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TPP AND CITIGROUP (PART II)

July 2, 2016

TPP AND CITIGROUP (PART II)

So, asks Dayen, why has Obama been more vigorous in fighting for the TPP, in league with Republicans and corporate America, than in seeking, say, a public option for health insurance or stiffer regulations for financial institutions? Good question, and I have no answer. The president, after all, entered office with a promise to renegotiate unbalanced trade agreements, agreements many (including me) believe has cost us millions of jobs as “free trade” pretense (Wall Street propaganda)   and “fast track” tactics (to avoid public and congressional scrutiny) appear in the TPP to represent more of the same rather than a renegotiation of old trade deals gone sour.

TPP as presently written (from what we can tell) is written by and for Wall Street corporate and banking interests with scant attention paid to the interests of the rest of us, such as jobs, the environment, currency fluctuation by design (see China and Japan), and various other ruses such as subsidies back home, dumping on overseas markets etc. Trump on campaign tours says he will tear up such agreements, but if elected he can’t and won’t irrespective of his campaign twaddle. What is needed is what Obama promised, i.e., renegotiation of old trade pacts and, I submit, a more careful look at the wants and needs of all the rest of us and our interests along with the paper shufflers on Wall Street on all future trade agreements along with repeal of the statute giving the president fast track authority.

So what happened with Obama’s promise? I think it has to do with the leopards who regularly go backwards and forth between government and Wall Street, especially Wall Street banks, and per Dayen, especially Citigroup. The principal architect and salesman for the TPP is Michael Froman, United States Trade Representative, as of 2015, the date of publication of Dayen’s essay.

We know from leaks and media reports, for instance, that the TPP contains language which will protect  the interests of pharmaceutical companies, software makers, and Hollywood conglomerates by protecting their patents and profits at the expense of competition and consumers (i.e., the rest of us). We also know from what we can gather from TPP that American multinational corporations will have improved access to poor countries with non-existent labor protections, such as Vietnam and Brunei, to manufacture their goods destined for import to America and further loss of our jobs here. Perhaps the worst section of the proposed trade agreement is the one which allows corporations to enforce the agreement themselves, which permits corporations to sue American governmental and other entities for damages for “expected future profits.” Does that mean that a multinational corporation sited in Vietnam can sue a zoning board for damages in Seattle if the zoning board refuses to allow the foreign corporation’s petition for variance to build a slaughterhouse next to a museum? I don’t know – yet.

So where did the chief leopard Michael Froman (USTR) hail from? He came to the job from Citigroup, the nation’s largest bailout recipient, where he managed a $49 billion Alternative Investments division. (It could be that Froman got the job because as a younger man he helped edit the Harvard Law Review with a colleague named Barack Obama, speaking of old acquaintances). The plot thickens. Before taking on the USTR job Froman was chief of staff to Bob Rubin, a then former Citigroup chair who became Clinton’s Secretary of the Treasury, who (along with Froman and Al Greenspan) advised Clinton to sign a repeal of the Glass-Steagall Act (which prevented banks from mixing commercial with investment banking), the biggest mistake, in my opinion, that Clinton made in his eight years in office, and which (in addition to Bush’s eight-year fiascoes of wars and pharmaceutical giveaways and tax breaks to the rich) led directly to the derivatives-mad and real estate bubble that brought on Bush’s Great Recession, a downturn from which we have still not recovered.

Dayen reports that after Obama won his first term, “Froman got a plum assignment as a member of the transition’s advisory board, effectively becoming the hiring manager for the president’s entire economic team, despite STILL BEING EMPLOYED at Citigroup. Froman’s assistant in staffing the administration was Jamie Rubin, Robert’s son. While Citi received hundreds of billions of dollars in bailout money, their man in Washington helped select key members of Obama’s staff, including Summers and Treasury Secretary nominee Timothy Geithner, who while at the New York Federal Reserve helped engineer the CITI bailout.”

Are you beginning to get the picture? The foxes are not only in the henhouse; they are running it. We chickens are relatively uninvolved with trade and treasury policies; ours is to try to survive in a trade regimen that takes our jobs and our futures. The Washington Post reports that of 566 cleared advisers on trade agreements, 480 of them represent private industry or trade groups, so it can be no surprise that the dominant voices in the ear of trade negotiators come from big business and that the finished product reflects their priorities, especially when the trade negotiators themselves have Wall Street or business backgrounds.

So what have been the results of living with past trade agreement (which the TPP resembles with its protection of intellectual and other property etc.)? The past 14 U.S. trade deficits have been among the largest in U.S. history, notes Dayen, an average of $500 billion every year. Damon Silvers, policy director for the AFL-CIO, says that the TPP “creates a subsidy for our firms to locate in TPP member countries and export back to us. This is not something you would be concerned about if you wanted to create jobs in the United States.” The AFL-CIO has made more than 100 specific suggestions about negotiating language, and Silvers reports that “we had every reason to want a TPP we could live with and perhaps endorse and those conversations were exhaustive, and they got nowhere.”

Members of Congress describe Froman’s behavior in briefings as a combination of arrogant and slippery, challenging opponents’ grasp of the facts while personally making inconsistent or even misleading claims. How dare such representatives of us chickens question authority from on high (aka known as an executive power grab)?

The old mantra that elevates “free trade” as an automatic public good doesn’t work when the deals mainly benefit the executive suites, Dayen notes. Without the constitutional hijacking of trade policy, and without a trade office captured by special interests, perhaps America can rebuild anew a future of shared prosperity leading to a more equitable society. Perhaps, but only if we are vigilant.

So can a leopard change its spots? I can only guess, but I need not guess with Froman, who has not “changed his spots” with his move from Citigroup to government but is rather an obvious front man for special interests from the Street. I am opposed to TPP for many reasons other than the ones I have skimmed over in this essay, and I think we should call our representatives to tell them to vote “down” when and if it is resubmitted to Congress for and “up or down” vote    GERALD    E

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