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.
All is not lost yet, however.
It turns out there’s a very good chance that the United States will never sign on to the TPP.
On Wednesday, Senate Majority Leader Harry Reid told reporters in Washington that he is against giving President Obama new fast track authority on trade deals like the TPP.
If given fast track authority, the president could push the TPP through Congress with only a simple up or down vote.
No amendments would be allowed.
Reid’s comments came just a day after President Obama urged Congress to give him “trade promotion authority” during his State of the Union address.
“Trade promotion authority,” of course, is just a code word for fast tracking.
If President Obama doesn’t get fast tracking powers, it’s going to be very hard — maybe even impossible — for him to get Congress to pass the TPP.
Democrats and Republicans alike oppose the deal, and without party leadership on board, getting the TPP through Congress will cost a lot of what remaining political capital he has left.
Harry Reid, a former boxer, may have just given the TPP a knockout punch.