Article 43


Tuesday, October 31, 2006

NAFTA Revisited

Despite its name, the primary purpose of the North American Free Trade Agreement (NAFTA) was not to facilitate trade among separate sovereign societies. Rather, it was to promote an integrated continental economy and establish the rules to govern it.

by Jeff Faux
Economic Policy Institute
September 28, 2006

Image by Matt Wuerker

As a former foreign minister of Mexico once remarked, ”NAFTA was an agreement for the rich and powerful in the United States, Mexico, and Canada, an agreement effectively excluding ordinary people in all three societies. It should, therefore, be no surprise that NAFTA rules protect the interests of large corporate investors while undercutting workers rights, environmental protections, and democratic accountability. Hence, NAFTA should be seen not as a stand-alone treaty, but as part of a long-term campaign by the conservative business interests in all three countries to rip up their respective domestic social contract.

This REPORT details how this campaign PLAYED OUT in the labor markets of all three nations. It is, of course, not the full and complete measure of the impact of NAFTA. But it is arguably the most important one, because the agreement was sold to the people of each nation on the promise that it would bring large net benefits in better jobs and faster growth. Indeed, supporters claimed the gains would be so large as to more than compensate for the erosion of the average workers’ bargaining power and the weakening of citizens rights to use government to protect themselves against the insecurities of unregulated markets.

Twelve years later, it is clear that the costs to workers outweighed the benefits in all three nations. The process differed from country to country, and given the greater size and wealth of the United States, the impact there has not been as great as it was in Mexico and Canada. But the overall pattern was similar. In each nation, workers’ share of the gains from rising productivity fell and the proportion of income and wealth going to those at the very top of the economic pyramid grew.

Americans were promised that NAFTA would generate large numbers of net new good jobs. Instead, over a million jobs that would otherwise have been created were lost, and wages were pressured downward for a large number of workers with less than a college education.

Mexican employment did increase, but much of it in low-wage MAQUILADORA industries, which the promoters of NAFTA promised would disappear. The agricultural sector was devastated and the share of jobs with no security, no benefits, and no future expanded. The continued willingness every year of hundreds of thousands of Mexican citizens to risk their lives crossing the border to the United States because they cannot make a living at home is in itself testimony to the failure of NAFTA to deliver on the promises of its promoters.

Canada likewise saw continental integration undercut working families. Except for those at the top, real incomes have virtually stagnated. Canadians were assured that NAFTA and the earlier CanadaU.S. Free Trade Agreement were necessary to save the social safety net of which they are justly proud. Yet a dozen years later, government transfers to individuals have dropped from 11.5% of GDP to 7.8% of the countryԖs GDP, and Canadian governments overall (non-military) program spending fell from 42.9% of GDP in 1992 to 33.6% of GDP in 2001 (see Canadian analysis starting on p. 53).

Defenders of NAFTA have two main responses. One is that its damage to workers is exaggerated. Perhaps. But NAFTA was supposed to make thing a great deal better for workers, notҗeven a littleworse. The second response is that the problems of inequality are largely the result of domestic policies and have nothing to do with globalization. Yet that ignores the enormous increase in bargaining leverage over workers that the ability to shift production out of the country, and then sell the products back home, gives the transnational corporation. With that leverage, corporate influence over economic policy has greatly expanded in all three nations since the agreement was signed.

The reality is that the denial of social protections in the rules of an internationally integrated market inevitably undermines the protections established in the previously separate domestic economies after decades of political struggle. In that sense, the דvision of NAFTA is profoundly reactionary: it pushes nations back toward a 19th century ideology in which governmentԒs economic function is to protect the interests of investors, while working peoplethe overwhelming majority in each nationחare left to fend for themselves.

The FOLLOWING THREE STUDIES add to the mounting evidence of NAFTAs perverse impact on the distribution of income, wealth, and political power in all three nations. For over 12 years, we have been told by NAFTAҒs champions to be patient, that NAFTAs great benefits were just around the corner. We are still waiting. The time for a continent-wide debate over the future of this agreement, which was negotiated by and for the rich and powerful in all three countries, is now overdue.

Jeff Faux is the founder and former president of the Economic Policy Institute. He is a contributing editor to The American Prospect, and a member of the editorial board of Dissent.


Image by Matt Wuerker

Posted by Elvis on 10/31/06 •
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Monday, October 30, 2006

Where Did The Iraqi Guns Go?

Thousands of weapons the United States has provided Iraqi security forces cannot be accounted for and spare parts and repair manuals are unavailable for many others, a new report to Congress says.
USA Today
October 30, 2006

The news leads The New York Times (click READ MORE below) this morning, after Sen. John Warner, R-Va., head of the Senate Armed Services Committee, requested the report from the Special Inspector General for Iraq Reconstruction, an office also headed by a Republican.

“The answers came Sunday from the inspector generals office, which found major discrepancies in American military records on where thousands of 9-millimeter pistols and hundreds of assault rifles and other weapons have ended up. The American military did not even take the elementary step of recording the serial numbers of nearly half a million weapons provided to Iraqis, the inspector general found, making it impossible to track or identify any that might be in the wrong hands.

“Exactly where untracked weapons could end up - and whether some have been used against American soldiers were not examined in the report, although black-market arms dealers thrive on the streets of Baghdad, and official Iraq Army and police uniforms can easily be purchased as well, presumably because government shipments are intercepted or otherwise corrupted.”


Posted by Elvis on 10/30/06 •
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Will Big Business Overthrow Sarbanse-Oxley?

Frustrated with laws and regulations that have made companies and accounting firms more open to lawsuits from investors and the government, corporate America with the encouragement of the Bush administration - is preparing to fight back.
By Stephan Lebaton
NY Times
October 29, 2006

Now that CORRUPTION cases like ENRON and WORLDCOM are FALLING OUT of the news, two influential industry groups with close ties to administration officials are hoping to swing the regulatory pendulum in the opposite direction. The groups are drafting proposals to provide broad new protections to corporations and accounting firms from criminal cases brought by federal and state prosecutors as well as a stronger shield against civil lawsuits from investors.

Although the details are still being worked out, the groups proposals aim to limit the liability of accounting firms for the work they do on behalf of clients, to force prosecutors to target individual wrongdoers rather than entire companies, and to scale back shareholder lawsuits.

The groups hope to reduce what they see as some burdens imposed by the SARBANSE-OXLEY Act, landmark post-Enron legislation adopted in 2002. The law, which placed significant new auditing and governance requirements on companies, gave broad discretion for interpretation to the Securities and Exchange Commission. The groups are also interested in rolling back rules and policies that have been on the books for decades.

To alleviate concerns that the new Congress may not adopt the proposals - regardless of which party holds power in the legislative branch next year many are being tailored so that they could be adopted through rulemaking by the S.E.C. and enforcement policy changes at the Justice Department.

Posted by Elvis on 10/30/06 •
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Sunday, October 29, 2006

Rising Debt For Old Consumers

Older Consumers With Credit Card Debt Have Few Places to Turn For Help

By Deanne Loonin
National Consumer Law Center
July 27, 2006

Part Two of NCLC’s Life and Debt Cycle

Credit Card Debt Is Sinking Many Older Consumers: Devastating Consequences for Elders Spur NCLC Report Outlining Reforms.

Older consumers have been increasing their debt loads at a time of life when debt is especially burdensome and FRAUGHT WITH PERIL. While older consumers still tend to hold less credit card DEBT than younger consumers, the elders are CATCHING UP. Not surprisingly, elders are also filing bankruptcy in record numbers.

NCLCs report, The Life and Debt Cycle Part Two: Finding Help for Older Consumers with Credit Card Debt includes original survey research on the types of programs and resources available to help older consumers with credit card debt. The reports were funded by a grant from the Retirement Research Foundation.

Part Two of the report includes a survey of state departments on Aging, Area Agencies on Aging, state AARP offices, and senior centers to evaluate the types of credit and debt-related services they offer. The report concludes that the elder assistance network does not offer much financial counseling assistance to elders beyond bill paying. Many refer elders to outside agencies. The top referral, by far, was to credit counseling agencies. This is striking given the serious problems with the credit counseling industry in recent years. It also indicates the potential for legitimate credit counseling agencies to help fill the gap in debt and credit assistance services for older consumers. The report contains recommended policy fixes to help develop comprehensive and effective programs.

“This report highlights the gaps in targeted assistance for older consumers with credit card debt” says the reports co-author and NCLC staff attorney Deanne Loonin. Because there is little margin for error with older populations, it is critical to help elders find effective assistance as early in the process as possible.

The report includes an extensive survey of reputable credit counseling agencies to assess the types of services they offer and whether those services are targeted for older consumers. The agencies in the survey reported that elders comprise a significant portion of their clients, an average of 20 percent. Eighty-seven percent of the survey respondents noted that these numbers have increased in the past five years.

The detailed policy recommendations in the report are aimed at improving the types of elder-focused services offered by the traditional elder assistance network and by credit counseling agencies. Further recommendations call on credit counseling agencies and creditors to expand the types of concessions and programs they offer to consumers in trouble, including principal reduction plans in certain circumstances. However, attempts to find out more about the programs offered directly by creditors were stymied by major creditors refusal to speak publicly about credit card loss mitigation policies.

NCLC staff attorney Deanne Loonin is the reports co-author and media contact. The report can be downloaded directly from NCLC’s website at the following LINK.

National Consumer Law Center is a non-profit organization with 37 years of working experience in consumer issues, especially those affecting low-income consumers. NCLC works with and offers training to thousands of legal-service, government and private attorneys, as well as community groups and organizations representing low-income and elderly people. Our legal manuals and consumer guides are standards of the field.



Posted by Elvis on 10/29/06 •
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Copyright And CDs

A think-tank has called for outdated copyright laws to be rewritten to take account of new ways people listen to music, watch films and read books.

The INSTITUTE FOR PUBLIC POLICY RESEARCH (IPPR) is calling for a “private right to copy”.

It would decriminalise millions of Britons who break the law each year by copying their CDs onto music players.

Making copies of CDs and DVDs for personal use would have little impact on copyright holders
, the IPPR argues.

Copyright issues have, in the past, been steered too much by the music industry, the report said.

Public respect

IPPR deputy director Dr Ian Kearns said: “When it comes to protecting the interests of COPYRIGHT holders, the EMPHASIS the music industry has put on tackling illegal distribution and not prosecuting for personal copying, is right.

“But it is not the music industry’s job to decide what rights consumers have that is the job of government.”

According to research from the National Consumer Council, more than half of British consumers are infringing copyright law by copying CDs onto their computers, iPods or other MP3 players.

Report author Kay Withers said: “The idea of all-rights reserved doesn’t make sense for the digital era and it doesn’t make sense to have a law that everyone breaks. To give the IP regime legitimacy it must command public respect.”

Intellectual property laws are currently being reviewed by the government.

Chancellor Gordon Brown has asked chairman Sir Andrew Gowers to report his findings back ahead of the pre-budget report in November.

The IPPR is hoping to influence this with its report, entitled Public Innovation: Intellectual property in a digital age.

Its key recommendation is that any policy regarding Intellectual Property policy should recognise that knowledge is a public resource first and a private asset second.

Social glue

The so-called knowledge economy is growing fast as the traditional manufacturing of goods is replaced by more intangible assets.

With it is a growing paradox in which intellectual property is both a commercial and cultural resource.

Knowledge must, therefore, perform the roles of both commodity and social glue, both private property and public domain,
IPPR report

“The internet offers unprecedented opportunities to share ideas and content,” the report says.

“Knowledge must, therefore, perform the roles of both commodity and social glue, both private property and public domain,” it adds.

The report looks at how Digital Rights Management (DRM) technologies - which restrict the sharing of music or other intellectual property - are affecting attempts to preserve electronic content.

It argues that the British Library should be given a DRM-free copy of any new digital work and that libraries should be able to take more than one copy of digital work.

Ms Withers said: “We charge the British Library as being the collective memory of the nation and increasingly it has to archive digital content.

“More and more academic journals are delivered digitally but copyright laws aren’t designed to deal with digital content.”

She said there was often a conflict between DRM and accessibility technologies which needs to be addressed.

“Someone with poor sight may use a screen reader technology and may have to change the format of the content to use it but some DRM technology isn’t sophisticated enought to take this kind of thing into account,” she said.

The report also calls for the government to reject calls from the UK music industry to extend the copyright term for sound recording beyond the current 50 years.


Posted by Elvis on 10/29/06 •
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