Thursday, March 24, 2016

WHO Is Spreading " Free Trade" Propaganda?

It is interesting to read how, in the wake of Bernie Sanders and Donald Trump's stances against "free trade",  we've seen a veritable blitz of favorable PR to support it in media like the Wall Street Journal, The Financial Times and The Economist.  As one studies these contributions one beholds an  abundance of unproven, unsubstantiated tropes and canards which all serious citizens are expected to swallow  - hook, line and sinker.

One of these is the repeated baloney - such as in a recent WSJ piece on trade - that "trade agreements always have a small net effect on jobs" . This from C. Fred Bergsten of the Peterson Institute for International Economics.  Incredibly, this guy admits at the same time "we're running large trade deficits and those do cost a lot of jobs". Really? Who'd have ever thought?

Another canard added in the WSJ article is that:

"Economists at the Peterson Institute think that Trans Pacific Partnership ...would barely affect American employment"  and "jobs created by greater access to Asia -Pacific markets would likely be offset by jobs lost". What total codswallop!

For a reality check, based on the existing leaks  AND  according to Public Citizen, we know that the "TPP could ship millions of good-paying US jobs overseas.  We also know that the TPP could increase the costs of health care and medicine, while hurting health and safety standards. And we know that the TPP could make corporations even stronger and undo what few reforms are left on Wall Street."

What these purveyors of bollocks like at the Peterson Institute always neglect to mention is that in order to retain or increase the availability of high productivity jobs that pay superior wages massive capital investment has to made in the U.S. by the same national and multinational corporations that stand to benefit.  It cannot be done by a few nips at the margins, or by tossing a few dried bones to the Plebes in the form of special job training, trade adjustment assistance or other public welfare spending.

No, this is not enough. It flat out isn't. Even the center right Economist ('Free Exchange', Feb. 6, p. 69) admits concrete benefits to workers "are visible only after decades".  This is inevitable in the face of de facto competition from the two billion low wage workers in Asia to whom we in the U.S. are already hostage. This is before the TPP has even been approved by congress to add millions more additional job losses  As one WSJ letter writer recently put it (Mar. 21, p. A13): "We are no longer abandoning industries and replacing them with new ones it's a whole class of people who are being let go".

Generally these people hail from manufacturing and are easily replaceable with trade pacts that favor much lower cost labor in the Asian or Latin American theaters. It's a case of capital betraying labor over and over.

Who the hell are these Peterson Institute people anyway? Well, a check shows their Institute is named after one Peter G. Peterson, a billionaire who has been aggressively behind the 'Fix the Debt' bunch to cut Social Security and Medicare. See, e.g.

 While the Koch brothers get a lot of bad press - as much as can be expected from the U.S. corporate media - Peterson flies under the radar on account of his:

"influence in national politics stemming largely from his ability to make his interests appear eclectic and nonpartisan. That allows intellectuals and luminaries of all political creeds to feel comfortable in the Peterson Foundation's capacious shade, displaying their public spirit as if it's a perk of eminence. The foundation's advisory board includes as members former New York Gov. Mario Cuomo; Facebook Chief Operating Officer Sheryl Sandberg; former Secretary of State George Shultz (a Republican) and former Treasury Secretary Robert Rubin (Democrat); former Federal Reserve Chairman Paul Volcker; and "60 Minutes" correspondent Leslie Stahl."

Kind of a mini-universe of Neoliberal elites beheld at once glance, eh? And you never thought both Ds and Rs were two sides of the same corporate coin?  To read more about the influence of Peterson, check out:

SO no wonder the same elites have become powerful mouthpieces for free trade. Let's also bear in mind here that the bulk of trade agreements confer huge benefits to lower wage nations via trade deficits amassed by the richer ones - like the US of A. Hence, there is from the start an ongoing Pareto based pressure to cut jobs in the wealthier nation to even things out and also to lower over time the purchasing power of the dollar.

How did we get to this sorry stage anyway, or groveling before these free trade moneymen and marketeers?  Well, by a number of mutually reinforcing dynamics that ultimately synergized....then on doing so, cluster-fucked the majority of people on planet Earth! Let me recite a few of the major influences below:

1) The extirpation of the Bretton Woods agreement

Bretton Woods was not perfect by any means but it did preserve human balance within a global trade network, i.e. without sacrifice to private monopoly or multi-national power. This was first recognized by President John F. Kennedy in late 1962 and 1963. Once Bretton Woods was killed, private power as wielded by unchecked multinationals could grow to rival the power of states.

People under the new WTO-GATT-NAFTA etc. hegemony were thereby rendered pawns and serfs to global capital.

So, one could say that within 10 years of JFK's assassination, the global tableaux had been set for eventual market domination of the world. With markets now substituting for genuine citizen action and democratic initiative. How better to achieve this than to mutate everyone into a "consumer" or herd animal? (Always re-stated in media reports, as opposed to the term "citizen" which gave the elites headaches. I mean how could a future serf be a citizen?)

2) Massive de-regulation, vastly reduced tax revenues

This likely began in the Reagan years, with the Bank Holding (De-regulation) Act of 1984, which sped the way to speculative excesses resulting in travesties such as the S&L scandal in the late '80s. It also preceded the securitization of U.S. mortgages to make them easier to offload to global speculators - while removing them as liabilities from banks' books. Thus, a million or so mortgages were now compiled into a vehicle known as "collateralized mortgage obligation" and sold off to global investors in bonds. In effect, unless people paid off their mortgages rapidly, they became hostage to speculative markets.

The reduced taxation likely emerged after a certain Neoliberal elite (probably a cabal of central bankers, politicos, investment firms and financial renegades)decided that from now on the economic commons was on its own, and would no longer be supported via taxation, but by leveraging DEBT. They thereby jacked up the rates on everything from mortgages to credit cards. Meanwhile, the inadequacy of state taxation meant college fiscal support from states would be cut leading to colleges having to increase tuition etc. on their own to compensate for the loss of their tax support.

3) The circulation of "free market" Bullshit by Think tanks and the Media

This helped to instill false consciousness until almost every halfway intelligent American began blabbering about the need for low taxes based on a free market myth that was confabulated in wingnut thinktanks, then fed to the corporo-media to publish in syndicated columns (e.g. by  Robert Samuelson, George Will, David Harsanyi and others)

In his book, False Dawn, John Gray documents how the so-called "free market" is a total set of bollocks and codswallop. In America, markets have almost never been free - and even up to a few years ago, other nations (e.g. Canada, Germany, France) were harping on the U.S. for preserving high tariffs for incoming goods from outside markets. As Gray puts it (p. 104):

"American government has never observed a rule of non-interference in economic life"

Thus, the claims of laissez-faire going hand in hand with the need for low taxation and "freedom" and "liberty" and being circulated for two decades and more is total horse shit. It is an invention of mainly right wing think tanks and their hacks, ensconced in places like the Heritage Foundation, the American Enterprise Institute, the Hudson Institute, the Hoover Institute, the CATO Institute and their many offshoots and clones. As Gray puts it (p. 105):

"In this Right wing rendering of the American creed a surreal inversion of history has been quietly accomplished".

And also, way too many have bought into this bullshit!

4) The metastasis of the "free market" myth to the global level

This is above all the basis of the current paradigm for leveraged debt, and rendering all peoples as nothing more than corporate serfs.

Here is the brutal, unvarnished truth for those who can take it and as first articulated by Chrystia Freeland (Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else.):  multi-national corporations backed by plutocrats  would become more powerful than nation states and hence be able to leverage almost total power to their benefit.  Über Plutocrats  no longer feel any civic allegiance or social obligation to the average citizen. While in decades past, the massively wealthy acknowledged on some level the need to contribute to the welfare of the whole society via just taxation, they no longer believe so. They now merely seek to compound their own wealth - and whereas before,  in earlier decades -  they used that wealth (at least part of it) to create jobs for their fellow citizens, they now have abdicated the role of Job creators and prefer instead to increase their capital by hedge fund investing, buying art or blood diamonds, or spending tens of millions to purchase influence in political campaigns.

What is the economic basis for this malignancy? Author John Gray (False Dawn, The New Press, 1998) put it in the context of misapplied Ricardian comparative advantage. Thus, deliberately applying Ricardian comparative advantage EXTERNALLY (where it was never intended to be applied) as opposed to internally. As Gray notes:

"Ricardian comparative advantage applies internally in trading nations, not externally between them. It implies that in a regime of unrestricted free trade the allocation of resources will be maximally productive within each trading nation and thereby, by inference, throughout the world. Insofar as the world then becomes a single market, efficiency and productivity in every country will be maximized."

In other words, David Ricardo would never have remotely conceived of allowing American furniture, clothing, toys, and other (e.g. software) products to be manufactured in China or India. He'd have regarded that as an economic abomination, and further he'd have warned that the country so foolish to do such a thing risked the health and integrity of its own markets, as well as its citizens welfare. He'd have added that those moving such manufacture outside and thereby lowering wages and benefits inside risked demolishing capitalism in said nation - by virtue of the fact that citizens-workers would no longer be able to spend as much on the consumer goods distributed- hence it would slow GDP. We'd have a crisis in aggregate demand which is precisely what we behold now. Yet, under G.A.T.T., NAFTA etc. that's exactlly what we've done.

Indeed, in one treatise ('On The Principles of Political Economy and Taxation') Ricardo observed:

"the fancied or real insecurity of capital, when not under the immediate control of its owner, together with the natural disinclination every man has to quit the country of his birth and connections, and entrust himself with all his habits fixed, to a strange government and new laws, checks the emigration of capital".

 Thus, Ricardo perceived the innate preference of nations (that are sane) for their own laws, culture, customs and economic benefit - which perception would naturally limit the flow of capital outward for other extraneous nations' benefit. The problem is that the global Plutocrats felt no such allegiance, becoming instead the equivalent of economic traitors and terrorists. Thus, in order to earn more profit and do it globally, they shifted jobs, markets to the cheapest place with the cheapest labor costs and least regulations. It was win-win for them.

As this process accelerated, and more and more nations were ground under in the global  'race to the bottom', the plutocrats' wealth increased.

Of course, nonchalant citizens have played into this as well, and aided and abetted the plutocrats' goals. They have done this by over-reproducing, and thereby creating a global over supply in labor.

On account of procreating a vast surplus labor pool, people - ordinary citizens - have also procreated themselves out of jobs, including decent paying jobs with decent benefits. Now, with so many competing with the same skill sets across the globe, the plutocrats can basically pick and choose winners and losers, as well as 'winner nations' and 'loser nations'. As we approach a global populace of some 8 billion the situation will only get worse - with only Peak Oil or a runaway greenhouse effect to slow it down. In each case, up to two thirds of humanity is likely to be extirpated (see also ) which means in any new "rebuilding" world - assuming such is even feasible, the plutocrats - if any remain- will not be able to leverage labor against itself.

Recall that it was Vladimir Ilyich Lenin ( 'Imperialism, the Highest Form of Capitalism', 1916) who first sounded the warning that mobile finance capital was designed to continually leverage labor to the lowest common denominator.

Perhaps, the best thing people across the globe can begin to do to assist themselves is to cease having kids beyond maybe one per family. To do otherwise is to continue to procreate a surplus labor pool that ensures poverty and destitution for many decades to come .....and which no politico, no matter how clever ....will be able to repair.

See also:

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