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Article Artículo

Taking Issue with Dani Rodrik: Trade Deficits are Different with Secular Stagnation (see Addendum)

I am a big fan of Dani Rodrik's writings on trade, and I agree with most of what he says in his NYT column today, but I do have one major disagreement. However, before going there let me emphasize some of the key points he makes in the piece.

First, Rodrik is very much on the mark in arguing that recent trade deals, like the Trans-Pacific Partnership, have very little to do with free trade. As he says, these deals are about imposing a corporate-friendly structure of regulations on both our trading partners and the U.S. (The deals have the effect of locking in laws that could otherwise be more easily altered.)

He also is right in singling out the pharmaceutical industry as the biggest villain in this story. We have been using these trade deals to ensure ever longer and stronger patents and related protections. The result is to make drugs, which would otherwise be cheap, extremely expensive. The price of drugs can be a serious burden even in rich countries, but patent protection can make life-saving drugs altogether unaffordable in developing countries. We should be looking to foster alternative, more efficient, mechanisms for financing research, not using trade deals to impose patent monopolies everywhere.

It's worth mentioning in this context the effort to impose rules on digital commerce in these trade deals. Folks following the scandals related to Facebook and Twitter's involvement in the presidential election know that we don't really have the rules down ourselves. In other words, we do not have a system in place that prevents both foreign and domestic actors from using dishonest means to influence public opinion and interfere with the democratic process. We also don't have effective systems in place to ensure the privacy of our personal data. These are really big issues that are probably worth getting sorted out before we try to shove a one-size-fits-all model on the rest of the world. 

CEPR / November 28, 2017

Article Artículo

Government

United States

Holiday Compilation: CEPR on the GOP Tax Bill

Catching up on your reading over the long holiday weekend? Prepare yourself for Monday’s smack of reality by reading up on CEPR’s insights into the GOP tax plan. The Senate is scheduled to vote on their version of the tax bill just after Thanksgiving.

Dean Baker, Eileen Appelbaum, and Alan Barber are talking (WBAI, WDET) and writing (BTP and CEPR Blog) about the potential outcomes of both versions of the bill that now includes the repeal of ACA’s individual mandate.

Dean Baker has this statement about the House version of the tax overhaul bill passed last week:

“The Republicans in the House voted to raise taxes on people with cancer, recent college grads and young people still attending graduate school in order to help finance tax cuts to corporations — that are already drowning in cash — and the very richest people in the country. There is no basis for the promised economic boom. This is a transparent giveaway to the people who fund their election campaigns. It is taking the corruption of politics in the United States to a new level.”

 

November 22, 2017