Wednesday, January 28, 2015

Obama on Middle Class Economics: the Dangers of Bipartisanship

In general, progressives were happy with Obama's State of the Union address. And with good reason. He defended increasing the minimum wage, hiking capital-gains tax on the wealthy, slapping a new levy on big banks and closing a loophole which allows capital-gains tax to be avoided. All good stuff. Until he got to trade issues. From the transcripts:
"21st century businesses, including small businesses, need to sell more American products overseas. Today, our businesses export more than ever, and exporters tend to pay their workers higher wages. But as we speak, China wants to write the rules for the world's fastest-growing region. That would put our workers and businesses at a disadvantage. Why would we let that happen? We should write those rules. We should level the playing field. That's why I'm asking both parties to give me trade promotion authority to protect American workers, with strong new trade deals from Asia to Europe that aren't just free, but fair.
Look, I'm the first one to admit that past trade deals haven't always lived up to the hype, and that's why we've gone after countries that break the rules at our expense. But ninety-five percent of the world's customers live outside our borders, and we can't close ourselves off from those opportunities. More than half of manufacturing executives have said they're actively looking at bringing jobs back from China. Let's give them one more reason to get it done."
The push for trade promotion authority is essential if the Trans Pacific Partnership (TPP) is to be approved. I have written on the issue before, specifically on the TPP and how it has made strange bedfellows (see here). This is one of the issues in which he may actually find common ground with the new Republican Senate. And it's a cautionary tale for those that think that bipartisanship is always good.

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