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January 16, 2004

Comments

back40

Well said.

john s

Please come and comment over at Crooked Timber; the same issue is being discussed as a result of an article by Nicholas Kristof in the New York Times. I'm a bit lonely trying to make the same point you make here.

axiom

The Iowa Caucus, Democratic Face Off and Liberalism used to accompany eachother every 4 years, but with Unions seeing power dwindle to a meager 10% of the labor population the issue of protectionism, 'fair trade' and isolation are increasing the factor for the Democrats. I like to defer to George Will on the issue of trade and how Conservatives were wrong about the issue of free trade yet as a whole Conservatives have come around to see the obvious benefits of free trade.

Gephardt has moved towards the protectionist view because his base IS the big unions. In the Midwest especially, the unions wield adament power. It's not quite the unchallenged power of the past when unions represented 60% of the American Labor force, but it's still formidable to elevate a candidate such as Dick Gephardt.

Between Dean and Gephardt they have quite similar views on trade; both want 'fair trade'. Dean tried to define it after a recent speech to a questioner by describing 'fair trade' like so.

I'm paraphrasing from memory, but this is pretty accurate.

"Here's what I'm proposing. I'm proposing a trade policy that protects workers rights, environmental rights and a living wage. There are consequences such as an increase in the costs of goods on the shelf, but the benefit is that moving operations or manufacturing overseas won't look as appealing due to the new regulations that other nations would be required to enact."

In reading Dean I see it like this. Other nations can put their people into mass graves, but if they dare do a thing to labor rights or environmental rights well then the US isn't going to trade with them. This stretch is really an attempt to put Deaniacs in a fit so I can get a clear cut answer as to how Dean would handle Iraq differently.

rob

The Guardian leader 17/1/04 sees Bush's faults & Democratic candidates' virtues in the following light -

"But a readiness to pursue a more collective, more respectful, less confrontational, less obviously self-interested approach to global issues"

The Guardian in their eagerness to oppose Bush have not noticed the anti-free trade stance of Dean, Gephardt & co.

Scott

I'm afraid that the world seems poised to enter another round of protectionism; led, once again by the U.S.A. It just seems to be where the political winds are going. A close relative who runs an economic survey agrees. It's not a sure thing, but I'm afaid of the passage of some legislation akin to the Taft-Hartley act that would lead to protectionist barriers accross the board and economic stagnation. (My worries are somewhat selfish, I'm entering my wealth building years, but either way such events would not be a good thing).

Simon

I am afriad that no one can win the Iowa, South Carolina and other primaries without some gesture towards protectionism. It is clear that Gephardt is by far the worst of them. The Slate article is also very good. However, it is worth analysing their views BEFORE embarking on the campaign trial to see perhaps more realistic views (Dean supported NAFTA, Clark spoke forcefully for Free Trade). Bush's treat to ruin the WTO and retreat to bilateralism, with favourable terms for those who support his wider agenda, is only made to look sane when confronted by the worst of Gephardt's lunacy.

JK

Gephardt is not in practice taken that seriously as a candidate. See the price quote over time for his candidacy on the Iowa Electronic Markets:

http://128.255.244.60/graphs/graph_DConv04.cfm

greeneyeshade

scott,
good post, but the protectionist law you mean is smoot-hawley; taft-hartley was about labor unions.

Scott

"'Level playing field' advocates—including, most prominently, the labor unions—say that it will prevent American jobs from being stolen. Another way to say this is that it will prevent jobs in poor countries from being created."

It's this simple: why should a job in one country be lost so that a job can be created in another country? What obligation does the US have to the world that is so important that it must allow its own citizens to be deprived of jobs so that someone overseas can have one?

Is this just down to the have-nots drowning out the voices of the (for the time being) haves or is there some silver lining for the recently fired American employee in this picture that I am missing?

I'm not saying free trade is good or bad, just raising a very simple point -- one which I have yet to see any Gephardt opponent / anti-anti-free trader / etc take the time to respond to. It was one thing when it was just textiles jobs that were headed overseas, but now it's the tech sector, and that's going to hit a lot closer to home with anyone who dreamed of hopping on the PC/e-gravy train of the 80s and 90s, once it gets up to speed.

I can almost guarantee you this is why politicians seen to be protecting -- by any means, right or wrong -- American jobs, will gain votes even if they otherwise don't appear to offer anything else of any merit. I voted for Bush Jr in 2000 mainly because he was suggesting the budget surplus be "returned" to the taxpayer -- I didn't care too much about the exact details, I just wanted that issue to have a big part in the national dialogue, ie I was sold on one issue that I considered that important.

If the democratics ever wake up to it, this is probably the one issue (with the right marketing) that could rival terrorism in the eyes of the average American voter, and give them a decent shot at reclaiming the White House.

Ryan

"Trade is not a zero-sum game: it's a mutually enriching exchange that allows gains in living standards through each country's being able to specialise in what it produces."

I'm surprised noone has challenged this. As you may be aware, I am not an expert in economics. Nonetheless this sounds like a ridiculous statement. Trade will ideally be a mutually enriching process, sure. But sometimes you get ripped off, no? Sometimes a country like vietnam starts selling a whole load of coffee on bad IMF advice, and there's a glut in the coffee market, and prices plummet, and this is enriching for consumers of coffee and enpoverishing for producers of coffee.

Sometimes countries aren't able to specialise in what they have a competitive advantage in, for example when the US/UK floods the developing world with agricultural products and erects tarrifs. It's still trade, if not 'free' trade. So I dispute your claim that trade is a mutually enriching exchange.

Go ahead Mr Kamm, sneer at my ignorance, I thought I'd rattle the cage anyway.

PS: Gore and Leiberman wanted to protect the environment and labour standards? No way! What fools! If we insisted that products were built in factories with a fire escape, then the poor would never escape from poverty! -he writes with sarcasm.

JK

"Gephardt is not in practice taken that seriously as a candidate".

Just a few hours later and he's already out of the race altogether. I rest my case.

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