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The reason trade is a major campaign issue |
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Written by Stumo
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Sunday, 30 December 2007 |
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Why are more candidates talking about trade this year? It
shifted the majority of the House in 2006 from the Republicans to the
Democrats. Many House races did not have Iraq as an issue, but
focused on trade and the economy. The pro-sane trade candidates
tended to win. The freshman Senators and House members were most likely to oppose the Peru FTA in November and December 2007.
A Gallop Poll this month found only 28% of respondents saying the economy is in excellent or good condition.
“The economic mood is grimmer than it has been since 1992,” said Andrew Kohut, president of the Pew Research Center.
The economy is a perennial top voting issue. We all care about
a lot of things, but "voting issues" are a rare breed that move
elections. So here is the kicker.
But a more likely cause of the anxiety among those polled appears
to be related to globalization and technology, and the failure of
public policy to keep up with those changes.
I'm not sure what "technology" means. There are not a lot of
poll results saying people don't want new technology. But
virtually all polls on the topic find much distrust of the wacko free
trader policies.
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In the news
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Key Flaws in the Bailout Legislation
On compensation, which is central to reforming the banks, and equity participation, which is essential for insulating the taxpayers from loss, the legislation is not what is being advertized by the Administration and the Speaker.
The bailout hardly restricts executive compensation. Those provisions are vague, except for golden parachutes, and really only apply to banks the government would take over.
For banks and securities companies that sell bad assets to the Treasury through the normal auction process, restrictions on compensation really only apply to golden parachutes for the top five officers--compensation that only applies if the banks fail and the CEO is pushed out. Restrictions on compensation do not apply to work performed by incumbent employees until a bank goes bust.
Hence the banks will be free to continue to pay excecutives through bonus systems that encourage reckless decisions as and get banks in further trouble. Only after banks get in trouble again, can the government get involved in compensation and management practices.
The same flaws apply to government warrants (equity positions in the banks).
If the government buys $100 billion of toxic paper from Citigroup, for example, and Citigroup recovers for now, the government will be able to do little to alter its management practices or participate in the benefits of its recovery. Only if Citigroup fails, after the bankers have been paid again, will the government be able to get involved in its business practices or get an equity stake--only when the bank is near worthless.
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