Bipartisan stupidity on trade

If there were ever a no-brainer, the promotion of free trade with Asia and the Pacific Rim – and particularly “fast track” authority for the President (any President) is it.  The imminent defeat of the President’s Pacific Rim trade initiative was the result of labor union intransigence, rightwing irredentism, leftwing lunacy and pure cowardice – not necessarily in that order.   It is hard to imagine a more perfect storm leading to a more absurd, damaging result.

It took some inside baseball in the House to make that happen.  Since Big Labor is predictably against free trade (preferring to preserve the status quo against fuller employment and productivity in the U.S.), Democrats have long sought ways to appease the beast.  The keystone of that effort is “trade adjustment assistance,”, by which the Government has the ability to offer training and other benefits to workers displaced by competition from imports.  Although Republicans have long been contemptuous of that program as a pork barrel sop to labor (which it is), it has been in existence for decades, and everyone knows it is critical to passing the fast track effort.  Unfortunately, even as President Obama was making herculean efforts to get House Democrats to vote for the packages, Nancy Pelosi turned on him.  She ultimately decided to join many in her caucus in opposing trade assistance for domestic workers, something they have supported since time immemorial, knowing that its defeat would doom the overall package.  And many ideologically pure Republicans joined the left wing Democrats.  The result was a lopsided loss for trade assistance and a win for wingnuts everywhere.  Which means fast-track Trade Promotion Authority is definitely in peril, if not dead.

This is a disheartening, wounding result.  It hurts all workers who are employed in making and delivering our products for export .  Just look at Ms. Pelosi’s California, which sent over $174 billion worth of goods overseas – including aircraft engines and aviation parts, telecom equipment, data processing machinery, integrated circuits,  not to mention wine and almonds and scrap metal.  Why don’t those workers get any consideration?  Six of California’s top 7 trading partners–Mexico, Canada, Japan, South Korea, Hong Kong and Taiwan–were part of this proposal.    Or what about Texas?  Texas exported $289 billion worth of goods last year, with almost half of that going to Mexico, Canada, and South Korea.  Do unionized workers at the Port of Houston count?  Does the OCAW care? But Texas’ 36-member delegation couldn’t see it.  Only 3 of 11 Democrats voted for the President’s proposal, and only 3 out of 25 Republicans supported the trade assistance proposal.  The other 30 were less interested in free trade with friends such as Australia, Canada, Mexico, New Zealand, Japan, South Korea and Taiwan (among other) than  in maintaining ideological or partisan purity.  We expect this kind of nonsense from D’s such as Lloyd Doggett, Gene Green or Sheila Jackson Lee, but from supposedly more forward-looking Joaquin Castro?  And on the GOP side, we would expect ideology to trump common sense in the person of Louie Gohmert (who even voted against fast track authority itself), but when did Pete Olson, Pete Sessions, and Michael McCaul leave the room?  Only six Texans should be cited for common sense:  Johnson, Cuellar and O’Rourke (Democrats) and  Barton, Brady and Thornberry (Republicans).

The truth is that this proposal offered one of the best ways to use our “soft power” to combat the ever-growing influence of China.  It is also the cheapest form of foreign aid that one can imagine, especially with respect to Mexico, where any aid to its economy helps to stem illegal immigration into the U.S.  The resounding defeat of this bill lays bare the dysfunction and stupidity of both parties.

As a side note, but one that may assume growing significance as we look forward to the next presidency, another disheartening (but not surpsing) facet of this controversy was Hillary Clinton’s craven silence while the proposals were being debated.  Candidate Clinton consistently dodged reporters and refused to take questions on many critical topics.  Her silence on the trade assistance bill leading up to the vote was cowardly.  After trade assistance authority went down to defeat, she said:  “The President should listen to and work with his allies in Congress starting with Nancy Pelosi, who have expressed their concerns about the impact that a weak agreement would have on our workers to make sure we get the best strongest deal possible,” she said. “And if we don’t get it, there should be no deal.”   Wow, talk about straddling barbed wire.  Here’s a personage who has been involved in national politics and policy for at least 25 years, including as a U.S. Senator and Secretary of State, and she bit her tongue until after the vote?  I’ll bet the man who appointed her Secretary of State really appreciated her post-vote advice. To observers who suggest it’s a good strategy for a Presidential frontrunner to avoid taking controversial positions, I say:  Yeah – and Nixon had an undisclosed plan to get us out of Vietnam.  If she’s like this as a candidate, we can only guess what she will be like as President.  We can’t say we weren’t warned.

Another warning from the mineshaft canary


We cannot send our own astronauts to the International Space Station, let alone bring them home, and we’re at the mercy of the Russians for transportation, but we’re on the outs with the Russians over their meddling in Ukraine, and these KGB graduates just managed to blow up another of their (unmanned) Proton-M rockets.  You wanna entrust your fellow-citizen astronauts to them?    

The only silver lining in this farce is the glaring light focused on the multiple failures of a feckless Administration and dysfunctional Congress.  We have “pressed the reset button” with a Third World autocrat who cannot and will not guarantee us reliable space transportation, let alone work with us for international peace and freedom.  We have starved our space program and other intelligent discretionary spending initiatives, such as infrastructure, air traffic control, and our national parks, as “too expensive” while failing to address the entitlements metastasis.   We have rearranged the deck chairs in the healthcare industry with a grandiose “reform” program, but simultaneously demonized risk-taking innovators.  We are more worried about abortion, gays, and immigrants “taking jobs” than we are about actually encouraging job creators. When are we going to get mad enough to force our elected officials to shed ideology in favor of things that work?

What matters in Texas?

Has Texas really sunk that low?  Is vaccinating the Lone Star State against the scourge of Sharia law really more important than addressing our education, transportation, and water needs?  Apparently so.  I didn’t know this until recently, but the Texas Legislature failed to pass a law last session prohibiting the application of Sharia law in this great State.  Our current Lieutenant Governor David Dewhurst, trailing in the polls against red-meat conservative state Senator Dan Patrick, felt the need to defend himself in their recent debate face-off for failing to shepherd through the Texas Senate a bill to prohibit the application of Sharia law in the Texas courts.  The Lite Guv contended he supported this measure “101 percent” and promised to appoint a new Committee chair next session in order to guarantee that Texans are not threatened with Sharia law anytime soon.

Yes, it’s true—S.B. 1639 was actually sponsored by Sen. John Carona, the chair of the Texas Senate Business and Commerce Committee, but it died in committee.  It died because, among other things, some of our legislators woke up long enough to realize that never, ever in Texas’s history had Texas courts deferred to Sharia law, and the need for this extra ounce of prevention seemed remote.  Ironically, Sen. Carona’s 100 percent true-to-Texas hostility to Islamic jihadist influence was apparently at least 1 percent short.  Carona lost his re-election bid in the Republican primary to an allegedly more-conservative candidate.  Now, regardless of whether Dewhurst or Patrick (or, heavens, the Democratic nominee Leticia Van de Putte) wins, the Business and Commerce Committee will have a new chair in the next session.

The wonder is not that there are one-off loonies in Texas who promote such legislation; the wonder is that people who know better are forced to pretend to support looniness or risk losing.  Witness Dewhurst, who will probably lose the runoff election anyway.  What if he had just said, “This is asinine.  We have better things to do than worry about Sharia law suddenly infecting our courts.  This is all of a part of my opponent’s general wackiness, including his concern that illegal immigants are introducing leprosy into Texas.  We need to focus on keeping the ‘Texas Miracle’ in place – which means meeting our education, water and and transportation needs for the next 10, 20 or 50 years.  Anyone who doesn’t focus on the important issues is hurting Texas.  Badly.”

I guess I’ll never be hired as a speechwriter, at least not by a Texas Republican.  Because I cannot find a single Texas GOP officeholder or candidate who talks that way.  That includes Dewhurst, whose nod to education in late January was to opine that, when one takes into account the cost of living, “we are paying our teachers a very fair salary.”  Not true.  Texas teachers are paid, on average, about 87% of the national average.  Even taking into account Texas’ lower overall cost of living, we would have to give every teacher in the state a 10% pay raise just to hit the national average.  Even more shocking, and even after the Legislature partially restored funding cuts from two years earlier, a widely-publicized study by the National Education Agency reckons that Texas spends $8998 per student, a 5 percent decrease from per-student funding of $9,462 in 2010-11. Yes, we all know that throwing more money at something doesn’t necessarily solve it.  But we’re spending less, not more. And that’s in a state which is flush economically.  We are raising a whole generation of children – not just in the Rio Grande Valley, but in the cities and towns throughout the State —   who are less literate than their peers in other states.  Burger flippers, yes.  Rocket scientists, not so much.

The same dearth of leadership is evident with respect to our critical water problems.  One statewide officeholder who touched on our water problems in a serious way is retiring from public office.  Susan Combs wisely decided that even a West Texas rancher was not conservative enough to win again, but in January she pointed out that Texas is facing a long-term water emergency.  (Yes, “emergency” is the word we normally apply to short-term problems, but here, it applies to both.)  Too bad the candidates for Governor and Lieutenant Governor haven’t taken note.  Abortion is much more important.  For example, in an interview on WOAI 1200 a few months ago, our current Attorney General (and still heavy favorite to be our next Governor) Greg Abbott spent more airtime on abortion and voter ID than these important issues.  Even though his friendly interviewer tried to ask him about water issues, Abbott’s spiel was focused on pointing out that we shouldn’t use the Rainy Day fund to solve our water problems.  OK, then, but what did he propose?  Nothing.

Perhaps we’re being unfair, and Attorney General Abbott really is interested in education, transportation and water, but that interview was just too short to get to the important stuff?  Nope.   Check out, where the candidate for Texas’s highest office lists key issues.  None of these three make the top 10.  They’re not even listed!  What’s the No. 1 issue?  You guessed it – ObamaCare.  What’s No. 2? – the Second Amendment.  You cannot find anything on education, water, or transportation.  (I guess we should be grateful that stopping human trafficking made it to tenth place.)

As for Sen. Patrick, who is widely anticipated to beat Dewhurst in the GOP primary runoff for Lieutenant Governor, his contribution on education seems to be an effort to re-work something called CSCOPE.  The details of this are fairly arcane, but Sen. Patrick seems to think that CSCOPE was a thinly-veiled effort to indoctrinate children into a left-wing, fifth-column agenda right under the noses of God-fearing Texas parents.  OK, once again, we know what he’s against, but what is Sen. Patrick for?  When asked by the Collin County Conservative Republicans “what do you want to accomplish?”, this is what he said:

“There are many conservative issues that I will take action on that have not passed in the last decade. I will pass legislation to secure the border, end magnets that draw illegals to cross our border, pass school choice, lower property taxes, repeal or reform the franchise tax, pass campus carry, protect life and marriage, reduce transportation debt, end the diversions from dedicated taxes and fees to other areas of spending, reduce the 21 vote rule to 19 and not appoint half the Democrats to be Chairs of Committees as has been the long practice.”

So the border is No. 1 and No. 2.  What refreshing candor.  Also, we can at least credit Sen. Patrick for being aware that education and transportation are issues, although it’s hard to tell what he is proposing to improve education, a labor-intensive industry where recruiting and retaining good teachers is critical, and even harder to tell just what more “school choice” will do for students if all the schools are underfunded.  It is also hard to tell just how lowering property taxes and reducing transportation debt will do anything about fixing our roads.  As for what Sen. Patrick “hopes to accomplish” in dealing with our water crisis, he offers – nothing.

The bottom line is that we Texans are enjoying good times, right here, right now, but if we don’t spend some money while we’re flush on upgrading our education system, providing for our water needs, and building and maintaining roads, that miracle will become a mirage in the rearview mirror.  Ronald Reagan (who by today’s standards would be condemned as a backsliding liberal) spent more money on California’s system of higher education than anyone, and California is reaping the benefits even now, all under a Governor once called “Moonbeam.”   Laugh all you want about those kooks in Cali, but they are better positioned for the 21st century than we are, by a long shot.

Ronald Reagan and Jerry Brown qualify as hardheaded realists; Greg Abbott and Dan Patrick are hardheaded ideologues.   We are about to digest the bitter fruits of their willful ignorance.  But at least it won’t be under Sharia law.

Cheating the poor

I am sure that Treasury Secretary Lew and President Obama are serious about raiding retirement plans that are “too big”, and discouraging “the wealthy” from avoiding taxes by saving. (Nevermind that the contributions and any accumulated increases will be taxed eventually anyway when withdrawn.) This latest initiative to discourage large savings means that many “average hard-working Americans” allegedly so beloved by the Citicorp alum and the President will be significantly harmed by these purported guardian angels. Many firms have plans that include significant matching contributions into the employees’ retirement plans. Some or all of that match is required in order for the bosses – a/k/a “the wealthy” a/k/a “the 1%” — to max out their contributions. Many firms match dollar-for-dollar the first 4% of contributions by the employees. So a $40,000 per year employee who puts $1,600 into a retirement plan doubles his or her retirement plan balance overnight.
Once the existing rules are thrown out and all promises are retracted, the bosses will stop contributing for themselves, and the matching contributions to their average hard-working employees will disappear.
Am I wrong?

Simpson-Bowles, you fools!

The sequester is an issue only because the President has consciously refused, throughout his four years in office, to propose any entitlement reforms.  Can anyone name a single entitlement reform that President Obama has specifically advocated, in public, and made even a token effort to implement?  (Please, don’t count the phantom savings that we will never see from purported healthcare reforms.  Even the most ardent apologists concede that the short-term truth is clearly the opposite.)

Since nearly 60% of the budget is off limits, the sequester hits even harder.  And the President has compounded the folly by making no effort to direct these cuts at non-essential services, instead preferring that they fall on the most useful ones, thereby wreaking maximum inconvenience on ordinary citizens.  Can it really be that the cuts at the TSA need to be at the airport scanning personnel level?  We couldn’t make a few cuts at the handbook-writing, convention-planning level?

Can it really be true that the President and Congress cannot find 6 percent savings in all discretionary spending by a Government that expands nearly that much year after year?  Or, to be more rational about it, that we cannot find 2.5% savings across the entire budget, or just half of the annual increase?

What we have seen, and is still playing out now, is politics, not responsible public policy.  The sad thing about this is that it’s not even good politics.  Had the President gone to the American people in late 2009 and, to steal a quote, asked everyone to “eat our peas” — by adopting Simpson-Bowles or something very close to it – the country would have begun a real economic recovery, and he would have been easily re-elected in 2012, with a higher percentage of the popular vote, not to mention avoiding the disastrous 2010 Tea Party takeover of the House.

It’s still not too late.

Simple explanation–why there aren’t more jobs

Let’s put this in terms that even an economics professor can understand:

Why is the recovery so anemic? Why is the employment-labor force ratio hovering around 58 ½ percent, instead of 62 ½ percent as it was until around 2008? In other words, why are we 9 or 10 million jobs behind where we should be if the same proportion of the workforce were employed as was normal until just 5 years ago? Why is it that, despite the Fed giving away money and loans available at the lowest rates in history, companies are not taking risks or expanding jobs here?

Back in late 2008 and early 2009, in an economic hailstorm, when the job creators in the private sector hunkered down awaiting the initiatives of the incoming Obama Administration, they expected tangible steps to jumpstart the private economy. After all, that’s where jobs are created. What did they get? The Administration’s first priority was health care reform that created immense uncertainty that lasts to this day – excepting only the absolute certainty that labor costs would increase. Added to that were new reporting and compliance costs in other areas of endeavor, so that enterprises could “prove” to the government’s satisfaction that they were not violating various laws and regulations. Added to that were measures that gave preferences to our most inefficient industries, whether in the form of wealth transfers from shareholders and investors to the ossified automobile industry, or from all taxpayers to the incredibly inefficient solar and wind industries peopled with Administration cronies. And did we forget the stimulus package trumpeted as “infrastructure” that was no such thing? To top that off, the President dished out some serious demagoguery over the airwaves against “wealthy fatcats” – never mind that milllions of small business owners qualify as “the wealthy” in his lexicon.

Despite incredibly low interest rates, the risk-takers aren’t buying. If you are the CEO of a Fortune 500 concern, are you going to gear up to hire more Americans and suffer more mandates – not just the ones you know about, but the ones you cannot yet imagine? Not likely.  The Fortune 500 companies aren’t borrowing, and if they are, they are acting rationally by investing overseas. And they are sitting on wads of cash, much of which they cannot even repatriate to the U.S. in the form of dividends to U.S. shareholders. If you are the owner of a small company, are you going to take risks by expanding?  No, your first priority is to cut overhead, not increase it; your second priority is to stay under the 50-employee limit so you don’t run into the Affordable Care Act.

There, does that explain it?

After four years, it’s time — at long last, and having been safely re-elected – for the President to own the consequences of his foolhardiness and (we hope) to chart a new path.  Who’ll give odds on that?