New York Times reporter Jennifer Steinhauer takes a look (8/26/11) at U.S. trade deals with South Korea, Colombia and Panama that are currently languishing in Congress. The piece calls them “free-trade” agreements, which is generally misleading: Trade deals usually involve complicated horse-trade negotiations regarding tariffs, patent protection and the like–meaning they make trade in some ways less free.
But more important are the other assumptions in the piece:
The three free-trade agreements, which originated with the Bush administration, would eliminate tariffs on cross-border transactions, expanding exports of American goods by about $12 billion a year, according to estimates by the United States International Trade Commission. Under the agreements, American service providers would be able to compete in the three countries, ostensibly adding new jobs to the American economy. Because of this, they are widely supported by the U.S. Chamber of Commerce and other business trade groups.
First is the assumption that these deals do something special to increase U.S. exports. A study from Public Citizen last year found more export growth to countries that don’t have “free trade” agreements with the United States. (Todd Tucker joined us on CounterSpin to talk about it at the time.) And the estimates of export growth haven been called into question as well.
“Ostensibly adding new jobs to the American economy” seems like a rather generous leap of faith. Critics have consistently argued that these deals will cost jobs– even the New York Times concluded last year that the Korea pact “is likely to result in little if any net job creation in the short run, according to the government’s own analysis.”
Lastly–is there any reason to suspect that the “U.S. Chamber of Commerce and other business trade groups” support these trade deals because they create U.S. jobs? As Dean Baker put it:
Corporations do not exist to create jobs, nor do they claim this as a goal. Invariably, corporate CEOs will say that their responsibility is to produce returns for shareholders as they announce large layoffs. If the Chamber of Commerce is supporting these deals, it is because it believes that they will increase profits, end of story.
It’s pathetic to see Americans drinking their own Kool Aid.
National Hiring Day, the grass roots idea for jobs, suggests that corporations have been given a lot and now it’s time for them to give back to their country. “Corporations are people”? Well then let them be patriotic people. When each hires one or more we can all help the country and get more jobs in one week then this congress did in 2 years.
There is a solution to the jobs problem and it could quickly put hundreds of thousands of people back to work. It is not pro left or right. It is not from any corporation, it’s outside the government control, it’s totally voluntary, works in about one week, and helps all with little sacrifice from anyone.
National Hiring Day – This is a day that corporations are encouraged to hire new employees. Corporations are called on to put patriotism first and help their country in
hard times. Those corporations that cannot hire, are asked to stop firing for that month.
http://wp.me/p5S9X-nv
FTA: Corporations do not exist to create jobs, nor do they claim this as a goal. Invariably, corporate CEOs will say that their responsibility is to produce returns for shareholders as they announce large layoffs. If the Chamber of Commerce is supporting these deals, it is because it believes that they will increase profits, end of story.
Calabro, no that’s not the end of the story. Business responsibility is changing. They are having all time high profits in these hard economic times. Time for them to give back to their country. Patriotism is part of their responsibility. Some say it’s just to shareholders. That’s changing to also management, employees, customers, suppliers, AND city, state, government.
The old thinking says corporations that beg the government for tax breaks, subsidies, influence, etc. are exempt from any responsibility to that country, and that customers will continue to support companies that refuse any initiative to help their country, and that businesses that don’t see the economic writing on the wall, and refuse to change, will somehow still prosper.
This is a loosing business plan in the real world.
People with jobs buy goods and services. People without jobs buy less. People with jobs pay taxes. Some people without jobs collect unemployment insurance. It appears that more american jobs would mean more profits as well as more tax revenue to retire more U. S. debt than we create.
John I agree. Smart businessmen will see that the grass roots idea of a National Hiring Day, that can be set up without any involvement from the stale mated congress, is good for business too. National Hiring Day, would help all. Let’s say you run a small business, by hiring one person, you are a part of this. Many others hire one or more. Then because you (and others) hired one or more, thousands have gotten jobs, lost insecurity and worry, and are ready to buy from you and others. AND they have a good reason to support your company. Just one hire from enough small businesses and the whole country has a big boost. You help a little and get good will from thousands that find jobs, in return.
http://wp.me/p5S9X-nv It’s a win-win for everyone that cuts through all political bickering to actually help people,and do it within a month. What’s needed is fair coverage of this ane other innovative ideas by a media that so far has refused to talk about it – though they talk about jobs daily. Perhaps FAIR should look into the refusal to talk about National Hiring Day in both progressive and conservative media.
They are exempt from responsibility. They only exist to profit. We are resources, a commodity. Commodities are always acquired at the lowest cost. “Good for the country” and “good for the people” are regarded by businesses as dangerous ideas (except when they can be used to hide behind).
How about a National Grovelling Day, that would be more likely to get the support of businesses.
No, let’s have a National Hire Day, and let’s have it be promoted by the Obama administration so the the Republicans can get another good laugh when our patriotic businessmen completely trash the idea.
Allen, I don’t know how corporations would spin an anti-help the country by not hiring day. I think some would not respond. They would be foolish. Most would help. But overall let’s let corporations speak for themselves pro or con.
National Hiring Day idea gets two reactions from people – the one says all corporations will turn their back on the country and put greed ahead of patriotism. The other says corporations are there to make money, most are just getting by, and patriotism through jobs creation is not a part of that responsibility.
I think most corporations are somewhere in between – they see that supporting the country during tough times like this is not a burden but an opportunity, an opportunity to not only help those out of a job, but get the economy going and help themselves to new customers with those new jobs.
There would be no need to import many of the consumer goods, if the cost of making them at home was not so high! This cost is partly due to that of the access to and use of land. The land lord gets fat, speculating in what his sites can bring in, but his expensive land is caused by the tax-payers’ money having previously been invested in improving the surroundings and by the growth in the population. The high price of the land is maintained because much of this land is unsold, waiting fror a buyer. For these advantages conferred by land ownership the tax payer pays and the land speculator grows fat whilst busily observing how his land lies.
To create more jobs we need to see the costs of land access and use reduced by a large amount. The legislation to achieve this must be through the land laws. A tax on land values will drive down the price of land to the level where everybody could own a piece and work it too. The following explain this proposal in more detail:
Why Tax Land Values? â┚¬“ The Theory of Land Value
As a community grows from a few pioneers, the use of land and other natural resources is limited by the territorial claims of its occupants as well as the poor means for access to its bounty and the slow external communications. The government slowly invests tax-payers’ money in various local and national infra-structures and the benefits from these improvements to the surroundings, gradually raise the living-standards of the population, allowing it to be more active economically.
However, this enhanced productivity of the land is not returned to the community as a dividend on its public investment. Instead, this advantage is taken by the few ex-pioneers who are now wealthy land-owners and whose monetary gain is in the form of a potential or actual ground-rent, (which is the true measure of the land value). The ground-rent on urban sites becomes progressively greater with the more central locations, having been intensely developed in mid-town due to the high-density of the population and their high potential for productivity.
Speculation in land values often results in choice sites being unused, which wastes their potential. The relatively few land owners and their production-managers also control the opportunities of the landless majority of workers to earn, whose labour needs access to the land and its improvements.
These two social injustices should be rectified by the introduction of land value taxation (LVT) instead of the main tax burden being placed on the earnings, goods-sales and ownership of built-up property.
14 ASPECTS of LAND-VALUE TAXATION affecting Government, Land Owners, Community and Ethics
The following 4 economic aspects of LVT are as listed according to the above titled categories:
3 Aspects for Government:
1. Most of the ground-rent being collected as LVT, adds to the national income. It allows the taxes on earnings, purchases and family/corporate ownership of buildings to be reduced or eventually to be eliminated.
2. The cost of collecting the LVT is much smaller than for income tax and other production-related taxes. The ownership of each land parcel is registered. Using regularly updated maps, the rental value of each site (as if without buildings) is public knowledge. Then the LVT is simple to understand, the amount of tax easily found and its payment by the land owner impossible to avoid. The many problems arrising from legal and confusing escape-clauses in the other tax regimes require an army of tax inspectors. This is not needed with LVT, the the only additional jobs being the up-dating of the land-rent maps and tables of sites data.
3. With LVT, the national economy stabilizes and no longer experiences the 18 year housing boom and bust cycle, which was due to the changing prices that arose from speculation in land-values during town expansion. Without LVT this cycle initiates due to the growing land prices as building sites are used, however speculators begin to withhold the opportunities to use them and the prices inflate. After the speculators have sold land to them, the site developers eventually find the land too costly to use,. When in panic, they try to sell the real-estate, it quickly drops in price. Instablity from co-lateral borrowing on land value also decreases with LVT.
6 aspects affecting Land Owners:
4. LVT is progressive, the owners of the most potentially productive sites pay the most tax. None is paid on marginally productive sites, since their owners cannot claim ground-rent from possible tenants.
5. The land owner pays his LVT regardless of how the land is used. When the land is leased to tenants most of the resulting ground-rent is the tax. After LVT is introduced, the majority of the population benefit since they are consumers, whilst a minority who are monopolists and speculators in land values and their banks, sustain losses.
6. Without LVT, as time passes the speculators in land value withhold more sites from use. This raises the prices chargeable for access to all the sites, due to their increasing unavailability.When the community is not growing and more so when it is, the tax payers’ money is continuously being invested in the infrastructure. So the urban sites become more useful, scarce and valuable. When LVT is collected it stops the speculation in land prices because any withholding of land from proper use is too costly for its owner.
7. The transfer of tax from production activities and the introduction of LVT, reduces the sales price of sites. Then the government investment in infra-structure no longer influences the land sales-prices, even though their value (or potential usefullness) may continue to grow.
8. With LVT, land owners are unable to pass the tax on to their tenant renters, due to the competition for land use. The users of (untaxed) marginal site price their produce according to the costs of their labour, the use of the durable capital and the added transport needs. Owners/occupiers who access more productiuve land pay LVT/ground-rent and compete in their producton, so this tax cannot be added to what buyers willingly pay.
9. With the introduction of LVT, land prices will drop. Speculators in land values will tend to foreclose on their mortgages and to withdraw their money for reinvestment. Recent mortgage contracts will cease to be worth retaining and the banks holding these contracts will experience losses, after they reposess their properties and need to sell them quickly and cheaply. (The property prices depend on the natural demand for homes, the current rate of LVT and the response by the land owners, not all of whom speculate.) Depending on the rate of these changes bankrupcies can result. LVT should be introduced gradually to allow the investors sufficient time to transfer money to company-shares in durable capital goods, where their greater use will meet the increased demand for produce (see below).
3 aspects regarding Community
10. With LVT, there is an incentive to use the land for production, rather than it laying idle or being partly used. An optimum amount of urban land is brought into use, which reduces the spread of the suburbs onto rurual land and avoid vacant city centers. Some of the urban land was previously held out of use by land value speculators. As these sites become available, their costs decline resulting in the same competition for their greater use.
11. With LVT, greater working opportunities exist due to the cheaper land and an increased number of available sites. Consumer goods become cheaper because entrepreneurs have less difficulty in starting-up and running their businesses. Demand grows, unemployment decreases and with it a reduction in the polarization of our class-society and its degree of poverty.
12. As LVT is introduced, investment money is withdrawn from land and placed in durable capital goods. Then production with more modern tools becomes less costly. The investors in company-shares tend to be wage-earners (as well as banks and monopolists). Their decisions favour more competition and cheaper local production without heavy transport costs, whilst the monopolists have less control of prices and the unavailability of alternative goods. This is a natural trend of our free-marketing social system.
2 aspects of Ethics
13. The collection of taxes directly from productive effort and commerse is socially unjust. The associated philosophy favours coersive robery and is â┚¬Ã…“Robin Hoodâ┚¬Ã‚ in style. LVT replaces this form of extortion by gathering the surplus rental income which comes without exertion. Consequently LVT is a natural system of money-gathering, which avoids the present-day distortion of business economics. It also implies the need for taking better care of the environment and that spoilers of nature should repair or pay for the damage.
14. Bribary and corruption cease with LVT. Before this was due to the leaking of news of municipal plans for housing development. However the speculation in land values is no longer worthwhile after LVT is in place.
Dave wow ok I read this…… twice.I know this is a big idea in libertarian circles.I reject the nefarious implications.My father always said God made the earth ,and he is not making any more.He always told me to buy land.I do because i enjoy it and…it is an investment.As far as i know i have not received any memos on how we landowners shall someday rule the world.And i do wonder how farmers would fare.It is an interesting philosophical argument for a cold day.