Jack Rasmus’s new Book, SYSTEMIC FRAGILITY IN THE GLOBAL ECONOMY, by Clarity Press, November 2015 is now available for purchase for readers interested in his most recent, in-depth, analysis of the current global economy.


Ordering Information:

Order from the author’s website at discount price of $27.00 plus s/h, via Paypal and credit card at: http://www.kyklosproductions.com

Or order from the publisher at http://www.claritypress.com/Rasmus.html
ISBN 978-0-9860769-4-7 — $29.95

Available from Amazon and other book publishers after December 1,


Just as contemporary economics failed to predict the 2008-09 crash, and over-estimated the subsequent brief recovery that followed, economists today are again failing to accurately forecast the slowing global economic growth, the growing fragility, and therefore rising instability in the global economy.

This book offers a new approach to explaining why mainstream economic analyses have repeatedly failed and why fiscal and monetary policies have been incapable of producing a sustained recovery.

Expanding upon the early contributions of Keynes, Minsky and others, it offers an alternative explanation why the global economy is slowing long term and becoming more unstable, why policies to date have largely failed, and why the next crisis may therefore prove even worse than that of 2008-09.

Systemic fragility is rooted in 9 key empirical trends: slowing real investment; a drift toward deflation; money, credit and liquidity explosion; rising levels of global debt; a shift to speculative financial investing; the restructuring of financial markets to reward capital incomes; the restricting of labor markets to lower wage incomes; the failure of Central Bank monetary policies; and the ineffectiveness of fiscal policies.

It results from financial, consumer, and government balance sheet fragilities exacerbating each other—creating a massive centripetal force disaggregating and tearing apart the whole, untamable by either fiscal or monetary means.

This book clarifies how the price system in general, and financial asset prices in particular, transform into fundamentally destabilizing forces under conditions of systemic fragility. It explains why the global system has in recent decades become dependent upon, and even addicted to, massive liquidity injections, and how fiscal policies have been counterproductive, exacerbating fragility and instability.
Policymakers’ failure to come to grips with how fundamental changes in the structure of the 21st century global capitalist economy—in particular in financial and labor market structures—make the global economy more systemically fragile can only propel it toward deeper instability and crises.

An appendix describes three equations that express in notational form the variables associated with the Theory of Systemic Fragility.

• Introduction: Fundamental Trends
• Chapter One: Forecasting Real and Financial Instability
• Chapter Two: The ‘Dead Cat Bounce’ Recovery
• Chapter Three: Emerging Markets’ Perfect Storm
• Chapter Four: Japan’s Perpetual Recession
• Chapter Five: Europe’s Chronic Stagnation
• Chapter Six: China: Bubbles, Bubbles, Debt and Troubles
• Chapter Seven: Slowing Real Investment
• Chapter Eight: Drift Toward Deflation
• Chapter Nine: Money, Credit and Exploding Liquidity
• Chapter Ten: Rising Global Debt
• Chapter Eleven: Shift Toward Financial Investment
• Chapter Twelve: Structural Change in Financial Markets
• Chapter Thirteen: Structural Change in Labor Markets
• Chapter Fourteen: Central Banks and Systemic Fragility
• Chapter Fifteen: Government Debt and Systemic Fragility
• Chapter Sixteen: Hybrid Keynesians and Retro Classicalists
• Chapter Seventeen: Mechanical Marxists
• Chapter Eighteen: The Contributions and Limits of Minsky
• Chapter Nineteen: A Theory of Systemic Fragility
• Appendix: Preliminary Equations


To read the Introductory Chapter, Chapter 11: ‘The Shift to Financial Asset Investing’, and the Extended Table of Contents, go to:


Click on the Icon for the book on this blog at the right, which will take you to the website and Paypal for ordering or for ordering from the publisher, Clarity Press.

TO ACCESS, Download or LISTEN TO PART 2 of jack Rasmus’s Critique of TPP on the Alternative Visions radio show, Nov. 20, 2015 go to:


or to:


(Note: first half hour of this show comments on contemporary US and global economic issues: Japan’s 5th recession, coming US fed rate increase, Emerging Market economies massive private debt, United Health insurance company threat to pull out of Obamacare, new ‘tax inversions’ rule by US Treasury, and US rule to allow GMO salmon without labeling. TPP analysis begins second half of hour show).


Dr. Jack Rasmus looks in depth at Chapters 27-28 of the TPP and how they set up a new global corporate government. Why the TPP violates Article III of the US Constitution and how its signing on October 4 in Atlanta represents the ‘founding convention’ of a new form of global corporate government. Jack explains the new ‘legislative-executive’ body of the TPP ‘Commission’ and the new tribunal courts system and the danger they represent to existing representative government in the US and the 12 member countries. Jack critiques the claim of TPP supporters that it is a ‘living agreement’, asking if this means every time the TPP is changed as new countries join will the TPP have to be ‘ratified’ each time? If not, then corporations and bureaucrats running the Commission and Courts will change the TPP as they like. Other chapters are reviewed on trade in goods, investment, intellectual property, financial services, labor and environment. Jack challenges Obama’s claim that 18,000 tariff cuts will mean more exports and jobs for US workers, noting TPP provides no control over currency devaluations which will more than offset tariff reductions. TPP is about ensuring money and investment flows by US banks, IT, and services companies without limit. It protects big Pharma companies and removes opposition to US produced GMO products by big US Agribusiness. TPP means: more profit and sales for them and fewer jobs, lower wages, and destruction of representative Democracy for the rest.

Jack announces a new format for future shows: The first half of the show will identify critical global and US economic developments of the preceding week, followed by comments on the economic proposals and programs of US presidential candidates. The second half of the show will focus on interviews or presentations on a major feature of the US or global economy. Next week’s feature: ‘Why the Global Economy is Slowing and why the IMF, World Bank, and Central Banks Keep Under-Forecasting the Trend’.

The following article by Dr. Jack Rasmus, appeared November 18, 2015, in teleSURtv media.

“The TPP agreement just recently released is a document of 5,554 pages. There are 30 separate chapters, not counting special ‘annexes’ and schedules. Then there’s a ‘secret guidance’ document, not yet released, which apparently even members of the US Senate still haven’t seen, according to US Senator, Jeff Sessions.

Of course, there are official executive summaries of the 5,554 pages, notably by the U.S. Trade Representative’s Office, and statements by President Obama. But readers won’t find out what the TPP is really about in these documents, which are designed to ‘market’ TPP to the public. In fact, these ‘for public consumption’ puff pieces are replete with misrepresentations, ‘spin’, and outright lies.

However, one statement by Obama is correct. He calls TPP “a new type of trade agreement”. It’s a new type all right.

The TPP is not simply an economic document, about trade in goods, services and, investor money capital flows. TPP is first and foremost a political document. TPP is the latest salvo fired by global corporations against national and popular sovereignty, against Democracy itself. The key to understanding how TPP is about global corporations setting up their own global government is contained in its Chapters 27 and 28.

In chapter 27, TPP provides for a new executive-legislative body whose decisions will usurp national and state-local legislative functions and representative democracy — already under serious attack everywhere by corporate money and other initiatives. And in chapter 28, TPP provides for a new kind of global corporate court system, run by corporate-friendly lawyers and hirelings who will make decisions which cannot be reviewed, appealed or challenged in existing court systems of any TPP member country. TPP ‘courts’ will take precedence over US and other national court systems, already under heavy attack by corporate forces vigorously promoting arbitration as a means by which to bypass the formal judicial system in the US.

TPP ‘Commission’ As Global Corporate Legislature-Executive Institution

Chapter 27 establishes a TPP Commission, composed of ministers or officials who oversee the operation of TPP and its future evolution. For the TPP is being called a ‘living agreement’, meaning it will change as new members join. What is not explained, however, is whether once it is ratified by Congress, will representatives get to ‘ratify’ each time it is changed? Or just once at the outset, thereafter allowing corporate lawyers, CEOs, and corporate-owned bureaucrats to change it anyway they please later?

According to TPP, the Commission members function as a kind of corporate global ‘Politburo’, a legislative committee of the Multinational Corporations of the TPP members, with yet to be defined accompanying executive powers. No separation of powers here.

More important, TPP is totally silent on questions like how will the Commission be determined? What are the terms of office of its members? Who chooses them and how? Can they be relieved and, if so, by whom and according to what process? To whom are they accountable? Can they meet in secret? What are the rules for decision making under which they’ll operate? The TPP is silent on all these questions. How convenient. Perhaps something addressing these questions exists in the mysterious ‘guidance document’ no one has seen yet. But don’t bet on it.

Most important, it appears the decisions by the Commission are not subject to review, let alone reversal, by Congress or any other existing government legislature. According to the US Congressional Record of November, 10, 2015 at least one US Senator has raised the warning that “we are empowering the TPP countries to create a new Congress of sorts” and a supra-national Commission that “will not be answerable to voters anywhere.”

TPP Korporate Kangaroo Kourts

But TPP proposes not only to negate existing government legislative and executive functions. It even more directly attacks existing judicial institutions and functions. Chapter 28 sets up an independent court system, or tribunals, which will make decisions that existing national Judicial systems cannot review or overturn. These tribunals are officially called ISDS panels, for ‘Investor-State Dispute System’, each of which is composed of three ‘trade’ and expert representatives. But once again, as in the case of the Commission, Investor-Corporate representatives selected by whom? How? For what terms? Representing whose interests? Etc.

Let’s call them what they are: ‘Korporate Kangaroo Kourts’, that will do most of their work in secret. TPP language allows them to conduct public hearings in public, but it also allows them the option to conduct hearings in total secrecy as well. Guess which they’ll prefer? TPP indicates KKKs may ‘consider’ requests from the public to provide written views—but consider does not mean ‘must’. It also says final reports will be available to the public—but that’s after their final decisions have been made. Furthermore, “the initial report will be confidential,” while the final report to the public is “subject to the protection of any confidential information in the report.” What’s finally released to the public will no doubt look like extensive ‘black outs’ in a typical US Freedom of Information Act request.

Here’s another problem: The ISDS-KKK courts allow corporations and investors to sue national governments—i.e. legislatures or executive regulatory agencies—that may try to pass laws or establish rules to protect workers, the environment, or whatever investors and corporations consider interfere with their ability to make profits under the TPP. The TPP suits will claim the US government violated the TPP treaty, even though the corporation’s dispute may in fact be between the Investor-Corporation and a state or local government.

This means technically that a corporation-investor that owns farmland in California, for example, can sue the state for imposing water rationing in the drought. That rationing would of course interfere with their profit making under TPP. Or how about a foreign owned restaurant chain in Los Angeles, which just passed a city ordnance calling for a $15 minimum wage? Under TPP, moreover, neither the state of California nor Los Angeles will be able to appear as a direct party to the TPP suit to defend itself, since disputes under TPP are restricted to the Corporation-Investor vs. the national government. So much for local democracy as well under TPP.

Corporate ‘Dual Power’ vs. Democracy

All governments exercise legislative, judicial, and executive functions. The TPP establishes on behalf of global corporations all the above. But TPP establishes those functions at the direct expense of existing government institutions, popular sovereignty, and the very idea of democratic representation. TPP’s Commission establishes a corporate pan-global legislature by corporate committee with unknown executive powers as well. Its KKKs clearly violate Article III of the US Constitution establishing an independent judiciary.

The signing of the TPP agreement in Atlanta, Georgia, on Oct. 4, 2015, represents in a sense the founding “Constitutional Convention” of global corporate government. For the economic Corporate Form has clearly ‘outrun’ the political Government Forms with which it has coexisted for the past two centuries.

All forms of revolution, they say, occur based on the emergence of ‘dual power’ and new sets of institutions attempting to replace the old. Chapters 27 and 28 of the TPP represent the seed of that emerging corporate dual power. So maybe its time for some new popular forms of ‘dual power’ to stop them as well.

Jack Rasmus is the author of ‘Systemic Fragility in the Global Economy’, 2015, now available at http://ClarityPress.com/Rasmus.html and at http://www.kyklosproductions.com

This content was originally published by teleSUR at the following address:
http://www.telesurtv.net/english/opinion/The-TPP-and-the-New-Global-Corporate-Government-20151118-0020.html”. If you intend to use it, please cite the source and provide a link to the original article. http://www.teleSURtv.net/english

Listen to the first of Jack Rasmus’s two part analysis of the recently concluded TPP, Transpacific Partnership Free Trade Agreement, on the Alternative Visions Radio Show of November 14, 2015. (Tune in for part 2 on friday, November 20, 2015 at 3pm New York time, on the Progressive Radio Network, at: http://prn.fm/#axzz26hkFIP6s)

Access the podcast for the November 14, Alternative Visions show at:


or at:



Jack Rasmus undertakes the first of a two part deep examination of the terms and conditions of the actual TPP agreement recently concluded. The origins and true functions of free trade agreements is explained, beginning with the 1944 Bretton Woods international monetary system, the IMF, and World Bank established by the US, the role of trade in US global dominance to the 1970s, the restructuring of trade and money flows in the 1970s, and the advent of Neoliberalism in the 1980s under Reagan and Thatcher. How free trade became the international lynchpin of US neoliberal policies, beginning in the 1980s and expanding ever since under both Democrat and Republican administrations. Obama as the biggest advocate of Free Trade thus far is explained. Jack then begins a section by section analysis of the 30 chapters of the TPP, with an overview of provisions associated with ‘goods’ trade, investment, financial services, intellectual property and Pharmaceuticals, and the Disputes Settlement/Corporate Global Courts system section that will undermine domestic democracy and sovereignty and lead to a new drive for global corporate supra-political institutions. In Part 2 next week, further details of the 30 chapters, and reactions by labor, environmental advocates, food safety groups, and others will be reviewed—as well as reports by organizers of the Nov. 18 national US protests against the TPP.

To listen to my analysis of the preliminary release of US GDP numbers for July-September 2015, listen to my Alternative Visions radio show of 10-20-15 on the Progressive Radio Network at:


or at:



Jack Rasmus looks beneath the surface of today’s announced preliminary figures for third quarter 2015 GDP, which slowed sharply at 1.5% from the previous quarter’s 3.9% official growth rate. Jack predicts the US economy is headed, once again, in early 2016 for another ‘relapse’ with US GDP collapsing to zero or near zero growth—for the fifth time of a single quarter collapse since 2011. The US economy is on a ‘stop-go’ trajectory of periodic single quarter ‘relapses’ followed by short, shallow recoveries. Jack notes a similar process globally has been occurring in Europe and Japan, where ‘recessions’ instead of ‘relapses’ occur. 3rd Quarter US data show problems in business spending on inventories, business structures and equipment investment. Problems in US manufacturing and exports continue and will worsen, he argues, and housing growth will remain tepid based on high end residences and apartments. Jack challenges claims by media and economists that US consumer spending will continue to prop up the US economy, citing recent negative wage growth, deflating prices, and rising household debt. Look for 4th quarter growth no better than third, then a ‘relapse’ in 2016 as the likely trajectory.

In the second half of the show, Rasmus discusses how US multinational corporations like Apple, Google, Starbucks and others manipulate global tax loopholes, how Wall St. manipulates the pharmaceutical companies, and how US consumers pay for pharma-bank profits and multinational corps taxes. Why politicians in office, and running, will do nothing about it—and pass even more tax cuts for US corporations after 2016 elections.

(This article appeared in telesurtv.net 10-29-15 as ‘Pigs at the Corporate Tax Cut Trough’)

“A year ago, in November 2014, the US held elections for the US Congress. In an article for telesur that month this writer predicted the top two objectives of the new Congress in 2015 would be the Transpacific Partnership (TPP) free trade treaty and major tax cuts for US corporations. With the TPP agreement recently signed, the top priority of the US Congress is now more business tax cuts. Leading the charge are US multinational corporations (MNCs).

Since 2001, tax cuts have allowed US MNCs to keep trillions of dollars they should have otherwise paid in taxes. And that’s not counting additional hundreds of billions of dollars more in quasi-legal tax avoidance and outright illegal tax fraud.

One would think the issue of multinational corporate tax rip-offs would be at the top of the list in discussions and debates between presidential candidates of both US parties. But thus far hardly a word has been said by candidates, Clinton, Bush, Trump and the others. The one exception has been Bernie Sanders, who has raised the issue of corporate taxes in general, but has said little about multinational corporations specifically—i.e. the biggest pigs at the corporate tax cut trough.

It’s an election year and US MNCs are among the biggest election campaign money contributors to politicians running for office. So politicians of both parties will ‘blow smoke’, tell voters what they want to hear, and ‘take the corporate money and run’. After the elections, they’ll pass new laws giving US corporations in general, and MNCs in particular, even more tax cuts.

Here’s some interesting specifics about US corporations and the taxes they don’t pay:

• The US Government Accounting Office (hardly a radical source) estimated in 2013 that US corporations paid an effective (i.e. actual) federal tax rate of only 12.6% to the US government—not the official 35% that the media likes to report.

• That 12.6% effective rate in 2013 compares to what was once an effective rate of 33% in 1990 and 29% as recently as 2000, when nominal rates were 34% (1990) and 35% (2001).

• In 2013 US corporations paid another effective 2.2% to US states that levy income taxes in the US.

• US multinational corporations’ nominal rate paid to foreign governments is another 6% on average. But that number is a joke as well. US companies like Apple, Google, Starbucks, US oil companies, big pharmaceutical companies, and telecom companies manipulate dozens of loopholes in tax codes to end up paying on average no more than another 2% of that nominal 6% to foreign governments.

• As a result of paying 2%, US MNCs now hoard between $1.7 trillion and $2.1 trillion in cash in their offshore subsidiaries, refusing to bring the profits back to the US to invest there in order to avoid paying US taxes.
It’s not as if US corporations can’t afford to pay more. Corporate pre-tax profits in the US have tripled since 2001 and doubled since 2008, to $1.65 trillion in 2014. And that’s not counting the offshore cash hoarding; or another $1.35 trillion for non-corporate business profits. That’s $3 trillion in business profits in the US last year.

US multinational corporations have the best deal of all US corporations. They have ‘loopholes’ that allow them to pay even less total taxes on a global scale. For example, because they are located in many countries, they can manipulate their internal prices paid between their subsidiaries so that the profits end up recorded in the country with the lowest nominal rates. Favorite locations of US MNCs are Ireland, the Netherlands, and favorite tax haven islands like Bermuda and the Caymans in the Caribbean.

Their nominal rates are then reduced further by loopholes provided by those countries. Tax cut lawyers and corporate finance managers even joke about loopholes they call the ‘Dutch Sandwich’ in the Netherlands that allows them not to have to withhold taxes. Then there’s the ‘Double Irish’ in Ireland that allows them to cut their effective tax rates in half. Google Corporation in this way records all its foreign earnings through Ireland that it then routes through the Netherlands—that way creating a ‘Dutch Sandwich with a Double Irish’ to go. In one recent year, Apple Corp. saved $9 billion in taxes this way. It’s why they hardly pay more than a token 2% on their foreign earnings in taxes to foreign countries.

Surely US tax collectors know of all these manipulations by US MNCs. Yes, of course they do. And they not only allow but encourage the loopholes. Since 1995, under the Clinton administration and continuing under Bush and now Obama, the US government allows US MNCs to manipulate the tax loopholes without penalty. After 1995, all US MNCs have to do is ‘check the box’ on their corporate Internal Revenue Forms to indicate a foreign subsidiary of the corporation is what’s called a ‘disregarded entity’ for paying taxes. They then can activate the ‘Look Through’ loophole on their IRS forms to move profits between their offshore subsidiaries.

Then there’s the so-called ‘tax inversions’ gimmick that became public last year, which US pharmaceutical companies in particular have been manipulating. ‘Inversions’ is the corporate strategy of buying a small company offshore and then transferring the US corporation headquarters there on paper. That makes the MNC technically a foreign company and reduces its US taxes, especially if the purchase is made in Ireland, Bermuda, Luxembourg, Belgium, or elsewhere.

After a flurry of publicity and attention given to the spread of MNC ‘inversions’ in 2014, the Obama administration went silent on the issue of stopping inversions. Billions of dollars in inversion ‘deals’ have continued.
But what about the US foreign profits tax? Don’t US MNCs have to pay the US 35% corporate tax on offshore profits, called for by US law? No. Not if the law is not enforced, which it isn’t. That’s why they’ve accumulated their $1.7 trillion and $2.1 trillion cash hoard in their offshore subsidiaries.

Apple Corp. alone has stashed more than $150 billion offshore.
While US politicians and the Obama administration do nothing about the US MNCs constant ‘gaming’ of the global tax system, recently an initiative was launched in Europe to go after the Apples, Googles, Starbucks, Amazons, and other US MNCs to make them pay.

Last week Margrethe Vestager, an EU competition commissioner, declared US MNC loopholes amounted to “illegal forms of state aid”. Investigations have been launched into Apple, Amazon, Starbucks, and other US MNCs. More are coming. Not surprising, in response the US Treasury department of the Obama administration is protesting Vestager’s investigations. And the US Treasury says it may have to cut US taxes for Apple and others to compensate if Europe makes them pay more offshore. Meanwhile, Obama and Congress have re-introduced legislation to cut US MNC’s nominal and effective tax rates on offshore profits even further. So watch for US MNCs taxes to decline still further.

And what are the candidates for US president and Congress of both parties saying about all this? Nothing. But what can one expect from those who are receiving billions of corporate dollars today to fund their re-election campaigns.

Jack Rasmus is author of the forthcoming book, ‘Systemic Fragility in the Global Economy’, Clarity Press, December 2015. For more information, go to: http://www.kyklosproductions.com/homewar.html

This article has been published by telesurTV Media, Quito, Ecuador, October 19, 2015

by Jack Rasmus

“Negotiations on the Transpacific Partnership (TPP) free trade treaty between the US and 11 other pacific rim countries were concluded last week, October 5, 2015.

Although the full TPP document is still being kept secret—to all but the representatives of multinational corporations who chaired the 30 committees and told the government trade representatives what to negotiate—some details of the super-secret deal have been leaking out.

And if the leaks are any indication of what’s to come when full details are released, consumers, workers, and everyone concerned about the growing global ‘corporatization’ of democracy, are in for a big shock.

Some Early Leaks

One of the most onerous of the TPP provisions leaked involves big pharmaceutical companies. In the US they have been given 12 years of monopoly rights over the sale of certain life-saving drugs. Lower cost generics are banned for that period. That ban on competition has already resulted in runaway price gouging of US consumers desperately in need of life saving drugs. The accelerating cost of the drugs in the US is also making insurance premiums unaffordable. This multi-year protection from lower cost generic drugs for ‘big Pharma’ is now embedded into the TPP as well. Those ill and in need of life saving drugs throughout the other 11 countries—mostly the poor and much of the working classes—will now be denied lower cost alternatives for life saving drugs, as in the US.

The minimum years of price protection from generics under the TPP is being reported as 5 to 8 years. But the 5 to 8 years can be extended up to 11 years. So millions throughout the 11 countries, who might have been able to get the generic drug versions, and save their lives, will now go without for more than a decade to come.

Another area is auto parts manufacturing. The US has agreed to allow more Japanese auto parts imported into the US. But it will be Japanese auto parts manufactured in Japan’s factories in China. In exchange, US auto companies will be allowed to set up more plants and production in Southeast Asia. Both provisions will result in lost jobs in the US.

Another people-killer provision involves the Tobacco companies. Disputes with governments trying to reduce smoking have in the past led to tobacco companies suing governments. Now the disputes must be arbitrated in special TPP courts. That means, at best, token limitations on tobacco sales. In exchange, it also means governments are effectively banned from limiting tobacco product sales by legislation or regulation. They must go to TPP courts to arbitrate efforts to regulate tobacco sales, where the companies will tie up decisions for years while continuing their current practices.

TPP gives corporations in general even more rights. Under TPP they can sue governments to prevent legislation or regulations that contradict the TPP treaty. Want to do something about big Pharma ‘price gouging’, as in the US? Forget it. Legislation addressing price gouging contradicts the treaty. Want to regulate? Forget it, see you in TPP court.

What the ban on any legislation and regulation contrary to the TPP means is that democracy and national sovereignty does not exist if it does not conform to free trade deals negotiated by the corporations themselves. TPP thus represents a major leap toward a global corporate political system, where the economic interests of corporations take precedence over national governments, elected representatives, and popular sovereignty.

Selling the TPP

The Obama administration has publicly declared TPP will reduce US tariffs on 18,000 exports. This will lower the cost of US businesses trying to sell to the other countries and create more export jobs. But there’s nothing to stop countries from lowering their currencies to more than offset the tariff reductions. Japan and most of the 11 countries have already been doing that and will continue as the global economy slows. Japan has been the biggest currency manipulator, reducing its Yen by more than 20% to the dollar. But no one in the US complains. They complain instead about China ‘manipulating’ its currency, even though China’s currency has been pegged to the dollar for years.

TPP is not primarily about exporting more goods from the US. TPP is about creating more favorable conditions for US corporations to invest in the other countries, and then re-export from those countries at lower costs, and thus higher profits, back to the US without having to pay tariffs. TPP is also about containing China.

China’s recent global economic initiatives have the US on the economic defensive, challenging its global economic hegemony. China’s recently created Asian Infrastructure Bank, its ‘silk road’ trade initiative, its forming of its own Asian free trade zone, the imminent approval of its currency, the Yuan, as a global reserve and trading currency by the IMF, and its deepening economic relationships with the UK, Germany and other Euro countries has the US on the economic defensive. The passage of the TPP is thus strategic for the US to counter these China initiatives and its economic momentum. Should the TPP fail, that momentum would no doubt accelerate. That in turn would make the US political and military strategy to contain China even more difficult. TPP is thus the lynchpin for US policy in general in Asia—economic, political and military.

TPP and Obama’s Free Trade Legacy

The TPP is the brainchild of US multinational corporations, who demanded a pacific region free trade treaty as soon as US president, Barack Obama, took office in 2009. In quick response to multinational US corporate pressure, in early 2010 Obama appointed then CEO of General Electric Corporation, Jeff Immelt, to head up the administration’s initiatives to expand free trade. Along with recommendations to protect US patents and expand tax breaks for exporters, the Immelt Committee introduced proposals for the TPP in 2010.

Although Obama had campaigned for office in 2008 on the promise of renegotiating existing free trade treaties that were costing US workers millions of jobs, like NAFTA, and promised not to introduce new treaties, he quickly embraced, pushed, and signed new free trade treaties with Latin America (Panama, Columbia) and Asia (South Korea).

In fact, Obama has either initiated or restarted bi-lateral, country to country, free trade treaty negotiations with no fewer than 18 different countries since taking office. That 18 is in addition to free trade negotiations that have been launched with the 28 countries in the European Union, and a similar multi-country free trade negotiation initiated with various middle east countries.

One of Obama’s dubious legacies therefore will be the recognition that he has been the biggest promoter of free trade in US history—bigger than even his predecessors, George W. Bush and Bill Clinton. That dubious legacy depends, however, on the passage of the TPP first. Should it pass in 2016, which is more likely than not, TPP will no doubt serve as the ‘template’ for pending deals involving more than 50 countries, which will quickly fall in line once the TPP is ratified. The fight against free trade is therefore only beginning. Lined up behind TPP are free trade deals with scores of other countries.

Jack Rasmus is the author of ‘Systemic Fragility in the Global Economy’, Clarity Press, November 2015. His website is http://www.kyklosproductions.com.


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