Obama Hurls Insults at Liberals on Trade
Progressives called ignorant, insincere, and motivated by politics, sparking fury among President's base
US
President Barack Obama leaves after speaking about trade policy at Nike
Headquarters on
May 8, 2015 in Beaverton, Oregon. (Photo: BRENDAN
SMIALOWSKI/AFP/Getty Images)
I spent many years working for senior Democratic Senators such as Lloyd Bentsen and House Democratic leaders beginning with the legendary Speaker Tip O’Neill, and have never seen any president of either party insult so many members of his own party’s base and members of the House and Senate as Mr. Obama has in his weeks of tirades against liberals on trade.
In Mr. Obama’s speech at Nike last week, his comments to Matt Bai of Yahoo over the weekend, and White House press secretary Josh Earnest’s comments to reporters on Monday, Mr. Obama and his White House staff have repeated a string of personal insults directed against prominent liberal Democrats in Congress, liberal Democrats across the nation, organized labor, and leading public interest and environmental groups who share doubts about the TPP trade deal.
By the time the House and Senate finish their work on trade the headline will probably be either “Obama loses on trade” or “Obama and Republicans win on trade.” Either outcome is undesirable for Obama. |
Of course Ms. Warren, the most nationally respected liberal leader in American politics, is motivated by what she believes is right for the nation. Doubts about the trade bill are not limited to Ms. Warren. They are shared by the leader of Senate Democrats, Sen. Harry Reid (D-Nev.), the leader of House Democrats, Rep. Nancy Pelosi (D-Calif.), and a majority of Democrats in the Senate and House as well as a significant number of leading liberal economists.
For the President to suggest that he knows more about trade then all of them do, and that they are all ignorant about the trade bill and trade policy, is staggeringly false and contemptuous of many who have been working on trade policy far longer than he has and know far more about trade, in truth, than he does.
For Obama to question liberals’ knowledge of trade, when he has chosen to keep the terms of the trade talks secret from the American people and most leading trade experts, and classified them as though the terms of trade talks should be equated with nuclear weapons secrecy, is absurd. As Elizabeth Warren and many others charge that the game is fixed, does anybody seriously believe that the highest paid lobbyists for the most wealthy global conglomerates that will reap the greatest profits from the trade pact are not aware of the key details of the trade talks that are being kept secret from most of the nation?
Let’s be clear. The issue is not protectionism versus free trade. Globalization is here to stay; it cannot be wished away. The issues are what should be the fair terms of trade; whether these terms should be decided in secrecy, where the winners get special access to the terms of the deal where the losers and the nation as a whole are kept in the dark; and whether Obama can lead an informed national discussion based on shared knowledge and mutual respect that his tirades about trade have failed to offer.
Obama should be nervous. By the time the House and Senate finish their work on trade the headline will probably be either “Obama loses on trade” or “Obama and Republicans win on trade.” Either outcome is undesirable for Obama.
President
Barack Obama speaks to Nike Employees and other Oregonians at Nike
Headquarters May 8, 2015 in Beaverton, Oregon. (Photo: Natalie
Behring/Getty Images)
To make matters worse, Obama’s insults against liberal Democrats on trade materially harm the presidential candidacy of Hillary Clinton, who needs to solidify trust from the liberals who distrust the trade bill. Does Clinton want to side with Obama and against the overwhelming majority of Democratic liberals on trade, on an issue where Obama’s attacks against liberals have inflamed many of them? Or does she want to side with the liberals, which could lead to defeat of the trade bill and alienate many of her business supporters?
Obama to this day does not fully understand why Republicans walloped him in the 2010 midterm elections, taking control of the House, and walloped him again in the 2014 midterms, taking control of the Senate, leaving his presidency a prisoner of a Congress that is fully controlled by Republicans.
What happened in 2010 and 2014 is that Obama inflamed conservative and Republican voters to vote in large numbers, while he depressed many liberal and Democratic voters who stayed home on Election Day. Obama’s current contempt for liberals on trade reinforces a trend that leads to the worst election results for Democrats.
For Obama to fire insults against liberals at Nike last Friday only adds insult to insult to injury. Nike is one of the companies most associated with exporting American jobs abroad to low-wage nations that often have abusive practices against workers. Is the president who says liberals don’t know what they are talking about on trade intellectually unaware of this, or callously insensitive to this, or so contemptuous of liberals he simply does not care?
Obama should be listening to liberals and working with liberals, not insulting liberals who want more high paying jobs under better conditions for American workers and workers around the world. |
The president should declassify and make public the terms of the trade talks to convince the nation there is no hidden danger lurking in the secret trade deal, to allow the leading economists and policy advisors of the nation to fully debate and clearly propose the best jobs plans to mitigate any damage.
In particular, President Obama should lead the charge to include in a trade bill the long-discussed and never enacted plan (which many business leaders and Republicans support) to create massive numbers of high wage jobs to rebuild America’s roads, ports, bridges, and schools.
No nation can avoid the economic facts that cause and will continue globalization. And no nation can avoid the economic fact that unfair terms of trade become a job destruction machine migrating jobs from higher wage nations to lower wage nations, creating downward pressure for wages in all nations, while computers and robots replace men and women doing the work of the world.
On trade Obama should be listening to liberals and working with liberals, not insulting liberals who want more high paying jobs under better conditions for American workers and workers around the world.
Anyone who doesn't like this president is a racist according to liberals.
ReplyDeleteI had though about starting a thread on this, but I have to say TS, I am surprised to see you are the one to post it. While the article does focus salaciously on what a seeming jagoff Obama is being toward his base, it also draws attention to another issue, which is that free trade deals have destroyed our labor force. JFK, was a free trader under the guise that it was good for the American consumer (http://reason.com/archives/2015/05/11/barack-obama-vs-elizabeth-warren-on-trad) Personally, I don't deny this point. The ongoing arbitrage between American workers and foreign workers has undeniably allowed me and millions of other Americans to acquire way more material crap than I could afford if I had to pay the cost of union made goods produced in America. However, an unpleasant aspect of this benefit is that it comes at the cost of American jobs. We can't have it both ways and I think the public is slowly starting to realize this.
ReplyDeleteTo me, much of this wage gap stuff is pretty simple. Compared to 40 years ago, the worker of today produces far more than the worker of 40 years ago, but is paid much less to do so. throw in globalization, IE the ability to pay a worker 30 cents an hour to make a good that costs hundreds of dollars, and you have a labor market wherein the employer has enormous power to dictate terms to an employee. Much as you all like to wail about Obama, I don't think any of you right of center really disagree with what I'm saying here. This really has nothing to do with Obama.
Looking at how gay marriage has gone, I think the Republican party needs to be careful on this one. Despite claiming Democrats have been soooooooooooooooooooooooooooooooooooooooooooooooooooooo anti business, Bill Clinton in particular was quite willing to sign off on deregulating wall street and also NAFTA. True, neither Democrats or Republicans have done anything really for small businesses, but again, go to what I said above, this is how free markets work. Whether you are a small business owner or a single provider of labor, you will lose when you have to compete against a company that can exploit a wage gap and that can use its size to blunt competition. This is our world today.
While I don't agree with the farther right religious views that the tea party seems to have embraced, I appreciate some of their libertarian views and since they are jerking the Republican party to the right, they are starting to create some daylight between Republican and Democratic candidates for POTUS. Hopefully people like Warren will do the same to the Democrats and create even more daylight.
Fun fact: In 1964, the U.S.'s largest employer was General Motors. The average wage for a non-management employee was about an inflation adjusted $50/hour.
ReplyDeleteIn 2014, the nation's largest employer was Wal Mart. The average wage for a non-management employee, just over $8/hour.
Just some food for thought. Bon apetit ...
Might have something to do with:
Delete1. People not wanting to buy their products.
2. Free trade agreements allowing imports without tariffs.
3. Foreign auto ,makers assembling in the outback of the US paying far less for labor than the cities.
4. Outsourced auto parts used in new auto's.
5. Illegal immigration stagnating wages with an over supply of entry level people.
But in any case, I drive one of GM's discontinued lines, Pontiac, and it's getting more difficult to find parts.
Though I support tariffs, the reality is that they are blocks to free markets. Free markets mean you compete and win, or lose and get nothing. We have a long, long way to go before wages here and abroad equalize. Tariffs are essentially just a tax aren't they?
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DeleteTariffs are not allowed with free trade agreements which is why our trading partners want them so badly.
DeleteEven the playing field. Our system doesn't allow it. Our country taxes goods produced before they are exported. Other countries use a different taxation system.
The U.S. system is considered a worldwide system though like other worldwide systems it allows its companies to defer tax liability on foreign “active” income until it is repatriated to the United States. Deferral has been noted as critical to the stability of the U.S. international business tax system because it enables U.S. companies to compete on a near-level playing field with companies domiciled within more favorable tax climates, as long as those companies can afford to keep the resulting earnings abroad.
Overwhelmingly, developed economies are turning to the territorial approach. While as recently as 2000, worldwide systems represented 66 percent of total OECD GDP, this figure has dropped to 45 percent heavily weighted by the U.S. Now, 27 of the 34 OECD member countries employ some form of territoriality, which is up from 17 just a decade ago. Additionally, every independent U.S. advisory board, working group, and federal agency tasked with exploring tax reform has recommended that the U.S. pivot toward a territorial system. These include President Obama’s Economic Recovery Advisory Board, Council on Jobs and Competitiveness, and Commission on Fiscal Responsibility and Reform.
Overwhelmingly, developed economies are turning to the territorial approach. While as recently as 2000, worldwide systems represented 66 percent of total OECD GDP, this figure has dropped to 45 percent heavily weighted by the U.S. Now, 27 of the 34 OECD member countries employ some form of territoriality, which is up from 17 just a decade ago Additionally, every independent U.S. advisory board, working group, and federal agency tasked with exploring tax reform has recommended that the U.S. pivot toward a territorial system. These include President Obama’s Economic Recovery Advisory Board, Council on Jobs and Competitiveness, and Commission on Fiscal Responsibility and Reform.
Yet President Obama and like-minded lawmakers want to purify the worldwide elements of the U.S. system. They see foreign investment by U.S. companies as displacing investment in the U.S. and seek to increase the U.S. tax penalty for investing abroad by repealing or further limiting deferral.
I'll concede, global taxation is not my issue. I read your posts on this and I think you support your point very well that our system is burdensome, too high compared to the rest of the world and is one of many causes that block companies from investing here. I keep coming back to similar thoughts though. I think the bottom line is that there is one dominant school of thought that says there should be no corporate taxation period. Most commentary I read ultimately leads to this end point. Corporations want rights of a citizen, but their BOD's and shareholders don't want to pay tax. Any tax. To achieve their goal, they arbitrage various tax systems and set up scam offices with the sole intention of dodging taxes. We could argue forever about whether we should or shouldn't have corporate taxes, and we would never agree. That said, I really believe Lou that we could adopt whatever tax arrangement you feel we should adopt, and the bottom line is that corporations would still set up shams just to avoid paying tax. If the real goal is to end all corporate taxation, then why not openly say so? We've had 30 plus years of lowering taxes in this country, and the results speak for themselves.
DeleteThis is kind of related, in my thinking, but your second sentence there seems important to me. Free markets means that we specifically don't level the playing field. If we say we don't want unions because they drive up the cost of goods and promote mediocracy and protect lazy SOBs, I don't see how a tariff is functionally any different. If we want to protect American workers and keep our economy strong, which I'm all for, than there really isn't any way to do so without basically limiting competition. I think this concept is eventually a conclusion that a lot of people are going to come to, particularly those with shitty jobs who been told that supply side economics and totally unchecked competition is good for everyone.
The point is simple. The US defers taxes on income not earned in the US. Other countries do not. It's a great deal for corporations to invest overseas and not in the US. Why would any responsible (to the share holders) pay 39% to bring money back to the US to invest.
DeleteWouldn't it be a fairer arrangement to tax all income earned regardless of where it's earned at 15% vs 39% for US earned income? A us company only doing business in the US pays far more than any international corporation.
The only reason a corporation even cares about a tax rate is they must remain competitive with other companies in the world. Paying more in taxes is a cost of doing business. Either raise the price, cut expense (people, off shore more) or close the business because of lack of sales. Proof positive is all the manufacturing over seas. Started with 1 company and all others follow to reduce prices, bigger profits. Both demanded by the consumer and share holders.
Corporation taxation is a joke when you really think about it. Tax the business they pass it to the consumer. Seems like people just don't understand the concept of cost of sales as the mantra of tax business beats loud and clear by the government and media.
We are not a third world country yet and our standard of living is higher than most countries. Should the government protect the standard of living via overseas tariffs to level the playing field? Should the government be restructuring free trade agreements to fair trade agreements where imports equal exports or tariffs are added to equalize labor costs?
Corporations ARE like people in that they don't want to pay tax. I still don't believe that American corporations pay anywhere near the stipulated tax. We did not lose our manufacturing base because of taxes, we lost it because of cheap labor and competition. Personally, this has become one of those things I don't really care about. I would not put up a fight to end corporate taxation, but I will not convince myself that somehow jobs will fall like manna from heaven if only we end corporate taxes. it would be nothing more than another pocket stuffer for the wealthy. Within 12 months, every benefit of eliminating taxes would be arbitraged out of the market and the only thing that would change would be year and profit statements.
DeleteI absolutely think the government should protect our standard of living, but again, if we impose tariffs to make imports equal to exports, it is an acknowledgement that we don't want pure competition and it seems to me that this is precisely the kind of thing that constitutionalists would not want to see happen. My Marxian view is that sometimes, in order to have real competition, you need to handicap those with distinct advantages. But, going back to what I was saying before, we can't have it both ways. If we want to protect our workers against cheap labor, then we are circumventing the spirit of free markets. Sometimes the invisible hand gives you a middle finger and you need to reinvent yourself because someone will do your job cheaper. Ultimately, I think you and I and a lot of other people agree it would be in our best interest to protect our middle class by not letting corporations exploit a wage gap. But when we do so, we are tacitly or otherwise asking the government to interfere with the free market.
As I said before Max, corporations pay no tax. It's a cost of doing business and built into the price of goods and services.
DeleteNo business eats the tax and says no problem.
The reality is Free Trade is a zero net effect on jobs. For every job created in our trading partners country, 1 job is destroyed in the US.
Look at the profit margins of the international companies, their profits are not enormous as some say but in the normal range.
We are quickly becoming a raw materials nation. We provide the raw materials, other countries manufacture goods to sell here.
Business exploiting a wage gap? Business off shores to remain competitive with foreign businesses. Without off shoring labor, many US based business would be out of business. See many people here buying a 10 dollar Made in the USA hammer vs. the 5 buck knock off made in China?
yeah, I understand the argument about business pays no tax, I just don't think it is an inflexible axiom that holds true at every level of taxation.
DeleteWhat is a "normal" profit range?
I agree on the last para, but that is the whole problem. The existence of a 5 dollar hammer from China doesn't mean anything until consumers here are given access to it free of tariff. It is an exploitation of the wage gap along with exploitation of the gap in standard of living and gap in what is deemed appropriate treatment of employees. In short, American workers have had a good run and everyone from consumer to politician has decided this must end in the name of.....freedom or something.
I just don't think it is an inflexible axiom that holds true at every level of taxation.
DeleteWhen it comes to corporate taxes it holds pretty steadfast.
I paid little in corporate taxes. At the end of the year, I emptied the account. Paid rent, extra to the utilities, phone company and then paid myself. Personal taxes were less than corporate taxes. January I loaned the company operating expenses at a reasonable rate to ensure payments were timely.
The travesty is the international companies deduct all expenses and offset overseas income to the breakeven point then bank the rest overseas as untaxed income til they invest it overseas or get a repatriation deal.
We get what we deserve for not looking at the labels and buying American which becomes more difficult as the years pass.
"We get what we deserve for not looking at the labels and buying American which becomes more difficult as the years pass."
DeleteYeah, I agree this is true, but I remember when reading gobs of Rand that to not buy the cheaper good was essentially to assault the gods of free markets. Imbedded in this is a reality of what happens when pure consumption becomes the most important thing. What is slowly happening in third world countries is that people are starting to earn relatively more money and buy more stuff, which creates more jobs and so on and so on. We have broken that chain here. However, for a long time we did thrive as a relatively closed market. We have been sold a mantra, most recently by Obama, that we must open our doors in order to remain in the global market. The problem though is that we aren't producing anything here that we can sell elsewhere. Gonna take a lot more than tax breaks to fix that
Last week, President Obama said Sen. Elizabeth Warren (D-Mass), noted for her staunchly progressive views, was "absolutely wrong" in her opposition to the trade accord. But even Sen. Ron Wyden (D-Ore.), who was an original author of the proposal, ended up siding with Senate Minority Leader Harry Reid (D-Nev.) in the opposition, apparently refusing to push it through unless Republicans agreed to move on other Democratic proposals. This reportedly "infuriated" some GOP senators who felt he was changing the stakes of the vote at the last minute.
ReplyDeleteIn the end, only one Democratic senator voted for the fast-track bill — but everyone has found someone to blame. "The level of aggressiveness [from the White House] is unprecedented," said Sen. Richard Blumenthal (D-Conn.). Read more on the bubbling tensions at Politico. —Kimberly Alters
Well, if I was President of the United states I certainly wouldn't be arrogant. I would just be my normal self. Of course I would require you peons to address me as His Illustrious Excellence, and to bow in my presence, but hey, that's the least you could do in the overwhelming aura of such magnificence, isn't it? Stinking Constitution, I don't need no stinking Constitution! My word would be immutable law. Other than that nothing would change.
ReplyDelete