The TPP trades off some U.S. protections and sovereignty to a foreign court sytem created under the agreement named an investor-state dispute settlement (ISDS). It’s not unusual for trade agreements to cede some sovereignty for the purpose of involving neutral parties. The TPP, however, seems to cede too much power to ISDS for some usual supporters of free-trade to support it. This was demostrated this Wednesday when “a group of academics who have traditionally embraced free trade, but who are alarmed by the inclusion of ISDS in the TPP. The group, 223 strong and led by Harvard Law Professor Laurence Tribe, warned that the U.S. will become subject to a flurry of suits by profit-seeking actors with no interest in working through a democratic or constitutional process.” For others that opposed the agreement it is a combination of this same court system and a new strict set of rules that govern intellectual property and freedom of information. The potential pitfalls in the agreement are real with serious economic implications. The question now becomes, is this enough to kill the agreement?
VIctory. Now What?
The more I read about the Middle East the more astonished I become at how incredibly shortsighted our foreign policy is in the region. President Obama admitted in April that his worst mistake as president was failing to plan for “the day after” in Libya. I mean, we’re only ousting a strongman dictator that has run the place for 40 years. Why would we need to have a plan for the country once said dictator is dead?
I think that is why we see a reluctance by Obama to intervene in Syria. Right now, our sole mission is the target and defeat of ISIL. Which had me thinking, what will we do after ISIL is defeated? They will be defeated. They have lost more than half their territory in Iraq since last year and it is only a matter of time before they start seeing significant losses in Syria. But do we expect wiping ISIL off the face of the earth will kill the extremist ideology that they adhere to?
This report by the Center for Strategic and International Studies had me wondering about “the day after” and is well worth the read:
https://csis-prod.s3.amazonaws.com/s3fs-public/publication/160823_Defeating_ISIS_IraqSyriaLibyaYemen.pdf
How Flint, Michigan Opened the Floodgates on Water Safety
National outrage erupted in the wake of the water crisis in Flint, Michigan, and in turn sparked a serious debate in policy regarding water safety in the United States. This crisis grabbed the attention of the nation as it became clear state employees neglected their responsibility to provide safe, drinkable water to Flint residents causing serious health hazards. Flint is a largely African American, low-income residential area, which also raises issues of racial and economic justice. The situation in Flint has had a profound impact on policy regarding water safety, as an important question entered political debate: Is this crisis isolated to Flint, Michigan?
It turns out, the crisis extends beyond just Flint. Flint’s crisis occurred due to flawed testing methods to make lead levels appear far lower than reality. This sparked a debate on whether states are properly testing and regulating water safety standards. This policy issue is of the utmost importance in light of government figures that show at least 18 million Americans drink tap water from systems that have violated federal rules for lead safety. These figures reflect states across the country, and government officials are being forced to respond. For example, as New York City schools begin the new year, experts investigated how its schools are testing its lead levels. They found that current testing methods run the risk of reporting lead levels lower than what they really are. New York City schools have responded by adjusting water testing procedures moving forward. Currently this week, the Senate is weighing in on a $9 billion dollar bill to authorize spending on the nation’s water infrastructure. Nation wide measures are needed to both address communities already afflicted with highly poisoned water, and prevent this water crisis from expanding its reach even more so across the country. This bill is receiving a great deal of bipartisan support in the Senate, with cries for a more modest bill from the House.
Moving Forward… I came across an interest worthy op-ed piece on how inadequately we seem to address breaches in environmental safety, which is a violation of human rights as citizens’ health and lives can be put at risk due to negligence. As seen in Flint when several state employees were charged and arrested, we resort to criminal law; however, this remains ineffective as, “Prosecutorial responses fill the void left when health and safety regulations succumb to corporate and political pressure.” We blame the “little people” who carry out the injustices, but we fail to point the fingers at the industry and finance leaders pulling the strings. An easy fix for these situation is to divert blame away from a corrupt system that encourages greed and negligence, and instead holds a few individuals responsible. Environmental issues like water safety are a systematic issue that demand systematic change and punishment.
Putting the TPP and trade in context
Post G20 Russia-US Updates
Before the G20 conference in China happened the Treasury Department increased sanctions. I discovered this via twitter and confirmed it here.
Reports of this are far and few between but I did find this piece on an Aberbizani news source (see here).
This is interesting as it seems that, at least according to Reuters, that the US and Russia will be meeting soon and that talks are expected to be positive.
Let’s review:
Before the G20 the Treasury Department announced increased sanctions.
During the G20 reports were coming out that the US and Russia were coming to terms on the Syria question then all of a sudden Russia “backed out.”
Now reports are coming in that the parties are going to meet and that a deal seems to be in the works.
So the question is whether this positivity is because talks really are getting somewhere or whether the sanctions that the Treasury Department is levying are inducing Russia. If it is the later we have to ask whether this will last? Do sanctions even work in the long term? They did not really work in Cuba, I really don’t know if they will work in the long run with Iran either (only time and nuclear oversight will really tell on that one).
UN Right Chief: Trump=ISIS
The U.N. High Commissioner for Human Rights, Zeid Ra’ad Al Hussein had some harsh words for a number of world leaders and political figures during a security and justice conference on Monday. Calling out Republican Presidential nominee Donald Trump, along with others around the world such Dutch leader Geert Wilders, Marine Le Pen of the French National Front, and Nigel Farage of Britain, Commissioner Hussein accused them of pushing “humiliating racial and religious prejudice”, stating that their actions can lead to a rise of populism that could “turn violent.”
He went further, making a striking comparison between these people and the ever-vicious, most well known terror group of the moment, ISIS.
Saying that they were employing fear tactics similar to that of the terror group, Commissioner Hussein stated that “Make no mistake, I certainly do not equate the actions of nationalist demagogues with those of Daesh…But in its mode of communication, its use of half-truths and oversimplification, the propaganda of Daesh uses tactics similar to those of the populists.”
He ends with a word of caution, a warning that we should have all learned from history a long time ago about how effectively xenophobia and bigotry have been “weaponized” through the ages. Clearly, this lesson seems to fly right over most people’s heads, even when it stares them right in the face.
If you ask me, it could be that some don’t want to take that lesson to heart…that they rather enjoy the implications of such warnings.
Michael Hayden Talks with Vice News.
The former head of the CIA and NSA, General Michael Hayden, recently spoke with Vice News about the ongoing presidential campaign. He was among the 50 officials from past Republican Administrations who signed a letter earlier this year calling Republican nominee Donald Trump a “risk to America’s ‘national security and well being'”.
General Hayden certainly made his feelings on Mr. Trump known quite clearly during this short interview. To him, the Donald is a reckless, unstable individual who should have no business dealing with national security, a man who should cause concern for everyone should he govern based on his words on the campaign trail.
More interesting to me, however, is when he touches on Democratic nominee Hillary Clinton and President Barack Obama. Its obvious that he doesn’t seem to have particularly high opinions of both of them. What’s intriguing here, though, is that he appears to view Mrs. Clinton as better on national security in contrast to the President, a solid sign that we could expect a possibly more hawkish foreign policy from a Clinton Administration.
One more thing; General Hayden defended waterboarding during the interview. I think that speaks for itself.
A bleak future for the U.S economy: something to think about
Below is a summary of an interesting article titled “How not to improve GDP” by Jennifer Rubin of the Washington Post. This article compares the economic policy proposals of the two presidential candidates .
Ms. Rubin expresses a rather pessimistic view of the candidate’s economic proposals, stating that the policies proposed by the presidential candidates to address economic recovery efforts “are distressingly inadequate, counterproductive or politically impossible”.
Ms. Rubin backs her argument by stating “ Donald Trump wants tax cuts that would give a windfall to the rich and increase the debt by at least $10 trillion over 10 years. He wants less regulation (not a bad idea in principle), wants to shrink the labor force and consumer markets by 11 million to 12 million people by rounding up and expelling illegal immigrants (an awful idea in principle and in particulars) and want to engage in trade war with China (an awful idea and surefire way to help send us skidding into a recession).”
She continues to say “a lot of what she (Clinton) is proposing- tax hikes, hiking the minimum wage, free college etc is either not going to do much for job growth, isn’t paid for or both.”
She backs this up by quoting a Yahoo Finance article titled Clinton’s economic plan trumps, well, Trump’s which states
“[Clinton’s] proposals would “do little to directly promote increased private sector investment,” Moody’s says, relying instead on government spending as the primary stimulus. And by promoting so many small ideas instead of a few overarching ones—such as corporate tax reform or a new value-added tax—Clinton is essentially promising even more government bureaucracy to implement and enforce yet more complexity in the sprawling federal regulatory regime.”
This article concludes by stating, “ In other words, if we do pretty much the opposite of what the two candidates want to do, we’ll be fine. The tragic part is that we have the capacity to be growing at much higher levels. Our Politicians, however, are playing dumb- or really don’t understand how to promote economic growth”
This is a scary when you think about it, do the presidential candidates have what it takes to steer the economic recovery efforts in the right direction?
A Quick Look at Secretary Clinton’s Proposed Economic Policies
Secretary Clinton’s proposed economic policies can be found at https://www.hillaryclinton.com/issue.
Moody’s Analytics predicts that “Secretary Clinton’s economic proposals will result in a somewhat stronger U.S. economy. Near-term growth is supported by the stimulus provided by her spending plans in combination with much stronger foreign immigration. Increased government spending, particularly more infrastructure investment financed primarily by higher taxes on the well-to-do, acts as an economic stimulant.
Greater government spending adds directly to GDP and jobs, while the higher tax burden has an indirect impact through the spending and saving behavior of high-income households. This mitigates the near-term negative impact on GDP and jobs since these households will not reduce their spending one-for-one in response to their higher tax bills and will use their savings and other financial resources. The higher minimum wage also crimps employment.
Longer-term growth under Secretary Clinton’s policies is somewhat stronger because on net they expand the supply side of the economy—the quantity and quality of labor and capital needed to produce goods and services. Most significantly, immigration reform, would greatly increase the size of the workforce and support stronger productivity. Her plan to increase spending on the nation’s infrastructure will also boost business competitiveness and productivity. Her paid family leave plan would lift labor force participation, while increased spending on college education and early childhood education would raise the educational attainment of workers.”
Moody’s Analytics predicts, “The economy will be significantly weaker if Mr. Trump’s economic proposals are adopted”
An analysis of Donald Trumps economic proposals by Moody’s Analytics predicts that “the U.S economy will become significantly weaker if Donald Trump’s economic policies were implemented.”
More information on Donald Trump’s economic vision can be found at https://www.donaldjtrump.com/positions/economic-vision.
This report reveals, “Mr. Trump’s economic proposals will result in a more isolated U.S. economy because cross-border trade and immigration will be significantly diminished. With less trade and immigration, foreign direct investment will also be reduced which will diminish the nation’s growth prospects.
Trump’s economic proposals will also result in larger federal government deficits and a heavier debt load because his personal and corporate tax cuts are massive and his proposals to expand spending on veterans and the military are significant.
Given his stated opposition to changing entitlement programs such as Social Security and Medicare, this mix of much lower tax revenues and few cuts in spending can only be financed by substantially more government borrowing.
Driven largely by these factors, the economy will be significantly weaker if Mr. Trump’s economic proposals are adopted.
Under the scenario in which all his stated policies become law in the manner proposed, the economy suffers a lengthy recession and is smaller at the end of his four-year term than when he took office.
By the end of his presidency, there are close to 3.5 million fewer jobs and the unemployment rate rises to as high as 7%, compared with below 5% today. During Mr. Trump’s presidency, the average American household’s after-inflation income will stagnate, and stock prices and real house values will decline.
Under the scenarios in which Congress significantly waters down his policy proposals, the economy will not suffer as much, but would still be diminished compared with what it would have been with no change in economic policies.
Those who would benefit most from Trump’s economic proposals are high- income households. Everyone receives a tax cut under his proposals, but the bulk of the cuts would go to those at the very top of the income distribution, and the job losses resulting from his other policies would likely hit lower- and middle-income households the hardest.
Even allowing for some variability in the accuracy of the economic modeling and underlying assumptions that drive the analysis, four basic conclusions regarding the impact of Mr. Trump’s economic proposals can be reached:
1) They will result in a less global U.S. economy; 2) They will lead to larger government deficits and more debt; 3) They will largely benefit very high-income households; and 4) They will result in a weaker U.S. economy, with fewer jobs and higher unemployment.”