Reprinted from Campaign For America's Future
Well, this is awkward. A few days ago President Obama literally laughed off Sen. Elizabeth Warren's concern that his so-called "fast track" provision, which would limit Congressional power regarding trade deals for the next six years, endangers 2010's Dodd/Frank financial reforms.
"I'd have to be pretty stupid" to sign an agreement that did that, the President said. He was reportedly laughing as he said it.
Just four days later, Canada's finance minister used a similar trade deal to challenge the "Volcker rule," a key provision of Dodd/Frank. "I believe -- with strong legal basis -- that this rule violates the terms of the NAFTA agreement," Joe Oliver told a banking conference.
As we were saying: awkward.
Many well-informed observers have echoed Warren's concerns, including Nobel Prize-winning economist Joseph Stiglitz. "The president is making some fairly nasty remarks about people on the other side, that they don't understand we're in the 21st century," said Stiglitz. "Actually, we do. I don't think he understands what's happened in the last third of a century."
Another critic was Simon Johnson, former chief economist of the International Monetary Fund, who wrote that "Senator Warren is entirely correct."
In fact, the White House appears to be playing word games when it insists that, as paraphrased by Politico's Ben White, "the fast-track bill currently before Congress includes language that expressly forbids changing U.S. law without congressional action." That may technically be true. But, by lowering the bar for Senate ratification of trade deals, it makes it easier to pass provisions that would change U.S. law.
Did the president and his team make a mistake in promoting fast-track, or did they knowingly back a provision that could undermine financial reform? Johnson rather convincingly concludes that "the latter, unfortunately, seems more likely."
Despite these well-informed objections, President Obama isn't content to merely rebut Warren's criticism. He has also been attacking her in gratuitously personal terms and was, in the words of interviewer Matt Bai, "unusually irritated" when asked about her objections.
"The truth of the matter is that Elizabeth is, you know, a politician like everybody else," Obama told Bai. "And you know, she's got a voice that she wants to get out there ... (but) her arguments don't stand the test of fact and scrutiny."
Some very well-informed sources disagree.
Fast-track isn't the only part of the president's trade initiative that threatens American laws. A provision in past trade treaties, and which reportedly is also included in TPP, cedes enormous power to secret, corporate-backed extrajudicial "courts." It's called Investor-State Dispute Resolution (ISDS).
Warren explained how ISDS works: "... highly paid corporate lawyers ... go back and forth between representing corporations one day and sitting in judgment the next." She told Greg Sargent of The Washington Post that ISDS "doesn't directly tell countries to repeal regulations. It imposes a financial penalty, which has caused countries to change their regulations..."