Arkady
President
One area where I disagree with fellow lefties is trade policy. Lefties thought NAFTA was a terrible idea and they insist, to this day, that their predictions of doom were correct and that we should, therefore, steer away from any similar trade deals:
http://www.salon.com/2015/05/08/america_is_about_to_make_a_horrible_mistake_all_over_again/
These lefties are correct about a lot of things. I believe such trade deals do have a tendency to increase income inequality within countries (while decreasing them across countries). And I think that we'd be a lot better off with trade deals that did more to ensure that poorer countries would gradually come up to our level, rather than us being forced to race down to theirs by cutting wages, labor protections, environmental standards, etc., or exporting manufacturing, to compete on price.
Yet, even with trade deals that have all those flaws -- deals where no real effort was made to implement methods to interrupt the "race to the bottom" -- the economic fundamentals are so solidly in favor of greater trade that I think we STILL wind up better off. That doesn't let politicians off the hook for improving on these deals. But I think it's important to be honest about the fact that, for all their flaws, these deals tend to be a net positive.
In a lot of people's minds, NAFTA has become associated with the Bush era of economic collapse, or the Obama era of weak economic growth. But, the timing doesn't support that. NAFTA (and the WTO round of the GATT, which is the other biggest trade liberalization change of the last quarter century) both date to late 1993. They were followed, for over seven years, by almost unprecedented improvements in the American economy and for the American worker. It was the longest economic boom in American history, eventually plunging unemployment below 4%, and it raised real incomes at every income quintile, dramatically lowered poverty, saw a soaring stock market, and a plunging budget deficit, low inflation, and a strong dollar. If trade liberalization is to blame for the economic malaise that set in shortly after Bush took office, it's very hard to explain the length of that supposed seven-year-long fuse.
Keep in mind, it's not just that the period of seven years following those trade deals was better than what we've had more recently. It was also much better than the era immediately preceding those trade deals. During the twelve years of Reagan/Bush, median real incomes were nearly flat, poverty rose, the US economy grew more slowly than the global economy, and deficits exploded to a then-record level. That's not even to get into the sociological devastation (record violent crime, record teen pregnancy rates, record divorce, etc.) So, it's not just that there's no sign NAFTA and the WTO caused harm, the timing suggests it helped, in that it marked a break from the trends of such a miserable era (which, actually, stretched back further to the high inflation and rising poverty rates that first took hold in the Nixon years). Granted, the strong, across-the-board improvement that followed NAFTA and the WTO for seven years eventually petered out, first into Bush's first recession, and the weak recovery that followed, then into Bush's second, more severe recession, and the even weaker recovery of the current period of government austerity. But I just can't see associating free trade with such long-delayed "results," rather than the good economic performance before that. It strikes me as liberals trying to make history fit their theories, rather than theories fit history.
http://www.salon.com/2015/05/08/america_is_about_to_make_a_horrible_mistake_all_over_again/
These lefties are correct about a lot of things. I believe such trade deals do have a tendency to increase income inequality within countries (while decreasing them across countries). And I think that we'd be a lot better off with trade deals that did more to ensure that poorer countries would gradually come up to our level, rather than us being forced to race down to theirs by cutting wages, labor protections, environmental standards, etc., or exporting manufacturing, to compete on price.
Yet, even with trade deals that have all those flaws -- deals where no real effort was made to implement methods to interrupt the "race to the bottom" -- the economic fundamentals are so solidly in favor of greater trade that I think we STILL wind up better off. That doesn't let politicians off the hook for improving on these deals. But I think it's important to be honest about the fact that, for all their flaws, these deals tend to be a net positive.
In a lot of people's minds, NAFTA has become associated with the Bush era of economic collapse, or the Obama era of weak economic growth. But, the timing doesn't support that. NAFTA (and the WTO round of the GATT, which is the other biggest trade liberalization change of the last quarter century) both date to late 1993. They were followed, for over seven years, by almost unprecedented improvements in the American economy and for the American worker. It was the longest economic boom in American history, eventually plunging unemployment below 4%, and it raised real incomes at every income quintile, dramatically lowered poverty, saw a soaring stock market, and a plunging budget deficit, low inflation, and a strong dollar. If trade liberalization is to blame for the economic malaise that set in shortly after Bush took office, it's very hard to explain the length of that supposed seven-year-long fuse.
Keep in mind, it's not just that the period of seven years following those trade deals was better than what we've had more recently. It was also much better than the era immediately preceding those trade deals. During the twelve years of Reagan/Bush, median real incomes were nearly flat, poverty rose, the US economy grew more slowly than the global economy, and deficits exploded to a then-record level. That's not even to get into the sociological devastation (record violent crime, record teen pregnancy rates, record divorce, etc.) So, it's not just that there's no sign NAFTA and the WTO caused harm, the timing suggests it helped, in that it marked a break from the trends of such a miserable era (which, actually, stretched back further to the high inflation and rising poverty rates that first took hold in the Nixon years). Granted, the strong, across-the-board improvement that followed NAFTA and the WTO for seven years eventually petered out, first into Bush's first recession, and the weak recovery that followed, then into Bush's second, more severe recession, and the even weaker recovery of the current period of government austerity. But I just can't see associating free trade with such long-delayed "results," rather than the good economic performance before that. It strikes me as liberals trying to make history fit their theories, rather than theories fit history.
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