Redstate

Posted at 1:28am on May 8, 2008 It Cannot Be Stressed Enough

By Pejman Yousefzadeh

Both Hillary Clinton and Barack Obama are the most protectionist major Presidential candidates to come down the pike in recent memory. I say "recent" because, of course there is one particular President who was in the same league with both Clinton and Obama when it came to promulgating lousy trade policy and making the country suffer for it. I know that Charlie Black works for the McCain campaign and gets paid to throw elbows, but he is right to go where he goes verbally:

The growing shopping list of promises has also served further to sharpen the contrast with John McCain, the Republican nominee, who has staked out a robustly free-trade stance for the general election.

"The last time we had a protectionist president was Herbert Hoover [in office from 1929 to 1933] and look how that worked out," says Charlie Black, a senior adviser to Mr McCain. "We think we can win this debate in a general election."

The ghost of Hoover may be smiling now. The ghosts of Hawley and Smoot most certainly are. The rest of us have every reason to feel grim.

Posted in 2008 | Barack Obama | Economic Antediluvianism | Free Trade | Hillary Clinton | Protectionism — Comments (3)/ Email this page » / Read More »

Posted at 1:12pm on May 6, 2008 Shorter Paul Krugman

By Pejman Yousefzadeh

"Don't worry too much about Hillary Clinton getting things completely and utterly wrong on the gas tax since economists are the only ones who are really obsessed about this issue."

I had no idea, of course, that we were supposed to excuse a policy error of tremendous proportions merely because if we failed to do so, we would be paying undue attention to the pet peeves of economists. Alarm bells should go off when a lousy gas tax policy is forwarded by a major Presidential candidate and when said Presidential candidate also says that she won't listen to the economics community and its consensus opinion that said Presidential candidate's gas tax policy is almost cataclysmically wrong.

Then again, perhaps Krugman just feels the need to get back into Senator Clinton's graces. She thinks he is The Enemy now:

She peddled her sham gas-tax holiday and repeated her attempt to blame Indiana's job losses on outsourcing and Nafta. Stephanopoulos asked her to name a single economist who thinks a tax-holiday plan would work, and the daughter of Wellesley and Yale took the chance to shove the geeks into their lockers: "I'm not going to put my lot in with economists."

When Stephanopoulos pointed out that Paul Krugman, a Times columnist, has raised doubts about the plan, Clinton lumped Krugman in with the Bush administration and said she wasn't going to listen to the people responsible for the last seven years.

Insert your own joke here.

Posted in Economic Antediluvianism | Economy | Hillary Clinton — Comments (19)/ Email this page » / Read More »

Posted at 12:47am on May 6, 2008 Reality-Based!

By Pejman Yousefzadeh

I suppose that one of the reasons why Hillary Clinton finds herself unexpectedly playing the role of underdog in the fight for the Democratic Presidential nomination is that she strikes people as one of the most arrogant know-it-alls imaginable (strange, I know, since she is the one trying to tag Barack Obama as the "elitist," but still . . .). She showed her tendency towards know-it-allism yet again just over the weekend:

This morning, George Stephanopoulos began his televised interview with Senator Hillary Rodham Clinton by asking if she could name a single economist who supported her plan for a gas-tax suspension.

Mrs. Clinton did not. "I'm not going to put in my lot with economists," she said on the ABC program "This Week." A few moments later, she added, "Elite opinion is always on the side of doing things that really disadvantages the vast majority of Americans."

She also said that despite the doubts of actual economists, she was sure that if her Administration got her tax plans "right," then "it would be implemented effectively." The haughtiness is breathtaking. Clinton actually thinks that the paltry savings from a gas tax holiday will be enough to (a) overcome the increase in demand, which will drive prices back up and (b) will overcome the costs that will be passed on to the consumer thanks to her foolhardy plan of imposing a windfall profits tax on the oil companies. Indeed, she doesn't even acknowledge that the oil companies would naturally pass along the costs to the consumer in order to protect their bottom line--which is entirely what one would expect as a result of misguided tax policy that ends up punishing business. As far as Hillary Clinton is concerned, there really is such a thing as a free lunch and her tax plan provides it. If it is ever implemented, consumers will find out that free lunches have gone the way of the dinosaur. And yes, John McCain is also wrong to think that a gas tax holiday would work but at least he doesn't compound his error by opting for the Clintonian windfall profits tax.

Posted in Economic Antediluvianism | Economy | Hillary Clinton — Comments (1)/ Email this page » / Read More »

Posted at 10:48pm on Apr. 28, 2008 Free Trade And Its Effects On The Economy

By Pejman Yousefzadeh

While it is fashionable to say that free trade policies are responsible for just about every negative thing that is currently going on with the economy--not to mention also being responsible for the reason certain adolescents are unable to get dates for the prom--the facts tell us something different. I have said before and will say again that while there is no economic silver bullet, free trade is as close to a silver bullet as anything there is. That we are turning our backs on a policy that has brought us a tremendous amount of prosperity with very little attendant cost is nothing short of bizarre and appalling.

I still dream of a world where bloggers don't have to constantly bring this sort of thing up and where the mainstream media will take the lead in challenging--and calling on the carpet--candidates who trash free trade and all of the good that it does just to get votes. I keep hearing that this is supposed to be a tremendously important election. Someone will have to explain to me, therefore, why it is that the mainstream press seems all too willing to allow candidates in this tremendously important election to demagogue a tremendously important issue. Are journalists too incompetent to challenge people like Hillary Clinton and Barack Obama when they rabble-rouse on the issue of free trade? Or are they just not courageous enough to act on what they know to be true?

Posted in Economic Antediluvianism | Economy | Free Trade | Protectionism — Comments (11)/ Email this page » / Read More »

Posted at 1:04am on Apr. 26, 2008 Guess Who Is In Favor Of Free Trade Agreements With Latin America

By Pejman Yousefzadeh

Behold. And relatedly, see this.

Heckuva job, Pelosi.

Posted at 11:50pm on Apr. 24, 2008 On Whether Poisoning The Well Can Sometimes Be A Good Thing

By Pejman Yousefzadeh

Nick Kristof is comparing Democrats who oppose a free trade deal with Colombia with George W. Bush. If this is what it takes to break the Congressional logjam over the trade deal, then I am all for it. Of course, the end result may merely be that the New York Times will get a lot of "how dare you compare me with that man!" e-mails, so this plan isn't really foolproof.

Posted at 4:38pm on Apr. 18, 2008 If You Are A Protectionist . . .

By Pejman Yousefzadeh

The Chinese will love you. And why not? If the Chinese are seen as a reliable trading partner and the United States is not, then China will likely beat the U.S. to being able to access markets around the world.

I certainly don't begrudge the Chinese as they try to do well in the field of international trade. But I certainly begrudge American "leaders" who apparently are bound and determined to have us unilaterally disarm and retreat behind protectionist walls--reconciling ourselves to less and less prosperity in the process.

Posted in Economic Antediluvianism | Economy | Free Trade | Protectionism — Comments (17)/ Email this page » / Read More »

Posted at 10:47pm on Apr. 17, 2008 I'll Make This Short And Sweet

By Pejman Yousefzadeh

Hillary Clinton accuses Barack Obama of being excessively pro-free trade.

Meanwhile, Barack Obama accuses Hillary Clinton of being excessively pro-free trade.

And while all of this goes on, world trade growth suffers:

World trade growth declined sharply in 2007 and is expected to slow further this year as financial turmoil and rising commodity prices further depress global economic activity, the World Trade Organisation said on Thursday.

Preliminary estimates suggest the volume of world trade rose 5.5 per cent in 2007, down from a robust 8.5 per cent in 2006.

Based on the latest gloomy global output forecasts by the International Monetary Fund, the WTO says trade growth this year could slip to 4.5 per cent, the lowest since 2002.

The candidate who can work to reinvigorate world trade will be the one who helps implement policies designed to bring about greater prosperity. Too bad that Clinton and Obama are too busy trying to define themselves as the anti-prosperity candidate.

Posted in Barack Obama | Economic Antediluvianism | Economy | Free Trade | Hillary Clinton | Protectionism — Comments (2)/ Email this page » / Read More »

Posted at 12:37am on Apr. 16, 2008 The Consequences Of Ditching The U.S.-Colombia Free Trade Agreement

By Pejman Yousefzadeh

As this article points out, it is going to be a whole lot harder to pursue an agreement in the context of the Doha round of multilateral trade talks now that fast-track authority for the U.S.-Colombia trade deal has been derailed and the deal itself has been put on the backburner indefinitely.

Incidentally, it is laughable to suggest--as the article quotes some as suggesting--that the real problem here is that the Bush Administration sought to craft a bilateral deal with the Colombians rather than paying exclusive attention to multilateral talks. My understanding was that the United States government could walk and chew gum at the same time and that the trade consequence of this was that we could pursue bilateral deals while at the same time working to hammer out a multilateral accord in the context of the Doha round. But here, apparently, we are being told by those who are sympathetic to Speaker Pelosi's efforts to keep the U.S.-Colombia trade deal from being ratified that it is just not right for the United States to engage in bilateral diplomacy and create bilateral trade agreements--not even when these agreements open foreign markets to American goods.

Additionally, we are told that the Speaker's actions may have been justified and responsible because they prevented an outright defeat of the trade agreement on the floor of the House. I have to think, however, that the reason the trade deal was put on the back burner was because Speaker Pelosi and her cohorts are protectionists--or at the very least, they want to do a good enough impression of protectionists to ensure that Big Labor supports Democratic candidates this fall with full enthusiasm.

Posted in Democrats | Economic Antediluvianism | Economy | Free Trade | Protectionism — Comments (0)/ Email this page » / Read More »

Posted at 1:06am on Apr. 15, 2008 Trade Follies

By Pejman Yousefzadeh

Either Nancy Pelosi doesn't understand the nature of the U.S.-Colombia trade deal, or she thinks that she can fool the public. In any event, she makes a hash of things in trying to explain why she allowed for fast-track authority to expire--thus putting the deal on the back burner:

Democrats will vote on a free trade agreement with Colombia only after the White House and Congress address pressing domestic economic concerns, House of Representatives Speaker Nancy Pelosi said on Monday.

"We still believe it is possible to bring the Colombia free trade agreement to the floor under the proper circumstances, but first we need to address the worsening economy," Pelosi told reporters.

Earlier, President George W. Bush said the pact was "dead" until Pelosi scheduled a vote.

"This has to be done in recognition not only of the concerns that we have about human rights violations of workers in Colombia, but based on the economic security of America's workers here in our country," the California Democrat said.

"We ask the president to, once again, bring his people to the table so we can move forward," she said.

Administration officials said they have been trying for months to engage Pelosi in talks on bringing the pact to the floor for a vote, only to have their efforts ignored.

One does not know whether to laugh or cry. American markets are already open to Colombia products. The deal opens Colombian markets to American products. How American workers do not benefit from having another market opened to the things they make is beyond comprehension.

But of course, there are a lot of myths associated with the rejection of the trade agreement. And concerns about American workers and the environment are Pavlovian and come about with the advent of any trade deal, the facts notwithstanding. Robert Zoellick was right and while I hate to say that I told you so, I did.

Posted in Democrats | Economic Antediluvianism | Economy | Free Trade | Protectionism — Comments (4)/ Email this page » / Read More »

Posted at 1:10am on Apr. 14, 2008 Correcting Harold Meyerson

By Pejman Yousefzadeh

It is a full-time job. Here is the latest result of punching in the time clock.

Posted at 9:57pm on Apr. 12, 2008 Speaking Of Hypocrisy On Free Trade

By Pejman Yousefzadeh

I give you Hillary Clinton:

Since 2001, Clinton has backed pacts with Jordan, Chile, Singapore, Australia, Morocco and Oman that were opposed by numerous labor, farming and environmental groups concerned that the deals contained insufficient safeguards for American workers and consumers.

As recently as November, Clinton supported a free trade agreement negotiated by the Bush administration with Peru.

Clinton's more recent critiques have cheered many trade critics, who long have complained that the pacts encourage companies to move jobs overseas.

But Clinton's campaign posture also has raised a few eyebrows. Lori Wallach, director of Public Citizen's Global Trade Watch division, a leading opponent of the structure of current trade agreements, said the New York senator apparently had shifted after getting "a lot of feedback from people across the country."

So she stopped being a free trader once she saw that it would get in the way of her political ambitions. Quelle surprise. I mean, one would never expect someone named "Clinton" to act like that.

Posted in 2008 | Economic Antediluvianism | Free Trade | Hillary Clinton | Protectionism — Comments (0)/ Email this page » / Read More »

Posted at 11:58pm on Apr. 9, 2008 That's All Right. We Didn't Like Prosperity Anyway.

By Pejman Yousefzadeh

Now that the Bush Administration has made clear the need for a free trade deal with Colombia--one that opens Colombian markets to American products (the reverse is already true) and one that demonstrates solidarity with Colombia in the wake of the country's recent military spat with Venezuela, I suppose it is only predictable that we have this:

House Speaker Nancy Pelosi (D-Calif.) said today that Democrats will seek to delay consideration of a trade agreement with Colombia, prompting the White House to accuse Democrats of threatening the next administration's bargaining power in trade talks.

Pelosi, who worked with the administration in crafting the Colombia Free Trade Agreement last year, said the House would vote on a rule change to freeze the clock on when it must consider the pact. Under the current provisions, the House has 60 legislative days to consider the measure after President Bush sent it to Capitol Hill on Monday.

Democrats instead want the trade deal considered as part of a broader economic relief package. Bush has rejected talk of a second stimulus package.

And well the President should. The first stimulus package was a bad enough idea. Now, we are going to go ahead and have a second one immediately after the first one? And we are going to hold up a free trade deal that could actually work to do it?

Let's all recall that one of the few bright spots of our economy is the export market. Indeed, American exports have basically helped keep the economy from completely sinking and if we have a mild recession, we will have exports to thank for its mildness. Now, with a chance to expand the export market still further--remember, the trade deal between Colombia and the United States will open Colombian markets to American goods--the Speaker of the House has basically decided to say "no thanks" and shoot the American economy in the foot.

What do we do next? Have a national "Let's All Down A Couple Shots Of Hemlock" Day? A couple of Speaker Pelosi's friends may well be on board with the spirit behind the proposition, if not the proposition itself.

Posted in Democrats | Economic Antediluvianism | Economy | Free Trade | Protectionism — Comments (0)/ Email this page » / Read More »

Posted at 10:05pm on Mar. 16, 2008 The Know-Nothings Of The 21st Century--And How To Fight Them

By Pejman Yousefzadeh

I realize that I beat up on neo-protectionists and neo-mercantilists a great deal. But here's the thing: They deserve it. Their arguments have no valuable intellectual content whatsoever, are wholly devoid of facts and indeed, are allergic to any attempt to introduce a dose of reality. Greg Mankiw explains why:

Economists are, overwhelmingly, free traders. A 2006 poll of Ph.D. members of the American Economic Association found that 87.5 percent agreed that "the U.S. should eliminate remaining tariffs and other barriers to trade."

The benefits from an open world trading system are standard fare in introductory economics courses. In my freshman course at Harvard, we start studying the topic in the second week, and we return to issues of globalization throughout the year. The basic lessons can be traced back to Adam Smith of the 18th century and David Ricardo of the 19th century: Trade between two countries creates winners and losers, but it leaves both nations with greater overall prosperity.

[. . .]

Today, Nafta could be hailed as a successful example of the bipartisanship that Mr. Obama promises. Most economists agree with Lawrence H. Summers, a Treasury secretary in the Clinton administration, who has said that Nafta "was really a watershed as to whether America was going to stand for larger markets, was going to stand for forward defense of our interests by trying to have a more integrated global economy."

"It contributed to the strength of our economy," he added, "both because of more exports and because imports helped to reduce inflation."

These are all facts. They are facts that smart people, intimately familiar with the details surrounding trade policy take as givens--much as they take the revolution of the Earth around the Sun as a given. They are also facts that by and large are kept away from the public by demagogues like Lou Dobbs and by the Democratic candidates for President of the United States--and what appears to be the great majority of their fellow Democrats. This attempt to deprive the general debate of valuable and needed facts will, if unchecked, lead to bad policymaking. And that will lead to a reversal in the many extremely considerable prosperity gains that we have achieved thanks to free trade.

I write all of this so that hopefully, readers understand the origins and nature of my passion on the issue of free trade. Free trade is too important an issue to leave to populist demagogues to monopolize. The only way the neo-protectionists and neo-mercantilists can win the debate on trade is if free traders do not make a genuine effort to give the public the facts on the issue of trade. Absent those facts, the forces of economic ignorance stand a very good chance of causing the policymaking process to go awry. But if the general public is in the know when it comes to the facts, the Know-Nothings of the 21st Century won't stand a chance.

Posted in Economic Antediluvianism | Economy | Free Trade | Mercantilism | Protectionism — Comments (63)/ Email this page » / Read More »