Whatever Happened to Free Trade?


With the tedious details of healthcare "reform" and tickle-fighting fantasists sucking up all of the media oxygen, it takes someone like James Pethokoukis, the most informative Greek-American since Dimetrios Synodinos, to remind us that President Obama is neglecting (or purposefully ignoring) a hugely important issue: free trade

Not that Obama has a problem with trade. In his State of the Union speech to Congress last January, he stated an ambitious goal of doubling U.S exports by 2015. It is trade policy that he seems uncomfortable with. That bold declaration in the speech was a direct result of lobbying from Obama's economic advisers. But the wonks aren't driving U.S trade policy in the Obama administration. The political team is. Its priority is passing healthcare reform. To pass healthcare reform, Obama needs his core union support. And a push for new trade agreements would alienate Big Labor.

So Obama has not nudged Congress to pass long-stalled treaties with Colombia, Korea and Panama. Instead, the emphasis has been on get-tough actions such as slapping preliminary duties on tires from China and bricks from Mexico. Nor has he tried to energize the Doha trade talks, pushing Brazil to first litigate via the World Trade Organization and now retaliate. And in the U.S., high unemployment has encouraged protectionist forces in Congress. A bipartisan House group just introduced a new bill to abandon the North American Free Trade Agreement, while one in the Senate is pushing for action against China because of its weak currency policy. 

You know America what needs in an economic downturn? Lunkheaded congressmen trying to restrict trade! (Cato's Dan Griswold, who knows more about this subject than any man should, addresses the "Nafta is bad for America" crowd herehere, and here.) According to Rep. Gene Taylor, a leather-faced Democrat from Mississippi, "At a time when 10 to 12 percent of the American people are unemployed, I think Congress has an obligation to put people back to work." If this makes economic sense to you, dear reader, please explain it in the comments.

Not too long ago, I wondered whatever happened to the free trade Democrat

NEXT: Matt Welch and Steven Greenhut on Stossel, Talking About Public Sector Unions, Pensions, and California

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  1. Not too long ago, I wondered whatever happened to the free trade Democrat.

    He’s probably hanging out in the liberaltarian Democrat’s basement.

    1. Does Terry Michael have a basement? I just assumed he lived in a mental hospital.

    2. He’s probably hanging out in the liberaltarian Democrat’s Mom’s basement.


  2. Day 1 – US abrogates NAFTA
    Day 2 – Canada & Mexico cease all oil exports to US

    1. Is that a threat, puckhead?

      1. If it is, you’re still pucked.

        1. You know, I was just looking through the National Archives, and it turns out that we bought Canada from the UK quite some time ago. We’ll be repossessing the good parts from the poachers shortly.

          1. Was that the section of the National Archives with the exchange agreement with the part of the Vatican Library containing the Donation of Constantine?


            1. Day #3: Major US movie and TV production studios annex Vancouver as part of the US.

              Bayhem ensues.

              1. For me, that would be the Michaelocalypse.

              2. Does that mean we would bet the Olympic Hockey Gold medal?

                1. Freudian slip (crossdresser!): get, not bet.

                2. Freudian slip (crossdresser!): get, not bet.

            2. Dude, we can forge the documents and strong arm the Brits into saying, “Oh, yeah, forgot about that.” And there’s nothing you can do to stop it!

              It’s all a secret plot to make Shatner eligible for the White House, of course.

              1. Do you think he’d pick Leonard Nimoy as his running mate? HE WOULD WIN INSTANTLY.

                1. Without DeForest Kelley as Surgeon General and James Doohan as Sec. of Energy, I’ll have to abstain from voting.

                  And no getting Worf to be in charge of DHS. I’ll not have you messing with the timeline.

                  1. You fucking schmuck. You’re letting the perfect be the enemy of the good.

                    1. On 2nd thought, I could support this ticket, but only with the proviso that President Shat do his “Get a life” speech as his first SOTU.

                      “You! Breyer. Look at you! You’re almost 60. Have you ever kissed a girl?”

                  2. DeForest Kelley and James Doohan are dead. Shatner, Nimoy, and Michael Dorn are all still alive. Don’t talk to us about screwing with the timeline.

                2. I’d vote for that ticket 10 gazillion times!

                3. Don’t they hate each other? Or better put, doesn’t everyone that worked with Shatner hate him?

                  1. Not anymore, no. Takei is the only one he seems to have any remaining issues (it helps that several others are now dead). But apparently him and Nimoy have always been on pretty good terms.

                    1. Is anyone else troubled that we now have the original Star Trek taking over the Executive branch and we already have TNG as the Supreme Court? And does that make Congress DS9? Or are we giving that one to frakking BSG?

                    2. BSG gambled everything on Tigh–I mean, McCain–winning.

                  2. Actually, Shatner and Nimoy have been close friends for decades. They had some disputes early on, during the first year or so of the series (who’s the real star?), but that’s all over and done with.

                    1. Is anyone else mad that they went with a reboot of the original ST and not with TNG, DS9 or Voyager? Shit, couldn’t we have at least ONE movie with the collective casts of TNG, DS9, or Voyager.

                      Oh no, thaw out Kirk, he’s the only ST the public will accept!

                    2. Kirk and Spock are the favorites for us casual fans. Hell, the entire original cast was great. But you’re right that a TNG or DS9 reboot could kick ass.

                    3. Or Voyager, even, but they’d have to at least do TNG first, or I’d say the casual fans would be nonplussed.

            3. That was one great fraud, by the way. One of the greatest in history.

              “Um, yeah. Says right here that I’m in charge of the entire Western Empire. Yep. Bow down to me, biotch.”

              1. Well, it was a lot easier when 98% of the population was illiterate, including most of the Kings and aristocracy.

                And the ability to burn anyone who said “you lie” at the stake tended to put a damper on critics.

        2. Puck you and the moose you rode in on, maple-sucker.

          1. You know, Episiarch, I think that’s a cannabis leaf, not a maple leaf. Which, of course, gives us the right to annex Canada as part of the War on Drugs.

            1. We have the right merely by being the US. I think Andrew Jackson had something to say about that.

              1. Maplefest Destiny?

                1. you write something worth reading.

            2. MMMMMMMMM,…. yeah,…. right.


              Got any of those chocolate chip cookies?

              Or a bag of Cheetoz?

              Hey, look at that cloud just driftin along.

              1. We probably already run Canada on the sly. I mean, you’re talking about a country that fakes Moon landings, shoots its own presidents, attacks itself, and has intimate relations with space aliens.

                And is the idea that the Canadian government is a total fraud that hard to believe? Hell, I’m starting to believe it myself, and I made all this crap up just now.

                1. Damn, that’s a good conspiracy theory…

                  1. You know your flag? It’s actually a 3D stereogram. If you look at it for a while, crossing your eyes a bit, you’ll see the words “Property of the U.S.A.” emblazoned on it.

                    Of course, under NAFTA, you are now compelled to export your own theory of how the U.S. is actually under Canadian control. The fact that everyone’s nukes are aimed at us and that terrorists will land the plane and let you off before blowing it up if you flash a Canadian passport, well, I might believe a theory explaining all that, too.

  3. Free trade is US welfare for third worlders!!!

    1. I agree!

    2. Here here!

  4. Holder Reportedly Failed to Disclose Gitmo Detainee Brief
    ShareThis4:45 PM, Mar 10, 2010 ? BY John McCormack
    Bill Burck and Dana Perino break news today: Eric Holder failed to disclose that he signed onto a brief in support of Jose Padilla in a 2004 Supreme Court case:

    “Holder and company made the argument that traditional law-enforcement tools, such as wiretaps, search warrants, Mirandized questioning, and the like, have served the nation’s security well and were sufficient to do the job. The government need not resort, they argued, to holding terrorists caught in the U.S. as enemy combatants, with no right to a criminal trial or to remain silent or to counsel during questioning, particularly if they are U.S. citizens.”

    Holder and his co-authors wrote in 2004:

    “[We] recognize that these limitations might impede the investigation of a terrorist offense in some circumstances. It is conceivable that, in some hypothetical situation, despite the array of powers described above, the government might be unable to detain a dangerous terrorist or to interrogate him or her effectively. But this is an inherent consequence of the limitation of Executive power. No doubt many other steps could be taken that would increase our security, and could enable us to prevent terrorist attacks that might otherwise occur. But our Nation has always been prepared to accept some risk as the price of guaranteeing that the Executive does not have arbitrary power to imprison citizens.”

    Burck and Perino continue:

    “Holder apparently failed to disclose his involvement in this brief when he was up for confirmation early last year, even though the Senate questionnaire he was required to fill out specifically requested such information and directed him to provide to the Senate Judiciary Committee copies of any briefs filed with the Supreme Court. He disclosed three amicus briefs but made no mention of this one ? or another one renewing his support for Padilla when the case returned to the Supreme Court again in late 2005. (The 2005 brief is much like the 2004 brief, except the language on acceptable risks is absent.) Had Holder disclosed these briefs to the Senate Judiciary Committee, no doubt he would have been extensively questioned about the views expressed in them. It is disappointing, and perhaps troubling, that he did not.”

    A Republican Senate Judiciary Committee aide confirms to ABC News that Holder failed to disclose this brief.


    1. So we have a tax cheat heading up Treasury and a perjurer Attorney General.

      That is some hope and change!

      1. Gobby, gobby!

        I always picture Gobby like the kid-Rosarch sitting outside his mom’s room with a long face as a steady stream of guys muss his hair on the way out….Thank goodness far-right politics give him something to focus his impotent rage on…

        1. Heh. I passed Holder getting out of his GMC Suburban tonight. I wish I had yelled something improper at him now, but I probably would have gotten a taste of the sidewalk courtesy of his Secret Service agents.

          1. I’m betting they just would have looked at you with a quiet smile. You’re not nearly as important or involved in some noble fight as you think, you know?

            As to the overall charge, I’m not sure that failure to disclose something like this=perjury anyway.

            1. Besides, since you, JW, are SO clearly not just a conservative trying to wear a libertarian dress and wig, you would applaud Holder’s alleged stance that the individual civil liberties of individuals should trump the power of executive agencies, right ;)?

              1. You’re a funny man. A sad, twisted and deluded little man, but funny.

                You amuse me. I shall kill you last.

                1. I shall kill you last.

                  I promised not to kill him at all, even if it saved the entire Earth. In return, I dont have to read his drivel. Hail incif!

                  1. But, isn’t it odd seeing John argue with himself?

                    1. Can he be charged with murder if he kills himself and is it a double homicide?

    2. OMG, Holder argued in favor of limits on executive power!!

      Wait, what?

      You’re complaining on a liberatarian website that the current Attorney General is not fascist *enough*?

  5. Is Obama on the record of being in favor of free trade? In his infamous “bitter, cling to guns” remarks he apparently disapproved of the anti-trade sentiment. But is it all we have? I believe that on most issues he made bolder statements that could be interpreted either way. But all I remember from his trade rhetoric during the presidential campaign was his NAFTA-bashing.

    1. Obama like 90% of politicans became anti-free trade because its a vote grabber. Paleoconservative protectionism have been proven it doesnt work.

      1. You better look at history. The US used protectionism during its rise to wealth. So did Britain, Germany, Japan, Korea, China. Britain made the stupid mistake in the late 1900’s to do free trade and that was the beginning of its downward path. By the time of the early 20th century both the US and Germany was beating Britain even though Britain had access to the largest empire in the world. Now the US has stupidly gone over to so-called free trade and it too is going down, deep in debt while its trading partners practice protectionism

        1. How did that there Smoot-Hawley tariff (1930), and reactions to it around the world, work out during the last great depression? (Between 1929 and 1934, international trade declined by two thirds.) Yeah, that’s the ticket!

    2. Did anything Obama said during the campaign reflect his policy positions now?

  6. Politics aside, this government is positively batshit insane on economics.

    Drastically increase spending during a recession? Check.

    Repeal tax cuts during a recession? Check.

    Funnel huge sums of money to political buddies during a recession? Check.

    Nationalize great chunks of two major industries? Check.

    Waste time on entitlement bills rather than deregulation? Check.

    Take steps to ensure that credit remains tight for as long as possible? Check.

    Waste resources on “green” b.s. during a recession? Check.

    Add more protectionist bullshit to slow down our economy more during a recession? Check.

    Continue wasteful military spending? Check.

    And so on.

    1. They’re not batshit insane in their world, ProL. What they care about is the next election, and winning it. They don’t even care about the one after that; why would they care what they’re doing to the country long-term?

      1. If it is any consolation, Canada and Mexico have politicians and pundits of the exact same stripe screaming how NAFTA sold out to the US.

        Interestingly, they will argue that ALL THREE countries “lost” under NAFTA.

        We need a new Bastiat for our age.

        1. I’m afraid that your politicians sucking just as bad as ours is no consolation. If I thought there was somewhere I could go that was saner and freer, I’d be a happier dude.

          1. Switzerland was once my backup country. then they joined the UN. sigh.

            Plus, I dont have the connections I had when I worked there in the early 90s.

        2. We need 300 million of him down here, and you need thirty million of him up there. Just to be on the safe side.

        3. These are the people who think that life would be swell if everything you owned was “locally produced”.

          I imagine they have a little picture in their heads of a tiny villiage, complete with a miller, a baker, a shoemaker, a chicken farmer (free-range only), a cow, a goat, a few pigs, a windmill. There’s a little brook in the middle running over a watermill, milling the grain, and children play in the fields. Everyone sings for some reason, and there are dwarves.

        4. The street named for Bastiat in Paris is a small insignificant one just off the Champs Elysee. Most people probably think he is an Anne Rice vampire character.

      2. Epi
        I don’t think any administration that was just worried about the next election would have done the bank bailouts. That was bound to be unpopular. Whatever else can be said about it, it’s doubtful it was done to win votes but because of a sincere belief it had to be done to avert something awful…Not saying it was right…

        1. Bush did the bank bailouts. He didn’t care about winning the next election.
          The “something awful” they wanted to avert was an inability to finance debt without jacking up interest rates.

          1. SIV, you have to admit that very few administrations, GOP or Dem, have wanted to see interest rates rise during their tenure.

            Besides, I’m not hard on Bush. He knew the bailouts would be unpopular. I think he did it with a sincere belief that if he did not there would worse economic harm. I think Obama is motivated by the same idea in most of his policies, some of which I agree with and many I do not…

            Either way whatever else motivated the bailouts it was certainly not a desire to win elections…

            1. I agree. Too many libertarians are obsessed with finding sinister motives behind politicians’ actions when stupidity is the obvious reason.

    2. I never had any love for the Clinton administration, but Obama’s complete and utter bumbling ineptitude in well, *anything*, is making me long for those years again.

      1. The post 1994 years, surely?

        1. I dunno. The HillaryCare/Travelgate/Vince Foster circus seems like a pic-i-nic compared to this colossal clusterfuck that we have for **cough** leadership today.

          1. Carter: Peanut Clusterfuck
            Reagan: Lackluster Clusterfuck
            Bush: Saddam-duster Clusterfuck
            Clinton: Pecan Clusterfuck
            W: Hercules Globular Clusterfuck
            Obama: US Economy-buster Clusterfuck

      2. It’s almost daily that I find myself once again amazed at the Obama administration’s utter, mind-blowing, bone-shattering incompetence and venality. And something I was just recently noticing: we don’t hear a peep from Hilary. Which means that she also realizes how pathetic these people are and is making sure she keeps her head down and is associated with them as little as possible.

        1. Well she seems to have no problem getting in Iran’s face.

        2. In her defense, she did recently say that our debt was a security issue because a lot of it is held by foreigners.

      3. I feel the same and also felt the same way during Bush 2. Ah the era of Clinton – those were the golden years.

        1. Divided government. Gridlock. All within our grasp in November.

          1. Gods, I can almost taste it.

            Wait, no, that’s Warty.

            1. FREEE-DOOOOM!

          2. Unfortunately, Obama is no Clinton.

      4. After eight years of the retarded son and 1+ of Hopey McChange, I really miss Bill Clinton. That whole living within your means, picking little shit conflicts to get involved in looks pretty damn good to me right about now.

    3. Pro-you’re a smart enough guy to know that there is a significant chunk of the feild of economics that thinks many of those things are exactly what should be done during a recession. It’s not that they are crazy or ignorant of “economics,” it’s that there is honest disagreement in “economics” about what to do in these situations, and they are convinced by a side you are not convinced by.

      1. Well the spending stuff is advocated by a significant number of economists, but that’s like 2 out of 12, a pretty shitty ratio.

        1. “but that’s like 2 out of 12”

          [citation ommitted]

          And, I think you’d have to admit, 2 out of 12 economists is a bigger chunk than the Austrians which libertarians hold so dear can command. This does not prove the latter’s ideas false of course, but by the same logic the fact that “only” 2 out of 12 economists endorse the Obama approach (if true) hardly makes that approach somehow a profoundly absurd economic approach…

      2. Actually, Keynesian economics had been largely repudiated by most economists prior to this recession. It’s return to vogue is a political, not economic, move.

        1. “Keynesian economics had been largely repudiated by most economists prior to this recession”

          [citation ommitted]

          1. Oh, for the love of God. Go read a friggin’ economics text book. Shoot, it was dying back when I was in school. Of my five economics classes, two of which were taught by near socialists, not one thought that Keynesian views on government spending were supported by the evidence.

            The monetarists largely won, even within government. A monetarist policy firmly controls the central banks in the U.S. and in Europe.

            1. Of course the monetarists did not win “within government.” Too wit, the current administration and its embrace of Keynes. Headlines like “We are all Keynesians Know” are common these days. Iirc a fairly well acknowledged fan of Keynes won the Nobel in economics in 2008…

              Of course, I’m not bound to defend Keynes per se. As you yourself note two of your five econ profs were “near socialists” whom I imagine would endorse policy closer to Obama than von Mises…

              1. Oh, no doubt it’s zombie economics now, arisen from the dead. The fight up until this recession was to incorporate some Keynesian theories into monetarism. There’s certainly no such thing as pure anything.

                Arguably, the administration is way off of anything that Keynes would’ve endorsed, so maybe it’s not fair to label their policies with his name.

                Anyway, my point was that it more or less came into vogue to justify massive government spending, not the other way around.

                1. I think too much credit can be given to pols sometimes. What every administration fears during hard economic times is to get the label of being “Hoover-esque” and not “doing something” when people are “hurting” economically. It just seems callous. So every administration, GOP or Dem, seems compelled to say it is DOING SOMETHING. That logic leads to government intervention/expansion because it seems so much easier to show you are DOING SOMETHING when you are giving people money or intervening…

                  I say this with some sympathy for it btw. It seems kind of callous to, in the midst of a recession where people are losing their jobs, to say, like many on H&R have said “hey, capital is just reallocating to more efficient uses, it’s all good!” Abstract notions of efficiency are not more important than the actual overall well being of the populace (its not hard to think of a scenario in which overall eonomic efficiency increases while overall well being does not, or even dips down; what kind of crazy man thinks that is a good situation?).

                  1. Don’t get me wrong though PL, given the amazing complexity of the economy and the seemingly inevitable imcomptence of the governing process, these attempts at DOING SOMETHING strike me as just as likely to have no, or negative effect as a positive one…It’s a mess dude.

                  2. In the realm of DO SOMETHING, they could have issued a very large tax rebate to the citizenry, a fraction of what was actually spent, instead of sending billions upon billions of dollars to their cronies and well connected friends. God knows the money would have been spent more wisely and effectively.

                    Wow. I almost made it through typing that without bursting into laughter.

                    1. It will be hard for some to believe, but that is the approach I would have sought. I wanted a big fat tax rebate check in my hand. When they take that money and spend it on building some f*cking bridge an inordinate amount is likely going to be lost via waste. That’s just the way things work…

                      In their defense they could point to some Bush tax cuts not helping much…

                    2. My comment, BTW, wasn’t an endorsement of supply-side econ, just a thought experiment of choosing between the lesser of evils.

                      :::runs very quickly away from agreeing with MNG:::

                    3. Yeah, that’s sort of what occurred to me – if you want to pump capital into the economy, maybe give it back to the people who earned it and let them use it to pay their bills and get the things they want and need. This instead of giving it out to their millionaire friends. This is the ultimate in “trickle down economics” – extract massive amounts of money from the productive parts of the economy and pour it into the pockets of those who nearly destroyed the economy so they can squander even more money.

                  3. These are all emotional appeals. That’s politics, not policy. As crazy it may sound to you MNG, a more efficient economy inherently increases the well being of its populace.

                    1. Yeah, I remember robc (aka the Inhumane Pussy Monster) reveling the foreclosures. It was great he said because it meant things were aligning more rationally. A nation with a high foreclosure rate was a blessed nation in his opinion.

                      Of course such a goofy opinion is possible only if you don’t give weight to the awful human suffering involved in foreclosure. Efficiency trumps actual human well being.

                      Here’s something: if bare economic efficiency is what is important then we should all go in tomorrow and bargain away our vacation time, overtime pay and such. Think about it: if we all agreed to produce the same amount for less benefits and pay overall economic efficiency improves.

                      But of course that is lunacy, it’s lunacy because economic efficiency is only good in so much as it promotes actual human welfare. The Sabbath was made to serve man, not man to serve the Sabbath…

                    2. The high forclosure rate is a *correction*. Corrections reduce suffering in the long run by avoiding either (a) allowing bubbles to inflate even longer, causing even bigger corrections, or (b) a long period of economic stagnation.

                      IMO, there is less suffering if we get the correction over with all at once than to prolong the agony.

                      On the other hand, I am one of those people who gets into the pool a millimeter at a time. YMMV.

                    3. We wouldn’t need such severe corrections if it wasn’t so dang hard to short sell because of legal barriers. Need a way for people to make money on the downside so it stays near the equilibrium prices.

                    4. What do you know about the Sabbath, goy?

                2. the administration is way off of anything that Keynes would’ve endorsed

                  Indeed, I heard some official claiming on the radio today that “every dollar of unexmployment benefits adds $1.90 or more to the economy”. Which isn’t even correct according to Keynesian theory. The multiplier effect only (theoretically) works if the money is spent *employing* someone doing something *productive*. Unemployment benefits aren’t even employment. They aren’t even make-work. By this logic, WELFARE should increase the GDP by double the amount of money spent.

                  1. Precisely.

                  2. No, you are completely incorrect about Keynesian theory. In keynesian theory, just the fact that the money is being spent causes GDP gains. Keynes gave examples of paying people to bury bottles and then paying others to dig them up. This is why Keynesians need the idea of “underutilization” to not be completely laughable.

  7. Playing devil’s advocate for a minute…the most protectionist country in the world is China, and they are doing OK as far as economic growth (one of the few “developing” countries that is actually developing).

    1. What color is the sky in your world?

      1. Hopefully bluer than the sky in China.

    2. We don’t know how much their numbers are cooked, they have a massive pollution problem, and they’re experiencing initial industrial growth, much like we did at the turn of the century. That type of growth is so exponential that it almost always remains positive.

      1. Their pollution is bad but what does it have to do with his point linking protectionism and economic growth?

        1. Just pointing out that their economic growth, even if it is close to what they say it is, is still going to get handicapped by the pollution soon. In other words, China seems to have high growth with a high level of protectionism, but those numbers are not reflective of a real or sustainable rate. So the negative pull of protectionism is being hidden.

          1. China is a blip compared to our economy (by any measure other than relative growth)–even today. China still treats great swaths of its population like crap. China is extraordinarily dependent in the long and medium term on the economic health of the U.S. and Europe. China’s growing middle class is almost certainly going to begin fighting for political freedom.

            Not to mention, China is already beginning to lose significant share of the low-end of manufacturing to other countries.

            Also, and finally, there’s India, which I think for any number of reasons is going to surpass China in the not-too-distant future.

            1. Not to mention, China is already beginning to lose significant share of the low-end of manufacturing to other countries.

              Which is where the effects of trade policy start to kick in. It’s going to become cheaper to import those low-end goods than to produce them domestically.

            2. I really think that India will be on top in the long run. A very long way to go, but politically, they aren’t handicapped by a totalitarian state that *will* blow up in China’s face at some point in the not-too-distant future.

              1. I agree. China is the next bubble to pop. I suspect that many of their state-owned industries have been cooking the books for years now and they are hiding all sorts of losses. Crony capitalism is going to be rampant.

                Similar things happened in the “asian tigers” in the Asian financial crisis. There’s a certain point where export-led growth seems to plateau, and it appears to be when you can’t get your advantage from cheap labor anymore.

      2. Heritage gives them a ranking on trade freedom that is 105th out of 179 countries.

        China’s official tariffs are a low 3.9%, but the maze of junk regulations that they unfurl upon trade when it suits the Party’s needs prompted Heritage to summarily make a huge deduction from their score.

        Nonetheless, there are by Heritage’s estimate 74 countries in the world more protectionist than China, including that one that sits right next to it that has an economic freedom score of 1 on a scale of 100.

        1. Is the 1 because the DPRK will import some Hennessey and giant rabbits when the Dead Leader needs them?

        2. How about Vietnam’s ranking? I saw that they are 144 in terms of total economic freedom but then some sort of browser problem prevented me from finding out about trade freedoms.
          Vietnam has been booming since they opened up in the mid- 80s, though there’s been pretty much nowhere else to go but up (only problems there are occasional massive inflationary problems). Still, I imagine they have high tariffs, no? Personally, I’m against any sort of tariffs at all, but I’m curious if that “protectionism is bad for one’s domestic economy” argument always holds up so well.

          1. Dude, where do you think you are asking for empirical verification of an empirical claim? Most true believers around these parts are Austrians, and they will tell you that claims like “protectionism are bad” are proven true at the axiomatic level, there is no need to go out in the world and see if the claim is actually verified.

        3. Let’s not forget that the most economically free nation is also right next to China.

        4. This kind of reaching would make Reed Richards proud. By your own evidence China would fall in the “more proctectionist than average” category, and as Max said it is doing well. Sure, there are lots of things at work here, but one thing can be definitively said given that fact: protectionism can be engaged in at the same time as economic growth is achieved. It’s not a stake to the heart as much rhetoric flung around here would suggest. The world is complicated, and right there fanatics lose out…

          1. Economic growth and protectionism can coexist if the country is benefiting from catching up growth (importing tech the developed world has had for decades), it doesn’t matter how free a country is, an advanced country can’t grow at 15% a year like China.

            1. So, as I said, the simplistic idea that protectionism sinks an economy is, of course, not verified by empirical evidence.

              1. Well, the effect of protectionism is either negligible, or negative. It is not *beneficial* is the point.

                In order for protectionism to have a negative impact, there has to be an import that is cheaper to import than to produce domestically. Given China’s labor pool, there probably aren’t too many things they need to import … yet.

                1. See Hazel, this is my problem with you Austrian types. You’ve assumed via axiom that protectionism MUST have these negative effects. Without looking at actual protectionist policies, actual nations and their actual outcomes. You just say “well, whenever an product can be imported cheaper than it can be produced domestically, protectionism will be harmful by preventing that importation.” The problem is, imo, while that sounds reasonable enough, there could be all kinds of other things going on and you’ve ruled out an honest look to see if that is indeed the case.

                  Let me give you an example. The classical economist says “people being rational, a worker who is offered a pay rate such as piece work will be more productive than an hourly employee.” If people rationally seek their own interest then paying them per bushel should result in such workers bringing in many more bushels per hour. However historical economics suggests that often when piece rates were introduced the average worker simply worked the piece rate until they made their traditional wage and then they quit and went home! Were we to trust the classical economists reasonable sounding axioms we would never have realized that it did not, in fact, work that way in the world…

                  1. It’s all well and good to say people don’t always behave rationally, or maybe protectionism doesn’
                    t have a negative effect under some particular set of conditins.

                    But the problem is that you guys don’t have a theory to explain and, more importantly, predict when such interventions will be beneficial. You can point at specific instance in the past and say “oh look Japan did X, and it didn’t seem to have a negative impact, explain why.”

                    All we can say is, given the huge number of variables at play, it is nearly impossible to explain why in a specific instance things don’t work as predicted. But we CAN say that on average, things DO go as predicted by the theory. And you can’t come up with an alternate theory that accurately predicts those instances that diverge from the theory.

                    1. “But we CAN say that on average, things DO go as predicted by the theory. And you can’t come up with an alternate theory that accurately predicts those instances that diverge from the theory.”

                      Hmm, I thought Austrians found all this predicting stuff to be bunk? Don’t worry, this is pretty common. I run into self-professed Austrians, they tell me it’s really impossible to predict things, and then go on to make policy prediction after policy prediction…

                      “But the problem is that you guys don’t have a theory to explain and, more importantly, predict when such interventions will be beneficial. You can point at specific instance in the past and say “oh look Japan did X, and it didn’t seem to have a negative impact, explain why.””

                      Again, for an Austrian this is some pretty heavy pot calling kettle black territory…

                    2. I didn’t say I was an Austrian. My economics background is mainly confined to game theory.

                    3. Game theory? Really? Then why do you ignore it all the time? It is a dagger in the heart of “free market” ideology, as game-theoretical negative-sum games riddle our economic system.

                      Worse yet for your theory, it sometimes requires games to end in double defection in order to reach the optimum state (eg, monopolies/collusion), and yet often requires double-cooperation (free-riders). I suppose you believe in some magic fu-fu dust that causes games to head in the right direction in the right situation, correct?

                    4. See Hazel, this is my problem with you Austrian types. You’ve assumed via axiom that protectionism MUST have these negative effects

                      The problem is deeper than that. Hazel’s assumption may well be correct, if you assume we live in a perfect libertarian world.

                      In practice, we do not. If China chooses to massively subsidize steel, for example, in a libertarian world this would simply mean Americans could buy cheap steel from China at the Chinese taxpayers’ expense, and would have no other effect. Hence, restricting such trades would be a negative.

                      But Hazel’s argument has a very serious flaw: we don’t live in a libertarian fantasy world, we live in reality. American steel company’s going out of business affects Americans in a number of ways.

                      1: Lost tax revenue from the companies and their employees and stockholders.

                      2: The numerous unemployment benefits, health care benefits, and job retraining benefits we must pay

                      3: The other negative affects of unemployment (poor health, depression, and life-long wage decreases) which spill over into the public domain.

                      4: The fact that this would put our military’s balls in the hands of the Chinese

                      5: The fact that this would further increase the trade deficit, putting our economic system’s balls at the mercy of the most gentle of squeezes by the Chinese central bank

                      6: Increased pollution, as the Chinese plants are environmental disasters.

                      So here in REALITY, which Hazel denies the existence of, it really does matter where the steel is made.

                    5. Chad’s a perfect example of the dilemma in explaining comparative advantage to the general public. You can point at things like lost jobs for steel workers. You can’t point at things like the jobs created by overall increases in economic efficiency resulting from lower steel prices.

                      It’s counter-intuitive. hence difficult to get average minds to understand.

                    6. Hazel, where in my hypothetical did I ever assume that China was more efficient than the US at producing steel? I instead assumed they were winning due to subsidies, and the ability to externalize their environmental costs. Indeed, they could very well be *less* efficient.

                      I note, like usual, that you just dodge my argument. I listed a whole host of negative effects of Chinese subsidies on Americans. I will assume that since you didn’t bother to refute them in any way, you accept them. Thank you for conceeding my point that there ARE negative effects, which your theory assumes do not exist.

                    7. Chad, your reply ably demonstrates Hazel’s point that you don’t understand comparative advantage.

                      Economic efficiency is not efficiency in producing steel. One country could be more efficient than another in producing steel yet it is possible that the most economically efficient arrangement of the two countries is that the more efficient steel producer buys all its steel from the less efficient producer.

                      As for your list, that is the seen. Left completely uncounted is the unseen: the products that could be made from steel because it is cheaper; the extra goods and services bought and investments made because there is more money in more people’s pockets because steel and steel goods are cheaper; the goods and services produced by the capital and labor that are no longer dedicated to making more expensive steel; etc. These benefits are spread across so many millions of people that they simply are not considered when looking at a few thousand newly unemployed.

                    8. Come back when you’ve learned more about game theory than what you read on the back of that cracker-jack box.

                    9. Wow, another dodge by Hazel. You must be in the mood to let me win today.

                      What, pray tell, is wrong with what I said, and why do you not think I have spent plenty of time studying game theory?

                    10. Re-educating you about game theory would take too long.
                      I’ll deal with it some time when I have a time to waste.

                    11. Sigh, look at the State and then include that into your game theory, and you end up with even worse negative sum games. Yes, markets make mistakes, but it takes a state to really mess things up on a grand scale, because states don’t self correct.

                      Anyway, the main problem of people who point at problems in markets is that they forget that the alternative to markets have those same problems only worse.

              2. The contention about Smoot-Hawley is that it triggered a protectionist trend around the world.

    3. China is one gigantic bubble waiting to burst. Real estate and manufacturing capacity are being heavily inflated by the government.

    4. I suspect that there isn’t a lot of demand in China for imports yet, so it’s effect is likely small. Wait until the labor starts drying up and industry can’t produce domestically as cheap as they can buy elsewhere.

  8. “At a time when 10 to 12 percent of the American people are unemployed, I think Congress has an obligation to put people back to work.”

    The obvious answer is to ban tractors and other farm machinery. Think of rows and rows of unemployed mortgage brokers and realtors in freshly plowed (by horses) fields, planting corn, seed by individual seed.

    1. Those would count as green jobs, so we get to count them twice for the stimulus tracking!

    2. by horses Perhaps by print media reporters would be better.

  9. I have an idea…

  10. Maybe a lot of you were too young to remember NAFTA’s passing. Gore et al pretty much promised everyone a magic unicorn if it passed, so naturally when, years later, that did not come to pass, it became crazy unpopular. The average person has a very time understanding how his life has been improved by and since NAFTA’s passing…

    1. Good thing we have guys like Obama around to profit from populist ignorance.

    2. NAFTA passed and we had the longest and largest series of per capita economic booms in many decades. You are completely wrong about it not being great for the economy.

  11. Obama strikes me as many things, but rarely a “populist.” Populists don’t eat arugula on the campaign trail.

    But my point was that if someone wants to know what undercut public support for NAFTA one should look at the laughable overselling of NAFTA back when it was rammed through with all the gentleness of a Ron Jeremy film…

    1. The problem is that comparative advantage is a counter-intuitive concept.

      Trade protectionism seems like “common sense” to the uninformed. It also appeals to nationalistic sentiment (Us vs. The Foreigners).

    2. Part of the over selling was the “Free” part of free trade.

  12. Well Hazel, remember that Gore et al oversold NAFTA claiming it would provide enormous economic benefits for us. The average American looks at his economic position since NAFTA and doesn’t see much improvement. Given the overselling as his point of reference he has a point…

    1. Personally, I don’t recall that.
      I recall a lot of debate and discussion on both sides. Plenty of critics saying it would cost American jobs. Buy American, blah blah.

      I supported it on the moral grounds that people should be able to buy whatever they want, so I don’t really remember the other arguments.

      1. Also, the biggest change in my life since NAFTA has been the internet.

        Compared to that, other changes in the economy are kinda hard to detect.

        1. “the biggest change in my life since NAFTA has been the internet.”

          Agreed. I’m amazed at its effects as a coordinating tool for voluntary transactions. Think the second hand market on Amazon. In the old days if you wanted some out of print book finding a seller was incredibly hard. Now, boom, his info is at your fingertips and you can make the transaction in like 30 seconds. It’s an amazing tool economically.

          And you know what, it likely would not have come about when and where it did if not for some significant government support 😉

          1. Whatever… Amazon.com is like seven layers removed from ARPAnet.

            That’s like claiming that English support of the Massachusett’s Company is responsible for the popularity of lobster tails.

            1. Mmmm…Lobster tails…

              Sorry, I participated in Red Lobster’s Lobsterfest earlier this week, and I was having a fond flashback…

          2. Defense Department. 🙂

            That, and GPS are probably the two best things to come from government R&D, and they both came from defense needs.

          3. CERN crafted what most closely resembles today’s Internet. Just think of what would have happened if the physicist dorks who worked there had more business savvy and less autism and kept even a small percentage of their new toy: unlimited funding. Probably would’ve found that silly ‘God Particle’ and negated humanity’s existance through runaway blackhole creation. So physics nerd autism coupled with the comfort of government funds seeking saved the planet.

            1. True story . . .

      2. I remember the Gore/Perot debate on Larry King, and several like events with more minor actors.

        The pro-NAFTA side responded to the critics who warned of fleeing US jobs by saying that NAFTA would actually staunch and reverse the flight of well paying US jobs to other places.

        The average American looks around and did not see that occur. I’m not sure he’s wrong about that…

        1. Which well-paying US jobs. There’s lots of high paying tech jobs these days.

          1. Yeah, they’re mostly taken by foreigners on work visas given away with Cracker Jacks, but they are there.

            1. Um right. The H1-B program sells out on the first day of every fiscal year.

      3. I don’t remember Gore doing much overselling. I remember a big debate on the Larry King Show where Ross Perot came off as a complete fucking lunatic. Gore, by contrast, was very reasonable.

        If you remember Gore overselling something, perhaps you are thinking of his work on Global Warming?

        1. Interestingly polls done the day after the Gore/Perot debate showed that more people said Gore won the debate than said they had WATCHED THE DEBATE.

          Perhaps you were one of them?

          Of course none of this deflects my main point, that NAFTA supporters sold NAFTA on the grounds that it would in fact reverse the number of well paying jobs leaving our shores. The average American is not crazy to find that claim wanting imo.

          1. That’s like saying that the unpopularity of celery sticks much be due to the outrageous claims of dieticians that celery will make you skinny in a week.

            1. Okay … my analogy generator is hiccuping.

              Point is, does anyone believe what politicians claim on face value anyway?

              Nobody is going to hate NAFTA because they feel it wasn’t as awesomely wonderful as AL GORE said it was going to be. Please.

            2. So what is your position Hazel? That the benefits of NAFTA are commonplace and obvious but the average American just defiantly refuses to acknowledge them?

              1. Um. No. The benefits are subtle but board and significant.

                How do you point at the general improvement in the economy that results from the average person having more disposable income to spend on leisure, or health insurance?

                An anti-free-trade person can point at specific factories closing and miving to mexico. Or specific steel plants threatened by foreign competition. A pro-free-trade person can’t point at “everyone has about 10% more pocket money”.

                Problem is , people *spend* their extra pocket money. They buy HDTVs, or go on vacation. Whatever. They are better off in the sense of having the pleasure of desires fulfilled. But what each person wants to spend his extra cash on – the money he saved on clothing or shoes – is different. How do you collect statistics on that?

              2. No. The benefits are subtle.
                You can’t point at general increases in efficiency the way you can point at a specific factory closing.



  14. What is so good about free trade? So what if a US produced product cost 10$ vs. a Chinese product that cost 5$. If you send that 5$ to China, that is 10$ less to pay for US jobs, US health insurance, US retirement programs and increased income tax revenue. Instead, the US is losing jobs and losing tax revenue and we are having to go to China to borrow back at least $2.50 in T-Bills which our children will end up having to back with interest. So that 5$ saved now turns into 5$ owed by our children.

    1. david,

      you clearly dont understand how economics work. If we stop buying a 5 dollar product from china and instead make it here for 10 dollars, that is 5 dollars of production that we have to give up somewhere else that is currently being employed. Importing things is not sending money to another country in a one way transaction. We are receiving another good that would have taken up more resources to produce ourselves.

      Take your logic to the extreme. Lets assume every household wasnt allowed to trade with anyone else because to do so would be sending dollars away. What standard of living do you think would exists if every household had to make everything they consumed themselves?

      1. So how does the money come back? They get some money and we get a good, but once the money is in China, it goes to local suppliers and local laborers. Given the existing trade deficit it is reasonable to assume that what they buy from us doesn’t equal what we’ve bought from them.

        1. for the moment on net they are buying our assets in return for us buying their goods. They are buying largely US bonds but also real assets as well.

        2. You are too focused on the money.
          Money performs an accounting function.
          That is its main value.

          1. Worst haiku attempt ever.

            1. Hrm, here goes:

              Focused on money
              Money is just accounting
              That is its value

  15. I have some sympathy for the anti-trade-agreement position in the vein of Ron Paul. If the agreement is something that tries to force the other country to surrender their competitive advantage by shoving environmental and labour regulations down their throat, then it’s yet more protectionist crap.

    We can have free trade simply by getting rid of tariffs. The other country doesn’t even have to follow suit. It’s better if it’s mutual, but one-sided is still better than nothing. Just like masturbation.

    1. “It’s better if it’s mutual, but one-sided is still better than nothing. Just like masturbation.”

      Getting ass raped is one sided too, but I doubt it’s better than nothing.

      At least that’s what the Gobbler has said…

      1. Ass rape is the quintessential zero-sum game.

  16. For practical purposes, there is nothing such as “free trade”. Virtually all trades are effected by third parties and affect third parties, both of which fly in the face of the idea of freedom.

  17. Virtually all trades behaviors are affected by third parties and affect third parties, both of which fly in the face of the idea of freedom. — BS struck.

    1. Shorter Chad: Everything affects everything else, therefore everything should be controlled by the government.

      Chad’s got a deep totalitarian streak. He would have been a follower or Pol Pot if he’d been born at a different time. Like Chomsky.

  18. All this arguing over trade and control of trade between humans is only an issue because of collectivist BS.

    Just as no business owns market share, no one owns a job (except one you create for yourself).

    To suppose otherwise is to make slaves of some for the benefit of someone else.

    1. Shhhh dont confuse Paleos and vote grabber Dems with facts.

  19. The problem we face with the people we elect, professional politicians, is that they are economically illiterate as well as IDIOTS when it comes to the rich history of America.

    They have absolutely no knowledge of our Declaration of Independence, our Constitution or basic business practices. We should NEVER again elect a lawyer to Congress. And anyone who is elected to Congress should be compelled to show us that he/she has a working knowledge of our Founding Documents.

    1. Part of their first day indoctrination should be to sit in a room with the Sgt at Arms and copy the entire Constitution, by hand, onto a legal pad. That way, we’ll know they’ve read the damned thing at least once.

Please to post comments

Comments are closed.