Maggie Barker's blog

Update: Farm Bill conference report now available --http://agriculture.senate.gov. The conference report is expected to be considered this week by both the Senate and House before being sent to the White House.

With respect to trade and the Farm Bill, U.S. farm subsidies are usually the topic du jour. But this week the House Ways and Means Committee is making a special effort to highlight other trade-related provisions in the Farm Bill. These provisions are not terribly exceptional, and have been circling the trade world for a while now, but it is interesting to note how House Democrats are marketing them -- as tools that can help not just to alleviate poverty (the standard argument) but to ease the global food crisis and ensuing riots in some parts of the world.  Global prices of staple foods have risen more than 40 percent in the past year and world stocks are at their lowest since the early 1980s.  Kudos for Ways and Means for seeing the linkages between trade and the food crisis and working with the Ag Committee to add these new trade provisions that specifically target poorer countries. 

House Ways and Means Chairman Charlie Rangel on the Farm Bill's trade preferences provisions:

The Farm Bill should promote nutrition and enhance food access at home and abroad. You can’t always spread democracy with a rifle and this bill improves on existing measures to address the crisis in Haiti caused by rising food prices and persistent poverty. By extending and strengthening provisions that would soon expire, we can help give a sense of certainty to investors to continue the economic growth and development we have built in the Caribbean region, while creating new opportunities for American workers, farmers and businesses.

This year's Farm Bill includes additional trade preferences for Haiti that relax and expand the HOPE Act's rules for duty-free treatment of Haitian apparel. These rules also create incentives to use U.S. imputs, thereby providing new opportunities for American workers, farmers, and businesses. According to Ways and Means, these additional preferences will help Haitian industry attract new investment and create immediate jobs, and generate income to help workers pay for increased food costs and other necessities.

The Farm Bill also extends the Caribbean Basin Initiative (CBI) for new two years. CBI provides preferences for textiles, apparel, and other goods, and has helped to raise the living standards and strengthened the economies of several Caribbean nations. Current CBI preferences are scheduled to expire on September 30, 2008.

On a related note, NDN recently endorsed the Global Poverty Act, which is designed to help the United States develop a strategy to further the U.S. foreign policy objective of cutting extreme poverty in half by 2015. 

NDN President Simon Rosenberg announced yesterday that NDN is endorsing the Global Poverty Act, which was introduced by U.S Rep. Adam Smith (D-WA) and passed by the U.S. House of Representatives last year.  U.S. Sen. Barack Obama (D-IL) has introduced similar legislation in the U.S. Senate.  Below is the letter NDN wrote to Smith and Obama:

Dear Congressman Smith and Senator Obama,

Today NDN is proud to add its name to those organizations supporting your far-sighted Global Poverty Act (H.R. 1302, S.2433).

In 2007, Congressman Smith, you argued:

Global poverty is one of the greatest moral and security challenges facing the world today. Nearly 2.7 billion people live on less than $2 a day and close to a billion live on less than $1 a day. This bill represents a major advance in our effort to address global poverty.

And Senator Obama, you added:

With billions of people living on just dollars a day around the world,
global poverty remains one of the greatest challenges and tragedies the international community faces. It must be a priority of American foreign policy to commit to eliminating extreme poverty and ensuring every child has food, shelter, and clean drinking water. As we strive to rebuild America's standing in the world, this important bill will demonstrate our promise and commitment to those in the developing world.

The Global Poverty Act is designed to help the United States achieve the United Nation’s eight Millennium Development Goals, which aim to eradicate extreme global poverty by 2015. 

NDN calls on President Bush and Congress to enact the Global Poverty Act this year. This legislation would require the President to develop and implement a comprehensive strategy to further the U.S. foreign policy objective of cutting extreme poverty in half by 2015.  To meet this objective and the other Millennium Development Goals, we urge President Bush and Congress to commit to increasing U.S. foreign assistance to 0.7 percent of GNP, the amount benchmarked for U.N. donor countries. 

In this age of globalization, our country’s economic and national security interests are increasingly bound to those of developing nations.  In our much more interdependent and connected age, a single fragile, failed or rogue state can do much more to degrade the earth’s environment and spread disease, terrorism, deadly weapons, and instability than ever before.  Thus, helping those peoples and nations struggling to build healthy, modern civil societies is not only the right thing to do, it is a true national security requirement for all free nations in the globalized world of the 21st century. 

In addition, raising just a small percentage of the world's people out of extreme poverty can help lift global incomes and contribute to the economic well being of the global economy.  As the economic success of countries such as India has shown, even the poorest countries can rapidly become important contributors to the global economy.

By adopting the Global Poverty Act this year, America’s leaders can send a powerful signal to the world that in the years ahead, the United States intends to reclaim its historic role as the world’s great champion of what we call the American formula: working to advance democracy, free markets, the rule of law, and personal liberty for all the peoples of the world no matter where they live, no matter how poor they are, no matter to whom them pray, no matter the color of their skin. 

We at NDN look forward to working with you in the years ahead to turn the Global Poverty Act from a visionary bill to an inspirational reality for billions around the world. 

Sincerely yours,

Simon Rosenberg
President
NDN

With the United States currently facing critical domestic and international challenges - a looming recession, debates over trade liberalization and immigration policies, the race for the White House, rising energy and food prices, and this summer's historic Beijing Olympics – a conversation on where the United States is headed is in order.

We hope that you can join NDN's experts - Dr. Robert Shapiro, Chair of NDN’s Globalization Initiative, and Simon Rosenberg, NDN President - for this far-reaching discussion on U.S. politics, the economy, globalization, and world affairs at large. NDN will host this gathering as part of the Bernard Schwartz Forums on Economic Policy on the evening of May 5 at the Harvard Club of New York City.

As some of you may know, Simon just returned from the World Economic Forum on Latin America in Mexico and was a speaker at the Herzliya Conference in Israel in January. And Rob just released Futurecast: How Superpowers, Populations, and Globalization Will Change the Way You Live and Work, a new book that charts the next dozen years of international progress and struggles, national triumphs and declines. President Bill Clinton has called Futurecast “prescient … insightful… a vital resource.” Rob is currently in London promoting Futurecast, meeting with members of the U.K. government, and taking part in a forum with the European Bank for Reconstruction and Development.

We look forward to having you join Simon and Rob for this important discussion on U.S. politics, the economy, globalization, and world affairs.

Details:
Monday, May 5
6 p.m. - 8 p.m.
The Harvard Club of New York City, North Room
35 W. 44th St.
New York, NY
Click here to RSVP

For any questions regarding this event, please contact Dave O'Donnell at 202.384.1213 or dodonnell@ndn.org

The editorial board of the New York Times mulled over this big question yesterday. It's not an easy one to answer -- issues abound about how to measure trade in the first place and then how to isolate its impact on growth. But we do know that the trade causes worry and in some cases, very real disruptions of job and wage security. The Democratic presidential candidates have been quick to capitalize on this anger, the editorial asserts.

This editorial is worth a read as it addresses the major points made by trade's critics - that trade causes job losses; that trade drives down blue-collar wages; that trade contributes to growing inequality in pay; that cheap imports threaten U.S. production of similar goods.  The editorial concludes that "No matter how hard economists look for trade's fingerprints on these inequities, they find it plays only a bit part."

So what's going on, asks the Times? Well.... no surprise here.  The rising cost of college leads to a dearth of educated, skilled workers and outsized executive pay and "excesses" in the financial markets widen the income gap. The meat of the article comes at the end:

...blaming trade is not the right way to go. What the [Presidential] candidates need to do is respect the voters, and explan the economics and outline policies that will address the true problems.

That means expanding the social safety net to help workers displaced by trade.... The government has to invest more in education to help produce better-prepared, better-paid graduates. To help American companies compete, it must invest in better roads and ports and address the country's health care crisis. And it must move toward move progressive taxation to redistribute the spoils of growth.

And the kicker:

Blaming Nafta and other trade agreements for America's workers' pain may play well on the campaign stump. But it will not solve the country's economic problems. It will only make them worse.

For more information on NDN's work to develop a new economic strategy for America, check out Michael Moynihan's paper on investment in infrastructure; our series of papers on new skills for the 21st century economy (here and here); and Rob Shapiro's paper on globalization.

Think quick - what's the first word that comes to mind when I say "NAFTA"? Ohio... Pennsylvania... election... job losses (okay, that's two words)... manufacturing... Mexico... bitter....

How about "environment"? Probably not. But today, Earth Day 2008, is a perfect opportunity to meld these two hot topics. On the campaign trail, Sens. Clinton and Obama have both advocated that NAFTA be renegotiated to include tougher environmental standards.  What does this mean exactly?

NAFTA was the first trade agreement that explicitly linked trade to the environment. In 1992, Presidential candidate Bill Clinton took issue with the agreement's weak environmental provisions. NAFTA ultimately included a side agreement - the North American Agreement on Environmental Cooperation - that required each country to enforce their own environmental laws and the creation of a tripartite environmental protection commission. At the time, NAFTA was praised for taking a most "green" approach to trade.

Since 1994, however, NAFTA's environmental standards have lagged behind those in US free trade agreements. Environmental standards are now incorporated into the core agreement, creating more effective means of enforcement. This is what Sens. Clinton and Obama seek in a renegotiated NAFTA.

If NAFTA is actually renegotiated -- and that is a HUGE if -- would moving core standards into the body of the agreement really address the serious environmental issues shared by Canada, the United States, and Mexico? At least with respect to the U.S. and Mexico, mechanisms are already in place for bilateral cooperation, such as the Border Environmental Cooperation Commission, the North American Development Bank, state and local governments, and NGOs. This is a question I think deserves more clarification, at least from the Democratic candidates.

Amid the Pennsylvania Primary madness, Clinton and Obama released statements on Earth Day, as did Sen. McCain. No matter what happens with NAFTA, today I congratulate all three candidates for including the environment in their plans for a new governing agenda.

One thing is clear - the globe is experiencing a shortage of food and a spike in prices of critical agricultural commodites. But the reasons behind this crisis are many, ranging from U.S. ethanol subsidies and mandates and the rise of biofuels; a draught in Australia that's killed wheat production; increased demand for beef in India and China; and so on.

Of particular note, however, are domestic and international trade policies that have distorted the flow of commodities across borders. Victor Mallet in the Financial Times takes a closer look at trade as a contributor to the current crisis.

Let's first start with how food exporters in some countries are now holding onto their exports to ensure a level of supply for domestic consumption and to retain inventory as hard times worsen. By hoarding supply, the shortage is worsened. As Mallet points out, "Trust in the efficiency and liquidity of the market has collapsed."

Domestic agricultural production in general has lagged in the last couple of decades, says Mallet. He uses the example of Asia, which as a region has done little to liberalize domestic markets, offer credit to farmers, or promote more modern means of production.

Then there's lack of progress on Doha and the reluctance of the EU and US to reform their ag policies -- it's not clear what impact this is having on the food shortage right now, but it reveals just how tough reforming agriculture trade is.

Also check out a piece by Swaminathan Aiyar in PostGlobal on biofuels and the food shortage.

A new Washington-Post ABC News poll today indicates that 70 percent of Americans disapprove of President Bush's handling of the economy and his approval rating remains at an all-time low (33 percent). Only 28 percent approve of his handling of the economy - a double digit decline from a year ago.

The governing failures of the Bush Administration are nothing less than historic. President Bush's economic agenda has effectively reversed the robust and sustained economic growth of the 1990s under President Clinton. His dismal economic record can be partly explained by poor policy choices -- unaffordable tax cuts, uncontrolled spending on the Iraq war, excessive deregulation, weak commitment to multilateral trade liberalization –- as well as by the failure of political conservatives to understand and capitalize upon the United States’ role in the new global economy.

The silver lining of the current economic downturn is that American voters gain a rare glimpse into the machinations of the U.S. economy and a chance to demand that our leaders address the consequences of Bush's mismanagement of the economy - the recession, financial crisis, and the ongoing struggle of the middle class.

Now is the time for American voters and our nation’s leaders to work together to develop and ultimately implement a new, comprehensive economic agenda that makes globalization work for all Americans. Such an agenda includes strategies that are independent of each other, but coordinated and comprehensive in scope, and which address the struggles of the middle class, the recession, and the financial crisis. This is a difficult challenge, but the Presidential candidate who can present a vision to transform our economy into one that includes all Americans while strengthening our economic ties with the world’s nations is the candidate who will win.

BLS released its March jobs report this morning -- employers cut 80,000 jobs in March, the most in 5 years and the third straight month of losses (as reported by the Washington Post). The unemployment rate is now 5.1 percent - the highest since September 2005.

The latest NY Times/CBS News poll finds that nearly three in 10 Americans say they are very concerned that they or someone in their household might lose their job in the next 12 months. Most of those polled say the country’s best years of good, available jobs are behind us. And 81 percent say the country is on the wrong track. (See David Leonhardt and Marjorie Connelly's NY Times article today.)

Yikes. We need a game plan. Clinton? Obama? McCain? This is your moment to to think big about the economy, where we're been, where we're headed. This plan has to go beyond a housing bailout and fiscal stimuli. How about addressing high health care and energy costs; making needed investments in infrastructure, human capital, and R&D?

NDN is pleased to announce the release of a new book by Dr. Rob Shapiro, Chair of our Globalization Initiative and former Under Secretary of Commerce from 1998 to 2001, entitled Futurecast: How Superpowers, Populations, and Globalization Will Change the Way You Live and Work. In the coming months, NDN will launch a series of events in New York City, San Francisco, and Washington, DC to mark the release of this important new book that seeks to predict what our world will look like in 2020.

In Futurecast, Shapiro draws upon his unique perspective on American and world affairs to chart the next dozen years of international and national progress. He explores the monumental forces that will shape the fates of the world’s major countries and their people: economic globalization, demographic aging of societies, the rise of America as a sole superpower, threats of terrorism and the promise of technology, and national struggles to maintain access to health care and secure energy sources without destroying the global environment.

We encourage our NDN friends to take a look at Futurecast, which is available for purchase on Amazon.com. The book has received glowing praise from reviewers, economists, and politicos alike. NDN President Simon Rosenberg called it "a must-read for anyone trying to make sense of how the global economy is changing in the early park of the twenty-first century," and Rolf Ekeus, the United Nations High Commissioner on National Minorities, has said that "Robert Shapiro understands the world and all of its complexity, from the rise and fall of nations to the problem of aging populations. No one is better equipped to tell us where we’re headed in the not-so-distant future."

Many of you may already be familiar with Shapiro's contributions to the NDN Globalization Initiative and national discourse on the impact of globalization on the U.S. economy. Shapiro has recently authored two seminal papers with NDN. In The New Landscape of Globalization, he presents a new analysis of how the fundamental dynamics of globalization affect U.S. growth, productivity, wages and job creation, health care and energy costs, and investment in education and human capital. Shapiro's most recent NDN paper, The Idea-Based Economy and Globalization, examines how and why U.S. companies and workers lead the world in developing and applying new intellectual property, and why these leads in innovation constitute a critical U.S. advantage in globalization.

Shapiro has also advised Michael Moynihan, NDN Fellow and Green Project Director, on his recent paper, Investing in Our Common Future: U.S. Infrastructure. This far reaching paper proposes a set of measures to restore our national political will and improve funding mechanisms to rebuild and advance our aging infrastructure. Moynihan calls upon the U.S. government to commit America to a series of environmental goals that would simultaneously green America’s infrastructure and drive important advances in environmental technologies.

We invite you to attend one of the upcoming events to mark the release of Futurecast. As part of NDN’s Bernard Schwartz Forums on Economic Policy, NDN President Simon Rosenberg will host events with Shapiro in San Francisco on Thursday, April 10 and New York on Monday, May 5 (details forthcoming). For more information on these events, please visit our website.

All three Presidential candidates delivered major speeches on the housing crisis and economic slowdown this week - Sen. Clinton on Monday in Philadephia; Sen. McCain on Tuesday in S. California; Sen. Obama today in New York. As Travis mentioned in his post, the Washington Post included summaries from each candidate's economic advisor of the major points. What follows is a summary of summaries:

According to Gene Sperling, economic adviser to Sen. Clinton's campaign, Sen. Clinton proposes and/or supports:

-A plan to encourage the restructuring of viable mortgages through a voluntary agreement to freeze interest rates on subprime ARMs and a 90-day foreclosure moratorium.
-A second stimulus package, focused on helping at-risk homeowners and communities.
-Policies that help Americans achieve greater economic security and upward mobility: a direct health-care tax credit; a direct $1,000 matching tax cut; higher education tax cuts that go directly to paying college tuitions.

According to Douglas Holtz-Eakin, a senior policy adviser to Sen. McCain's campaign, Sen. McCain proposes and/or supports:

-A tax credit for R&D, investment incentives and a lower corporate tax rate to improve U.S. competitiveness
-"Comprehensive health-care reforms," tax credits, and health insurance market reforms
-Low taxes, controlled government spending and the honoring of international agreements to reassure investors, strengthen the dollar, and help to ease inflation and oil prices
-Modernizing unemployment insurance and training programs

With regard to the mortgage crisis:

-No taxpayer dollars should bail out real estate speculators or financial market participants who failed to do due diligence in assessing credit risks.
-Any financial assistance should be accompanied by reforms
-Where government assistance is merited, lenders and homeowners should make financial sacrifices to qualify.

According to Austan Goolsbee, senior economic adviser to Sen. Obama's campaign, Sen. Obama proposes and/or supports:

-Efforts to create a new FHA Housing Security Program to provide incentives and guarantees for lenders to buy out mortgages that exceed the value of homes and convert them to stable 30-yr fixed rate mortgages.
-Direct interest-rate subsidies for low- and middle-income borrowers; comprehensive credit counseling; aid for loan workouts and reform of bankruptcy code
-Extending unemployment benefits; providing money to hard-pressed states; permanent tax relief to seniors and working Americans
-A plan to fund investment in infrastructure; an alternative energy and green jobs development program; a job skills program
-Improving oversight of credit markets
-Enacting a long-term saving program

What's missing from these plans? Take a look at Jake's post yesterday on Mark Halperin's piece in Time.