Bad Business
In the Journal, an analysis of the anti-business legislation sponsored by Sen. Obama...
Along with Democratic co-sponsors Sherrod Brown and Dick Durbin, Mr. Obama introduced the bill in the Senate in August 2007. Recently in Janesville, Wis., he repeated his intention to make it a priority as President: "We will end the tax breaks for companies who ship our jobs overseas, and we will give those breaks to companies who create good jobs with decent wages right here in America."Mr. Obama's proposal would designate certain companies as "patriot employers" and favor them over other, presumably not so patriotic, businesses.
And I thought we were ushering in an end to divisiveness....
The legislation takes four pages to define "patriotic" companies as those that: "pay at least 60 percent of each employee's health care premiums"; have a position of "neutrality in employee [union] organizing drives"; "maintain or increase the number of full-time workers in the United States relative to the number of full-time workers outside of the United States"; pay a salary to each employee "not less than an amount equal to the federal poverty level"; and provide a pension plan.In other words, a patriotic employer is one which fulfills the fondest Big Labor agenda, regardless of the competitive implications. The proposal ignores the marketplace reality that businesses hire a work force they can afford to pay and still make money. Coercing companies into raising wages and benefits above market rates may only lead to fewer workers getting hired in the first place.
Worth reading it all. And along that same line, Steve Chapman skewers the Dems misleading anti-NAFTA rhetoric with, you know...facts...
...Tuesday's debate in Cleveland devoted a lot of time to the question: Are you now or have you ever been a supporter of NAFTA? Both candidates denied any complicity, past or present, and both vowed to scrap the treaty if the Mexican government doesn't agree to changes.Obama makes a special theme of blaming this and other trade agreements for setting off a race to the bottom that destroys American jobs. "In Youngstown, Ohio," he said in a Texas debate, "I've talked to workers who have seen their plants shipped overseas as a consequence of bad trade deals like NAFTA, literally seeing equipment unbolted from the floors of factories and shipped to China."
Why NAFTA would induce a company to move production to China is a puzzle, but you get the idea. His campaign claims a million jobs have vanished because of the deal. That sounds devastating, but over the last 14 years, the American economy has added a net total of 25 million jobs—some of them, incidentally, attributable to expanded trade with Mexico. When NAFTA took effect in 1994, the unemployment rate was 6.7 percent. Today it's 4.9 percent.
But maybe all the jobs we lost were good ones and all the new ones are minimum-wage positions sweeping out abandoned factories? Actually, no. According to data compiled by Harvard economist Robert Z. Lawrence, the average blue-collar worker's wages and benefits, adjusted for inflation, have risen by 11 percent under NAFTA. Instead of driving pay scales down, it appears to have pulled them up.
Manufacturing employment has declined, but not because we're producing less: Manufacturing output has not only expanded, but has expanded far faster than it did in the decade before NAFTA. The problem is that as productivity rises, we can make more stuff with fewer people. That's not a bad thing. In fact, it's essentially the definition of economic progress.
We're not the only country facing that phenomenon. China makes everything these days, right? But between 1995 and 2002, it lost 15 million manufacturing jobs.
This dishonest Democratic electioneering ignores the fact that in the first 10 years after NAFTA was passed, our trade with Mexico nearly tripled, from $81 billion to $232 billion. To hear these two dueling protectionists tell it, no workers in the United States drew a paycheck from any of that extra $150 billion of corporate revenue. They simply won't admit that great wealth was created on both sides of the border by NAFTA. (In fact, they are loath to admit that wealth is "created" by entrepreneurship at all, let alone that it is a good thing.)
The following items are from a summary of a CATO analysis of the effects of the expansion of trade in the last decade:
* Trade has had no discernible, negative effect on the number of jobs in the U.S. economy. Our economy today is at full employment, with 16.5 million more people working than a decade ago.* Trade accounts for only about 3 percent of dislocated workers.Technology and other domestic factors displace far more workers than does trade.
* Average real compensation per hour paid to American workers, which includes benefits as well as wages, has increased by 22 percent in the past decade.
* Median household income in the United States is 6 percent higher in real dollars than it was a decade ago at a comparable point in the previous business cycle. Middle-class households have been moving up the income ladder, not down.
* The net loss of 3.3 million manufacturing jobs in the past decade has been overwhelmed by a net gain of 11.6 million jobs in sectors where the average wage is higher than in manufacturing. Two-thirds of the net new jobs created since 1997 are in sectors where workers earn more than in manufacturing.
* The median net worth of U.S. households jumped by almost one-third between 1995 and 2004, from $70,800 to $93,100.
So far Obama has been a moving target with his anti-business positions. At times serious, as in the proposed legislation referenced in the WSJ piece above, and at other times, if you look closely, he's signaling that he is not to be taken seriously, it's just campaign demagoguery.
The anti-NAFTA stuff he's peddling in Ohio and elsewhere as a way to exploit people's anxiety about some real manufacturing job losses is especially dishonest and cynical, since as even the New York Times notices, he has no real intention of trying to reverse the agreement:
...when you read this [Clinton] plan, or Mr. Obama’s trade agenda, you discover none of it is particularly radical. Neither candidate calls for a repeal of Nafta, or anything close to it. Both instead want to tinker with the bureaucratic innards of the agreement. They want stronger “labor and environmental standards†and better “enforcement mechanisms.â€It’s a bit of an odd situation. They call the country’s trade policy a disaster, and yet their plan to fix it starts with, um, cracking down on Mexican pollution.
The question this raises is what Mr. Obama or Mrs. Clinton would really do about Ohio’s troubles if one of them became president — and whether it would make a difference.
These are the same kinds of (Big Labor dictated) environmental and labor standards that Dems used to hold up recent trade accords with some of our South American allies. We make no friends among our potential trading partners around the world when arrogant "gringo nannies" insinuate themselves into the sovereign internal affairs of nations after trade deals have already been negotiated, in order to lecture them and demand they restructure their internal labor standards and improve their environmental practices before we'll deign to sell them our products.
I guess that's part of the new diplomacy we could expect as a regular diet if we vote these people into power.
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