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Backing free trade is presidential? |
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Written by Stumo
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Monday, 07 July 2008 |
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John McCain is pushing his free trade support more than any other presidential candidate in history... at the campaign stage.
No candidate in recent memory has made such broad support for free trade as central to his campaign as McCain. Those presidents who pushed for lowering the barriers to international commerce, Bill Clinton and both George Bushes, were far more ardent free traders once they reached office than they had presented themselves when seeking it.
That's been the worry. Candidates say nothing about trade, but then support these trade agreements later. But is it presidential to support them?
"In this environment, it has been a way to differentiate the
candidates," said Michael Veseth, professor of international political
economy at the University of Puget Sound. "Backing free trade is a
presidential thing to do."
Odd comment. McCain is at least clear. Obama is leaving his options open talking both sides of the debate ("can't cut off trade, but need different trade agreements). He opposes the Colombia FTA, but supported Peru. He supports the best Asian currency manipulation bill currently pending in the Senate. McCain has not signed on as a co-sponsor. Obama's most specific statements are that we need labor and environmental provisions in new trade agreements. Weak tea. But at least it is some tea.
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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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