Populism on the Rise in GOP Race for President – By Nick Timiraos Updated Nov. 11, 2015 7:39 p.m. ET

Candidates bash big banks, the Fed, corporations and international trade deals in their latest debate

 WSJ's Editor-in-Chief Gerard Baker and Washington Bureau Chief Jerry Seib were moderators of the fourth Republican primary debate. They discuss the top political moments and takeaways from the GOP debate. Photo:AP

WSJ’s Editor-in-Chief Gerard Baker and Washington Bureau Chief Jerry Seib were moderators of the fourth Republican primary debate. They discuss the top political moments and takeaways from the GOP debate. Photo:AP

The latest presidential debate vividly captured how the 2008 financial crisis has reshaped the Republican Party by unleashing a potent populist strain that could further scramble an already unpredictable primary contest.

Candidates vying for the 2016 GOP nomination have grown distinctly more leery of big banks, corporations and international trade deals, and outright hostile toward the Federal Reserve.

Some of these impulses gave rise to the tea-party movement in 2009 and flared in the 2012 GOP primary contest, but they faded with the nomination of former Massachusetts Gov. Mitt Romney, a private-equity executive.

The debate in Milwaukee didn’t appear to fundamentally alter the state of the race. But with candidates heading off to Iowa and New Hampshire on Wednesday, it showed how their jockeying to carry the populist banner could intensify in the run-up to those states’ early nominating contests next February.

From defense policies to tax plans to help families: Watch highlights from the fourth Republican presidential debate in Milwaukee.

Candidates who have made full-on appeals for the antiestablishment mantle—businessman Donald Trump, former neurosurgeon Ben Carson and Texas Sen. Ted Cruz—are looking to consolidate that support as the field eventually narrows. Others, such as former Florida Gov. Jeb Bush, Ohio Gov. John Kasich and Florida Sen. Marco Rubio, are walking a finer balancing act to maintain broader appeal.

The populist undercurrent has upended the Democratic field as well, where Vermont Sen. Bernie Sanders, the self-described democratic socialist, has filled arenas while raising millions from small donors. Progressive party leaders have pushed front-runner Hillary Clinton to adopt more liberal proposals on everything from higher minimum wages to making Social Security benefits more generous.

“A nasty—and ignorant—anti-Wall Street climate prevails in both parties, and it’s something our industry has to worry about,” said Greg Valliere, chief global strategist at Horizon Investments, in a client note Wednesday.

The fourth GOP debate, sponsored by The Wall Street Journal and Fox Business Network, illustrated how Republicans are competing to bridge their populist message with the party’s traditional support for lower taxes and less regulation. Candidates castigated crony capitalism, questioned the value of a Pacific trade pact and bashed the Fed as a cause of the financial crisis and a tool of the Obama administration.

Carly Fiorina, the former chief executive of Hewlett-Packard, criticized President Barack Obama’s health-care overhaul for prolonging a “cozy little game between regulators and health-insurance companies.” She called on the government to require every health-care provider to publish “its costs, its prices, its outcomes, because as patients we don’t know what we’re buying.”

In the fourth Republican presidential debate in Milwaukee, candidates sparred over whose tax, military and immigration plans represented “conservative” principles. WSJ’s Jason Bellini reports.

Mr. Cruz said his flat-tax proposal would end preferential treatment of the rich and well-connected. “No longer do you have hedge-fund billionaires paying a lower tax rate than their secretaries,” he said. “Giant corporations with armies of accountants regularly are paying little to no taxes while small businesses are getting hammered.”

Mr. Rubio found himself defending a proposal to boost child-care tax credits as a way to support low- and middle-income Americans against charges from Kentucky Sen. Rand Paul that it would run up big deficits and create a new entitlement program.

One notable exchange came when candidates were asked how they would handle failing banks during a hypothetical rerun of the 2008 financial crisis. During a back and forth with Mr. Cruz, Mr. Kasich chided candidates for issuing “philosophical” platitudes.

“When you are faced, in the last financial crisis, with banks going under and people who put their life savings in there, you got to deal with it,” Mr. Kasich said, who was booed by the audience at one point.

Mr. Cruz initially said he would “absolutely not” support bailing out big banks but later said there was a role for the Fed to serve as a “lender of last resort.”

The exchange “seemed yet one more example of how the wounds from the financial crisis have yet to heal, and those who try to talk rationally about it are disadvantaged against populists,” said Charles Gabriel, a financial-industry policy analyst at Capital Alpha Partners in Washington.

Candidates voiced concerns about the power of big banks, even as they promised to sweep away new regulations, including the Dodd-Frank financial overhaul that requires the biggest banks to raise more capital to withstand financial crises. They also heaped criticism on the Federal Reserve, which has taken unprecedented steps to spur growth in the seven years following the financial crisis—but has also consistently overestimated growth rates in its forecasts.

Mr. Paul said the Fed’s policies had hurt the poor by leading to higher prices and lower currency values. But inflation has remained under the Fed’s 2% target for more than three years with many economists concerned more recently about deflation. Also, the dollar has strengthened this year as U.S. economic growth looks comparatively better than in the rest of the world.

Mr. Cruz said the Fed had become “a series of philosopher-kings trying to guess what’s happening with the economy.” To manage inflation, he advocated a return to the gold standard, an idea widely dismissed by mainstream economists.

Milton Friedman, the late Nobel laureate who championed free-market policies, urged President Richard Nixon to abandon the system of fixed currency-exchange rates that emerged after World War II shortly before Mr. Nixon took office in 1968. Mr. Nixon scrapped the peg in 1971.

At Tuesday’s primetime GOP debate, Sen. Ted Cruz and Gov. John Kasich took opposite positions on “too big to fail.” Photo: Getty

In Tuesday evening’s first debate, New Jersey Gov. Chris Christie criticized the Fed for keeping rates artificially low to support Mr. Obama. He then warned that rates were too low to revive the economy should it slide back into recession. “The Fed should stop playing politics with our money supply,” he said.

White House officials have rejected outright the idea that they would seek to influence monetary policy. Some analysts said the criticism of the Fed distracted from Republicans’ opportunities to offer more concrete pocketbook proposals.

“The most dismaying element” of Tuesday’s debate was that “none of the candidates appear to have read, much less absorbed, the innovative ideas” of “reform-minded conservative economists,” said Norm Ornstein of the American Enterprise Institute, a conservative think tank that has advocated many of those policies. “Instead, they all promoted ideas that appealed to the antediluvian base.”

Write to Nick Timiraos at nick.timiraos@wsj.com

The Trans-Pacific Partnership is finally public. Here’s what you need to know. – Updated by Timothy B. Lee on November 5, 2015, 6:40 p.m. ET

The Obama administration has finally released the full text of the Trans-Pacific Partnership, a controversial deal that would knit together the economies of a dozen Pacific Rim nations. Now Obama just needs to win one more vote in Congress for the US to accept the agreement.

But while the Obama administration says that the deal will boost the US economy and boost America’s influence in Asia, critics have portrayed it as a package of giveaways to corporate interests. They’re mobilizing the deny Obama the congressional majority vote he needs to get the deal over the finish line. The fight over the TPP has pushed Obama and Republican leaders into an unusual alliance against congressional Democrats who vehemently oppose the deal.

As soon as the agreement was released, interest groups began flooding my inbox with press releases praising or attacking the deal. But Simon Lester, a trade policy expert at the Cato Institute, predicts that it could take a month for a full picture of the deal’s implications to emerge. “If you want to get an overall sense, you have to compare every product and every service.” And there are hundreds of provisions spread over 30 chapters, so that’s going to take a long time.

The TPP is a lot more than just a trade deal

The TPP is usually described as a trade deal, and it certainly will have important provisions related to trade. Negotiators have been considering liberalizing trade in cars and trucks, rice, dairy products, textiles, and a lot more.

But the agreement is also a lot more than a trade deal. It has more than two dozen chapters that cover everything from tariffs to the handling of international investment disputes. The reason these deals have gotten so complex is that people realized that they were a good vehicle for creating binding international agreements.

Article continues:



The just-completed Trans-Pacific Partnership deal, explained – ` Updated by Timothy B. Lee on October 5, 2015, 6:20 p.m. ET


President Obama and Japanese Prime Minister Shinzo Abe on April 28, 2015. Mark Wilson/Getty Images

Trade negotiators in Atlanta reached an agreement Monday that could affect everything from American exports of pharmaceuticals to New Zealand milk, Japanese rice, and Vietnamese textiles.

The deal, known at the Trans-Pacific Partnership, would more closely link the economies of 12 Pacific Rim nations and have sweeping global implications. President Obama has portrayed it as essential to cementing America’s relationships in Asia, but critics such as Sen. Elizabeth Warren (D-MA) have portrayed it as a giveaway to corporate interests and a threat to US sovereignty.

Of all the issues under negotiation, the most contentious was legal protections for the pharmaceutical industry. American drug companies and their allies in the Obama administration have been pushing for new rules that would limit competition and boost drug prices. Other countries, with the support of public health groups, have pushed back, arguing that the measures would cost thousands of lives.

Ultimately, the negotiators split the difference. They agreed to language that would require some countries to expand the legal protections afforded to drug companies (and raise prices in those countries), but big drug companies got less than they wanted.

Now the action will move to Congress, which must approve the deal before it can take effect. We can expect the TPP to attract criticism from both ends of the political spectrum. Already, Vermont Sen. and presidential candidate Bernie Sanders (D-VT) has blasted the deal as a victory for “Wall Street and other big corporations,” while Sen. Orrin Hatch (R-UT) has complained that the drug protections in the bill “fall woefully short” of what the industry had requested. Obama faces a big challenge convincing critics on both sides that while the deal might not be perfect, it’s still better than no deal at all.

The TPP is a lot more than just a trade deal

The TPP is usually described as a trade deal, and it certainly will have important provisions related to trade. Negotiators have been considering liberalizing trade in cars and trucks, rice, dairy products, textiles, and a lot more.

But the agreement is also a lot more than a trade deal. It has more than two dozen chapters that cover everything from tariffs to the handling of international investment disputes. The reason these deals have gotten so complex is that people realized that they were a good vehicle for creating binding international agreements.

American negotiators — and, therefore, US interest groups — have had the most power in these negotiations

Modern trade deals include a dispute-settlement process that helps to ensure that countries keep the commitments they make under trade deals. If one country fails to keep its commitment, another country can file a complaint that’s heard by an impartial tribunal. If the complaining country prevails, it can impose retaliatory tariffs on the loser.

Interest groups have realized that this same mechanism can be used to enforce agreements on topics that have little to do with trade. And so a wide variety of interest groups — from Hollywood and the pharmaceutical industry to labor and environmental groups — have lobbied to include rules they favored in trade agreements. And because the US is the world’s largest economy, American negotiators — and, therefore, US interest groups — have had the most power in these negotiations.

For example, at the behest of Hollywood and other US copyright holders, American negotiators have been pushing other countries to adopt our long copyright terms: the life of the author plus 70 years. International investors have pushed for an investor-state dispute settlement process that allows private investors to challenge foreign government policies before an impartial arbitration panel — a process critics such as Sen. Warren describe as a threat to American sovereignty. Drug companies want other countries to provide the same robust legal protections for new drugs they enjoy in the United States.

At the same time, labor and environment groups have pushed the Obama administration to incorporate their priorities into the agreement. The Obama administration insists the president has done just that, but so far these changes haven’t gone far enough to convince these groups to endorse the agreement.

Drug protections were the biggest sticking point

Previous trade deals already required TPP member countries to provide a minimum level of patent protection for pharmaceuticals, but most countries didn’t provide protections as generous as those in the United States. Obama’s trade negotiators wanted to include language in the TPP requiring other countries to make their laws more like those in the United States.

The most controversial provision of all concerns a type of drugs called biologics. These drugs are produced by biological processes rather than being synthesized in a chemistry lab. Drug companies say that patents, which protect a specific chemical formula, do not always provide adequate protection for biologic drugs, because it’s often possible to find another compound that’s biologically equivalent even though it has a different chemical structure.

Even the Obama administration’s own budget wonks believe 12 years of protection is excessive


Article continues:


Free Trade for Green Trade – Foreign Affairs August 4, 2015

In the run-up to the Paris talks at the end of the year, governments are preparing their strategies to negotiate national emissions reduction targets. But elsewhere, a different battle is unfolding as firms and governments compete to try to capture the benefits of the rise of the new green economy. A wave of trade disputes in clean energy industries is one result. Since 2010, at least 11 such cases have been initiated. Trade cases in solar photovoltaics, in particular, have emerged as some of the most politically charged in recent history.

Trade disputes over subsidies and price dumping have the potential to stymie the deployment of low-carbon energy technologies by increasing their price relative to fossil fuels. And they are unnecessary; most arise out of the assumption that the clean energy race is a zero-sum game between competing national and regional economies. But that isn’t how green industries work, and government policy needs to catch up with the reality that domestic firms (and efforts to protect the environment) benefit from free trade in the clean energy industry.

Sprott Power Corporation's Wind Asset Manager Peder Schlanbusch looks out from on top one of the 15 wind turbines which were officially opened in Amherst, Nova Scotia, June 25, 2012.

Sprott Power Corporation’s Wind Asset Manager Peder Schlanbusch looks out from on top one of the 15 wind turbines which were officially opened in Amherst, Nova Scotia, June 25, 2012.


When clean energy technologies such as solar photovoltaics and wind entered the mass market a decade ago, producers were largely manufacturing locally for consumers in the United States, Europe, and Asia. Global trade, particularly in anything other than final products, was limited. In such a world of national or localized production, trade protection may indeed have served as a useful tool for securing jobs against unfair competition.

Article continues:

The nerd’s guide to learning everything online – TEDxIndianapolis · 18:10 · Filmed Nov 2012

Some of us learn best in the classroom, and some of us … well, we don’t. But we still love to learn, to find out new things about the world and challenge our minds. We just need to find the right place to do it, and the right community to learn with. In this charming talk, author John Green shares the world of learning he found in online video.

The entire world learned a very important lesson about China this week – LINETTE LOPEZ Jul. 11, 2015, 7:18 AM

hildren study at an experimental school on November 7, 2007 in Chengdu, capital of Southwest China's Sichuan Province. Students attending the school are supported financially by the 'Golden Phoenix' project, whereby local government allocates a $17.2 subsidy for every junior high school student living in the mountainous areas towards food, clothing, transportation and hot water costs, and provides each of them with free dormatory accommodation to enable them have equal chance of high quality school education in the city.

Getty / Guang NiuChildren study at an experimental school on November 7, 2007 in Chengdu, capital of Southwest China’s Sichuan Province. 

As the entire world watched mainland China’s major stock indices plunge this week, it learned something very important about the country that, for the most part it didn’t know before.

China is fragile.

After a massive 150% rally in the Shanghai Composite Index over the last year, on June 12th China’s largest stock market (and it’s smaller Shenzen Index) started to plummet.

Before the bleeding stopped on Thursday, Shanghai had erased gains from April, May and June.

And the entire country was shocked — almost as shocked as the rest of the world. China’s leading Communist Party (CCP) had been very clear. The people were to buy stocks, and so they did the whole year through up to this point — taking out high interest rates loans to do so with gusto.

So when the downturn came, it hit retail investors — who make up 25% of China’s stock market — hard. The government tried to do everything it could to stop the stock slide. It ordered large investors not to sell for 6 months, launched an investigation into short sellers, threw almost $20 billion at the problem, canceled IPOs and more.

The Chinese people responded by blaming foreign bankerswaiting for their government to bail them out completely, and, in some extreme cases, committing suicide.

The odd thing about all this is, as many retail investors as there are in China’s stock market, the money actually in the market only makes up about 15% of household assets.

So why the freak out?

pew china over take US pollPew Research

Article continues:


The GOP’s 2016 trade divide – By MANU RAJU 6/23/15 7:28 PM EDT Updated 6/23/15 8:07 PM EDT

It’s Cruz and Paul vs. Rubio and Graham in the party’s latest ideological split.

Republican presidential candidate Sen. Rand Paul, R-Ky. departs after speaking during the Road to Majority 2015 convention at the Omni Shoreham Hotel  in Washington, Thursday, June 18, 2015. (AP Photo/Andrew Harnik)

Marco Rubio entered the first floor of the Senate, sneaking up a back stairwell to cast his biggest vote of the year: advancing President Barack Obama’s trade agenda.

The Florida Republican stayed on the Senate floor for a minute, then darted down a staircase, ignoring questions about conservative criticism of a bill some on the right have derisively dubbed “Obamatrade.”

“Not today,” Rubio, the presidential hopeful, said as he rushed out of the Senate.

Rubio’s mum posture on Tuesday underscores how divisive the issue has become in Republican presidential politics. While a vast majority of Republicans in both houses of Congress voted to advance the trade agenda, a vocal segment of the GOP base has aggressively attacked the plan, contending it would hurt American workers, change immigration laws and give Obama too much power.

It’s the latest chapter in the intraparty struggle that’s consumed the GOP since the 2010 midterms, as business-minded Republicans battle with the tea party wing over the party’s identity and direction.

The influence of the activist right was on vivid display Tuesday when Ted Cruz, the Texas firebrand who has aligned himself with that segment of the GOP, sharply reversed course on trade. After vocally supporting fast-track trade authority for Obama, Cruz announced that he would oppose the plan. He cited “corrupt” backroom deal-making that, he contended, would weaken U.S. immigration policies and even lead to the extension of the charter for the controversial Export-Import Bank.

“I support free trade and have vocally supported free trade for a long time,” Cruz told reporters after the vote. “But the cronyism and the backroom deals are unacceptable.”

Republican proponents strongly disputed the assertions.


Article continues:


White House, GOP try to pick up the pieces on trade – By Cristina Marcos – 06/13/15 06:00 AM EDT

Getty Images

House Republican leaders and the White House are trying to figure out how to rebound from a stunning Friday defeat on the House floor that has left President Obama’s trade agenda in limbo.

The dramatic loss capped a week of furious lobbying by President Obama and GOP leaders, who for once had found themselves on the same side when it came to fast-track trade authority.

They appeared to be on the verge of a major victory on fast-track — and indeed, the controversial measure allowing Obama to send trade deals to Congress for up-or-down votes was approved Friday in a separate 219-211 vote.

But because the House failed to approve a separate measure for workers displaced by trade deals known as Trade Adjustment Assistance (TAA), the entire package sunk.

The TAA bill failed in an overwhelming 126-302 vote after House Democrats decided opposing the workers assistance legislation was their best strategy for defeating fast-track, which is mostly opposed by the Democratic conference.

For some trade supporters, it felt as if defeat had been snatched from the jaws of victory, and Ways and Means Committee Chairman Paul Ryan (Wis.) and other GOP leaders appeared visibly frustrated by the stunning events.


Article continues:


Dems deal Obama huge defeat on trade – By JAKE SHERMAN, JOHN BRESNAHAN and LAUREN FRENCH 6/12/15 8:56 AM EDT Updated 6/12/15 4:02 PM EDT

US President Barack Obama and House Minority Leader Nancy Pelosi walk through a hallway after meeting with House Democrats at the US Capitol on June 12, 2015 in Washington, DC. President Barack Obama Friday went to Congress Friday for a frantic round of lobbying ahead of a crucial vote on his sweeping trans-Pacific trade agenda. The House of Representatives is expected to vote mid-day Friday on final passage of so-called Trade Promotion Authority, and while Republican leaders are confident they have the momentum to get it across the finish line, the vote remains a toss-up.
 AFP PHOTO/MANDEL NGAN        (Photo credit should read MANDEL NGAN/AFP/Getty Images)

The House on Friday dealt a staggering blow to President Barack Obama’s trade agenda, as Democrats turned en masse against the president just hours after he made a direct appeal to salvage a centerpiece of his second-term platform.

Lawmakers easily defeated a measure to help workers displaced by free trade known as Trade Adjustment Assistance. The aid package needed to pass in order to enact companion legislation that would give Obama fast-track trade authority to complete the sweeping, 12-nation Trans-Pacific Partnership trade pact.

The vote on the TAA bill was 126-302.

“Whatever the deal is with other countries,” Minority Leader Nancy Pelosi (D-Calif.) said before the vote, breaking her longtime silence on the issue, “we want a better deal for America’s workers.”

The vote came after President Barack Obama, in a last-ditch effort, made a rare visit to the Capitol to lobby for legislation. He implored Democrats to “play it straight” on the decisive vote.

Obama spent roughly 40 minutes with Democratic lawmakers, taking no questions but telling his party to “vote your values,” according to a source in the room.

But Democratic lawmakers rebuffed him hours later, voting overwhelmingly to scuttle the trade package that was a centerpiece of the president’s second-term agenda. Minority Leader Nancy Pelosi (D-Calif.), who had remained silent for weeks on the trade issue, went to the House floor shortly before the vote to speak against the trade deal.

Afterward, Pelosi linked trade to her party’s uphill effort to enact a long-term highway funding bill. “The prospects for passage of” the trade bill, she wrote in a letter to fellow Democrats, “will greatly increase with the passage of a robust highway bill.”

After TAA failed, the House approved fast-track legislation, known as Trade Promotion Authority, in a 219-211 vote. But that vote was largely for show, because enactment of TPA is contingent on approval of TAA.

The House could vote again on TAA next week. If enough votes flipped to pass it, it would mean that TPA prevailed as well, because the two bills are interconnected.

House Republican leaders say they have 100 votes for TAA, and Democrats would need to provide 118 if another vote happens. On Friday, Democrats provided 40 votes for TAA, while 86 Republicans supported it. In other words, Democrats would need to essentially triple their vote total to pass the measure.


Article continues:


The fight of Paul Ryan’s career – By Jake Sherman and Anna Palmer 5/20/15 5:07 AM EDT

WASHINGTON, DC - APRIL 22:  Committee chairman U.S. Rep. Paul Ryan (R-WI) (L) listens to ranking member Rep. Sander Levin (D-MI) (R) during a hearing before House Ways and Means Committee April 22, 2015 on Capitol Hill in Washington, DC.  The committee held the hearing on

The questions from skeptical lawmakers come in rapid fire — but Rep. Paul Ryan, they say, always seems to have a ready response.

What would President Barack Obama’s trade deal mean for steelworkers in the Rust Belt? How would it affect agricultural interests in the Midwest? Most commonly, House Republicans need to be convinced this isn’t simply a power grab by a president they don’t trust.

Over the past several months, the Wisconsin Republican has worked — almost single-handedly, and quite stealthily — to build support to give Obama additional authority to negotiate a massive trade deal with Pacific Rim nations. It’s one of the most aggressive, meaningful — and risky — legislative efforts of Ryan’s political career. More than perhaps any leading House Republican, he is taking ownership of the issue — and failure is still very much a possibility.

The Senate is almost certain to clear the so-called trade promotion authority legislation before its Memorial Day recess at the end of the week. When the bill reaches the House, Capitol Hill insiders are predicting one of the toughest legislative battles of the Obama era.

Trade politics scramble ordinary legislative coalitions, making this whip operation tough and unpredictable. More than 150 Democrats are vehemently opposed to the trade bill despite the push by a president of their own party. And Republican leaders like Ryan are working to close ranks behind the Democratic president they tried to unseat.

In many ways, it’s what Ryan’s been waiting for: the chance to put his imprimatur on the Ways and Means Committee, the top-notch panel on which he has served for many years.

If he’s successful, it will be a legacy-burnishing accomplishment. If Ryan fails, it matters little whether Democrats and Republicans are to blame. Ryan’s detractors are sure to relish in an I-told-you-so moment months in the making. While he’s universally known as a policy wonk, some Republicans privately wonder whether Ryan has the vote-counting acumen to get complex legislation through the House.

“I just think it would be a big mistake for our country if we were to fail to do this,” Ryan said in an interview Tuesday, speaking broadly about trade promotion legislation. “I think this would be a punctuation mark on the declining narrative of America and we should not have our fingerprints, as Republicans, on anything that makes it look like we’re in decline. Trade is very important, it’s about time that this administration gets around to it. Forget our party, this is important for our country.”

In an almost cruel turn of events, Ryan’s prospects for success hinge partly on the president who defeated him and Mitt Romney in the 2012 election. With House Minority Leader Nancy Pelosi (D-Calif.) against the legislation and her deputy, Steny Hoyer of Maryland, all but silent, the president is now leaning hard on the Congressional Black Caucus to support the effort, with little appreciable success.

Asked how many votes Democrats need to provide, Majority Whip Steve Scalise (R-La.) said, “more than they have now.”

Article continues: