Saturday, August 7, 2004

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Just so long as it's campaign rhetoric...

Jill Zuckman writes in today's Chicago Tribune on how the Kerry-Edwards ticket responds to hostile and vocal Bush supporters at campaign events:

Nobody ever said campaigning like Harry Truman on the back of a train through hostile territory was going to be easy.

That's what the Democratic candidates for president and vice president began to realize late Thursday night as they pulled into this rural outpost and found themselves surrounded by about 2,000 politically divided voters in the pitch dark.

Holding candles, flashlights and posters, the people of Sedalia engaged in a shouting contest: Some called out "Four more years" and "We want Bush," while their neighbors chanted, "Three more months" and "Kerry! Kerry!"

The candidates themselves could barely get a word in....

Whether the rowdy crowd surrounding the Kerry-Edwards train was any indication of how Missouri will vote this year is difficult to assess. But it provided one of the less scripted moments of the campaign season so far.

"Will you let us speak? Will you let us speak, please?" Edwards urged the Republican section of the crowd, which was trying to drown him out with boos.

"We would never shout down our opponents when they're speaking," Edwards added, between attempts to describe his vision for one America without states that are either "red" or "blue."

As the Bush protesters continued to boo, Edwards asked them, "Are you guys really booing outsourcing of millions of America's jobs and doing something about it?" (emphasis added)

I'm sure Kerry supporters would say this is just campaign rhetoric -- exaggerated, distorted, and buffoonish campaign rhetoric.

UPDATE: Just for the record, like Pejman Yousefzadeh, I'm certainly not endorsing the booing in the first place. Indeed, one could argue that this kind of incivility merely encourages the response Edwards gave. What I can't stop wondering -- again -- is what this leads to if Kerry wins.

posted by Dan on 08.07.04 at 03:42 PM


I saw this footage on Fox yesterday. Edwards actually came off really well. He showed compassion and a sense of humor. You should have seen his expression, he was smiling in a kind of unbelieving shock that people actually have so little compassion for those who lose their jobs to outsourcing overseas. It was an extremely effective moment. If you were someone seeing that shot on Fox, and you've lost your job or felt it was at risk, you'd be thinking Edwards was a good guy and his opponents were a bunch of corporatist pricks.

posted by: timshel on 08.07.04 at 03:42 PM [permalink]

Timshel is seeing this through glasses of a particular hue. I suspect he believes that outsourcing is harmful, and that colors his perception. The comment is amazingly lame, though Edwards delivered it with style. That was his day job, after all.

I wouldn't participate in a shoutdown, and I think people should have their say. But part of campaigning is getting out of your party's echo chamber to confront the fact that the people who are opposed to you are not cartoon cutouts, but actual human beings. They don't look like your stereotype told you they would.

When pressed, Edwards fell back to treating people as abstracts. That is probably a wise move, as there are millions more voters who are only going to read or hear what you said than voters present in from of you. Most politicians move to those abstractions too easily, but the political calculus is pretty easy to see.

It is hard to be both locally connected and nationally quotable, so Edward's gambit is understandable. But however it works out politically, it is certainly not a positive morally.

posted by: Assistant Village Idiot on 08.07.04 at 03:42 PM [permalink]

The lone-quote Drezner strikes again. Perhaps Kerry sould have people who want to attend such rallies sign loyalty oaths first, would that increase his p-value?

posted by: Jor on 08.07.04 at 03:42 PM [permalink]

Jor has an excellent point: there would be no booing at Kerry/Edwards rallies if, like the GOP, tickets were available only to those who signed oaths to support the ticket.

posted by: BayMike on 08.07.04 at 03:42 PM [permalink]

“As the Bush protesters continued to boo, Edwards asked them, "Are you guys really booing outsourcing of millions of America's jobs and doing something about it?" (emphasis added)

I'm sure Kerry supporters would say this is just campaign rhetoric -- exaggerated, distorted, and buffoonish campaign rhetoric.”

No, it’s the real agenda of the new Democratic Party. I long ago realized that Laura Tyson, Robert Rubin, and Brad DeLong are heretics and being effectively marginalized. The clincher was the two major races won by the Democrats in Louisiana based solely on frightening voters about free trade. That was the tipping point, as Malcolm Gladwell might describe the situation. It’s as simple as that. This is an important issue which can win campaign races. Free trade is a gutty position during the best of times. It is an almost impossible goal if the economy is even slightly sluggish. Earth to Dan Drezner: wake up to reality. If George W. Bush sometimes wimps out on free trade, what in hell is a Democratic candidate who is being screamed at by a large percentage of their party going to do? Especially if that individual is John Kerry, infamous for putting his wet finger into the blowing wind?

I almost forgot to cynically add that the three previously mentioned economists will now pay an enormous price for chickening out when the Democrats won in Louisiana. They might have put a halt to such further nonsense in the future if they had voiced their objections---and taken the chance of letting the Republicans win. Oh well, that’s water over the bridge. They instead placed party loyalty over the good of the country---and now deserve to be treated with a certain degree of polite disdain.

posted by: David Thomson on 08.07.04 at 03:42 PM [permalink]

Doing something about it, version 1: closing off our borders. Bad.

Doing something about it, version 2: creating new, better jobs at home to replace the lost ones. Good.

If you do the second, then the calls to do the first die off. See W. J. Clinton, 1993-2000.

posted by: Anno-nymous on 08.07.04 at 03:42 PM [permalink]

Agree re Edwards handled as well as possible.
The guy knows people-- whether you like him or not.

Need different models for trade issues.
Old models are achaic and following as some old religion is killing U.S.( but not our competitors who don't follow models in your textbooks).

Yes, our borders do need closing as well as screening out visas, etc. for national safety and security-- in several ways and for several reasons.

Should have had a national debate about military budget long before it crept back up again. Our military budget shouldn't be more than 2-3 times those closest to us. Further, I am and have been for Tribute paid to us for protection of our military. Think we are fools not to.

posted by: Alex on 08.07.04 at 03:42 PM [permalink]

No, it’s the real agenda of the new Democratic Party.

What is?

I have already asked on the Hillary Clinton thread: Do you guys (David Thomson, Dan Drezner and others here) actually think that outsourcing/offshoring are desirable for their own sake, should be encouraged and thus any kind of criticism of outsourcing/offshoring should be condemned?

Nobody is talking about prohibiting outsourcing/offshoring.

posted by: gw on 08.07.04 at 03:42 PM [permalink]

It's hard to see the point of this post.

Is it that Edwards is foolish to express concern about people losing their jobs to outsourcing? Why? I understand the value of free trade, but does that mean we should just shrug off the difficulties it clearly creates for some Americans? That's a nice dry academic attitude, but perhaps we could think a few steps further, and try to figure out ways to help these people.

Or is the point that Democrats are vicious protectionists who will destroy the economy. Sorry, I see no evidence that either party is particularly dedicated to free trade. Anybody seen Mankiw since he suggested that outsourcing was no big deal?

posted by: Bernard Yomtov on 08.07.04 at 03:42 PM [permalink]

> What I can't stop wondering -- again -- is what this leads to if Kerry wins.

Well obviously Dan, your concerns are legitimate. Kerry and Edwards will personally pen legislation banning all outsourcing, force it through the Republican congress, sign it and enforce it, all within the first 24 hours of their administration. This, in spite of the fact that the most they've ever suggested is reciprocal enforcement of trade agreements.

A lot of Republicans seem to get a kick out of deriding Andrew Sullivan for being 'one-issue', but at least his issue bears the virtue of substance.

p.s. David Thomson:

"What in hell is a Democratic candidate who is being screamed at by a large percentage of their party going to do?"

Maybe the same thing the last Democratic president did (i.e. run one of the most consistently and successfully free-trade administrations in history)?

posted by: sebastien on 08.07.04 at 03:42 PM [permalink]

Dan - so why on earth are you still sitting on the fence regarding your vote? Do you really think Kedwards' talk on outsourcing for the past year has been merely campaign rhetoric?

And I can't help but picture mobs of people (well, in the case of Kedwards probably more like 3 people, as even one of their wives probably wanders over to the opposition Brick-Tamland-from-Anchorman style) But anyway, why does picturing these people in the dark, holding candles chanting "Ker-ry! Ker-ry!" remind me of footage of crowds of Argentinians standing outside the Casa Rosada chanting "Evita! Evita!"

Maybe it has something to do with populism and horribly failed presidencies?


posted by: Danny on 08.07.04 at 03:42 PM [permalink]

"Maybe the same thing the last Democratic president did (i.e. run one of the most consistently and successfully free-trade administrations in history)?"

Bill Clinton was never under such pressure from his left wing. Howard Dean has changed everything. Todya's Democratic Party is far more liberal.

posted by: David Thomson on 08.07.04 at 03:42 PM [permalink]

“Do you guys (David Thomson, Dan Drezner and others here) actually think that outsourcing/offshoring are desirable for their own sake, should be encouraged and thus any kind of criticism of outsourcing/offshoring should be condemned?”

Gosh darn it, I think that you are starting to get it. I most certainly do believe that outsourcing is so innately logical that one should be “condemned” for criticizing it. Such pathetic people are similar to those who insist that the earth is flat. There is only one concern with outsourcing that deserves respect: what can be done to the help the people earning a living in sectors that were destroyed by the creative economic process? Did somebody say that they are against outsourcing? If that's the case, you should grow all your own food and not enjoy anything that is produced by a person living outside your home.

posted by: David Thomson on 08.07.04 at 03:42 PM [permalink]

As a person living in the part of the country Kerry/Edwards is promising jobs to-- it would be nice to be able to believe that they can make it happen. But the truth is jobs here disappeared in the Reagan, Bush1 and Clinton administrations at a rate at least as fast as now. Most people realize this-------a few tax breaks aren't going to bring them back.

posted by: bethl on 08.07.04 at 03:42 PM [permalink]

"Most people realize this-------a few tax breaks aren't going to bring them back."

That's right. Many jobs are gone forever. The automobile, for instance, destroyed the horse and buggy industry. This is the cost of a growing economy. People must often adjust and find a new way of earning a living. The paradox is this: the wealthier our economy becomes, the more jobs are created--and destroyed.

posted by: David Thomson on 08.07.04 at 03:42 PM [permalink]

David Thomson, I came up with an idea about outsourcing etc and I wonder if you or anyone else might suggest flaws in the reasoning.

Say you were dictatorially running a large third-world nation that didn't have any debt to the IMF etc. So you could and did put in trade barriers to keep out foreign goods except for the ones you particularly wanted, factories and such.

And you work your people hard making baskets and dolls and whatever will sell overseas. Use the foreign exchange to buy factories and patents and infrastructure and raw materials for more exports. Pretty soon you can sell plastic flyswatters and plastic wastebaskets and plastic dolls etc.

You set your prices below what foreigners can do who don't have essentially slave labor (or actual slave labor). But well above your raw material cost. Peg your currency to the US dollar. As you take over each little market segment you get that much more income for the capital equipment to take over the next little market segment.

And you welcome outsourcing, your people work a lot cheaper than similar quality in the US, partly because you don't pay them as much and partly because of the exchange rate.

In theory all this is suboptimal for the world and suboptimal for you. Your workers are working hard for little reward, if you imported more good stuff for them they would get more for their work. But let's say you don't care about that. So you use your dollars to buy what you need, and whatever you don't need you just save. If you bought US stuff you'd stimulate the US economy and put unemployed americans to work doing whatever the US comparative advantage would have them do. But, as I said, you don't care about that.

So eventually, for international trade people have a choice, they can buy from the USA expensive or they can buy from you cheap or they can buy elsewhere somewhere in the middle. The tendency is to buy from you cheap. The dollars you are holding are losing their value. Your currency is tending to support the dollar.

So your people are working hard for little reward. You're losing that way. The US people are getting lots of stuff from you that they pay for with increasingly worthless dollars. You're losing that way.

And the americans are priced out of a lot of markets because you are paying to support their currency. Without you they could devalue the dollar and be more competitive. But they can't, when they try to devalue their currency they're trying to devalue yours too. Whole american industries are destroyed. American productivity per employed worker may be up but a lot of their people can't find work and their hours are wasted watching TV and surfing the net and worrying about their debts.

And you own a tremendous number of dollars that no one particularly wants. The more of them you get the more you lose.

But say you don't care about any of those losses. Say your intention is to become the new world superpower or something like that. Imagine simply paying your enemy to let you wreck their economy! You work cheap, they can't compete, and instead of letting them build their economy with whatever works for their remaining comparative advantage, you mostly write off their debts.

A far cheaper way to beat them than to invade and bomb their factories. Which wouldn't work against a nuclear power anyway....

So, I can see that free trade produces the most wealth. Anyone who interfers with trade will probably hurt his own nation's wealth as much as he hurts the people he's reduced trade with. But could there be national policies that make this the right thing to do anyway?

When people use the term "economic warfare" what exactly are they talking about?

posted by: J Thomas on 08.07.04 at 03:42 PM [permalink]

Agree and well said, J.Thomas.

posted by: Alex on 08.07.04 at 03:42 PM [permalink]

"...he was smiling in a kind of unbelieving shock that people actually have so little compassion for those who lose their jobs to outsourcing overseas." -Wow! You sure can read a lot from a smile, timshel.

How 'bout:
...he was smiling in a kind of unrelenting melancholy known only to the Ungaboonga tribe of northern Antartica.


...he was smiling in a kind of shocking unbelief that some people do not enjoy bull-whips in the same way Democrats do.

posted by: Les Nessman on 08.07.04 at 03:42 PM [permalink]

Ignoring the effect of offshoring isn't exactly useful, Dan.

It's going to have to be dealt with, whether that means trade restrictions, or more effectively, efforts to aid Americans in an environment of transient employment and no job security, where whole fields of employment can become unviable in a short amount of time. And it ought to also address the healthcare problems created by unemployment.

posted by: Jon H on 08.07.04 at 03:42 PM [permalink]

Outsourcing is scary and potentially dangerous in leaving even more Americans behind economically. Try to avoid the siren call of protectionism. Europe has a lot of protectionism and maintains 7% to 15% unemployment. Does anybody want to think what America would be like with chronic 7% to 15% unemployment? Look at the grief Bush gets for 5.6%. We need students taking fewer self-esteem classes, race-studies and women's studies. We need to graduate people with something to offer the modern world. We need the NEA demanding full literacy for high school graduates. Instead we just beat up on the countries with a vision (Japan in the 80's), now India and China. Outsourcing is scary for me too. Just losing a job period sucks. It should be studied and evaluated somewhat but don't let loose with another government policy that will only make the problem worse.

posted by: Ptolemy on 08.07.04 at 03:42 PM [permalink]

Average Joe, I will try again.

The liberal elite believes in something they call "free trade", because they believe in something they call "comparative advantage". To figure out what they're talking about you have to understand comparative advantage.

I will give an example. Suppose you are a computer programmer, but somebody else is a better programmer. So you get fired. However, you can get another job working in a vinyard growing grapes. You might say, how do I know that job is waiting for you? What if the other guy is better at growing grapes too? And the answer is that it doesn't matter if he's also better than you with the second job -- since it doesn't pay as well he'll be a programmer instead and he'll leave the other job to you. No matter how many people are better than you at no matter how many other jobs, there will always be a job for you. Because there are more jobs than there are people to do them, and no matter how bad you are at everything, no matter how uncompetitive you are, there's always some job waiting that nobody else wants.

Comparative advantage says this is also true for whole nations. If we aren't as good at making shoes as some other nation, let them make the shoes and we'll buy them. They'll buy something we make. It's guaranteed. Even if they're better at everything than we are, they'll do the things they get the biggest profit from and leave the least profitable things for us to do.

Say that we're 2nd-best at making computers, but nobody else in the world wants to compete with us for making little paper parasols to put on mixed drinks. The best nation can make the computers, and we can make the paper parasols, and the world will be better off -- it will have more computers and more paper parasols than it would if we each made both! And not only that, *we* will be better off. It's guaranteed! The math is kind of complicated and there are a lot of ifs-ands-and-buts about when it's guaranteed, but it's one of the most basic discoveries of the science of economics and no respected economist doubts it. If every government lets people trade whatever they want to, whenever they want to, for the prices they agree between themselves, everybody is better off. And that's what they mean by free trade. The governments work together to make everybody better off.

The US government says that free trade is good and everybody should do it. And when poor countries get in trouble -- like we gave them loans it turned out they couldn't pay off -- we always make them do free trade whether they want to or not. Usually they don't want to. They say they want to develop their countries, they want to make their own steel and train their own computer programmers and all that, because they don't see that the market knows better than they do what to do. They think they know better than the market.

So they give money to businesses so they can compete better, and they might put taxes on things foreigners try to sell in their country, and they think that will give their businesses that aren't good enough a chance to get better. They give their schools money to train computer programmers for the same reason. They don't see that if the market wanted them to have computer programmers then the market would train them itself. And the result is that we get more programmers than we need, and some of them aren't good enough and ought to do lawnwork or something. The wasted training means there's a little less of something else to go around.

OK, then there's money. Comparative advantage shows that when people all do what the market will pay them the most for, there's the most to go around. But it doesn't say how things get paid for.

So I'll go over that quick.

posted by: J Thomas on 08.07.04 at 03:42 PM [permalink]

Money is a kind of promise. You can take a dollar and go into any 7/11 in the country and buy a candy bar. Usually you'll get change back. You can't be sure exactly how much change you'll get. Maybe the candy bars will get a little smaller.

It's government's job to make sure the promise is kept well enough that people don't get too upset. Supply and demand works for candy bars and money both. When there are too many dollars in people's pockets for the number of candy bars, the government needs to take some of those dollars away. When there aren't enough dollars for the available candy bars the government needs to spend some (or give them away). The government can take money from people. The people hate it. Or it can offer people a deal, they give it money now and it will give them back even more money later. People don't hate that, they get to choose. If there aren't enough people who want to make that deal the government can offer them more money later to sweeten the deal. Of course later they'll get their money and it might be an even bigger problem then, but that's later. If the amount of money gets out of line with the stuff people want to buy then bad things happen to people who use money and they complain, so it's the government's job to take care of it.

When you trade with foreigners, whose money do they use to trade? Yours. You buy from them with dollars and they buy from you with dollars. But it isn't always the same people buying and selling, so they buy and sell dollars among themselves. Just like it's better when the price of candy bars in dollars doesn't change too fast, it's better when the price of dollars in pounds doesn't change too fast. But the governments can't really stop that, so when it goes wrong international traders just have to suck it up.

Sometimes governments have tried to regulate trade in their currencies. Done well, they stabilise prices and make a little money. Or they might lose a little. Done badly they distort the market and maybe pay heavily. They say they'll buy and sell pounds for dollars, and they set a rate, and if the rate is too high everybody buys while if it's too low everybody sells. They pay through the nose to mess up international trade. Economists mostly agree that it's better for governments to have free trade in money just like everything else. It's bad to distort markets.

Economists are all intellectuals and they disagree about everything. But all reputable economists agree about the basics. Comparative advantage works. Without government interference there will be the most stuff to go around, everybody will get the best job for them in the world economy, and they will get the rewards they deserve.

Free markets work. They result in the most wealth to go around and everybody gets their fair share of that wealth. Every economist agrees with this except communists and other kooks that nobody listens to.

Now I'll say about my problem.

posted by: J Thomas on 08.07.04 at 03:42 PM [permalink]

Sometimes governments do interfere with trade. Like, before the iraq invasion we had trade sanctions against iraq for a long time. We didn't get to buy as much oil from them as we wanted. They didn't get to buy as much medicine, power-plant equipment, water purification equipment, taxicabs, etc. We lost a little wealth. They lost maybe half a million people to disease and when we invaded their tanks were junk.

Now we have sanctions against iran and syria, and with any luck their armies will be already beaten before we invade them.

*We* interfere with trade, *they* get hurt.

We say free trade is best. But is it best for every country? It makes the most wealth, as defined by what people want to buy. If we had free trade in cocaine there would be more cocaine for people to buy and it would be a lot cheaper. The people who work hard to stop cocaine could do something more productive. We would all be richer -- or would we? We would -- if we let the cocaine-users decide what's worth buying.

*We* restrict trade in cocaine, the foreign cocaine-sellers get rich selling less. This time stopping free trade works against the country that does the stopping. Sanctions against iraq worked against iraq. They hurt iraqis worse than they hurt us. Could some other nation distort trade in ways that would hurt us more than it hurts them?

I think so but I'm not an economist. I think a third-world country that controls its people and controls its imports could hurt us. They make things and sell them cheap, and don't spend the dollars. Every market they want to dominate, they can. They pay to take over our electronics industry. They get the business but it costs them. We would do it better but it's cheaper for us to let them do it -- because they're basicly paying for it. There's less to go around but we get cheap electronics and they get all the losses. They can pay to take over our chip-design industry. They can pay to take over our steel industry. They can pay to take over pieces of our munitions industry. Every market they want, until their people suffer too much. But they're a third-world country, their people get to slowly *improve* their conditions while they work hard for little reward. It doesn't matter whether we outsource to them or they outcompete our businesses, the result is about the same. They do the work, we get the results cheap, and they collect our dollars -- our promises -- without collecting on them.

In one sense we're better off. We get to buy a lot of consumer junk cheap. We don't have to work hard. But if they were at war with us they would be glad to pay a lot of money to bomb our computer industry, our computer-chip industry, our steel industry, etc.

And they can disrupt our trade with the rest of the world. If they are exporting a lot of things cheap while we have trouble exporting our expensive stuff, the market in dollars would make our dollars cheap and their currency expensive, and it would even out. But if they prop up the value of the dollar by buying more of them than they need, then everybody has their currency and wants to buy from them while dollars are expensive so it's hard for us to sell. So it would stay hard for us to export and easy for us to import, and the problem would get worse. In the short run we're getting something for nothing which isn't a problem, but this third-world nation could decide to sell a lot of dollars all at once, and then maybe buy a lot, and international traders would take a lot of lumps. Some international traders could make a lot of money from it; it would cost the nation that tried it. But again, if they were at war with us how much would they pay to disrupt our trade? This might do it better than a bunch of submarines off our coasts.

There's a lawyer joke that has the punchline "How much justice can you afford?". Maybe we need an economics joke that ends "How much free trade can you afford?"

So, is this right? Maybe I just don't understand enough economics, and the problems are really impossible? Or do we only want free trade with our allies? Or what?

posted by: J Thomas on 08.07.04 at 03:42 PM [permalink]

"I'm certainly not endorsing the booing in the first place. Indeed, one could argue that this kind of incivility merely encourages the response Edwards gave. What I can't stop wondering -- again -- is what this leads to if Kerry wins. "

No, the real problem is Republicans trying to censor and squash dissenting voices in our Republic.

I agree with the other voices in this thread, you've seriously misrepresented the Democratic position on job creation. God knows why. What do you have to gain from the Bush administration policies?

This year the Democrats learned something. You can't negotiate or capitulate to people who hate you, as it only shows you as weak and fuels their hatred more. That's why you won't see Democrats backing down from their positions to whining by Republicans. So go Cheney yourself.

posted by: Steve4Clark on 08.07.04 at 03:42 PM [permalink]

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