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Ohio and NAFTA

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The Wall Street Journal‘s superb columnist Mary Anastasia O’Grady says this today [2] about the protectionist pronouncements pouring forth from both the Clinton and Obama camps:

After watching the Obama-Clinton debate in Cleveland on Tuesday, I came away convinced that both candidates for the Democratic presidential nomination want to run this country like Argentina.

In that country, Juan Peron-inspired labor syndicates and their bosses dominate the economy and work hand-in-glove with the state. Together they have ensured Argentina’s isolation from international commerce and investment, and a slow but steady decline in living standards.

This is a sharp left turn for the Democratic Party leadership. One of the most significant global trade-liberalization rounds in the 20th century bore the name of John F. Kennedy. Now Hillary Clinton and Barack Obama, by threatening to dissolve the North American Free Trade Agreement unless it is converted into a cudgel for Big Labor, want to drag us backward.

Also, as Rossputin [3]‘s Ross Kaminsky points out to me in an e-mail, the unemployment rate in Ohio in December 1993 — the month before NAFTA took effect on January 1, 1994 — was 6.5 percent.  Says Ross: “It has never since touched a level that high again.  Why the hell doesn’t anyone say that in public? It’s so obvious a thing to look at.”

Great point.  (Of course, the reason that Clinton and Obama don’t speak this truth is because to do so would not help them politically.  Remember, they seek office and power rather than truth and understanding.  To expect either of them to utter even one politically inconvenient truth is as reasonable as expecting your pet turtle to recite from memory the Magna Carta.)

Looking at the data on Ohio’s unemployment rate [4] from the early 1990s onward is indeed revealing.  The unemployment rate in Ohio was declining before NAFTA took effect (it was, for example, 7.0 percent in January of 1993).  The rate continued to decline, reaching 3.9 percent as recently as February of 2001.  From that date, it began to rise, hitting 6.2 percent for a few months in 2004.  From November 2004, Ohio’s unemployment began again to fall, settling in to the mid-five-percent range pretty much since then.  The most recent reading (for December 2007) is 5.8 percent.

Also, the most recent month prior to NAFTA going into effect in which Ohio’s unemployment rate was as low as 5.8 percent is October 1990.

Ohio’s unemployment rate before and after NAFTA took effect emphatically does not tell a tale of workers in that state being harmed by expanded trade between the U.S., Canada, and Mexico.

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