Say a Prayer for the Free-Trade Democrat
Where have all the free-trade Democrats gone (long-time passing)? I noted earlier today that Hillary Clinton adviser Mark Penn got shitcanned for his ties to the Colombian government, specifically his work to push through a pending free-trade agreement with that country and these United States. Clinton, whose husband helped push through the North American Free Trade Agreement, is against the Colombian deal.
Given the demagoguery on the trade issue done during the Democratic primary in Ohio, it's worth dwelling on Clinton's and Barack Obama's trade positions, which suck. From the LA Times:
The Colombian trade pact sent to Congress on Monday by President Bush represents a win-win for the United States. Colombia already enjoys U.S. tariff preferences, and has since 1991; in exchange for making them permanent, Bogota would eliminate its tariffs on U.S. exports, which would greatly boost American manufacturers. To refuse the deal would alienate pro-U.S. governments across Latin America and push them closer to hostile leftist rivals such as Venezuelan President Hugo Chavez. If Clinton and Obama make good on their promises to revisit NAFTA, meanwhile, it could spark a trade war with Canada and Mexico and reverse more than a decade of growth for all three North American economies.
Bill Clinton proved to Democrats that the party could both support sensible trade policies and win elections. It's a shame that his potential successors have forgotten that lesson.
Yet hardcore Dems seem hell-bent on pushing anti-trade as a defining characteristic of their party. Here's Talking Points blogger Josh Marshall talking about Penn:
Having your key campaign advisor also be an international man of mystery-cum-PR-lobbyist-cheeseball is fairly problematic. But for Hillary's sake, when her political future is on the line in a state like Pennsylvania, wracked by the loss of industrial jobs for decades, you think he could have waited a few more weeks before prancing off to help get a new free trade pact passed?
I think there's little doubt that Penn is a tool when it comes to having too many masters and all that, but do Democrats--whether in the rank and file or in the egghead brigades--really think that Pennsylvania's (or Ohio's, of Michigan's) lack of industrial jobs has anything to do with Colombia? Or even NAFTA for that matter? For starters, manufacturing employment peaked in the U.S. in 1979.
Blogger extraordinaire Alan Vanneman, a man on the Democratic side of the debate, plays out a different take--and one I wish were more popular across the politicial spectrum:
Yes, poor Pennsylvania, staggering under a 4.9% unemployment rate (February 2008). Poor Pennsylvania, with a per capita income of a mere $36,680 (2006 data), ranking only 18th in the U.S. A free-trade pact with mighty Colombia (2006 income per capita, a whopping $2,740) would surely blow a huge hole in the Keystone State's economy.
Hillary Clinton, Josh Marshall, and a lot of other "liberals" should hang their heads in shame at this disgraceful "Fuck the Latinos" campaign strategy.
What was NAFTA's effect on unemployment in the U.S.? Read about it here.
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Chris Hayes put it best:
I'm glad the term "liberal" was italicized here since I consider myself a classic liberal who is not above some tariff engineering once in a while.
For instance, my big problem with NAFTA was how we exported our ADM farm subsidies INTO Mexico - thus depriving the small Mexican farmer his corn trade. We effectively exacerbated the immigration "problem" many times over to benefit agri-business here.
Most countries have anti-dumping trade provisions - is that protectionist? We export computer trash to evade environmental law - is that free trade?
Unfettered trade is not free trade. This is a tough issue and a one-size-fits-all mentality is not always the best. "Free" trade will soon become another loaded, meaningless political term.
For instance, my big problem with NAFTA was how we exported our ADM farm subsidies INTO Mexico - thus depriving the small Mexican farmer his corn trade.
That would a problem with farm subsidies, not free trade or NAFTA.
A counterpoint to alkalai and Chris Hayes.
Hillary Clinton, Josh Marshall, and a lot of other "liberals" should hang their heads in shame at this disgraceful "Fuck the Latinos" campaign strategy.
Oh, good, a cheap race card.
Most countries have anti-dumping trade provisions - is that protectionist?
Yes.
We export computer trash to evade environmental law - is that free trade?
Yes.
Unfettered trade is not free trade.
Actually, those are pretty close to synonymous.
"Free" trade will soon become another loaded, meaningless political term.
That does appear to be your goal...
Yet hardcore Dems seem hell-bent on pushing anti-trade as a defining characteristic of their party.
Hey, hows that whole liberaltarian alliance thing working out?
We just need higher taxes; the economy will really take off.
The tariff thing has been pretty much taken care of, by flushing the dollar down the toilet. Will the Democrats give George W Peron a public "thank you?"
Oh, good, a cheap race card.
Indeed.
It is stunning how many people see racism where plain old protectionism is clearly to blame.
Not that there is much moral difference between the two. The former is less excusable solely because society has matured to the point where racism is considered reprehensible. I hope that someday society will mature enough to reject protectionism too.
Trade barriers placed on New York City.
Women, minorities hardest hit.
Gee, why would politicians court a huge constituency who thinks that free trade is bad? Because their votes count as much as anyone else's is my guess.
"That would a problem with farm subsidies, not free trade or NAFTA" - val.
You are correct, sir - and you help establish my point.
When we import BMW's we import subsidized health care for their employees. Ford is not on a level playing field.
So what is the problem? We are the largest debtor nation by far in terms of trade, consumer, and national debt. We're insolvent - just no one has called in our margin yet.
Ford is not on a level playing field.
German health care policy has nothing to do with the fact that Ford manufactures shitty cars.
Of course not.
Everyone knows that Ford, GM, and what's left of Chysler design and build shitty cars because of the unions.
I find this whole fiasco to be a massive exercise in hypocrisy. I agree that the murder of unionists creates an environment hostile to labor organization, and represents a horrible legacy that will take decades, probably, to reverse.
It is entirely within the unions' and Democrats' perogative to try to fix that.
But they should have done this when Congress was voting on the Andean Trade Preference Act last year and this spring, because that act was what most directly benefited Colombia.
What this complaint amounts to now is that we, as rich Americans, shouldn't be allowed to make profits as long as someone in the country we're selling to is oppressed. We should, however, be allowed to purchase goods from (and thus, aid) the corporations often implicated in the murders because it helps the poor Colombians make better wages.
We are the largest debtor nation by far in terms of trade...
Trade deficits are part of a current account deficit which is balanced by foreign investment in the US, which in turn is an investment in the high productivity of the US economy. Investment in capital, for reference, increases wages by increasing labor productivity.
...consumer,
Free trade means cheaper goods and less need for consumer debt to maintain a constant standard of living. You're complaining about either monetary policy or a lack of capital controls.
and national debt.
Free trade means cheaper goods and a lower national debt to maintain a constant level of government services. Tariffs are an insignificant portion of national revenue and have been so for decades. Trade flows as a whole are smaller than federal spending, and free trade has no positive relationship with national debt. You're complaining about either low income taxes or government spending.
Point being that "free" trade is just an abstraction - and despite NAFTA, the old folks in Buffalo can't drive into Canada to buy their bladder and boner meds. The "free enterprise" Big Pharma guys don't like that.
And GE wanted to buy Honeywell several years ago then cleared the US regulators and HON agreed to the deal.
Until the EU killed it.
If there were "free trade" no lengthy agreement would be needed - instead the NAFTA agreement was some 4000 pages. I saw plenty of restrictions in those 4000 pages.
Alan Vanneman truly sounds like a "Blogger extraordinaire" after Reason's heart: race-baiting over a trade pact. What a sleaze.
Reason might consider acknowledging that Obama supports Bush's SPP, aka "NAFTA on steroids". He's completely fake, but in a "libertarian"-friendly way.
Wow. The dollar is at nearly all time lows, helping American manufacturing exports as never before. Right now, for the same reason, import are relatively expensive. If these chuckleheads go after the (semi) free trade treaties under these conditions, they should expect other countries to retaliate, exports to be stymied, and the job loss through the rust belt to be greatly accelerated.
In typical Reason fashion, this post conflates a pending "free trade agreement" with actual free trade, a common but altogether mistaken assumption.
A big part of these trade agreements is about forcing U.S. intellectual property laws upon poor countries. For instance, requiring state-run health care systems to use only brand-name pharmaceuticals, rather than cheaper generics. The effect of that is that more people die without access to life-saving drugs in order to boost the profits of Big Pharma.
That ain't free trade -- that's mercantilism.
21 posts on the Democrats' position on trade deals, and the words "labor" and "environmental" have yet to appear.
A race card, on the other hand, finds it way into not just the comment threads, but the blog post itself.
shrike,
Maybe we should call it "freer" trade to address your semantic objections?
Or if your point is that if some tarriffs should remain then they should all remain, how do you justify that?
And if it's impossible not to import some sort of "subsidy" along with a foreign made good in today's world, how does that justify the status quo, i.e., the exact amount of tariff being charged currently?
I remember when the John Birch society used to be sane when it came to economics. American Opinion bookstores would carry F.E.E. tracts and books by Mises, Hayek and Hazlitt. Then they discovered that the people living south of us had darker skin tones, and those living north of us tended to be more liberal. Today the biggest drum the JBS beats on is protectionism in one form or another.
NAFTA is hardly perfect, but you don't fix it by replacing it with Smoot-Hawley II. You fix it by abolishing it and replacing it with NOTHING! Allow the free flow of goods and people across the borders! If free trade between California and Oregon is good, then free trade between California and Baja is good as well.
Free trade is a net economic benefit. Even if the other nation produces everything cheaper than you. Even if the other nation still has tariff barriers in place. Even if the other nation has brown skinned people. Even if the other nation has deplorable civil rights. Adam Smith knew this. David Ricardo knew this. Hayek and Friedman knew this.
p.s. I'm a minarchist, but I'm more than willing to compromise if it gets me closer to my goal of liberty. Thus I would accept a small 5% tarriff, but only if it were uniform across all goods from all nations. And I would also accept restricting visas, if the limited visas could be auctioned.
According to Atrios, this scary free trade pact that Hillary is so proud she opposes actually simply extracts concessions from Colombia for the US, in order to maintain the free access to our market that Colombia already has.
So once again the anti-trade folks are being the fucking Keystone Cops.
And why shouldn't we demand that other nations respect our IP laws if they want to trade with us? Even pure theoretical free trade requires laws against stealing.
Ford and GM don't build shitty cars.
http://www.thecarconnection.com/Auto_News/Daily_Auto_News/Power_Initial_Quality_All-Time_High.S173.A7086.html
But they do have legacy costs that make competing tough. And those cost were driven by demands of unions that were met by management. I don't see a particular problem there.
If worker's health care is a part of the cost of imported BMWs, then aren't the German taxpayers - who pay for the nationalized health care - actually subsidizing the American consumers who buy the BMWs? Sounds like a good deal to me.
the words "labor" and "environmental" have yet to appear.
Perhaps this is because shooting down free trade agreements or bundling labor and environmental standards with them does nothing to forward either the general population's standard of living or the environment. Rather, it just makes everyone poorer in general and benefits inefficient industries. Poorer people care less about the environment, and keeping inefficient industries are as much help to the labor movement as abolishing the wheel.
"Or if your point is that if some tarriffs should remain then they should all remain, how do you justify that?" - fyodor
I am not a proponent of tariffs.
I am a proponent of uniform codes - ie., If we require FDA inspection for pharma raw materials then the Chinese should be held to the same standards for their exports to us.
UCC for electronics is a good example - the Chinese have no problem with that code but when it comes to food and chemicals they sing a different tune.
some fed,
It hasn't generally been my experience that easy, true, and devestating arguments against an anti-"Free Trade" position are left lying there.
You disagree with the Democrats' position? Fine, but it is dishonest to misstate what then position is, and then presume to critique it.
And why shouldn't we demand that other nations respect our IP laws if they want to trade with us?
Because our IP laws are shit and need to be reformed? Do we really want to export our crappy ass IP laws?
And why shouldn't we demand that other nations respect our IP laws if they want to trade with us?
Put bluntly, nations should not be trading with nations. Rather, private interests should be trading with private interests, and their trade should not be held hostage to their nations' laws.
"Hillary Clinton, Josh Marshall, and a lot of other "liberals" should hang their heads in shame at this disgraceful "Fuck the Latinos" campaign strategy."
My "Fuck the Latinos" Strategy begins here:
http://i55.photobucket.com/albums/g142/jooshh/lohan-jessica-alba.jpg
"And GE wanted to buy Honeywell several years ago then cleared the US regulators and HON agreed to the deal.
Until the EU killed it."
I worked at Honeywell's executive offices when that all happened and I say smart move by the EU. The Honeywell chairman at the time -- Michael R. Bonsignorie was a fricking narcissistic idiot. I remember him getting off of the elevator with is 5-year-old grandson as he bellowed, "Behold the heir apparent!
Jack Welch was wise to shit him out. And so was the EU.
Carol--where are you?
Ford and GM don't build shitty cars.
HAHAHA!
I've owned Fords. I've driven GMs. Every one, without exception, had shitty quality control. I now own two Toyotas. They're both extremely reliable. I'll never buy another union-built American-brand car again.
Try leafing through an issue of Consumer Reports, or try comparing the resale value versus purchase price of three-year-old cars, if you want to know which companies build the best quality cars for a given price point.
Good thing they don't have unions in Japan. Or Germany.
To those who accuse me of race-baiting, I'm sorry but both Hillary and Obama are using heavily nativist language. People in Ohio knew that NAFTA was not to blame for their problems, but Hillary and Obama couldn't stop talking about it. And the notion that free trade with Colombia is somehow going to unhinge the U.S. economy is beyond ridiculous.
"Average" Americans are, not surprisingly, unhappy that their take-home pay has remained flat for the past eight years. So why not, if not "soak the rich," at least raise their taxes? (I'd be in favor of it.) Since taking control of Congress, Democrats have voted to continue subsidies to millionaire cotton plantation owners in Mississippi and boosted federal mortgage loan guarantees to homes worth more than $700,000, while refusing to make hedge fund billionaires pay income taxes on their income (they pay capital gains instead). Hillary and Obama talk about how much they hate imports, and foreigners, while coddling the upper classes. If that's the new populism, count me out.
Good thing they don't have unions in factories in America that build Japanese or German makes, or even site those factories anywhere near towns with a significant union presence.
Good thing the unions in Japan and Germany work better than the ones in Detroit, which are slowly strangling the Big Three as they bleed market share year after year.
Since when do we buy cars so that people can have jobs? I thought that people made cars that people would want and therefore pay for them, not the other way round.
nativist != racist
wrong on economics != racist, either.
Hillary and Obama talk about how much they hate imports, and foreigners... Lie.
http://www.barackobama.com/issues/trade
Trade
Obama believes that trade with foreign nations should strengthen the American economy and create more American jobs. He will stand firm against agreements that undermine our economic security.
Fight for Fair Trade: Obama will fight for a trade policy that opens up foreign markets to support good American jobs. He will use trade agreements to spread good labor and environmental standards around the world and stand firm against agreements like the Central American Free Trade Agreement that fail to live up to those important benchmarks. Obama will also pressure the World Trade Organization to enforce trade agreements and stop countries from continuing unfair government subsidies to foreign exporters and nontariff barriers on U.S. exports.
Amend the North American Free Trade Agreement: Obama believes that NAFTA and its potential were oversold to the American people. Obama will work with the leaders of Canada and Mexico to fix NAFTA so that it works for American workers.
Improve Transition Assistance: To help all workers adapt to a rapidly changing economy, Obama would update the existing system of Trade Adjustment Assistance by extending it to service industries, creating flexible education accounts to help workers retrain, and providing retraining assistance for workers in sectors of the economy vulnerable to dislocation before they lose their jobs.
I must be missing the part about hating foreigners and imports.
To echo joe's point...
If Obama and Clinton could make a plausible case for restricting trade with Europe in order to "save" "American" "jobs", they would.
This is not about racism. It is about demagoguery and taking advantage of people's economic ignorance.
This is not about racism. It is about demagoguery and taking advantage of people's economic ignorance.
Probably true, but I don't think its entirely accidental that their position also allows them to tap into nativist sentiment.
Obama believes that trade with foreign nations should strengthen the American economy and create more American jobs.
Translated: Obama believes that some trade can/should be restricted, unless it can be shown that it "strengthen[s] the American economy" and "create[s] more American jobs." IOW, unless the trade meets some collectivist goal, it is fair game. It is not enough that the trade represents a voluntary exchange that creates value.
Who cares if the trade raises standards of living, reduces prices, supports "creative destruction" of low-paying jobs (moving people, over time, into higher paying jobs), etc.
Wait a second, libertarians don't believe trade with foreign nations should strengthen the American economy and create more American jobs?
Really?
Cuz I'm always hearing them talk about how we should encourage more foreign trade for precisely that reason - because we will be better of, with a stronger economy and more jobs.
Why, right up there in the blog post, I see a link that takes me to a story about how NAFTA has...wait for it...strengthened the American economy and created more American jobs.
I'm so confused.
joe,
You may want to try reading the second and largest paragraph of the Obama position you quoted.
Alan Vanneman isn't wrong. He just sees the things that others are unable to see. A true visionary. Perhaps a guest blogging spot right here on Reason? Give me a "reason" why not!
MikeP,
You mean this?
Fight for Fair Trade: Obama will fight for a trade policy that opens up foreign markets to support good American jobs. He will use trade agreements to spread good labor and environmental standards around the world and stand firm against agreements like the Central American Free Trade Agreement that fail to live up to those important benchmarks. Obama will also pressure the World Trade Organization to enforce trade agreements and stop countries from continuing unfair government subsidies to foreign exporters and nontariff barriers on U.S. exports.
Amend the North American Free Trade Agreement: Obama believes that NAFTA and its potential were oversold to the American people. Obama will work with the leaders of Canada and Mexico to fix NAFTA so that it works for American workers.
Perhaps you can bold the part where he denounced foreigners and imports for me.
Is it the part about getting other countries' governments to stop subsidizing foreign exports?
That's the only reference to "foreign" anything I can see.
Lotsa stuff about economics and trade. Nothing about foreigners. Nothing about Latinos. Help me out here.
Prolefeed, the linked article is my evidence.
I've dealt with you "Toyota people" before. Ya'll got short memories of how much you paid to replace stuff that "never breaks on Toyotas". Just this weekend my brother was showing my buddy his 08 Prius (47 mpg Avg) and talking about how great his (Japanese model) Celica was. He forgot to mention the intake manifold that had to be replaced at a cost of $900 at only a little over 100,000 miles - the reason he started looking at new cars in the first place. (What causes something like that to need to be replaced, ever, I have no idea. He didn't run the thing out of coolant or anything stupid like that). Another friend is the same way. When going on and on about how U.S. cars are bad (including that they represent American capitalism) he neglects to mention the $700 braided hose that the Toyota dealer had to replace on his Camry. I've never had to replace a $700 hose on an American car - cuz the new engines you buy every three years come with new ones...(kidding)
And to top off my anecdotal evidence, here is the million mile truck:
http://wcco.com/local/million.miles.truck.2.651861.html
Perhaps you can bold the part where he denounced foreigners and imports for me.
I'm sorry, joe. I thought you were responding to R C Dean's 5:18pm comment. I guess not, since he didn't mention any denunciation of foreigners or imports.
My mistake. I don't know who you were responding to, though.
And if that doesn't convince you, I can post a few youtube videos or reply about 50 telling you how wrong you are. After that, you're just a racist. So, give up yet?
You're right, MikeP, my bad.
I misunderstood your point.
German health care policy has nothing to do with the fact that Ford manufactures shitty cars.
You would have a very hard time finding a SUV that preforms as good as an Expedition does over rugged terrain for the same price.
The problem is that the market for a good SUV for a good price is smaller then the market for crappy cheaper SUVs that are just as roomy and do not have to ride over rugged terrain.
Ford should have made a crappy SUV that they could have sold for less.
I am not a proponent of tariffs.
I am a proponent of uniform codes - ie., If we require FDA inspection for pharma raw materials then the Chinese should be held to the same standards for their exports to us.
Or else what? We charge tariffs? And how far do we take this? Till every single law on both sides of the border is the same?
Wait a second, libertarians don't believe trade with foreign nations should strengthen the American economy and create more American jobs?
Of course we do, only we would have no reason to say "should" (in that way) because we think it inherently does. By using that word, Obama is directly implying (and I'd think you'd agree with this) that some trade strengthens the American economy and some doesn't. Personally, I can't get a good handle from that passage on what he sees as distiguishing the two, though I see some room for reading things into it. But I mainly see an emphasis on "standing against" bad trade, which leads me to believe he sees more bad in trade than good. But your mileage may vary.
Regarding the racist/nativist thing, without citations Alan Vanneman has hardly demonstrated his point.
Till every single law on both sides of the border is the same?
Works for me!
Right. I too thought I agreed with Obama until I realized that by "should" he wasn't making a prediction.
YOU MIGHT BE AN IDIOT:-)
If you think Barack Obama with little or no experience would be better than Hillary Clinton with 35 years experience.
You Might Be An Idiot!
If you think that Obama with no experience can fix an economy on the verge of collapse better than Hillary Clinton. Whose 😉 husband (Bill Clinton) led the greatest economic expansion, and prosperity in American history.
You Might Be An Idiot!
If you think that Obama with no experience fighting for universal health care can get it for you better than Hillary Clinton. Who anticipated this current health care crisis back in 1993, and fought a pitched battle against overwhelming odds to get universal health care for all the American people.
You Might Be An Idiot!
If you think that Obama with no experience can manage, and get us out of two wars better than Hillary Clinton. Whose 😉 husband (Bill Clinton) went to war only when he was convinced that he absolutely had to. Then completed the mission in record time against a nuclear power. AND DID NOT LOSE THE LIFE OF A SINGLE AMERICAN SOLDIER. NOT ONE!
You Might Be An Idiot!
If you think that Obama with no experience saving the environment is better than Hillary Clinton. Whose 😉 husband (Bill Clinton) left office with the greatest amount of environmental cleanup, and protections in American history.
You Might Be An Idiot!
If you think that Obama with little or no education experience is better than Hillary Clinton. Whose 😉 husband (Bill Clinton) made higher education affordable for every American. And created higher job demand and starting salary's than they had ever been before or since.
You Might Be An Idiot!
If you think that Obama with no experience will be better than Hillary Clinton who spent 8 years at the right hand of President Bill Clinton. Who is already on record as one of the greatest Presidents in American history.
You Might Be An Idiot!
If you think that you can change the way Washington works with pretty speeches from Obama, rather than with the experience, and political expertise of two master politicians ON YOUR SIDE like Hillary and Bill Clinton..
You Might Be An Idiot!
If you think all those Republicans voting for Obama in the Democratic primaries, and caucuses are doing so because they think he is a stronger Democratic candidate than Hillary Clinton. 🙂
Best regards
jacksmith...
p.s. You Might Be An Idiot!
If you don't know that the huge amounts of money funding the Obama campaign to try and defeat Hillary Clinton is coming in from the insurance, and medical industry, that has been ripping you off, and killing you and your children. And denying you, and your loved ones the life saving medical care you needed. All just so they can make more huge immoral profits for them-selves off of your suffering...
You see, back in 1993 Hillary Clinton had the audacity, and nerve to try and get quality, affordable universal health care for everyone to prevent the suffering and needless deaths of hundreds of thousands of you each year. Naughty Girl. 🙂
Approx. 100,000 of you die each year from medical accidents from a rush to profit by the insurance, and medical industry. Another 120,000 of you die each year from treatable illness that people in other developed countries don't die from. And I could go on, and on...
Whose 😉 husband (Bill Clinton) led the greatest economic expansion, and prosperity in American history.
A prosperity that was largely due to economic prescriptions such as free trade that Hillary Clinton is now disowning.
Who anticipated this current health care crisis back in 1993, and fought a pitched battle against overwhelming odds to get universal health care for all the American people.
And in so doing single-handedly created the Republican takeover of Congress, causing a well-divided government and inducing President Clinton to assert that "the era of big government is over." Thank you, Hillary Clinton.
Whose 😉 husband (Bill Clinton) went to war only when he was convinced that he absolutely had to. Then completed the mission in record time against a nuclear power. AND DID NOT LOSE THE LIFE OF A SINGLE AMERICAN SOLDIER. NOT ONE!
Yugoslavia was a nuclear power?
You might be an idiot if you believe you are secretly voting for a third term for Bill Clinton.
" AND DID NOT LOSE THE LIFE OF A SINGLE AMERICAN SOLDIER. NOT ONE!"
Who were those guys whose bodies were dragged through the streets and hung from bridges in Somalia?
And Hillary's "35 years of EXPERIENCE?" How the hell is being married to a cad of a husband qualify as political experience? Maybe Chelsea has years of experience as well?
If you believe that, you are for hell sure an idiot.
If I run for president in 29 years, I am SO counting the time I've spent arguing with you goobers on these threads as "fighting for Democratic values."