Obama

Mideast tensions are straining U.S.-Saudi ‘special  relationship’

Posted on by j.giglio

To say that no one is very happy about American involvement in the sectarian political cauldron of the Middle East is to exaggerate very little. The public wants the United States to extricate itself from the Sunni vs. Shiite wars that plague the region and reliable allies are not plentiful as long-term alliances shift with the escalating chaos.

Take for instance America’s decades-old “special relationship” with Saudi Arabia. The alliance was first sealed when President Roosevelt met the first Saudi king, Abdul Aziz, in 1945 aboard the cruiser USS Quincy in the Suez Canal. They cut a simple deal: America would bring the Saudis under its security umbrella and the Saudis would supply oil.

For decades, the Saudi-American relationship largely worked well for both parties. After all, the Saudis were the world’s largest oil producer and sat on better than one-fifth of the world’s proven oil reserves, giving it great influence over global oil prices.

The U.S.-Saudi alliance may be an old one, but since the Arab Spring in 2011, the relationship has deteriorated. The latest fissure was sparked by the Saudi’s recent execution of a prominent Shiite Muslim cleric, which prompted condemnation throughout the Middle East.

There are several reasons why the Saudis are upset with America. They bitterly opposed Washington’s support of pro-democracy protestors in Egypt during the Arab Spring and urged President Obama to use force to preserve President Hosni Mubrarak’s dictatorship. America’s accommodation with the Muslim Brotherhood during their brief reign in Egypt further angered the Saudi monarchy.

Then Washington was critical of the military coup responsible for displacing Egypt’s Muslim Brotherhood President Muhammad Morsi, while Saudi Arabia pledged billions to the new Egyptian government. After this experience, the Saudis became paranoid that America would sell them up the river as they had Mubrarak.

As the Syrian civil war worsened in 2013, President Obama backed off his threat of military force against President Bashar al-Assad, who allegedly used chemical weapons against his own people while concurrently announcing a rhetorical pivot to Asia. The Saudis and other longtime American allies felt abandoned.

Since the overthrow of the Shah during the 1979 Iranian Revolution, Saudi Arabia and Iran have what could mildly be described as a tense relationship. While the two Islamic countries are separated by only a few miles of Persian Gulf, the religious and political gap is much wider. Underlying Saudi concerns is the schism between Sunnis and Shias, who have been at each other’s throats for more than a millennium. Iran is mostly Shia Muslim and, like most of the countries in the Middle East, Saudi Arabia is majority Sunni.

The two are currently engaged in proxy wars in Yemen and Syria that exemplify the Sunni/Shia divide. The Saudis were horrified when the U.S. recently entered into a nuclear deal with Iran. They consider the threat of a nuclear-armed Iran intolerable.

Finally, the United States’ continuing support for beleaguered Israel remains a point of contention. Joint opposition to the emergence of ISIS is the only recent development that reinforces the mutual interests of Saudi Arabia and the United States.

Despite the growing list of grievances, the two countries need each other. The U.S. retains a strong military presence in the Persian Gulf and cannot soon be replaced as the ultimate guarantor of Saudi security. In the midst of regional turmoil and with the ever-present threat of jihadist terrorism, the U.S. still relies heavily on the Saudis to help police the neighborhood.

Still further, the Saudis are a major buyer of U.S. weapons, having spent more than $46 billion on American arms since President Obama took office. The kingdom is also the largest producer in the Organization of Petroleum Exporting Countries that controls about 40 percent of the world’s oil.

Since sectarian wars in the Middle East are likely to get worse before they get better, the relationship calls to mind the old English proverb: “With friends like this who needs enemies?”

originally published: January 23, 2016

When it comes to Syria, let Iraq be the lesson

Posted on by j.giglio

How many times do people ask themselves “what if,” consciously considering what has happened and what might have been? What if you had taken a different job, or married someone else? These questions are a fundamental feature of the human condition.

They are also a good exercise in understanding the world and suggesting alternative approaches to identifying and achieving goals. In that sense, they can be applied to current events in the Middle East.

The fancy name for “what if’ questions is counterfactual thinking. For historians, this is a way of thinking about a past that did not happen. For the rest of us it is, among other things, one way to make sense of experiences and think about what to do differently in the future.

Popular culture likes counterfactuals as a conventional story telling device. For example, the current Amazon television series “Man in the High Castle,” an adaptation of Philip K. Dick’s 1962 novel of the same name, is essentially a counterfactual, imagining America had the Nazis won World War II.

Today the Middle East is in chaos and is the most active war zone in the world. But what if the United States had not invaded Iraq in 2003? We will never truly know, but let’s look at how things might be different.

Sure Saddam Hussein was a gruesome dictator who killed hundreds of thousands of people and started wars. But after spending much in American blood and treasure, is Iraq a stable functioning democracy, or did the invasion simply cause geopolitical chaos and a humanitarian tragedy?

Under Hussein, Iraq was a bulwark to contain Iran, which now exercises far greater influence in Iraq, Syria, Lebanon and the entire Middle East than it did before the invasion. After the United States packed up and left in 2011, Iran rushed into the power vacuum.

At the time of the Iraq invasion, Libya had been ruled by the same strongman for over 40 years, but it was stable. Policy makers in Washington decided to go along with France, the United Kingdom and others to topple Muammar Gadhafi’s regime, once again without a viable alternative in place to replace the old order. The result is a failed state and another humanitarian tragedy.

It can be argued that the invasion of Iraq diverted military and financial resources away from Afghanistan before the Taliban had been defeated. A greater focus on Afghanistan might also have kept Pakistan from engaging in mischief.

Perhaps it doesn’t make sense for the United States to simultaneously pursue ousting Syrian President Bashar al-Assad while targeting ISIS and radical Islamists of all stripes in Syria. And would ousting Assad simply result in the same murderous chaos we have seen in Iraq and Libya?

The United States may be at a stage in the Middle East where is has to decide whether ISIS or keeping Assad in power with the support of Iran and Russia represents a greater national security threat. Perhaps it’s time for President Obama to get past his Putinphobia and cut a deal with him as the allies did with Stalin to defeat the Nazis in World War II. The current strategy isn’t working, so why not work with Russia and Iran to create an international solution?

There are no easy answers in the fight against radical Islamist terror groups, but when the President and others say they will destroy them, it is incumbent on them to explain a detailed strategy. It is not enough for world leaders to say that ISIS will be defeated. They need to describe what those words really mean. What will success look like, how do you measure it, and how long will it take?

Asking what might have been had the United States not invaded Iraq provides an interesting lens through which to view the Middle East. And perhaps it offers some insights into how to deal with that troubled region more than a decade after the invasion.

Originally Published: December 19, 2015

How Americans became soft targets

Posted on by j.giglio

Americans can add concerns about their physical safety to a list of worries that already includes job insecurity, record economic inequality, and trust in government reaching an all-time low.

The San Bernardino shootings show that terror attacks on soft targets are not confined to Europe. The premeditated slaughter of innocent civilians by radical Islamic terrorists (dare I say the name) in Paris was followed by promises of similar attacks in other “crusader cities” including Washington, D.C. and New York City.

The most recent attacks are a reminder that American foreign policy blunders have caused chaos in the Middle East, where Islamic State outposts are gaining strength in Libya, Afghanistan, Lebanon, and Egypt. Americans understand you cannot underestimate ISIS, as President Obama did when he characterized them as a junior varsity team that has been contained as a local actor and did not represent a national security threat.

American troops exited Iraq at the end of 2011, completing a deployment that cost nearly 4,500 American lives, left more than 32,000 wounded and cost taxpayers trillions of dollars. The president said the US was leaving behind a “sovereign, stable, and self-reliant” Iraq.

Instead, the exit left the door open for the Islamic State’s land grab. All the gains made following the “surge” from 2007 to 2011 were washed away, with Islamic State terrorists taking territory and committing mass killings.

The President did not help matters in 2012, when he warned Syrian President Bashar al-Assad that using chemical weapons would cross a “red line.” Yet when Assad did just that in 2013, Obama did nothing. The inaction undermined America’s credibility and exasperated our allies.

The blunders did not start with President Obama. Common sense has gone on holiday among the worthies in Washington since 9/11, beginning with a feckless decision to invade Iraq that was a precipitating event in the unraveling of the Middle East and creation of one of the worst refugee crises since World War II.

The American-organized coalition invaded in 2003 because of Saddam Hussein’s alleged connections to terrorism and the potential threat posed by Iraq’s supposed possession of weapons of mass destruction. It turned out that Iraq did not have WMDs; Hussein’s links to al-Qaida and other terrorist groups were equally illusory.

The invasion was also supposed to transform a country benighted by decades of dictatorship into a Western-style free-market democracy that would be a model for other Middle East nations. Instead it opened Pandora’s Box and promoted Iran’s metastasizing regional hegemony.

The abrupt fall of Baghdad was accompanied by massive civil disorder, including the looting of public and government buildings, as the country slipped into anarchy. There was no plan for what to do after the victory and little recognition given to religious, ethnic, and political complexities among the Shiites, Sunnis and Kurds. Dissolving the army put several hundred thousand armed Iraqis on the street with no jobs and firing government employees, mostly Sunnis linked to the Hussein regime, transformed the country into a breeding ground for the very terrorism the invasion was supposed to combat.

By the fall of 2003 these blunders and the lack of enough American troops to establish security for the Iraqi people contributed to the growth of insurgency.

America allowed the old order to topple without a viable alternative in place – a reckless act with no precedent in modern statecraft. Now we are faced with the monumental challenge of picking up the pieces.

Today you need a scorecard to keep track of what is happening in the Middle East. For example, the Kurds have been a strong American partner. But Turkey, an equivocal NATO ally, claims that the Syrian Kurds are a terrorist group and have been bombing America’s most reliable ally in Syria and Iraq while ISIS brokers black market oil in Turkey to fund itself.

Sadly, the effects of these blunders aren’t limited to the Middle East. Here in the United States, Americans now live in fear of their physical safety.

Originally Published: December 12, 2015

Why should Americans trust refugee process?

Posted on by j.giglio

Everyone loves a good argument and few questions are more likely to start one right now than “should we allow Syrian refugees into the United States?” Answering the question requires balancing competing concerns. First and foremost is the moral imperative of protecting American citizens versus the humanitarian concerns of providing for refugees.

But that isn’t the only set of competing concerns. What about the question of whether the United States should be helping its own -thousands of homeless veterans, for example -before helping others who may represent a unique security threat? Should America’s self-interests be sacrificed in the pursuit of high ideals. And in the 21st century, that self-interest is threatened by the specter of global jihad.

The Obama administration plans to increase refugee admissions for fiscal 2016 to at least 85,000, with 10,000 of the refugees coming from Syria, despite the horrific Paris attack in which at least apparently one of the attackers is believed to have posed as a Syrian migrant to get into France. The plan would move these refugees to the front of the immigration line, ahead of “undocumented” immigrants and those on the “legal” immigration list.

White House Deputy National Security Advisor Ben Rhodes employed the usual self-assured bureaucratic rhetoric, saying that the government has a “very careful vetting process” for all Syrian refugees. Still further, he argued that these refugees are tragic victims; women, children and orphans of the Syrian civil war that has raged since 2011. Put like that, who could disagree with the canonical view of the administration?

The director of the FBI, for one. James B. Comey testified before Congress in October that his agency has neither the resources nor the necessary information to fully vet Syrian refugees. He could not offer assurances that terrorist fighters could not slip in by posing as refugees. Nobody can guarantee ISIS could not use the Syrian diaspora as a way to kill Americans and serve as an ISIS Trojan Horse. There are no solid background records available to confirm that refugees are who they say they are.

All this should not be surprising given that we are dealing with refugees from a broken country in the midst of years-long civil war.

Overlooked in the discussion are security risks presented by the estimated 40 percent of the 11-to-12 million unauthorized residents who came here legally, then stayed after their student, business, or tourist visas expired. Lest Americans forget, on 9/11, 19 foreign terrorists came through America’s front door on legitimate visas, hijacked four planes and murdered almost 3,000 innocent people. On the day of the attack, four of them were continuing to live in the shadows even thought their visas had expired.

If the federal government has not been able to track the arrival and departure of foreign visitors, why would Americans believe their government can effectively screen Syrian refugees. To put it nicely the average American lacks confidence in the competency of their government to identify covert operatives. That is not irrational.

All it takes is one terrorist to get through the screening process. In other words, the government agencies conducting the screening have to be perfect. If you believe they are capable of such behavior, it is likely you think it’s possible to fight a war without collateral damage to civilians.

It is said that the definition of insanity is doing the same thing over and over and expecting a different result. It is a definition Americans should remember as we consider the issue of allowing Syrian refugees into the United States.

Originally Published: November 28, 2015

Corporations’ interest vs. the public interest

Posted on by j.giglio

There is much truth to the cliche that politicians are primarily interested in getting re-elected. To achieve this goal they cater to the small group of voters who are paying attention to the details of the legislative process – and often looking to cook up a raiding party on the public interest to promote their own goals.

Take a provision tucked into the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd­ Frank), one of the most sweeping financial reform bills in U.S. history, which President Obama signed into law in 2010. Dodd-Frank demonstrates that policy making is dominated by powerful businesses and other well-organized special interests.

In the aftermath of the historic bailout of the financial system and major banking houses in 2008 and 2009, which precipitated the worst economic downturn since the Great Depression, the financial industry fell under intense criticism and scrutiny. The omnibus 2,300-page bill was passed in response to this financial and economic crisis.

Its stated aim was to “promote the financial stability of the United States by improving accountability and transparency in the financial system, to end ‘too big to fail,’ to protect the American taxpayer by ending bailouts, to protect consumers from abusive financial services practices, and for other purpose.” It was supposed to reduce system-wide risk and prevent a financial collapse like the one in 2008.

While the law did not lay a hand on Fannie and Freddie Mac, major players in the 1997-2007 housing bubble and the subsequent financial crisis, it did address the subject of “conflict minerals” that was promoted by certain non-governmental organizations supported by celebrities such as George Clooney and Brad Pitt.

These activists lobbied Congress and got them to state that the exploitation and trade of certain conflict minerals was fueling a humanitarian crisis in the Democratic Republic of the Congo that warranted the imposition of disclosure requirements.

The NGOs argued that profits from conflict minerals have helped fund the conflict between rebel militias and government troops in Congo that has claimed millions of lives and resulted in widespread human rights abuses, including violence against women and the conscription of children as soldiers.

The conflict minerals are tantalum, tin, tungsten, and gold, which are used in many industries. Tungsten, for example, is used in the screens of cellphones and tin is used to solder circuit boards.

Congress directed the Securities and Exchange Commission to promulgate a rule requiring thousands of publicly traded U.S. companies to investigate whether they or any of their suppliers use minerals mined in the conflict-ridden parts of Congo and to annually disclose the origins of conflict minerals necessary to its operations if the minerals originate from Congo or an adjoining country.

Supporters of the Dodd-Frank conflict minerals provision and of the SEC implementing rule argue that such disclosures reduce the violence involved with the mining of conflict minerals. Opponents argue that they are burdensome and costly to administer.

Combating brutal human rights abuses in the Congo is surely a good idea, but is a Wall Street Reform bill the appropriate place to do it? And is the SEC the right entity to implement the law?

And what are the boundaries of corporate social responsibility? How much responsibility does a firm have for its supply chain? Are there alternative and transparent approaches to dealing with the issue of conflict minerals? Corporations cannot be asked to solve all the world’s problems.

The financial industry was widely criticized for its intense lobbying efforts to shape Dodd-Frank’s legislative and rule making process. But they were not the only ones to convince lawmakers eager to curry favor with powerful special interests to include provisions in the legislation that promote their own rather than the public interest.

Originally Published: October 10, 2015

Obama free trade isn’t so free for US

Posted on by j.giglio

The fight for fast track legislation to allow President Obama to negotiate the secretive Trans-Pacific Partnership trade deal is over. After pulling out all the stops to push the deal through Congress, the President signed legislation giving him the authority to negotiate the trade agreement and put it before Congress for a straight up-or-down vote with no amendments allowed.

Americans are told that free trade is the best strategy for advancing global economic development, reducing poverty and achieving world peace. There is a lot to be said on behalf of the utopian dreams of free traders if you ladle enough frosting on the cake to compensate for its shortcomings. But if we want to help the American middle class -the stated goal of virtually  every politician -we would pursue different policy priorities.

To say that everyone benefits from free trade is misleading. Trade creates winners and losers and every American deserves to know the details buried in these deals. The benefits of the North American Free Trade Agreement and other trade deals have not been shared as broadly as promised.

Economists, businessmen and politicians, the most devoted acolytes, say technological advances lead to increased productivity, which means fewer workers are needed to get the job done. Yes, we have substituted capital for labor. But we have also substituted cheap offshore labor for American workers and the result is that Americans are losing jobs, their wages are stagnating and the middle class is coming apart at the seams.

How countries trade and whether they benefit from it are important questions. Starting with Adam Smith, economists have emphasized specialization and exchange as essential to increasing productivity and raising living standards.

The economic argument for free trade relies on the principle of comparative advantage developed by David Riccardo in 1817. His quaint theory, which built on Smith’s work, remains the cornerstone of free trade economics. So what in simple terms is comparative advantage?

Let’s assume that Lady Gaga, the world-famous entertainer, also happens to be a world- class typist. Rather than both entertaining and typing, she should specialize in entertaining, where her comparative advantage is greatest and she could maximize her income. This key insight is still endorsed today by the overwhelming majority  of economists.

Americans who lose their jobs are becoming less rich so people in foreign countries can be less poor. In the aggregate, people are better off, but domestic workers bear the cost. It should be clear by now that on the home front, free trade contributes to rising inequality, wage stagnation, and lost jobs .

The gains from trade are often widely dispersed, while the losses are concentrated. The extent to which offshore outsourcing is responsible for some of our current labor market woes has become highly contentious in recent years.

Perhaps it is time to adopt a national strategy that can make the American economy grow fast enough to produce decent jobs for every member of the American family who wants to work. How about if we start by investing in our broken infrastructure so it can generate economic growth instead of hamstringing it, and educating our children so they become world leaders in something besides sports?

Then we just might become internationally competitive again, and restore our economy to full employment while we’re at it

originally published: July 11, 2015

Cost of being wrong about trade is paid by American workers

Posted on by j.giglio

President Obama, powerful business and government elites, special interests and reflexive free trade advocates are working hard to garner congressional support to consummate the ambitious and furtive 12- nation trade agreement known as the Trans-Pacific Partnership (TPP). This is a big deal; linking 40 percent of the world’s economy- so big that it has been negotiated in secret.

We are told that free trade means the unimpeded flow of goods, services, capital and labor across international markets. In this best of all free trade worlds, consumers get the lowest prices.

This is all well and good for American consumers, but what about the increased unemployment and reduced wages free trade also brings? Unless consumer prices have fallen by more than the average worker’s income in recent decades, this may not be such a great deal.

In the real world, critics say the TPP is more like managed trade than free trade. America’s trading partners engage in currency manipulation to make their exports cheaper and U.S. exports more expensive than if exchange rates were determined by market forces. Consequently, some lawmakers worry that currency manipulation by trading partners is an important cause of the large and growing U.S. trade deficit, and will further injure domestic industries and workers. For them, many of the arguments for free trade are just globaloney.

Japan, a member of the proposed TPP deal, is by its own admission a currency manipulator. Its leaders want a relatively low exchange rate for its currency, the yen, because it makes their goods and services cheaper in the United States. Automakers and other manufacturers believe such currency manipulation constrains sales of American products.

Here is a simple example: The Japanese central bank prints more yen and then buys assets denominated in dollars. This increases demand for the dollar, which increases its value while at the same time driving down the value of the yen. By manipulating their currency Japan is subsidizing its exports by making them cheaper and placing a hidden tariff on imports. The U.S.-Japan goods trade deficit reached $78.3 billion in 2013, costing U.S. workers thousands of jobs. The U.S. is acquiescing in outsourcing the value of the dollar to a trading partner who wants to win jobs and gain higher incomes for their people.

On the other hand, there are those who see the trade deficit in a positive light as it provides foreigners with dollars that they recycle by bingeing on United States Treasury debt, thus financing federal budget deficits.

Opponents of the current deal complain that, among other things, it does not address currency manipulation, which subsidizes Japan’s exports and taxes American ones. A bipartisan amendment that would have cracked down on countries that manipulate their currencies was offered by Senator Rob Portman, R-Ohio, and Senator Debbie Stabenow, D-Michigan, during the Senate consideration of the TPP, but it failed by a narrow 51-48 vote.

The Obama administration has done a good job of sealing itself off from any discordant feedback, threatening to veto the bill if the amendment passed.

Wages for American workers have been stagnant for decades and the U.S. economy has kept going by substituting growth in consumer debt for growth in consumer income.

The essential unanswered question about TPP is whether the aggregate benefits of lower prices to American consumers that leave them allegedly with more discretionary income offset job losses for the American worker and displacement of American industries.

It’s easy to be wrong about the answer to this question when the costs of being wrong are paid by others – namely the American worker.

originally published: June 13,2015

 

Laboring over Obama’s trade deal

Posted on by j.giglio

For those who came in late, President Obama has forged a rare alliance with Senate Majority Leader Mitch McConnell of Kentucky and congressional Republicans to push the Trans-Pacific Partnership (TPP), a proposed regional free trade agreement among the United States, Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.

The deal has been developed in secret so the American public is on the outside looking in. Based on what has been leaked, there are apparently 29 chapters in the TPP, but only five deal with traditional trade issues such as tariffs. The rest are about intellectual property, financial regulations, labor laws, and rules for health, safety and the environment.

Sen. McConnell said that: “By passing this legislation we can show we’re serious about advancing new opportunities for bigger American paychecks, better jobs, and a strong economy.” But in fact it is the TPP’ s labor law provisions that may be particularly problematic for American workers and, by extension, our country’s economy.

While many people believe free trade is generally a fine idea, some have escaped its gravitational pull. Opposition to this deal comes primarily from the president’s own party, many of whom contend that “better American jobs” is a fatigued phrase with a truth quotient somewhere near zero.

Nothing will blind them to the fact that the United States has run consistently high trade deficits for more than three decades, ranging from of $35.1 billion in 1983 to $505.5 billion in 2014. The cumulative deficit over this period is in the trillions, even as American wages have been flat or declining. This is the trading profile of an 18th century British colony.

They argue that growing trade deficits have been a drag on economic growth; that putting the United States in direct competition with low-wage countries has slowed job creation and put downward pressure on wages.

According to the office of the United States Trade Representative, “The president has always made clear that he will only support trade agreements that include fully enforceable labor standards, which we are pursuing in TPP”.

But Massachusetts Sen. Elizabeth Warren is among those who believe this is utter nonsense. She has forcefully raised the question of whether what is proposed in the agreement is in fact achievable. Her IS­ page report, “Broken Promises,” reviews labor standards over two decades of free trade agreements and documents in detail the use of child and forced labor, intimidation of union activists, restrictions on free speech and assembly, discrimination against women and other deplorable working conditions. The report plainly states that: “The United States does not enforce the labor protections in its trade agreements.”

A 2014 Government Accounting Office report also detailed the failure to enforce labor provisions in free trade agreements. Based on these reports, assurances that it will be different this time are hardly persuasive.

This reality cannot be ignored. Labor abuses are not waiting to be found, like eggs at an Easter egg hunt. Who is going to police labor standards in other TPP countries, especially those with weak judicial systems? Are the “best and the brightest” in the federal government going to ensure workplace compliance in foreign countries when they can’t even control the number of undocumented immigrants who overstay their visas here in the United States?

The TPP’s Investor-State Dispute Settlement mechanism enables foreign corporations to sue governments for lost profits using special tribunals of private attorneys in secretive proceedings, yet workers don’t have a comparable tool to address labor standard violations.

Free trade only works when the exchange is an equal one, when all the players operate under the same rules, including labor policies. If they don’t, American workers face unfair competition, and domestic jobs and industries are sacrificed to trading partners with pools of exploitable labor.

originally published: June 6, 2015

The more we learn about Obama’s trade deal, the worse it looks

Posted on by j.giglio

The Trans-Pacific Partnership (TPP) is a mega free-trade pact that would link 11 Asian countries and the Americas. The member countries have nearly 800 million people, an annual gross domestic product of about $28 trillion and they account for 40 percent of the global economy and one-third of world trade.

That’s the good news. But there are plenty of things about this deal that should give us pause.

TPP has been negotiated in secret since 2009. According to Vermont Sen. Bernie Sanders, the minimum wage in Vietnam- one of the parties to the deal- is 56 cents per hour.

TPP is the economic cornerstone of President Obama’s pivot to Asia. China is not part of the deal. Indeed, the pact is seen as a way to bind Pacific trading partners closer to the United States and counter China’s growing power in Asia.

Prospects for approval advanced last week with the Senate’s 62-37 vote to give this president and his successor so-called trade promotion authority, also known as “fast-track.” This authorizes the president to negotiate the trade agreement and bring it back to Congress for an up or down vote – no amendments or filibuster allowed. And you thought legislative power was vested in Congress. This approach is taken because if Congress were to amend the trade package, it would have to go back to the 11 other countries for approval.

The battle now shifts to the House of Representatives, where a tougher fight is expected. The president’s effort to pursue TPP has split his own party due to labor’s concerns that previous trade deals have cost jobs and depressed wages for American workers competing with low-wage countries.

The draft TPP document is under wraps. If lawmakers want to read it, they and a staff member can go to a security office in the Capitol as long as the staff member meets certain security requirements, but they cannot discuss the details of what they read.

Industry executives and their lobbyists, on the other hand, have had direct access to the text, advising administration negotiators on terms and provisions while the public is excluded from reviewing the draft. It’s not exactly a process that rewards collaborative behavior and promotes transparency.

What the public has learned about the TPP has come from documents publicized by Wikileaks. About 18 months ago, Wikileaks published a draft of the “intellectual property” chapter of the text that would likely lead to higher drug prices because the pharmaceutical industry gets stronger patent protections, which would delay cheaper generic versions of drugs.

Even better, an “investor-state dispute settlement” (ISDS) provision would allow multinational corporations to sue countries over laws that might reduce the corporations’ “expected future profits.” Foreign investors can also sue if a regulation gets in the way of their ability to profit from an investment. Picture Phillip Morris suing Australia for passing laws to discourage children from smoking.

And the court ISDS creates to hear such a suit consists of three private-sector attorneys serving as judges.

Sen. Elizabeth Warren, D-Mass., is especially concerned that allowing foreign companies to sue national governments in special tribunals would infringe upon American sovereignty and could unravel financial sector regulations. The president played junkyard dog on her in an interview with Yahoo Politics when he said: “Elizabeth is, you know, a politician like everybody else. She’s got a voice that she wants to get out there. And I understand that. And on most issues, she and I deeply agree. On this one, though, her arguments don’t stand the test of fact and scrutiny.”

The more you learn about the TPP, the worse it looks. Is it any wonder that the draft has been kept under lock and key?

Perhaps the only thing more improbable than the Seattle Seahawks passing on second and goal from the one-yard line in the Super Bowl is the notion that the American public benefits from the lack of transparency surrounding the Trans-Pacific Partnership.

originally published: May 30, 2015

America mugged by good intentions

Posted on by j.giglio

The Obama administration has unveiled a sweeping 645-page pollution control rule limiting carbon dioxide emissions from the hundreds of fossil-fuel power plants. It’s a noble gesture, but one that ignores the fact that climate change is a global problem that requires a global solution.

The rule requires a 30 percent cut in carbon dioxide emissions by 2030 relative to 2005 levels. Hardest hit are the roughly 600 coal-fired power plants that account for 40 percent of U.S. electricity and about 38 percent of carbon pollution, the single largest source of greenhouse gas emissions. They contribute to the U.S. being the world’s second largest source of such emissions.

In 2007, the Supreme Court ruled that carbon dioxide and other global warming pollutants could be regulated under the Clean Air Act. The Court gave the EPA the green light to regulate heat-trapping gases in automobile emissions and regulate greenhouse gases such as carbon dioxide that contribute to global warming.

The proposed rule is the strongest action the president has taken on climate change. It fulfills the pledge he made in his first year in office that, compared to 2005 levels, the U.S. would reduce its greenhouse gas emissions such as carbon dioxide roughly 17 percent by 2020 and 85 percent by 2050. During his first term, the president increased vehicle fuel efficiency standards.

The various stakeholders have a year to comment on the proposed rule. Each state will then have a year to design and submit implementation plans. States can employ a variety of measures to meet the target, including plant upgrades, requiring plants to switch from coal to natural gas, enacting measures to reduce demand for electricity, producing more energy from greenhouse gas-free renewable sources such as solar and wind, or by starting “cap and trade” programs in which states agree to cap carbon pollution and firms buy and sell permits to pollute.

If states do not develop plans, the EPA will impose one.

The transition to a low-carbon economy won’t be free. It will likely drive up the price of electricity and of goods down the energy chain. Environmentalists and others argue that some of the expense will be offset by decreased health care costs and that new clean energy technologies will create jobs.

But the problem is not American warming, it’s global warming. The U.S. is only one player in the climate game.

China, India and other developing countries are poised to see an explosion in carbon pollution as millions of people join the middle class and enjoy cheap, available coal-fired electricity. Coal is used to generate nearly 40 percent of all the electricity produced in the world.

China has already passed America as the leading emitter of greenhouse gases due to its increased reliance on coal-fired power plants and growing use of automobiles. As recently as 2007, China was bringing one or two new coal-fired plants on line each week. With a growing economy and rampant urbanization, it is the world’s biggest energy consumer; its use of coal, oil and other fossil fuels doubled between 2000 and 2010.

Coal accounts for 70 percent of China’s total energy consumption and 80 percent of its electricity. Its share of global coal usage rose from 27 percent in 2000 to 47 percent in 2010, twice the volume consumed in the U.S.

Emissions have leveled off in the industrial world but continue to grow rapidly in developing countries. The question is whether developing countries have an interest in accepting economic constraints that would change that dynamic. What evidence is there that the environment edges out economic growth as developing countries’ top priority?

The logic behind the proposed mandate seems to be that by leading by example, the U.S. will spur others to reduce greenhouse gas emissions. The U.S. being one strong voice among a chorus of reasonable nations might be a splendid idea if nations were reasonable, but how many times must the U.S. get mugged by countries pursuing their own self-interest?

Sadly, as Walter Cronkite himself might have said, “that’s the way it is.” Case closed.

originally published: June 7, 2014