Diatribes of Jay

This is a blog of essays on public policy. It shuns ideology and applies facts, logic and math to economic, social and political problems. It has a subject-matter index, a list of recent posts, and permalinks at the ends of posts. Comments are moderated and may take time to appear. Note: Profile updated 4/7/12

13 June 2015

The TPP Debacle


[For an analysis whether fast track is constitutional, click here. For a coda-update on the proper limits of progressive opposition to the TPP, click here.]

Imagine you were prime minister of Great Britain almost a century ago, in the inter-bellum generation 1919-1939. Imagine you were also a prophet of sorts, gifted with extraordinary political and economic foresight.

Imagine you knew, in your mind of minds and heart of hearts, that the twentieth century would be the American Century. Imagine you understood that, although the sun then never set on the British Empire, America would come to dominate the world, scientifically, technologically, industrially, commercially, economically, culturally (through cable TV, movies, the Internet and mobile devices), and yes, militarily.

What would you do?

When a big dog gets much bigger than the rest, what can the little dogs do? If they’re smart, they group together. They group for three purposes: to resist the big dog’s dominance, to improve their own chances of surviving and prospering, and to influence the big dog’s behavior for the common good.

Actually, canines don’t form very sophisticated groups. We call them “packs.” In contrast, we primates group well: grouping is part of our evolution, both biological and social.

Yet Britain missed its chance. It didn’t form or lead a group. It continued its traditional snobbishness and rivalry with Continental Europe, which subsist today. It led the charge in ostracizing and collectively punishing Germany, the Continent’s big dog, after World War I.

So how does Britain fare today? It’s still a leader of sorts, at least in culture and intellectual life. Its newspapers, including The Guardian and The Economist, are still some of the best in the world. Its two great universities, Cambridge and Oxford, are still world class. And it still produces movies and TV shows that many in the world watch, even outside the English-speaking world.

But in most other ways, Britain is involuting into an aging and respected global irrelevancy. It’s turning away from Europe. Scotland is breaking off.

At the outset of our new century, it’s hard to think of any remnants of the great British corporations like those that once “discovered” and developed parts of the so-called “New World,” including America. The only ones I can think of that matter now in the global arena are Rolls Royce, which still makes good jet engines, and BP, the big oil company best known for polluting our Gulf. Imperial Chemical Industries, which dominated the twentieth century, has split up, sold off, and internationalized. Land Rover and Jaguar are parts of foreign corporations. Today, in the twenty-first century, Britain is aptly described as America’s “poodle.”

Now think for a moment about what you know, in your mind of minds and heart of hearts, is going to happen in this, our new century. China is becoming the big dog, despite its archaic and dismally inefficient writing system. Everyone’s economists predict it. The daily newspapers report it. And everyone knows it in his bones.

It’s not just population, although people matter. Nor is its the Chinese people’s legendary work ethic, which other cultures share, especially in Asia. It’s also governance. China’s government may not be pretty. It may not be soft. It may not be democratic. But it’s effective.

The seven-member committee that rules China is probably the best, most experienced, most cooperative and most expert national ruling body of any in the world. All in all, it probably has the most power, and the most real expertise, to effect constructive change and avoid stupid mistakes. It differs radically from our Congress and most democratic parliaments, in which the overwhelming majority of members are lifelong professional politicians or lawyers—jacks of all trades and masters of none.

China has other advantages, too. As a culture, it never came close to adopting a muscular, proselytizing religion like Christianity or Islam. Today those religions so trouble America, Europe and the Middle East. And China, unlike America, is not riven by a mindless ideological split. It’s busy making its government work, along with its industry and its people, for the greater good.

Meanwhile, we Yanks are busy arguing about how “big” government should be. Like Jonathan Swift’s fictional ideologues disputing which end of a boiled egg to flatten, we vexatiously dispute abstractions while letting our infrastructure decay to the point of economic drag, not to mention embarrassment. China, which has jettisoned Communism in all but name, has a single religion, making money, and a single ideology, pragmatism.

Finally, China is the only major industrial nation besides Germany that is not now mired in debt. It has debt problems domestically, but it has over $2 trillion of foreign reserves on which to draw. No other industrial nation, let alone the world’s already second-largest economy, has that advantage.

Now we can easily bring this essay’s opening scenario current. Just change “America” to “China;” change “Britain” to “America;” and change the geographic focus from Europe to Asia. Then you have a precise analogy to what is going to happen to us Yanks in the twenty-first century, unless we are smarter than the Brits in the twentieth.

Indeed, it’s already happening. Nothing or no one can stop it. The best we can do is retard it and ameliorate its effects on the little dogs. And the only way they—including us Yanks—can do so is to drop borrowed British pride, suppress our Yankee “exceptionalism,” and form or join a group, in economic partnership with other little dogs.

That’s the big picture. And that’s what our President, with his inveterate grasp of the big picture, understands.

It’s odd, really. Everyone expects Barack Obama to perform miracles of persuasion. All expect him to open his arms like Moses, take Congress and the multitudes to his bosom, and persuade the blind.

But professors are teachers and sometimes prophets. They are not miracle workers. Already Barack Obama has performed three miracles: (1) getting elected (twice!) by a clear popular majority in a consummately racist nation, (2) saving our economy, and (3) passing improvements to national health insurance against the adamant opposition of a great political party and human history’s most bizarrely effective propaganda machine.

Changing the course of millennial global history is beyond even his capacity. So is persuading pols who live to beg for money and think in bumper stickers, when they think at all.

Woodrow Wilson, another college-professor president, was similar. He tried mightily, but in vain, to persuade the victorious World War I Allies not to punish a defeated Germany collectively, not to drive it into an economic, social and political corner. He failed.

The result was precisely what he predicted. A second global war came, much more horrible than the first. When it ended, 50 million people lay prematurely dead, worldwide, and the world had been transformed forever.

I know, I know. In its current form, the TPP won’t do much for labor rights or environmental protection. It doesn’t even retard, let alone prevent, nationalist currency manipulation. It doesn’t magically make the world a better place.

But realism suggests that our Yankee power to do all that is declining as rapidly as global warming is accelerating. Despite our dreams of global leadership and empire, the ground is already sifting under us, far more rapidly then we imagine.

As I’ve outlined in another recent post, we live not just in a new century, but in a new millennium. Just as nation states replaced the secular power of organized religion in the Second Millennium (at least in the West), corporate industrial and commercial power are replacing nation states as the foci of economic power and activity in the Third. Their doing so is a crucial and necessary step in our human social evolution.

Our biological evolutionary paradigm is rule by a single alpha male in a clan of about thirty members. Slowly but surely, our corporations are letting us retain this biological evolutionary model while rationally governing a global economy of going on seven billion individuals, each with a high and growing level of training and specialization in what he or she does day to day. The spread of corporations is just a consequence of increasing sophistication and division of labor in human technology, culture and economy.

At the moment, our Yankee corporations dominate this global transition. Amazon, Apple, Cisco, Google and (yes, still!) Microsoft dominate the Internet, which we Yanks invented and gave to the world. In advanced medical equipment, GE shares the world with Siemens. In advanced heavy equipment, GE shares the world with Siemens and the Japanese zaibatsu and the South-Korean chaebol.

But our dominance is waning as we watch. If you want to see the trend, look at consumer electronics, which Japanese and Korean corporations dominate. Or look at foreign oil-and-gas companies, like those in OPEC, which increasingly dominate the global economy outside the United States. Or look at aircraft, for which Airbus is neck-and-neck with Boeing in making big planes, while Canadair and Embraer nibble around the edges of the markets for smaller, regional planes.

Let’s be frank. It’s deplorable that our pols and trade negotiators have not made greater effort to preserve and spread the hard-fought gains of labor, consumerism and environmentalism during the West’s last century. They should try harder to do just that.

This big strategic blunder was not the President’s. Nor was it his trade negotiators’. The blunder belongs to the corporate executives, lawyers and lobbyists who “negotiated” TPP’s current terms in their closed rooms. Deprived of political input—and apparently devoid of common sense—they fell for classic overreaching. They drafted provisions that make governments pay for enacting rules to make their people’s lives easier, healthier, safer and happier.

Like most democratic pols, our pols are jacks of all trades and sometimes not too bright. But few of them would have fallen into such an obvious trap of hubris and overreach. So now the corporate poobahs will have to go back to the drawing boards and renegotiate the “pay for imposing rules” provisions. They will have to eliminate them, or at least restrict them to rules that are self-evidently counterproductive or unnecessary. Maybe the corporate poobahs who now rule the world collectively can learn a thing or two from common pols after all.

Yet while we seek to correct their error of overreach, we must never forget, as they did, the primary goal of the TPP. It’s to address the rise of China, and to keep it peaceful, productive and restrained, as the Brits and European powers failed to do with our Yankee dominance of the twentieth century.

We are addressing an historic and inevitable shift of economic power and focus to Asia. That part of the world has never been a big center of progress in labor, consumerism or environmentalism.

Yet Asia can learn. As recently as the 1960s, air pollution in Tokyo and Osaka were so bad that Japan’s ubiquitous vending machines offered “sips” of oxygen to weary, coughing commuters. Today, the air in those cities is no worse (or much better!) than the air in leading cities of America or Europe. Our trade negotiators should try harder to preserve and advance the goals of labor, consumers and environmentalists, if only because businesses need workers who can afford to buy what they sell (Henry Ford’s law), and CEOs and managers have to breathe the air, drink the water, and eat the sometimes tainted food, too.

If you want to see the future, go to a new city district in the southeast of Seoul, the whole of which didn’t exist twenty years ago. Now it’s a model of twenty-first century progress.

Five lanes of traffic, in each direction, thread between gleaming, glass-and-steel high-rise buildings of the kind once known as “skyscrapers.” The cars are all of recent vintage, mostly Korean. Their polished and waxed surfaces gleam in the sun.

Oddly, the district is known as “Tehran Alley,” because Tehran, Iran’s capital, is a sister city of Seoul. But it looks nothing like Tehran or anything in the Middle East. It looks more like Fifth Avenue in New York in its heyday, in the 1950s, but without today’s potholes. Its anchor is twin-towered Co-Ex, a convention center with two world-class hotels that is a small city in itself.

Where are all the foreign embassies, the symbols of governmental power? They are in another part of Seoul altogether. They are huddled near Gwanghwamun, the ancient capital’s medieval gate. The modern “embassies” of real economic power today are all clustered around Tehran Alley. They are the gleaming skyscrapers of every multinational corporation in the world, Yankee, European, Japanese, Middle Eastern, and Chinese. We Yanks and the Brits can take pride that most of their names and logos are in English and in the Roman alphabet, one of the world’s two best.

Already the transition to corporate power is most of half a millennium old. The Brits and the Dutch started it when their “East India” companies developed the so-called “New World.” We Yanks grasped the baton in our American century, running harder and faster with it than any nation in history.

Now it’s China’s and Asia’s turn. Corporate rule is a game any nation or people can play. In the seventy years of Pax Atomica, it has spread to every continent and virtually every nation but the poorest. In just the last forty years alone (a mere two generations) it has wrought economic “miracles” in Japan, South Korea, Thailand, China, and now Vietnam. The “miracles” are spreading even to parts of Africa and the Middle East.

This is the course of human social evolution. There is no going back. With only 4% of global population, we Yanks cannot long continue to dominate it unless we combine with others to share the burden and help make the rules. God knows that making good rules is a thing that the Brits and (until recently) we Yanks have excelled at.

Of course we must try harder to retain, and to spread to others, the human and social values of labor, consumerism, and environmentalism that we Yanks have pioneered. But we must also keep our eye on the ball. If we let this chance slip through our fingers while our and our allies’ prestige and collective corporate power are at their peaks, we may well end up like Britain.

A century hence, or even half a century, we Yanks, too, may be isolated, insecure, fearful, lamenting a dilapidated infrastructure, and deeply in debt with no way out. (Speaking of decaying infrastructure, have you ridden the London Underground recently?) New York, like London today, may be a butler to bankers and oligarchs. In our universities, movies and centers of culture, we, too, may some day be nursing idle dreams of past glory.

That’s what the President, in his usual big-picture way, is trying to avoid. And that’s why our Congress and trade negotiators must try harder to preserve our national values without losing sight of the big picture, lest we Yanks and even English-speaking culture, in our turns, become global irrelevancies.

Coda: Clarity in Opposition

The TPP debacle illustrates an increasingly common defect in our national politics. We Yanks often fail to be clear in opposing each other’s political initiatives.

Until quite recently, that was the case with many progressives’ opposition to the TPP. Many opposed the initiative from the beginning merely because corporate interests were for it.

That’s not a good enough reason to oppose anything. Corporations, after all, are responsible for the vast majority our national wealth and creature comforts. Although they can and do do stupid things, they are not the people’s enemies.

Second came word that corporations were largely responsible for drafting the treaty’s current version, and in secret. The secrecy raised hackles and suspicion, the more so in what is supposed to be an open society. But secrecy alone is not enough to justify opposition, only wariness.

Third was the notion that the TPP does not mandate foreign improvements in protecting labor, consumers and the environment. While lamentable, that, too, is no reason to oppose the TPP. Improving those things was never its purpose. Anyway, most of our trading partners would reject attempts by us Yanks to impose our own values on their societies as foreign meddling. So the “may” improve language of the current draft is probably the best we could hope for in a treaty designed and intended for other purposes.

What did and does justify opposition was the final, telling point. A provision of the current draft apparently allows corporations to sue for damages in private arbitral tribunals—not even national or state courts—whenever labor, consumer and environmental rules reduce their profits.

This provision wouldn’t just keep the TPP from helping us spread our own environmental values abroad. Rather, it would allow corporations to push us backward by making our existing, as well as future, protective rules costly. In the worst case, it might motivate dilution, retraction or non-enforcement of rules against child labor, adulterating or counterfeiting foods, food ingredients and drugs, and increasing pollution and global warming. It might do the same for rules making workplaces, cars and appliances safer.

This “pay for rules” provision was and is a case of clear and present corporate overreach. It’s also completely gratuitous. It has no logical or practical relationship to the TPP’s primary purposes: facilitating trade in services and intellectual property, and creating a collective counterweight to China’s big dog.

It seems little more than a nasty “zinger” that corporate lobbyists tried to sneak over in the dead of midnight secrecy. Retroactively, it also seems a monstrous strategic blunder, justifying all the suspicion and paranoia with which many progressives reacted to the treaty, and, more generally, often react to any corporate initiative. It was a dumb thing to propose, and it would be a dumb thing for the Senate to advise and consent to.

The point here is not to criticize progressive opponents of the TPP. The very secrecy of the process made their job of loyal opposition much harder than it should have been. But now that some members of Congress have taken the trouble to vet the still-classified document, opposition should focus on this zinger and the secrecy that made it possible, not the fact of corporate authorship or interest. (Any other zingers that emerge from the darkness of secrecy of course should also be fair game.)

So the “pay for rules” provision must go. Or it must be strictly limited to rules that are self-evidently not good. We should all thank Senators Sanders and Warren, and Congressman Peter DeFazio(D., Or.) for doing their jobs, penetrating the secrecy as much as possible, and alerting the public to this zinger.

Yet at the same time, we progressives should try hard not to mimic the GOP, let alone the Tea Party, in its mindless, unfocused opposition to Obamacare. Right-wing opposition to that initiative was never intended to perfect it or to provide a substitute, but to vilify, embarrass and stymie the President, who had made it a centerpiece of his tenure in office. Opponents never identified a single specific provision to which they objected; they just objected to the President being president and having the temerity to try to govern the nation that he was twice duly elected to lead.

We progressives should never stoop so low. Instead, we should point out how low the President’s opponents have stooped and how counterproductive and un-American their opposition has been.

As for the TPP itself, we so far have identified two and only two flaws. The first is the “pay for rules” provision, which must go, substantially or totally. The second is the process of absolute secrecy that, from the beginning, has fomented distrust and suspicion while clouding and often preventing rational discussion. In retrospect both seem political blunders on the part of the treaty’s proponents, and the zinger only seems to make the secrecy worse.

Do we really want to make governments pay for rules that outlaw child labor, require overtime pay, or require food labels to state accurately what’s in the food? I don’t think so. But as we progressives fight these blunders, we must take care never to allow the voting public to confuse us with rabid, know-nothing opponents of Obamacare. We are better than that.

Is Fast Track Constitutional?

When bad things happen unexpectedly, there’s often an unseen cause. So it may be with the noxious “pay for rules” provision of the current draft of the TPP. Its mere existence, let alone its near acceptance by Congress, opens a whole can of worms.

Let me begin with a dose of humility. Although a retired law professor, I am not a constitutional scholar. Apart from my erstwhile trade, my sole claims to expertise in this matter are: (1) being unusually inquisitive and disinclined to swallow conventional wisdom whole, (2) having a probing mind, and (3) having had a reputation for being a pretty good legal draftsman. In addition, a quick Internet search has convinced me (but not beyond a reasonable doubt!) that fast track has not yet undergone constitutional scrutiny.

Maybe that’s because fast track is so complicated. If you want a summary of all the many legal complaints that might be made against it, read this post by Public Citizen.

This blog tries to keep things simple. It tries to probe the essence of things, not to increase already burdensome complexity. So what I’m after is a simple answer to a simple question: is fast track consistent with the basic structure of government, including the separation of powers and checks and balances that our Founders set up? Is it true to the basics, never mind the details?

Here’s where things, as in Alice in Wonderland, get curiouser and curiouser.

What jogged my thinking was Senator Warren’s recent complaint that fast track would allow the next president to push through treaties without filibusters. Filibusters? Doesn’t the Constitution explicitly require a two-thirds vote in the Senate to advise and consent to any treaty? And doesn’t a filibuster require only a lesser vote, namely, 60% instead of two-thirds? When a senator as smart as Warren, also a law professor, says something that confusing, you can bet the confusion extends far beyond her.

So let’s start with the basics. Article II, § 2 of our Constitution gives the President “the Power, by and with the Advice and Consent of the Senate, to make Treaties, provided two thirds of the Senators present concur . . . .”

That seems pretty clear, doesn’t it? Approving treaties is one of the very few things for which our Constitution explicitly requires a super-majority vote. And that vote, being two-thirds, is beyond even filibuster territory. It’s serious stuff.

Why did our Founders require for treaties the biggest majority anywhere required in our Constitution, the same as for impeachment? Because, when they drafted our Founding document, our nation was still a small fish in a bid pond. Some years earlier, we had spent six years in a draining war for our independence from what then was the mightiest empire (Britain’s) in the Western world. George Washington, our first president, reminded us of our status as the runt among empires when he warned us of “foreign entanglements.”

And “entanglements” are exactly what treaties are. Like legislation, they can last forever. But, being “out there” in the much larger world, and involving changeable cultures quite foreign to us, they can involve many more—and much less foreseeable—unintended consequences.

Today, for example, we contemplate the possibility of nuclear war with Russia if we have to honor our NATO treaty obligations to defend Poland. We contemplate similar gut-wrenching choices if we have to defend Japan against China. Stuff doesn’t get much more serious than that.

Maybe that’s why our Founders gave our Senate the power to advise and consent, and excluded our House. They knew that the Senate would be the “cool,” deliberative body—the smart ones, if you will. The House would be the “hot” body, often driven by passions and prejudices of the moment, as it is today.

As we contemplate the Tea Crazies and the Hastert Rule, which gives a less-than-30% minority of the House veto power over legislation, we have to admire our Founders’ foresight and wisdom. They knew what they were doing, even without foreseeing Denny Hastert’s recent fall from grace.

So why, pray tell, does the House participate in voting on fast track at all? Does approval of a majority in the House, even with a possible veto by a less-than-30% minority, make up for the lack of the two-thirds vote in the Senate, which our Constitution explicitly requires? Curiouser and curiouser.

Insofar as procedure is concerned, Article I, § 5, clause 2, gives “[e]ach House [authority to] determine the Rules of its Proceedings . . . .” So the Senate could, by mere majority vote, decide not to allow amendments while considering whether to advise and consent to any treaty put forward by the Executive. But why does the House get a vote on that? Why does it vote at all?

Then there’s the whole matter of deliberation. Our Founders wanted our “cool” and “elite” deliberative body, the Senate, to consider and debate “foreign entanglements.” Apparently they wanted to exclude the House rabble entirely. At least they said so as clearly and explicitly as they did anything in our Constitution. Like a valid will that disinherits a troublesome child, the “advice and consent” clause is awkward and painful but clear and enforceable.

But if the Founders intended that, didn’t they also intend the Senate to take such weighty matters seriously? Did they really want to let the Senate be forced to vote in haste, within short time limits, on a draft treaty shrouded in secrecy until the very moment of its presentation for “advice and consent”?

No, it’s not just hard—it’s impossible—to square the history of this draft of TPP with the deliberative, near-consensus procedure that our Founders set up for “foreign entanglements.” In fact, it would be hard to imagine a scenario more at variance with the odd scheme of separation of powers (“disinheriting” the House), our checks and balances, or the self-evident yearning for careful deliberation by an elite legislative body that our Constitution embodies.

To be sure, the Constitution’s requirements may not maximize “efficiency” in getting treaties signed. It is possible to imagine a scenario of “horribles.” Drafts might bounce pass back and forth among our Executive, the Senate, and putative foreign partners to the point of exhaustion, until the foreigners got tired of us and sought other, less troublesome, nations with which to deal.

But isn’t that scenario really a straw man? The preventatives are obvious. Get the Senate, or at least its committees, involved early. Inform its key members of the discussions as they happen. Let them see early drafts and comment on them, and take their comments seriously. Take the Senate, or at least its leaders, into the Executive’s confidence. In other words, try to act as if our nation were actually the transparent, open, chips-on-the-board polity it is supposed to be.

Let me be clear. I think Barack Obama is our best president, by far, since JFK, maybe since FDR. I support Obamacare 150%. I believe that something like the TPP will be useful, if not necessary, to avoid isolating our increasingly fragile economy and to counter China’s growing power. So I’m about as big a fan of the President and (among progressives) of the TPP as you will find anywhere.

But I also believe that our over-lawyered, over-lobbied government has gotten far too complex, devious and secretive for its own good. We have a yawning ideological gulf between our parties in large measure because they no longer trust each other. Obamacare had and has such a hard time because it was and is far too complex, and because a president who promised to put the negotiations on C-SPAN ended up acquiescing in congressional secrecy, prolixity and deviousness (calling a tax a “mandate”).

We Yanks have to return to simplicity. We must restore openness. We need to abandon the ridiculous notion that something as important and world-changing as the TPP can be negotiated in secret by self-evidently self-interested parties and end up winning the public’s understanding, let alone support. We ought not to be suprised that this bastard procedure spawned a zinger like “pay for rules.”

We need, in short, to go gack to the wisdom of our Founders, or at least to obeying the most basic rules they gave us, such as that for “advice and consent.” Then maybe, just maybe, we Yanks can muddle through.

Footnote 1. In his brief statement of opposition to the present draft of the TPP, DeFazio proved to be an articulate, cogent and persuasive spokesman, of the sort that used be common in Congress but now is rare. If you want to heal your chagrin at our system of government, give his statement a watch. (Reading the words alone doesn’t do it justice. Set the timer at 4:48.) After you do, you may follow me in beginning to believe that, notwithstanding the Tea Party, there is still intelligent life in our House.

Footnote 2. The Constitution only requires a two-thirds vote of senators “present,” leaving open the theoretical possibility that two thirds of a quorum could approve a treaty. That boils down to as few as one-third of the Senate’s membership, or 34 votes, as Article I, §5, clause 1, sets a quorum as a majority of membership.

Yet it’s hard to imagine any senator who is sentient and mobile (even with assistive devices) failing to appear for a vote on a treaty as important as the TPP. He or she would be abdicating his or her responsibility to constituency and nation, in one of the two most important decisions (the other being impeachment) that senators ever make. Even Congress’ all-but-abandoned power to declare war requires only a majority vote.

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