City Club of Cleveland
Office of Citizen
Rest in Peace,
At City Club 01.07.05: Sherrod Brown for "Fair" Trade - and Gov in '06?!
Submitted by Norm Roulet on Sat, 01/08/2005 - 18:11.
Congressman Sherrod Brown was the speaker at the first Cleveland City Club Friday Forum of 2005, on January 7, where he presented insight from his recently published book on American free trade policy, Myths of Free Trade: Why American Trade Policy Has Failed, and shared personal perspectives on life in Washington, Ohio, and around the world. Appreciative attendees enjoyed the company of an insightful speaker, empowering statesman, and refreshing intellectual â€“ and we may well have been the first to learn Brown is seriously considering a run for Ohio Governor in 2006. Where else but the City Club may we the people of Cleveland get up close and personal to explore the most important issues in the world, with the most insightful people in the world.
Sitting 20 feet from our Congressman of District 13, in Northeast Ohio, hearing him speak eloquently about his worldly pursuit of truth about free trade and answer any question posed from attendees - from "aren't Democrats in Washington a bunch of 98 pound weakling"? to "would you consider running for Governor of Ohio"? - I truly valued the City Club slogan of "A Free Exchange of Thought", and left the session thinking more insightfully about free trade, and the prospect of "Brown for Governor". Here's a recap of the discussion, also broadcast on TV and radio and available by tape.
Brown started his talk by discussing observations on America's free trade policy, highlighting his book Myths of Free Trade, the profits from sales of which go to Results and Cleveland Jobs With Justice. He made the free trade issue personal and human, as seems his style.
He offered a brief background on free trade policy, explaining that before 1990 global trade policy was a below the public radar issue in congress, with limited media interest, handled by commissions and of greatest interest to multinational corporations and their lobbyists. Then came Fast Track, and NAFTA (North American Free Trade Agreement), and PNTR (Preferred Nation Trade Relations). Then followed mounting trade deficits, and the WalMarting of America, and publicity of labor abuse by companies like Nike and the TV pop-star Kathy Lee Gifford, and the complete realignment of the American and world economy, which started to disturb congressman in the late 1990s. The media and public really became aroused about world trade issues in 1999 with the "Battle of Seattle", when 10,000s of global citizens protested at the World Trade Organization summit there. Once visible in TVland, USA, Brown says, the majority of Americans grew to oppose American Free Trade policies, to the extent they saw realities. Brown then explained the realities of Free Trade he has seen.
He recounted a visit to workers at a Mexican GM plant near the border of America - an area he says is the most toxic in the Western Hemisphere. He described the workers' homes as a fraction of the size of the stage on which he stood, built of packing material from the factories in the area, surrounded by waste. The factory, he recalled, was like a modern American automotive factory except it had no parking lot, as none of the employees make enough money to buy cars - pay there is not sufficient to produce consumers, even as the jobs there displace consumers in America, making this free trade a negative impact on our and the global economies. He described seeing the same problems in Asia, where workers making shoes can't even afford those, and Central America - he spoke of "coffee widows" in Nicaragua whose husbands no longer can make a living producing coffee because World Bank policy has forced massive expansion of coffee growing in Viet Nam (no #2 in world), driving down all global prices, making the industry unprofitable for farmers in developing nations.
He then spoke of meat processing plants here in America that once offered well paying, safe jobs to Americans, but that have eliminated union representation and now pay immigrant workers low wages to process 2.5 times more carcasses per hour, resulting in poorer health and quality standards and making this one of the most dangerous jobs in the world. As a side-note, he mentioned that the processing plants have higher quality standards for meat being shipped to Europe, highlighting how industry has prioritized consumption here, over quality, concluding unregulated production is worse for workers and consumers.
Brown mentioned a conversation with an important Chinese national activist, now living in America, who explained the vanguards of the Chinese Communist Party movement are major American corporate CEOs. Brown explained when congress was considering PNTR for China, despite their human rights issues, the airport in Washington DC was clogged with corporate aircraft and the halls of congress congested with corporate CEOs, knocking on every legislator's door, lobbying for ratification. Brown said they pitched wanting access to billions of Chinese consumers when in fact they wanted access to billions of $1/day Chinese laborers, who have little chance of ever becoming consumers of much beyond simple food and shelter.
Brown acknowledged most corporate elites and mainstream media outlets serving the elites in America are supportive of "Free Trade". But common citizens poll against this, and legendary Nobel Lauriat economist Paul Samuelson has come out to say free trade is in ways a net loser for America. From The American Prospect:
Samuelson argues that, far from representing an unmitigated boon, free trade may in some circumstances prove a net loser. Among countless globalists who stand duly corrected, not the least chastened are two of Samuelson's own former students: Jagdish Bhagwati and Gregory Mankiw. Noted for their ardent embrace of globalism, the pair are identified by name as purveyors of "polemical untruth" in Samuelson's opening paragraphs.
Samuelson's insight is that if a low-wage country like China suddenly makes a major productivity leap in an industry formerly led by the United States, the result can be a net negative for the American people. Although American consumers may benefit via low-low prices at Wal-Mart, their gains may be more than outweighed by large losses sustained by laid-off American workers.
This conclusion, coming as it does from the pope of economic orthodoxy, is already (even before its official publication) causing a sensation in the economics profession.
Brown continued by referencing some trade deficit data, like the $120 billion deficit with China this year, and that over the past few years America has lost 1 in 5 manufacturing jobs. This leads up to a battle now in congress that is near and dear to Brown's heart... the Central American Free Trade Agreement (CAFTA)... which Bush has signed and Brown encourages the public to be vocal against. For this and all Brown's candor, he receives a warm round of applause and opens the floor to Q&A.
Q. Democrats are now viewed politically as 98 pound weaklings - what do you think of that?
A. The House and Senate are very different in how they work these days. They used to be more bi-partisan but now are very partisan. Ultimately, Brown believes, Democrats represent majority of citizens in America and so must reach out to the people and activate them to have more of a voice in public policy and law making.
Q. Clinton was for free trade so how can this be viewed as a party issue - that Democrat was wrong.
A. Clinton did start out for NAFTA but by the end of his administration he became more aware of problems with free trade, and started to work toward "fair trade". But Bush has pushed trade policy in reverse toward free trade at expense of human rights and economic progress. Brown believes trade needs to be viewed as a "People Issue" considering quality of life of all people involved, including those harmed by environmental impacts... from unsafe worker conditions to toxic waste at the Mexico-America border. He points out that now, in considering CAFTA, 90% of Democrat legislators are against, but 70% of the majority Republicans are for. To influence this issue, Brown believes small business owners need to speak up about their concerns, but acknowledges most of them are probably Republicans, and they don't have the resources to lobby anyways. Longer term, it is necessary for individuals and small businesses to align to gain a voice in trade issues controlled by high price lobbyists and multinational corporations.
Q. Are you considering a run for Governor of Ohio?
A. Brown replied he loves his current office and that if Kerry had won he'd be writing the national Healthcare reform bill - but Kerry didn't win, so he isn't. Brown also said he loves Ohio and while he hates the idea of having to work with the state legislators, who seem preoccupied with fighting same sex marriage and promoting concealed weapons instead of saving our state economy, he wants to turn this state around, so he is considering running for Gov. - a conclusion Crains also took from this forum - see http://www.crainscleveland.com/news.cms?newsId=2879 ... reporting that Brown is "thinking about" running for governor. He said he is concerned about the direction of the state, in particular the loss of manufacturing jobs, the rising costs of tuition at the state's public universities, the mismanagement of Medicaid, and the corruption of public officials. But, reflecting on his job as a legislator, he added, "I can't think of a job I like more than this one."
Q. The Wall Street Journal likes free trade - doesn't that mean something?
A. Brown is not a fan of the Wall Street Journal, which is the largest media supporter of free trade and is not in synch with the American public reality.
Q. Does America do too much using subsidies to further our national business interests - e.g. for importing oil?
A. By acting as the "Undeniable Superpower" we spend more than our fair share policing the world, which adds to spending, and much of our policing is to protect interests of American corporations abroad, which could be viewed as subsidies. We also allow American corporations to headquarter in tax exempt countries to avoid paying US corporate taxes, which is a policy favoring the largest corporations, so our tax policy is problematic.
Q. Oil consumption in America has exploded and is increasing so what percent of free trade and the deficit is reflected in that one commodity and is there anything that can be done about that?
A. Big problem - latest energy bill is designed for more conservation and efficiency but Brown doesn't see us making real progress here.
Q. How do we overcome need in developing countries for jobs, even if pay is poor?
A. Brown says that is the hardest question to reconcile. He believes workers in developing nations could be paid more, giving them a higher quality of life, and costs to consumers elsewhere would still be low: e.g. raise from $0.25 to $0.50 per pair of jeans sewed in China, which retail for $25 in America. He points to other economic development methods for developing those economies, like microloans (2005 is the UN International Year of Microcredit) to small businesses. While people may believe developing countries need American trade to survive, Brown points to the history of economic activity around the world, which our policies disrupt, and that once disrupted it is very difficult for those economies to normalize. Brown is not opposed to doing business abroad but feels our policies need to promote the fair and good business practices that make America a great country, like fair trade, fair wages, workplace safety, environmental responsibility and respect for human rights in general. Current free trade policies do not take these issues into account and ultimately make the world worse, and poorer - minimize consumers - with fair trade policies we would create more consumers for a sum gain.
Brown receives warm applause and goes off to mingle and sign books.
I left reflecting on free trade and Brown's prospects for Governor. I agreed with Brown on his beliefs about the environment, fair trade, personal empowerment, and social responsibility to all people and the planet, but I distrust politicians and was interested in other opinions. At a meeting with a friend that followed, I asked his opinion on Brown. He said he does not agree with Brown's beliefs on free trade - my friend sees the issue as growth of the overall global economy by developing unique value at each link in the chain - the loss of manufacturing jobs in America is a reasonable response to lower cost labor elsewhere, and American jobs must realign to higher value purposes. Low wages in developing countries will raise as supply of cheap labor tightens - all supply and demand, shifted to a universal level of absolute macroeconomics. As an economist, I ultimately recognize these absolutes, over time, for those left alive, to the extent the world remains reasonably livable. The loss of life and ecology in the mean time suggests to me a more compassionate hand in policy-making.
Thus, I consider, is Brown the hand to steer good policy, and should he do that in Ohio, as Governor, or in DC, as Congressman and perhaps eventually President. For the next few years I wish him well in DC and hope he serves Ohio well - ramping up to 2006 we'll see how other politics play out. I did some googling to see how the 2006 Governor's race is shaping up and this is already fascinating. So far, for the Democrats, the most likely contenders seem to be Brown and Jerry Springer. For the Republicans, Blackwell has announced and Petro and Montgomery are also expected to run. As the 2006 election will be won on the Internet, I visited each potential candidate's election website and Jerry Springer has my vote - he understands the power of the WWW. Blackwell is eCampaigning the most aggressively, but he doesn't use the power of IT well. With a few years to learn, we'll see which candidates realize that the WWW is where they must meet their citizens, and where their citizens will decide who to elect to represent them in government.
For today, I vote for the City Club as "The Free Exchange of Thought", in person. Coming up in the next few weeks, at the City Club:
Fixing Ohio School Finance: A Report from the Governor's Blue Ribbon Task Force on Financing Student Success
Dr. Myles Brand
David E. Gilbert
Delos M. Cosgrove, M.D.
Dialogues on Leadership - New Leaders Only