Why Congress can't take a stand on globalization

Some companies go overseas to find cheap labor. Other companies find cheap labor in the US and they exploit it. It's tough for lawmakers to resolve the anxieties of globalization. 

Jim Cole/AP/File
Sen., Lindsey Graham (R) of South Carolina talks to employees after touring New Hampshire Ball Bearings on April 9, 2015, in Laconia, N.H. Senator Graham met with workers to discuss their support of legislation reauthorizing the Export-Import Bank.

Democrats rejected President Obama’s top domestic initiative yesterday on a procedural vote, and it’s not quite clear when it will be coming back to the Senate floor.

Maybe it will. Maybe it won’t.

But there are plenty of policymakers who would be more than happy to avoid taking a clear stand on free trade.

On issue after issue, Congress is attempting to come to grips with a much smaller world.

Trade is but one example.

International tax is another. The rest of the world is cutting corporate tax rates while America stands still.

The OECD countries have a plan to impose taxes on companies that are trying desperately to find favorable tax havens. The United States is ostensibly part of this group, and many of its most iconic companies may be forced by European countries to pay more in taxes.

If that doesn’t get you excited about corporate tax reform, nothing will.

The Export-Import Bank’s charter is about ready to run out sometime this summer. It’s been around since the Great Depression and is used by big companies (and a lot of smaller ones) to help their customers come up with financing to buy their products.

So, if you want, say Turkmenistan’s government wants to buy a Boeing jet, they will use the Export-Import Bank. This is good for Boeing, because they know they will get paid, it is good for Boeing employees, because they know they will get paid, and it is good for Turkmenistan, because they get a nice, shiny new Boeing plane.

Theoretically, the taxpayers are on the hook if Turkmenistan defaults, but in the real world, the Ex-Im bank has been a net winner for the Department of Treasury.

Conservatives believe that this government-financed bank is a boondoggle for Boeing and an example of corporate welfare. Proponents of the bank believe that if we don’t do this, all of our global competitors will clean our clock.

Globalization means competition on wages and prices. If corporations can find somebody else to produce their products for lower wages, that means they can offer lower prices to consumers.

That's bad for American workers who are used to better wages than somebody in China or Mexico, but it is very good for those same workers who buy sneakers and big screen televisions at greatly reduced prices.

Many people come to America because they want better wages and access to our very nice (comparatively) way of live. But some of those who come make their way here either by crossing the border illegally or overstaying their visa. They don’t have legal documents that give them legal protection. And they are more than willing to work at below the minimum wage, because that minimum wage is still higher than where they are from.

Some companies go overseas to find cheap labor. Other companies find cheap labor here aplenty, and they exploit it.

This is another part of globalization. The more we refuse to fix our legal immigration system, the more we allow these problems to fester.

Globalization means diseases like Ebola go viral, especially on the Internet.

Globalization means that bad ideas (and bad television shows) and bad rumors can fly around the globe at the blink of an eye.

If it seems that we live in a world that we just can’t control any more, well, of course that is true. Truer now more than ever.

Congress doesn’t seem to be particularly well-equipped to deal with the anxiety that comes with globalization.

John Feehery publishes his Feehery Theory blog at http://www.thefeeherytheory.com/.

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