Where economics meets religious fundamentalism
San Francisco Chronicle
Where economics meets religious fundamentalism
David Sirota
11 August 2006
Since the Sept. 11,2001, terrorist attacks, the world has learned a lot about the dangers of religious fundamentalists. They cannot be reasoned with, bargained with or talked sense to no matter how destructive their actions are. Why? Because they are governed not by fact, but entirely by faith — a concept the American Heritage dictionary defines as "belief that does not rest on logical proof or material evidence."
Unfortunately, faith-based fundamentalism is not the exclusive domain of terrorists. Some fundamentalists operate in the legitimate, nonviolent world of American politics where they wear suits, appear on television and are venerated as geniuses. Their religion is called "free" trade, which they zealously insist will lead America to economic nirvana. Yet, like other fundamentalists, their proselytizing does not rest on logical proof or material evidence, and their vision is apocalyptic, at least for most Americans’ economic future.
Our country now stands at the end of a 20-year "free" trade binge. The word "free" is in quotations because these pacts with low-wage places such as Mexico, China and Central America include thousands of pages of patent, copyright and intellectual-property provisions protecting corporate interests. These deals are only "free" of similar provisions that protect workers’ wages, workplace rights and environmental standards. As U.S. Sen. Byron Dorgan, D-N.D., meticulously details in his new book "Take This Job and Ship It," the result of this trade policy is the explosion of corporate profits, executive salaries, job outsourcing, trade deficits and the simultaneous destruction of workers’ wages, benefits and job security.
As with other faith-based fundamentalists, concrete reality does not seem to matter to the "free" traders. Says U.S. Rep. Sherrod Brown, D-Ohio, another of Congress’ rare trade critics: "After all these years in the trade debate, people in Washington have drunk so much of the free-trade Kool-Aid that they still, to this day, don’t see the crisis in trade policy unfolding in front of them."
Take stagnating wages. Just months after government data showed that workers wages as a share of national income are approaching a 40-year low , Treasury Secretary Henry Paulson declared that low pay and inequality in America is now "simply an economic reality" that cannot be changed. This reality, he added, has nothing to do with specific policy decisions such as the refusal by U.S. officials to include wage protections in America’s trade deals. No, as Paulson said devoutly, it is all just a result of natural "U.S. integration with the global economy."
The most ardent free-trade fundamentalists say no solutions to this wage problem are necessary, despite rising costs for energy, health care and housing. Workers "who want to live in high-priced cities can work two jobs," said Michael Cox, a top Federal Reserve economist. He cynically labeled this let-them-eat-cake-ism "portfolio diversification in your income."
Similarly, Paulson ignored increased job outsourcing and poverty levels and instead claimed "the clear benefits of [free] trade" are "more jobs, and a higher standard of living for Americans." He said the major way to address the wage problem is to "focus on helping people of all ages pursue first-rate education" — brazenly disregarding the Bush administration’s recent admission that college graduates saw their wages fall 5.2 percent between 2000 and 2004.
This fundamentalism extends well-beyond just the Republican Party. Consider Clinton Treasury Secretary Robert Rubin — who, despite now serving as a top executive of Citigroup, still plays an integral role in directing Democratic Party policy. In a recent interview, he acknowledged that the "free" trade policies he helped construct exacerbated economic inequality and that such rising inequality is problematic. Yet, he made sure to reiterate his opposition to serious trade reform. "I would not hold back from going ahead on a trade agreement because another country refused to accept labor standards," he said, adding that "I don’t think there’s anything in the design of the [trade] system we would have done differently."
How, then, can America address the inequality problem? According to Rubin, all we need is more of the same. "Once you get the better growth" you supposedly get from "free" trade, he said, "you can figure out the other part, the distribution." Translation: Just keep the faith.
Of course, no analysis of free-trade fundamentalism is complete without a look at the high priest himself — Thomas Friedman. As a New York Times columnist and author of "The World Is Flat," he is widely considered by the political establishment to be the authority on international economic policy. On trade, it goes from Friedman’s lips to politicians’ mouths and votes.
Yet, Friedman now admits his advocacy of "free" trade deals is based not on fact or data research, but entirely on faith. In a recent interview on CNBC, Friedman told the story of a man in Minnesota who asked him, "Is there any free-trade agreement you’d oppose?"
"I said, ’No, absolutely not,’ " Friedman recounted. "I said, ’You know what, sir? I wrote a column supporting CAFTA. I didn’t even know what was in it. I just knew two words: free trade."
Forget about CAFTA’s protectionist provisions inflating pharmaceutical prices in Central America. Forget about popular opposition to CAFTA in many of the countries the deal was supposed to "help." Forget about "logical proof or material evidence" to support Friedman’s belief that the deal would actually help raise living standards. Friedman didn’t know about that. All it took for him to put his pen to paper was the holy incantation of "free trade."
America, we may recall, is supposed to have a constitutional separation of church and state. But if faith comes in many stripes, then that separation is being violated when it comes to trade. Fortunately, Americans are beginning to fight back. Just this week, Sen. Joe Lieberman lost his Democratic primary election in Connecticut after his little-known opponent, Ned Lamont, made Lieberman’s record supporting destructive "free" trade deals a central campaign issue. Lieberman’s crushing defeat was the most high-profile example of how Americans are strongly rejecting "free"trade fundamentalism at the polls.
The public understands that it’s time for fact-based reforms that prevent our country from edging ever closer to economic disaster.
David Sirota is the author of "Hostile Takeover" (Crown, 2006).
