At The Conversation Marina v. N. Whitman makes a proposal about mitigating the adverse effects of “free trade” agreements on those who are hurt by them—expand trade adjustment assistance:
The TPP, which was agreed to earlier this year by 12 Pacific Rim countries, is aimed at reducing tariffs but, much more significantly, it would remove other national barriers to finance and investment as well as trade in goods, services and digital transactions. Among these changes are harmonization of national regulations and protection of intellectual property.
That agreement, which still requires ratification by the Senate, is now on the rocks after the populist candidacies of Trump and Sanders seized on anti-trade sentiment and gave it a powerful voice.
While this won’t save the TPP, rethinking how we assist those hurt by free trade is important so that at a minimum – once the anti-globalization views now ascendant have attenuated and the U.S. budget can accommodate increases in discretionary programs – future agreements don’t leave so many workers feeling left behind. Tinkering isn’t enough.
It starts with crafting policies that encourage a more flexible labor force, while at the same time providing a safety net for those who have to do the flexing. The Danes have coined a word for such policies: “flexicurity.†Rather than trying to protect jobs toppled by economist Joseph Schumpeter’s “winds of creative destruction,†government policies should ease and speed the transition to new and sturdier ones.
So in terms of the TAA, a crucial change would be to make training and other programs for the reemployment of displaced workers more effective and wage insurance for those who have found new jobs but at significantly lower salaries than the old ones more generous, in both amounts and duration. It is also critical to extend such measures to all workers displaced by change – such automation and changes in consumers’ tastes – not just trade.
I have a related but alternative proposal. First, impose a Pigouvian tax on those who benefit most directly by these managed trade agreements. That will serve to limit the appetite of those who advocate poorly-constructed managed trade programs whose benefits are narrow and concentrated.
Second, give money directly to those hurt the most by these agreements. Give them to workers not companies. Don’t give them to educational institutions that produce retraining programs of dubious actual value. Let the workers do whatever they care to with them, whether it’s pursue retraining, starting a business, or just spending it.
Third, phase the subsidies out on a fixed calendar over time. A well-known process encourages people to adapt to circumstances rather than assuming the subsidies will last forever.
That wouldn’t be perfect but it would be better than what we’ve been doing.
One could practically go through the paragraphs you quoted and debunk it on a phrase by phrase basis. Ultimately, she assumes a people that do not exist in a nation that is 228 times the size of the one she cites as preferable. Not only that, but her proposed policies basically fall into the bucket of being a redistribution of wealth from the bottom 90% to the top 10% – again.
Schuler’s proposals would also fail, but for different reasons, mostly political in nature. For his proposals to work, they would need to be implemented as stated, but that presupposes a political class that gives a damn about anyone other than their large donors AND that has the ability to comprehend what he’s proposing. Also, it’s unslear how the political class itself could get their hands on the funds being disbursed. The other problem with Schuler’s proposal is that once in place, the subsidies would become very popular, and would therefore be hard to cut. Should such a scheme ever be implemented, it’s easy to imagine the subsidies being made even more generous at the start than would be warranted just so that they would be hard to cut later. Just because _I_ can’t see an easy way for the pols to skim off the program doesn’t mean they won’t figure out a way to do so.
Tl;dr version of my comment: We’re screwed.
I’m a policy guy not a politics guy which is not to say that I’m ignorant or indifferent to politics. I’ve mentioned it before but it seems timely to say it again.
My family was intensely political. My dad’s grandfather was one of St. Louis’s political bosses. My dad’s uncle was the sheriff of St. Louis. My dad was very involved in politics including working as campaign manager for various campaigns. Harry Truman asked my dad to be his campaign manager for his last senate run but my dad turned him down.
The kitchen table conversation in my family wasn’t about sports or TV. It was about politics and I was expected to be knowledgeable about it from a very early age.
Dinner guests in our house included lawyers, judges, our Congressional representative, and the chairman of the St. Louis Board of Aldermen (the St. Louis city council).
I understand politics, politicians, and the practical workings of government pretty darned well. And I understand its limitations. I’m more interested in what can work than in what’s politically comfortable for incumbents.
Cutting subsidies that were intended to be temporary has happened in the past but, admittedly, it was in the distant past. For example, after the San Francisco earthquake large numbers of survivors were housed for several years. Initially they were housed at no charge; then they were charged a small rent; the rent was gradually increased; eventually they were evicted. So it can happen.
It can still happen. Temporary housing was provided after Katrina but it went on for far too long. The last temporary housing following Katrina was still operating until 2012.