Obama Puts Unions Ahead of a Healthy Economy, Free Trade

-By Warner Todd Huston

President Obama claims that he wants to "create jobs," and is happily touting several policies that he claims will create jobs in this jobless, non-recovery. Unfortunately, all his polices really do is shore up the high cost unions that kill job growth. As GOP Senate Minority Leader Mitch McConell says, Obama has "relentlessly pursued an agenda that is radically opposed" to job growth.

Speaking on the floor last Tuesday, Senate Republican Leader Mitch McConnell said, "For two and a half years, Democrats in Washington have paid lip service to the idea of job creation -- even as they've relentlessly pursued an agenda that is radically opposed to it... Democrats don't want to admit that the government-driven policies of the past two and a half years are part of the problem. And until they do, nothing will change. Unless Democrats change their priorities and their policies, the threats of a downgrade won't go away. The debt won't get any smaller. Businesses won't create the kind of jobs we need to build prosperity. "We need to change course and a good place to start is with trade," McConnell said. "The President himself has explicitly acknowledged in front of the cameras that free trade agreements will create tens of thousands of jobs for American families who need them. Yet now the President's advisors say that the White House plans to hold off on this bipartisan job-creating initiative unless it can spend more money on a government benefits program first."

America is in desperate need of jobs. The country is in worse condition with chronic joblessness than it has been since The Great Depression. Yet all the president can do is placate jobs-killing unions and torpedo the sort of free trade agreements that would improve our economy.

Recently George Will blasted the Obama administration for putting unions ahead of trade agreements that create jobs. "President Obama is sacrificing economic growth and job creation in order to placate organized labor. And as the crisis of the welfare state deepens, he is trying to enlarge the entitlement system and exacerbate the entitlement mentality."

On May 4, the administration announced that, at last, it was ready to proceed with congressional ratification of the agreements. On May 16, however, it announced it would not send them until Congress expands an entitlement program favored by unions... The basic TAA [Trade Adjustment Assistance] still exists. But the administration's stimulus included TAA in its policy of increasing spending almost everywhere in the hope that stimulus-level spending could be made permanent. Which is what Democrats who do organized labor's bidding are trying to do: Forty-one Democratic senators are supporting Obama's demand that the stimulus-level TAA spending, which expired in February, be resumed before the trade agreements will be submitted.

Will thinks that some Democrats do oppose the Administration on these anti-growth measures but he thinks they lack the "courage" to speak up. He feels that unions have such a stranglehold on the Democrat Party that they won't speak up. Me, I doubt there are any that really feel that way, courage or no. The entire edifice of the Democrat Party is built on the billions spent by unions to get favorable, plaint Democrats into office.

Unions feed Democrats campaign cash by the billions so that Democrats will get elected in order to give unions sweetheart deals at the taxpayer's expense. Then Democrats comply with union demands causing unions to reward Democrats with even more campaign cash. It is a vicious cycle from which voters are cut out from being able to influence lawmakers, tax rates, and government spending -- the latter two of which soar to satisfy unions.

Leader McConnell is right on with his comments on this situation. "The White House is free to advocate on behalf of unions. That's its prerogative. But this time it's gone too far," he said. "When the White House is actively depriving others of jobs because some union boss isn't getting his way, it's lost touch. So . . . I'm calling on the administration once again to send us the three pending trade agreements that the President himself has said would create tens of thousands of American jobs -- and to leave Trade Adjustment Assistance out of it. We need to separate these issues, deal with them independently, and move ahead with these trade deals."

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  • It is not readily apparent that free trade promotes either jobs or lower consumer prices.

    If free trade promotes jobs then where are the jobs previous free trade agreements produced? Millions of unemployed Americans would like to know. We have more free trade agreements already in place now than we have ever had and simultaneously unemployment. Each and every one of those free trade agreements was promoted with the same promise of more jobs. All have failed to deliver. The White House says that for ever billion dollars in trade we generate 5,000 jobs. If that is true then it seems reasonable that 5,000 jobs are lost for every billions dollars in trade deficit. So the 2010 trade deficit of $635 billion represent a job LOSS of 635 x 5,000 or 3,175,000 jobs. Plus any jobs that might result from any multiplier effect. How can you make the claim that free trade is good for jobs? Free trade destroys jobs.

    Free trade clearly harms workers but does it really give American consumers lower prices? There is reason to doubt it:

    First, American consumers pay higher prices for domestic consumption of the goods exported. Have you checked grain prices lately? Opening up new markets creates higher demand for those products exported. Higher demand leads to higher prices. If the Colombia FTA leads to grain exports the American consumers will pay even higher prices for grains. As collateral damage many of those grain farmers in Colombia will lose their jobs and come here as illegal aliens taking American jobs.

    Second, we are trying to stimulate export growth by devaluing the dollar. A devalued dollar means that American consumers pay higher prices for all imported goods. Have you checked the price of a gallon of gasoline lately? Part of that price increase is the result of trying to increase trade with a cheap dollar.

    Third, how much of the cost reduction do outsourcing companies really share with consumers? Greed having caused them to outsource in the first place it is unlikely they suddenly turned generous with their price. Their increased profits suggest they retained much of the cost savings for their own profit limiting any benefit to consumers.

    Free trade is the problem not the solution.

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