The middle class is toast unless we radically rethink our country’s trade policy.
And the best way to start rethinking our trade policy is to ditch the Trans-Pacific Partnership, or TPP.
For over 200 years after the founding of the republic, our economy was built on a system of tariffs, which are small taxes on imported goods.
These tariffs made foreign goods more expensive in the United States, thus protecting American manufacturing, and made our country a global superpower.
American businesses and American workers didn’t have to compete with cheap products or cheap labor from abroad, and so our economy flourished.
Everything worked fine until the 1980s when President Ronald Reagan abandoned the system of tariffs that had worked so well for centuries and ushered in the era of so-called “free-trade.”
Every president since, including Democrats like Bill Clinton, has followed Reagan’s lead by slashing tariffs and signing us on to free-trade deals like NAFTA and CAFTA.
This has been a disaster for the American working people — and it has impoverished our nation because, as Adam Smith pointed out, the wealth of nations is in large part what they manufacture.
Public Citizen’s Trade Watch estimates that NAFTA alone has led to a net loss of around one million jobs here in the US – many of them the kind of good manufacturing jobs that helped Americans rise into the middle class throughout the twentieth century.
The Trans-Pacific Partnership would be even worse.
While the treaty has been negotiated entirely in secret with the help of about 600 so-called “corporate advisors,” we do know a little about it thanks to organizations like Wikileaks.
Wikileaks has been releasing a steady stream of TPP documents over the past few months — and those documents paint a pretty scary picture.
The TPP would give big pharmaceutical companies virtual monopoly patent power, let corporations sue countries in international courts over regulations that those corporations don’t like, and gut environmental and financial rules.
These leaks prove what many TPP critics have been saying for a while: that the treaty is less about actual trade and more about empowering massive transnational corporations at the expense of We the People and the government that represents us.
In other words, game over for the middle class.