...TPP... will almost certainly have nothing on currency... It will not make it any easier, and could well make it more difficult, for the United States to address the trade deficit that results from having an over-valued dollar....
The United States has faced a serious problem of secular stagnation.... No one in a position of power is prepared to talk about big increases in the government deficit.... If we could reduce the value of the dollar enough to lower the trade deficit by just 0.2 percent of GDP, but are blocked from this path by TPP provisions, then the resulting loss of 0.3 percent of GDP (assumes a multiplier of 1.5 on net exports) would exceed the gains that have Brad so excited.... Brad has not set a very high bar....
The countries of the region spend close to $700 billion a year on pharmaceuticals.... Let's say the TPP raises drug prices by 20 percent. That gets $140 billion a year, a sum that's more than 80 percent larger than Brad's $75 billion. Will TPP raise drug prices by this much? Certainly the drug companies who are at the table would like to see [it].... TPP will mean higher prices on fertilizers, pesticides and a wide range of other chemicals as well books, movies, recorded music, video games and all sorts of other good things.
Finally, we should consider the issue of the mix between winners and losers.... Okay, all of this is incredibly crude, but it is possible to think of plausible scenarios in which most of the people in this country end up as losers from the TPP. So, why should we buy this industry-crafted deal?
Three things... No, four things:
If Dean is correct that we will spend any significant amount of time over the next generation at the ZLB for monetary policy, then his argument wins, decisively. The gains from freer trade are then much less than the high-unemployment losses, and anything that makes it even marginally less likely that we do the right thing for full employment is a huge loser.
I applaud Dean's focus on the transfer fro the consumers of the Pacific to Pharma and Hollywood without distinguishing between which consumers pay. If we escape the ZLB, this is, I think, the key issue: will the intellectual property provisions do more harm to global income distribution and global growth than the tariff reductions and market access provisions will do good? Since I don't know what the IP provisions really are, I cannot say. (Paging Maurice Obstfeld of the CEA. Maurice Obstfeld to the white courtesy phone, please...)
At least as I count it, it still looks to me like more people in the United States have been winners than losers from globalization--and vastly more have been winners than losers worldwide. In order to get more losers than winners in the U.S., you have to argue that globalization caused not just the fall of manufacturing but the success of the war on unions, the rise of the Overclass, and the hypertrophy of finance. All of those look to me like processes largely (but not completely) independent of globalization. And I do not see why the presumption should be looking forward that this next step of globalization will be bad.
All that being said, I find myself extremely frustrated that Obama is not, say, demanding that Congress passes the one-sentence fix to ObamaCare needed to protect it from the King v. Burwell lawsuit before he will sign the TPP implementing legislation. And I may well turn on a dime when I actually get to see and when we get to cost out the implications of the IP provisions of the TPP.
Fear, surprise, ruthless efficiency, an almost-fanatical devotion to the pope, and…