Federal government is not very good at many things. Legislation, for example is the result of endless debate, arguments, real and false publicity, opaque and transparent concepts and ultimately convoluted compromise. Amtrak continues to rack up losses while CSX, NS, UP and BNSF railways publish gains. The USPS loses money in vast amounts each year but the Post Office keeps delivering mail and tweaks a business plan that is irreparable. Fannie Mae and Freddie Mac, both GSE’s (Government Sponsored Enterprises) securitize mortgages for wider sale called MBS’s (Mortgage-Backed Securities).
The purpose of Fannie and Freddie is to expand the secondary mortgage market so that mortgages can be bundled into investment securities to spread risk and broaden the investment market. In the recent financial crisis also referred to as monetary meltdown, Fannie and smaller sibling Freddie needed about $150 billion in funding (from taxpayers) to weather the storm.
Bouncing back the two GSE’s have repaid their borrowings. In addition, big banks that traded the securitized mortgages were fined billions of bucks to refill the empty money tanks of the two big GSE’s. There has never been any mention or accountability for the government’s role in requiring lending to mortgagees that in many cases couldn’t even make the first payment.
There is something that the federal government is really good at; creating acronyms. In addition to those defined above, there are thousands of others including TPP (Trans-Pacific Partnership) and TAA (Trade Adjustment Assistance). These two acronyms are associated with the proposed legislation that partially failed in a House vote on Friday, June 12.
Although ‘Fast Track’ Trade Authority passed with 28 Democrats and 191 Republicans ‘for’ while 157 Democrats voted against along with 54 Republicans, the Trade Adjustment Assistance surprisingly failed with 144 Democrats and 158 Republicans voting against the legislation. Another vote will be taken in a few days, hoping that some minds can be bent to vote in favor of TAA.
The TPP deals with duties, tariffs, taxes, government intervention and subsidies, pricing, shipping, port fees and other details of trade. TAA deals with the results of free trade on jobs and reflects subsidies to U.S. workers who have suffered job losses due to the free trade authority with the U.S. and 11 other nations involved, i.e. Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. The Philippines, South Korea and Taiwan are interested in this partnership but are not included at this time.
As mentioned by Mr. Obama, this trade agreement is important because if we don’t establish trade relations with other countries now, China, Russia or other governments may set the rules at a later date. It is reasonably obvious that rules set by more autocratic governments would be less favorable for the U.S.A.
Why would Democrats vote against prospective legislation that subsidized workers who were displaced or at least affected by fair-trade imports? The answer is that they fear that in no way would the supplemental subsidies rise to balance the cost of the job losses. Most Republicans on the other hand feel that brisk free trade among nations is the essence of world commerce, fair pricing and prosperity for all traders. Republicans believe that free trade raises the value of work in all nations.
Trade between nations is the foundation of international relationships. Tourism, politics, diplomacy, conflict, immigration, religion, currency valuations, jobs, crime, travel, shipping, shopping, learning and study, medical care and other life activities depend on friendly, fair, free trade among sovereign trading partners.
The votes reflect the varying perceptions that representatives have on the same subject. The flaw that taints votes is that each legislator may be thinking about a limited population segment rather than the home district or the nation as a whole. The question then becomes, is this trade agreement bad for a few but good for the greater good of constituents and the nation as a whole and the world at large?
After Representatives study that question, the answer must rest on a conception that takes their district, our country and the world into account. In our quest for fairness are we heading for minority rule?
– Dick Baynton
