Ideal Taxes Association

Raymond Richman       -       Jesse Richman       -       Howard Richman

 Richmans' Trade and Taxes Blog

AFL-CIO's Trumka asks Obama for stronger action on China
Howard Richman, 5/27/2010

The AFL-CIO may be changing course. Back in November 2008, AFL-CIO policy director Thea Lee approved President-elect Obama's plan to ignore the trade deficits. She told Reuters: “Starting at home will be the key to unlocking any forward movement on the trade agenda.”

Back then, there were 13.1 million workers employed in American manufacturing. Now there are only 11.6 million. Now, AFL-CIO President Richard Trumka is starting to get restive. reports the  text of his May 3 letter to President Obama. In that letter, he comes out strongly against China's currency manipulations:

I wanted to let you know that the AFL-CIO intends to consult with our coalition partners and take steps to refile our Section 301 case on currency manipulation if the Chinese government does not act to reverse the undervaluation of the yuan in the next several months. Going forward, market forces must be allowed to determine the exchange rate between the United States and China - not systematic and one-sided intervention....

But he is not especially concerned with the loss of 1.5 million more American manufacturing jobs. His strongest words object to President Obama's acquiescence to the Chinese government's suppression of workers' rights:

We have been disappointed that your administration has not chosen to press the Chinese government to address this crucial issue as a priority. In our view, the systematic and egregious violation of Chinese workers' basic rights is at the center of what is wrong with our trade relationship with China. If workers cannot exercise their basic rights, they can neither build a democracy nor join the middle class - and our trade relationship is destined to remain out of balance.

The above argument has an element of truth in it. As part of China's mercantilist policy, the Chinese government does suppress domestic wages. But the last sentence, which attributes our trade deficit with China to their lack of a middle class, is total nonsense. Japan and Germany have wages every bit as high as ours, but they do not run trade deficits. Our trade deficits with China are caused by China's mercantilist strategy, not by our higher wages.

Still, this is a step forward for the AFL-CIO. Perhaps, someday, Trumka might even get behind something that would restore his members' manufacturing jobs, such as Import Certificates (ICs) to balance trade.

As I noted in a recent commentary, an Economic Policy Institute December 2009 working paper (Addressing Balance of Payments Difficulties Under World Trade Organization Rules) agreed with my father, son, and me (Trading Away Our Future, 2008) that auctioning ICs would be consistent with WTO rules.

Not only would ICs restore millions of American manufacturing jobs, but auctioning them would also bring in plenty of government revenue.

Your Name:

Post a Comment:

  • Richmans' Blog    RSS
  • Our New Book - Balanced Trade
  • Buy Trading Away Our Future
  • Read Trading Away Our Future
  • Richmans' Commentaries
  • ITA Working Papers
  • ITA on Facebook
  • Contact Us

    Jan 2022
    Dec 2021
    Nov 2021
    Oct 2021
    Sep 2021
    May 2021
    Apr 2021
    Feb 2021
    Jan 2021
    Dec 2020
    Nov 2020
    Oct 2020
    Jul 2020
    Jun 2020
    May 2020
    Apr 2020
    Mar 2020
    Dec 2019
    Nov 2019
    Oct 2019
    Sep 2019
    Aug 2019
    Jun 2019
    May 2019
    Apr 2019
    Mar 2019
    Feb 2019
    Jan 2019
    Dec 2018
    Nov 2018
    Aug 2018
    Jul 2018
    Jun 2018
    May 2018
    Apr 2018
    Mar 2018
    Feb 2018
    Dec 2017
    Nov 2017
    Oct 2017
    Sep 2017
    Aug 2017
    Jul 2017
    Jun 2017
    May 2017
    Apr 2017
    Mar 2017
    Feb 2017
    Jan 2017
    Dec 2016
    Nov 2016
    Oct 2016
    Sep 2016
    Aug 2016
    Jul 2016
    Jun 2016
    May 2016
    Apr 2016
    Mar 2016
    Feb 2016
    Jan 2016
    Dec 2015
    Nov 2015
    Oct 2015
    Sep 2015
    Aug 2015
    Jul 2015
    Jun 2015
    May 2015
    Apr 2015
    Mar 2015
    Feb 2015
    Jan 2015
    Dec 2014
    Nov 2014
    Oct 2014
    Sep 2014
    Aug 2014
    Jul 2014
    Jun 2014
    May 2014
    Apr 2014
    Mar 2014
    Feb 2014
    Jan 2014
    Dec 2013
    Nov 2013
    Oct 2013
    Sep 2013
    Aug 2013
    Jul 2013
    Jun 2013
    May 2013
    Apr 2013
    Mar 2013
    Feb 2013
    Jan 2013
    Dec 2012
    Nov 2012
    Oct 2012
    Sep 2012
    Aug 2012
    Jul 2012
    Jun 2012
    May 2012
    Apr 2012
    Mar 2012
    Feb 2012
    Jan 2012
    Dec 2011
    November 2011
    October 2011
    September 2011
    August 2011
    July 2011
    June 2011
    May 2011
    April 2011
    March 2011
    February 2011
    January 2011
    December 2010
    November 2010
    October 2010
    September 2010
    August 2010
    July 2010
    June 2010
    May 2010

    April 2010
    March 2010
    February 2010
    January 2010

    Book Reviews
    Capital Gains Taxation
    Corporate Income Tax
    Consumption Taxes
    Economy - Long Term
    Economy - Short Term
    Environmental Regulation
    Last 100 Years
    Real Estate Taxation


    Outside Links:

  • American Economic Alert
  • American Jobs Alliance
  • Angry Bear Blog
  • Economy in Crisis
  • Econbrowser
  • Emmanuel Goldstein's Blog
  • Levy Economics Institute
  • McKeever Institute
  • Michael Pettis Blog
  • Naked Capitalism
  • Natural Born Conservative
  • Science & Public Policy Inst.
  • Votersway Blog
  • Watt's Up With That


  • [An] extensive argument for balanced trade, and a program to achieve balanced trade is presented in Trading Away Our Future, by Raymond Richman, Howard Richman and Jesse Richman. “A minimum standard for ensuring that trade does benefit all is that trade should be relatively in balance.” [Balanced Trade entry]

    Journal of Economic Literature:

  • [Trading Away Our Future] Examines the costs and benefits of U.S. trade and tax policies. Discusses why trade deficits matter; root of the trade deficit; the “ostrich” and “eagles” attitudes; how to balance trade; taxation of capital gains; the real estate tax; the corporate income tax; solving the low savings problem; how to protect one’s assets; and a program for a strong America....

    Atlantic Economic Journal:

  • In Trading Away Our Future   Richman ... advocates the immediate adoption of a set of public policy proposal designed to reduce the trade deficit and increase domestic savings.... the set of public policy proposals is a wake-up call... [February 17, 2009 review by T.H. Cate]