Democracy for New Mexico

Bingaman and Udall Push for Trade Agreements to be Paired with Worker Protections

Senators Jeff Bingaman and Tom Udall report that they have written to President Obama to convey their support for his decision to insist on having a deal in hand to extend Trade Adjustment Assistance (TAA) before going forward with the pending trade agreements with South Korea, Colombia, and Panama.

In a letter to the President this week, Bingaman and Udall joined 40 other Senate colleagues to express their support for the TAA provisions that were enacted in 2009 and said they look forward to helping secure bipartisan support to extend that version of the program. The 2009 legislation made significant improvements to TAA, such as broadening eligibility to include workers in service industries, as well as workers who lose their jobs to countries such as China that have not signed free trade agreements with the United States. This version of TAA increases the Health Coverage Tax Credit (HCTC) that helps beneficiaries pay for private health insurance.

Since 2009, nearly 2,500 New Mexicans have relied on TAA benefits; more than 60 percent of them were covered under the eligibility provisions that have since expired, according to the Senators.

For months, the minority party in the Senate has opposed extending TAA until the administration provided a path forward for the free trade agreement with Colombia.

“TAA has been a core pillar of U.S. trade policy. The program ensures that workers who lose their jobs and financial security as a result of globalization have an opportunity to transition to new jobs and emerging sectors of the economy. Important reforms were made to TAA in 2009, which have helped streamline the program and make it more efficient for beneficiaries. In 2009, Congress also expanded eligibility to all workers whose jobs have been moved offshore, regardless of whether the United States has a trade agreement with the particular country. It also recognized the important role of the service industry in the U.S. economy by bringing service workers into TAA.

“The program also improved and expanded access to TAA’s Health Coverage Tax Credit (HCTC) – an initiative that promotes private health insurance access for recipients, and makes health insurance coverage more affordable to workers who lose their jobs due to trade and offshoring. In the absence of this program, more Americans would need public assistance and more individuals nearing retirement would be forced to use the emergency room as their sole source of health care,” the letter states.

“These bipartisan reforms to the TAA program help hundreds of thousands of workers, in every state, by moving workers more quickly from government support to private sector jobs. Since new TAA began in May 2009, the program has assisted 185,000 Americans who may have otherwise been ineligible for services, with usage in some states increasing by more than 40 percent. Unfortunately, these critical TAA reforms expired on February 12, 2011.

“We share the goal of your National Export Initiative to double U.S. exports and are looking forward to working with you on implementing a strong trade and competitiveness strategy. We recognize, as you do, that such a deal will be challenging to secure because it requires significant bipartisan commitments in both chambers of Congress to vote in favor of a TAA extension. The challenge is worth it. We agree with you that strengthening the safety net for the middle class by extending TAA should be a prerequisite for the consideration of new trade agreements,” the letter continues.

Stephen Jones: The New Mercantilists

This is a post by contributing writer, Stephen Jones, of Las Cruces.

As the current recession has dragged on, the national debate seems to have turned to slashing national investment and eliminating national debt at all cost, while, at the same time, backing dirty, failing and outdated industries, rather than growing our way out of bad economic times. Instead of engaging in sound market-based solutions and working toward the sound public investment that supports innovation, leaders of both parties seem intent on abandoning any semblance of sound classical economic policy for the all-out support of an outdated policy of neo-mercantilism.    

Mercantilism was a theory of economic development that held that there was a finite amount of wealth in the world, and that national treasuries were entirely dependent on the monopoly trade in, and the extraction of, that fixed wealth. The mercantilist age was based on increasing debt in protected commercial combinations, supported by massive militarist states, whose national blood and treasure was spent in maintaining those protected monopolies. Mercantile traders used their accumulated wealth to buy control of governments, who in turn spent the treasuries of those nations to maintain the mercantile monopolies. The mercantile epoch is best remembered for galleons filled with Mesoamerican gold, Indian cotton and southeast Asian spices plying the ocean waves to feed Europe's little addictions.

For most of four centuries, up until the end of the 1800's, European mercantilists stacked their gold and silver bullion and forced their home kingdoms deep into debt, engaged primarily in maintaining colonial supply lines including, most notoriously, the Atlantic triangular trade. This trade involved moving raw materials extracted from the Americas to Europe, sending manufactured goods back to the the Americas and to Africa and turning human beings into commodities. The human commodities were traded as slaves, and most perished working in the sugar cane fields of the Western Hemisphere, the cash crop of the colonial powers of mercantile Europe.

Adam Smith, War and Revolution
By the time of the enlightenment era of the mid-eighteenth century, the radical thinkers of Europe had mustered the courage to speak up against the mercantilist masters of that continent. Among the seditious, Adam Smith, the Scottish economist and philosopher wrote, "A great empire has been established for the sole purpose of raising up a nation of customers who should be obliged to buy from the shops of our different producers all the goods with which these could supply them. For the sake of that little enhancement of price which this monopoly might afford our producers, the home-consumers have been burdened with the whole expense of maintaining and defending that empire."

It would be comforting to believe that the old mercantilist age came apart merely through the superior economic and political arguments of enlightened spokespersons like Adam Smith. In fact, however, the old order collapsed in decades of war and revolution, including a thirty-years-long world war between Britain and France that finally hurled both of those empires and their allies from the Western Hemisphere. It should be little wonder why the framers of the United States Constitution were so suspicious of national trade monopolies and standing armies. Two-and-a-half centuries on, we seem to find ourselves right back at square one.

A New Incarnation of the Mercantilists
Over the last few years, our Republican and libertarian friends would have us believe that they are the great defenders of Adam Smith's economic orthodoxy, champions of the "invisible hand" of the market, condemners of the large national debt and the defenders of enlightened economic growth, working to get us back to basics. Unfortunately, nothing could be further from the truth. In fact they are just a new incarnation of the old mercantilist hoodoo.

Like medieval burgesses in their counting-houses, the Republican leadership puts the defense of monopoly trade combinations ahead of support for competitive small businesses, backs obsolete and dirty extractive industries over green technologies, opposes infrastructure development, whether it be rail, smart-grid energy, or rural broadband, and holds an outdated military-industrial complex sacrosanct, and all the enormous national debt that goes with it, at all costs. They place corporate protection ahead of innovation; they place government policing of individual "lifestyle" ahead of education, and military expenditures ahead of infrastructure, education, health and human resource development. Above all they defend tax breaks for oil companies over everything else. Drill here, drill now!

The Facts on Debt and Deficits
The inconvenient facts are readily available. Most of our national debt has been piled up almost entirely by Republican Administrations. Prior to sometime last year, when they got some kind of economic religion, the GOP told us, in the words of Dick Cheney, that "deficits don't matter." Ronald Reagan began his first term with a total debt of only $930 million and increased that total debt to $2.7 trillion, more than all the presidential administrations before him combined, including the "New Deal" of Roosevelt and "Great Society" of LBJ. The first Bush Administration expanded the national debt to over $4 trillion, and then George W. Bush nearly doubled the debt from $5.6 trillion to more than $10 trillion. Rather than calling for shared sacrifice, the second Bush fought two unfunded wars, while slashing the tax rates for the wealthiest Americans, and told the rest of us to just "go shopping."

Most of our deficits come from support of one industry, of course, and that is maintaining the endless international supply lines of the oil industry.

A Right-Wing Prescription for Failure
Instead of addressing the real cause of all that debt, the Republican Party takes aim at everything that has nothing to do with the deficits, including Social Security. Instead of moving us away from our oil addiction, the GOP moves to protect that one industry against any competition. As gas and food prices rise and national capital cash flows remain sluggish, Republican leaders take aim at everyone and everything other than the root causes of all that debt -- particularly education, health, infrastructure and services to the poor -- and instead pump cash into the coffers of central bankers, falsely believing such transfusions will somehow cure capital-flow problems.

In Wisconsin, the GOP's Governor Scott Walker attacks collective bargaining instead of building on that state's strong education facilities. In Michigan, Governor Rick Snyder seeks to cut corporate taxes by 86%, while raising individual income taxes and hatching a dubious scheme that would allow him to install un-elected corporate managers over elected local governments. New Jersey Governor Chris Christie calls for raising that state’s estate tax exemption from $675,000 to $1 million, while eliminating New Jersey's earned income tax credit. Maine Governor Paul LePage, a Tea Party favorite, has introduced a tax package that would raise the state’s estate tax exemption from $1 million to $2 million -- allowing four hundred of the state’s wealthiest estates to escape taxation -- while hiking property taxes to make up the difference.

New Mexico Governor Susana Martinez wants to slash funds for public education while blowing away any regulatory oversight of dirty extractive industries or her pet campaign contributors like Doña Ana County's dirty factory-dairy industry. Former Governor Gary Johnson, launching his vanity presidential campaign from a Taos-area ski slope, and looking to stoke the heart-strings of the so-called libertarian flock, tells us we should just go ahead and eliminate the whole national debt by next Thursday.

These schemes are not a recipe for recovery; they are a prescription for failure. They place protection for favored trade combinations ahead of innovation or sound market investment.

The Real Adam Smith
Even old Adam Smith, usually cited for his pure market orthodoxy, understood the need for public investment to public support the marketplace. Smith frequently called for government infusion of funds for key areas of development, including infrastructure and public education. Far from backing the unchecked support of corporate interests, Adam Smith was frequently among big business's greatest critics, especially when they worked with government partners to support old trade combinations and stifle small-market innovation. "Businessmen," Smith wrote in the Wealth of Nations, "are an order of men whose is never exactly the same with that of the public, who have generally an interest to deceive and even oppress the public, and who have, upon many occasions, both deceived and oppressed it."

The time is now for the government and the marketplace to invest in the future and oppose the policies of the new mercantilists, both those of the Republican Party and the corporatists in the Democratic Party, and to get back to basics and build for the future. 

To see more posts by Stephen, visit our archive.

Governor Bill Richardson on New Mexico Trade Mission to Cuba

Governor Bill Richardson traveled to Havana, Cuba yesterday as part of a mission to strengthen potential trade and cultural partnerships between New Mexico and Cuba. During the visit, Richardson will help market New Mexico commodities and follow up on inroads made on potential trade partnerships during a visit to Cuba last year, according a press release from the Governor's office.

Richardson says he has made increasing international trade a priority of his administration and the state has seen tremendous growth since 2003. Just this past Friday, Governor Richardson announced he was forming a Task Force on International Trade to look at ways to further expand trade with foreign countries.

A statement released by the Governor's office said, "During his visit last year, Governor Richardson called on the U.S. to ease travel restrictions to Cuba, which the Obama Administration appears poised to soon do, as a first-step to improving relations between the two countries which could potentially lead to increased trade opportunities. The connections New Mexico has made with the commerce officials in Cuba during these missions will put the state in a good position to take advantage of those new opportunities."

This week’s mission will include meetings with officials from Alimport, which is the Cuban Government agency responsible for agricultural commerce. Under a provision of the US Treasury Department Foreign Assets Control (OFAC), states are authorized to sell agricultural, medical and IT products in Cuba on a cash basis.

Accompanying Governor Richardson to Cuba were state Agriculture Department Secretary Miley Gonzalez and Cultural Affairs Secretary Stuart Ashman.

Governor Richardson and Secretary Ashman will pay for all of their own expenses during the trip. The delegation is set to return to New Mexico on Friday.

Unintended Consequences: NAFTA and a Borderland in Crisis by Stephen Jones

This is a post by contributing writer, Stephen Jones, who is a progressive political activist and a resident of Las Cruces, New Mexico.

Late last summer we in New Mexico and West Texas opened our respective local newspapers and found the lurid headline, ‘THREE HEADS FOUND IN COOLER IN JAUREZ.’ This gang-related triple murder just across our southern border is typical of the tragic headlines that greet us almost weekly in New Mexico and elsewhere in the Southwest. The occasional trickle of traffic now moving across the once crowded, friendly and bustling border crossings that once bound nations and families together over la frontera at El Paso, Texas and Columbus, New Mexico is testament to a world gone suddenly, tragically and frighteningly wrong.

We are all familiar with the demagogic appeals of the right to its angry racist base of support in regard to the immigration into the United States of both documented and undocumented Mexican laborers, and the related attacks by racists on Mexican culture and character in the southwest over the violence in Juarez and elsewhere in the borderlands. What we rarely hear is thoughtful criticism of the provisions and implementation of NAFTA, the North American Free Trade Agreement, that is largely responsible for these unintended consequences.

NAFTA represents one of the keystone economic agreements of the “neoliberal” economic philosophy outlined by “Austrian School” economists Friedrich von Hayak and neo-conservative Milton Friedman of the University of Chicago, and implemented politically by Ronald Reagan and his successors over the past thirty years in the United States. That “giant sucking sound” we heard, the “Austrian school” neo-cons assured us was all in our imaginations. Rather the “comparative advantage” of the United States, the concept of relative economic, marketing and technical strength of one party over its partner would help lead to a thriving American workplace.

American manufacturing hasn’t exactly thrived. Neither has American marketing or any other economic indicator under NAFTA. Furthermore, the immediate consequence of the passage of NAFTA under the Clinton Administration, coupled with the failure of Democrats to address health care reform, was that Democrats stayed home from the polls in 1994. NAFTA also led to a deepening political stratification and the ascendance of right-wing extremism at home.

If anything, NAFTA has been even more devastating to Mexico. Peter Costinini, reporter for MSNBC, writes, "In the Mexican countryside, NAFTA has accelerated the exodus of campesinos (peasant farmers) to the cities and corporate farms of northern Mexico and the U.S. Overwhelmed by the influx of cheap, subsidized U.S. corn allowed by NAFTA, many of Mexico's 2.7 million corn farmers are leaving their lands.”

According to the Center for International Policy, U.S. subsidies and financing to Mexico under NAFTA have served to create distorted market conditions. Huge U.S. agricultural conglomerates like Monsanto and ConAgra have “forced open” the Mexican markets to American grains, notably corn. By undercutting and dumping cheap grain on the market, indigenous farmers, who have worked the land in Mexico for generations, have been driven out of business. As a result they have been driven off the land.

Furthermore, while American agri-business lobbies to retain, and continues to exploit Depression-era price supports, Mexico has been forced to accept International Monetary Fund (IMF) economic guidelines for “fairness.”

Mexico is the most rapidly urbanizing nation in the world. In ten years the percentage of population working in agriculture has dropped from over 40% to 30% of Mexico’s demographic profile. As a result, Mexico’s rural population has been forced to seek work in the cities, where they take up residence in substandard housing, with poor health and sanitation conditions. Communities are split apart, and families and traditions trampled in the process. As in the United States, dislocation and alienation lead to desperation. This creates a ready-made recruiting ground for the drug gangs of Mexico.

Facing starvation, others flee across the border into the United States. Those who make it past the natural dangers of the desert crossing face an underground “illegal” status, the seething hatreds of right-wing demagogues and barriers of language and culture to overcome. This results in more alienation, and often, gang membership on this side of the border, strengthening the international drug trade even further.

The hideous East Berlin-like “fence” that separates Juarez from El Paso and Sunland Park, New Mexico is no barrier to commerce. Mexican drug cartels know how to dump their products on American streets just as well as ConAgra knows how to dump its corn on Mexico’s. Addiction and its related physical diseases resulting from the drug trade put additional strain on the American health care system; yet another unintended consequence of NAFTA.

This is not to say that Americans should entirely abandon free trade. Comparative advantage is a legitimate economic concept, not just an empty phrase tossed around by the so-called “economists” of the “Austrian School.” Free trade also needs to be fair trade. The European Union is successfully integrating its economies while building in protections for labor, health, human rights and the environment. Applicant states are given time and assistance to ramp up to Western European standards. Australia, New Zealand, Japan and the Southeast Asia are working toward free trade modeled on the European and not the American model. We should too.

We need to begin to address the issues at the root of the borderland crisis, and we need to do it now. If we don’t, we may soon find that the El Paso “fence” is about as effective at holding back gang violence as it is at holding back the free-flow of American corn or Mexican drugs.

To read more posts by contributing writer Stephen Jones, visit our archive.