The Command Post
Iraq
September 27, 2003
The Most Positive Aspect Of Clinton's Legacy Is In Danger

WSJ.com - Trading Places
Generally Presidents have very little impact on the economy in the short term -- unless it's negative, such as regulations and laws that prevent markets from clearing, or positive when repealing same -- and occasionally have a long-term impact: a legacy. Bill Clinton picked up NAFTA from Bush the elder and guided it through a hostile Congress. Al Gore mopped up the floor with Ross Perot on Larry King arguing in favor of NAFTA. A fantastic achievement.

Oddly, in the Mississippi race for governor this year the Democrat, Ronnie Musgrove, is attacking Republican Haley Barbour for supporting NAFTA and lobbying on Mexico's behalf. I suppose it's too much to ask that Barbour actually make a principled case in favor of NAFTA now, but no. He's using images of Clinton and Gore, and Musgrove's endorsement of them, to tie Musgrove to Clinton and all the ugly things that implies in the minds of Mississippians. NAFTA is really Clinton's crowning achievement.

The Democrats will have taken a turn for the worse if Joe Lieberman is not their nominee. He's the only free trader of the bunch and the only one with the sense to not do the stupid things a President can do to screw up the economy.

Howard Dean recently told the Washington Post that former Democratic Treasury Secretary Robert Rubin had advised him he couldn't "sell" Dr. Dean to Wall Street if he didn't become more of a free-trader. Dr. Dean declared this almost as a badge of honor, which illustrates a dangerous economic turn in the race for the Democratic Presidential nomination.

We had our differences with Bill Clinton, but there's no doubt one of his achievements was leading his party away from protectionism. Open trade was a pillar of his New Democrat philosophy. He and Al Gore routed the AFL-CIO and Ross Perot to pass Nafta in 1993, followed by bills to create the World Trade Organization and allow most-favored nation trading status for China. A decade later all three have contributed to American prosperity.

But without a Democrat looking out for the national interest from the Oval Office, the party is now slipping back toward trade parochialism. On Capitol Hill, the party's regional and union interests have become dominant; most Democrats opposed giving President Bush new trade negotiating authority last year. More ominous still is the rhetoric coming from the Presidential candidates.

In demanding that Nafta be renegotiated, Dr. Dean is hardly alone. With the exception of Senator Joe Lieberman, we can't find any of the other candidates who still supports it. John Kerry attacked Dr. Dean as a protectionist the other day, but the Massachusetts Senator has also said he regrets having voted for Nafta. Dr. Dean is also getting whacked from the left for not being protectionist enough: Congressman Dick Gephardt has mocked the fact that Dr. Dean sent Bill Clinton a letter supporting it and showed up for the signing ceremony in 1993, only to walk away from it now.

Meanwhile, Senator John Edwards is sending out weekly news releases trying to pick a trade fight with China. Even Mr. Lieberman, a recognized free-trader, is trying to show he can also be "tough" on trade by joining the Bush Administration in knocking China around.

On the bright side, we could end up with a combination of McGovern and Mondale running against Bush in 2004. Short of Lieberman winning for the Democrats they're set to regress economically.

Posted By Robert Prather (Insults Unpunished) at September 27, 2003 04:00 AM | TrackBack
Comments

I have to admit being of two minds on this. I don't feel like an authority (because I'm not) but this is how I'm thinking about this at the moment.

Free trade only seems sustainable if conditions on the playing field are fair. I remember all the trade dumping that Japan used to do. Whereas we shouldn't protect ourselves against honest competition, we have to admit that this competition will lead to an averaging out of a global median standard of living. Americans are not immune to being slapped by Adam Smith's invisible hand just because they were born and/or live in a country that currently provides them with a standard of living most of the people in competing countries only dream about after seeing glimpse of it on their televisions. I think that it should be considered fair to place demands on exporters to this country who externalize their manufacturing cost to the environment or produce their goods through rank exploitation. This is not only to combat unfair trade practices that cost American jobs, but this kind of behavior constitutes the kinds of injustice that makes all our lives less than they should be. If one really wants to play on an open field like 'free trade' it means that one has to be more savy, not less. Too often I feel that self-proclaimed free traders are really only out to increase the profit margin for shareholders and boards in the near term, especially when a fair amount of the labor used to produce the profits they recieve has been outsourced offshore. I don't think I can trust a Free Trader unless that person also has a solild track record on issues of honest governence. These days, I have a hard time pointing to anyone like that, unfortunately. We should all start thinking about who wants to govern and who is just out to rule. Character really does matter, as does intellect and a proper vision of what the future could look like, one way or the other.

Posted by: Mac33 at September 30, 2003 10:07 PM

It would really be nice to have a world where every country dealt fairly with another, but if you're going to hold your breath and wait for that time, best of luck.

If a country wants to "dump" on us, I say, let 'em. Japanese steel didn't kill the American steel industry. Our labor priced itself out of the market. I've had a dozen friends, a brother-in-law, a grandfather and two cousins working in steel at any one time and I'll tell you what, it's hard to make a profit when you're paying $58/hr in wages & benefits compared with $30/hr in Japan and $15/hr in Korea. Would I have loved to have seen all my relatives go on making the big bucks? Sure. But only my brother-in-law is doing so as of this writing.

Simply put, Americans have to clean up their own house first. No more corporate welfare for exporters. Our products either make it on their own merits, or they don't. Giving taxpayer dollars to GM or Quaker Oats to sell product overseas is a terrific waste of capital. Let's deal with the countries that want FAIR trade, not some bizzare patchwork of protectionist this and free-trade that. We have nothing to fear from competing on the world market, and everything to gain.

Bush is, in the area of foreign trade, a retrograde after Clinton. In that respect, the US might have just as well elected Dick Gephardt.

Don't get me wrong, no one's happier that Dick will never see the Oval Office, but George 43's got a remarkably democratic streak when it comes to protectionist trade practices. I expected better from him, but what he's done with steel price supports is nothing more than pandering for votes with taxpayer money.

Ben Franklin said no country was ever harmed by free trade and that's 100% correct to this day. There is nothing wrong with turning a profit, or bringing home something for the stockholders, and you don't have to break laws or Commandments to do it. Hundreds of companies do it now, and more would if only government would get out of the way.

Posted by: torpedo_eight at October 2, 2003 01:12 AM

Toopedo_eight,

I tend to agree with what you're saying, except for expecting more from Bush. The cost of a commodity, such as labor or raw materials will vary from spot to spot. The steel industry was done in here by a combination of high wages and dumping by overseas competators. I was thinking more about televisions, where there was a concerted effort by producers like Sony and Mashusta to produce TVs (which were in fact a superior product than their Zenith et al couterparts in terms of market potential) and sold them at under production costs in a predatory manner.

Steel is a material that is barely manufactured, a raw material in itself. I am closer to your position than you think. However, most of the anit-labor rhetoric that I have heard verges on corporate propaganda. It was not the unions who decided what the absurd crap that passed for American manufactured cars, (for a narrow example) all through the mid 60's to present would be. Stand at a street corner and look at cars go by some time. The American brands still look off the competative mark and if you select the 5 to 7 year old cars you come to the conclusion that the UAW had to play on a pretty shitty team. My Dad had a friend that had a Nissan still running at 250,000 miles in the mid 80's. We all thought that it was impossible (sure it was rusted, but he lived in Michigan). It's the same old story everywhere. I have a French friend who told me he couldn't believe that stores still sold ranges with the old electric coil resistence burners. He claims that the low end in Europe has been sealed ceramic for as long as he could remember. Which would you really rather own, a Maytag or a Siemens dish washer?

There was an old joke about the first introduction of CAFE standards, Tokyo hired 50 engineers to meet them while Detroit hired 50 Lawyers. I didn't think it was funny then and I think it is less funny today.

As far as getting the Government out of the way, there is a proper place for Government, to provide for the Welfare of the people. Government(s) should set ground rules that everyone abides by, good government does this well, bad government does it the way too many American Governments have done it and is doing it more than ever during this administration. You DO NOT redistribute wealth in a society upwards! You do keep an eye towards attempting to even the starting line out by using some of societies productivity towards nurturing the next generations of consumers, employees, and most important, citizens. The fiscal policies of the Bush administration is amazingly stupid. The only way fiscal policy can ever be effective is when it is directed at influencing aggragate demand. Stalinism and Fascism were both attempts by the Government to get involved in the production side of the equation for the benifit of the elete (the real elete, not the people the country club republicans like Rove want to brand elete, Kenny BoyLay would be an elete trying to make descissions for you, especially if you lived in CA two years ago). Trick-L down smells like fascism to me. When you say, 'no more welfare for exporters." you should extend that to the upper reaches of the income brackets. There is no one who benefits from what taxation provides nearly as much as the wealthy. A poor person who is on 100% support is still not close to Bill gates in terms of the amount of support taxes have provided. Bill would probably tell you this is true. The wealthy need so much to make the money that they are increasingly not taxed on. They need an educated workforce and consumer base, roads and infrastructure, a military and police force to protect their assets, etc. etc. etc. The poor 'welfare cheat' doesn't need nearly this much, she's two steps from the wilderness as it is.

Posted by: Mac33 at October 7, 2003 05:12 PM

Post a comment

Thanks for signing in, . Now you can comment. (Click here should you choose to sign out.)

As you post your comment, please mind our simple comment policy: we welcome all perspectives, but require that comments be both civil and respectful. We also ask that you avoid the extensive use of profanity, racist terms (neither of which we consider civil or respectful), and other boorish language.

We reserve the right to delete any comment, and to prohibit you from commenting on this site, if we feel you have broached this policy. As a courtesy, we will first send you an email noting a violation so you understand the boundaries. This will occur only once, however, and should we ban you from our comment forums we expect that ban to be permanent.

We also will frown upon those who suggest that we ban other individuals for voicing unpopular opinions, should those opinions be voiced in a civil and respectful manner. The point of our comment threads is to provide a forum for spirited though civil and respectful discourse … it is not to provide a forum in which everyone will agree with your point of view.

If you can live by these rules, welcome aboard. If not, then we’re sorry it didn’t work out, and thanks for visiting The Command Post.


Remember me?