Photo: Signing NAFTA: Clinton signed NAFTA (the North American Free Trade Agreement), an agreement with Canada and Mexico.
"[The task is to] covertly lower the standard of living, the whole social structure, of America so that we can be merged with all other nations." -- Rowan Gaither (1909-1961) Attorney, investment banker, President of the Ford Foundation (1953-1956)
The master plan has always been to wipe out the the once strong and prosperous American middle class by churning an entire nation into pathetic and dependent beggars. Why? The massive concentration of wealth and power into the hands of banksters, crony capitalists, fascists, oligarchs and government is the dream of the ruling elite. For all practical purposes, they've succeeded.
Although inflation, taxation, lower wages and massive job losses have been bleeding the middle class dry, the history of the loss of good paying manufacturing jobs is quite interesting. Even more interesting, it was actually planned! And while there are other components to the systematic selloff of America, like our criminal Congress Critters passing bills that tax domestic corporate earnings at much higher rates if they produce and earn in the U.S. versus earning their dough offshore, another major component of our misery is NAFTA and other horrifying trade agreements supported by Republicans and Democrats alike. The expediting of the real bleed of American jobs is fully attributable to Bill Clinton who enthusiastically supported the North American Free Trade Agreement (NAFTA). Despite numerous warnings that NAFTA would be catastrophic to the American middle class and domestic manufacturing, the political class was more interested in filing its campaign coffers with special interest dough by selling multi-national corporatists legal protectionism.
NAFTA was a piece of legislation that was unprecedented in its scope and economic consequences as it conferred dictatorial powers of implementation upon the executive branch of government without any congressional oversight whatsoever. Moreover, NAFTA established secret working groups that are publicly funded, totally unaccountable to anyone and they operate off the radar of congressional and public scrutiny.
NAFTA passed in both houses of a Democratic controlled Congress in 1993. In the Senate, it passed with 61 yeas and 38 nays. In the House, it was much closer at 234 yeas to 200 nays. The Republicans in the House really came through for Clinton by providing 132 Yeas to counter 156 Democratic nays. Still, 40% of the Democrats in the House voted for NAFTA.
The vote itself is more than a bit intriguing. Many of NAFTA’s congressional supporters ended up as presidential candidates or high ranking congressional office holders and government officials. On the Senate side, the big name Democrats who voted for NAFTA includes Bill Bradley, Tom Daschle, Christopher Dodd, Ted Kennedy (deceased), Joe Lieberman, John Kerry and Joe Biden, now Vice President. A lot of these Democrats had made various bids for the presidency or vice presidency of the United States. Interestingly, big name NAFTA supporting Republicans includes John McCain, Bob Dole (defeated by Clinton), Mitch McConnell (current Senate Minority Leader) and many others who were none too eager to assist Bill Clinton in the sellout of the American worker.
On the House side, NAFTA supporters included big name GOPers like Dennis Hastert, Newt Gingrich, Dick Armey, John Boehner and Ron Portman, all of whom rose to leadership positions in the House or the Bush Administration. Democrat Nancy Pelsoi, who voted yes on NAFTA, ended up Speaker of the House for her role in decimating U.S. manufacturing and jobs.
Clearly, these traitorous rogues were handsomely rewarded with greater political power for engineering the systematic dismantling of the world’s greatest manufacturing legend in all of human history.
But the wholesale slaughter of the American middle class doesn’t end with NAFTA. It was immediately followed up by another Clinton initiative and victory with the aid of a Democratic controlled Congress hungry to continue wiping out the American middle class – subjecting America to the World Trade Organization, another boondoggle that savaged the American worker and has resulted in Chinese poison foods and other toxic products entering U.S. markets. These horrors consist of Chinese seafood raised in sewage contaminated waters, poisonous ingredients that are killing our pets and the substituting of deadly industrial grade ingredients for pharmaceutical grade ingredients in many other products and raw materials.
In discussing the WTO, Republican Newt Gingrich admitted that by “transferring from the United States at a practical level significant authority to a new organization” that America would indeed experience radical changes in our system of governance. In his own words Gingrich summarized the WTO, “This is not just another trade agreement. This is adopting something which twice, once in the 1940’s and once in the 1950’s the U.S. Congress rejected. I am not saying that we should reject it; I, in fact, lean toward it. But I think we have to be very careful because it is a very big transfer of power.”
Not only did Gingrich vote for NAFTA, he was an active participant in using a lame duck session of a Democratic Congress in 12/94 to get the U.S. entry into the WTO quickly approved before newly elected Republicans, who had swept the 11/94 elections, were sworn into office. At that time many Republicans tended to vote in favor of U.S. sovereignty and against entangling the U.S. in complex trade deals that were potentially destructive to the interests of the American worker and American manufacturing.
NAFTA was further strengthened by the passage of the Dominican Republic-Central American-United States Free Trade Agreement (CAFTA) in July, 2005 when Caribbean nations were added. Also, Bush followed in the steps of Clinton and aggressively strengthened the anti-American worker agenda of Clinton. To facilitate a more expeditious implementation of NAFTA/CAFTA, Bush signed the Security and Prosperity Agreement (SPP) with Mexico and Canada, which created more unaccountable layers of secretive government bureaucracy to merge the U.S. with Mexico and Canada via the North American Union.
What are the effects of NAFTA/CAFTA on the American economy?
The Economic Policy Institute published a study of the effects of NAFTA on the U.S. worker more than a decade after its 1993 passage. The results are alarming.
Despite its name, the primary purpose of the North American Free Trade Agreement (NAFTA) was not to facilitate trade among separate sovereign societies. Rather, it was to promote an integrated continental economy and establish the rules to govern it.
Twelve years later, it is clear that the costs to workers outweighed the benefits in all three nations.
The 1 million jobs displaced by NAFTA trade, primarily in manufacturing, would have paid $800 per week or more in 2004. The average job in the rest of the economy paid only $683 per week, 16% to 19% less than trade-related jobs. Growing trade deficits with Mexico and Canada have pushed more than 1 million workers out of higher-wage jobs and into lower-wage positions in non-trade related industries. Thus, the displacement of 1 million jobs from traded to non-traded goods industries reduced wage payments to U.S.workers by $7.6 billion in 2004 alone.These figures are old and and since those NAFTA figures were documented, millions of good paying manufacturing jobs have since vanished from America.
Gee Bill, I wonder how prosperous Americans are feeling these days? Hillary Clinton was forced to deal with the ravages of NATFA in her failed bid for the presidency. Every politico in America campaigns on jobs and the economy but once they are elected, they all sellout the American worker. Obama is no different.
Bill Clinton lied, as did his ruthless power mad wife, and Bill continued his brutal manipulation of the American middle class; Bush was no different and now the latest electoral messiah, Obama, is continuing with Bush/Clinton economic policies. There was no extension of economic prosperity in the U.S. resulting from America joining the WTO and approving the entry of China into the organization. In an Economic Policy Institute (EPI) analysis, the results of trade with China equated to staggering job losses in America.
Contrary to the predictions of its supporters, China's entry into the World Trade Organization (WTO) has failed to reduce its trade surplus with the United States or increase overall U.S. employment. The rise in the U.S. trade deficit with China between 1997 and 2006 has displaced production that could have supported 2,166,000 U.S. jobs. Most of these jobs (1.8 million) have been lost since China entered the WTO in 2001….Between 2001 and 2006, jobs were displaced in every state and the District of Columbia. Nearly three-quarters of the jobs displaced were in manufacturing industries. Simply put, the promised benefits of trade liberalization with China have been unfulfilled.Many economists blame the catastrophic trade imbalances between China and the U.S. as nothing more than China deliberately keeping its currency devalued while imposing slave wage rates. EPI suggests that this equates to a 40% Chinese subsidy on exports.
As a matter of policy, China tightly pegs its currency's value to that of the dollar at a rate that encourages a large bilateral surplus with the United States. Maintaining this peg required the purchase of about $200 billion in U.S. Treasury Bills and other securities in 2006 alone.1 This intervention makes the yuan artificially cheap and provides an effective subsidy on Chinese exports; best estimates are that the rate of this effective subsidy is roughly 40%. China also engages in extensive suppression of labor rights; it has been estimated that wages in China would be 47% to 85% higher in the absence of labor repression.As the Chinese cleverly manipulate their currency to give subsidized Chinese products price advantages in foreign markets, this is at the expense of the American worker. More importantly, there is no way that the American worker can possibly compete with the slave wages in China or other third world cheap labor nations.
China’s inhuman labor practices are legendary. I remember reading a UPI story about an incident involving 31 Chinese workers who were forced to work as slaves in a brick factory owned by a Communist Party official. They were emaciated and fed nothing but bread and water. The workers had burns all over their bodies from being forced to carry bricks that had not cooled. Chinese labor practices are notoriously inhumane and well documented.
Such is the reality of Clinton, Bush and now Obama defined “prosperity” and “free trade”. The Clinton and Bush gangs represent the two premier crime families in America but apparently the Obama gang has wholehearted embraced Clinton/Bush economic policies.
These so-called free trade agreements are not free trade agreements. In fact, they are nothing more than protectionism for special interests. Besides multinational corporations carving out highly profitable spheres of influence and control, the real agony is always felt by ordinary folks in every nation that is a party to these agreements. NAFTA forced Mexico to accept highly subsidized U.S. agricultural products which essentially drove Mexican farmers out of business and fleeing el Norte in search of low wage jobs just to feed their families. Until NAFTA, farming was a springboard to middle class prosperity in Mexico as small farmers were thriving but NAFTA wiped them out. It wasn’t a situation of “free trade” that wiped out the Mexican farmers; it was that they couldn’t compete with the mega subsidies so lavishly bestowed upon wealthy U.S. corporate agricultural welfare recipients.
The problem was compounded with the ethanol scam, a U.S. concocted “let’s make our rich big agricultural” industry even richer by mandating the idiotic churning of food into fuel. As corn prices skyrocketed globally and shortages exploded, tortilla prices shot through the roof in Mexico and other third world nations. Since tortillas and corn products are a staple food product in poor and third world nations, there were tortilla riots as hungry folks seeking subsistence level foodstuffs were being priced into acute hunger because of U.S. crony capitalism and U.S. agricultural welfare.
But crony capitalism or fascism/oligarchy works both ways when the lobbyist lawyers who write these long and complex protectionist agreements start carving up the loot. Carlos Slim is the richest man in Mexico and on any given day is even rich than Bill Gates. His vast wealth is derived by a telecom monopoly and Slim’s virtual control over all landlines and wireless phones in Mexico has afforded him the status of a telecom monopoly czar. Not surprisingly, Mexico has some of the highest telecom rates in the world. Yet, super efficient, low cost U.S. telecom operators are banned from operating in Mexico.
Republicans are famous for getting high on protectionist “Free Trade” agreements. It’s the GOP’s definition of economic liberty and capitalism even though they are pure fascism and corporatist protectionism. It’s how our gangster government operates under the guise of “free market capitalism” while being nothing more than protectionist rackets that breed the kleptocracy of crony capitalism.
While witnessing Hillary Clinton loose the Democratic primary was sweet, make no mistake – Obama is very much a global player in destroying America and his agenda is to wipe out what remains of American prosperity, American freedom, American sovereignty and the American middle class. John McCain was no different as he was an active participant in engineering the NAFT/CAFTA/WHO fiasco that has delivered us so much agony. Besides being a warmonger extraordinaire and a mentally unstable danger to the entire world who wants to push the nuclear button and Bomb, Bomb, Bomb Iran, McCain has absolutely no understanding of the plight of the American people and what they are going through. His economic ignorance during his campaign was so pronounced, it bordered on the hilarious. While McCain was just a power hungry delusional neocon famous for his quick temper and insensitivity to American workers, Obama was smooth and articulate and his lies were as big as his legendary and exceedingly pleasant smile.
Yet, there are other moving parts to our “free trade” nightmares. Personally, I absolutely support true free trade but not these protectionist economic weapons of mass destruction being paraded as “free trade” agreements or trade agreements that give Carlos Slim a telecom monopoly and U.S. agricultural welfare queens a monopoly on food.
One of the worst problems in attempting to achieve true free trade, besides the weapon of currency manipulation, involves the issue of taxation. The U.S. has a draconian corporate tax and many of our trading partners have a Value Added Tax (VAT). A VAT is a tax on every component of a product’s journey to “finished” goods status, from raw materials, to purchased components, to everything utilized in the manufacturing process etc.
When VAT nations export to the U.S., the producer is rebated in the form of a direct cash subsidy a cash payment that is the equivalent of the VAT. This gives foreign produced goods from VAT nations a huge competitive price advantage when they arrive in U.S. markets as imports. Conversely, when U.S. produced goods enter VAT nations as imports, U.S. goods are assessed the equivalent of a VAT which is nothing more than an indirect tariff on U.S. goods. It has been estimated that automobiles imported into the U.S. from VAT nations have a 20% price advantage because of VAT rebates. This VAT rebate situation has played a key role in harming U.S. producers domestically and in the arena of international trade. VAT nations rig the system to protect domestic manufacturing at the expense of imports while the reverse is true in American where domestic producers are penalized in favor of products produced in VAT nations.
Also, there is the issue of how subsidies affect true free trade. Boeing and Airbus have been at each other’s throats for years as they file complaint after complaint against one another. Boeing claims that direct European Union subsidies to Airbus violates the nature of free trade because once subsidies are part of the equation, free trade cannot function in the manipulative economic environment of subsidies. Airbus claims that Boeing is so heavily subsidized by U.S. Department of Defense contracts that the sheer volume of U.S. government contracts functions as massive indirect subsidies.
Precisely because true free trade is difficult to identify, if it even occurs anywhere on the planet these days, the situation is made extraordinarily complex by the direct interventions of governments, defense contractors, subsidies and VAT.
For trade to be truly “free”, it must, above all, be “fair” to all parties. These destructive trade agreements shoved down our throats are neither fair nor do they constitute free trade. Moreover, there is scant evidence of level playing fields anywhere.
America used to have simple 1-2 page bi-national free trade agreements with nations that effectively eliminated tariffs. These days, trade agreements are literally multi-national agreements that are thousands of pages long and written by special interests, their lawyers and their lobbyists. Somehow, none of this can be considered a level playing field that promotes true free trade simply because the parties involved effectively accomplish nothing but carving out a protectionist niche for the respective players. Not only is this a very bad situation, the folks who are hurt the most are American workers because they seem to get the short end of everything. But the folks in other nations are also savaged by these agreements.
Finally and pathetically, America has transitioned from a prosperous creditor nation to a pathetic debtor nation. We literally go to foreign nations and tell them “loan us money to cover our massive deficits and you will get special trade preferences and deals”. So they happily buy up our debt and gladly accept the outsourcing of U.S. manufacturing that is literally packed up and shipped to foreign shores. This is one component of our economic decline that that government avoids addressing at all costs simply because the government does not want the folks to know that all that deficit spending and the foreign debt to finance it is disastrously costly to the American people and their prosperity. Congress shamelessly sells our jobs to foreign nations in exchange for loans.
The true cost of our massive $15 trillion in debt is far more than the interest costs of about $400 billion annually that is obscenely unaffordable anyway. The fact that the desperate U.S. is gleefully trading jobs for foreign loans only attests to the depth of the criminality in DC.
Congress Critters and power brokers have understood this for a very long time. Those who have aided and abetted in delivering the American middle class to economic hell have been extraordinarily rewarded with money and power.
Until the unspeakable is finally spoken, we remain in denial and doomed to an economic system that can only be accurately described as industrial feudalism and slavery.