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Pacts Americana

Obama Toes the Imperial Line on Trade

Hearken to your geopolitical catechisms, America, for there are new trade accords in the air! Trade deals punctuate the placid world-conquering assurance of the global economic elite with the same ritual, righteous certainty offered by a Hollywood Spider-Man reboot, or the stations of the cross.

And like the latter, they function almost exclusively as an article of faith. The high-church orthodoxy on global free trade is that it is, quite literally, the way of the world. Nation-states and their laughably petty borders and trade barriers are being obsolesced, in grand digital fashion, by the efficiencies of market competition. Resistance is futile, and capitulation to the self-evident trends in future commerce is the surest path to success. If you should succumb to any momentary doubt, just look at what’s happened to the doubting Thomases in Greece, or the confirmed backsliders in Puerto Rico. Any country or principality that fails to toe the line, pronto, is asking for ruin—bankruptcy, bond-market pillaging, or involuntary austerity measures (and more than likely, all three, in other-than-tolerable doses).

How deep does this faith run? Why, no lesser an eminence than the president himself has found time to explain the urgent need for the Trans-Pacific Trade Partnership, in a sober, condescending offering over at the Washington Post op-ed section. Here you will find all the glorious talking points of the globalization dogma as they’ve been tested out, refined, and reverently incanted over the past quarter century in neoliberal Washington, on Wall Street, and at think tanks, university faculties, and conferences of all description.

The sermon begins with the invocation of China’s economic might—this is, let us not forget, the largest potential consumer economy in the world, and it looms over the Asian-Pacific region, which “is on its way to becoming the most populous and lucrative market on the planet.” What’s more, China is itself seeking to tie up many of the opportunities that its regional trading partners bring to market via its own Asian trade accord known as the Regional Comprehensive Economic Partnership. Surely that can’t be right! After all, its provisions “won’t protect a free and open Internet. Nor will it respect intellectual property rights in a way that ensures America’s creators, artists, filmmakers and entrepreneurs get their due.”

OK, so let’s hold up right there. Just three paragraphs into his free-market oration, our president has badly contradicted himself. For it takes only a cursory examination of how creative work is compensated in today’s digital-streaming economy to recognize that, however much the United States fancies itself a global protector of the livelihoods and property rights of creative workers, it is busy systematically dismantling those basic protections within our own economic borders—and all at the behest of that “free and open Internet” that we want China to endorse and promulgate. No, when our Trade Negotiator in Chief says he’s going to the mat for artists and creators, what he really means is that he’s plumping for the Motion Picture Association of America, and the many studio and media executives who serve reliably as big-ticket Democratic donors.

The phrases reduced lifetime income and depressed labor-participation rates should be recited, like Transcendental Meditation mantras.

Alas, Obama’s argument is riddled throughout with many such leaps beyond logic—all likewise betraying the central (but ever unstated) organizing directives of the moneyed American set. The most mind-bending such flourish comes when Obama argues, citing zero empirical support, that trade pacts will spur American job growth: the TPP, he reasons, “levels the playing field by setting the highest enforceable standards [n.b.: there’s no evidence from the immediate context just what standards the president is talking about] and by removing barriers to selling our goods overseas—including the elimination of more than 18,000 taxes that other countries put on products made in America. Simply put . . . American businesses will export more of what they make. And that means supporting more higher-paying jobs.” For good measure, Obama tried out the same talking point on the New York Times’s lickspittle economics brand-purveyor Andrew Ross Sorkin in the Times Magazine this weekend, when he incoherently offered up the view that because—yes—“most trends are irreversible given the nature of global supply chains . . . we better be out there shaping the rules in ways that allow for higher labor standards overseas so that we have more of a level playing field.”

Now, how exactly do we know that this is a malodorous heap of bullshit? Because these are exactly the same arguments made in 2000 to support China’s eventual entry into the WTO—and all available evidence says that these sunny forecasts of greater, and more widely distributed, American prosperity issuing from that China free-trade accord were 180 degrees wrong. Labor economists David Autor, David Dorn, and Gordon Hanson published a paper in January called “The China Shock: Learning from Labor Market Adjustment to Large Changes in Trade.” Their findings are a stinging rebuke to the fast-and-loose equation of lower trade barriers with greater general job growth. Instead, they write, the data show that

Adjustment in local labor markets is remarkably slow, with wages and labor-force participation rates remaining depressed and unemployment remaining elevated for at least a full decade after the China trade shock commences. Exposed workers experience greater job churning and reduced lifetime income. At the national level, employment has fallen in U.S. industries more exposed to import competition . . . but offsetting employment gains in other industries have yet to materialize.

Let that sink in a moment: for the past fifteen years, the open door to China that bosses and business-friendly political leaders have longed to force ajar was being shut, over and over again, in the faces of American workers. For any political apparatchik or cable commentator still puzzling over the enduring popular appeal of the parallel attacks on free-trade orthodoxies mounted by Donald Trump and Bernie Sanders, the phrases reduced lifetime income and depressed labor-participation rates should be recited, like Transcendental Meditation mantras, until the awful truth of what those forces mean in one’s own adult working life at last becomes manifest.

In this context, though, the findings of Autor et al. are simple testimony that Barack Obama is lying through his teeth. And lying is, if anything, a polite euphemism: if it is indeed true, as his last Democratic predecessor in the Oval Office was fond of saying on the campaign trail, that the definition of insanity is to continue to try the same failed approach to a problem in the conviction that the results will differ this time, then all American trade policy, to the extent that it’s being sold as a boon to our working class, is pathologically mad.

At the same time, of course, it’s a madness shared across our vast media-political complex. Obama no doubt placed his TPP manifesto at the Post since the paper’s op-ed pages are outfitted with a dreary roster of free-trade cheerleaders, from former Newsweek austerity hound Robert Samuelson to erstwhile New Republic editor (and reborn austerity hound) Charles Lane to reliably business-jingoist diplomatic hands Jackson Diehl and Fred Hiatt. One cannot help but picture the Post’s editorial board room would be brought to a renewed sense of ideological fervor if the remains of laissez-faire ideologue Milton Friedman were taxidermically preserved and seated at the head of the conference table, the way that utilitarian scold Jeremy Bentham is preserved in the City of London. And from its ex cathedra perch on the editorial page, the Post, like the New York Times and (need we add?) the Wall Street Journal and every other soi-disant respectable news outlet has tirelessly touted the magical benefits of free trade from the very earliest days of the NAFTA debate.

For the past fifteen years, the open door to China that bosses and business-friendly political leaders have longed to force ajar was being shut, over and over again, in the faces of American workers.

The truly deranging thing about this elite consensus is not merely its simple empirical bankruptcy; one has come, alas, to expect as much from all the most ardently treasured articles of ruling-class faith. No, what’s remarkable about the media’s near-complete free-trade fealty is that almost all of our landmark free-trade accords are negotiated and ratified in conditions of complete public opacity—so that neither the Washington Post nor its loyal coterie of neoliberal pundits really know what, substantively, they’re arguing for when they heroically take to their column inches to wisely urge a less-regulated, less-accountable regime of global economic leadership on the rest of us. So it’s striking to learn this week that Greenpeace has managed to leak the central provisions of another major regional trade pact, the Transatlantic Trade and Investment Partnership, which nations in the Euro system are slated to endorse or reject this summer, and which is currently at the center of the fevered “Brexit” debate in England. It turns out that the TTIP, like the many other such pacts cobbled together in the general orbit of the Davos power elite, is largely made up of lavish giveaways to powerful American corporate interests. As John Hilary reports in the UK Independent the provisions of the accord ensure “that US corporations will be granted unprecedented powers over any new public health or safety regulations to be introduced in future. If any European government does dare to bring in laws to raise social or environmental standards, TTIP will grant US investors the right to sue for loss of profits in their own corporate court system that is unavailable to domestic firms, governments, or anyone else.”

In other words: The TTIP will do pretty much the polar opposite of all the munificent, leveling wonders that Obama is claiming that its cross-oceanic cousin, the TPP, will achieve in and around China. So the president is not only lying about the proven track record of free trade policies in Asia—but also, so far as we inconsequential civilian peons are able to reckon, about the fundamental aims and objectives of our entire free-trade regime. Elsewhere in his interview with Sorkin, the president makes what’s clearly meant to be a disarming admission. “If I hadn’t gone into politics and public service,” he said, “the challenges of creating a business and growing a business and making it work would probably be the thing that was most interesting to me.” I believe it. And I have to say—he’d make a hell of a media executive.