Penny Wisdom and Pound Foolery


Can you have it both ways?
By Dirk Olin
At the risk of sounding like an oxymoron, I am a pro-labor free-trader. This provokes looks of disbelief from my friends on both the right and the left. They shake their heads as if to say, “You can’t have it both ways.”
Their position assumes, of course, that human progress in the workplace is mutually exclusive of commercial progress in the marketplace. This is the zero-sum mindset that has paralyzed the three free-trade deals—with Colombia, South Korea, and Panama—that have been sitting on President Obama’s desk. While Washington fiddles, others churn. In July, South Korea cut a trade pact with the European Union, while Colombia and Canada opened up a commercial highway in August. And in September, two of the three, Korea and Colombia, announced their own bilateral deal that is expected to be completed by year’s end.
The three agreements at issue in Washington would erase tariffs on cross-border transactions, expanding American exports by $12 billion annually, as projected by the United States International Trade Commission. American service providers would be able to compete in those countries, adding jobs to the U.S. economy. Little wonder, given that all three nations are growing like wildfire, relative to the U.S. and Europe.
Korea is growing at an annual rate of more than four percent, Colombia tops five, and Panama is above six. (At the risk of mixing a national culinary metaphor, it is Korea that is the big enchilada: As the administration has itself declared, “America’s economic output will grow more from the U.S.-South Korea agreement than from the United States’ last nine trade agreements combined.”)
So what’s the holdup? Well, each side does have legitimate concerns. The administration and organized labor rightly worry about job losses in particular sectors.
That is why they demand increased funding for trade adjustment assistance (TAA). That program provides training, unemployment payments, and healthcare subsidies to displaced workers. Qualified workers get up to 156 weeks of unemployment benefits, compared with a maximum of 99 weeks under standard benefits.
You will be shocked to hear that conservatives see the $1 billion program as a boondoggle, riddled with waste, fraud, and abuse. They can fairly point to the Labor Department’s failure, now running at four years, to deliver a promised report on the efficacy of the program.
Whom you agree with depends on your point of skew. But part of the problem is undeniably our outmoded political system. Of the biggest countries that have retained their triple-A credit ratings, exactly none has a presidential system, as opposed to a parliamentary one. We need coalition government. But our polarized primaries and 24/7 media toxicity won’t let us have it. Given our widespread dystrophy—high unemployment and poverty, low consumer confidence and corporate investment, swollen debt and a damaged credit rating—the torpor is psychologically depressing and economically recessing.
The stasis requires a third-way solution. Even if this logjam gets fixed, a similar standoff will likely plague the next round of trade talks.

Perhaps human resources executives could persuade their C-suite colleagues to adopt the kind of transcendent “coopetition” that increasingly animates the corporate responsibility movement. The notion would fit under the umbrella of what we here call coalition commerce.
Under this construct, the corporate beneficiaries of trade deals would create consortiums to retrain displaced workers. The key difference from TAA would be that the companies would create and administer the programs themselves. Who better to decide how to retrain the displaced than the employers who might re-employ them?
After all, notwithstanding our debilitating unemployment, the country is actually suffering from a shortage of skilled workers. In August, 33 percent of small businesses reported having few or no qualified applicants for job openings, according to a National Federation of Independent Business survey. That was up from 21 percent in December 2009.
Of course, coalition commerce is far easier said than done. Should the consortium be voluntary or mandatory? Who would run the programs? How would the contributions of the individual companies to the consortium be determined? And how would existing training programs be affected?

However difficult to master, that composition seems infinitely easier to learn than the tune that both parties are playing on our burning national fiddle.

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