http://www.huffingtonpost.com/robert-e-prasch/obama-jobs-speech_b_948705.htmlI hope Prasch is wrong about this, but it's an interesting theory so I wanted to post it here.
Robert E. Prasch (Author, How Markets Work: Supply, Demand and 'The Real World')
President Obama's Speech and the Unemployed: Why Now?
Posted: 9/4/11 07:30 PM ET
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At first glimpse, it is reasonable to suppose that the President and his advisors are sufficiently worried about the upcoming election to actually do something for the unemployed. This would be prudent, as a reduced level of unemployment is a good predictor of an incumbent President's reelection prospects, although an important exception was President Reagan in 1984. But, if this were the motivation, one might suppose that the administration would select a plan or plans that could conceivably get the job done (For such a program, see here). Yet, it is evident that the set of programs and policies that early reports suggest are being cobbled together are either symbolic (such as a "workfare" requirement for unemployment insurance that has been pioneered in Georgia), or too small (the proposed infrastructure expenditures), or too long-term (the so-called infrastructure "bank"), to make much of a difference. Worse, their modest effectiveness is certain to be swamped by the negative impact on employment that can be anticipated from the deficit "deal" that the President negotiated earlier this fall (Dean Baker has an astute criticism of the likely content of the proposals). Moreover, we know that a serious effort to address unemployment would require a confrontation with Congress while simultaneously discomforting the President's friends and supporters on Wall Street. As we have seen repeatedly, he instinctually defers to the latter on economic matters. Hence, the idea that he plans to do something sufficiently drastic to tangibly change the unemployment numbers before November 2012 simply fails to tell us "Why now"?
By process of elimination, we can only infer that the President's agenda is symbolic and hence political. If so, what political ends might be in view? Being on record as "caring" about unemployment is always good, but President Obama and his advisors have often spoken of their "concern." A need to reiterate it does not, on its own, explain this new political initiative. It stands to reason that there must be another explanation. Perhaps it is designed to be a distraction. If so, from what are we being distracted? The answer, while admittedly speculative, is most likely "Free Trade."
It is common knowledge that the White House plans to submit three completed "Free Trade" agreements to the Senate this September -- South Korea, Colombia, and Panama. (As always, these treaties are primarily about guarantees and protections for financial and investment flows, restrictions on intellectual property, and related issues. But exploring their content will have to await another post.) With a remarkable sense of timing, the administration also plans to mark Labor Day 2011 by opening multi-party talks on a Trans-Pacific Free Trade Area. (Trade negotiators, lawyers, lobbyists, and hundreds of corporate honchos are invited to these talks -- critical economists, civil society groups, and the public are not.) The President's "voter base" is firmly opposed to these secretive and largely detrimental deals, as is the bulk of the American public. This opposition would most likely intensify if the public were fully briefed on their contents. Simultaneously, there is no question that the President's "donor base" is highly enthusiastic about these deals -- after all, they were in the room when the details were hammered out. Wall Street, the Chamber of Commerce, and the National Association of Manufacturers are beside themselves with excitement. The treaties promise extraordinary protection of financial and investment flows, innumerable exemptions from regulation, new and lucrative opportunities for off-shoring jobs, and political recognition and validation of the absence of labor protections and union rights that is a characteristic of most of these nations and regions. K-Street lobbyists can look forward to high fees and lavish banquets during and after the Senate vote. Big agricultural intermediaries look forward to crushing South Korean farmers with their heavily subsidized produce. This year, Colombia is on track to outperform its 2010 record of murdered unionists. If you're a plutocrat or one of their paid representatives, what's not to like?
My conjecture is that the forthcoming speech and any accompanying legislation was and is intended to provide political cover and a welcome distraction throughout the passage of these "Free Trade" treaties. As during the Clinton years, the treaties will be presented -- with meticulous dishonesty -- as jobs programs (For a glimpse of the scale of this dishonesty, consider that Panama would have to multiply its consumption of American-made goods twenty-fold to import as much as it currently exports to the United States. Even then, their total imports would have no discernible effect on our economy). Handled properly, the Washington press corps and the public could be induced to blur the distinction between a set of largely ineffective jobs programs and the proposed trade agreements. After all, the reporting is certain to downplay analysis while highlighting rancor and noise. My best guess of the end result is that the Republicans will succeed in stripping away what little is of value in the jobs programs while allowing the trade agreements to remain standing as part of some sort of "grand bargain." President Obama will then -- alas -- be "forced" to sign both. This would allow the trade agreements to become law, while minimizing the administration's "footprint." For the White House, this would be a highly desirable outcome as all early signs suggest that this is shaping up to be an election that will marked by a deafening lack of enthusiasm from rank-and-file Democrats.
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