Tweet [1]
Hillary Clinton and Barack Obama are increasingly hostile to trade [2] (or so they say on the campaign trail — admittedly not a stage on which truth and frankness get many lines).
There are countless distressing facets of this anti-trade nonsense. One of these is the weaselly “I’m for free trade as long as it’s fair trade” refrain. Such a claim (now as familiar in political campaigns as Dunkin’ Donuts) is a cowardly attempt by the candidate to stand on both sides of the issue by invoking a word (“fair”) loaded with emotion but devoid, in this context, of meaning. No one, as far as I know, favors unfair trade — but by slapping the label “unfair” on any trade that a candidate’s favorite constituents dislike, that candidate can oppose free trade while claiming still to support free trade.
Such a rhetorical gimmick is unfair.
Also distressing is the fact that Austan Goolsbee, the fine economist who is a close adviser to Obama, apparently is ignored by the would-be President of the USA on this front. Of course, I have no knowledge of what Goolsbee says and doesn’t say to Obama, but I presume that Goolsbee isn’t in the anti-trade camp. Consider that just this past June Goolsbee had this excellent column [3] in the New York Times, with this key passage:
We [Americans] hate experiencing major adjustments and industry transformations that force people to look for new jobs. That experience has made many skeptical about the future of the United States in the world economy. Yet the evidence seems to show that for all our dissatisfaction, we are the most flexible economy around and may be best poised to take advantage of the coming changes on a global scale precisely because we are so good at adjusting.
A related source of distress is Alan Blinder’s recent skepticism of trade — his lending his good name and the prestige of the economics profession to protectionists. It’s very bizarre (especially in light of the fact that Blinder wrote this [4]). In today’s New York Times, “Economic Scene” columnist David Leonhardt quotes Blinder [5] as saying that “Trade has winners and losers … and there have been a lot of losers in Ohio.” I’ve written elsewhere [6] about “winners and losers” from trade. But I can’t resist making my point again, if only in a slightly different way.
Trade is just one manifestation of consumer sovereignty. Just as there are, by Blinder’s calculus, winners and losers from consumers shifting their expenditures from goods made in America to goods made abroad, there are winners and losers from consumers shifting their expenditures from goods made in Illinois to goods made in Arizona – and from consumers shifting their expenditures from donuts, beef, cigarettes, whiskey, and train travel to bagels, fish, yoga lessons, wine, and air travel. Trade plays no unique, or uniquely important, role as an avenue of economic change spurred in part by consumer sovereignty. The only practical way to rid the economy of such “loses” is to try to freeze it, a futile step that will in the long-run only make losers of everyone.
(I thank my friend Greg Papandrew for the title of this post.)