vietnam a much larger labor cost advantage over Chinese workers. In which case, the Chinese government will have two options; let millions of Nike and Dell and Apple and Microsoft jobs head south to Vietnam, along with the jobs of contractors and subcontractors, or manipulate its currency even more, which means all of those US corporations manufacturing stuff in China for export to the US will see unprecedented and explosive growth of their profits; and all of this will occur at the expense of small and medium sized US companies that make stuff in the United States and export them to China.
That means several unpleasant things will occur to the US economy:
1. US unemployment will grow with the TPP, as exports to China diminish.
2. Inequality in wealth and income will continue to increase, destabilizing the economy further.
3. The stock market bubble will continue to expand, and the coming stock market crash will be even worse than imaginable.
4. US businesses will need to export more US jobs to China, and all of these bad things will trickle down to more crowded classrooms, less government services, reduced wages, fewer jobs, more poverty, and much more negative stuff for the 99 percent, as the taxes from those jobs are shipped overseas.
5. All of which means the US trade deficit will become greater because all of those things made by US companies in China will continue to be exported to the US, and the number is bound to increase with the TPP.

The super rich will become even more super richer, while the middle class will continue to evaporate.
Take a look at the graph below. On the left side (the Y axis) is the Yuan, which is the Chinese currency. The US dollar is on the bottom line (the x axis). Now look at the two intersecting lines, which is the supply and demand for dollars. In this example, 600 yuan can purchase $100 in the currency markets, which is roughly what the two currencies currently exchange for.

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So when Nike, Microsoft or Apple Inc. manufacture a product in China that costs the consumers, say, 600 Yuan in China, given the exchange rate, the same product will cost $100 in the United States, after, of course, it is exported from China to the USA. Assume these US corporations have a 25% profit margin. That means these companies get 150 Y profits in China per product, and $25 profit when they export their products to the United States.
Under the same conditions, this is true for companies that manufacture products in the USA, and then export them to China. American manufacturing companies earn $25 per $100 of product sold in the USA, and 150 Y when their products are exported from the USA to China.

The government of China has often manipulated the value of its currency. So what happens when it does this? It purchases dollars. This shifts the D1 line to the left, because there are less dollars on the market, which is shown in the graph below as line D2. This makes the Yuan less expensive in terms of dollars.

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Why are the higher up folks at Nike, Microsoft, Apple and hundreds of other US corporations that are producing goods in China for export to the United States against any legislation that seeks to address Chinese currency manipulation? The answer is easy; it increases their profits!
When the Chinese government manipulates it’s currency by purchasing dollars, 800 Y will now purchase $75. Do the math; 600 Y will purchase now $56. What does that mean?

It means that when Nike manufactures a pair of shoes in China which costs 600 Y there, in the US it should cost $56 rather than $100, thanks to China’s currency manipulation, but that rarely happens. The US corporate propaganda machine will lie to you and tell you it makes Chinese imports less expensive. However, the truth is China’s currency manipulation increases the profits of Nike. Rarely, if ever, do prices go down for US citizens in this scenario.
Nike still gets 25%, or 150 Y, in profits when its shoes are sold in China. When it exports the same shoes to the USA from China, Nike still gets 25% profit on $56, which is $14 dollars. However, Nike still sells its shoes for $100 in the United States, which means another $44 in earnings per pair, in addition to the $14.
That means Nike’s profit margin on a $100 pair of shoes goes from 25% at the old exchange rate to 58% at the new exchange rate. This sends its earnings and stock prices higher. The same thing occurs with Microsoft, Dell, Hewlett-Packard, Apple, and all US corporations manufacturing in China, and exporting their products to the United States.
So who pays the price for this?
The 99 percent do; if you work for a living in the United States, or if you’re a small or medium size business owner. Here’s how.
Suppose you are a US manufacturer producing shoes in Oregon that sell in the USA for $100. You ship them to China at 600 Y for $100, and earn 150 Y, or $25, in profits. Now suppose the Chinese government manipulates its currency by purchasing tens of billions upon tens of billions of dollars. The supply of dollars on the international currency markets shrinks, making dollars more expensive, and as noted above, the D1 line shifts to D2, which represents the new supply of money. BTW, the space between D1 and D2 represents the amount of dollars the Chinese purchased.
Those $100 US made shoes now costs 1000 Y in China. Okay, my graph isn’t too high tech, but the actual figure is 1066 Y, if you do the math, but let’s stick with the 1000 Y, for simplicity sake. There’s still a 25% profit margin per pair of shoes, but at the 1000 Y price, there’s not a whole lot of buyers in China. The US manufacturer could lower the price of the shoes to 750 Y, but he or she isn’t making a penny at that price, and they’re still overpriced for the Chinese market. Say goodbye to the Chinese market for all US products at the new exchange rate.
US exports to China are going to shrink quite rapidly under this scenario. This means fewer American jobs, and declining wages for everyone. It means less tax dollars going to schools and other government services; it means no retirement pay for a larger percentage of the 99 percent.

Over the past fourteen years, since China was granted most favored nation trade status, Nike’s stock price has risen over a thousand percent, from $10 a share to over a $100. Chinese currency manipulation has helped fuel this bubble. So if you purchased a million shares of Nike in the year 2000, today the value of those shares would be over $10 million. With the TPP and Chinese currency manipulation, the value of Nike’s stock will continue to increase, but only at the expense of everybody else. Much of the US stock market bubble is fueled by the same force, and that goes for the stock prices of Apple, Microsoft, Dell, Adidas, Hewlett-Packard and many more. And if the TPP passes through congress, more US manufacturers will need to shift production to China.
However, it’s going to be worse than you can imagine.
Millions of jobs in Mexico, Central America, Peru and Chile will also be threatened with exportation to Vietnam and China under the Trans Pacific Partnership (TPP). In which case, US exports will decline.
Maquiladora zones are located in Mexico and elsewhere in Latin America. These are free trade zones established by the United States and the host nations, such as Mexico, Honduras and El Salvador. The zones allow US manufacturers to assemble products in the zones, and then ship them duty free to the United States. Wages are bone poor in the Maquiladora zones, as low as $7.50 a day in Mexico’s northern zone, but they are higher than in Vietnam and China. China’s minimum wage is a little more than double Vietnam’s .28 cents per hour.
The parts assembled by US manufacturers in the Maquiladora zones must be made by US companies. This has been negotiated. In 2013, US corporations shipped $51 billion worth of parts manufactured in the United States to the over 3000 US factories in the northernmost Maquiladora zone in Mexico. That zone is twelve and a half miles deep and stretches from the Gulf of Mexico to the Pacific Ocean.
That 51 billion dollars of exports supports 250,000 American manufacturing jobs. The people who earn a living with those jobs spend their hard earned cash in their neighborhood grocery stores, stereo stores, clothing stores, computer stores, automobile dealerships, real estate companies, restaurants and more. That’s how those 250,000 manufacturing jobs keep another 400,000 to 800,000 people employed in other areas of the economy.
That doesn’t count the tens of thousands of Americans that mine the iron ore, or the rock, or chop the trees to make paper and houses, or manufacture cement, or who mold metal into products, and other producers of raw materials, or the people who operate the electric companies that power those 250,000 soon-to-be-lost manufacturing jobs. But that’s not all.
Just like the jobs that will be lost to Chinese currency manipulation via the TPP, all of these jobs pay state, federal and local taxes that support schools, road building and maintenance, forest service jobs, fire and police, and a lot more government jobs.
The TPP appears to be geared toward rendering obsolete the Maquiladora zones. Why else would Vietnam be a party to this agreement? The Vietnamese aren’t going to be purchasing a lot of American goods and services simply because those people can’t afford to do so.
When the TPP becomes law, kiss those jobs in the Maquiladora zones goodbye. Kiss that $51 billion dollars in US exports goodbye. And that’s just for the exports to one of these zones.
In El Salvador, 230,000 apparel workers will likely lose their jobs, which will be shipped to Vietnam if the TPP becomes law. Tens of thousands of workers in other central America nations will also lose their apparel manufacturing jobs in the zones. These people sew many of the clothes people wear in the United States and elsewhere.
Over 200,000 American workers supply the parts necessary to manufacture those clothes. Fabric, yarn and thread are made in US factories, and are then exported to Central America. Kiss those exports goodbye. Kiss those American jobs goodbye, as well as the hundreds of thousands of US jobs supported by those textile jobs.
If the TPP becomes law, we’re looking at the loss of billions of dollars of exports yearly, and millions of US jobs. And that’s only with the loss of two Maquiladora zones. Thank you Senator Wyden!
With the loss of jobs in the zones on such a massive scale, wages will drop like dead flies in Mexico and Central America. That happened in Mexico after Nafta, which drove millions of people into the USA illegally.
Hundreds of thousands, and perhaps millions, of people will be forced to migrate to the United States illegally, and not because they want to migrate. This will depress the wages of millions of American citizens and put incredible pressure on our social service tax dollars, which will be greatly weakened by the loss of jobs.
So who benefits from the TPP? The difference between the old higher wages and the new lower wages will go straight into the pockets of rich shareholders and CEOs via higher corporate profits, rising dividends, and soaring share prices. Working people will pay the price. In other words, the TPP will redistribute massive amounts of income from the 99 to the 1 percent. That’s what it has been negotiated to do.

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