U.S.A.-- A Country Of Economic Refugees

Not my housekeeper, Juana

My housekeeper, Juana, is from El Salvador. The only way I know she's an American citizen is that we talk about who she's voting for every time elections roll around. Unlike Mitt Romney, I'm not running for office so I have no idea who's on the gardening crew. I know Roberto, the main guy, is American because he was born in L.A. But I'm not sure what the status of his employees are. I suspect the Gang of 8 proposals aren't really meant to make their lives any easier. As Joshua Holland explained in The Fifteen Biggest Lies About The Economy, "the idea that immigrants, especially undocumented immigrants, take jobs from the native-born and keep wages low and taxes high is so deeply embedded in our discourse that even many progressive-minded people have come to believe it [and] that people believe immigration plays a much greater role in the plight of many U.S. workers than it actually does." But just because that's a widely-held belief, it doesn't make it true.

Here is the reality: new immigrants (legal or not) have a negative short-term impact on local governments’ fiscal situation, but over the long haul, they contribute more in taxes than they take in services. Immigrant labor may have a negative effect on wages for a small group of Americans, but that’s anything but established, and the positive contributions-- including their contributions to native workers’ wages-- are enjoyed by a much, much larger group of Americans. All of these factors are very small in relation to the economy as a whole, and almost none of the rhetoric about how immigration hurts working people is justified by the data.

...The Corporate Right, which has made strange bedfellows with immigrants’ rights activists in recent years, has pushed a narrative that’s very different from the one embraced by the nativists. Corporate America argues that newly arrived workers take jobs that Americans won’t do. Yet that’s only partially true; many unauthorized immigrants fill nonunion jobs that are impossibly crappy, pay poverty wages, and are rife with workplace violations, and they work those jobs side by side with millions of natives and legal residents. The reality is that there are not enough Americans who are willing or able to tolerate poverty wages and other workplace abuses.

At the same time that spending on immigration enforcement was going through the roof, the resources allocated to enforcing overtime, minimum wage, workplace safety, and other protections for workers were cut and cut again. According to research conducted by NYU’s Brennan Center for Justice, the number of workplaces that fell within the jurisdiction of the Department of Labor’s wage and hour division more than doubled between 1975 and 2004, and the number of workers in those establishments increased by 55 percent. Yet during that period, the number of inspectors available to enforce basic labor standards declined by 14 percent, and the number of “compliance actions” the agency completed plummeted by more than a third.

Those who advocate more law enforcement to tackle the immigration issue often invoke images of the United States descending into anarchy-- of a nation losing control of its borders and therefore its sovereignty. There is anarchy in America, there is lawlessness, but you’ll find a lot more of it in the kitchen of your favorite diner than along the Rio Grande.

Unfortunately, there’s not much in the way of nationwide data on workplace violations, but we do have a large body of local and state studies, and all point to the same conclusion: they are simply rampant at the lower end of the economy and among vulnerable populations.

Consider the findings of just a few of those studies, as compiled by the Brennan Center:

• A 2004 study of two hundred workers conducted at multiple sites in Fairfax County, Virginia, found that

• 54.6 percent were paid less than agreed on.
• 53.1 percent reported nonpayment for work done.
• 35.6 percent said they’d been victims of racial discrimination.
• 25.8 percent had been given bad checks.
• 16 percent reported that they’d been subject to violence on the job.
• 14.9 percent said they’d received threats from employers.

• A 2002 study of chicken processors found that six in ten plants failed to pay workers overtime.

• In a 1998 study of restaurant workers in Los Angeles, only two out of forty-three establishments complied with basic labor laws.

• A 2005 study of grape pickers in California’s Central Valley found that half of all workers reported pay stubs that reflected less than the total number of hours worked, and half reported that they had not received all of the overtime pay they were owed.

• A 1998 study looking at workers in the restaurant, garment, hotel, and motel industries-- all occupations with large numbers of unauthorized workers-- found that only one in twenty restaurants complied with minimum wage laws and only a third of hotels and motels were in compliance, as were only four of ten shops in the garment industry.

Study after study reported similar findings. And it bears repeating: although these illegal jobs are clustered in industries in which many unauthorized workers toil, millions of legal immigrants and U.S. citizens work those same jobs and are also victims of widespread employer abuses. According to one 2003 study, the percentage of workers being ripped off via minimum wage violations is not that much lower for natives than it is for immigrants-- 13 percent versus 9 percent among women and 9 percent versus 6 percent among men.

Most of the focus of the immigration debate in this country has been on the immigrants themselves, especially unauthorized immigrants. But very little attention is paid to the other side of the transaction: the incentives that U.S. companies and households have to hire an unauthorized worker over a citizen.

For one thing, enforcement efforts rarely target employers. As the Washington Post noted, while “federal immigration authorities arrested nearly four times as many people at workplaces in 2007 as they did in 2005... only 92 owners, supervisors or hiring officials were arrested in an economy that includes 6 million companies that employ more than 7 million unauthorized workers. Only 17 firms faced criminal fines or other forfeitures.” Those raids devastate workers’ families, but they represent little more than an inconvenience to employers, who have little reason to improve working conditions when they can hire new employees who are just as easy to exploit.

Illegal immigrants sell their labor on a black market that’s similar in many ways to those for other illicit goods and services, such as the drug trade. The sellers’ incentives are well-understood: the lion’s share of those who have moved to the United States in the last decade are economic refugees, fleeing home countries where they can’t eke out a dignified life. Human traffickers, who can realize enormous profits from shipping people across national boundaries, provide for the market; their incentives, again, are well-understood.

The buyers, of course, are Americans-- and not only corporate America. Middle-class households and many small firms use illegal labor, but their side of the transaction goes largely undiscussed. Without looking at both sides of the coin-- demand, as well as supply-- it’s impossible to arrive at a reform agenda that can result in an effective, humane, and sustainable system of immigration control.

An unregulated sector of the economy, rife with illegal jobs, is the largely unexamined “pull factor” for much of the (low-skilled) immigration to the United States. Most recent immigrants work at jobs that fall somewhere between what’s available in their native countries and the kind of jobs one would expect to find in a highly advanced economy. They also tend to be jobs that can’t be easily outsourced to countries with an abundance of cheap labor.

A good example of these kinds of jobs can be found in New York City, where the cost of living is among the highest in the country. A report in Crain’s New York Business News found that in underregulated New York restaurants, green grocers, retail corner laundries, and private households, “Typically, workers will be quoted a flat weekly salary of $300 and then have to work 60 hours a week, receiving an effective wage of $5 an hour with no provision for overtime.”36 New York State’s minimum wage was $7.15 per hour, and federal and state laws require overtime pay for any hours worked over forty per week.

In order to create a sustainable model for immigration control, we need to look at decreasing the demand for workers who are willing to fill those jobs. This means breaking Americans’ addiction to exploitable labor. As long as there are $5-per-hour jobs in New York City that few natives can afford to work, and millions of workers who don’t have jobs that pay that much in poorer countries, we’ll have a large number of people who want to migrate to our shores. As long as our immigration system doesn’t permit enough of them to migrate legally, we’ll have an “illegal immigration problem.” It’s simply the law of supply and demand at work.

Yet it’s not true that all unauthorized immigrants work those kinds of jobs. There’s no question that employers are sometimes legitimately unable to find citizens or legal residents to fill even decent jobs. That’s especially true in rural communities, where young people tend to take off for the big city and the population is aging and in decline. In 2007, I spoke with Oklahoma state senator Harry Coates soon after his state passed one of the most restrictive immigration laws in the nation. Employers in Oklahoma weren’t only having problems filling low-paying “McJobs,” he told me. “In the oil fields, they’re paying $18 to $20 per hour to start,” he said, “but they can’t find enough willing workers to fill the jobs. We’ve told our young people to work with their minds, not with their hands.” Coates added, “We’ve shot ourselves in the foot by running off willing workers for willing employers.”

Progressive immigration and workplace reform would focus our enforcement resources on cleaning up the bottom end of the labor market: on the jobs that bring people to our shores, rather than on the immigrants who work them. Guaranteeing workers-- immigrant and native alike-- the right to organize and enforcing wage and overtime laws would equalize the price of hiring unauthorized and legal workers and would go a long way toward addressing the demand for illegal labor without the ugliness of raids and deportations.

Once the goal of eliminating substandard and often illegal jobs-- un-American jobs-- from the U.S. workplace is accomplished, there would be far less resistance to new workers coming in to fill jobs that can’t be staffed by Americans. Public opinion research shows that when people perceive the economy to be functioning well for them, much of the anxiety over immigration disappears.

Instead we get a bigoted, right-wing ideologue like Ted Cruz sitting on the Judiciary Committee's Immigration, Refugees and Border Security subcommittee singing tunes for his Know Nothing base:

Cruz Claimed Obama Wants Immigration Reform Bill To “Crater” So Democrats Can Use It As “A Political Wedge.” According to Ted Cruz in an interview with the Dallas Morning News, “[Obama’s] behavior concerning immigration leads me to believe that what he wants is a political issue rather than actually to pass a bill. What he wants is for the bill to crater, so that he can use the issue as a political wedge in 2014 and 2016. That is why I believe the president is insisting on a path to citizenship for those who are here illegally. Because by insisting on that, he ensures that any immigration reform bill will be voted down in the House.” [Dallas Morning News, 3/24/13]

Cruz: “I Do Not Support The Dream Act And Categorically Oppose Amnesty.” In an interview with the blog Conservatives in Action published on Cruz’s campaign website, Cruz said, “I do not support the Dream Act and categorically oppose amnesty. I categorically oppose amnesty and I strongly support legal immigration for those that have followed the rules and come here to pursue the American dream.” [TedCruz.org, 7/18/11]

Cruz: “End Benefits Like In-State Tuition For Illegal Aliens.” According to the Texas Tribune, Ted Cruz said, “We need leaders who will get serious about enforcing the border: triple the border patrol; use walls, fences, and technology; end sanctuary cities; repeal Obama’s newly ordered amnesty; and end benefits like in-state tuition for illegal aliens." [Texas Tribune, 6/25/12]

Cruz Called On Romney To End Obama’s “Deferred Action” Policy Toward Young Undocumented Immigrants. According to the Huffington Post, “Ted Cruz, a Republican senatorial candidate from Texas, said Monday he thinks presidential candidate Mitt Romney should end President Barack Obama's deferred action policy, going beyond Romney's line that he doesn't need to because he'll fix the problem quickly through Congress. Asked by Telemundo whether Romney should reinstate deportations of young people granted deferred action, Cruz said, ‘I do.’ ‘I think it is without authority, and we're a nation of rule of law, and it is not defending anyone's freedom to be undermining rule of law,’ he said of President Obama'sJune announcement that his administration would grant work authorizations and deferred action-- reprieve from deportation concerns for two years-- to some undocumented young people.” [Huffington Post, 8/28/12]

Cruz Attacked Primary Opponent’s Support For Guest Worker Program. According to Fox News Latino, “Cruz went on the offensive against Dewhurst on illegal immigration-- a key issue in the state that shares the longest stretch of U.S.-Mexico border-- calling attention to Dewhurst’s 2007 support of a guest worker program for the state’s undocumented immigrants, announced at a speech in South Texas. Cruz called the guest worker idea more expansive than President Obama’s decision to call off deportations for immigrants without criminal records who came here illegally as children-- a policy that Cruz opposes and called ‘illegal.’” [Fox News Latino, 7/18/12]

Cruz Supported Border Wall, Including Possibility Of Confiscating Private Property. According to Fox News Latino, “Cruz also distinguished himself from Dewhurst with his full-throated support for a border wall estimated by the Department of Homeland Security to cost $7.3 billion, or $6.5 million per mile. Cruz defended the border wall proposal even if it meant expropriating private property-- a position that the debate’s moderators, WFAA reporter Brad Watson and Gromer Jeffers of the Dallas Morning News, said contrasted with Cruz’s message of fiscal conservatism. ‘One of the specific powers and responsibilities of the federal government is to secure the borders,’ Cruz said. ‘Property can be taken with due process of law and just compensation.’” [Fox News Latino, 7/18/12]

Cruz Criticized Idea Of Providing Green Cards To Unauthorized Immigrants. According to the Washington Examiner, “Sen. Ted Cruz signaled yesterday on FOX News that he was concerned about allowing illegal immigrants to get a green card-- reportedly part of the Gang of Eight Senate bill for immigration reform. Sen. Marco Rubio, R-Fla., supports the idea of allowing illegal immigrants to apply for a green card after a 10-year wait. ‘The problem with the green card is the green card is a permanent legal residence status, and anyone who has a green card is eligible for citizenship within five years,’ Cruz explained to FOX News host Sean Hannity. ‘And so, if someone can get a green card, that is a path to citizenship.’” [Washington Examiner, 4/2/13]

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La Reforma Integral De La Inmigración

Gang of Eight

Early this morning, 1:30 this morning, the Gang of 8 formally filed their immigration reform bill. The Senate's Know Nothing caucus of unreconstructed bigots and anti-Latino hatemongers, led by Ted Cruz (R-TX), David "Diapers" Vitter (R-LA), Jefferson Beauregard Sessions (KKK-AL), John Cornyn (R-TX) and Chuck Grassley (R-IA) is coordinating with Steve King's House Bigotry Caucus and Kris Kobach, the Mitt Romney advisor who came up with the "self-deportation" strategy that helped the GOP lose last year's elections. Their strategy is to use delays and parliamentary maneuvers to kill it, offering “poison pill” amendments aimed at breaking apart the fragile bipartisan group that developed the plan.

The tactics, used successfully by opponents of an immigration bill during a 2007 debate in the Senate, are part of an effort to exploit public fissures over core components of the comprehensive legislation introduced Tuesday by eight lawmakers who spent months negotiating the details.

...Conservatives are taking aim, arguing that allowing undocumented workers to remain in the country amounts to “amnesty”; that the border control steps are not strong enough; that the guest-worker program will undercut Americans at a time of high unemployment; and that the bill will amount to trillions of dollars in new federal costs.

Those factors make immigration reform “a heavy lift,” said Kansas Secretary of State Kris Kobach, a lawyer who helped Arizona draft one of the nation’s strictest immigration laws in 2008. “Twenty million Americans are unemployed or under-employed. At any other normal time, no one would breathe about amnesty.”

When writing his book, The Fifteen Biggest Lies About the Economy, Joshua Holland closed his chapter on immigration with a story about how Kris Kobach's anti-immigrant law has hurt Arizona.

In April 2010, Arizona governor Jan Brewer... signed SB 1070 into law. To say the very least, the bill was controversial.

Despite the fact that the federal government has exclusive domain over regulating immigration, Arizona’s law made being in the country illegally a state crime (it was only a civil offense on the federal statutes). It made transporting an unauthorized immigrant a crime. And it empowered police to detain anyone they suspect of committing those crimes.

...[W]hen reactionary xenophobia and economic reality clash, the latter always wins.

Reaction to the bill was swift. Within weeks of the law’s passage, two of Arizona’s largest cities, Flagstaff and Tucson, announced that they were suing to block the law. A boycott of Arizona goods and services was called. The Boston, Los Angeles, and Oakland city councils stopped doing business in the state, and, as of this writing, New York and Washington, D.C., were considering following suit. San Francisco and Boulder, Colorado, suspended all official travel to the Copper State. According to the Arizona Hotel & Lodging Association, nineteen conferences were canceled just in the first week after the bill was signed.

According to an analysis by the Immigration Policy Center, “If significant numbers of immigrants and Latinos are actually persuaded to leave the state because of this new law, they will take their tax dollars, businesses, and purchasing power with them.”

The University of Arizona’s Udall Center for Studies in Public Policy estimates that the total economic output attributable to Arizona’s immigrant workers was $44 billion in 2004, which sustained roughly 400,000 full-time jobs. Furthermore, over 35,000 businesses in Arizona are Latino-owned and had sales and receipts of $4.3 billion and employed 39,363 people in 2002, the last year for which data is available. The Perryman Group estimates that if all unauthorized immigrants were removed from Arizona, the state would lose $26.4 billion in economic activity, $11.7 billion in gross state product, and approximately 140,324 jobs, even accounting for adequate market adjustment time.

Again, the federal government has exclusive domain over regulating immigration to the United States, so Arizona’s law is unlikely to withstand legal challenges. But if it does, what follows would be utterly predictable: the state not only will lose out on tourism and international business travel, but a huge share of its workforce, both legal and otherwise, will also seek less nasty climes. Arizona will face enormous litigation costs, and local police agencies will start to complain that they don’t have the resources to enforce other laws. Brand Arizona will continue to take a pummeling, companies will face a whole new set of hiring challenges, and the state’s business community will start to complain. Eventually, the very same lawmakers who pushed the new law will admit that it didn’t work out as they’d intended.

I say this with the confidence born of past experience. In 2007, Arizona passed another tough “enforcement only” immigration law, which mandated the use of an (unreliable) electronic verification system and subjected employers to the loss of their business licenses for hiring the wrong people. It turned out to be a disaster that might rank up there with the Edsel or New Coke in the pantheon of boneheaded ideas.

The state had a very low unemployment rate when the law was passed-- it was, at least in part, a “solution” to a problem that Arizona didn’t have. Unemployment was at 4.1 percent when the law went into effect in early 2008 and had been at 3.7 percent when a judge upheld the measure a year earlier. By the middle of 2008, lawmakers were scrambling to undo the shock they’d inflicted on the state, as up to 8 percent of the population-- according to one estimate-- decided to hightail it out of Arizona en masse. The state faced new labor shortages, as well as a loss in demand from all of those worker-consumers. Eventually, the law was amended, in part due to pressure from Arizona businesses.

The people of Arizona learned the hard way that immigrants not only supply labor, but also demand goods and services in turn. In addition, they learned that newer immigrant communities have a mix of people with different legal statuses all jumbled together, and that when there’s a widespread perception that politicians (and citizens) are attacking immigrants, it doesn’t much matter that some people differentiate between those who are “legal” and “illegal”-- Arizona lost plenty of citizens and lawful permanent residents with that drop in population.

A University of Arizona study concluded that economic output in Arizona would drop 8.2 percent annually if foreign-born workers left the state’s labor force. “Getting rid of these workers means we are deciding as a matter of policy to shrink our economy,” Judith Gans, an immigration scholar at the university’s Udall Center, told the Wall Street Journal. “They’re filling vital gaps in our labor force.”

Arizona’s experience isn’t unique. In 2006, the town of Riverside, New Jersey, passed a strict immigration ordinance. A year later, the New York Times reported, “With the departure of so many people, the local economy suffered.

Hair salons, restaurants and corner shops that catered to the immigrants saw business plummet; several closed. Once-boarded-up storefronts downtown were boarded up again.” The town was also hit with serious legal bills defending against several lawsuits. According to the Times, “The legal battle forced the town to delay road paving projects, the purchase of a dump truck and repairs to town hall.” The law was repealed a little more than a year after it went into effect.

Hazelton, Pennsylvania’s ordnance was blocked before being implemented-- but not before the municipality had spent $2.4 million in court costs. The town’s insurance carrier refused to cover the costs.

When Oklahoma passed a draconian immigration law, the Chicago Tribune reported, “Construction companies that relied upon undocumented laborers are having trouble completing jobs... And business is down sharply at the stores, groceries and restaurants that serve a Hispanic clientele.” Republican state senator Harry Coates told the Trib: “You really have to work hard at it to destroy our state’s economy, but we found a way... We ran off the work force.”

Tuesday afternoon, Obama got a sneak-peak. He issued a statement of support. But then, his entire career has been based around compromise: "This afternoon, Senators Schumer and McCain briefed me on the bipartisan immigration reform bill that they have drafted with their colleagues in the Senate. This bill is clearly a compromise, and no one will get everything they wanted, including me. But it is largely consistent with the principles that I have repeatedly laid out for comprehensive reform. This bill would continue to strengthen security at our borders and hold employers more accountable if they knowingly hire undocumented workers. It would provide a pathway to earned citizenship for the 11 million individuals who are already in this country illegally.  And it would modernize our legal immigration system so that we’re able to reunite families and attract the highly-skilled entrepreneurs and engineers who will help create good paying jobs and grow our economy. These are all commonsense steps that the majority of Americans support. I urge the Senate to quickly move this bill forward and, as I told Senators Schumer and McCain, I stand willing to do whatever it takes to make sure that comprehensive immigration reform becomes a reality as soon as possible."

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"Free" Trade-- Another Way For Conservatives To Undermine Democracy

In the closing to his brilliant book, The Fifteen Biggest Lies About The Economy, Joshua Holland takes on the misleading notion of 'free trade' by pointing out that "Just because politicians say they believe in open markets and free trade between nations doesn’t make it true. In reality, they believe in 'free trade' until someone else gets a comparative advantage, and then their hypocrisy emerges and they become fierce protectionists."

Most people still believe that discussions of “free trade” are about ships full of bananas or ball bearings or whatever, crisscrossing the high seas. Understanding why that’s just a small part of the issue is key to grasping the difference between “free trade” and what these deals we’ve been signing for the last thirty years are really about: a corporate power grab.

Prior to World War II, trade wars were common, and they often led to shooting wars. In the mid-1940s, the General Agreement on Tariffs and Trade (GATT) was created to avoid those conflicts and foster world peace. Many of its authors were FDR liberals. They had high ideals.

Between 1944 and the mid-1990s, trade negotiations were conducted by dull, (mostly) white guys in business suits, and nobody really gave a damn. Poor countries griped about agricultural subsidies and the rich countries’ protectionism, but they were free to try various development strategies, including those that didn’t adhere to the dictates of “the market.”

During the first decades of the GATT, which governed trade between 1947 and 1995, the United States and “old” Europe had economies based heavily on manufacturing. Today, however, almost all advanced economies share a very similar distribution: about 1 to 2 percent in agriculture, maybe 20 or so percent in manufacturing, and around 80 percent in services.

For approximately the first forty years of the GATT’s existence, its members negotiated reductions in tariffs, quotas, and other traditional forms of market protectionism. They were the manufacturers, and those deals were for the most part negotiated on a level playing field between the world’s advanced economies-- what they call “North-North” negotiations in trade lingo.

People who brand opponents of today’s trade deals “protectionists” might ask themselves why nobody resisted the GATT during those years of slashing tariffs and quotas and the like. The reason is that reducing tariffs is what most people think of when they hear about “opening markets” and freeing up international trade. The controversy began only as “free trade” was gradually redefined to include all manner of domestic policies.

Beginning in the 1970s, two things happened-- or, I should say, two things aside from the oil shock of ’73. In 1979, during the Tokyo round of the GATT, negotiators began to look at “nontariff barriers.” These included onerous customs procedures, mountains of paperwork required to import goods, subsidies for domestic industry, and so on. That shift to “nontariff barriers” coincided with the emergence of the new conservative movement, with its think tanks and front-groups, and the elections of Reagan and Thatcher to head the Western world’s leading political and economic powers.

Now, once they started to look at nontariff barriers, it was inevitable that somewhere along the line, someone in those think tanks would say, “We can call all of those environmental laws and food-safety regulations nontariff barriers, too!”

With that mind-set, in 1994, after years of negotiations, the GATT culminated in the creation of the WTO, which had enforcement powers unlike any other multilateral organization. Its rules hadn’t been written by FDR liberals, but by the Reagan-Thatcher Big Business conservatives in the corporate jets circling Washington.

For too many of them, the new “free trade” framework provided a back door through which they could advance a broader agenda. They could push a set of treaties that pressured-- and, in many instances, legally compelled-- domestic legislatures to conform to the prevailing economic theories known as the “Washington Consensus” (whenever anyone calls something a “consensus,” it probably isn’t even close). And the definition of “nontariff barrier” continued to expand.

(In the meantime, since the early days of the GATT, dozens of countries, many of them newly liberated from the clutches of European colonialism, had been added-- and most were poor and had inadequate infrastructure and very different economic distributions. Many relied on agriculture not only for food, but also as a significant source of employment. Early on, the developed countries promised to start cutting agricultural subsidies and giving those developing countries a level playing field for agriculture, but so far they just haven’t gotten around to it yet.)

In addition, they began to look not only at the flow of goods across borders, but also at services. This brings us to a really key point: there’s a massive pile of cash just sitting out there in the functions that governments commonly perform: from education to sanitation and everything in between. According to Tony Clarke of the Polaris Institute, a Canadian NGO, the total estimated value of the world’s service sector, including public services, is between $15 trillion and $20 trillion. That’s a honeypot.

By the time we arrived at the “Singapore Round” in 1996, there was an aggressive push to (1) enact a broad set of “investor protections” that made a variety of laws-- some protecting the public interest-- subject to the WTO’s dispute-resolution process and (2) allow countries (or even private companies) to exert pressure on other governments to privatize their public services.

Organized labor, community activists, environmentalists, food security specialists, farmers, and many other groups started to see these rules as a significant threat to their work. They gathered to greet the ministers a few years later in Seattle-- the famous “teamsters and turtles” coalition-- which led to the infamous “Battle in Seattle” (actually a brutal police riot). Since that time, the fight has really been about how deep into the realm of domestic policy various trade agreements should reach.

Pressuring countries to adhere to the economic policies of the “Washington Consensus,” whether they’re popular or not, is job number one for the big multinationals, because a majority of governments on the planet today are, to varying degrees, democratic. And democracy is a huge challenge to many of the big multinationals’ interests. Workers’ movements, environmentalists, pesky public interest groups, and, above all, voters exert various degrees of influence on those elected representatives.

Trade treaties constrain legislatures to remain true to the prevailing orthodoxy. Most folks don’t know this, but when state lawmakers draw up new legislation, they often drop a line to the office of the U.S. Trade Representative to make sure their bills comply with our trade commitments.

Other countries acting on behalf of their biggest corporations can challenge laws that aren’t “WTO legal.” These aren’t about widgets being shipped from here to there; the range of what falls under the catchall “free trade” is astounding. A few of the more notorious decisions include:

• A Massachusetts law preventing state and local governments from doing business with the brutal dictatorship in Burma was overturned by domestic courts after a WTO challenge.

• An EU policy that gave preferential tariffs to small banana exporters in Europe’s former colonies was successfully challenged by the United States after lobbying by the Chiquita banana company.

• Venezuela, backed by Brazil, successfully challenged provisions of the United States’ Clean Air Act that kept fuels with higher levels of pollutants out of the market.

The WTO has an enforceable arbitration process, but it isn’t always necessary to lodge a formal grievance. Because the vast majority of challenges to various domestic laws have been upheld, merely the threat of bringing a case is usually enough to make governments rethink their legislation. This is common when it comes to health, environmental, and food safety laws. In the first ten years of WTO arbitration panels’ operation, all but two such challenges brought before them prevailed.

In NAFTA and in regional deals such as CAFTA and the proposed Free Trade Area of the Americas (FTAA), the business community managed to get what it had tried and failed to achieve in the WTO: the ability of multinationals to cut out the middle man and sue governments directly for the loss of profits resulting from a regulation or a law they consider too “burdensome.” Under those rules, “signatory governments are required to provide extensive rights and privileges to foreign investors,” who are then “empowered to privately enforce these new rights by demanding cash payment from governments” that don’t give them what they want, according to a report by Public Citizen.

The cases are decided behind closed doors in “private tribunals operating outside the nations’ domestic court system”:

The track record of cases demonstrate[s] an array of attacks on public policies and normal governmental activity at all levels of government-- federal, state and local. Even though these NAFTA cases implicate commonplace public policies, the investor-state system is a closed and unaccountable one. Citizens whose policies are being attacked have no avenue of meaningful participation and neither do the state and local officials they elected to represent them. [Domestic] court decisions can be challenged and jury decisions undermined, yet no judge or jury has standing to participate in the private NAFTA tribunals.

These rules shift significant amounts of risk from investors to governments. At the same time, they sharply limit what governments can ask for in return.

The common response to this critique is pretty straightforward: most of the parties to international trade deals such as the WTO are democratic states. Their legislators are elected by the people, and when they enter into a treaty, they’re doing it on behalf of those who put them in office. Hence, democracy is safe, even if democratic governments don’t always have the freedom-- the “policy space”-- to advance their constituents’ interests.

But we have to remember those private jets stacked up over Washington during the run-up to the vote on CAFTA. That trade deal faced stiff public resistance-- one poll taken in the weeks before Congress voted found that three out of four Americans opposed trade agreements that resulted in job losses at home, even if they resulted in cheaper goods and services. And cheaper goods were a central selling point for the deal.

As the vote neared, it looked as if George Bush might have become the first president to fail to get a trade agreement through Congress in forty years. But all of the lobbying might of various business groups came to bear on members of Congress. As the Washington Post reported, “A prominent business leader recently laid it on the line: Business groups are prepared to cut off campaign contributions to House members who oppose the pact. ‘If you [lawmakers] are going to vote against it, it’s going to cost you,’ Thomas J. Donohue, president and CEO of the U.S. Chamber of Commerce, warned recently during a meeting on Capitol Hill.” Several years later, months before the 2008 presidential elections, Donahue would announce a $60 million war chest dedicated to punishing those whom the Los Angeles Times described as “candidates who target business interests with their rhetoric or policy proposals, including congressional and state-level candidates.” “We plan to build a grass-roots business organization so strong that when it bites you in the butt, you bleed,” Donohue said.

On the eve of the vote, the Bush administration started to cut deals with members of its own party who were resisting the pact. The Los Angeles Times reported, “For more than an hour, lawmakers milled about the House floor and gazed at the electronic scoreboard displaying the vote tally, which showed CAFTA several votes short of the mark.” Nancy Pelosi, then the House minority leader, told the Times, “Right there in front of us, for the world to see, they were twisting arms, making deals, changing votes.” Finally, when the count reached 217 to 215, the vote was gaveled to a close, and the deal had scraped through by a hair.

Yet if the pressure on lawmakers here in the United States was great, it paled in comparison with that brought to bear on leaders of smaller, poorer states such as Costa Rica. Lori Wallach, the director of Public Citizen, noted that “The U.S. ambassador to Costa Rica, Mark Langdale, was slammed with a rare formal denunciation before Costa Rica’s Supreme Electoral Tribunal in August after he waged a lengthy campaign to influence the vote on CAFTA. As part of that [campaign], Langdale employed misleading threats and suggested there would be economic reprisals if CAFTA were rejected.” The Bush administration repeatedly threatened to remove Costa Rica’s trade preferences-- which waived some duties on products it exports to the United States-- if the Costa Rican people rejected CAFTA in a referendum.

This kind of geopolitical arm-twisting is par for the course in venues like the WTO. In 2001, immediately after the attacks of 9/11, U.S. trade representative Robert Zoellick made the case that advancing the Anglo-U.S. model of corporate “free” trade was key to winning the “War on Terror.” At the time, author Naomi Klein wrote, “Zoellick explained that ‘by promoting the WTO’s agenda, these 142 nations can counter the revulsive destructionism of terrorism.’ Open markets, he said, are ‘an antidote’ to the terrorists’ ‘violent rejectionism.’”

The United States has become infamous among trade observers for using that kind of rhetorical “linkage” to advance its agenda, but it’s far from unique in that regard. These kinds of power plays are especially evident in negotiations between wealthy states and the developing world, so-called North-South negotiations.

As Aileen Kwa, who analyzed the back-room deals in which trade agreements are formed in great detail, wrote, “In comparison to the United States, the EU is usually more sophisticated in the rhetoric it adopts... it promotes its agenda at the WTO as being ‘in the interests of developing countries.’ This is ironic since developing countries’ assessment[s] of their own interests are the complete opposite.”

The highly developed states use economic blackmail-- threatening poorer countries’ trade preferences and foreign aid accounts-- and blatantly undemocratic methods to overcome the developing world’s concerns about these deals and get them to sign on the bottom line.

In their seminal book Behind the Scenes at the WTO, Kwa and coauthor Fatoumata Jawara cast a bright light on the murky world of international trade negotiations. “Any country whose political system operated as the WTO... [does]-- where... rules were routinely ignored, and people or interested groups routinely used bribery and blackmail to achieve their political ends-- would not only be rightly condemned by the international community as undemocratic and corrupt, it would also face a real and constant threat of revolution,” they wrote.

Crucial meetings are held behind closed doors, excluding participants with critical interests at stake, with no formal record of the discussion. When delegates are, in principle, entitled to attend meetings, they are not informed when or where they are to be held. Meetings are held without translation into the languages of many participants, to discuss documents which are only available in English, and which have been issued only hours before, or even at the meeting itself. Those most familiar with issues (Ambassadors) are sometimes discouraged or prevented from speaking in discussions about them at Ministerial meetings. “Consultations” with Members on key decisions are held one-to-one, in private, with no written record, and the interpretation left to an individual who has a stake in the outcome. Protestations that inconvenient views have been ignored in this process fall on deaf ears. Chairs of committees and facilitators are selected by a small clique, and often have an interest in the issues for which the committee is responsible. The established principle of decision-making by consensus is routinely overridden, and the views of decision-makers are “interpreted” rather than a formal vote being taken... Rules are ignored when they are inconvenient, and a blind eye is turned to blackmail and inducements. The list is endless.

A free-market transaction, remember, has to be free of coercion. All parties have to have access to the same information. By these standards alone, “free trade” is anything but.

There have been plenty of "Free Trade" votes since then, but let's go back and look at the aforemented 217-215 vote on CAFTA in 2005. 27 Republicans just couldn't bring themselves, even with all the concentrated pressure, to vote against the United States. Twenty-seven was enough to have killed the bill. It only passed because 15 Democrats, almost all of them notorious corporate whores, crossed the aisle in the other direction and gave Bush the votes he needed to pass the bill and further wreck the U.S. ecconomy. Almost all of those traitorous Democrats have since been defeated. But here's the list of the ones still serving in Congress:

• Jim Cooper (Blue Dog/New Dem-TN)
• Henry Cuellar (Blue Dog-TX)
• Rubén Hinojosa (D-TX)
• Jim Matheson (Blue Dog-UT)
• Gregory Meeks (New Dem-NY)
• Jim Moran (New Dem-VA)

State Senator Daylin Leach is the Blue America-endorsed candidate for the open congressional seat in northeast Philadelphia/Montgomery County. He's focused like a laser on economic growth and job creation as the only way to lift America out of the economic morass that the ideologically-based conservative Austerity agenda has driven the country into. Leach is a proponent of FAIR Trade, rather than the misnamed coprorate jihad called "Free" Trade. This morning he told us, "'Free' trade is often one of those phrases which is cleverly used to conceal the fact that the opposite of what is being said is what is actually the result. It's like calling a bill gutting environmental regulations the Healthy Skies Initiative, or calling a bill antithetical to what our founders intended when they wrote the Constitution The Patriot Act. Too often 'free trade' takes away our freedom to protect our workers, our environment, and our economic well-being."

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