Redstate

By Pejman Yousefzadeh Posted in 2008 | Barack Obama | Free Trade | Hillary Clinton | Outsourcing The Formation Of Arguments — Comments (7) / Email this page » / Leave a comment »

Sometimes, it is best to give one's wordsmithing skills--such as they are, in my case--a rest, and turn the microphone over to someone else.

Let us turn the microphone over to Stephen Moore, who wrote the following in yesterday's "Political Diary" for the Wall Street Journal (no link, alas; the dirty capitalist running dogs charge people to see their stuff. But because I run with the running dogs--or at least, because I run with the people who run with the running dogs . . . er . . . anyway, there is a lot of canine running and it's just a metaphor, so what does it matter in the end?--I get to see the stuff for free) about the Democratic Presidential candidates' trade policy.

Read on . . .

As Barack Obama and Hillary Clinton barnstorm through the industrial regions of Ohio, they seem to be competing for the title of most ardent protectionist. The theme of the Democrats in this election year is that opposition to free trade is a political winner -- though it wasn't for John Kerry, Michael Dukakis, or Walter Mondale.

Mrs. Clinton says she wants a "timeout" on trade agreements. Mr. Obama wants to rip open Nafta and renegotiate it because, he says, it has cost "one million jobs." Never mind that the evidence is just the opposite: A study by researchers at Harvard finds that American companies engaged in international trade and "out-sourcing of jobs" actually are net creators of jobs. "The U.S. has created more than 20 million new jobs since Nafta was passed in the mid-1990s," notes CNBC's Larry Kudlow. "How can Obama say that Nafta has cost jobs?"

But the real hidden benefit of trade may be in taming inflation. A new analysis by the esteemed American Institute for Economic Research in Great Barrington, Mass., provides persuasive evidence that trade-impacted industries in the U.S. have falling prices, while industries exempt from trade have high inflation rates. "If you mostly bought TVs, computers, and electronic gadgets, your cost of living went down last year... even though overall consumer prices rose by 4.1% for the year." The biggest price declines were in apparel, cars and trucks, electronic equipment and computer software. In these industries, firms have little power to raise prices because of cutthroat competition.

Meanwhile, the biggest increases in prices were for gasoline, medical care, college tuition and public transportation. Except for gasoline, these industries are not subject to price pressures from trade. Says John Tamny, editor of Realclearmarkets.com: "If workers have to pay more for goods and services, they're made poorer, not richer." But don't expect any reasoned explanation of trade's benefits from Mr. Obama or Ms. Clinton, who have decided the mood this year calls for peddling the audacity of fear, not hope, in places like Toledo, Dayton and Youngstown.

Good stuff. And today, John Fund (that last name just reeks of capitalism) piled on. Someone hand him the microphone:

Is Barack Obama climbing out so far on his campaign's left wing as to court a potential political crash as his party's nominee?

Mr. Obama used to make soothing, moderate noises on the economy, well aware that projecting an image as a wild-eyed populist could hurt him with independent voters in the fall. But in the heat of the Texas and Ohio primaries, he has thrown restraint aside and joined Hillary Clinton in a jihad against globalization.

Most infamously, Mr. Obama paired his endorsement by the anti-trade Teamsters Union with a pledge to block "open trucking" with Mexico, by which cargo vehicles can easily cross the border without transferring their shipments to U.S. trucks.

As for NAFTA, which has proven a boon to many border areas of Texas, Mr. Obama now claims that the agreement with Mexico cost "millions of jobs" and says he wants to renegotiate the treaty. On the outsourcing of U.S. jobs overseas, Mr. Obama has come up with a Rube Goldberg plan to levy lower corporate taxes on firms that become "patriot employers" and keep jobs in the U.S. "What he is effectively saying is that companies that offshore jobs are unpatriotic," economist Gary Hufbauer told the Financial Times. "This is serious language."

It may also be serious politics. John McCain advisers believe that Mr. Obama's "stop the world" rhetoric combined with his designation as the most liberal senator by the National Journal magazine give them an angle to appeal to business owners and workers in export industries. "The only Democrat to win the White House in the last generation was Bill Clinton, who was moderate on trade," says one McCain adviser. "If Obama wants to try trade extremism instead as a campaign tactic, that's a battlefield we will be happy to meet him on."

Advisers to Mr. McCain believe that Mr. Obama would present a juicy target as nominee. "We see him as a classic liberal whose proposals come straight out of the 1970s," says Douglas Holtz-Eakin, senior McCain adviser. "It is hard to understand his stance on trade. Access to the U.S. market is a vital element of our foreign policy."

One hopes that the electoral dangers that will be faced by protectionist politicians will be directly proportional to the economic dangers that would be faced by the country if protectionism became the foundation of America's trade policy. If so, free traders should have no problem whatsoever getting themselves elected.