Murder, Inequality, Corporate Profits and Free Trade Go Together

Matt Stoller is a fellow at the Roosevelt Institute.  You can follow him on twitter at // 

Here’s the President on Sunday on a new trade deal with Colombia.

Obama says US trade deal with Colombia has strong protections for workers and the environment….

“It’s not a race to the bottom, but rather it says each country is abiding by everything from strong rules around labor and the environment to intellectual property protection. And so I have confidence that as we implement this plan, what we’re going to see is extraordinary opportunities for both U.S. and Colombian businesses.”

Here’s the AFL-CIO President Rich Trumka’s mild and private (subsequently leaked) objection to the trade agreement.

Mr. Trumka noted that many Colombian employers continued to subcontract work in what he said was an illegal strategy to block unionization. He wrote that after municipal workers in the city of Jamundí began a unionization effort in January, the city fired 43 workers, two union leaders received threats, and one activist, Miguel Mallama, “was gunned down in the streets on March 25.”

And here’s the reality, as seen by leaders on the ground.

“The United States was talking about how our situation has gotten better,” Cambindo, who visited Washington last week to voice his opposition to the deal, told HuffPost through a translator (video below). “But that’s not true. Our situation continues to be bad, and it’s getting worse.”

Colombia remains by far the world’s most dangerous country for union leaders and members. Nearly 3,000 activists have been murdered there in the last 25 years, with convictions resulting in a paltry 6 percent of the cases.

Finally, this is the macro picture, a graph of corporate profits mapped against net exports.  The core relationship is the arbitrage of labor costs by the threat of offshoring.  The Colombia FTA, which is supported by both Obama and Romney, is simply continuity with this framework.

You can see the beginnings of financialization and globalization in the early 1970s.  The trade gap gradually expanded during the Reagan Presidency in the 1980s, then the gap began widening after Clinton signed NAFTA and really took off in the late 1990s after American businesses figured out how to do business in China (after Clinton let China into the WTO).  Then there was an explosion of the trade deficit and corporate profits after Bush came into office in 2000.  This system briefly collapsed during the recession of 2007-2009.  President Obama’s policy framework resuscitated this architecture of corporate profits at the expense of workers’ paychecks and, well, lives.

Naked Capitalism / By Matthew Stoller | Sourced from

Posted at April 16, 2012, 9:24am