October 21, 2003

"Read Your Script!" Nightly Business Report (October 27, 2003)[TV]

These days it is difficult, to put it mildly, to make much progress toward freer trade when a Democrat is in the White House. Labor unions contribute an awesome share of resources--money and volunteers--to Democratic campaigns. And the fallout from the macroeconomic policy mistakes of the 1980s convinced America's labor unions that freer trade destroyed their jobs and is not their friend. By and large they are wrong, but that's not an argument any Democratic politician is or will soon be eager to take on.

It is supposed to be much, much easier to make trade freer when Republicans are in the White House. The downsides of change brought about by trade--displaced workers and shuttered no-longer-competitive factories--aren't the Republicans' core concerns. Their core concerns are the foreign-funded factories and the booming high-tech and leading-edge exports that freer trade expands. They are supposed to focus on the creation of wealth: growing the pie. The Democrats are supposed to focus on the distribution of wealth: reslicing the pie to diminish the extremes of wealth and poverty, and to make sure that children don't grow up in dire poverty that robs them of real equality of opportunity later on.

But these current Republicans in office haven't read their script: steel tariffs, blocks to agricultural imports, an unwillingness to seriously negotiate at the WTO meeting at Cancun, and now the public relations plan to blame China for unemployment--none of these are intended to or in fact will grow America's and the world's wealth. We would all be much happier if this administration recovers its bearings. It still has at least 13 months to run, after all. And its successor may well be as little inclined to move toward freer trade than this one.

Posted by DeLong at October 21, 2003 02:44 PM | TrackBack

Comments

You are completely on the mark in your criticisms of the current administration's trade policies, and, what is more, by refraining from "Type M" arguments, you make it easier for those on the other side of the political divide to voice their agreement with you. If only a certain NYT columnist would emulate your method here, rather than launching into predictably histrionic attacks that prod even the disenchanted members of the opposition to circle the wagons ...

The present administration has had little to offer to the libertarian wing of the right, and I suspect, no, am certain, that the only thing keeping them from abandoning the GOP is that the likely alternatives seem certain to be even worse. What happened to the Howard Dean who was once a backer of free trade, and who once worked to rein in Medicare costs? So much for plain speaking, eh? But what may be politically suicidal for a Democratic presidential candidate ought to be the bread and butter of a supposedly conservative Republican, and yet Bush has shown so little enthusiasm for free trade that he makes Bill Clinton look like a Randian by comparison.

Posted by: Abiola Lapite on October 21, 2003 02:44 PM

Based on the record of this administration, can anyone really expect it to behave in a way that is consistent with some set of principles? So should anyone be surprised when its actions seem to flow from trying to find an immediate sound-bite answer to complex questions?

Posted by: Donald A. Coffin on October 21, 2003 02:49 PM

And the fallout from the macroeconomic policy mistakes of the 1980s convinced America's labor unions that freer trade destroyed their jobs and is not their friend. By and large they are wrong, ...

Four or five days a month, my law partner goes to Cookeville, Tennessee to preside over Chapter 7 meetings of creditors. You would not believe how many of these people had to file because their jobs went to Malayasia, and there are no new jobs. So, the justification for this is that the rest of us are better off because we get cheaper blue jeans and stuff.

I do not understand two things. First, if the comparative advantage of other countries is their willingness to work for a lot less money than one needs to live here, and now we are losing even pretty good high tech jobs, what exactly is the American comparative advantage that is going to help the labor movement protect its people?

Second, "by and large" obviously does not include the displaced worker, who is not going to find a job in Cookeville. So, how do you justify the immiseration of some so the rest of us can have cheap blue jeans?

So, why exactly is the labor movement wrong?

Posted by: Masaccio on October 21, 2003 04:01 PM

AL

Your only real point was that the Dems are not being strong advocates of free trade. True and regrettable. But Bush43 has preached free trade while his has practiced protectionsim. So Brad DeLong's statements were completely on the mark - if not a little gentle to this White House.

Posted by: Hal McClure on October 21, 2003 04:36 PM

AL

Your only real point was that the Dems are not being strong advocates of free trade. True and regrettable. But Bush43 has preached free trade while his has practiced protectionsim. So Brad DeLong's statements were completely on the mark - if not a little gentle to this White House.

Posted by: Hal McClure on October 21, 2003 04:39 PM

Dean and Gebhardt are way protectionist while Kerry seems to be more in favor of free trade than Bush. There is a real difference among Dems. If they get the right person in office, the Democrats can get good trade agreements. Mr. Bush has not because he is too unilateralist. By definition, trade agreements require bilateral or multilateral AGREEMENTS.

Posted by: bakho on October 21, 2003 05:06 PM

Dear Brad

A very excellent essay. One problem is that it does tend to undermine your campaign against the 700 word limit. I assume that is why you didn't have time for the excellent informative M-type arguments which you would otherwise have included (no irony). I'd say the only real problem is since when has soundbite speak impacted the English language to the extent that it smalls your vocabulary so much that even you use grow as a transative verb ?

Posted by: Robert on October 21, 2003 06:51 PM

I would love to see Brad respond to Masaccio's question. While I enjoy coming to this site for economic education, I wish the Prof. would unpack some of his comments disparaging the interests of labor.

Posted by: vsa on October 22, 2003 01:28 AM
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