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Monday, May 25, 2015

Why TPP is a Such a High Priority to Obama

     Krugman wonders this:

     I don’t know why the president has chosen to make the proposed Trans-Pacific Partnership such a policy priority. Still, there is an argument to be made for such a deal, and some reasonable, well-intentioned people are supporting the initiative.

     
     But other reasonable, well-intentioned people have serious questions about what’s going on. And I would have expected a good-faith effort to answer those questions. Unfortunately, that’s not at all what has been happening. Instead, the selling of the 12-nation Pacific Rim pact has the feel of a snow job. Officials have evaded the main concerns about the content of a potential deal; they’ve belittled and dismissed the critics; and they’ve made blithe assurances that turn out not to be true.

     http://www.nytimes.com/2015/05/22/opinion/paul-krugman-trade-and-trust.html?rref=collection%2Fcolumn%2Fpaul-krugman&contentCollection=opinion&action=click&module=NextInCollection&region=Footer&pgtype=article

    Whether or not this is a good trade deal, I am still undecided. I do think I understand now at least some of why the President has made this a priority. I think part of it is not about the specifics of the TPP but also the question of whether he has fast track authority to enter trade treaties. 

   Up until I read a piece by Matt Yglesias I found Obama's support for the deal something of a conundrum. Yglesias was who argued that whether or not you like TPP Obama should have trade authority-which is tough to convince opponents of as if he gets it, then he'll do this deal they think is going to be bad-they think NAFTA was bad and they think TPP will be as bad or worse than NAFTA. 

   Yet, by dividing off TPP from the general question of TA, a light bulb went off for me: of course the President wants TA-any President would. 

     http://diaryofarepublicanhater.blogspot.com/2015/05/i-think-ive-figured-out-why-even.html

      A lot of people on the Left have shredded the President here.  I think Dan Kervick is unnecessarily harsh here:

     Obama: "Waahhhh, all the other presidents got their trade deals. Why won't the meanies give me my trade deal to cement my legacy?"

https://twitter.com/DanMKervick

What is striking about trade deals is the following two items

1. Democrats tend to be much more skeptical of trade deals than Republicans

2. However, even though most Democratic voters and Dems in Congress, tend to at least be more skeptical of such deals, Democrats who win the Presidency, nevertheless always end up supporting them.

Why is it that once a Democrat becomes President they become pro free trade? I think it comes down to answering this question:

In what ways are Democratic Presidents more like Republican Presidents than Democratic Congressmen?

Yes-they are still Presidents. In general, I think it's' fair to say that a President of either party will tend to support bills that increase executive power and oppose bills that will decrease and erode it.

Regarding trade, it's not hard to see why any President-of either party will want trade authority. The thing is that the very act of even having to ask for TA reminds a President of his relative weakness vis a vis foreign heads of state. The countries that we negotiate trade deals with all are either:

1. Dictatorships who obviously don't need permission from anyone to do a trade deal or much else

2. Parliamentary democracies whose Presidents or Prime Ministers all by definition have the TA without having to ask Congress for permission to have it like an American President.

With our gridlocked separation of powers system, a President who wants to negotiate with other heads of state already has to play a game of 'Mother, may I' to start with-which is not pleasant for them.

However, it's even worse for Democratic Presidents. A GOP Congress will give a GOP President the authority sought; Clinton was never able to get back TA after the GOP took over Congress; he didn't have it initially thanks to Democrats either but because it was left over from the Reagan years.

Even though GOPers mostly favor trade deals there will always be enough in the House to join with large amounts of Democrats who are just saying no to scuttle the deal.

So the question of trade policy is doubly frustrating if you're a Democratic President.

http://diaryofarepublicanhater.blogspot.com/2015/05/democratic-presidents-dont-get-fast.html

So this at least gives us some reason why Democratic Presidents always end up wanting these trade deals-but also not getting them. If you're a betting person, the good money is probably that Obama won't get it this time either.

P.S. As to the 'normative' question of whether or not this is a good deal, that's another whole post, the point of this one was simply to look at least part of why the President wants it.

It seems to me that Ross Perot's 'Giant sucking sound' did indeed materialize; in deciding if this is true it's not enough to compare the number of jobs then and now: my sense is that NAFTA didn't so much kill jobs as kill better paying jobs in favor of lower paying ones.

Both free trade and the digital revolution have seemed to have this effect. There may be more net jobs now than in 2000 when I believe the negative effects of these two factors really begun to kick in, but they are not well paying jobs-we have indeed become a nation of burger flippers.

There are good ways and bad ways to argue for TPP but a bad way that has been used way too much is solely on the most general, theoretical grounds: 'Trade is good as it gives customers options, better products, and more leisure, etc' without even looking at the specifics of TPP

http://diaryofarepublicanhater.blogspot.com/2015/05/on-tpp-investors-business-daily-not.html

The reason why liberals oppose deals like the TPP is they belive it

1. Leads to a 'race to the bottom' arms race in regulations and wages

2. Costs jobs or lowers wages of jobs.

I've seen no one do the kind of analysis of TPP to see which effect might be stronger.




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