The TPP – Part 1

Donald Steiny Blog, Economics, Politics Blog Leave a Comment

No one knows all the details of TPP but there is some misinformation about it that is astounding. I just saw a headline in the Guardian that says “No One Knows How Much Senators Were Paid to Fast Track Trade Bill.”
The problem with that headline is that it makes no sense whatsoever.

“Fast track” has nothing to do with how fast the bill goes through the House and Senate, the bill gives “Fast Track Authority” to the President. What that means is that the president can directly negotiate trade deals. They are still voted on by the House, but the “fast track” part is that they are not allowed to filibuster or amend them.

If you have been paying attention, especially in recent years, Congress members will amend a bill with something unrelated like banning abortion. They love to do this with bills that are popular and the President would like to see pass. Then they pass it and the President has to veto it. Then they can go off about how good they are and how the President is holding things up. They may also amend it so it can’t pass because their colleagues can’t vote for the amended version.

People are also freaking out that the negotiations are being done in secret. Almost all trade (and other negotiations) are done privately. If you haven’t done it in the past, you might want to check out a book on negotiating. One of the things that is commonly done is to ask for more than you expect to get. It would not be a good idea if, when they did that, newspapers, Fox News and every other genius with an opinion started freaking out about it.

I don’t know what is in TPP because it is secret and neither does anyone else in the general public. So all the hyperbole about how horrible it is is just a reflexive dislike of trade bills or people who have read the utter nonsense as was printed in the Guardian.

The main reason we have low wages is not because foreigners are stealing our jobs. That is a reason to a degree, especially in the lower skilled jobs, but automation is replacing many jobs and the kind of skills that are needed are changing and leaving some people behind.  When President Obama was talking about the Supreme Court decision that (hopefully) ended the legal attacks on Obamacare, he talked of  protecting people in the “changing economy.”

But, even those reasons are not the main ones.

The main reason is that it is easier to make money off of money than it is to invest it in businesses. We have a giant parasite sucking the life out of the economies of the world called “the finance industry.”  It adds no value. Even its alleged “risk mitigation” doesn’t do much good when they collapse the world economy as they do every 10 years or so.

I will get more into why trade is not the real problem in the next segment.

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