Decision ‘08

George Will On ‘Progressive’ Economic Foolishness

My friends, on both the right and the left, I ask you a question, in all earnestness: how can you vote Democratic if you understand the slightest thing about economics? If for no other reason (and there are plenty of other reasons, but we’ll let that slide for the moment), I could never support a party that is against free trade. To even type the phrase ‘against free trade’ causes a wave of nausea to ride over me. If there is one thing that every reputable economist knows (read: every economist that doesn’t push partisan agendas, in the manner of the reprehensible Paul Krugman), it’s that free trade is the backbone of the modern economic miracle.

George Will points out the latest ‘progressive’ folly:

Last Wednesday, when the Dow dropped 360.92 points, 132 members of the House of Representatives—116 of them Democrats, including a majority of committee chairmen and three fourths of the party’s freshmen—voted to protect America from Peru’s economic might. That country’s GDP ($186.6 billion) is smaller than Connecticut’s ($204.1 billion); its $8.8 billion worth of exports to America are an imperceptible drop in the enormous bucket of America’s $13 trillion economy.

The stock market’s current palpitations are not caused by Democrats—who might win the presidency next year and probably will control Congress throughout the next presidential term—voting against free trade. Other causes are sufficient—the price of oil almost hitting $100 a barrel, GM announcing a $39 billion third-quarter loss, a Chinese official intimating that his country might begin dumping some of its mountain of dollar-denominated assets.

Although the House passed the Peru agreement, Democratic opposition shows the growing strength of a long-term fever: A majority of congressional Democrats opposed the North American Free Trade Agreement in 1993. For the first time since the 1920s—which were followed by the grim 1930s—one of the parties is protectionist. Opposition to liberalized trade has become liberal or, as is now said, “progressive.”

John Edwards, the shrillness of whose progressivism is inverse to his standing in the polls, urged Congress to reject the Peru agreement. This, although during his single Senate term—his entire governmental experience—he voted for the Andean Trade Preference Act, under which Peru has almost entirely free access to U.S. markets. The agreement he opposes would give U.S. companies reciprocal access to Peru’s market.

Edwards would require Peru to adopt more stringent labor and environmental standards than the pact requires. This, in spite of the fact that the pact’s standards were negotiated by two very liberal House Democrats (Charlie Rangel and Sander Levin), have been endorsed by the AFL-CIO and are stronger than those in the Chile and Singapore agreements for which Senator Edwards voted. Hillary Clinton, who vows to undo the damage done by what she thinks has been George W. Bush’s overbearing unilateralism in dealing with other nations, promises to re-evaluate all existing trade agreements to pressure nations to adopt domestic polices more pleasing to us. Free trade, crucial to the growth of wealth globally since 1945, is in peril. People are playing with fire at a moment when there is economic gasoline spilled all over the place. But overstating problems can be its own form of fire: Recent polls, taken just before the announcements that third-quarter growth was a robust 3.9 percent and that 166,000 jobs were created in October, showed that up to 46 percent of Americans think the economy is in a recession.

Ignorance may be bliss to the person exhibiting it, but it causes nothing but heartache for those in the vicinity…

29 Responses to “George Will On ‘Progressive’ Economic Foolishness”

1 Peter Says:
November 12th, 2007 at 10:27 pm
The Bush administration protects the agricultural, sugar, pharmaceutical, cotton, and tobacco industries from foreign competition.

The administration which has done the most to foster free trade in recent years was when Bill Clinton was President.

Insinuating that Democrats are against free trade and Republicans favor free trade is simply untrue.
2 Mark Says:
November 12th, 2007 at 11:25 pm
Ah, but Bill Clinton was the exception…I’ll grant you that he was far, far better than most Democrats on economic issues…but generally speaking, Peter, the Democrats are protectionist populists. Surely you can’t deny that!…
3 Mark Says:
November 12th, 2007 at 11:25 pm
I’m talking about today’s Democratic party, to be clear…not the past…
4 Mark Says:
November 12th, 2007 at 11:44 pm
In fact, let’s make it simple - show me the statement by any Democratic presidential candidate in defense of free trade…one statement, by any candidate…
5 Mark Says:
November 12th, 2007 at 11:57 pm
One more thing, Peter, in case you missed it from the Will excerpt: a majority of Congressional Democrats opposed NAFTA; Bill Clinton passed it with the Republican Congress…
6 Fred Says:
November 13th, 2007 at 12:25 am
I read somewhere that ever since they began polling people on the state of the economy there has never been fewer than 32 percent of the population that believes we were in a recession. Think about it, all through the roaring 80’s and 90’s when the question was asked large numbers of people simply didn’t know times were booming. That’s some job the MSM did there.
7 Andy Vance Says:
November 13th, 2007 at 4:55 am
Free trade for thee, but not for me.
8 Aaron Says:
November 13th, 2007 at 11:11 am
Oh really?
9 peter Says:
November 13th, 2007 at 11:52 am
Mark: I’m not here to bang a drum for Democrats — nor am I a John Edwards fan, as I view him as an opportunist — I’m a firm believer in free trade — my only point is that there is plenty of sin to go around on all sides.
10 Andy Says:
November 13th, 2007 at 3:24 pm
Aaron, thanks!

I’ll take my standard of living @ 2x poverty with 2k sq ft on 1.3 acres, with the potential to keep moving up any which way I choose, any day over middle class in Old Europe with a 1k sq ft flat and pretty much reaching the top and having to stop. Gee, I guess that’s why we’re the #1 destination for any foreigner that wants to elevate their economic status. Better to be dirt poor in America than getting by back home.

Free trade is not the bogeyman that fair-traders make it out to be. If the core concern is our global corporations are not doing enough to raise the emerging countries’ standard of living, then tariffs are not the way to go since the beneficiaries of the added costs will not be the poor in either country.

Simply put, trade barriers are lose-lose.

I could theoretically accept it if our govt sought to peg foreign labor rates at a certain level and mandate environmental goals. The problem is when and how our govt would adjust to economic realities. Given their track record for ham-fisted calibration, they’re better off by staying out of it.

The better solution is just to let the free market do its thing. Witness the competition for labor in Indian call centers as the rates spiral upwards as companies up the ante to maintain the workforce. This will level off as the workforce reaches parity in wages and standards of living — supply and demand.
11 mikebdot Says:
November 13th, 2007 at 4:13 pm
That link of Aaron’s should help anyone realize why 46% of americans might think we’re in a recession. 42% of the lowest income people…stayed in the lowest income range. 50% of the 2nd tier…stayed in the 2nd tier. Even if you average just those two, that’s 46%. Not sure how one could be surprised. Most people don’t give a hoot about “the economy” and what “it’s doing”. They care about their jobs and their own well-being.

As for those data saying anything about “stagnant wages”, it depends on what one means by the phrase. If one means “how much more money is an individual making after 10 years?” then those data state that perfectly well. But if one means “how much more money does the average line worker make vs. 10 years ago?” or the “average CEO make”, some of that data tells a different story. Fact is, you can “read into” the statistics whatever you want, but I’m not sure anything in that link refutes anything Edwards has said.
12 Andy Vance Says:
November 13th, 2007 at 5:16 pm
The better solution is just to let the free market do its thing.

As Dean Baker lays out in the link I provided above, the “free market” ain’t all that free. Somehow, free traders like Will neglect to include trade barriers such as copyright protections and immigration restrictions on Indian doctors and newspaper columnists.

And before we conclude which party qualifies as economic rationalists, let’s not neglect the Laffler’s and Murray’s infamous curves.
13 Mark Says:
November 13th, 2007 at 8:33 pm
Andy, the question is not whether both parties have sinned, economically speaking…the question is which is closer to right, as a general rule…and I submit to you that the Democratic party of the present time is under the spell of protectionist, populist pablum that punishes people who produce…
14 Andy Vance Says:
November 13th, 2007 at 9:01 pm
*cough, cough*

I’m sorry, what?
15 too many steves Says:
November 13th, 2007 at 9:48 pm
Wow, nice alliteration!
16 Peter Says:
November 13th, 2007 at 11:13 pm
I submit to you that the Republican party of the present time — at least its anti-immigration wing, which is a large part of the GOP — is “under the spell of protectionist, populist pablum that punishes people who produce.”
17 peter Says:
November 14th, 2007 at 8:16 pm
“If there is one thing that every reputable economist knows (read: every economist that doesn’t push partisan agendas (sic), in the manner of the reprehensible Paul Krugman)”

1) Paul Krugman teaches at Princeton and has written or co-authored over two dozen books. I would say that makes him a reputable economist.

2) Paul Krugman has a philosophy which leans left. George Will has a philosophy which leans right. Does that mean that George Will pushes “partisan agenda?”

3) Why is Krugman “reprehensible?” Because you disagree with him?
18 Mark Says:
November 14th, 2007 at 9:24 pm
Krugman is a partisan hack. George Will is not an economist, but a columnist…he may be a partisan hack (hardly, though - have you read his excorciating columns on the Iraq War?), but he’s paid to be…as is Krugman, now…he’s not with the NY Times because of his economic background, but because of his particularly unique ability among economists to always interpret the facts in the way most damaging to Republicans…hardly a disinterested truth-seeker…
19 Mark Says:
November 14th, 2007 at 9:25 pm
And I stand by my statement - if there is a consensus among scientists that we are suffering the effects of man-made global warming, there is an equally strong consensus among economists that free trade is an unequivocal good…does that mean EVERY economist believes it - no, just as not every scientist believes in global warming…but it is the consensus, nonetheless…
20 Peter Says:
November 14th, 2007 at 9:33 pm
1) Post 18: I disagree, but this is not an argument which can be won one way or the other. In my view, Krugman has a strong point of view which is also opposed to the Republican agenda. I don’t always agree with him, but I don’t think that he is there to bang a drum for the Democrats.

2) Post 19: Not to pick nits, but “if there is a consensus among scientists that we are suffering the effects of man-made global warming, there is an equally strong consensus among economists that free trade is an unequivocal good” is not a logical statement. There is no relationship between the first clause and the second. They may share a similarity (consensus) but whether or not there is a consensus among economists about free trade has no logical connection to whether or not there is a consensus among scientists regarding global warming.
21 Mark Says:
November 14th, 2007 at 10:26 pm
The point is that the left constantly ridicules the right for ‘flying in the face of consensus’ on global warming, yet it does the same thing when it flies in the face of the consensus of free trade. Of course, there is no causal relation among the two, it was an analogy…
22 Peter Says:
November 14th, 2007 at 10:41 pm
I can’t speak for “the left,” but your point that there is an inconsistency among some is certainly a valid one.

As for the nit picking: logically speaking, an if/there (short for if/therefore) construction indicates causality. My wife thinks I’m a jerk for pointing out stuff like this (or that agenda is plural, agendum is singular, and there is no such word as agendas). I’ll concede that she has a point.
23 mikebdot Says:
November 15th, 2007 at 11:16 am
Mark: The difference between “economist” and “scientist”, in terms of making conclusions based on actual conclusive evidence, is very large. Economists make policy changes and then try to explain away the results using preconceived notions they’ve had since they decided in advance to change the policies. They do not construct experiments and interpret the results. The problem with “experimenting” with actual people might be a moral one, since policy changes have real life consequences, but I think until we get to that point, the “science” of economics will remain shrouded in a paradox wrapped in an enigma…or vice versa. The “data” is pretty much never good enough to say, unequivocally, anything about it. That is what is most frustrating to me. “Historical data” is an awful way to make decisions, especially when there was no designed experiment involved. Manufacturing’s understanding of that statement’s truth, more than anything, has been the key to the productivity gains of the past 50+ years. But my opinion is biased as I’m an engineer and think of Deming as a god.
24 Ryan Bonneville Says:
November 15th, 2007 at 1:52 pm
Well, Mark, for my money I’m just not that convinced that Republicans are all that great on trade any more. Sure, they used to be better than the Democrats, and the Democrats may have even gotten worse than they used to be, but no one’s all that great. The current President has certainly not been a great advocate of lower trade barriers or subsidies and, in the place where he’s been seriously good for the free market (immigration policy), a substantial portion of his party went absolutely insane. And, while there’s no definitive evidence yet, I would guess his Supreme Court nominees both support the finding in Gonzales v. Raich - which is also, I think plausibly, about free markets.

Obviously the correct answer to your question is something like: Uh, the Democrats aren’t going to blow up Iran or torture prisoners of war. Generally speaking, they also aren’t racists or homophobes. If elections are about judgment or character, the Republican presidential candidates should be laughed off the stage. If they’re about policy… well, that one might be a little closer, but bad on trade is something I’m more willing to accept than bad on war and basic human rights.

On Krugman, I think both sides need to cool it. Yes, Krugman oversells himself for liberal causes, but it’s worth pointing out that conservatives hate him all out of proportion to anything he really does. He’s not consistently wrong (in fact, a good argument can be made that he has been pretty consistently right from the beginning about what an atrocious president Bush is), he’s not dumb, and he’s not that influential anyway. He certainly isn’t “reprehensible”.
25 Mark Says:
November 17th, 2007 at 12:47 pm
Ryan, your comments on Krugman reinforce the point I’m making - he’s employed by the New York Times for his liberal punditry, not for his economic acumen…
26 Peter Says:
November 18th, 2007 at 10:43 am
Does the Times give op-ed space to David Brooks for his conservative punditry or to Thomas Friedman for his middle of the road punditry?
27 Peter Says:
November 18th, 2007 at 11:26 am
One other Times-related note: today’s paper has a front page article on a secret American program to safeguard Pakistani nuclear weapons. The article mentions that the Times held the story for three years due to the Bush administration’s request, but printed it today after the administration withdrew its request.

The Times has been harshly criticized on this site and elsewhere for being only too eager to print national secrets. Here is an example of a newsworthy subject which was kept under wraps for years, in deference to administration wishes.
28 Ryan Bonneville Says:
November 18th, 2007 at 1:40 pm
Mark, obviously that’s why Krugman is employed by the Times. It doesn’t make him a bad economist, a crazy person, or “reprehensible”. You’re partisan too; does that make you “reprehensible”?
29 Mark Says:
November 18th, 2007 at 3:02 pm
Okay, I’ll grant you that Krugman’s being ‘reprehensible’ is a value judgement on my part, rather than an objective fact…for an example of why, see his recent full-court press on declaring Reagan to be a racist…Peter, good on the Times for keeping a secret…I don’t pretend that they’re always wrong on their news decisions, just on their editorial ones (okay, okay, 99.93% wrong)…