Economy

Make sure to see Broder's look at Democrats and the trade deal announced last week.  His reporting skills are put to use in taking the tempreture of some key Democrats:

Levin said that the government in Colombia, which is allied with the United States in opposing the influence of Venezuela's leftist Hugo Chávez, must do more to curb violence targeted at union organizers. And Levin, representing an auto district, wants South Korea, which ships thousands of cars to the United States, to open its doors to American-made vehicles.

Nonetheless, both Levin and Schwab describe last week's agreement as "an important first step" toward rebuilding a bipartisan coalition behind a trade policy that expands the volume of shipments into and out of this country -- but that raises labor and environmental standards instead of degrading them.

That is what Levin calls "expanding the circle of those who benefit from globalization," a healthy step beyond the old and futile debate between "free trade" and "protectionism."

But there are some forces in the Democratic Party and elsewhere reluctant to abandon the old rhetoric -- or the old fights. Bloggers such as David Sirota and interest groups such as the U.S. Business and Industry Council condemned the new agreement and vowed to fight the issue.

Because most Republicans are on the side of liberalizing trade, the key question is how many Democrats will support trade agreements negotiated by a Republican administration. When I asked Rep. Rahm Emanuel, the chairman of the House Democratic Caucus, his answer was "maybe 60 to 90," substantially less than half the Democratic membership but perhaps enough to make a majority with Republican votes.

The sticking points with the President will be additional money for veterans' benefits, education and health care. The budget is 2% bigger than the President and he is hinting he might veto it, but House Appropriations Chairman David R. Obey (D-WI) hass a pretty good comeback:

"It's that 2 percent difference that makes him a president, not a king, and I don't plan on crowning him...I haven't had too many people grab me back home and say, 'Obey, why don't you come to your senses and cut cancer research?' That's what the president's budget has done for the past two years, and that's what it would do again."

Senate Budget Committee Chairman Kent Conrad (D-ND) makes the important point that Republicans couldn't even agree on a budget, and Democrats intend to do better, even working with a Republican President.

Rep. John Dingell questioned the logic of Senator Barack Obama's energy plan, specifically on his stance that federal fuel economy regulations have an effect on America's dependance on foreign oil. Dingell said:

“I will observe I admire Sen. Obama and his desire to focus on solutions,” Mr. Dingell said. “But — with all due respect, as the Sopranos would say — I would not travel to Chicago for the purposes of teaching people how to butcher hogs.”

Mr. Dingell said he supported Mr. Obama’s suggestion that the federal government help domestic car makers with soaring health-care costs. But in a news conference following his speech, the congressman said Mr. Obama’s suggestion that such aid be tied to improved fuel efficiency is “erroneous” and “wrong.”

The Washington Post weighs in with an editorial detailing the victories Democrats won in the new bi-partisan trade deal (read our statement here). 

While we should all be pleased with the spirit of this deal, it would be advisable for those wanting to garner votes to create a bigger context for the coming debate.  The data is very clear here - in this decade globalization has been very good for those with capital and for American corporations, but has not been so good for American workers and families. 

A vital strategic goal for those of us who believe in the benefits of liberalization must be to help our elected leaders come up with an agenda that successfully reverses the sluggish job growth and weak income and wage growth of our time.  To believe that the American people will accept the current way the economy is unfolding is niave.  Poll after poll, and the core economic data show that for about two-thirds of all Americans the economy is not what they want it to be.  They are losing faith that this century's global economy has the capacity to give them the opportunity and upward mobility all generations of Americans have to come to expect.  Making the American economy work for more Americans is one of the most important governing challenges of our time, and one NDN has been relentlessly focused on for the past several years in our Globalization Initiative.  

So in the days ahead I think it would be wise for those looking to build public support for this new trade policy to talk about what their strategy is bring greater prosperity to our workers and kids.  We've offered many ideas - raise the minimum wage, reform our immigration system, put a laptop in every backback, bring broadband to all Americans, fix our health care system so all Americans can have adequate insurance and good care, give our workers the option of card check, adopt the Speaker's innovation agenda, significantly increase funding for the teaching of science and math in all schools - the list goes on and on.  And it is time for once and for all to stop throwing out "TAA - trade adjustment assistance" as a sop that everyone knows isn't an adequate response to the realities we face today. 

The conversation about trade cannot happen in a vacuum.  Unlike the 1990s, globalization is neither seen to be, or is, working for a majority of Americans.  If the American people and their elected leaders are being asked to support greater liberalization, they must be told in clear terms what the strategy is to help them achieve the American Dream in a much more competitive age.  These conversations need to be linked.  And those looking to build public support for further liberalization need to get serious about offering not just a new trade policy, but a comprehensive economic strategy for America in the 21st century that helps ensure that globalization works for all Americans. 

Dr. Robert J. Shapiro, Director of our Globalization Initiative, and I just released the following statement. Feel free to comment below.

We congratulate Speaker Pelosi, Chairmen Baucus and Rangel, the White House and other Congressional leaders - including the New Democrats - for finding common ground and fashioning together a new approach to trade policy.

The agreement shows that this White House and the new Congress are capable of doing what the American people want them to do – come together and offer forward-looking, pragmatic solutions to the tough problems facing our nation today.

 

This new agreement creates a new and better framework for our trade arrangements, one that will put labor and environmental issues front and center in future trade deals, and no longer relegate these important issues to side agreements. This new path may allow America to once again be a leader in fashioning the new rules of the road for the global economy, a role that up until now has been neglected by the Bush Administration.

 

This new agreement will be remembered as an historic one if it leads the White House and Congress to forge a new national strategy that seeks prosperity for all Americas in this intensely competitive economic era. Even as the economy as a whole is well positioned to prosper in a time of globalization, too many Americans are struggling to get ahead. By undertaking the necessary governmental actions and making the needed investments in education, skills, technology, infrastructure and communities, America will be able to ensure that our workers and our kids the same broad opportunities that all proceeding generations have enjoyed.  

"Nearly 50 years ago, President John F. Kennedy advanced a new trade policy that cemented Democrats as the party of free and fair trade.  Today, we build on that tradition to announce a new bipartisan breakthrough for fair trade – where we expand opportunities for American businesses, workers and farmers.

Our economic future rests upon our ability to open new markets for U.S. goods and services so that we can continue to capitalize upon the innovative spirit of the American people.  We must also do much more to address the consequences of globalization and how many working families are faced with increased economic insecurity.

Free trade must be fair trade. For that reason, the inclusion of basic, internationally recognized labor and environmental standards in our trade agreements have been long-standing Democratic priority. 

Enforceable labor standards ensure that our trading partners abide by the most fundamental standards of common decency and fairness – prohibitions against child and slave labor, protection from employment discrimination, and the right for workers to form a union.

Similarly, protecting our planet is a core Democratic value and must be reflected in the core of our free trade agreements, not as a side agreement.

Last November, Americans voted for a New Direction, and that includes a right direction on trade – where labor and environmental standards are at least as valued as our financial interests. 

Today marks a new day in trade policy so that we can raise living standards in the U.S. and abroad, expand markets, spur economic growth and uphold strong labor and environmental standards.”

Steven Pearlstein has a thoughtful look at the new bipartisan deal on trade in today's Post.

Treasury Secretary Henry Paulson is going on offense in an attempt to prove that the U.S. is open to foreign investment. Citing the Dubai Ports World deal as an example of skepticism surrounding the issue, Paulson is reaching out. Today he spoke at a panel on the importance of attracting foreign investment capital, and is scheduled to head to St. Louis tomorrow to meet with foreign-owned firms.

Adding his weight to the issue, the President released a statement encouraging foreign direct investment in the U.S. today. The first from a president in 15 years (the last was issued by George H.W. Bush), it cites foreign investment as key to creating jobs, stimulating growth and boosting productivity in the U.S. Two interesting paragraphs from the statement:

A free and open international investment regime is vital for a stable and growing economy, both here at home and throughout the world. The threat of global terrorism and other national security challenges have caused the United States and other countries to focus more intently on the national security dimensions of foreign investment. While my Administration will continue to take every necessary step to protect national security, my Administration recognizes that our prosperity and security are founded on our country's openness.

...

My Administration is also committed to advancing free and fair trade in multilateral, regional, and bilateral negotiations. We will work aggressively to conclude the World Trade Organization's Doha Development Agenda negotiations and to secure congressional approval of the free trade agreements with Colombia, Panama, Peru, and South Korea. The prospects for the Doha Development Agenda negotiations to produce significant new economic opportunities, particularly in developing countries, demand that we do everything possible to reach an outcome that creates new trade flows and strengthens global development.

European leaders are working to ease Paul Wolfowitz out as President of the World Bank by offering a deal.  If Wolfowitz leaves soon, they say they will allow the United States to pick the next President, as has been tradition since the bank was founded.

Leading governments of Europe, mounting a new campaign to push Paul D. Wolfowitz from his job as World Bank president, signaled Monday that they were willing to let the United States choose the bank’s next chief, but only if Mr. Wolfowitz stepped down soon, European officials said.

European officials had previously indicated that they wanted to end the tradition of the United States picking the World Bank leader. But now the officials are hoping to enlist American help in persuading Mr. Wolfowitz to resign voluntarily, rather than be rebuked or ousted.

The goal, they said, is to avert a public rupture of the bank board over a vote, possibly later this week, to sanction Mr. Wolfowitz. Even if the vote is a reprimand, they said, it could effectively make it impossible for him to stay on.

And the WAPO talks about the how this current scandal could threaten future funding for the World Bank.

In addition to offering a critique of the US auto industry on its home turf, Barack Obama delved into his energy plan yesterday. The Detroit Free Press has a good article which covered his speech to the Detroit Economic Club, including a mention of why Obama chose to make the speech in Detroit (a decision which won him the endorsement of Michigan State Senator Hansen Clarke):

"I'm making this proposal ... because I don't believe in making proposals in California and giving a different speech in Michigan," he said.

More from Obama's speech:

"While foreign competitors were investing in more fuel-efficient technology for their vehicles, American automakers were spending their time investing in bigger, faster cars," Obama told a Detroit Economic Club luncheon at Cobo Center. "And whenever an attempt was made to raise our fuel-efficiency standards, the auto companies would lobby furiously against it, spending millions to prevent the very reform that could have saved their industry."

...

"Our goal is not to destroy the industry, but to help bring it into the 21st Century," Obama said. "So if the auto industry is prepared to step up to its responsibilities, then we as a country should be prepared to help."

As the Washington Post notes, however, Obama faces a tough position regarding his energy policy. As a Senator, Obama supports coal-to-liquids technology, a policy which angers environmentalists. Cathy Duvall, national political director of the Sierra Club, explains his situation further:

"Senator Obama right now is balancing two tensions. First off, he is a senator from Illinois, whose job it is to represent . . . one of the biggest coal-producing states in the country. On the other hand, he's also a presidential candidate and needs to demonstrate the leadership needed to move our entire country in the direction to tackle tough questions like energy independence and global warming."

For more information on NDN's coverage of the 2008 Presidential election, click here.