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George Bush's Trade Sucker Punch?
The wonderful thing about distraction is that it usually works. In politics, you can use distraction to your benefit by getting your opponents organized, funded, and riled up - and then change the agenda. It's a fake, like a wind-up from Muhammad Ali that left his opponents out cold from the sucker punch they never saw coming from the other hand.
So, for a president who used "Weapons of Mass Destruction" and 9/11 to justify a war that most of his advisors wanted to start three years before the World Trade Center collapsed, it's not unreasonable to consider the possibility that George W. Bush's Social Security "reform" may be nothing more than a giant distraction intended to hide another agenda.
The Bush Administration's sucker punch may be a radical new trade policy that leaves no CEO behind.
The press, beleagured by the Social Security imbroglio, barely mentions the new Bush trade agenda and it's well-heeled supporters. But, already, visitors to such right-of-center web sites as the Drudge Report are getting pop-ups showing the president and quoting him as saying, "Open trade is not just an economic opportunity, it's a moral imperative." The pop-up takes them to a site called "Americans for Growth Through Trade", which is a project of the Business Roundtable, a multinational lobbying group. There, they're asked to send a letter to Congress urging support for the Roundtable's wish list of trade deals that they've embodied in an unsigned report called "2005: A Crossroads for International Trade Policy"
Indeed, 2005 may be a crossroads, at least if it was anything like 2004. But not the way the CEO's would have you believe.
The November trade deficit of $60.4 Billion was the highest on record, and the year's may well be $600 Billion, or 6% of GDP - above the 5% many economists consider "dangerous" - once final figures are tallied. 2004 also saw the startling decline of the Dollar, leading many to speculate that it may soon cede it's position as the world's reserve currency to the Euro. And while some in the Administration see the Dollar's fall as a good sign - something that will make US goods more attractive in foreign markets - others aren't so sure. China - along with a lot of other US trade partners - peg their currency to the Dollar; so, when the Dollar falls, their already cheap goods come even cheaper to Europe and other trading partners that have a free-floating currency.
Ultimately, the trade deficit must be financed. Americans borrow the money to pay for it, at interest, from foreign lenders - Japan, China. But the day may come - and it may be soon - when foreigners don't see the US as a good place to invest their money. And when that happens, interest rates would have to be increased to lure them back into the US market, increasing the cost of such things as home mortgages and car loans. Economic luminaries like Paul Volcker, Alan Greenspan and Pete Peterson have all warned of the dangers of the continuing trade deficit.
Still, the CEO's persist with their wish list - largely because their companies will benefit. Among other things, the CEO's want the Doha round of the WTO Agreement completed, (which would open the two elements of the US economy that actually have trade surpluses - agriculture and services - to increased foreign competition) and an expansion of NAFTA to the notoriously low-wage economies of Central America and the Dominican Republic. Finally, the CEO's hope to continue the diminished role of the House and the Senate over trade by renewing the president's "fast-track" authority to conclude trade negotiations. And Congress - looking for their payoff in the form of bundled campaign contributions from corporations - will listen.
Soon, the CEO's will line up to collect their bonuses for having done such a great job firing workers, boosting profits, and "increasing shareholder value" - all done more by adroit political manipulation of the Congress and the Bush Administration than any special business acumen. And progressives, labor leaders, farmers, environmentalists and others - Paul Krugman, perhaps? - who oppose the insanity of the Bush Administration trade policy will be recovering from the sucker punch they never saw coming.
After all, they were too worried about President Bush's Social Security "reform" wind-up to see the trade punch coming...
Copyright, 2005. In the Arena. Use liberally, but please cite http://InTheArena.bravehost.com as the source.
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