David Broder's War

Dean Broder uncorks a rich defense of the People's Republic of China today, arguing that a trade war would ensue if the Obama Administration moves forward with tariffs on tire imports.

Many in business fear that this is the opening round in what could become a much larger and more dangerous trade war.

For now, the Chinese have threatened only minor retaliation, a cutback in imports of auto and chicken parts from the United States. But both sides have plenty of other, larger weapons they could deploy [...]

The danger is that once you strike the first blow against foreign competitors, you can't tell what will happen next. Obama has taken that risk, so fingers are crossed.

Oh noes, trade war! Except, no, China's consumer base offers little possibility for China to have the room to engage in retaliatory strikes.

Chinese consumers who buy $608 billion of goods from overseas are diminishing the prospects of a trade war with the U.S.

China’s imports, up 68 percent in five years, now amount to almost one-third of gross domestic product, according to World Bank data. The nation’s demand for foreign products is a boon for American companies, which exported $351 billion to China in the past five years.

U.S. President Barack Obama’s 35 percent tariff on tires from China spurred a Chinese investigation into prices of U.S. poultry and car products. Dangers of further escalation may be mitigated by the increasing benefit China provides the world economy. Poised to surpass Japan as No. 2 in GDP, its purchasing power is a lure to firms seeking new customers.

“As China depends more on domestic demand, its rise won’t be seen by the rest of the world to be as big a threat as some view it now,” said Shen Minggao, a former consultant to the World Bank who is chief economist in Hong Kong for the Greater China region at Citigroup Inc., the third-largest U.S. bank.

In fact, with respect to the one threat the PRC made, to look into "dumping" of chicken parts, the Chinese have such an appetite for chicken feet that they would practically revolt if the government tried to cut off imports.

The fact that China has demand and not just supply means that there is an equilibrium where trade laws can actually be enforced. That's all that's been done in this respect, and Dean Broder is just trying to protect the neoliberal consensus by arguing otherwise.

China Can Go Ahead And File A Complaint

I mentioned briefly China's counter-charge against the United States in exchange for extending tariffs on tire production. They have decided to probe US chicken and auto parts sales in China, accusing American exporters of "dumping" (selling goods at less than cost). Marcy Wheeler has a look at this:

I assume China is targeting chicken because our Ag is subsidized and the meat industry has a lot of clout in this country.

I'm more fascinated by China's decision to go after auto parts (and note, some of the announcements on this say "automotive products," which might include cars themselves).

In truth, China imposes huge tariffs on cars coming into its country (and ties permission to import cars to sourcing in China--for example, GM might get to import a certain number of Cadillacs in exchange for sourcing another part of its Chinese-production in China). And the import of parts is often limited to more complex parts that are the same in China as they are in the US. There's not much there there.

It looks like China is targeting auto parts because the government is highly involved in GM and Chrysler, and China can using a threatened cut-off of those markets to leverage a scale-back on the tire tariffs. But the problem is that there's a mechanism to settle these disputes called the WTO, and with China as a member this so-called "trade war" will actually be settled by the governing body through a normal resolution process, including whatever retaliation China offers. And on that front, the US action was available under the existing trade agreement, and I can't see how any amount of legal wrangling can deny that fact. In the end, China and the US are symbiotic trading partners, and this tariff raise doesn't have to lead to any escalation at all. We'll see who stands their ground.

Better News On Bagram

Barack Obama has been lit up for not being the be-all and end-all to liberals for months now, and a fair amount of those criticisms are warranted. The storm of criticism has also driven out of the conversation what has been a pretty decent week for those who want to see a bit more fairness and humility in our domestic and foreign policy. In addition to the resumption of talks with Iran, the Administration will pursue bilateral negotiations with North Korea. The raising of tariffs against Chinese tire imports, while met with petulance and idle threats by the PRC, represents a genuine concern for American manufacturing the likes of which we haven't seen in decades. And this announcement on detainee reviews at Bagram AFB, while not wholly sufficient, is nevertheless welcome.

The Obama administration soon plans to issue new guidelines aimed at giving the hundreds of prisoners at an American detention center in Afghanistan significantly more ability to challenge their custody, Pentagon officials and detainee advocates say.

The new Pentagon guidelines would assign a United States military official to each of the roughly 600 detainees at the American-run prison at the Bagram Air Base north of Kabul. These officials would not be lawyers but could for the first time gather witnesses and evidence, including classified material, on behalf of the detainees to challenge their detention in proceedings before a military-appointed review board.

Some of the detainees have already been held at Bagram for as long as six years. And unlike the prisoners at the Guantánamo Bay naval base in Cuba, these detainees have had no access to lawyers, no right to hear the allegations against them and only rudimentary reviews of their status as “enemy combatants,” military officials said.

The changes, which are expected to be announced as early as this week after an obligatory Congressional review, come as the Obama administration is picking through the detention policies and practices of the Bush administration, to determine what it will keep and what it will abandon in an effort to distance itself from some of the harsher approaches used under President George W. Bush. Human rights groups and prisoner advocates cautiously hailed the policy changes but said the government’s track record in this area had been so poor that they wanted to see concrete results before making hard judgments.

These are not habeas trials under the American system of justice, which should follow for those detainees brought to Bagram from other countries and not as part of the Afghan war. But this is in response to a federal judge's ruling that would have allowed those very prisoners to challenge their confinement, so hopefully it can be put together in such a way that satisfies the principle. And this Defense Department official's quote is encouraging:

“We don’t want to hold anyone we don’t have to hold,” said one Defense Department official, who spoke on the condition of anonymity because the guidelines have not been formally announced. “It’s just about doing the right thing."

Karen DeYoung and Peter Finn have more.

A Defense Of American Jobs

I remember when I was told on a daily basis that the President's greatest responsibility was to protect the American people. Well, this President just did that. He protected their jobs.

In a break with the trade policies of his predecessor, President Obama announced on Friday night that he would impose a 35 percent tariff on automobile and light-truck tires imported from China [...]

The decision signals the first time that the United States has invoked a special safeguard provision that was part of its agreement to support China’s entry into the World Trade Organization in 2001.

Under that safeguard provision, American companies or workers harmed by imports from China can ask the government for protection simply by demonstrating that American producers have suffered a “market disruption” or a “surge” in imports from China.

Unlike more traditional anti-dumping cases, the government does not need to determine that a country is competing unfairly or selling its products at less than their true cost.

The International Trade Commission had already determined that Chinese tire imports were disrupting the $1.7 billion market and recommended that the president impose the new tariffs. Members of the commission, an independent government agency, voted 4-2 on June 29 to recommend that President Obama impose tariffs on Chinese tires for three years. Mr. Obama had until this coming Thursday to make a decision.

China undercuts the global market through manipulating their currency and treating their workers like slaves. America can stand by and do nothing as jobs fly away and the manufacturing base gets obliterated, or they can act under their own trade laws to do something about it. The inconvenient fact is that we don't have free trade; every country acts to protect their interests. And so should we.

Very good move by the President. Dave Johnson has more.

Let The World Be Flat, Then

Here's something everyone can sink their teeth into - the White House enforcement of trade laws! Actually, it's more serious than it sounds. The Chinese are undercutting American manufacturers on price through actions of questionable legality, and the Obama Administration needs to make a choice on whether or not to enforce that.

By Sept. 17, Obama must decide whether to slap a 55 percent tariff on tires imported from China, as recommended by a federal trade panel, or leave the matter alone, as a phalanx of lobbyists representing manufacturers in China and U.S. companies that import from them are urging.

From 2004 to last year, the number of Chinese tires imported to the United States more than tripled, and their share of the U.S. market rose from 5 percent to 17 percent. Over the same period, the share of the U.S. market served by U.S. factories declined by a similar amount. More than 5,000 U.S. jobs were lost.

Opponents of the tariff say the U.S. industry's shrinkage is unrelated to the surge in Chinese imports. The U.S. manufacturers, they say, have strategically moved into pricier, more profitable tires, shifting production of cheaper tires overseas.

This is a measure designed to save American manufacturing jobs. The "world is flat" crowd tells us that we shouldn't bother so much with that, because globalization has provided cheap crap for us all and the world must freely trade. The answer to that is that all countries restrict their own markets. Toyota wouldn't exist without tariffs. A lot of major industries overseas wouldn't. In particular, Chinese industry receives government subsidies that violate international trade law, and they should face the consequences.

In one of the largest U.S.-China trade cases ever, the U.S. Commerce Department has issued a preliminary finding that Chinese steel pipe producers have received government subsidies in violation of trade law, helping them overrun the competition.

The volume of steel pipes imported from China more than tripled between 2006 and 2008, rising from $632 million to $2.6 billion, according to the Commerce Department.

The subsidies from the Chinese government allowed the firms to overwhelm their U.S. rivals, according to six U.S. companies that filed the complaint along with the United Steelworkers union. The companies alleged that their Chinese rivals received discounts on raw materials and loans from government-owned firms.

To even the playing field, the Commerce Department has ordered that tariffs ranging from an estimated 11 percent to 31 percent be imposed on the steel pipes from China.

The steel pipes at issue in the case are those used primarily by the oil and gas industry. They are known as "oil country tubular goods." By dollar volume of imports in the industry, the case represents the largest U.S.-China trade case ever, attorneys said.

If you want to argue for a level playing field, you have to be willing to call out both sides and seek one that's truly level. Good for the Obama Administration, so far, for making that case.

iCarly: In This Case, the I Stands For Iran

If we're going to have to deal with eMeg, then we also must contend with iCarly (and anyone with sons, daughters, nieces or nephews knows the reference). Weeks into her brave transition from failed CEO and failed Presidential campaign surrogate into the bold new world of failed Seante candidate, Carly Fiorina has hit a snag in the form of her extremely dicey past:

Over the past dozen years, Hewlett-Packard has sold hundreds of millions of dollars worth of printers and other products to Iran through a Middle East distributor, sidestepping a U.S. ban on trade with the country.

Now the person who headed HP for much of that time, Carly Fiorina, is ramping up to run for U.S. Senate. And questions are emerging about what Fiorina knew about HP's growing presence in Iran during her six-year tenure at the Silicon Valley firm from 1999 to 2005 [...]

Fiorina, a Republican who is gearing up to challenge three-term Democratic incumbent Sen. Barbara Boxer in 2010, declined an interview request. But she issued a statement through her campaign spokeswoman saying that she was unaware of any sales to Iran during her time at the company.

"It is illegal for American companies to do business in Iran," the spokeswoman, Beth Miller, wrote. "To her knowledge, during her tenure, HP never did business in Iran and fully complied with all U.S. sanctions and laws."

iCarly's stock response when questioned about her awful tenure at Hewlett-Packard is to say that she was unaware of the misdeeds and only aware of the deeds. For someone running on her success as a go-go CEO, that's a curious position to take, that she didn't know about large chunks of HP's business. Especially when the evidence has been clear for years that HP products found their way into Iran, with their printers becoming "nearly ubiquitous there," according to a Boston Globe report. HP has finally gotten around to severing their relationship with a Dubai-based distributor which clearly funneled their products into Iran. That distributor worked for HP throughout iCarly's tenure.

This is fun:

One former federal trade enforcement official said HP's dealings with the country are ripe for further investigation. If Fiorina or other HP employees based in the United States were aware that HP products were being resold to Iran, they could face fines or even prosecution for violating the trade embargo, said Mike Turner, former director of the Office of Trade Enforcement at the U.S. Department of Commerce.

"If I was still sitting in my chair today," said Turner, who retired as head of the enforcement agency two years ago, "I'd be looking at who at HP had knowledge of this and when did they develop that knowledge."

I actually appreciate iCarly entering the race. It would be so boring watching Chuck DeVore play the Washington Generals to Barbara Boxer's Harlem Globetrotters. iCarly will add a dash or two of corporate failure, espionage, illegal trade practices and possible indictment, all the while giving the state economy a stimulus by spending all her money in defeat.

The Fight Over Border Adjustment

So the President, who during the 2008 campaign traipsed through Ohio turning into a second coming of Paul Wellstone, vowing to tear up every free trade agreement and ensure they under his Administration complied with labor and environmental statutes, wants you to know that elements of the Waxman-Markey bill are protectionist.

President Obama on Sunday praised the energy bill passed by the House late last week as an “extraordinary first step,” but he spoke out against a provision that would impose trade penalties on countries that do not accept limits on global warming pollution.

“At a time when the economy worldwide is still deep in recession and we’ve seen a significant drop in global trade,” Mr. Obama said, “I think we have to be very careful about sending any protectionist signals out there.”

He added, “I think there may be other ways of doing it than with a tariff approach.” [...]

The House bill contains a provision, inserted in the middle of the night before the vote Friday, that requires the president, starting in 2020, to impose a “border adjustment” — or tariff — on certain goods from countries that do not act to limit their global warming emissions. The president can waive the tariffs only if he receives explicit permission from Congress.

The provision was added to secure the votes of Rust Belt lawmakers who were wavering on the bill because of fears of job losses in heavy industry.

In the floor debate on the bill Friday, one of its authors, Representative Sander M. Levin, Democrat of Michigan, said, “As we act, we can and must ensure that the U.S. energy-intensive industries are not placed at a competitive disadvantage by nations that have not made a similar commitment to reduce greenhouse gases.”

In the interview on Sunday, Mr. Obama said American industries like steel, aluminum, paper and glass had legitimate concerns about competition from developing nations. But he warned that trade sanctions based on the extent to which other countries curbed carbon dioxide emissions might be illegal and counterproductive.

You can read the transcript of these remarks here.

The thing about global warming is the word "global." More than that, the policy objective of cap and trade is to limit greenhouse gas emissions used by people in this country. Energy companies have already made the threat that, in the event of Waxman-Markey taking hold, they would simply process fuel and coal offshore and bring it to the United States to avoid the emissions cap. Border adjustment is a perfectly reasonable way to avoid that outcome, as Paul Krugman explains:

The truth is that there’s perfectly sound economics behind border adjustments related to cap-and-trade. The way to think about it is in terms of a well-established theory — the theory of non-economic objectives in trade policy — that owes its origins to Jagdish Bhagwati, who certainly can’t be accused of being a protectionist. The essential idea is that if you have a non-economic objective, such as self-sufficiency in food production, you should choose policy instruments to align incentives with that objective; in normal circumstances this leads to consumer or producer intervention, rarely to tariffs.

But in this case the non-economic objective is to reduce greenhouse gas emissions, never mind their source. If you only impose restrictions on greenhouse gas emissions from domestic sources, you give consumers no incentive to avoid purchasing products that cause emissions in other countries; as a result, you have an inefficient outcome even from a world point of view. So border adjustments here are entirely legitimate in terms of basic economics.

And they’re also probably OK under trade law. The WTO has looked at the issue, and suggests that carbon tariffs may be viewed the same way as border adjustments associated with value-added taxes. It has long been accepted that a VAT is essentially a sales tax — a tax on consumers — which for administrative reasons is collected from producers. Because it’s essentially a tax on consumers, it’s legal, and also economically efficient, to collect it on imported goods as well as domestic production; it’s a matter of leveling the playing field, not protectionism.

And the same would be true of carbon tariffs.

If the WTO can look at border adjustments and offer its blessing, surely the United States can. The dirty little secret is that countries use very real protectionist policies all the time - it explains the existence of Toyota. In this case, the goal is simple to avoid unintended consequences from the policy. I assume Barack Obama does want to reduce greenhouse gas emissions. This is the way to ensure that cap and trade doesn't simply result in leakage. In addition, making China concerned about a trade war is a good way, perhaps the only way, to get them on board with global climate change talks.

In addition, there's that dirty little secret about the Congress and also this nation: we have a lot of fair traders, enough to scuttle the bill:

First, I may be wrong on this, but given the closeness of the vote, is anybody sure that Waxman-Markey would've passed without the border adjustments? I'm not, and, I'm also pretty sure that nothing passes the Senate without them (maybe not even with them), so this surely deserves much larger weight on the 'pro' side of the ledger than people seem to be granting.

Second, the potential scale of losses from leakage don't sound trivial to me. A report by RFF says that the benefits of unilateral US carbon pricing are reduced by 25% if nothing is done to stop leakage. And, comparing border adjustments to other ways to curb this leakage while we wait on an international agreement make them look pretty good to me.

I am not very sanguine about the politics of losing a quarter of the benefits of an incredibly hard-fought legislative win every year while we wait on an international agreement - how durable do people think the WM win will be if opponents can come back every year with (not totally in-credible) estimates of how many jobs we've lost to trading partners because of it? The border adjustment in WM buys more than a decade to reach an agreement before it kicks in. This seems entirely reasonable to me.

Third, where I think Krugman is most right about this stuff is how bizarre it is that a (literally) textbook economics solution (albeit a second-best one) to this problem (that is probably even allowed under existing international trade law) has inspired such ferocious hand-wringing about protectionism, coercion, and making other countries furious. There is no rational reason at all why a carbon tariff that any country can unilaterally disarm through its own actions should be a serious hold-up to an international agreement.

Nobody wants to talk about the populist elements of the House, which is this case are the only ones who get the economics of the situation, IMO. But they must be reckoned with.

Fair Trade Contingent Now Formidable Opponent

Ron Kirk made some controversial comments affirming that the Obama Administration has no plans to reopen NAFTA, but would look to address labor and environmental concerns outside of the agreement. Whereupon David Sirota's head exploded. Or actually not - he made some side comments about the virtues of campaign promises, but he also stated that "I still hold out hope - based on the White House's rhetoric - that even though Obama is going back on his promise to reopen NAFTA, there will nonetheless be progressive trade policy changes soon." That's kind of interesting, and I think the optimism comes from the set of allies in Washington for progessive trade policy, moving the country in a new direction:

Trade is emerging as a source of friction between President Obama and congressional Democrats.

Trade critics on Capitol Hill are complaining about comments by Ron Kirk, Obama’s trade representative, who on Monday said Obama does not want to renegotiate the North American Free Trade Agreement (NAFTA) after all.

“I’m disappointed,” Sen. Sherrod Brown (D-Ohio) said of Kirk’s comments. “The president needs to understand there is strong opposition to more-of-the-same trade deals.” Freshman Sen. Kay Hagan (D-N.C.) also expressed disappointment.

Kay Hagan's opposition in particular is interesting. She has not taken any high-profile stands as a freshman, to my knowledge, and starting with trade means that she considers it an important issue to her constituents. The President will simply be bound by a very large and strong fair-trade component on Capitol Hill. The Colombia and Panama FTAs will offer a testing ground. Here's what Kirk had to say:

Mr. Kirk, who as mayor of Dallas was known as a strong advocate of free trade, also said the administration planned expeditious reviews of pending trade agreements with Colombia and Panama.

He said that Colombia had made “remarkable progress” in reducing violence — attacks against labor activists have been a key sticking point — but that other issues remained, and he vowed intensive consultation with Congress on the matter.

The Bush administration signed the agreement with Colombia in November 2006. But Congressional Democrats and United States labor groups have said the Uribe government must do more to stop the antilabor violence and hold perpetrators accountable, a position Mr. Obama supported during his campaign.

Regarding Panama, Mr. Kirk said that differences on labor standards, and the question of the country “possibly being a tax haven,” needed resolution.

Certainly, taking these concerns seriously, and putting conditions on these free trade agreements, represents a change in and of itself.

Stay tuned.

Going Global On The Great Recession

I covered a bit of this in last night's week in review, but the World Bank's report that the world will experience negative economic growth in 2009 for the first time since WWII is very discouraging news. I don't know if I agree with the framing of this Washington Post story - this was as much a problem of sovereign wealth funds and international banks BUYING junk mortgage-backed securities as it was the lending frenzy in the US and the distribution of the mortgage-backed securities themselves - but the implications of this negative growth are severe.

The World Bank also cautioned that the cost of helping poorer nations in crisis would exceed the current financial resources of multilateral lenders. Such aid could prove critical to political stability as concerns mount over unrest in poorer nations, particularly in Eastern Europe, generated by their sharp reversal of fortunes as private investment evaporates and global trade collapses.

In its report, released ahead of a major summit of finance ministers in London this week, the World Bank called on developed nations struggling with their own economic routs to dedicate 0.7 percent of the money they spend on stimulus programs toward a new Vulnerability Fund to help developing countries.

The report predicted that the global economy will shrink this year for the first time since the 1940s, reducing earlier estimates that emerging markets would propel the world to positive growth even as the United States, Europe and Japan tanked. The dire prediction underscored what many are calling a mounting crisis within a crisis, as the downturn that started in the wealthy nations of the West washes over developing countries through a pullback in investment, trade and credit. Despite the United States' position as the epicenter of the crisis, investors are flocking to U.S. Treasury bills and the dollar, squeezing developing nations out of global credit markets.

Certainly the idea of a global stimulus is one that the US is pushing. There are very real, frightening national security implications to developing nations collapsing, and it's important to deal with that shortfall in demand instead of isolating regulatory reform (which is also needed) at the G20. Even while the US stimulus looks to be coming in low, it's relatively high compared to most other developing nations. The more that there is a unified global stimulus, the less leakage from one country to the next (which is the concern with the US, say, stimulating the Chinese economy through the consumer purchase of a lot of their goods) and the better for global trade, which has absolutely cratered. Larry Summers actually talked about this today in the Financial Times.

Barack Obama’s top economic adviser has urged world leaders to pump more public money into the economy in a co-ordinated effort to boost demand and lift the world out of recession.

In an interview with the Financial Times, Lawrence Summers said the urgent need for a short-term increase in spending by governments temporarily overrode the longer-term goal of tackling the global imbalances many economists believe caused the financial crisis.

The US administration had no choice but to take strong public action to “save the market system from its own excesses”, he said.

His comments, ahead of next month’s crunch G20 summit in London, make it clear that the US administration wants industrialised nations to share responsibility for engineering a global demand-led recovery and does not believe this burden should fall on China alone.

“The old global imbalances agenda was more demand in China, less demand in America. Nobody thinks that is the right agenda now,” said Mr Summers.

“There’s no place that should be reducing its contribution to global demand right now. It is really the universal demand agenda.”

That's the only way out of this crisis, which is why Republican calls for a spending freeze are so absurd. Still, it's important to recognize that even a global demand surge up to the levels of the United States would probably not be sufficient to stem the tide of downturn. Paul Krugman notes today that policymakers are behind the curve:

To see how bad the numbers are, consider this: The administration’s budget proposals, released less than two weeks ago, assumed an average unemployment rate of 8.1 percent for the whole of this year. In reality, unemployment hit that level in February — and it’s rising fast [...]

So here’s the picture that scares me: It’s September 2009, the unemployment rate has passed 9 percent, and despite the early round of stimulus spending it’s still headed up. Mr. Obama finally concedes that a bigger stimulus is needed.

But he can’t get his new plan through Congress because approval for his economic policies has plummeted, partly because his policies are seen to have failed, partly because job-creation policies are conflated in the public mind with deeply unpopular bank bailouts. And as a result, the recession rages on, unchecked.

O.K., that’s a warning, not a prediction. But economic policy is falling behind the curve, and there’s a real, growing danger that it will never catch up.

Cheery Monday news!

The Curious Case Of Ron Kirk

Congressional Quarterly has a tracker of Obama's cabinet nominees. With the confirmation of Hilda Solis last night, there are only three unfilled positions. Gary Locke was announced today as the latest nominee for Commerce Secretary, and the Health and Human Services Secretary is to be determined after the withdrawal of Tom Daschle.

And then there's Ron Kirk, the former Mayor of Dallas. He was announced as the choice for US trade representative on December 19.

Since then, he has not been confirmed.

He has not been scheduled for a vote in the Senate Finance Committee.

He has not been scheduled for a HEARING in that committee.

Did everyone forget about him? Is he the Sixteen Candles nominee?

FINALLY, yesterday, committee chair Max Baucus signaled that Kirk's hearing should happen soon, perhaps next week. This is 2 1/2 months after his nomination.

I guess trade isn't much of a priority.

Cautious But Correct

Cautious Obama returned today in a trip to Canada:

President Barack Obama stepped cautiously in his first foreign trip Thursday, refraining from asking Canada to rethink its plans to withdraw troops from Afghanistan and saying changes to the North American Free Trade Agreement can wait. The new U.S. president was cheered by crowds in the snowy Canadian capital and responded by declaring "I love this country" at a news conference. On his way out of town, he stopped at a downtown market, where he delighted onlookers by shopping for gifts for his family.

In the news conference with Canadian Prime Minister Stephen Harper, Obama acknowledged that he has said NAFTA does too little to protect U.S. workers and the environment. Canada, the United State's largest trading partner, is leery of changes to the deal, and Obama said robust trade helps both nations.

Noting that NAFTA has side agreements on labor and the environment, he added, "If those side agreements mean anything, then they might as well be incorporated into the main body of the agreements so that they can be effectively enforced." He said he hopes there eventually will be a way to do so "that is not disruptive to the extraordinarily important trade relationships" between the U.S. and Canada.

This is cautious, but generally in the right. Side agreements respecting labor and the environment should be embedded and enforceable, not on the side and easily evaded.

We have a crucially important trade relationship with Canada, and I don't think anybody, on the left or the right, is looking to change that. But the facts are that both Americans and Canadians see problems with NAFTA that they would like reformed, and crying "protectionism!" at the very raising of criticism of a corporate-written trade deal is completely ridiculous, as are the comparisons of "Buy America" laws in the stimulus (which has been the standard in federal purchases since the 1930s), and, bizarrely, the Smoot-Hawley Tariff Act (which didn't even affect the Depression anyway, given that trade at the time was maybe 4% of total economic output). And at a time of economic downturn, I don't think anyone should apologize ever for wanting to bolster American industry and innovation.

Transforming The Domestic Economy

The rage over the "Buy American" provisions in the economic recovery package are symptomatic of the entire reason why we're surging toward economic disaster. Let's go over this again: provisions like this are CURRENT LAW for federal procurement. When the federal government purchases, they purchase American goods. Just like every other country does. China is building a huge railroad with their initial stimulus package made entirely out of Chinese products. Every country does this. It's not controversial in the least.

Yet, it's only controversial when America, who has been selling out their industrial and manufacturing base for so long that multinationals expect nothing less, tries to implement the exact same policy they and the rest of the world have been doing for decades. This is ridiculous.

Last week the House of Representatives version of the bill stirred alarm in the EU and Canada by demanding that all iron and steel bought to rebuild the country’s crumbling infrastructure has to be American made.

Anxious lobbying by the EU has fallen on deaf ears as explicitly protectionist language was added to the Senate bill leaving it open to legal challenge under the rules of the World Trade Organisation (bullshit, federal procurement has never been and will never be subject to these trade agreements -ed) [...]

Big multinational corporations, including Caterpillar and General Electric which depend on foreign manufacturing plants, have launched a rearguard attempt to remove the Buy American provisions from the bill. The Emergency Committee for American Trade, another lobby group, is sending out shrill alarms that the stimulus bill could trigger a trade war that would ultimately damage American interests.

“Protectionism is the crackcocaine of economics. It may provide a high. It’s addictive and it leads to economic death,” said Richard Fisher, president of the Dallas Federal.

The Smoot-Hawley Tariff Act was put into place by corporate execs who wanted their companies to profit from the Depression. This measure is being opposed by the ancestors of those corporate execs who want to profit again. Any parallel between the two is completely absurd. It's the inverse.

Which is why even the free-traders in the Obama Administration are zipping their lips about these provisions.

Free-traders on President Obama’s economic team are suppressing concerns over Buy American provisions in the stimulus, derided as protectionist by corporate lobbyists.

Treasury Secretary Timothy Geithner and Obama’s top economic adviser, Lawrence Summers, have raised no objections to tough provisions in the House stimulus bill intended to ensure that U.S. iron and steel are used in any infrastructure projects, such as the construction of highways and bridges, even if they add to the project’s cost.

Nor have they complained about a provision in the Senate bill that would go much further by calling for the use of U.S. iron, steel and other manufactured goods in infrastructure spending in the stimulus.

Some interests have also called for language to ensure that any spending on health technology in the stimulus goes to U.S. firms, and not those in India.

Support in both chambers means the iron and steel provisions, at a minimum, seem likely to be included in the bill sent to President Obama’s desk, despite an outcry from business groups and foreign governments that argue they could set off a new trade war.

Seriously, tough crap. The bottom line is that creating American manufacturing jobs multiplies the stimulus, and goes a long way to transforming what's so sick about this economy. We can leap from bubble to bubble forever, creating enormous pain and suffering in the down times, or we can build an economy that works, based on making things, and selling things that you make because people want to buy them, and because they can afford them because they have a job with a living wage. More from John Judis, who is absolutely correct that this would finally spur our huge global trade deficit that has been killing the economy for years.

American Made

I thought the most hollow rhetoric of the Presidential campaign was President Obama's vow to "stop tax breaks for companies that ship jobs overseas." It was a direct appropriation of a John Kerry line from 2004, and it had no oomph to it, no flourish, nothing beyond the boilerplate. In fact, this was symptomatic of all of Obama's rhetoric on trade. I always thought he believed at least nominally in the Washington consensus, that neoliberal trade was part of the globalized world and there was no way out of it. The fight over the "buy American" provisions in the stimulus plan are starting to confirm this belief.

The stimulus bill passed by the House last night contains a controversial provision that would mostly bar foreign steel and iron from the infrastructure projects laid out by the $819 billion economic package.

A Senate version, yet to be acted upon, goes further, requiring, with few exceptions, that all stimulus-funded projects use only American-made equipment and goods.

Proponents of expanding the "Buy American" provisions enacted during the Great Depression, including steel and iron manufacturers and labor unions, argue that it is the only way to ensure that the stimulus creates jobs at home and not overseas.

Opponents, including some of the biggest blue-chip names in American industry, say it amounts to a declaration of war against free trade. That, they say, could spark retaliation from abroad against U.S. companies and exacerbate the global financial crisis.

And today the Telegraph of London reports that Obama will work to gut the proposal.

The White House has promised to review the protectionist proposals, passed last week by Democratic allies in the House of Representatives, which would ban the use of non-American steel in the $800 billion of construction projects.

Privately, diplomats are withering about the "excitable" US rhetoric in support of the Buy America proposals...Europe is being helped by lobbyists on behalf of American companies like Caterpillar and General Electric...

They are hoping that free trade sympathisers in the Senate commerce committee will strike out clauses that would violate America's obligations to EU nations under World Trade Organisation rules. America has similar obligations to Canada and Mexico as part of Nafta, the North American Free Trade Area.

This is nothing more than American industry and foreign suppliers conspiring to maintain the status quo that has destroyed American manufacturing for 50 years. It's a legitimate concern that stimulus money, designed to spur American economic activity, would "leak out" of the US economy without benefiting US workers and taxpayers. The Buy America Act of 1982 already stipulates that recipients of federal money would use domestic suppliers in a variety of contracts, so this provision would simply extend existing law to the stimulus, and would not be subject to trade agreements. As David Sirota explains, Obama campaigned on this, and now he's looking to the Senate Commerce Committee to bail him out of his lukewarm commitments.

Further the Economic Policy Institute shows the crucial nature of this provision.

Multinational companies such as General Electric and Caterpillar, and their allies in the Chamber of Commerce, are attacking “Buy American” provisions included in the economic recovery bill passed by the House on January 28th. They claim that these provisions will provoke a “trade war” with foreign governments, but foreign governments have long histories of supporting their own domestic companies. These companies are self-interested, simply wanting unlimited access to imports, many of which are illegally subsidized and unfairly traded. U.S. and foreign multinational companies (MNCs) were responsible for nearly two-thirds of all U.S. imports in 2006, as shown in the chart below. U.S. firms led the way with $678 billion in imports, 36.4% of all U.S. goods imports.

Companies like Caterpillar, which will benefit from billions of dollars of infrastructure spending in the stimulus package, want unfettered access to cheap steel from countries like China, which poured more than $15 billion into energy subsidies into that sector in 2007 alone. Chinese steel imports more than doubled between January and November, while U.S. steel production fell nearly 40%. The Chamber of Commerce, which also opposes further “Buy American” provisions, represents the interests of U.S. companies like Caterpillar and IBM as well as foreign multinationals like Toyota and Siemens, all represented on its board of directors. Congress has finally realized that what’s good for big business is not always good for America, and that new rules are needed to rein in runaway corporations. That’s real progress.

Simply put, domestic suppliers exist on an unlevel playing field. Toyota wouldn't exist without generous subsidies from the Japanese government. Our multinationals that are allegedly based in the United States make up for that by racing to the very bottom for their materials and undercutting American workers. It ought to stop.

Either The Economy Is Fixed In 100 Days Or We Revolt!

Paul Krugman appears to be in contact with the Obama transition team, which is very positive news. It may be why the recovery package is expanding in the face of more bad economic news:

Faced with worsening forecasts for the economy, President-elect Barack Obama is expanding his economic recovery plan and will seek to create or save 3 million jobs in the next two years, up from a goal of 2.5 million jobs set just last month, several advisers to Mr. Obama said Saturday.

Even Mr. Obama’s more ambitious goal would not fully offset as many as 4 million jobs that some economists are projecting might be lost in the coming year, according to the information he received from advisers in the past week. That job loss would be double the total this year and could push the nation’s unemployment rate past 9 percent if nothing is done.

The new job target was set after a meeting last Tuesday in which Christina D. Romer, who is Mr. Obama’s choice to lead his Council of Economic Advisers, presented information about previous recessions to establish that the current downturn was likely to be “more severe than anything we’ve experienced in the past half-century,” according to an Obama official familiar with the meeting. Officials said they were working on a plan big enough to stimulate the economy but not so big to provoke major opposition in Congress.

Mr. Obama’s advisers have projected that the multifaceted economic plan would cost $675 billion to $775 billion. It would be the largest stimulus package in memory and would most likely grow as it made its way through Congress, although Mr. Obama has secured Democratic leaders’ agreement to ban spending on pork-barrel projects.

We can't afford to have a spending package less than this at this point. The economy has truly cratered nationwide, even in areas that didn't experience a housing boom, as the slump ripples through the greater economy. They're stopping jury trials because the states can't afford them, for crying out loud (how exactly does that not violate due process?). This, by the way, is why direct aid for state and local governments is as crucial as these public works investments.

But what about the state of things AFTER two years of deficit spending? We will be facing a world much different from the one that fueled economic growth in the 1990s and the early part of this decade. The bubbles will have been stamped out and unlikely to resurface, at least for a while. Consumer spending as an engine covering 2/3 of economic growth, so that our collective future depends on whether or not kids like the newest Elmo doll, is unsustainable, and since wages are stagnant, unlikely to continue. What is going to take the place of these drivers of growth? Krugman looks at this today as well.

A few months ago a headline in the satirical newspaper The Onion, on point as always, offered one possible answer: “Recession-Plagued Nation Demands New Bubble to Invest In.” Something new could come along to fuel private demand, perhaps by generating a boom in business investment.

But this boom would have to be enormous, raising business investment to a historically unprecedented percentage of G.D.P., to fill the hole left by the consumer and housing pullback. While that could happen, it doesn’t seem like something to count on.

A more plausible route to sustained recovery would be a drastic reduction in the U.S. trade deficit, which soared at the same time the housing bubble was inflating. By selling more to other countries and spending more of our own income on U.S.-produced goods, we could get to full employment without a boom in either consumption or investment spending.

That is the answer, in my view - a reindustrialization of America. The hope is that the investments in areas like alternative energy will spur innovation and create new industries that America can export. But that's not going to happen overnight. It's going to take at least a decade to get manufacturing where it probably needs to be to bring the trade deficit back into balance. The other question, which Krugman addresses separately, is who gets stuck with decreasing trade surpluses in this zero-sum game. Clearly, if the exports are related to energy efficiency and aternative fuels, the answer is the Middle East. But if it relates to the source of most of our trade deficit, namely China, I don't think they will allow it, and they've been buying up our debt for years and years to make sure they have at least a partial veto on the resurgence of American manufacturing.

Which means that restoring our economy will be a long, slow, drawn-out process, lasting not a year or two but much longer. And this entire time, Republican know-nothings will promote impatience and start blaming the solutions as the problem. You saw an early example of this when the right, aided by a compliant media, cherry-picked a large infrastructure request from US mayors, finding one or two pieces that are supposed to invalidate the entire idea of federal spending. There will be plenty more of that, solemn speeches on the floor of the Congress along the lines of John McCain's "OMG $3 million for bear DNA!" nonsense. Plenty of hack groups like "Citizens Against Government Waste" will pop up with every spending request to call it wasteful, Republicans in the Oversight Committee of the House will demand hearings, the Pete Peterson Foundation will put out lamentation after lamentation about the soaring deficit, a newly energized set of conservative radio talkers will hammer these themes day after day, and conservative revisionist historians will influence media groupthink by questioning whether all this public works spending can even help the economy. By this time Republican candidates for national office will be getting lots of attention by slamming all the "pointless budget-busting porkbarrel spending" that is hurting the economy. And this will only get worse as the years go on:

But once the economy has perked up a bit, there will be a lot of pressure on the new administration to pull back, to throw away the economy’s crutches. And if the administration gives in to that pressure too soon, the result could be a repeat of the mistake F.D.R. made in 1937 — the year he slashed spending, raised taxes and helped plunge the United States into a serious recession.

The point is that it may take a lot longer than many people think before the U.S. economy is ready to live without bubbles. And until then, the economy is going to need a lot of government help.

This is not completely fated to happen, a technological breakthrough could spur new economic activity, and reducing wasteful health care or military spending would at least cool the deficit and make that money far more productive. But in general terms, failed conservative policies have put us into a ditch, and it's going to take a long time to dig our way out. Human nature in general is not exactly oriented toward unlimited patience or long-term planning. Conservatives are practically counting on that.

Boyz In The LaHood

So the second Republican has been tapped for President-elect Obama's cabinet - former Illinois Congressman Ray LaHood as Transportation Secretary. In past Administrations, the Transportation Secretary hasn't been that powerful a job and has been a dumping ground for the inevitable token member from the opposite party. Heck, even Bush had Democrat Norman Mineta installed there. However, with the focus on infrastructure improvements being central to Obama's economic recovery platform, and with a lot of that going to rail and transit, DOT might be more important this time around. And it's being handed to a Republican. Of course, there's an open question about how involved LaHood would be on those infrastructure issues, rather than the normal work of DOT, a lot of which involves air travel.

The reception has been mixed. Streetsblog is not impressed.

We've been calling around to Congressional staffers, advocates and insiders to get a better sense of what Obama's appointment of Ray LaHood as transportation secretary means for those pushing for sustainable transport, smart growth, livable streets. While no one is giving up hope on the Obama administration a month before the inauguration, the general consensus is pretty clear. As one insider summed it up: "It's a real read-it-and-weep moment."

The selection of a downstate Illinois Republican with close ties to highway lobby stalwart Caterpillar Inc. is being taken by many as a clear sign that progressive transportation policy is, for now, nowhere near the top of the Obama's agenda.

"Obama still hasn't made the transportation - land use - climate connection," Petra Todorovich, director of Regional Plan Association’s America 2050 program said. "It's clear he's thinking about these things in separate categories." For Todorovich and other advocates, the LaHood pick was the second shoe to drop this week. The first piece of bad news arrived on Monday when Obama trotted out his "green dream team," his appointments to key environmental, energy and climate posts, and the transportation secretary was nowhere to be found.

Friends of the Earth is a little more hopeful:

“Congressman LaHood’s challenge is great. He must ensure U.S. transportation policy supports, rather than undercuts, the Obama administration’s goals on energy and climate change. This means he must work closely with Obama’s nominees for the Department of Energy and Environmental Protection Agency, and with Obama’s new energy and climate czar, Carol Browner.

“While his overall record on energy and environment issues is poor, LaHood has in recent years broken with many in his party to support crucial investments in passenger rail and public transportation, and he is a member of the Congressional Bike Caucus. These are reasons to hope that he may be open to the visionary transportation policy that is needed to move our country forward.

“Friends of the Earth looks forward to working with Congressman LaHood to bring about such a policy.”

I think it's clear that Obama doesn't connect green policy and transportation policy, but it's probably because his green thinking outweighs the thinking on transportation. I don't think LaHood will have much of a power center. He is moderate for a Republican, and he has promoted expanded rail and transit funding in recent years, so I don't think he'll be an obstacle to that either. At some point, however, Streetsblog is right: to truly remake our energy future we need to provide options to alter the way we live - with smart growth, proper land use and livable streets. The era of suburban sprawl cannot continue because our efforts on reining in greenhouse gas emissions will collapse. DOT actually could play a valuable role in setting that policy, but Obama doesn't want to go there. His urban background, however, suggests he understands the importance of it, both for the economy, the environment and quality of life. So we'll see.

...just to round out the cabinet, there's former Dallas mayor Ron Kirk as US Trade Representative. I think it was clear with Xavier Becerra's remarks when he turned down the job that Obama didn't really think trade was a first- or second-order priority, and he didn't connect trade to our larger economic problems, so this may be another area where the pick doesn't entirely matter since that policy will be attacked from a different angle.

CA-31: Becerra Out, Garcetti In?

Xavier Becerra, a Congressman from Hollywood, is at the least being strongly considered for the post of US Trade Representative and may have already accepted the job. Becerra is in the House leadership as Vice President of the Democratic caucus, and while he voted for NAFTA he has since regretted doing so, and he led the fight against CAFTA and other trade agreements which he felt did not have the proper safeguards, or labor and environmental standards. And channeling my inner David Sirota, the fact that pro-business conservatives are worried about the direction Becerra will take US trade policy confirms that he would be an excellent choice:

And now Business Week reports on some rumblings of opposition from the pro-business and free-trade camp:

Philip Levy, who's now with the conservative American Enterprise Institute, told the mag that the choice is "troubling," arguing that "to oppose Nafta is in many ways to lash out symbolically against trade." A business lobbyist added to the mag that he and his colleagues are "pretty concerned."

Well, I'm sold.

If Obama brushes off the concerns of the American Enterprise Institute (and really, everyone should) and Becerra gets the job, a very safe Democratic seat in the heart of Los Angeles would be up for grabs. Considering the density of the city it's actually a pretty large district (with lots of it in rapidly gentrifying Hollywood), and has a good deal of Latino voters. However, this would be up for grabs in a special election, and the universe of special election voters is probably a smaller Hispanic universe than on a normal Election Day, so I wouldn't say that only a Latino candidate could win here. In fact, LA City Council President Eric Garcetti represents a good portion of the district on the council.

Garcetti would be a progressive leader in the Congress and a major upgrade. Becerra is a member of the Progressive Caucus and generally solid on the issues, but he's not particularly outspoken, and as part of the leadership team, wouldn't stray too much from the party line. On the other hand, Garcetti is a smart, committed young leader, a Rhodes Scholar at Oxford and a graduate of the London School of Economics who has led on so many progressive issues in the city it's hard to even count them all. It would be great to have someone in the Congress with the background of dealing with key urban issues from graffiti to housing to development, while at the same time having led on important national initiatives like clean money, the war in Iraq (the LA City Council was among the first to pass a resolution opposing it) and renewable energy. Garcetti jumped aboard the Barack Obama campaign from almost the very beginning as a California chairperson, so he would be able to tap that network of organizers pretty easily. He would make a fantastic member of Congress, among the best in the nation in my view. Rep. Becerra would get to set trade policy, and Los Angeles would experience no dropoff in leadership. Everybody wins!

O Canada

This NAFTA/Canadian consulate flap is becoming a full-fledged international incident. The Canadian Embassy has now apologized for conveying the message that Obama's campaign was saying different things about NAFTA to them in private than he has in public, and a member of the New Democratic Party questioned Prime Minister Stephen Harper harshly today.



It's clear to me that Obama economic advisor Austin Goolsbee probably said SOMETHING to SOME Canadian official, but that he was completely out on his own in saying it. I don't think Obama's team has been prepared for how this turned out, but I don't know if the two-faced charge is accurate, and certainly Obama is really not much different on NAFTA than Clinton, so again it's the Clinton campaign saying "he's just as bad as I am!"

UPDATE: You cannot discount the role of Stephen Harper in this. His conservative government is in routine contact with conservatives in the United States, and as this ends up looking bad for Obama and potentially extends the Democratic race, the idea that this is simply a favor for McCain is possible. Now we learn this.

Canada's left-leaning New Democratic party demanded that Harper fire his chief of Staff, Ian Brodie, who is reported to have leaked word of the meeting.

Sandra Buckler, a Harper spokeswoman, denied Monday that Brodie or anyone in Harper's office leaked word of the memo or meeting.

Somehow I don't believe Harper's spin. I think this was a trap.

The Populist Strategy

Rather than argue about who stole from what speech or who has wanted to be President for how long, I think it'd be instructive to take a look at the way both campaigns are presenting themselves and organizing on the ground.

I know there is this creeping idea that Obama is engendering a cult of personality (thanks for that, Hillary partisans in the liberal blogosphere!), but actually he's empowering individuals to take action and build a working majority. The great thing about this is how the campaign is manifesting that vision in Texas, where he's making young voters care about politics, organizing within unions, and using a full-throated message of populism to make his case.

Union officials say that a push from younger members helped persuade the Service Employees International Union and the United Food and Commercial Workers to endorse Obama last week. Both unions plan to be active in the campaign, making personal contact with their membership on behalf of Obama.

About 40% of the food union's members are younger than 30 years old, and their enthusiasm helped move the union out of neutrality and toward an endorsement, said union president Joe Hansen. "Barack Obama did something to our members and to our leadership," Hansen said [...]

One of two ads that Obama is airing in Latino radio markets in Texas is pitched explicitly at younger Latino voters. "Obama is talking to me," it says, "about the opportunity to go to college, and about ensuring my parents and grandparents have the healthcare they need. That's why I'm talking to others -- my parents, my uncles, and my friends" about supporting Obama.

Some local Obama backers say they have begun to see the Illinois senator, the son of an African father, as someone who can relate to the Latino experience [...]

Both also say they favor reworking the North American Free Trade Agreement.

Still, Obama's strategy is to try to make NAFTA a central issue of the campaign and to try to draw contrasts on the issue with Clinton.

Many union voters believe that NAFTA was responsible for encouraging companies to send U.S. jobs abroad.

Of course, with Texas close to the border and Ohio shedding manufacturing jobs, it's natural for both candidates to take on an unabashedly populist strategy.

WAUSAU, Wis. — Senators Hillary Rodham Clinton and Barack Obama intensified their populist appeals on Monday, responding to widespread economic anxiety and pushing the Democratic Party further from the business-friendly posture once championed by Bill Clinton.

Mrs. Clinton, speaking on the eve of the Wisconsin primary but looking forward to primaries in Ohio and Texas on March 4, issued a 12-page compendium of her economic policies that emphasizes programs aiding families stressed by high oil prices, home foreclosures, costly student loans and soaring health care premiums.

In public appearances here and in her economic booklet, she took aim at hedge fund managers, oil company profits, drug company subsidies and trade agreements that she says encourage companies to export jobs [...]

Campaigning in Ohio before flying to Wisconsin for an election-eve rally, Mr. Obama said the wealthy had “made out like bandits” under the Bush administration and called for an end to tax breaks for companies that move jobs overseas.

“In the last year alone,” Mr. Obama said, “93 plants have closed in this state. And yet, year after year, politicians in Washington sign trade agreements that are riddled with perks for big corporations but have absolutely no protections for American workers. It’s bad for our economy; it’s bad for our country.” [...]

At an event Monday at a union hall in Wausau, Mrs. Clinton said that other countries had taken advantage of the Bush administration’s pro-trade policies.

“I’m tired of being played for a patsy,” Mrs. Clinton said at the hall. “We have the largest market in the world. It’s time we said to the rest of the world, ‘If you want to have anything to do with our market, you have to play by our rules.’ ” [...]

He delivered a blistering critique of corporations that he said had benefited to the detriment of working families across the United States over the last seven years.

“We now have greater income inequality than any time since the Great Depression,” Mr. Obama said, speaking to reporters after touring the titanium plant. “For us to want to reverse that so everyone has a stake in the economy, I think is just common sense and good for everybody, including business.”

I don't think that suddenly, with the election of either of these two, that overnight worker's rights will top the agenda and corporations will lose their personhood. But I do think it's excellent for them both to try on the populist rhetoric and take it out for a test drive. Who knows, they might even like it. And it shows how John Edwards is STILL driving policy in this race. Obama met with him over the weekend, and if Edwards were smart he wouldn't endorse yet. He's getting a lot of mileage out of dangling the endorsement, and the candidates truly are moving to his side.

It's also great that there's still a race going on. That's not a popular view, but you wouldn't be seeing this back and forth on who is more committed to American jobs and reducing inequality without an actual contest. I didn't think I'd EVER see Hillary Clinton say something as forceful as "I'm tired of being played for a patsy." And because the race is extending into so many states, that's just another method in which the new coalition of Democrats can hold whoever makes it to the White House accountable.

Now, I don't expect this to last. Clinton is already scurrying away from her rhetoric by talking about the continuing vital role of the oil and gas industry in remarks to the Houston Chronicle. But for the record, I DO think that both Clinton and Obama are committed to some fairly fundamental changes in our economy, like investing in green jobs, rewarding companies that stay stateside, making trade deals somewhat more fair, and stressing the need to fight climate change. That would be a significant shift from the status quo. And having two candidates who send surrogates to a debate on science is, in a word, refreshing.

Once again, these candidates aren't perfect but their becoming boxed in through this battle to a strikingly new vision for America, and that's a good thing.

Burma Update

The military junta ruling Burma with an iron fist has found the last few activists not already in custody. Meanwhile, the junta claims that they found weapons in monasteries, which gives new meaning to the word "planted evidence." They're now trying to curry favor by offering food aid to the monks (the ones that are still alive, that is). And while peace talks have been scheduled with Aung Sun Suu Kyi, all kinds of preconditions have been placed on top of them, which Suu Kyi has rejected.

This is a desperate situation, with a country that is clearly violating international law and human rights conventions. China allowed a Security Council resolution condemning Burma to pass through, but is still actively trading with them. Real economic isolation is the first step to ending this madness.

"Fully Briefed" and more from Rep. Harman

My post about Jane Harman's remarks at a town hall meeting yesterday about the secret "torture memos" revealed this week by the New York Times is up at Think Progress, submitted through their Blog Fellows Program, which I can't recommend enough. Let me contextualize those remarks a bit more, and add some of the other interesting things Rep. Harman had to say.

I asked the question to Harman about the secret memos. Earlier this week, the White House claimed that all relevant members of Congress had been fully briefed on the classified program sanctioning harsh interrogation techniques by the CIA. At the time of the memos, Harman was a member of the "Gang Of Eight" routinely briefed on intelligence matters. Harman was shaking her head as I asked the question if she was fully briefed, chuckling almost in disbelief. Her answer:

We were not fully briefed. We were told about operational details but not these memos. Jay Rockefeller said the same thing, and I associate myself with his remarks. And we want to see these memos.

Harman is now the third member of the Gang of Eight, joining Jay Rockefeller and Nancy Pelosi, to reject the White House's claim that they were fully briefed about these memos. The Administration is lying, again, and it is now incumbent upon Congress to make every effort to obtain those memos and to enshrine into law a full repudiation of the arguments therein described. The follow-up question I wanted to ask Rep. Harman, but could not, was how she would go about pressuring the White House to get those documents. Obviously the vehicle for this is through the confirmation of Attorney General nominee Michael Mukasey. Considering that these memos came out of the Justice Department, there should simply be no movement on his confirmation without an exchange of the memos.

Let me add some additional information about the town hall. I wrote in my Think Progress post this tidbit:

Harman later revealed that she was speaking with an unidentified Republican in her office, who told her that if President Bush were to attack Iran, then even he would vote for impeachment.

You have to understand the environment of this town hall meeting. The audience included the hardcore progressives that made up the core of the Marcy Winograd primary challenge to Harman in 2006; in fact, Winograd was on a panel right before Harman's arrival. These people were SCREAMING for impeachment; the first two questions were about this issue. And Harman could do nothing but reiterate that Nancy Pelosi, not her, had taken impeachment off the table. She went on to describe her no votes against the Clinton impeachment and how MoveOn.org was born out of the impeachment debate (odd of her to approvingly cite MoveOn, considering she voted to condemn their remarks in the "General Betrayus" ad). But when she brought up Iran, she said "this little anecdote should make you smile," and mentioned the above exchange.

Here are some of the other notable tidbits in Harman's meeting.

• She recommended Jack Goldsmith's "The Terror Presidency" as the best source for understanding how the Bush Administration attempted to expand executive power through neutering the Office of Legal Counsel. She had the book with her.

• She reiterated that "intelligence was politicized again" on the FISA bill, referring to the fake terror attack hyped by the White House designed to get wavering Democrats to sanction warrantless surveillance. It was a cold-blooded tactic, and it should be heavily publicized. I thanked Rep. Harman for speaking out on this, and I hope that she'll continue as well as encourage other members to corroborate her allegations. Harman said she is working to change the new FISA bill, which will "probably be introduced this week." The goals are that any surveillance must be done through the FISA court, with a warrant, and with minimization protocols if a US national is involved.

• Harman spoke about her legislation to close Guantanamo, restore habeas corpus, and end the use of national security letters outside their initial purpose. She spoke glowingly about the vote this week to put Blackwater contractors under the auspices of US law, and thanked both Rep. Waxman and Rick Jacobs, who produced Iraq for Sale, with their efforts to get the word out about Blackwater's numerous abuses and how they fell into the "legal black hole" regarding their activities.

• She recommended the Seymour Hersh article about developments with respect to Iran, and said that she has invited him to speak to the Congress. Harman was adamant in saying that "targeted sanctions are working" with Iran, and that the government should "stop the saber rattling" that could lead us to another catastrophic war.

• She trumpeted her contribution to the House energy bill, a measure to retire the incandescent light bulb by 2012.

• On trade, she made a disappointing statement. Despite voting against NAFTA and CAFTA and claiming that she was proven right on those votes, she said that some trade deals are admissable with proper labor and environmental standards as well as trade adjustment assistance, and referring to the current Peruvian Free Trade Agreement that will come up for vote in a couple weeks, she said that "It was approved by Charlie Rangel." Uh-oh. We know that this bill, crafted in the dead of night to appease corporate interests, does not go nearly far enough to ensure labor and environmental standards, and would be nothing more than NAFTA-light.

• Someone asked Rep. Harman about the Walt-Mearshimer book "The Israel Lobby" and AIPAC's support for endless war, including war with Iran. Harman, who has been linked in the past to lobbies like AIPAC, said "I'm not a member of AIPAC... I support a two-state solution where Palestine can thrive economically with borders that are defensible to Israel." She pretty much dodged the question.

• On the still-unresolved EPA waiver that would allow California to make their own rules on tailpipe emissions that contribute to global warming, Harman said that she signed on to a letter protesting the slow-rolling from the EPA and the Department of Transportation, and she added that Gov. Schwarzenegger should work harder to get DoT to "back off" (they've been accused of lobbying lawmakers to pressure the EPA to block the California law).

• Finally, Harman asked for education activists to call her office and tell her about the reauthorization of No Child Left Behind. While she said that Rep. Miller has claimed to her it has been improved, she said "I am prepared to oppose it" if the changes are not satisfactory.