Obama's anti-NAFTA rhetoric (1 Viewer)

[UncleTrvlingJim]

How much of that is due to NAFTA and how much is due to the weakest dollar in decades and the burgeoning demand for agricultural commodities in Asia?

I have the feeling you could scrap NAFTA tomorrow and exports are going to remain at near record levels because they are cheap and demographic factors in our largest customers are driving demand.

Surely Mexico and Canada are not driving the export boom on their own?

No, but if you start enacting trade barriers, the benefits of a weak dollar get diluted. Right now, the best part of a having a weak dollar is that we can export our goods...it will actually make it less likely for companies to leave here for cheaper labor elsewhere, etc... at this point we should be encouraging more free trade b/c with a weakening dollar we're going to benefit from it even more now...

 

[dapperdan]

How much of that is due to NAFTA and how much is due to the weakest dollar in decades and the burgeoning demand for agricultural commodities in Asia?

I have the feeling you could scrap NAFTA tomorrow and exports are going to remain at near record levels because they are cheap and demographic factors in our largest customers are driving demand.

Surely Mexico and Canada are not driving the export boom on their own?

Absolutely, the weak dollar has a lot to do with the increases in exports, along with the economic advances in China and India. But if you believe that scrapping NAFTA would have a minimal impact on our exports, I would say you're dreaming. I'll do a little bit of research over the coming days/weeks to get those estimates. Always better to quantify a discussion.

The other side of the coin; if you scrap NAFTA, you greatly accelerate wage cost inflationary pressures.

Look at it this way, what is the chief argument against NAFTA...that it robs the U.S. of jobs. What is the least of our worries right now, as a country, from a demographic and economic perspective: jobs. We simply don't have a jobs problem by historical standards, and given the current demographics of our population, we're unlikely to have a jobs problem for the foreseeable future. Yes, the unemployment rate will move higher throughout this recession. Horror of horrors, maybe it goes above 6%, who knows.

But beyond this recession, the problem this economy faces is a shortage of workers, not a surpluss of workers. NAFTA criticism is simply a political charade.

 

[dapperdan]

Ok, so I've gone out and found a few numbers.

From: Robert Scott, a trade expert at the liberal Economic Policy Institute (cut and paste sentence from the L.A. Times http://www.latimes.com/news/nationworld/nation/la-na-naftaqa29feb29,1,762577.story)

"The rise in the U.S. trade deficit with Canada and Mexico through 2004 has caused the displacement of production that supported 1,015,291 U.S. jobs since the North American Free Trade Agreement (NAFTA) was signed in 1993."
http://www.epi.org/content.cfm/ib214

This article was published in July 2005. So, doing a little math, according to NAFTA's most ardent critics, NAFTA has displaced a grand total of 7,050 jobs per month since it's inception. Mind you, the author doesn't say the U.S. has lost 7,050 jobs per month, because he knows that's not true. He says displaced. Why, because, based on our current unemployment rate of 5%, 95% of those who were displaced, found work. I would guess that many of them got a very tidy severence package.

For example, when Ford recently offered a buyout to 54,000 UAW workers (story as of Jan 28, 2008), the UAW workers were offered: "Employees with 30 years of service can retire with full benefits and a cash payment of as much as $70,000, double the cash offer made in 2006 when the company began its latest restructuring effort." http://blog.cleveland.com/business/2008/01/ford_offers_buyouts_to_54000_u.html

Obviously, not everyone who's jobs were displaced by NAFTA were so lucky. However, it is fair to say that due to the nature of shifting jobs from a plant in the U.S. to a plant in either Canada or Mexico, the jobs shifts hardly came as a surprise to plant workers. These plant shifts are hardly instantaneous decisions for companies to make, and unless the respective unions were completely asleep at the switch at the time, there had to be plenty of advance notice to the workers that plant shutdowns were going to occur.

Next, given the weak dollar, at this point in the game, it wouldn't be surprising to actually see a flow of manufacturing jobs shift, back towards the U.S. from Mexico and Canada.

 

[dapperdan]

On the upside, according to the Grassley Report to the Senate, September 11, 2006:
www.senate.gov/~finance/press/Gpress/2005/prg091106.pdf

"NAFTA has been, overall, very positive for U.S. farmers. Between 1992 and 2005, while U.S. agricultural exports to the world grew by 46 percent, U.S. agricultural exports to Mexico and Canada increased by an even greater 128 percent. Some 32 percent of all U.S. agricultural exports went to these two countries in 2005, up from 21 percent in 1993. Under NAFTA, U.S. agricultural exports to Canada have doubled, from $5.3 billion in 1993 to $10.6 billion in 2005, and have more than doubled to Mexico, from $3.6 billion in 1993 to $9.4 billion in 2005."

 

[SoonerJim]

Ok, so I've gone out and found a few numbers.

From: Robert Scott, a trade expert at the liberal Economic Policy Institute (cut and paste sentence from the L.A. Times http://www.latimes.com/news/nationworld/nation/la-na-naftaqa29feb29,1,762577.story)

"The rise in the U.S. trade deficit with Canada and Mexico through 2004 has caused the displacement of production that supported 1,015,291 U.S. jobs since the North American Free Trade Agreement (NAFTA) was signed in 1993."
http://www.epi.org/content.cfm/ib214

This article was published in July 2005. So, doing a little math, according to NAFTA's most ardent critics, NAFTA has displaced a grand total of 7,050 jobs per month since it's inception. Mind you, the author doesn't say the U.S. has lost 7,050 jobs per month, because he knows that's not true. He says displaced. Why, because, based on our current unemployment rate of 5%, 95% of those who were displaced, found work. I would guess that many of them got a very tidy severence package.

For example, when Ford recently offered a buyout to 54,000 UAW workers (story as of Jan 28, 2008), the UAW workers were offered: "Employees with 30 years of service can retire with full benefits and a cash payment of as much as $70,000, double the cash offer made in 2006 when the company began its latest restructuring effort." http://blog.cleveland.com/business/2008/01/ford_offers_buyouts_to_54000_u.html

An administration accused of "cowboy diplomacy" and unilateralism suddenly finds itself on the wrong end of international trade treaties, with the polling leaders in the Presidential race ready to scotch them at the earliest convenience. This is multilateralism? Lou Dobbs, once a rational economics corrspondent, found his voice as a radical protectionist, and is now the maddest man on television, Olbermann included. This is his offspring, and Ohioans and nativists everywhere lap it up.

The Democratic leaders for the nomination are opposed to the South Korean trade treaty, amazing in light of the now favorable government they now have and the continued importance of having a trade bulwork against their northern neighbor. they are opposed to a treat wioth Columbia, presumably due to the corruption and drug links. Again, this is an ALLY against those interests. They are opposed to a trade pact with Peru. They are opposed to CAFTA, the central america treaty, because we what, fear Guatemala?

Herbert Hoover lobbied for and passed the tariff-laden Smoot-Hawley, which converted what would have been a short nasty depression into a lasting indictment of "unfettered capitalism", characterized by bank failures, a worldwide depression, the rise of Nazism, Fascism, romance with Communism and invocation of Socialism-light, the brand of protectionist politics extolled by the Moorish Messiah of Illinois, and the Harridan Hildebeest of New York.

I could only hope Obama is not serious regarding dismantling these trade pacts. In any event, the WTO is paramount, and consitutes one world entity which has worked despite the usual leftist and Trilateral tinfoil crowd protests. The World Index of Freedom shows continued improvement, and money, respecting no shores, will flow towards the best opportunites. If we erect barriers, then foreign mutual and index funds are the ticket.

 

[blackadder]

Absolutely, the weak dollar has a lot to do with the increases in exports, along with the economic advances in China and India. But if you believe that scrapping NAFTA would have a minimal impact on our exports, I would say you're dreaming. I'll do a little bit of research over the coming days/weeks to get those estimates. Always better to quantify a discussion.

The other side of the coin; if you scrap NAFTA, you greatly accelerate wage cost inflationary pressures.

Look at it this way, what is the chief argument against NAFTA...that it robs the U.S. of jobs. What is the least of our worries right now, as a country, from a demographic and economic perspective: jobs. We simply don't have a jobs problem by historical standards, and given the current demographics of our population, we're unlikely to have a jobs problem for the foreseeable future. Yes, the unemployment rate will move higher throughout this recession. Horror of horrors, maybe it goes above 6%, who knows.

But beyond this recession, the problem this economy faces is a shortage of workers, not a surpluss of workers. NAFTA criticism is simply a political charade.

I'm not advocating scrapping it.

Just pointing out that there is a lot more at work.

We seemed to do quite well prior to NAFTA...

 

[Mr. Sparkle]

Turns out a Canadian official that attended the meeting that Obama's campaign said never happened drafted a 1300 word memo documenting what was said:

http://ap.google.com/article/ALeqM5jrFPkleRZmbmPtPxHBGNAPSzfUtwD8V5OLP00

In part:

Noting anxiety among many U.S. domestic audiences about the U.S. economic outlook, Goolsbee candidly acknowledged the protectionist sentiment that has emerged, particularly in the Midwest, during the primary campaign. He cautioned that this messaging should not be taken out of context and should be viewed as more about political positioning than a clear articulation of policy plans.

You can always count on a bureaucrat to create a paper trail.

 

[SoonerJim]

Turns out a Canadian official that attended the meeting that Obama's campaign said never happened drafted a 1300 word memo documenting what was said:

http://ap.google.com/article/ALeqM5jrFPkleRZmbmPtPxHBGNAPSzfUtwD8V5OLP00

In part:




You can always count on a bureaucrat to create a paper trail.

Mr Sparkle, people like you are creating cynicism!!!

 

[UncleTrvlingJim]

Turns out a Canadian official that attended the meeting that Obama's campaign said never happened drafted a 1300 word memo documenting what was said:

http://ap.google.com/article/ALeqM5jrFPkleRZmbmPtPxHBGNAPSzfUtwD8V5OLP00

In part:




You can always count on a bureaucrat to create a paper trail.

so obama gets plus 1 point for not being an idiot when it comes to economics and at least talking to the canadians ahead of time.

he gets minus 10 points for being a typical politician (one of his main appeals is that he's supposed to stop all that -- yeah right).

 

[gavinj]

Turns out a Canadian official that attended the meeting that Obama's campaign said never happened drafted a 1300 word memo documenting what was said:

http://ap.google.com/article/ALeqM5jrFPkleRZmbmPtPxHBGNAPSzfUtwD8V5OLP00

In part:




You can always count on a bureaucrat to create a paper trail.

Just like you can always count on a EE poster to take a quote out of context. Why did you snip out the part about Goolsbee saying that this is the part of the document that is completely innacurate?

------

The memo is the first documentation to emerge publicly out of the meeting between the adviser, Austan Goolsbee, and officials with the Canadian consulate in Chicago, but Goolsbee said it misinterprets what he told them. The memo was written by Joseph DeMora, who works for the consulate and attended the meeting.

Goolsbee disputed a section that read: "Noting anxiety among many U.S. domestic audiences about the U.S. economic outlook, Goolsbee candidly acknowledged the protectionist sentiment that has emerged, particularly in the Midwest, during the primary campaign. He cautioned that this messaging should not be taken out of context and should be viewed as more about political positioning than a clear articulation of policy plans."

"This thing about `it's more about political positioning than a clear articulation of policy plans,' that's this guy's language," Goolsbee said of DeMora. "He's not quoting me.

"I certainly did not use that phrase in any way," Goolsbee said.

 

[JimEverett]

The problem is that our trade policies have created the weak dollar by unilaterally lowering our tariffs and rarely demanding reciprocity from other nations. It is an unfair competitive advantage for foreign nations - particularly like China and Mexico.
Look at the schedule of tariffs in the current WTO, if tariffs on Chinese goods imported into the US are less than 1% while the same goods are taxed at 20% when exported from the US to China then how is that a good deal? The WTO is full of that crap.
Not to mention other advantages - like pegged currencies, lax environmental laws, government subsidies, child labor, meager wages, etc.
Those are the problems with the trade deals, and crying out "free trade is good" just doesn't make sense. If Obama cannot see that then his judgment isn;t as good as he claims.

 

[dapperdan]

Just like you can always count on a EE poster to take a quote out of context. Why did you snip out the part about Goolsbee saying that this is the part of the document that is completely innacurate?

------

The memo is the first documentation to emerge publicly out of the meeting between the adviser, Austan Goolsbee, and officials with the Canadian consulate in Chicago, but Goolsbee said it misinterprets what he told them. The memo was written by Joseph DeMora, who works for the consulate and attended the meeting.

Goolsbee disputed a section that read: "Noting anxiety among many U.S. domestic audiences about the U.S. economic outlook, Goolsbee candidly acknowledged the protectionist sentiment that has emerged, particularly in the Midwest, during the primary campaign. He cautioned that this messaging should not be taken out of context and should be viewed as more about political positioning than a clear articulation of policy plans."

"This thing about `it's more about political positioning than a clear articulation of policy plans,' that's this guy's language," Goolsbee said of DeMora. "He's not quoting me.

"I certainly did not use that phrase in any way," Goolsbee said.

"so obama gets plus 1 point for not being an idiot when it comes to economics and at least talking to the canadians ahead of time.

he gets minus 10 points for being a typical politician (one of his main appeals is that he's supposed to stop all that -- yeah right)." - UTJ

Lol. So gavinj, just curious, are you conceeding the idiocy point (1 point), in order to get back the -10 points for being a typical politician?

 

[DMaestro]

Those are the problems with the trade deals, and crying out "free trade is good" just doesn't make sense. If Obama cannot see that then his judgment isn;t as good as he claims.

Obama has stated as much several times. Paraphrasing: free trade "can be" good given fair standards that are actually enforced by all parties involved.

 

[UncleTrvlingJim]

The problem is that our trade policies have created the weak dollar by unilaterally lowering our tariffs and rarely demanding reciprocity from other nations. It is an unfair competitive advantage for foreign nations - particularly like China and Mexico.
Look at the schedule of tariffs in the current WTO, if tariffs on Chinese goods imported into the US are less than 1% while the same goods are taxed at 20% when exported from the US to China then how is that a good deal? The WTO is full of that crap.
Not to mention other advantages - like pegged currencies, lax environmental laws, government subsidies, child labor, meager wages, etc.
Those are the problems with the trade deals, and crying out "free trade is good" just doesn't make sense. If Obama cannot see that then his judgment isn;t as good as he claims.

I agree that there needs to be reciprocity, but what I need is numbers to see if the current arrangement is an overall net benefit for us vice protectionist policies on both sides.... I suspect even with the current imbalance we're still seeing an overall net benefit, just not as good as it should be.

 

[gavinj]

Lol. So gavinj, just curious, are you conceeding the idiocy point (1 point), in order to get back the -10 points for being a typical politician?

I'm conceding that some people here will go to great lengths to misconstrue details in order to make their otherwise weak arguments seem like they have some weight. Sometimes reading these threads is like watching toddlers run with scissors. I guess that if I need to concede something in this thread it would be that, in light of this latest story, Goolsbee has cost Obama whatever chance he had at winning the Republican nomination for President.