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Saturday, September 22, 2007

Where's Bernie?

Would you believe Costa Rica?

That's right, amigos - Costa Rica! And rather hush-hush on the publicity-side, too.

Bernie_s We heard it from a reliable source on Thursday that Independent Vermont U.S. Sen. Bernie Sanders [right], would be visiting Costa Rica this weekend to express his strong opposition to CAFTA - the Central American Free Trade Agreement.

Costa Ricans are holding a national referendum on CAFTA on October 7. Our source said Sanders had been invited by Luis Guillermo Solis, a political science professor at the University of Costa Rica, who is a leader of the "No" side.

Costa Rican President Oscar Arias is a leader of the "Yes" side.

Costa Rica, a nation twice the land size of Vermont with 4 million citizens, has Central America's strongest economy. Besides bananas, tourism and retirement enclaves for North Americans, there's offshore gambling, Costa Rica's #1 industry!  The country has been described as an Internet Las Vegas! The legal gambling outfits do not have to pay tax on profits earned outside of Costa Rica.


Thought we'd hear from Sanders' U.S. Senate office but finally gave up and contacted them on Friday.  Press Secretary Michael Briggs confirmed it. Said he thought the Economic Policy Institute - a left-wing D.C. think tank that's involved with the trip - would have sent us this release.

Economic Policy Institute

EPI NewsAlert: Congressional Trip To Highlight CAFTA Concerns

Costa_rica On October 7, Costa Rican citizens will decide whether or not to approve the Central American Free Trade Agreement (CAFTA), in an unprecedented referendum that could have serious economic and social consequences for Costa Rica, the United States and other countries.  This weekend, two U.S. lawmakers – Sen. Bernie Sanders (Ind-Vt.) and Rep. Mike Michaud (D-Maine) – will travel to Costa Rica to meet with governmental, business, labor, farm, and student leaders to discuss issues related to unfettered free trade.

On Sunday, they will appear at an EPI press conference to explain why they voted against CAFTA and that many in the U.S. Congress share their opposition to unfettered “free trade”.

Didn't see Sanders visit to Costa Rica [accompanied by two of his advisors including Huck Gutman], mentioned anywhere in the Vermont press, or any press, did you?

Not a peep.

Interesting, since Ol' Bernardo, as you know, has been an outspoken opponent of NAFTA and CAFTA. His tune has been a consistent one. In 2005, as a member of the House, he voted against CAFTA, but it passed anyway on a squeaker 217-215.


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"Didn't see Sanders visit to Costa Rica [accompanied by two of his advisors including Huck Gutman], mentioned anywhere in the Vermont press, or any press, did you?"

Why do you imply that Bernie's trip to Costa Rica should be covered by the Vermont press? Who the hell cares? I don't.

Doug Hoffer

To Vermonter: Would you say the same thing about the Governor's trip to China?

It is irrelevant whether you like or dislike Bernie. He is one of our two Senators and CAFTA has important implications for Vermont.

Peter's point is well taken. By choosing to cover the latest car crash rather than this story, the local media misses an opportunity to help us better understand the so-called "free trade" agreements that have cost us jobs and sovereignty.

Furthermore, it's remarkable that Costa Rica is allowing their citizens to vote on CAFTA. Americans never had that opportunity (Hell, the Governor never even discussed it with the legislature before signing on behalf of Vermont!).

So to answer your question, I care. And so should you.


No, I don't care about loudmouth Bernie's latest junket. Whether it's to oppose CAFTA or to meet with Hugo Chavez, or what-the-hell-ever. That's fine if you do. I disagree that Freyne's icky personal love affair with Bernie should dictate the reporting prioroties of the rest of the media world.


Some nasty people on this site.

Peter Freyne

Yes, Jeff. Good point.

And if "Vermonter" used his real name, like Doug Hoffer and others do, and folks knew that in his "real" life he is a corporate lawyer and partner at Downs Rachlin & Martin, the state's largest law firm, I don't think he'd express himself like he does here in Freyne Land.

Who would?

Hey, Vermonter, you think maybe "grow-up" time has finally arrived?


Right on, Peter! "Junket"? What f'ing brass! A junket is whenb one of your National Gop Crooks like Gerrymandering Tom Delay takes a Scottish golf trip on Jack aberamoff's dime. You really are shameless!

Nate Freeman

Is Downs Rachlin & Martin paying "Vermonter" to be a political scribe? At first I thought "Vermonter" just needed to get a job, he posted here so much. Now it looks like this IS his job. Very likely, he's getting paid a helluva lot more than Peter Freyne to be here, too.


Nate Freeman


Not sure where I stand on CAFTA or NAFTA, but my question is this...if we are going to be against importing the inexpensive things like clothes are we going to be willing to pay the price of US goods? For example when we can buy a man's imported Arrow or Van Husen dress shirt for $19.95 are we willing to substitute it with a US made shirt for $95?
There is a lot of talk from people, but I don't think they walk the walk. Have Bernie show the tags on his clothes and I doubt very much that you will find anything made in the USA on the labels. This is the guy who drove a foreign car until he was forced by the unions to drive a US made job.

Doug Hoffer

To: Gunner

It's a valid question but there's much more involved then the price at the cash register. First, while most imported manufactured goods are cheaper, the difference for many is not as great as your example ($19.95 vs $95.00).

Second, the ability to afford domestic items that would be marginally more expensive is a function of wages. If U.S. workers were paid something close to a livable wage, they could afford to pay a little more for basics. [Henry Ford understood this. One of the reasons he paid his workers $5.00 per day - a big deal at the time - was because it would allow them to afford one of his cars!]

And note that higher wages would reduce the need for public assistance. There are many working people who cannot afford health care or housing and rely on public assistance. This is an indirect subsidy to low-wage employers and the cost never shows up at the cash register (thus, the difference is less than it appears). As a result, those who try to buy local are forced to pay through taxes even if they don't shop at Wal-Mart or buy cheap imported goods.

Third, every dollar that leaves the U.S. is a dollar lost and we fail to capture the significant benefits of the multilier effect (money circulating in the economy). This is a big deal.

Fourth, other "externalities" that are not included in the price of imported goods include deeply subsidized transportation (oil - and wars for oil, roads, etc.) and the pollution from global transport; environmental damage from extraction & production overseas where they don't have stringent laws & regulations; and so on.

The point is that what economists characterize as economies of scale or "natural" market advantages ignore all of these factors. A true accounting would look a lot different then the price at the register.

Obviously, the U.S. cannot and should not seek to be an island. Some things are better produced elsewhere. But let's level the playing field (labor & environment) before we assume we can't "compete". The downward pressure on wages from cheap labor overseas is killing American workers.

It's an important subject and worthy of more analysis and discussion. That's exactly why the media should cover CAFTA / NAFTA and related issues.


" By choosing to cover the latest car crash rather than this story, the local media misses an opportunity to help us better understand the so-called "free trade" agreements that have cost us jobs and sovereignty."

Just thinking the job of the local media would be to cover the local car crash. If you want to find out about Bernies trip you should look in the national media, probably isn't there, but that would be the place it should be.

"If U.S. workers were paid something close to a livable wage, they could afford to pay a little more for basics."

But Doug, would this then increase the price of the basics. I mean if you pay the guy making the shirt more, you have to raise the price of the shirt. Which in turn means you have to pay the guy making the shirt more to afford the shirt. Which, makes the shirt cost more, and now the guy making it still can't afford it. Simply paying people more, isn't the answer.

"And note that higher wages would reduce the need for public assistance." Except paying higher wages makes things more expensive, not reducing public assistance, but increasing the need. Not only do those on public assistance that just got the wage increase still need it as basics are more expensive, but all those that didn't get the wage increase now can't afford to live with out some assistance as well. This experiment has been done before. As Bernie says the middle class is shrinking. Why, because they can't afford to pay their taxes, they can't afford to buy the basics, so they become the poor, go on public assistance. This in turns leads to the need for more tax money to pay for that, which just pushes more and more people onto public assistance.

And I have to agree with Vermonter, that Peter definitly has some weird fascination with Bernie. Bernie gets 5X more Peter time then either Pat or Peter.


Where's "Vermonter?" Where did he disappear to all of a sudden? I smell burnt toast through my monitor via this site!

Not everyone agrees that Bernie's visit to Costa Rica means nothing. In fact, I beleive ANY visit from a representative of government (that comes from Vermont) IS a news story and those who report the news would say the same. Regardless of political parties are where they stand, if that rep is from Vermont, expect the news to follow.

IMO, I know there are many out there who believe this visit benefits readers and bloggers alike. Just like Jim Douglas, Brian Dube, and the Ag. secreatary's visits to Cuba are important. So why isn't "Vermonter" complaining about their visits to Castro's Cuba? After all, they are an enemy of the United States and a socialist dictatorship. God forbid if anybody visits his country! Yet, Vermont republicans go to Cuba. Contradictory to the GOP's platform, shall we say? Why is it OK for them and not say... Michael Moore? Granted he can be obnoxious at times but why go after him when you've got Republicans here at home going for similar purposes? Sounds like double standards to me.

As for Peter's alleged "icky personal love affair with Bernie," may I remind you that Peter's a columnist. When you get to that point the rules can be bent, just like Tom Friedman, Paul Krugman, Bob Herbert, etc. I'm sure there's many like them in Vermont and Freyne is in that same kind of journalist mold.

And that's all she wrote!


And "Brattlerouser" would be . . .?

Doug Hoffer


"But Doug, would this then increase the price of the basics. I mean if you pay the guy making the shirt more, you have to raise the price of the shirt. Which in turn means you have to pay the guy making the shirt more to afford the shirt. Which, makes the shirt cost more, and now the guy making it still can't afford it. Simply paying people more, isn't the answer."

Your argument only makes sense if shirts are all that people need. Higher wages means families are better able to afford the really costly items in a household budget like health care, housing, transportation, food, etc.

According to the Census Bureau's 2005 Consumer Expenditure Survey, on average a single person earning $30,290 paid $9,835 for housing, $4,030 for transportation, $3,073 for food, $2,024 for utilities, $1,750 for health care, and $1,425 for taxes.

In contrast, the average spent for apparel was $980 (3.2% of gross income).

Moreover, a dollar raise for workers does not translate to a dollar raise in the cost of the product. In the U.S., 80% of the employees in the apparel industry are production workers but they only get 62% of payroll. And their wages represent only 19% of the cost of goods - and here's the kicker - only 10% of the value of shipments. So if you raise the hourly wage by $2.00, the cost of a shirt would go up about 2%. So those 210,000 workers would earn an additional $3,000 - $4,000 per year but the cost of a $40 shirt would go up less than a dollar.

I'm pretty sure many (if not most) Americans would view that as a fair trade. Pay workers more and keep money in our economy.


Sorry Doug was using the example floating around to illustrate my point. What if we raised the wages of all labors. Then the shirt would cost more, your food would cost more, milk would cost more, getting your haircut would cost more, your Health Care would cost more, your morning coffee and paper would cost more. So even though each of those things may only go up a quarter or two, the overall cost would offset most all of your raise.

I'm not sure about your math there, but really increasing wages simply doesn't help. If a company makes 20% profit on a product before a wage hike they are going to make 20% profit after a wage hike. The consumer will pick up the tab. On a bigger purchase; Example, I build you a 200,000 dollar house. 50% of that is labor, if I give all my workers a raise from $10-12.50 (20%) the cost of your house just went up to $20,000. That's alot of extra dollars on a 200,000 dollar home (low income) in this town. Not too mention since we are paying the loggers, truckers, and mill workers more the material is going to cost more.

Doug Hoffer


This is a much longer conversation that is appropriate for a blog. A few points.
1. I didn't say we should raise all wages; only those below a livable wage.
2. Your premise was that it's OK to buy cheap imported goods. My response was that a) they're not as cheap as you think; and b) raising wages for those who produce SOME products would not result in large increases in prices.
3. Thus, your example about housing costs does not fit since the labor cannot be exported (i.e., we're not competing with China - only illegal immigrants, who are taking more & more entry level construction jobs). And while some in the construction trades earn less than a livable wage, many do.
4. As far as I can tell (from Census data), payroll for residential construction is less than 15% of total costs rather than the 50% in your example. Thus, a $2.00 per hour raise for half of the workers (since skilled tradespersons already earn more than a livable wage) would result in an increase in the price of a $200,000 home of about $3,000.
5. While that's not peanuts, consider this. The added cost would increase your monthly mortgage payment by less than $20 per month. Although every dollar counts, $20 per month sounds much less frightening than your suggestion that it would add $20,000 to the cost of the house.
6. As for the suggestion that cost of everything would go up if workers were paid a livable wage, it's really only the cost of those goods & services produced with cheap labor. And the increase would be directly related to how labor intensive the work is (smaller labor inputs would mean smaller price increases) and how much of each industry's workforce is underpaid.

In the end, full time work should be sufficient to meet your basic needs. Getting from here to there is complicated but I hope we can all agree on that.

A lot of the problem today is that new wealth (profits and the benefits of increased productivity) is going primarily to the top 5%. That's not how it used to be. In the `50s, `60s, and early `70s, income for all workers increased at about the same rate. Since then (and especially in the last 5 - 10 years), the percent of new wealth going to most workers has dropped dramatically. The phrase "a rising tide lifts all boats" used be true. Not anymore.


I agree Doug this conversation is way to complex for a blog thread. But I think the first step is to determine what in reality constitutes a livable wage. The largest problem with this is for example most people want to put a one size fits all number on it. The state for example when it decides who does or doesn't qualify for assistance bases its decision on an arbitrary number. That number really is accurate though as the cost of living between Burlington and Avril are even close to the same. One is likely 3X the other. I don't think it is OK to buy cheap imported goods at all, I prefer to buy american, and I prefer to not pay twice as much simply because it is a domestic product. There needs to be some serious fixes before the US can compete with other countries price wise. First off, benefits are what kills domestic manufactures. The cost of health care for example means a lot higher cost for domestic workers then in CHina where a good salary is $350 a month with no benefits. Solving a liviable wage entails solving cost drivers as well. And, again increasing those who don't make a livable wage will increase products making things much more difficult for those on the edge now. I think you would find that if you had to raise the liviable wage as defined in Burlington for example (around $13.hour I think) to $15/ hour across the country you would see huge increases in prices for everything. Everything relies on low wage earners 5 times over to get the raw materials, process, package, ship and sell a product. And, as someone who used to work in the residential construction you can be sure the cost of building a house is 40-50% labor, or at the least was a decade ago. The answer is to raise wages slowly, and at that same time cut the cost drivers. It is the only way, and one doesn't help with out the other.


Felicidades Costa Rica, you made it


Felicidades Costa Rica, you made it

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