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pampango

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Hometown: Xenia, OH
Member since: Tue Sep 19, 2006, 04:46 PM
Number of posts: 23,104

Journal Archives

Reich: Why Either Trumpís and Cruzís Tax Plans Would Be the Largest Redistributions to the Rich

in American History

The tax cuts for the rich proposed by the two leading Republican candidates for the presidency Ė Donald Trump and Ted Cruz Ė are larger, as a proportion of the government budget and the total economy, than any tax cuts ever before proposed in history.

Trump and Cruz pretend to be opposed to the Republican establishment, but when it comes to taxes theyíre seeking exactly what that Republican establishment wants.

Trumpís proposed cut would reduce the top tax rate from 39.6 percent to 25 percent Ė creating a giant windfall for the wealthy (at a time when the wealthy have a larger portion of the nationís wealth than any time since 1918). According to the Center for Tax Policy, the richest one tenth of one percent of taxpayers (those with incomes over $3.7 million) would get an average tax cut of more than $1.3 million each every year. Middle-income households would get an average tax cut of $2,700.

Bottom line: If either of these men is elected president, we could see the largest redistribution in American history from the poor and middle-class of America to the rich. This is class warfare with a vengeance.

http://robertreich.org/post/141444893405

That's 'populism' right-wing style. Go after Mexicans, Muslims, Chinese. They are the OTHER. While giving our 1% (apparently they are part of US?) what they want.

How convenient that the 'anti-establishment' republicans think that 'trickle-down' economics works for the middle class no matter how often it has failed. Or they are proposing what the 1% wants after all and don't actually care about average Americans.

Surprise! Surprise!

"... the nationís mayors - most of them Democrats - remain overwhelmingly

committed to free trade in general and the Trans-Pacific Partnership in particular.

Mayors Rise to the Defense of Free Trade

Mayors and private sector leaders in almost all of Americaís major metropolitan areas believe they can accelerate growth and expand opportunity by deepening their integration into the world economy, not retreating from it.

Particularly among Democrats, this metropolitan globalism has opened a chasm between the partyís local and national leadership.
In the presidential race, Bernie Sanders has unreservedly denounced free trade deals like the 12-nation Trans-Pacific Partnership that President Obama completed last year; Hillary Clinton has feebly bent in that gale, abandoning her own earlier support for the Pacific agreement. Far fewer congressional Democrats than in the 1990s are backing free trade, too.

But the nationís mayorsómost of them Democrats, especially in the larger citiesó remain overwhelmingly committed to free trade in general and the Trans-Pacific Partnership in particular. The U.S. Conference of Mayors has officially endorsed the Pacific pact, and it has drawn enthusiastic praise from big-city Democratic mayors such as Atlantaís Kasim Reed, Chicagoís Rahm Emanuel and Tampaís Bob Buckhorn.

Blocking trade agreements, Cabaldon notes, wonít stop the changes powered by the unrelenting forces of technological advance and global competition. ďThe notion that you can just freeze your metropolitan economy in place right now, or the way it used to be, is just a fiction we canít live with,Ē Cabaldon says. ďSo itís a question of what are the tools we have to make the best of the opportunities, reduce the suffering from the dislocation and then figure out how to compete.Ē

http://www.theatlantic.com/politics/archive/2016/03/clinton-sanders-free-trade/475113/

The secret of Trump's RW populist success is that too many people blame our problems on OTHERS

rather than our own 1% - who look amazingly like Trump himself. Like RW populists George Wallace (though a Democrat he certainly qualifies) and Pat Buchanan before him, he appeals to the racist/nativist streak in too many people.

We trade less than any country in the world (other than 2 small African ones) but what is the cause of our economic problems - trade according to Donald. We have a lower percentage of immigrants than Canada, Germany and Sweden, but what causes our economic problems - too many immigrants according to Donald.

The 'beauty' of Trump's RW populism is that while he distracts us with scapegoating of foreigners - both the ones who immigrate here and the ones who stay home and work - he preserves what really enriches our 1%: regressive taxes (his plan would be more 'trickle-down' tax cuts for the rich), weak labor unions (Donald loves him some 'right-to-work') or a flawed safety net (OK, while his plans are 'oddly' vague they might not be as bad as your typical republican's).

Canada, Germany and Sweden would tell Donald (if he cared what they thought which he doesn't) that trade and immigration do not hurt the middle class as long as you have high/progressive taxes, strong unions and an effective safety net. Of course, if a country does not have those things the domestic economy (75% of the US economy has nothing to do with trade) does not benefit the 99% as well. Without them the 99% benefit little from trade or from the domestic economy. (FDR would say that was the flaw in Coolidge's and Hoover's high-tariff, no-trade policy in the 1920's.) And that is the RW populist secret that Donald protects with his "Look over there! Is that a foreigner taking your job?"

Like FDR Bernie would, I think, go after our 1% with higher taxes, a better safety net, legal support for labor unions and better regulation of corporations and the finance industry. Like FDR Bernie would see that with the benefits of domestic and international-linked parts of our economy being redistributed to all and not just the 1%, he would push for us to be more like Scandinavia in terms of how we negotiate and trade with the rest of the world.

We trade less than every country in the world other than Sudan and the Central African Republic.

If trade is the cause of our problems, why does it not cause worse problems in progressive countries that trade 2-3 times as much as the US does?

I doubt that our relatively minuscule level of trade is going to change no matter who gets elected in November (although there is a chance that Trump will trash the whole system) but we will still blame our problems on trade rather than on regressive taxes, 'right-to-work' or an ineffective safety net. And the 1% will keep laughing at us behind our backs. They know what would help the middle class and hurt them and it ain't restricting trade. (Germany, Sweden and Canada can attest to that, too. Trade ain't the issue; it's taxes, unions and safety nets.)

The US (2%), Canada (18%) and Italy (3%) gained manufacturing jobs from 1991-2000.

They were the only industrial countries to gain manufacturing jobs during that decade. The UK lost 31%, Japan 15%, South Korea 17% and Germany 24%.

In the decade from 2001 -1010 things changed. No developed countries gained manufacturing jobs. The smallest loss was in South Korea at 5%, Germany 10%, Canada 22%, the US 24%, Sweden 27% and the UK 28%.

From 1991 to 2012 the US was in the middle of the rankings of manufacturing jobs losses (while manufacturing output soared in all countries). The biggest loser was the UK at 51%, followed by Sweden at 39%, Japan at 33%, Germany and France at 30%. The US came in at 24% followed by South Korea at 20%, Italy 11% and the best was Canada which only lost 6% of its manufacturing jobs from 1991 to 2012.

https://www.fas.org/sgp/crs/misc/IN10109.pdf

Would Trumpís trade threats work? Many experts are skeptical

Donald Trump has promised to shred Americaís trade deals and impose fines on imports from Mexico and China. ... By attacking trade agreements, the Republican presidential front-runner is channeling the belief, common among many of this yearís angry voters, that foreign competition is robbing American jobs and shrinking wages.

Levying those tariffs would probably require congressional approval. It would violate commitments the United States made when it joined the North American Free Trade Agreement in 1994, and the tariffs would trigger retaliation from Mexico.

No problem, Trump says. Heíd rip up NAFTA. He could exit the agreement provided he gave Mexico and Canada six monthsí notice. Experts differ on whether Congress would have to authorize this.

If Trump replaced the low tariffs provided by NAFTA and World Trade Organization rules with punitive tariffs on Mexican and Chinese goods, he probably would ignite a trade war that would raise prices for Americans and cause diplomatic havoc. Economists recall that the 1930 Smoot-Hawley legislation, which raised tariffs on imports, inflamed trade tensions and worsened the Great Depression.

http://www.dailynews.com/government-and-politics/20160313/would-trumps-trade-threats-work-many-experts-are-skeptical

Something tells me that Trump will not wait for congressional approval. Krugman thinks that Trump may well follow through on his threats "as part of a reign of destruction on many fronts."

Krugman:if globalization makes an effective union movement impossible thatís a big problem. Does it?

This is mainly a data note to myself. But with trade becoming an issue in the election, I thought it might be useful to take on one myth: the supposedly necessary relationship between globalization and the decline of organized labor.

You hear this myth from both sides of the political spectrum ó from conservatives asserting that unions became unsustainable in the modern economy, and from protectionists on the left arguing that free-trade agreements killed labor.


Background: I am very much in the camp that considers organized labor an essential force for equality, both because it gets higher wages for ordinary workers and because itís a political counterweight to the power of organized money. So if globalization makes an effective union movement impossible, thatís a big problem.

But thereís evidence close at hand that the link is far from proven. More on this when I get around to a longer piece.

http://krugman.blogs.nytimes.com/2016/03/14/a-note-on-globalization-and-labor/

It will more interesting to read the future 'longer piece' on this but his preliminary expression of doubt about the link between the two seems consistent with the strength of unions in countries that are more 'globalized' than the US - like Germany, Canada and Sweden - and the weakness of unions in the few countries that are less 'globalized' than the US.

Krugman: "The case for TPP is very, very weak. ... if a progressive makes it to the White House,

he or she should devote no political capital whatsoever to such things."

A Protectionist Moment?

Furthermore, as Mark Kleiman sagely observes, the conventional case for trade liberalization relies on the assertion that the government could redistribute income to ensure that everyone wins ó but we now have an ideology utterly opposed to such redistribution in full control of one party, and with blocking power against anything but a minor move in that direction by the other.

But itís also true that much of the elite defense of globalization is basically dishonest: false claims of inevitability, scare tactics (protectionism causes depressions!), vastly exaggerated claims for the benefits of trade liberalization ... Iíve always been clear that the gains from globalization arenít all that great ... less than 5 percent of world GDP over a generation.

The truth is that if Sanders were to make it to the White House, he would find it very hard to do anything much about globalization ó not because itís technically or economically impossible, but because the moment he looked into actually tearing up existing trade agreements the diplomatic, foreign-policy costs would be overwhelmingly obvious. ... Trump might actually do it, but only as part of a reign of destruction on many fronts.

But it is fair to say that the case for more trade agreements ó including TPP, which hasnít happened yet ó is very, very weak. And if a progressive makes it to the White House, he or she should devote no political capital whatsoever to such things.

http://krugman.blogs.nytimes.com/2016/03/09/a-protectionist-moment/?_r=0

Thanks for this. Interesting that the labor chapter of the US-Peru FTA is a model

for what unions were endorsing for the TPP. Has the implementation of the labor chapter in the US-Peru agreement been effective since it took effect in 2009?

Krugman: Republicans and Trade Wars (much less respectful of international obligations).

Actually, a bit of background: establishment Republicans may talk free trade, but they are if anything more protectionist than Democrats in practice (although neither party is seriously protectionist these days.) Remember, it was Bush, not a Democrat, who imposed a WTO-illegal steel tariff, then had to back down in the face of European pressure. And going back, remember that Reagan, not Carter, imposed import quotas on Japanese cars.

The reason for this difference, I think, is twofold. First, Republicans are much less respectful of international obligations; it took a while for the Bushies to realize that trade rules apply to us, too, and that the EU is as big a trade superpower as we are. Second, thereís a level of cynicism, of willingness to play politics with foreign affairs, on one side that isnít matched on the other.

Which brings me to the latest fight. Romney declares with horror that Trump would start a trade war. His economics is all wrong, which is the main thing; but itís also worth noting that three and a half years ago Romney himself argued for exactly the same policies Trump advocates now, blithely dismissing the dangers:

ďIíve watched year in and year out as companies have shut down and people have lost their jobs because China has not played by the same rules, in part by holding down artificially the value of their currency,Ē Mr. Romney said.

Now, Romney could argue that the situation has changed ó as it has since 2010, when I was arguing for the threat of countervailing duties. Back then China was in fact engaged in harmful currency manipulation; these days itís bleeding reserves in the face of YUGE capital outflows (a trillion dollars last year!) that is, itís intervening to prop the yuan up, not hold it down. But thatís not the case Romney is making.

http://krugman.blogs.nytimes.com/2016/03/06/republicans-and-trade-wars/
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