Sacrificing Economic Growth and Job Creation

George Will's column today is about how "President Obama is sacrificing economic growth and job creation in order to placate organized labor.... and enlarge the entitlement system and exacerbate the entitlement mentality."

MP: The issue here is the Free Trade Agreements (FTAs) with Colombia, Panama and S. Korea which are being held up for approval until "Congress expands an entitlement program favored by unions" - the Trade Adjustment Assistance (TAA) program, which provides financial aid (welfare payments) to American workers who lose their jobs due to foreign competition. 

George Will raises another very important issue about how competition and economic dynamism affect the labor market:

"There is this problem with TAA at any level: It is unjust to treat some workers as more entitled than others to protection from the vicissitudes of economic dynamism.

Consider a hypothetical Ralph, who operated Ralph's Diner until an Applebee's and Olive Garden opened in the neighborhood. With economies of scale and national advertising budgets, those two franchises could offer more choices at better prices, so Ralph's Diner went out of business. Should he and his employees be entitled to extra taxpayer subventions because they are casualties of competition? "Why should someone be entitled to such welfare just because he is affected negatively by competition that comes from abroad rather than down the street?

MP: Keep in mind that the Colombian FTA was signed 1,661 days ago in November 2006, and has been languishing ever since awaiting Congressional approval.  Also consider that all three FTAs will provide greater access for American manufacturers to sell manufactured goods overseas, which translates into more jobs in the U.S.  So the real story here is about the power of organized labor to use its political muscle to create a drag on U.S. economic growth and job creation.