The world’s biggest nanny
July 11, 2008
Ronald Reagan always got a laugh when he offered audiences what he described as the scariest nine words in the English language: “I’m from the government and I’m here to help.”
The punch line, funny though it was, defined Reagan’s anti-government philosophy but it did not describe his fiscal legacy – record federal spending, record government deficits, record trade deficits.
Those records, ironically, were smashed by his political heir, George W. Bush. Backed by a pliant Congress, the so-called conservative, anti-government Bush Administration not only burned through the $4 trillion federal budget surplus inherited from the Clinton White House, it also added another $5 trillion in new deficit spending.
Going from $4 trillion up to $5 trillion upside down in less than eight years can be called many things, but it cannot be called anti-government.
The capstone to this through-the-looking-glass era of demagogy is the World Trade Organization. Can anyone explain why the biggest haters of the “nanny state” are also the biggest supporters of the biggest nanny the world has ever created?
Part of the explanation, wrote Mark Weisbrot, co-director for the centrist Center for Economic and Policy Research in Washington, D.C., in an op-ed last October, is that today’s WTO backers sell trade negotiations as “free trade” when, in fact, these efforts are really exercises in picking winners and losers.
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For example, noted Weisbrot, a big, chosen winner in trade talks might be a pharmaceutical company whose U.S. patents are enforced around the world; a loser would be U.S. textile workers whose jobs are sent around the world.
As such, he explained, while WTO backers claim free trade has benefited “the average (U.S.) household by $10,000,” the bigger truth – and one that many Americans are now discovering – is that “average” means one giant winner averaged against hundreds, if not millions, of losers.
“In other words,” Weisbrot noted, “the last three decades of foreign commercial policy have been a net loss for the vast majority of Americans” because the benefit that cheaper imported products might have delivered has easily been canceled by U.S. “wage stagnation due to globalization.”
U.S. farmers, ranchers and farm organization leaders figured out that fact two years ago as the Doha Development Round of WTO trade talks outlined specific subsidy cuts big ag exporters like the U.S. and European Union would be forced to enact to level the global food field.
What looked like early winners in the opening rounds of talks – increased red meat, feed grains and processed foods exports – soon faded when longer-term losers, like sugar, cotton and soy, came into focus. That winners vs. losers math quickly caused the farm groups to soften their support for the Doha talks, essentially halting them. Today, the talks remain in their 2006 rut.
Which isn’t all bad, noted Weisbrot in his op-ed last October, because the current deal is a future dog for millions of Americans.
“Looking forward,” he noted, “the World Bank estimates that the gains to the U.S. economy” – the entire $14.2 trillion per year economy, not just the $250 billion per year American farmers and ranchers add to it – “from a successful round of WTO talks at between $2.7 billion and $6.8 billion per year,” or, he calculated, “about one to three weeks’ spending on the Iraq war.”
Given that tiny, tiny winner – picked, mind you, by the WTO nanny – “…we are supposed to be worried if this round collapses?”
Let it collapse, Weisbrot advocated, because the losses brought to U.S. shores by Doha will affect “the majority of workers through lower wages” while “the gains are concentrated among the big corporations…”
Unless, of course, you want another nanny.
© 2008 ag comm
Write to Alan Guebert at agcomm, 21673 Lago Dr., Delavan, IL 61734, or by email at email@example.com