News & Short Takes
"We have created nearly 21 million new
jobs nationwide since 1992...Trade is not the sole cause of
this success, but it is a vital component," said Deputy
U.S. Trade Representative Richard Fisher in March.
In a new brief on "The Facts About Trade
and Job Creation," Robert E. Scott of the Economic Policy
Institute provides evidence that, on balance, "free
trade" has resulted in a net loss of jobs and lowered
Gross Domestic Product. What’s missing from the Trade Rep’s
analysis is imports, which have skyrocketed since 1992.
Says Scott: "Trade includes imports as
well as exports. Looking at exports while ignoring the effects
of imports is like trying to keep score in a baseball game by
adding up the runs scored by one team and ignoring those
scored by the other."
Here are the hard numbers according to Scott:
Between 1992 and 1999, rising exports
created about 4.1 million jobs. But soaring imports cost
us 7.3 million jobs. That’s a net loss of 3.2 million
Rising exports caused real output (the
Gross Domestic Product) to increase by 19.8 percent. But
galloping imports reduced real output by 35.2 percent. And
so, trade caused a net 15.4 percent decline in the GDP.
Scott notes that probably the biggest impact
of expanded trade is the way it pushes workers in and out of
jobs. In 1999 alone, he reports, a total of 11.4 million
workers — 8.9 percent of the workforce! — either gained or
lost a job due to trade. No statistic can describe the
dislocation and job fear that figure represents.
For more info, see the Economic Policy
Institute’s website at www.epinet.org.
©2000 Mike Konopacki
Despite such evidence, Democrat and Republican
politicians are pretty solidly united behind pro-corporate
global trade liberalization schemes.
But the American public is not so sure. A
Business Week/Harris poll of 1,024 Americans taken in April,
just days before the big trade protests in Washington, found
most people were queasy about the effects of "free
A slim majority of 51 percent described
themselves as "fair traders," while only 10 percent
said they were "free traders," and 37 percent were
outright "protectionist." They were evenly split on
whether trade increased or decreased U.S. jobs. But they
thought trade agreements with countries such as China and
Mexico definitely resulted in lower U.S. wages.
When asked what should be the major priorities
in U.S. trade agreements, 74 percent said preventing unfair
competition by countries that violate workers’ rights, 77
percent said preventing the loss of U.S. jobs, and 80 percent
said the environment.
Congress may soon vote on whether to
deregulate the nation’s $200 billion electricity market,
allowing big energy companies to elbow their way into retail
The Center for Responsive Politics notes that
there’s been a sudden surge of interest in utility
deregulation on the Hill lately, and wonders if monumental
campaign contributions by corporate supporters of deregulation
might have something to do with it. Both houses of Congress
are likely to take up the issue this summer.
In April, billionaire Warren Buffett, who owns
a utility company in Iowa, visited House Speaker Dennis
Hastert and Minority Leader Dick Gephardt to argue for
deregulation. The deceptively named lobby group Americans for
Affordable Electricity, meanwhile, has meted out some $12
million in soft money, PAC, and individual contributions in
1999. AAE’s members include Enron, Anheuser-Busch, the
National Restaurant Association, and General Motors.
For more info, see the Center for
Responsive Politics’ website at www.opensecrets.org,
or call Holly Bailey at 202-857-0044.
Faces of the IMF/World Bank
©2000 Mike Konopacki
The little known leaders of the International
Monetary Fund and World Bank had a rare moment of high
visibility in April. They came out from their conference
rooms, looking tired and pale, to defend their institutions in
the face of protests by students, environmentalists, and union
members in Washington, D.C. (see:
We Put the IMF/World Bank on the Defensive). The IMF’s
Stanley Fischer and World Bank’s James Wolfensohn were a tad
defensive, insisting that their primary aim was to reduce
poverty and suffering worldwide.
But on the eve of the Washington protests, the
International Confederation of Free Trade Unions released a
survey of its trade union affiliates around the world about
how they perceived the work of these global financial
In their statement, the union organizations
charge that there is a "huge gap between IMF/World Bank
statements about reducing poverty, and the disastrous
consequences of their policies, which in many cases have had
exactly the opposite effect."
The ICFTU cites one recent case in which the
IMF commended the government of Tunisia for refusing to
implement an unemployment insurance system. In Haiti, the IMF
urged the government to implement an across-the-board freeze
on public spending. In Bosnia-Herzegovina, the World Bank
recommended that the government not adopt laws guaranteeing
workers the right to collective bargaining.
"In many countries," the ICFTU
charges, "narrowly focused labor market deregulation,
often at the suggestion of the two financial institutions, has
become synonymous with weakening trade unions and dismantling
bargaining structures, reducing workers’ protection, and
penalizing the unemployed, which has contributed to increasing
inequality and poverty."
Once upon a time, rich people were ten times
more likely than poor people to be audited by the IRS. No
longer. A study by researchers at Syracuse University found
that last year, people earning under $25,000 a year had a 1 in
74 chance of being audited, while people making over $100,000
had a 1 in 87 chance.
Apparently the shift is at least partly
President Clinton’s fault. When rampaging Republicans, led
by Newt Gingrich, wanted to reduce the earned income tax
credit back in 1995, Clinton countered with a proposal to
increase audits of the working poor.
The nonpartisan campaign reform group Public
Campaign also blames "a Congress dependent on campaign
contributions from an elite group of givers who are
For more info: wwwpubliccampaign.org.