The Democratic victories have generated a lot of pessimism in the business press about there being any chance for a revival of world trade talks. I'm certainly not optimistic about a revival in trade talks.

That said, let me offer two counters to this -- one positive and one negative.

The negative is that there wasn't exactly a lot of momentum on trade liberalization before the election. The most symblolic evidence of this fact come from this Reuters story from November 2nd:

Comatose world trade talks showed a possible sign of brain activity on Thursday as World Trade Organization Director General Pascal Lamy arrived in Washington to meet with U.S. officials.

Experts said Lamy could be gathering material for a possible draft plan to try to get the talks started again, although the visit was billed as a low-key opportunity for Lamy to meet with top Bush administration officials on the heels of meetings and speeches in New York and Boston this week....

Lamy will return to New York to run in that city's marathon on Sunday. (emphasis added)

[So what should Lamy have done with his time?--ed. Oh, the impasse is not his fault -- the WTO director has practically no power. His ability to train for the marathon is a symptom of the stalemate among the key countries -- not a cause.]

Second, even if Doha goes down, and even if enthusiasm for free trade slows in the Congress, progress towards liberalization can still be made. Consider that in the past week, Vietnam was admitted into the WTO, and the US approved Russia's entry into the organization as well. There are a few other economies on the outside looking in -- Ukraine and Kazakhstan, not to mention a third of the Middle East-- and if the US can facilitate their entry, then the WTO can live up to its name.

Two months ago I blogged about the serious pitfalls of implementing fair trade certifications in the coffee trade.

Now I see that the Economist's business.viewhas an interesting story about the brewing battle between Starbucks and Oxfam:

Coffee has become a big testing ground for what it means to be an ethical consumer. The hugely successful Fair Trade brand allows many coffee addicts to get their fix with a clearer conscience, safe in the belief that no farmers have been exploited in the growing of it.

So no wonder that Starbucks, an up-market global coffee chain, has reacted like a scalded barista to criticism from Oxfam, a development charity. Oxfam says that Starbucks is depriving farmers in Ethiopia of $88m a year, by opposing the Ethiopian government's efforts to trademark three popular varieties of local coffee bean. At least 60,000 customers worldwide have contacted Starbucks with expressions of concern, prompting the company to post leaflets in its stores defending its behaviour. It accuses Oxfam of “misleading the public”, and insists that the “campaign needs to stop”....

Starbucks also has questions about the different standards of fairness applied by the Fair Trade brand custodians in different parts of the world. It doubts even that the strategy of the Fair Trade movement, to secure farmers a premium over the market price for their beans, is the best basic approach. Starbucks prefers a code known as the CAFE practices (Coffee and Farmer Equity), which aims to help coffee farmers develop sustainable businesses through a mixture of technical support, microfinance loans, and investment in infrastructure and community development where the farmers live.

So far from being a bloodthirsty exploiter happy to keep farmers in poverty, Starbucks emerges as a responsible firm approaching difficult questions in a thoughtful way. It wants to help its suppliers improve their lot. It is certainly no cheapskate. Starbucks says that last year it paid an average price of $1.28 per pound, 23% above the New York Board of Trade's benchmark “C” price, for all its coffees.

Starbucks's enlightened behaviour makes good business sense. The firm has positioned itself at the quality end of the market, where ethically-minded consumers are concentrated. It has absolutely no incentive to behave badly. Strikingly, another quality coffee producer, Illy Café, has similar issues with the Fair Trade movement, and also prefers to build sustainable coffee farming rather than indulge in simplistic Fair Trade posturing.

UPDATE: Joshua Gans has some thoughts on the matter that are worth checking out.

With the midterms and all I forgot to highlight this article from the New York Times education supplment about why ultimate frisbee is the sport of kings:

Forget college guides, U.S. News & World Report rankings, average SAT scores. The best gauge of an institution’s ex cellence may actually be … its ultimate Frisbee team. At least that’s the theory of Dr. Michael J. Norden, a Univer sity of Washington professor of psychiatry.

Ultimate started in the 60’s as the hippie’s anti-sport — a coach-free, referee-less, noncontact game comb - i n ing the free-form elements of Frisbee with the strategy, athleticism and goal-making of football or soccer. Players call their own infractions, and “The Spirit of the Game,” the ruling document, says that while competition is encouraged, it must not be “at the expense of the bond of mutual respect between players, adherence to the agreed-upon rules of the game, or the basic joy of play.” More than 500 colleges and universities now have teams competing interscholastically.

Dr. Norden analyzed the Ultimate Players Association “power ratings” of private national universities over a decade (the ratings assess strength based on past performance), and he discovered a startling pattern. “All the schools with above-average ultimate teams also have aboveaverage graduation rates,” says Dr. Norden, whose son is, not coincidentally, a serious high school player looking for a university with a good team. “They average a 90 percent graduation rate, while the average graduation rate for private national universities is just 73 percent. Statistically, that just doesn’t happen by chance.”

Furthermore, the private universities in the top half of ultimate standings had 208 Rhodes and Marshall scholars; the bottom half, just 15. The top seven — Stanford, Brown, Harvard, Tufts, Dartmouth, Yale and Princeton — had almost as many scholars as all the rest combined. (A followup study of public and liberal arts colleges found a similar correlation.) Dr. Norden cites another distinction: “Six of those top seven universities, all but Harvard, made Princeton Review’s list of the happiest students.”

I'm on the road to NYC today. At about noon, however, my latest bloggingheads.tv episode with Matthew Yglesias should be online at... er.... bloggingheads.tv. UPDATE: Here's the proper link.

In this episode:

1) As an act of political protest against Question 1 going down, I drink a lot; Matt, in an act of protest against his headset not working, uses an actual phone;

2) We debate Rummy's departure and its timing;

3) What does the new Congress mean for Iraq? For U.S. foreign economic policy?

4) Did the netroots acoomplish everything or nothing?

5) In an act of political bravery unparalleled in the history of the blogosphere, I defend the U.S. Constitution against Yglesias' desire for a parliamentary system of government;

6) What's K-Fed's future?

Defense Secretary Donald H. Rumsfeld, architect of an unpopular war in Iraq, intends to resign after six stormy years at the Pentagon, Republican officials said Wednesday.

Officials said Robert Gates, former head of the CIA, would replace Rumsfeld.

The development occurred one day after congressional elections that cost Republicans control of the House of Representatives, and possibly the Senate as well. Surveys of voters at polling places said opposition to the war was a significant contributor to the Democratic Party's victory.

President George W. Bush was expected to announce Rumsfeld's departure and Gates' nomination at a news conference. Administration officials notified congressional officials in advance.

[Why three yells?--ed.] First, this blog has wanted Rummy to retire for quite some time. Second, Gates is a member in good standing of the Bush 41 crowd -- i.e., he's, you know, competent.

Third, if it is Gates, this might reduce some of the paranoia about Joe Lieberman-replacing-Rumsfeld-and-then-being-replaced-by-a-Republican scenario that's been discussed in some parts of the blogosphere. This also kills the Santorum-for-DoD campaign just after it starts, by the way.

UPDATE: It's official! Yee-haw!!

Rich Lowry makes an interesting point over at The Corner:

The public probably wanted Bush to reach out to and listen more to critics. They wanted him to break-out of the "stay the course" stalemate in his Iraq policy, which had been embodied by Rumsfeld. They wanted him to acknowledge, really acknowledge in a serious way, their deep disatisfaction with the course of things in Iraq. And lo and behold, about 18 hours after the election, he is doing all of things. American democracy is a marvelous thing.

It would seem that the markets ain't thrilled with the midterm elections:

Global finance markets have wobbled on fears that a Democrat victory in the US Congressional elections could prompt less market-friendly policies in the world's biggest economy.

Investors watched nervously as jubilant Democrats seized power in the US House of Representatives for the first time since 1994 and edged closer to taking the Senate, pushing European and Asian equities lower and weighing also on the dollar.

European indices eased off fresh five-year highs struck the previous day, while Japanese shares tumbled by more than one percent, as investors also feared that a split in power in Washington would create legislative gridlock.

"The European market started slipping lower (on Wednesday) with the Democrats taking power from the Republicans, traditionally thought of as more business friendly," said Michael Davies, an analyst with the Sucden brokerage firm in London.

London's FTSE 100 index of leading shares slid 0.53 percent to 6,211.00 points, Frankfurt's DAX 30 index dipped 0.44 percent to 6,334.20 points and in Paris the CAC 40 index shed 0.47 percent to 5,412.18.

The DJ Euro Stoxx 50 index of top eurozone shares lost 0.41 percent to 4,055.98 points.

The US dollar meanwhile staged a slight retreat against the euro and the yen.

"Although the outcome of US elections is unlikely to have a huge effect on the greenback, there are many that argue that if the Democrats win control of the House of Representatives, this will lead to a rise in protectionist policies or to political deadlock that could slow reforms," Davies added.

UPDATE: Kevin Drum labels this kind of story, "Idiotic Conventional Wisdom Watch." He might be right -- but that conventional wisdom seems pretty widespread in the business press. Consider Neil Dennis, "Stock markets stall after Democrats win House," Financial Times:

The win was seen as negative for equity markets, particularly if the Democratic Party also takes control of the Senate – a result which still hangs in the balance.

“A [overall] win for the Democrats would be considered negative for stocks as it would likely result in a less business friendly environment,” said Matt Buckland, a trader at CMC Markets.

US oil and drugs companies are expected to become subject to windfall taxes if the Democrats were to take control of the Senate, while companies are also likely to feel the pinch of a forecast rise in the minimum hourly wage.

“Unless we see an improvement in sentiment this could be the trigger to start booking some of the profits we’ve seen accrued since late September,” he added.

Meanwhile, the dollar remained mired at a six week low against the euro as uncertainty over control of the Senate led to cautious trade.

The victory by the Democratic party in U.S. congressional elections appears to have left President George W. Bush hampered in his efforts to push through free-trade agreements being negotiated with several Asian nations and facing an antagonistic legislature bent on placing its own stamp on policies from trade to defense to stem- cell research - all with potential ramifications for Asia and the rest of the world....

But analysts, diplomats and economists in Asia said that the vote could have much greater consequences for the region, as they appeared to herald a further turn inward for the United States, away from globalization and engagement with Asia.

"The message to the politicians is that we really don't want to get involved in foreign intrigues," said Tim Condon, an economist at ING Financial Markets in Singapore. "It reinforces this kind of populist thinking that there's only a downside to globalization."

The turn in his party's fortunes will undoubtedly weigh heavily on Bush during his trip planned for this month to attend the Asia Pacific Economic Cooperation summit in Hanoi. Analysts said a preoccupation in Washington with domestic issues was likely to play into the hands of China, which has been boosting its own diplomatic profile in Asia and the developing world.

Analysts said one of the clearest casualties of the Democratic victory was likely to be the Bush administration's trade policy.

Concerns that Congress will get tougher on China's trade surplus by pushing it to revalue the yuan are likely to push the dollar down in global markets, they said, on expectations that China and other Asian exporters will allow their currencies to rise to deflect such criticism.

"Democrats are seen as a bit more protectionist on that end," said Chua Hak Bin, an economist at Citigroup in Singapore. "Markets will expect a lot of these pressures to show up."

Most of those who reclaimed Republican seats ran hard against free trade, globalization, and any sort of moderate immigration policy. That these Democrats won makes it likely that others will take up their reactionary call. Some of the newcomers may even be foolish enough to try to govern on the basis of their misguided theory.

On the other hand, this Forbes report attributes the equity market downturns to profit-taking rather than the Democratic takeover.

I agree that the reaction of equity markets is probably nothing -- but the effects on trade policy are nothing to be sneezed at.

UPDATE: Kevin Drum renews his ire at this kind of press coverage here -- he's got a decent case.

Comment away on the election results here. AP reporting on the exit polls is suggestive of a big Democratic night:

In surveys at polling places, about six in 10 voters said they disapproved of the way President Bush is handling his job, and roughly the same percentage opposed the war in Iraq. They were more inclined to vote for Democratic candidates than for Republicans.

In even larger numbers, about three-quarters of voters said scandals mattered to them in deciding how to vote, and they, too, were more likely to side with Democrats. The surveys were taken by The Associated Press and the networks.

More evidence of a big Democratic surge. Fox News's commentator panel led by Brit Hume, which is considered mostly right of center, has reason to be skeptical of this perception of Democratic gains. But the Fox panel, which includes Fred Barnes, Bill Kristol, Mort Kondracke, Juan Williams, and Hume, is now saying the exit polls and their analysis suggest what Barnes calls "a good Democratic night."

The conservative commentators warned viewers to beware of a Democratic bias in exit polls, but they conceded that things look very good for the Dems.

Fifty-seven percent of late deciders, the Fox exit polls show, are breaking for the Democrats, and 39 percent for Republicans. This is a very important harbinger.

UPDATE, 10:30 PM: Question 1 goes down. Grrrr.......

UPDATE, 10:34 PM: Just when I think John Kerry can't say something dumber, he pulls it off. CNN showed him at the Deval Patrick headquarters saying the following:

We have made history tonight, because we have elected, for an unprecedented ninth time, the greatest Senator in the history of the United States Senate, Ted Kennedy!!

And we have made history, not just here but across the country, because it is clear, from those who are winning in America, that Americans are not just voting for Democrats and for Republicans, they are voting against the politics of smear and fear. They want a change.

UPDATE, 10:52 PM: I'm not going to stay up late, but glancing at the results so far, I can't imagine the Democrats will be overjoyed. If the numbers hold, the GOP will hold onto Senate seats in Virginia, Missouri, and Tennessee. Some of the vulnerable Republicans have held onto their House seats. If the Dems retake the House, it's impressive, but this doesn't look like 1994 at this point in the evening (see final update below)

We'll see how long it will be before the "blame Britney" crowd becomes a mob.

UPDATE, 12:17 AM: So I stayed up late -- so sue me. The Dems have retaken the house, and have a slim chance at the Senate since Jim Webb looks like he's barely going to beat George Allen. More impressive, but as Jeff Greenfield observed, this would be the first time in quite a while that the House flipped but the Senate did not.

Over at The Corner, Ramesh Ponnuru suggests the GOP will actually have to suck up to libertarians now:

If Sodrel loses in Indiana, as looks likely, it may be because a libertarian candidate took votes from him.... So far, losing because of libertarians hasn't caused Republicans to move toward the libertarians ideologically. But maybe things will change this time.

UPDATE, 7:10 AM: Well, it seems like there are shades of 1994 in the election. If Jim Leach went down in Iowa, and the Democrats win the Senate and they win a majority of governorships, then it's fair to describe this as a tidal wave.

Over the weekend, I blogged at Open U. about possible last-minute October surprises for the midterms.

Well, if the Dems do worse than expected in today's midterms, I think we know who to blame:

TMZ obtained the legal papers, filed today in Los Angeles County Superior Court, citing "irreconcilable differences." In her petition, Spears asks for both legal and physical custody of the couple's two children, one-year old Sean Preston and two-month old Jayden James, with Federline getting reasonable visitation rights.

As for money, sources tell TMZ the couple, who married in Oct. 2004, has an iron-clad prenup. Not surprisingly, Spears is waiving her right to spousal support. She's also asking the judge to make each party pay their own attorney's fees.

Spears gives the date of separation as yesterday, the same day she flaunted her incredible revamped physique during a surprise appearance on David Letterman's show. Sources tell TMZ there was no single reason for Britney pulling the plug, rather, it was "a string of events."

1) Her divorce will fire up Andrew Sullivan to point out -- again -- how Britney has defiled the institution of marriage more than any gay man ever could.

2) This in turn fires up the conservative base over at NRO's The Corner.

3) In the next three hours, a outpouring of social conservatives forget the Ted Haggard follies and vote for the GOP

4) At the same time, under-30 voters -- considered to be overwhelmingly Democratic -- decide not to vote in favor of surfing the web to find out how the young Ms. Spears is looking doing.

5) The combined effects push the Republicans to actually pick up seats in Congress and in state capitols.

Howard Kurtz reports in the Washington Post that exit poll data will be more closely held this year than in the past:

The biggest behind-the-scenes change in network coverage involves what has been dubbed the Quarantine Room. Determined to avoid a rerun of recent years, when its exit polls leaked out by early afternoon to the Drudge Report, Slate and other Web sites, a media consortium is allowing two people from each of the networks and the Associated Press entree to a windowless room in New York. All cellphones, laptops and BlackBerrys will be confiscated. The designated staffers will pore over the exit polls but will not be allowed to communicate with their offices until 5 p.m.

The consortium, called the National Election Pool, is conducting no surveys for House races. The exit polling will take place for Senate and gubernatorial contests in 32 states with competitive races.

The recent track record with such polling has been pockmarked with failure. There was, of course, the debacle of election night 2000, when the networks used polling data from Florida to prematurely award the presidency, twice, within hours. In 2002, the network consortium's predecessor, Voter News Service, suffered a computer meltdown and pulled the plug on its exit polls. Two years ago, its sample was so skewed that the group's surveys showed Sen. John Kerry beating President Bush well into the night. (emphasis added)

Lorne Manly has more at the New York Times Caucus blog.

Hat tip: Open University's David Greenberg.

UPDATE: Jim Lindgren is right: "Expect heavy hinting by the networks after 5pm ET today."

So I went to vote this morning -- and discovered that a whopping three out of the 13 races had both a Democrat and a Republican running for office (and one of those was for Ted Kenney's seat, so it doesn't really count). A few of the minor state offices had a Green/Rainbow candidate as well as a Democrat running. Barney Frank was running unopposed.

How lopsided is this ballot? I remember there being more Republicans running in Cook County, for Pete's sake.

This leads me to wonder -- what's the most lopsided ballot in America this election day? Tell me, dear readers, how lopsided is your ballot?

Unlike two years ago, the hardworking staff here at danieldrezner.com will not be offering any grandiose endorsements for anyone holding political office.

However, it is worth noting that the staff has finally found an issue where the blog wife and I will be voting one the same side: Question 1 on the Massachusetts ballot:

This proposed law would allow local licensing authorities to issue licenses for food stores to sell wine. The proposed law defines a “food store” as a retail vendor, such as a grocery store, supermarket, shop, club, outlet, or warehouse-type seller, that sells food to consumers to be eaten elsewhere (which must include meat, poultry, dairy products, eggs, fresh fruit and produce, and other specified items), and that may sell other items usually found in grocery stores. Holders of licenses to sell wine at food stores could sell wine either on its own or together with any other items they sell.

The Boston Globe's endorsement provides sufficient explanation:

In 34 other states, shoppers at grocery stores can buy wine with their steaks. This has not caused an epidemic of drunken driving or teenage alcohol abuse. But the availability of wine with groceries does make life a little more convenient for the many adults who like to sip wine with their dinner.

Massachusetts allows only limited sales of wine at supermarkets. By loosening some of the state's restrictions, Question 1 would promote competition among retailers, and convenience for consumers. The Globe urges a Yes vote on this question.

But let me urge all blog readers in the state of Massachusetts -- help the hardworking staff here at danieldrezner.com get tanked expand our consumption choice set.

Over the past 72 hours, every poll announcement I've seen has the Republicans gaining momentum. Mickey Kaus and Charles Franklin argues that this trend actually started 10 days ago -- so no one blame Kerry.

How serious is this momentum shift? It's actually forced the NYT's Adam Nagourney to perform his prognostication pirouette 24 hours before the election takes place -- contrast today's Page One story with yesterday's Page One. The contrasts with Nagourney's usual tactic of having a "Democrats Gaining Steam" headline on Monday of election week followed by a "Republicans Display Hidden Strengths" headline Thursday.

I have a very simple question -- what's driving this? Is it:

a) Positive headline numbers on the economy (Dow Jones Industrial Average + falling unemployment numbers)?

b) Election coverage crowding out depressing Iraq coverage?

c) Foot-in-mouth syndrome among other prominent Democrats?

d) A general lack of faith that the Dems offer a viable alternative?

e) Republican "dirty tricks"?

Tom Zeller's column in the New York Times today focuses on liberal efforts to Google-bomb vulnerable Republican candidates. Zeller reports that the effort has been successful:

A GOOGLE bomb — which some Web gurus have suggested is perhaps better called a link bomb, in that it affects most search engines — has typically been thought of as something between a prank and a form of protest. The idea is to select a certain search term or phrase (“borrowed time,” for example), and then try to force a certain Web site (say, the Pentagon’s official Donald H. Rumsfeld profile) to appear at or near the top of a search engine’s results whenever that term is queried....

To the extent that the public consciousness is now just as likely to be reached through a computer screen as a television, the idea that passionate sorts would engage in computer-ready actions should come as no surprise.

And yet many people were shocked by the revelation two weeks ago that left-leaning bloggers were trying to drop a Google bomb on the campaigns of dozens of Republican candidates — not least because its bellicose promise seemed to throw into question the very integrity of search engine results.

This took link bombing to a new level. The key phrases targeted were the names of the Republican candidates themselves. The goal was to tweak things so that searching for “Clay Shaw,” the Republican representative from Florida, for example, would return — high in the results — a news article, preselected from a relatively mainstream publication, detailing some negative aspect of the candidate’s record. This was repeated for 50 or so candidates.

Did it work? The short answer is yes — somewhat. The folks at MyDD.com, where it all began, have been tracking the progress quite out in the open at mydd.com/tag/googlebomb. It’s worth a visit for people of all political persuasions, if only to catch a glimpse of the future of political strategizing.

So, clearly, political Google-bombing has achieved its short-term goal of pushing particular stories into prominence.

That said, the Luddite in me remains convinced that this will actually have absolutely zero effect on the election. For this to work, you need to believe that undecideds are going to actively search for candidates on the web before making their vote, and in the process stumble across the unflattering story. This is possible in theory, but in practice my hunch is that the people more likely to use the Internet to acquire information on political candidates are more likely to have made their voting decisions already -- and hence the Google-bombing effect would be too late.

Or, to be more flip about it, James Joyner characterizes how these kinds of plans usually end:

Step Four: Sharks with lay-zers on their foreheads.

Step Five: Take over world.

And, to be fair, a less stringent version of the Google-bomb hypothesis is that a few undecideds stumble across the Google-bombed story, and then e-mail it to everyone they know, creating a viral effect. This is the topic du jour in David Carr's NYT column:

Ken Avidor would not seem to constitute much of a threat to the Republican Party. A Minnesota graphic artist with no official political role, he is a self-described Luddite and a bit of a wonk with an interest in arcane transportation issues.

But last month, Mr. Avidor, a Democrat, managed to capture some video in which Michele Bachmann, a Republican candidate running for election to the United States House of Representatives from Minnesota’s Sixth District, suggested that, after some fasting and praying, not only had God told her to become a tax attorney, he had called her to run for Congress. And now that the election was near, God was “focused like a laser beam, in his reasoning, on this race.”

In the parlance of politics, Ms. Bachmann was “speaking to the room,” in this case, a group at the Living Word Christian Center in Brooklyn Center, Minn. The speech was Webcast live by the church group, allowing Mr. Avidor to use a video camera he borrowed from his 17-year-old daughter to capture the shaky but discernible video off his computer monitor. He then used a three-year-old Mac to edit the piece and then forward it to, well, the world at large.

The video on YouTube and Mr. Avidor’s video blog (michelebachmannmovies.blogspot.com), was picked up by other bloggers and eventually, The Star Tribune, the daily newspaper in Minneapolis. Ms. Bachmann’s opponents did everything they could to circulate the video and put her in a position of explaining God’s unpaid consulting role in her campaign.

People in the elections business often say that the most powerful form of endorsement, next to meeting and being actually impressed by a candidate, is the recommendation of a trusted friend.

In this election, YouTube, with its extant social networks and the ability to forward a video clip and a comment with a flick of the mouse, has become a source of viral work-of-mouth. As a result, a disruptive technology that was supposed to upend a half-century-old distribution model of television is having a fairly disruptive effect on politics as well.