Opinion

The Great Debate

Obama: Building trade to build growth

The Obama administration has quietly embraced the most ambitious agenda on trade and investment liberalization in the past two decades.

The United States is currently juggling no fewer than five high-level trade negotiations: free trade talks with the European Union; the Trans-Pacific Partnership (TPP) talks with a dozen Asia-Pacific countries; a new Information Technology Agreement covering trade in high-tech goods; negotiations on liberalizing services trade though the World Trade Organization, and a last-ditch effort this week to agree on new trade facilitation measures at the WTO ministerial meeting in Bali.

This about-face on trade from President Barack Obama’s first term is remarkable.

In 2008, candidate Obama promised to renegotiate the North American Free Trade Agreement (NAFTA) with Canada and Mexico to add tougher provisions for protecting worker rights and the environment. Once in the Oval Office, he stalled for several years before even sending to Congress three free trade agreements — with South Korea, Panama and Colombia — that had been completed by the Bush administration. Today, however, the administration’s trade agenda is the most far-reaching since the late 1980s and early 1990s, when the United States was negotiating NAFTA and the Uruguay Round of world trade talks.

The new direction is as much accidental as deliberate. Except for the new talks with Europe, the various trade initiatives have been slowly advancing for many years and are now coming to fruition. But it also reflects the administration’s belated recognition that opening new global markets is vital for generating stronger U.S. growth.

A road paved with sand

Bills have been introduced into both the House and the Senate to dismantle the federal government’s role in interstate highways and leave that massive responsibility to individual states. Tea Party adherents and other conservatives are applauding this effort. The Interstate Highway System, they argue, was largely completed in the 1980s and local communities should provide their own transportation needs.

The new transportation bill proposed by Senator Mike Lee (R-Utah) and Representative Tom Graves (R-Ga.) however, tragically misses the mark when it comes to our national infrastructure needs. Their legislation would abandon the highway trust fund just when our roads and highways are most in need of reconstruction, repair and expansion.

Though many voters are demanding a check on big government, our elected officials need to remember that the Founding Fathers wrote into the Constitution a federal obligation to build and maintain a national infrastructure. Localizing responsibility for the Interstate Highway System is a complete disconnect from how the world’s largest economy works.

It’s not just fast-food workers who are underpaid

Akil Poynter, 20, works 30 hours a week at a St. Louis area McDonald’s, earning $7.35 an hour for manning the grill. Since the Florissant Valley Community College student can’t get by on that income, he took on a second job, preparing sandwiches and salads at a local Panera Bread. There he receives $7.95 an hour for another 25 hours of labor a week.

Asked the difference between his two employers, Poynter says there isn’t much of one. Panera’s nicer surroundings and higher-quality food don’t translate to better working conditions. “The environment is different but the work is the same,” Poynter noted. “Workers are working their butt off every day to get their paycheck.”

As a coalition of groups, including Fast Food Forward and Fight for 15, prepare to undertake one-day job action against fast-food establishments in 100 cities this Thursday, it’s worth taking a moment to contemplate Poynter’s words.

Can states’ rights work for liberals?

Can states’ rights work for liberals? It has always been a conservative cause. Conservatives use states’ rights to resist federal policies that protect civil rights, voting rights and abortion rights. Today, however, federal action is often blocked. So progressive states are passing laws that bypass gridlocked Washington and advance the liberal agenda on their own.

In his famous keynote address at the 2004 Democratic convention, Barack Obama criticized pundits who “like to slice and dice our country into red states and blue states.” His rejoinder: “I say to them tonight, there is not a liberal America and a conservative America — there is the United States of America.”

Obama was wrong. Americans have become more and more politically segregated over the past 50 years. Since the 1960s, politics has come to reflect lifestyle and values, and people often choose to live among others who share their lifestyle and values. And therefore their politics.

Longer lives would lead to better living

Last week, the United States Food and Drug Administration ordered the Google-backed genetic testing company 23andMe to stop selling its home testing kits, arguing that the possibility of false positive readings for potentially fatal or debilitating conditions could prompt people to take unnecessary and potentially fatal medical action. The FDA should now work quickly to develop standards so that 23andMe and companies like it can get back to their vital businesses of working to extend the human life span.

Looking at the challenges facing us, you’d be forgiven for thinking that long lives are a problem. Humans face food shortages, the effects of climate change, and potential overcrowding on a global scale, as well as developed world retirement and healthcare systems that are ill-equipped to serve the needs of too many Methuselahs. But these problems might be more the result of short-term thinking rather than long-lived lives. The economist John Maynard Keynes once remarked, “In the long run, we are all dead.” We may have taken that too much to heart.

Meanwhile, powerful forces are working on a cure for aging that could result in the radical extension of human life so that people can live at least to the outlier age of 120, if not beyond. Google, with clout and cash to burn, has funded and nurtured numerous projects meant to extend the human life span, perhaps indefinitely. Google co-founder Larry Page views death as a problem to be solved. Futurist and computer scientist Ray Kurzweil serves as an adviser to Calico, a Google project meant to cure aging, as if it were a disease rather than a fact of life.

Don’t miss the boat on trade facilitation

Trade ministers open their meeting in Bali Tuesday with the aim of creating a new multilateral trade reform package worth more than $100 billion to the global economy. The deal — focusing on measures to cut red tape at borders — would be a welcome shot in the arm for both global trade and for the World Trade Organization itself.

This may come as a surprise to some. Indeed, you could be forgiven for thinking that the Doha Round of multilateral trade negotiations had quietly died after a 10-year struggle. But in fact, work has continued in the World Trade Organization — and in capitals around the world — to capture some of the gains from what was once billed as the most ambitious trade round ever. The first multilateral trade agreement in almost 20 years now stands tantalizingly within reach.

The package on the table in Bali includes important provisions on agriculture and development, which would give greater transparency and additional safeguards for international trade. Top billing should go to “trade facilitation” reforms that would streamline border and customs procedures the world over.

Does it matter whether or not economics is a ‘science’?

Recently, at the House of Sweden, there was a feisty exchange among the newest Nobel laureates. First, one of the economics winners, Robert Shiller, questioned the validity of the efficient markets hypothesis, the prize-wining idea of co-laureate Gene Fama. This prompted chemistry winner, Martin Karplus, to say “What understanding of the stock market do you really have?” He reckoned economics can’t explain the market and questioned if “the dismal science” is even a science.

That conversation demonstrates the understandable frustration people have with the economics profession. That frustration deepened with the financial crisis, which few predicted, and the anemic recovery that followed it, where economic policies failed to revive growth. It leads many to ask: “What use are economists and their theories?”

It’s important to understand that economics isn’t fortune-telling. If you judge a single economic model by its ability to predict the future, inevitably it will fail you. Economics merely aims to determine the best use of scarce resources. That requires some understanding of how different factors in the economy interact. For example, if you have limited means to boost the economy and increase government spending, what happens to income?

The 4 reasons why Amazon won’t be shipping by drone anytime soon

This weekend Amazon Chief Executive Officer Jeff Bezos told 60 Minutes that he wants small unmanned aerial vehicles — drones — to speed packages to online shoppers as early as 2017, cutting delivery times to as quick as 30 minutes.

It’s a bold, imaginative plan — one that could propel a host of technological and legal advancements.

It’s also really, really difficult to pull off. What follows are just four of the reasons Bezos’ Amazon delivery-drones might not get off the ground.

A shifting global economy brings Australia to a crossroads

Australia is no longer immune to the stagnation in the West. Despite a resilient housing market, Australia’s economy is slowing. With a worsening labor market, consumption is eroding, along with business confidence.

In the past two years, the benchmark interest rate has been almost halved to 2.5 percent. Still, Australia’s real GDP growth is likely to decrease to 2.4 percent during the ongoing year and will remain barely 2 percent until the mid-2010s.

Australia is at a new crossroads.

In the past decade or so, exported commodities fueled Australia’s terms of trade, thanks to rising commodity prices. While agriculture and natural resources each account for barely 3-5 percent of GDP respectively, they contribute substantially to export performance. True, the service sector of the economy, including tourism, education, and financial services, continues to account for some 70 percent of GDP. However, the country’s abundant and diverse natural resources attract substantial foreign investment.

It’s time to retire Cyber Monday

It’s that time of year again. Time for Americans to gather, eat turkey with all the fixings, and give thanks for what they’ve got. It’s also time for our old friend Cyber Monday — the Monday following Black Friday — one of the biggest shopping days of the year. But frankly, it’s a holiday we can do without.

I have nothing against online shopping. I’d much rather sip a cappuccino and shop in the comfort of my own home than endure long lines and fight with other harried customers in the post-Thanksgiving rush. But this holiday no longer reflects the realities of digital shopping in 2013.

First mentioned in an announcement by Shop.org on November 28, 2005, Cyber Monday was dreamed up by marketers to address a legitimate consumer need. Few U.S. consumers had high-speed Internet access at home, and it was reasoned that a dedicated day to encourage people to shop online when they returned to work the following Monday would give a boost to holiday sales.

  •