Q&A B-2 and 1968 Executive Order 11387 Re Exporting Amn Jobs

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Q&A B-2 and 1968 Executive Order 11387 Re Exporting Amn Jobs

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---------------------------- Original Message ----------------------------
Subject: Q&A B-2 and 1968 Executive Order 11387 Re Exporting Amn Jobs
From: Solutions
Date: Wed, December 9, 2015 9:47 pm
To: ReadingLiberally-SaltLake@johnkarls.com

Dear John,

Question B-2 of the Short Quiz was: “If Prof. Reich does correctly identify the “free flow of capital” as the culprit [i.e., the cause of the exportation of American jobs], does he recommend re-instituting 1968 Executive Order 11387 imposed by President Johnson and continued by President Nixon for the first 5 years of his Presidency (please see our 2/12/2014 Six-Degrees-Of-Separation E-mail Campaign described in the first section of http://www.ReadingLiberally-SaltLake.org)?”

Our 2/12/2014 E-mail Campaign to President Obama said, inter alia: “An erudite 1969 legal analysis of that OFDI Program [established by Executive Order 11387] appears in Duke Law School’s Journal of Law and Contemporary Problems, Vol. 34, No. 1, pp. 47-63, and is available on-line at http://scholarship.law.duke.edu/lcp/vol34/iss1.”

First Q for You.

That legal analysis says that the purpose of Executive Order 11387 was to reduce the then-existing foreign balance-of-payments deficit, rather than to halt the export of American jobs which is America’s current problem.

So would the renewal of Executive Order 11387 for a different purpose be legally valid?

Second Q for You.

Would the renewal of Executive Order 11387 violate any U.S. treaty such as our World Trade Organization (WTO) obligations?

Your friend,


---------------------------- Original Message ----------------------------
Subject: Re: Q&A B-2 and 1968 Executive Order 11387 Re Exporting Amn Jobs
From: ReadingLiberally-SaltLake@johnkarls.com
Date: Thu, December 10, 2015 4:26 am
To: Solutions

Dear Solutions,

Thank you very much for your e-mail.

Reur First Q

The erudite legal analysis referenced in the 2/12/2014 E-mail Campaign to President Obama was contained in the Duke Law School’s Journal of Law and Contemporary Problems and was authored by a partner in Washington DC’s premiere law firm, Covington & Burling.

The article (1) described in detail the OFDI Program which controlled the “free flow of capital” in order to reduce the then-existing foreign balance-of-payments deficit, (2) stated that the statutory basis for Executive Order 11387 establishing the OFDI Program was Section 5(b) of the 1917 Trading With The Enemy Act, as amended, and (3) also stated that as of the date of that article (12 months after the issuance of the Executive Order) there had been no legal challenges to the validity of the regulations.

The 1917 legal provision on which the 1968 Executive Order was based, is still in effect.

That 1917 legal provision does not, by its terms, restrict the purpose for which capital exports from the U.S. can be restricted.

Moreover, America’s balance-of-payments deficit today dwarfs each of the 1968-1974 deficits.

Accordingly, our 2/12/2014 E-mails to President Obama made the point that the same balance-of-payments justification still exists, in addition to which America would be “killing several birds with one stone” --

“Although the objective of the 1968 Executive Order was to reduce the deficit in America’s foreign balance of payments, additional benefits would flow from a similar Executive Order today -- (1) the retention of more American capital in the U.S. would mean that the additional capital would have to be invested in domestic projects that would employ more American workers, thereby reducing or eliminating American unemployment; and (2) the resulting increase in the ratio of capital employed per American worker would cause the real income of American workers to rise once more. It is time we took action to stop pitting American workers against the world’s poorest laborers, especially those who are not even protected by their own governments with regard to workplace-safety rules, environmental standards, child-labor laws, etc., etc.”

Reur Second Q

Every law school course in international law begins with the principle that international treaties are NOT like contracts!!!

Because an international treaty lasts ONLY SO LONG AS the parties want it to continue.

This over-arching principle should NOT be confused with any enforcement provisions that might be contained in a treaty.

Because if a treaty partner attempts to apply an enforcement provision, the party against whom enforcement is sought can simply renounce the treaty. In other words, the application of an enforcement provision against a party to a treaty is only possible if that party wants the treaty to continue in effect.

History contains zillions of examples of international treaties that were breached.

Including zillions of examples where no enforcement was sought because the aggrieved party did not want to risk renunciation of the treaty by the breaching party (either because the treaty contains other provisions that were important to the aggrieved party or because the aggrieved party simply wanted to preserve an excuse to continue to complain).

So there are two answers to your Second Question.

First answer.

The World Trade Organization (WTO) has NEVER attempted to regulate foreign-exchange controls, including foreign-exchange rates.

Indeed, U.S. complaints about China’s foreign-exchange controls and foreign-exchange rates have been such a constant feature of international dialogue that the complaints never rate more than a footnote, if that, in news reports about meetings with Chinese leaders.

Second answer.

Even if there were (AS APPEARS DOUBTFUL) some obscure bi-lateral treaty in which the U.S. had agreed, UNLIKE China and the WTO, to refrain from foreign-exchange controls, the U.S. could simply ignore that provision and, if the other party sought to enforce it, the U.S. could then simply renounce the hypothetical obscure-bi-lateral treaty.

After all, why should the U.S. continue to export American Jobs because of some obscure bi-lateral treaty which probably does NOT even exist, much less have any importance to the U.S. (at least not in comparison to the continued destruction of the American economy)???

Closing Comments

The E-mail Campaign to President Obama was a response to his claim that he would, with a mere stroke of his pen, issue whatever Executive Orders would benefit America. Though admittedly, he probably was not thinking of saving American jobs from being exported when he made that claim.

An interesting Q would be what would happen if a bill were introduced in Congress to enact the old OFDI program that had existed 1968-1974 by virtue of a mere Executive Order.

In other words, how would our pols vote if forced to choose between their campaign contributors who export American jobs, and American voters whose jobs are being exported???

Thank you again for your inquiry.

Your friend,

John K.

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