Friday, January 5, 2007

Taking exception to American exceptionalism?

I have an article in the January/February issue of The National Interest entitled, "Mind the Gap." It's an extended review of two books on public opinion and international relations. The first is Andrew Kohut and Bruce Stokes' America Against the World -- which compares and contrasts the attitudes of Americans and other nationalities, relying primarily on the Pew Global Attitudes project. The second is Benjamin Page and Marshall Bouton's The Foreign Policy Disconnect, which compares and contrasts the attitudes of Americans and foreign policymaking elites.

An excerpt:

In detailing the patterns and gaps between the American public and others, these books nicely complement and occasionally contradict each other. Both The Foreign Policy Disconnect and America Against the World will add grist to the mill for those who profess faith in the wisdom of crowds and doubts about the judgment of foreign policy experts. After cogitating on both books, it would be difficult for the informed reader to believe that Americans hold irrational or flighty views about foreign policy. Most Americans, on most issues, articulate what George W. Bush characterized as a “humble” foreign policy during the 2000 campaign. They want a prudent foreign policy based on security against attacks and threats to domestic well-being—though American attitudes about multilateralism remain an open question. The gaps between American attitudes and the rest of the world are overstated; the gaps between Americans and their policymakers might be understated. The biggest question—which neither of these books answers satisfactorily—is to what extent these views, and gaps between views, matter.
Read the whole thing.

posted by Dan at 11:37 AM | Comments (15) | Trackbacks (1)

Thursday, January 4, 2007

The devil is in Max Baucus' details

I've received more than one query about what to make of Max Maucus' Wall Street Journal op-ed on trade policy(subscription only). Here's an excerpt:

Some think that the new Democratic congressional majority will be bad for trade policy. While it is true that some candidates criticized trade in their campaigns, I believe that the new Congress will have both the desire and opportunity to renew U.S. trade policy, with a unifying purpose that Americans can understand and support. Through trade, we must bolster the nation's innovative economy in an increasingly global marketplace. At the same time, we must tackle with equal vigor the negative domestic consequences of globalization, from trade deficits to job losses.

Congress should begin by renewing the administration's fast-track negotiating authority for trade agreements. The current grant expires in June, and trading partners will not negotiate trade agreements with us unless Congress gives the president the ability to bring these agreements to fruition....

Fast-track authority should be improved as it is renewed, with better trade enforcement capability and better environmental and labor provisions. By making those changes, we can protect American interests, project America's values, and help to create consumer classes capable of purchasing more U.S.-made goods. And as we address expiring fast-track authority, we must take on -- head-on -- globalization's downsides, especially worker displacement and the unsustainable trade deficit.

The trade deficit requires action on several fronts, which include beefing up U.S. export promotion programs and dedicating more time and resources to trade enforcement. We must also recognize that the trade deficit has causes closer to home, especially Americans' negative savings rate.

When it comes to helping workers, we must make the Trade Adjustment Assistance (TAA) program, which expires in September, more reflective of today's innovative economy.

TAA is our commitment that America will provide wage and health benefits while trade-displaced workers retool, retrain, and find better jobs. And a renewed TAA must do what today's program does not. TAA must be available to the eight out of 10 American workers who make their money in services professions; and it must apply to all workers displaced by trade, not just those affected by free-trade agreements. In fact, we should seriously examine the idea of expanding TAA into "GAA" -- Globalization Adjustment Assistance that would offer benefits not only to workers displaced by trade, but to those displaced by all aspects of globalization.

In addition to these new priorities, we must refocus current trade efforts. The Doha round is of obvious importance, but the world's economies do not appear ready to make the hard choices necessary to bring the round to an ambitious conclusion. Doha may yet progress in time, as the Uruguay round did after 1990. But until then, America should move forward on commercially significant initiatives with our largest trading partners. We should lay the foundations for a future free-trade agreement with the European Union and Japan by concluding a first ever free-trade agreement in services. We should stitch our current patchwork quilt of free-trade agreements into a seamless, coherent network that we can later open to other countries. Even more immediately, we must enforce China's trade and investment commitments. Doing that will help to boost the U.S. gross domestic product by $86.5 billion over the next three years.

There are three ways to interpret this essay:
1) Baucus, representing pro-trade Democrats, is laying down a marker against protectionist Democrats. For Sherrod Brown, Byron Dorgan, James Webb, etc., he's saying, "It's great that you won your elections with economic populism, but now you have to actually try and craft policy that does not trigger trade wars, runs on the dollar, global recessions, economic development, etc. We agree that cushioning the losers is important, and we're with you on bolstering labor and environmental standards, but let's play like grown ups, shall we?"

2) Baucus, representing the Democratic caucus, is trying to get the Bush administration to sign off on Democratic policy proposals with a veneer of soothing rhetoric. When you boil down the policy proposals, what Baucus is saying doesn't differ all that much from Sherrod Brown and Byron Dorgan: inserting stringent labor and environmental standards into FTAs, "trade enforcement," etc. He's just doing it minus the crackpot economic theories and idiotic rhetoric. Because Dorgan and Brown are so far out there, however, Baucus suddenly looks reasonable proposing something as amorphous as "Globalization Adjustment Assistance."

3) Baucus isn't entirely sure what he's saying. Again, see the GAA. And the lack of suggestions for increasing U.S. savings. Then again, it's only an op-ed, so specificity is tough.

I'll be charitable and say that the op-ed is 40% of (1), 25% of (2), and 35% of (3).

One last point -- Baucus embrace of a service pact with the EU, coming so soon after Angela Merkel's quasi-TAFTA proposal, makes me wonder if the Bush administration will become more enthusiastic about the proposal -- or run away, scared it's an EU-Blue State conspiracy.

posted by Dan at 03:58 PM | Comments (4) | Trackbacks (0)

More bloggingheads goodness

My latest bloggingheads duet is with Eric Alterman. In a stunning new visual effect, I wear my glasses. We discuss:

1) Gerald Ford's "when I die" interviews (in which Eric and I confuse the Pueblo and Mayaguez debacles);

2) Why pundits stink (in which Eric does not forgive Andrew Sullivan);

3) The end of Big Liberalism in domestic policy (in which Eric surprises me by sounding positively Clintonian)

4) Grand strategy, redux (in which I make a heartfelt apology)

Adults over 21, here's a fun drinking game to play while watching -- take a shot whenever Eric or I pimp our own work!! [Why can't they take a shot every time you say "you know"?--ed. Because their livers would explode.]

posted by Dan at 08:43 AM | Comments (1) | Trackbacks (0)

Condoleezza Rice's powers of persuasion

After Condoleezza Rice became Secretary of State, she (well, not only she) convinced Robert Zoellick to leave the U.S. Trade Representative's position to take the Deputy Secretary of State position. In the hierarchy of Washington positions, this was viewed by many as a step down in rank.

Since Zoellick left last July, the position had been vacant... until now. Condi's found a replacement, according to the Washington Post's Glenn Kessler:

Secretary of State Condoleezza Rice has persuaded John D. Negroponte to leave his post as director of national intelligence and come to the State Department as her deputy, government officials said last night.

Negroponte's move would fill a crucial hole on Rice's team. She has been without a deputy since Robert B. Zoellick left in July for a Wall Street firm. It also comes as President Bush plans to announce a new Iraq strategy; as former Iraq envoy, Negroponte would be expected to play a major role in implementing that plan in his new role.

Negroponte's decision to step down as the nation's top spy for a sub-Cabinet position marks a sudden reversal. Rice had earlier sought to recruit Negroponte -- as well as other high-profile figures -- for the job, but last month he insisted he was staying at his post.

Over at the New York Times, Mark Mazzetti explains why this move is so puzzling: "On paper, the director of national intelligence outranks the deputy secretary of state, raising questions about why the White House would seek — and why Mr. Negroponte would agree to — the shift."

Maybe there are hidden perks to the dSoS position. Possibilities include:

1) A sweeter parking spot;

2) Unlimited refills at the Foggy Bottom Starbucks

3) A heavy-duty stapler that actually works

4) A lower profile position so that years later, when autopsies of this administration are written, Zoellick and Negroponte are more in the background and less front-and-center.

5) The position is actually more powerful

That last one is suggested by Kessler:
Rice gave Zoellick wide berth as her deputy. He had primary responsibility for relations with China, the crisis in Sudan, Latin America, economic affairs and Southeast Asia. In a first for a deputy secretary of state, he frequently allowed reporters on his plane when he traveled abroad.
Whoa! Talking to the press!! Where do I sign up for this job?!

UPDATE: Greg Dejerejian offers his explanation:

The likely reason Cabinet level people like Zoellick and now, Negroponte, will take a Deputy slot is because, in reality, they know they will often be serving as quasi-Secretaries of State given how weak their boss has proven (Zoellick on Sudan, China etc, Negroponte on a to be determined portfolio, very likely to include Iraq). Sorry to be so plain about it, but there it is, no?
Ed Morrissey thinks this is more about Negroponte than the vacant dSoS position: "The change reflects a possible loss of confidence in Negroponte, especially given his proximity to the President and the obvious opportunity to influence his decisions on policy on a whole range of issues."

UPDATE: More speculation from James Joyner, related to point #5 above -- it's not that dSoS is so great, it's that DNI is so bad a position.

ANOTHER UPDATE: The Nelson Report proffers this answer:

Negroponte’s immediate past includes Ambassador to Baghdad, and it is within the context of the Administration’s total immersion in the Iraq situation that his acceptance of the job must be seen, our sources argue.

“The President makes his big speech next week, and he’s desperate to make it look like he has a real strategy, and not just a revised process,” says an informed observer. “Negroponte helps them [Bush and Rice] ‘re-brand’ the policy because he seems credible, and he has personal overseas friendships and contacts. This Administration has almost no one it can deploy for this purpose.”

In other words, “see this as more about Rice, in some ways, than Negroponte. She’s articulate, but if you know something about the topic, you usually see it’s mostly glib salesmanship. She has no serious credibility overseas, she owns no personal relationships with any international leaders which are valuable, deployable in private, face-to-face diplomacy.”

posted by Dan at 07:57 AM | Comments (1) | Trackbacks (0)

Wednesday, January 3, 2007

Do hawks have a psychological edge?

In the January/February issue of Foreign Policy, Daniel Kahneman and Jonathan Renshon make a very provocative argument -- as a species, humans are too damn hawkish:

National leaders get all sorts of advice in times of tension and conflict. But often the competing counsel can be broken down into two basic categories. On one side are the hawks: They tend to favor coercive action, are more willing to use military force, and are more likely to doubt the value of offering concessions. When they look at adversaries overseas, they often see unremittingly hostile regimes who only understand the language of force. On the other side are the doves, skeptical about the usefulness of force and more inclined to contemplate political solutions. Where hawks see little in their adversaries but hostility, doves often point to subtle openings for dialogue.

As the hawks and doves thrust and parry, one hopes that the decision makers will hear their arguments on the merits and weigh them judiciously before choosing a course of action. Don’t count on it. Modern psychology suggests that policymakers come to the debate predisposed to believe their hawkish advisors more than the doves. There are numerous reasons for the burden of persuasion that doves carry, and some of them have nothing to do with politics or strategy. In fact, a bias in favor of hawkish beliefs and preferences is built into the fabric of the human mind.

Social and cognitive psychologists have identified a number of predictable errors (psychologists call them biases) in the ways that humans judge situations and evaluate risks. Biases have been documented both in the laboratory and in the real world, mostly in situations that have no connection to international politics. For example, people are prone to exaggerating their strengths: About 80 percent of us believe that our driving skills are better than average. In situations of potential conflict, the same optimistic bias makes politicians and generals receptive to advisors who offer highly favorable estimates of the outcomes of war. Such a predisposition, often shared by leaders on both sides of a conflict, is likely to produce a disaster. And this is not an isolated example.

In fact, when we constructed a list of the biases uncovered in 40 years of psychological research, we were startled by what we found: All the biases in our list favor hawks. These psychological impulses—only a few of which we discuss here—incline national leaders to exaggerate the evil intentions of adversaries, to misjudge how adversaries perceive them, to be overly sanguine when hostilities start, and overly reluctant to make necessary concessions in negotiations. In short, these biases have the effect of making wars more likely to begin and more difficult to end.

Foreign Policy also invited Matthew Continetti and Matthew Yglesias to comment on the piece. Yglesias is enthusiastic about the finding, and goes even further:
Kahneman and Renshon actually end up being unduly generous to the hawkish point of view. Sometimes, of course, war is necessary. But since there are two sides to every conflict, hawks won’t always be right. Even in a case where an American president is rightly listening to his hawkish advisors (George H.W. Bush in the first Gulf War, say, or Bill Clinton over Kosovo), a foreign leader (Saddam Hussein, Slobodan Milosevic) is making a serious miscalculation in listening to his hawkish advisors.

In short, most decisions to go to war have been mistakes. Sometimes, as in World War I, both sides are making a mistake, and other times, as in World War II, only one side is, but the upshot is that the impulse to launch wars is more widespread than it ought to be. Indeed, hawks themselves recognize this fact. Pro-war arguments almost always contend that the enemy is irrationally aggressive, while overestimating one’s own military capabilities. Where the hawks go wrong is in their belief that irrational exuberance about violence is the exclusive province of real or potential adversaries, rather than a problem from which they themselves may suffer.

Continetti is less sanguine:
[W]hy do only the fundamental attribution errors of hawks lead to “pernicious” effects? Doves share the same bias; it just works in different ways. If hawks treat hostile behavior at face value when they shouldn’t, so too do doves treat docility. Those who championed the 1973 accords ending the Vietnam War saw them as a chance for the United States to leave Vietnam while preserving the sovereignty of the south. But to North Vietnamese eyes, the cease-fire was merely an opportunity to consolidate their forces for the final seizure of the south, which happened a mere two years later.

The second hawk bias Kahneman and Renshon identify is “excessive optimism,” which the authors speculate “led American policymakers astray as they laid the groundwork for the current war in Iraq.” Yet prior to the war in Iraq, some hawks worried that Saddam Hussein might set oil fields ablaze, as he had done in 1991. They worried that he might launch missiles against American allies in the region, that his removal might be long and bloody, and that post-Saddam Iraq would face humanitarian crises of great magnitude. Doves optimistically argued that Saddam could be “contained” even as the sanctions against him were unraveling and as America’s military presence in Saudi Arabia became increasingly untenable.

Why Kahneman and Renshon limit the biases they identify to hawks is something of a mystery. Take “reactive devaluation,” or “what was said matters less than who said it.” They cite likely American skepticism over any forthcoming Iranian nuclear concessions as an example, albeit conceding that doubt may be warranted in this case. They could have cited a domestic case instead: Just as many Republicans opposed President Clinton’s interventions in Haiti, Bosnia, and Kosovo, and at one point even accused him of resorting to force in order to distract from the Monica Lewinsky scandal, many Democrats now oppose Bush administration policies sight unseen because they don’t like the messenger. Doves are just as susceptible to reactive devaluation as hawks.

I love this article -- in fact, it's going in my Statecraft course for this semester!!

However, I love it in part because it's simultaneously clear, provocative, and way overblown as a hypothesis. That is to say, even if one acknowledges the individual-level cognitive biases discussed in the piece, it's a stretch to then conclude that foreign policies are more belligerent than they should be because of hawk bias.

If I have more time today, I'll try to fill out these cryptic points, but for now, here are my issues with the argument:

1) Definitional squabbles: I don't like the "hawk" and "dove" labels. Individuals can be hawkish in some situations but dovish in others. Indeed, there might be ideologies or operational codes that countermand the crude hawk/dove dichotomy.

2) There might be worse cognitive biases. Click here, here, here and here for a prior discussion about how, regardless of one's hawk and dove proclivities, even political experts get an awful lot wrong for reasons other than hawkishness. In fact, Kahneman and Renshon have posited a hedgehog theory of war, and that makes me think they've sipped from the very elixir they fear.

3) There are rationalist arguments for war. There aren't a lot of them, but they do exist. It would be interesting, however, if one could marry game-theoretic problems of imperfect information and credible commitment problems to fundamental attribution error and other hawk biases (and yes, please e-mail me or post a citation if someone has done this already).

4) This theory massively overpredicts war as an outcome. If one accepts this argument, then one would also have to explain why war has been such a historically rare event -- and it's been getting rarer. There are a lot of countervailing factors that the authors don't mention, including but not limited to bureacratic politics, domestic politics, regime type, balance of power, etc.

5) Organizations act as a particularly powerful constraint on cognitive limitations. This is one point of the original Carnegie school of organizational behavior.

6) I'm not sure Democrats want to be too enthusiastic about this finding. Let's have some fun and apply these cognitive biases to the domestic policy of liberals*. Hmmm..... so liberals will be likely to demonize their political opponents and misread their intentions.... they'll be excessively optimistic and prone to an "illusion of control" in their domestic policy ambitions.... and they'll double down on ambitious social programs that look like they're not working terribly well (cough, health care, cough). Run, run for your lives!!!

*Yes, this applies with almost equal force to Republicans, but Yglesias is defending the thesis here, so I'm using his side as an example.

posted by Dan at 11:20 AM | Comments (5) | Trackbacks (0)

A reluctant tip of the cap to Brian Cashman

Baseball fans who follow the Hot Stove League may be aware that the Red Sox have made some aggressive moves in a bid to improve their performance from the 2006 season.

[Yeah, that'll show the Yankees!!--ed.] Er..... perhaps not. I must duly link and quote this Seth Mnookin post from last week here:

Suddenly, the Yankees are shedding payroll like they’re the Marlins, and [Yankees GM] Brian Cashman looks determined to pick up young prospects and jettison the senior citizens collecting outrageous paychecks.

This doesn’t mean the Red Sox and the Yankees will have anywhere near equal payrolls, but it does seem to indicate that Steinbrenner (and his Tampa-based suckups) are no longer making baseball-related decisions. If that’s true, it’s bad news for Boston (and everyone else). A senior member of the team’s baseball ops staff told me last year that the only reason the Sox had a fighting chance against a team with $80 million more in payroll was because New York made such stupefyingly idiotic moves. If that’s not going to be the case anymore, it means the Yankees and the Sox are going to be operating more and more on the same plane…not because, as some would have you believe, the Red Sox have become the Evil Empire II but because the Yankees are starting to act (and yes, it hurts to say this) intelligently.

Gulp. Two thousand and seven, here we come…

It gets worse, according to USA Today's Bob Nightengale:
The Arizona Diamondbacks expect to complete a deal with the New York Yankees by the end of the week to bring back pitcher Randy Johnson, a high-ranking Diamondbacks official familiar with the negotiations told USA TODAY.

The clubs have agreed on the package of players the Diamondbacks will send to the Yankees, according to a club official from each team — two minor league pitchers and a major league reliever.

The deal has not been completed because of money issues, including how much the Yankees will pay toward Johnson's $16 million contract in 2007.

Hat tip to David Pinto, who also makes the Marlins comparison:
[T]he Yankees are just tired of old pitchers trying to stay ahead of a great offense. Depending on the pitchers in this deal, the Yankees will end up picking up quality pitching prospects like the Marlins did last year while still remaining a playoff contender.
I can take some comfort that ESPN's Keith Law thinks the Red Sox had a good offseason as well, and that Boston got the better Japanese import. I can also take some comfort in the fact that, well, the season hasn't started yet, so this is all just so much idle chat. As Peter Gammons notes on his ESPN blog:
What we do know about 2007 is that we don't know much. Hit the rewind button back a year, and tell us you thought the opening matchup of the World Series would pit Anthony Reyes against Justin Verlander, and that the Series would be closed by Adam Wainwright. Or that the Marlins would win one less game than the Braves, or that Chien-Ming Wang would lead the majors in wins, Aaron Harang would lead the National League in wins and strikeouts, Barry Zito would be worth $126 million to the Giants and Daisuke Matsuzaka would be worth $103 million to the Red Sox, and that Jason Marquis could have a 6.02 ERA, lead the NL in losses, runs allowed and gopher balls and be worth $7 million a year to the Cubs.

The game is acted out by humans, not computer programs.

But I can't shake the feeling that over the past six months, Cashman has done as good a job, if not better, than Red Sox GM Theo Epstein. And unlike the last time I compared the two franchises, the Yankees farm system doesn't look so barren now.

Developing.... in a worrisome way.

UPDATE:'s Jon Heyman thinks the Red Sox improved themselves more than the Yankees this offseason, but if Heyman's numbers turn out to be correct, it's not enough for them to catch the Yankees.

Also, given the cost of pitching this offseason, I do like this move by Theo Epstein.

posted by Dan at 11:01 AM | Comments (2) | Trackbacks (0)

Tuesday, January 2, 2007

The mother of all economic integrations

Three months ago I discussed German enthusiasm for a transatlantic free trade area. Well, now Bertrand Benoit and Quentin Peel report in the Financial Times that Angela Merkel is planning on taking the next step -- not TAFTA exactly, but defintely liberalizing:

Angela Merkel, German chancellor, will this month launch a sweeping initiative for the harmonisation of US and European legislation to boost investment flows and trade between the world’s largest economic blocs.

Initial talks will review financial market regulations, including delisting rules, which many US-listed European companies feel are too cumbersome, as well as intellectual property law. Ms Merkel is also seeking mutual recognition of technical standards for products such as cars....

Her ambition is to create a single transatlantic market for investors, with common rules and standards on issues such as intellectual property and financial regulation. However, her initiative may face opposition from a more protectionist US and other EU member states....

“Our economic systems are based on the same values,” said Ms Merkel. “We have learnt how to combine the Anglo-Saxon and Continental European legal systems, which are very different from one another . . . think transatlantic co-operation will be more straightforward in many areas than might appear at first glance.”

Ms Merkel’s initiative marks the EU’s first attempt to achieve a transatlantic single market since a similar move by the European Commission in 1998 petered out because of French opposition. Formal negotiations on drafting the partnership should start at the EU-US summit in May, she said.

Matthias Wissmann, chairman of the German parliament’s Europe Committee, estimates that the integration of US and EU financial markets alone could be achieved by 2015 and would cut trading costs on both sides by 60 per cent and the cost of equity capital by 9 per cent.

Ms Merkel stressed that tariffs and customs duties were not part of her plan.

Merkel talks about this in an interview with the FT's Quentin Peel. Some excerpts:
At the forthcoming EU-US summit we want to talk about ever-closer economic co-operation. Our economic systems are based on the same values. The EU and the US have sophisticated patent legislation. We have regulatory mechanisms governing our financial markets. We should be looking for ways to keep developing these together at a transatlantic level. We must watch out that we do not drift apart, but instead come closer together, where there are clear advantages for both sides.

For example, it causes unnecessary friction for patent rules in the US to be structured differently from those in the EU. I think our economies can save a lot of money and effort, in stock market share offerings, for instance, or in setting technical standards. We face the same tough competition from Asian markets, and from Latin America in the future. We must join forces and co-operate, for instance in the fight for better intellectual property protection in the global market.

Now I'm beginning to wonder if John O'Sullivan knew something I did not 18 months ago. I hope so -- for one thing, I could then look forward to Sherrod Brown complain about Polish plumbers.

posted by Dan at 10:45 PM | Comments (3) | Trackbacks (2)

How protectionism causes bad traffic

My Fletcher colleague John Curtis Perry, with Scott Borgerson and Rockford Weitz, have an op-ed in today's New York Times that explores America's decline as a maritime shipping nation. Apparently, it has something to do with protectionism:

In 1948, more than a third of the world’s merchant fleet flew the stars and stripes; today that figure is down to 2 percent. Half a century ago, America built more ships than any other nation, and New York City could boast that it was the world’s busiest seaport. Sliding from the top since the 1980s, New York now barely ranks among the top 20.

The only American port now on the top-10 list is Los Angeles-Long Beach, an indication of how much maritime trade has shifted from the North Atlantic to the North Pacific.

A major factor in the decline of American shipping has been an antiquated law that prevents American coastal shippers from buying ships made in other countries. By amending this law and, at the same time, encouraging the development of domestic coastal shipping, Congress could help restore America’s status as a great and proud maritime nation....

Shipping has always been the most economically efficient way to carry goods from place to place; it requires no investment in highways or rails, and thanks to the relatively frictionless ease with which ships move across water, fuel costs per ton are low. The arrival of containerized shipping pushed transport costs even lower, swelling world trade and expanding global wealth....

The export-driven economies of Pacific Asia built much of their enormous success upon the new maritime technologies. The United States did not. The Merchant Marine Acts of the 1920s and ’30s are one reason why.

Intended to protect the domestic shipbuilding industry, the acts decreed that the only ships allowed to call on two or more consecutive American ports would be those built in the United States, owned by American companies, flying the American flag and operated by American crews.

At the time, the United States still had a large merchant marine. But the acts’ restrictions handicapped coastal shipping within American waters, opening the way for the growth of the trucking and freight-rail industries.

To revive the maritime trade, Congress should give shipping companies as much choice in buying ships as their land-based rivals have when buying trucks and train cars.

Freed from the restraints of the Merchant Marine Acts, commercial shippers could not only begin to resume their position in global trade but also handle much more of the freight that moves within our borders. Before railroads and highways were developed, a network of water transportation routes connected America’s port cities and towns. Today coastal shipping handles only 2 percent of domestic freight, even though coastal counties hold more than half of the nation’s population.

The trucks that carry nearly a third of our cargo clog the highways. That is one reason why Americans now lose at least 3.7 billion hours and 2.3 billion gallons of fuel each year sitting in traffic. Ships could take on a larger share of this freight — and even some of the passengers now traveling by highway and rail — and carry it at lower cost....

Americans are rightfully concerned about security, but part of protecting the nation is generating a strong economy. Revitalized coastal shipping could shorten our morning commutes as it begins to rejuvenate America’s wider maritime economy.

UPDATE: Tyler Cowen unearths this great Walt Whitman quote about protectionism:
The profits of "protection" go altogether to a few score select persons--who, by favors of Congress, State legislatures, the banks, and other special advantages, are forming a vulgar aristocracy full as bad as anything in the British and European castes, of blood, or the dynasties there of the past

posted by Dan at 08:38 AM | Comments (12) | Trackbacks (0)

Monday, January 1, 2007

Merry New Year!!

Three thoughts to welcome in 2007:

1) It's good to be near the focal point. New Year's has never been high up there on my holiday list, but I always enjoyed it less when I wasn't in the Eastern time zone when Auld Lang Syne was sung. I have to conclude that this is because the dropping of the ball in Times Square means something more when I'm in the same time as New York. Why this is true is beyond me.

2) The young people today will never believe their elders when we tell them that for the longest time, Dick Clark did not age. Tonight he was half a beat behind countting down, but back in the day, Fortunately, Wikipedia will tell them too, and because it is on that newfangled information superhighway, they will accept it as gospel.

3) A question to readers -- is there a movie that does a better job with New Year's Eve than Trading Places?

posted by Dan at 12:32 AM | Comments (4) | Trackbacks (0)

Sunday, December 31, 2006

Let's end the year talking about trade

How to close out 2006? How about a post about trade? [Yeah, because you never write about that!!--ed.]:

1) In the lastest issue of Foreign Affairs, Rawi Abdelal and Adam Segal suggest that the tide has turned for globalization:

Has the current age of globalization already started to come to a close? Will the process of integration continue, or will it grind to a halt?

The paradoxical answer is neither of these scenarios. The technological revolution that has driven the current wave of globalization will continue. Communication will become still cheaper and easier, allowing corporations to spread their operations -- research and development, design, and manufacturing -- around the planet. Companies will exploit scientific talent in other countries to spark a new wave of technological innovation.

At the same time, certain barriers will start to rise. The institutional foundations of globalization -- such as the rules that oblige governments to keep their markets open and the domestic and international politics that allow policymakers to liberalize their economies -- have weakened considerably in the past few years. Politicians and their constituents in the United States, Europe, and China have grown increasingly nervous about letting capital, goods, and people move freely across their borders. And energy -- the most globalized of products -- has once more become the object of intense resource nationalism, as governments in resource-rich countries assert greater control and ownership over those assets.

This sounds about right to me -- provided there is no major shock to the system (cough, dollar crisis, cough).

2) One step forward, one step back on U.S. trade policy. Stepping forward, Cato's Dan Ikenson rejoices in a mundane, yet positive change in how the Commerce department calculates anti-dumping rates. If the policy change takes place, it would be a welcome falsification of Daniel Kono's powerful hypothesis about how democracies obfuscate their protectionist policies (see also: "hypocritical liberalization").

Stepping back, the Detroit News' Gordon Trowbridge reports on the Labor Department's willful negligence in implementing the Trade Adjustment Assistance program:

[I]n a series of sometimes harshly worded opinions, the federal court that hears appeals of application decisions has criticized the Labor Department's administration of the program, accusing officials of shoddy investigations and blatant misreading of the law.

"This is no longer people criticizing the Department of Labor for one or two cases. This is a systemwide problem," said Howard Rosen, a former congressional staffer who now heads an organization calling for changes in the trade adjustment program.

Your humble blogger is quoted later in the story. Let's just say it takes a unique kind of incompetence to get me to agree with Sander Levin on anything.

3) Greg Mankiw cues me to a Washington Post op-ed by Senator Byron Dorgan and Senator-elect Sherrod Brown, "How Free Trade Hurts", in which a.... well, let's call it imaginative economic and historical analysis is put forward. Here's an excerpt:

At the turn of the 20th century, child labor was common; working conditions were often abysmal; there were no enforced workplace health, safety or environmental requirements; no unemployment insurance; and no workers' compensation. Workers were attacked and killed for the sole reason that they wanted to form a union; there was no 40-hour week, minimum wage, job security, overtime pay or virtually any other limit on the exploitation of employees.

America was split dramatically between the haves and have-nots. It was a harsh work world for many: nasty, brutish and, too often, short.

Worker activism, new laws and court decisions changed all that during the past century....

The new mobility of capital and technology, coupled with the revolution in information technology, makes production of goods possible throughout much of the world. But much of the world at the beginning of the 21st century looks a lot like the United States did 100 years ago: Workers are grossly underpaid, exploited and abused, and they have virtually no rights. Many, including children, work 10, 12, 14 hours a day, six or seven days a week, for only a few dollars a day.

The result has been a global race to the bottom as corporations troll the world for the cheapest labor, the fewest health, safety and environmental regulations, and the governments most unfriendly to labor rights. U.S. trade agreements paved the way for this race: While rejecting protections for workers or the environment, they protected investors and corporate interests....

We must insist that all trade agreements have labor, environmental and other protections so that American workers can compete on a level playing field. Trade agreements must also be reciprocal. The American market is the most desirable in the world. Every country wants access to it. That gives us a great deal of leverage, if only we'd use it. Barriers to U.S. products overseas should not be tolerated.

Free-trade agreements have protected drug companies, international investors and Hollywood films, yet failed to protect our communities, our workers and our environment.

We believe there is a better way. Fair trade is not the enemy of more trade. It's how we expand international trade without reversing U.S. economic progress.

Oh, wow -- compared to these guys, suddenly James Webb looks like Cordell Hull.

Mankiw addresses the historical questions, and a lot of other free trade bloggers pick at the remaining carrion.

I've written previously about the dubious nature of the race to the bottom hypothesis. Indeed, I had updated and extended these arguments in the first draft of All Politics Is Global. Ironically, this section got cut from the final manuscript -- because the academic consensus is that the race to the bottom is so easy to refute, there was no point in devoting half a chapter to it.

After reading Brown and Dorgan's op-ed, however, this chapter fragment seems worth resuscitating. So, for those people who still really, really believe that globalization leads to a race to the bottom -- click here. And for those Congressmen reading this -- go click over to this Greg Mankiw post and make the recommended resolutions.

posted by Dan at 11:01 PM | Comments (12) | Trackbacks (1)