Thursday, September 16, 2004

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Jagdish Bhagwati really doesn't like John Kerry

Over the past month, international economist Jagdish Bhagwati has started taking some serious pot shots at John Kerry's rhetoric on trade and outsourcing -- despite Bhagwati's self-proclaimed status as a Democrat. This past Monday he penned a Wall Street Journal op-ed (subscription required) that contained the following:

How does one forgive him his pronouncements on outsourcing, and his strange silences on the Doha Round of multilateral trade negotiations? Indeed, Sen. Kerry, whose views and voting record were almost impeccable on trade, has allowed himself to be forced into such muddled and maddening positions on trade policy that, if one were an honest intellectual as against a party hack, one could only describe them as the voodoo economics of our time.

There seem to be three arguments by Sen. Kerry's advisers that have prompted this sorry situation for the Democrats: First, that the Bush trade policy is no better; second, that electoral strategy requires that Sen. Kerry act like a protectionist, while indicating subtly (to those that matter) a likelihood of freer trade in the White House; and third, at odds with the previous argument, that the U.S. does indeed have to turn trade policy around toward some sort of protectionism (and restraints on direct investment abroad) if it is going to assist workers and reward the unions. Each argument is flawed....

In the end, Sen. Kerry cannot totally jilt his constituencies. He will have to claw his way to freer trade, making him a greater hero in a war more bloody than Vietnam. The unions, in particular, are going to insist on their reward. This is forgotten by the many pro-trade policy advisers and op-ed columnists who argue privately that we should not worry -- because Sen. Kerry is a free trader who has merely mounted the protectionist Trojan Horse to get into the White House. The irony of this last position is that it is, in fact, too simplistic. Besides, it suggests that when President Bush does the same thing, he's lying, but that when Sen. Kerry does it, it's strategic behavior! Is it not better, instead, for us to tell Sen. Kerry that his trade policy positions are the pits -- before he digs himself deeper into a pit from which there is no dignified exit?

Juan Non-Volokh points out that in this op-ed, "Bhagwati is harshly critical of Kerry, but he does not celebrate President Bush's trade credentials." True enough. However, last month, Bhagwati did say much nicer things about Bush (and much harsher things about Kerry) as part of an interview he gave to Der Spiegel:

Bhagwati: The Democratic party is moving towards a kind of anti-globalization attitude, an anti-free trade attitude in particular. I think this is dangerous. Since I finished my book, there has been this debate about outsourcing. Kerry and Edwards are clearly trying to use scare tactics here. At the convention, they got lots of applause whenever they spoke about American jobs being shipped overseas.

SPIEGEL ONLINE: If those arguments resonate at the convention, they might convince voters, too.

Bhagwati: But Kerry and Edwards don't know what they're talking about. If we look at the offshoring of online services like call centers or basic accounting, we're talking about a maximum loss of 100.000 jobs a year to countries like India. That is nothing for an economy this size. The US is a major hyperpower, and yet every time it gets into competition with Mexico, China and India, we work ourselves into a panic. It's like a rottweiler getting scared because a French poodle is coming down the road.

SPIEGEL ONLINE: Kerry and Edwards are not just speaking about call centers. Especially in industrial swing states like Ohio, they promise to stop the loss of manufacturing jobs to lower-wage countries like China or Malaysia.

Bhagwati: Here we're not talking about outsourcing but good old foreign investment. There is a huge amount of academic work that shows that this is beneficial to the US. On average, low-value jobs are going out and high-value investment is coming in. In North Carolina, where Mr. Edwards comes from, we have the I95. Along the way, there used be textile firms that have gone out since they can't produce efficiently there. Now the workers are employed by Siemens and several other German companies, with far better salaries. That section of I95, in fact, is now known as the autobahn.

SPIEGEL ONLINE: Rhetoric is one thing - but do you think Kerry will actually implement detrimental economic policies if he's elected? For instance, he proposes to give tax credits to companies that create jobs in the US instead of abroad. That can't do any harm, can it?

Bhagwati: It boils down to subsidizing companies when they stay and penalizing them when they go out. If we start doing that, other countries can follow. Everybody will be worse off. Our firms lose comparative advantage if they're stopped from saving costs. A dead firm can only employ dead souls. So we may save 10 jobs by not outsourcing but we will lose the entire 100. Keep in mind, too, that investment from multinationals helps countries like India and Mexico fight poverty. Some sections of Africa sorely need foreign investment. If we Democrats crack down on this, it's not compatible with our notion that Bush and his friends are the nasty guys.

SPIEGEL ONLINE: Bush himself is hardly a model free-trader. He imposed highly protectionist tariffs on steel imports right at the beginning of his term.

Bhagwati: He tried to win over voters in crucial industrial states. But he later punched holes into the safeguards, exempting all kinds of products and countries. Once the WTO declared them illegal, he quickly lifted the tariffs. Bush really believes in the capacity of American firms to compete successfully. During the campaign, he keeps stressing that free trade is good for us. He even got a member of his cabinet to say there's nothing wrong with outsourcing. I'm afraid Bush looks very presidential on trade, unlike my own party. (emphasis added)

Question to Kerry suppporters who also support free trade -- if Kerry were to actually get elected, would he prove to be a prisoner of his own protectionist rhetoric, or be able to tack back towards a more trade-friendly position because he burnished his protectionist bona-fides with his campaign rhetoric?

Full disclosure -- Bhagwati is not my biggest fan.

UPDATE: It's all Bhagwati, all the time here at!! Click here for the transcript of a "debate" between Lou Dobbs and Jagdish Bhagwati on PAula Zahn Now earlier this week.

posted by Dan on 09.16.04 at 12:28 PM


Tossing out a question that is only tangentially-related to this post. How do jobs moving overseas help me as an American worker? I know it's obvious to many who post here, but it's not obvious to me. If modern technology makes it easier for someone in India to do the same job I'm doing, and they are willing to do it at one-tenth the salary, how does that improve my lot in life?

I know I can retrain, but modern technology is going to continue to reduce geographic barriers to competition. This means a rising supply of workers to compete with. Rising supply generally means lower prices. In this case, the supply is workers and the prices are wages. How is this helping me? It's clear that it either helps me or is value-neutral to me if I own a business that can take advantage of the reduced labor costs, but how does it help someone who doesn't own a business?

I just don't get it, yet it's supposed to be obvious. If someone is interested in helping me out here, I'd appreciate it.

posted by: Timshel on 09.16.04 at 12:28 PM [permalink]

Well let me say this. Baghwati's an economist and a very bright one with lots of smart things to say about what a good US trade policy should be. But he's not a political reporter, or a political analyst or political scientist or, in general, anyone who's in a position to know what Kerry's trade policies would be. Kerry's voting record on trade is well-known and quite good. I've reported on this issue quite a bit and been assured that he'll be pro-trade. His entire team of economic policy advisors is from the pro-trade wing of the party. The closest thing to an exception here is Laura Tyson, who specifically told me that a Kerry administration would pursue new trade agreements and resist pressure to incorporate labor and environmental standards into the WTO.

In addition, congressional democrats are more -- not less -- likely to support trade agreements with Kerry in the White House. A big block of House Democrats (led by the CBC I believe), in particular, who supported Trade Promotion Authority for Bill Clinton opposed it for George W. Bush and weren't shy about saying that they were doing so out of pure partisanship. That's an ugly sort of behavior, just as Kerry's decision to appease protectionist voters with rhetoric rather than policy is pretty ugly, but the policy facts simply don't indicate that a Kerry administration would be anti-trade.

Bhagwati's claim that Bush "even got a member of his cabinet to say there's nothing wrong with outsourcing" is simply a lie. The person who said it wasn't a member of the Bush cabinet. And Bush didn't "get" him to say it. He went off the reservation and said it. Bush's response was to publicly distance himself from the remarks and then muzzle the guy who made them.

I'm quite sure that if Baghwati really wanted to get to know more about Kerry's trade policies, some of the economists working with the candidate would have been happy to discuss it with them. Instead, he's analyzing -- and, as above, often misanalyzing -- the two candidates' records in order to paint a rosy picture of Bush and a nasty one of Kerry. I don't care to speculate on what, exactly, Bhagwati's problem is, but he seems to me to have simply taken a disliking to Kerry and now he's being irrationally hostile, something you, Dan, are obviously familiar with.

posted by: Matthew Yglesias on 09.16.04 at 12:28 PM [permalink]

Dan, I think the answer to your question is blowing in the wind. If protectionism appears to be picking up support, that's the way Kerry will tack. If not, he won't. The only reason Kerry's free trade credentials are as good as they are is that he's represented a state with expanding hi-tech industries and has been close to the entertainment industry, which relies heavily on overseas markets. If Kerry were a senator from South Carolina he would have a different record.

With respect to Bush and trade, I've noticed something fairly remarkable. Outside of Defense and (to a much lesser extent) Justice, Bush has allowed his Cabinet secretaries very little policymaking discretion compared to, for example, Reagan. Yet after a crude and politically unsuccessful lunge toward protectionism early in his administration Bush now finds himself not just presenting Congress with new trade liberalization agreements but also in the forefront of efforts to revive the Doha round. The explanation, I think, is in his choice of trade representative, the extraordinarily resilient and skillful Robert Zoellick. I don't think Bush has changed his mind on trade since 2001, but Zoellick has changed his administration's policy. In context, it's a remarkable achievement.

posted by: Zathras on 09.16.04 at 12:28 PM [permalink]

"Bhagwati: It boils down to subsidizing companies when they stay and penalizing them when they go out. If we start doing that, other countries can follow. Everybody will be worse off. Our firms lose comparative advantage if they're stopped from saving costs."

Does this make sense? If our companies are subsidized for staying, how are they stopped from saving costs? Don't we assume that if the cost saving outweighs the subsidy they'll outsource, and if not they won't?

Dr. Drezner's concern should be one of degree, not of kind. It seems like Kerry is in favor of using government funds to slow outsourcing, not stop it. Since Dr. Drezner's posited benefits of outsourcing (as I understand them) take time to materialize, and since outsourcing seems fad-like these days, isn't that a prudent policy?

It certainly is a far more prudent use of government funds than going to the moon. We are still going to the moon, aren't we? Someone promised us the moon; I'm sure it was Bush.

posted by: Brent on 09.16.04 at 12:28 PM [permalink]

Matt: First of all, Bhagwati is not lying about the cabinet member -- while I assume you're thinking about Greg Mankiw, Treasury Secretary John Snow has also spoken out in favor of outsourcing". Don't ever lie in my comments section again, Matthew!! (yes, I'm kidding).

Second of all, as I've observed previously, the Kerry campaign team seems perfectly willing to speak out of both sides of its mouth on this issue. I really do hope you're right -- but you're staking an awful lot of confidence in Kerry -- and therefore his advisors -- not being trapped by his own rhetoric.

posted by: Dan Drezner on 09.16.04 at 12:28 PM [permalink]

Dr. Drezner,

This is more grist for the presidential candidate endorsement mill. I appreciate the fact that you are presenting "both sides of the story". I will be curious to see where you end up. I had thought that you would eventually say, before the election.

What is happening in Iraq is bad. My gut feeling is that we are where we are due to the State Department and political considerations. We have kept backing off from the critical fights due to Iraqi political considerations, when we were on the verge of winning.

The nasty thing is that I only see a President Kerry as being weaker and more vascillating. What we have is bad enough.

Actually, all this was predicted: that the enemy would try to stop elections, by making this be really bad (which they are doing).

I would be interested to know what you think we could do differently (besides put the anti-war guys in charge of our foreign and military policy).

posted by: Jim Bender on 09.16.04 at 12:28 PM [permalink]

Well, there are two ways to pay-off his protectionist supporters: one, by instituting traditional protectionist measures, and two, by pushing for pseudo-protectionist measures like environmental and labor standards in our trade agreements. If President Kerry chooses option two, as I suspect he will given his record, I don't see a problem. I personally think those kind of standards, if properly designed, will help the cause of free trade by giving it more legitimacy both here and, most importantly, in the developing world. So, on my hopeful days, I see a happy confluence between the pandering that Kerry will be obliged to do and the actual policies that I want to see.

posted by: Dave on 09.16.04 at 12:28 PM [permalink]

Forgive me, Jim Bender, but you are off-topic. I make no comment as to whether your remarks are true or wise, but they don't belong on this thread.

I'd like to ask Matthew Yglesias if he really thinks that John Kerry would if asked say that "... a Kerry administration would pursue new trade agreements and resist pressure to incorporate labor and environmental standards into the WTO." All respect to Laura Tyson, but what the candidate himself says during the campaign ought to count for something.

posted by: Zathras on 09.16.04 at 12:28 PM [permalink]

I think the answer to your question, Dan, may lie in what the unions themselves believe John Kerry means. Here is what the AFL-CIO says John Kerry's position on trade is.

This promise might give you all pause:

"He will ensure our trading partners play by the rules and will work to stop countries such as China and Japan from manipulating currency and undermining the value of U.S. products abroad. Kerry also will order an immediate 120-day review of all existing trade agreements to ensure our trade partners are living up to their labor and environment obligations and that trade agreements are enforceable and balanced for America’s workers. He will insist that core worker and environmental standards are included in all trade agreements—and are enforced."

Kerry may have more wiggle room from the Teamsters:

"Hoffa said the Teamsters can waver on the trade issue for a candidate with "a total package" who can win in November."

My guess is Labor won't smite Kerry for going forward with trade pacts and probably will be OK if those promised trade pact reviews come up empty. But he will be under pressure to put "core worker and environmental standards" in any new pacts.

posted by: Appalled Moderate on 09.16.04 at 12:28 PM [permalink]

Trapped by rhetoric? How trapped has George W. Bush been by his campaign rhetoric on foreign policy? When was the last time any of us heard the words "humble" and "foreign policy" come out of George Bush's mouth?

posted by: Beltway Bandit on 09.16.04 at 12:28 PM [permalink]

In talking about protectionism and outsourcing you are talking about the symptoms not the disease. The disease is the weak economy. If we fail to get domestic strength it does not matter who wins the election, we will get protectionism and and outsourcing rules. Protectionism,or its latest thing, outsourcing, is never an issue when the economy is strong.

posted by: spencer on 09.16.04 at 12:28 PM [permalink]

Yeah, yeah, yeah, you AND Matt live in a world where it's all black and white and there is never any nuance. All benefits will accrue tomorrow, and there is no long run. And Matt is happiest when there are no trees around his gentrified district.

Heaven forfend that trade agreements consider environmental, labor or other social issues. Remember, in the long run, we are all still alive!

Free Trade Good, Fair Trade Bad. No. Fair Trade IS HITLERISM!

posted by: jerry on 09.16.04 at 12:28 PM [permalink]

For the first three years of my physics education, we studied frictionless pulleys. Ah, how easy it was to model when we could make all sorts of assumptions. In my fourth year, we learned how to model friction.

When will the comparative advantage proponents of pure free trade begin to realize we live in a world filled with friction?

posted by: jerry on 09.16.04 at 12:28 PM [permalink]

Shorter Yglesias: Don't pay any attention to what Kerry is actually saying about trade, it's all just a lie to attract the rubes. In the end, he'll surely support the position I favor.

posted by: Al on 09.16.04 at 12:28 PM [permalink]

It seems to me that the Democrats this year are so united in their desire to get rid of Bush that they are comfortable with deferring all the difficult debates until after the election. While Democrats disagree on if free trade is a good idea or not, they do agree that talking about outsourcing and unfair competition gets votes.

So they are going to allow Kerry to say whatever he wants about outsourcing and then leave it until after the election to figure out what he means by all these things. The protectionists also are aware of this bargain, and are ready to not hold Kerry's feet to the fire until after the election. They are comfortable hearing the rhetoric and hoping that if the rhetoric is successful they are going to have the upper hand after the election.

If Kerry is elected here is how I think it will play out: I think that Kerry will look to make sure that he pursues policies that he can point to being successful. I think he is smart enough to know that the best politics is good policy. His time is going to be sucked up by figuring out how to change the situation in Iraq, get us back on the right track in the war against Al Qaeda, and restore our standing with people around the world. Between all that he is not going to have the time or the political will to change US trade policy.

I think that by default he is going to follow his advisors on this, and that will be to pursue his previous policy of supporting free trade. I don't think this means he will be an advocate of free trade, but the protectionist rhetoric will disappear as well.

Just since you asked. And yes, I support John Kerry and I support free trade.

posted by: Rich on 09.16.04 at 12:28 PM [permalink]

"Shorter Yglesias: Don't pay any attention to what Kerry is actually saying about trade, it's all just a lie to attract the rubes. In the end, he'll surely support the position I favor."

That's hardly fair, his position is much closer to: Don't pay any attention to what Kerry is actually saying about trade. In the end he'll surely support the position I favor even though it is anathema to many of the largest and most powerful supporters of the Democratic Party.

posted by: Sebastian Holsclaw on 09.16.04 at 12:28 PM [permalink]

"It boils down to subsidizing companies when they stay and penalizing them when they go out. If we start doing that, other countries can follow. Everybody will be worse off."

Um, as above, but: Japan? China? South Korea? Vietnam? (Mexico to a certain extent) France? Germany? Italy? Are they not um, 'leading'? (How much of that *does* India do? Does he write harsh editorials in Indian newspapers urging the Indians on to opening their markets?)

Is that not the deal advocated by neo-liberals DeLong and Krugman? A 'safety net' of some sort to alliviate the upfront costs (pains) of free trade, so that the economy can muddle through to the back-end gain?

One would be tempted to think, after reading that, that the important issue is that jobs be outsourced to India soonest, and the comparative advantage stuff can show up when it feels like it.

['Outsourcing debate causes sudden rash of Indian economists. Film at 11.']

posted by: ash on 09.16.04 at 12:28 PM [permalink]


I notice no one has given you an answer, at least not in this comments thread. Perhaps you've received one via personal email. Unfortunately, I don't have credentials to provide one either.

My opinion, however, is that neither side in such a debate really addresses an individual person. They all talk aggregates, industries, businesses, society, etc.

Broad policies from either side of the discussion, therefore, do not have an answer for you. Each recognize that there will be periods of adjustment as the face of business changes. And some even recognize that these periods will affect people and have some sort of plan to help people.

In my opinion, it often seems that those discussing fair trade, outsourcing, globalization, and other broad concepts fail to understand, or perhaps even care, about the person and family afected by their policies. That's of course, an uninformed opinion.

Of course, in many ways they cannot address the individual. Policies aren't designed for individual workers most affected. In some ways, it's the individual's responsibility to learn, to understand, to be prepared to change. Perhaps one of these able posters can suggest a study program, books, or educational URL, that would shed some light.

posted by: JimP on 09.16.04 at 12:28 PM [permalink]

I have the greatest respect for Dr. Bhagwati. While I'm a Kerry supporter - I hope Kerry listens to Bhagwati better than Bush listens to you. And BTW - I'm surprised two intellectually honest free traders are having this spat.

posted by: pgl on 09.16.04 at 12:28 PM [permalink]

This is the question at hand:

You have two candidates: candidate A and candidate B.

Candidate A: "I support x"
Candidate B: "I oppose x"

If you had to hypothesize about which one would be a stronger supporter of x after being elected, which would you pick?

posted by: Adam on 09.16.04 at 12:28 PM [permalink]

In other words, regarding free trade, "he's lying now" is the best case scenario with Kerry, and the worst case scenario with Bush

posted by: Adam on 09.16.04 at 12:28 PM [permalink]

Can someone please explain to me why environmental and labor standards being part of a trade agreement is such a bad thing? They're part of every developed country's domestic economies, so why not incorporate them into the global economy? (Oh, and please don't just say that they're a front for protectionism. I'd like to hear an argument against their substantive merits, rather than the oft-repeated trojan horse line.)

posted by: Dave on 09.16.04 at 12:28 PM [permalink]

Whoa. Good job, Mr. Yglesias. You took the words right out of my mouth. But I think I can add something, and since I am lazy, I am going to just reprint what I have already typed at Angry Bear:

You know, I've worried about the same thing. Before I get into anything else, let me say that Bhagwati, while by all accounts a sterling economist, is probably not a keen political observer in the same way that, oh, James Carville is. Thus, he doesn't understand politicians usually do things to fire up their bases in the primaries and elections and then leave it at that.

But on to Kerry's position on free trade. By and large, does anyone disagree that he's not a protectionist? From what I gather, he has a strong record on trade. And if we are going to judge him on his record, then we don't have a whole lot to worry about.

More than that, let's look at who is working for, with, or actively supporting him. Off the top of my head, I can think of Gene Sperling, Laura Tyson, Lael Brainerd (who is also his trade representative), Robert Rubin, and George Akerlof. Are any of them protectionists? Take Rubin, for example. He has to sell Kerry on Wall Street - and if werent't able to do that, why would he be so actively involved in campaign? And George Akerlof is on the cover of Bhagwati's book "In Defense of Globalization" saying how anti-globalization individuals are blocking the process of global prosperity.

If you actually look at the protectionist rhetoric, it's not that bad. He plays on fears of outsourcing, but he has said numerous times he's not going to do anything to spot it. He's merely going to remove the incentive to outsource, which means that he's going to remove a distortion in the tax code and thus restore free market conditions. Take a look at this. He may dress this outsourcing stuff up in protectionist rhetoric, but like I have said, that's politics. Is it commendable? Hell no. Is it understandable? Yes.

The biggest concern is probably his plan for manufacturers, but I need to do more research there before I continue.

posted by: Brian on 09.16.04 at 12:28 PM [permalink]

Oh yeah, the "this" is this piece from Slate:

posted by: Brian on 09.16.04 at 12:28 PM [permalink]

Who's running Kerry's economic policy during the campaign? Roughly the same people who were running Clinton's.

Who would run Bush's economic policy in a second term? Presumably the same people who are running it now.

Who has been more committed to free trade, Clinton or Bush? I'd argue Clinton.

Given that, and Kerry's support as a senator for free trade, I'd argue that Kerry would be more of a free trader than Bush. Note that Kerry highlighted his previous support for free trade in his WSJ op-ed piece the other day.

posted by: The Other Dave on 09.16.04 at 12:28 PM [permalink]


What sort of environmental and labor standards are you referring to, specifically in regards to his record?

posted by: Brian on 09.16.04 at 12:28 PM [permalink]

Bravo, The Other Dave. Remember that we are talking about Kerry, not Kucinich (or Buchanan).

posted by: Brian on 09.16.04 at 12:28 PM [permalink]

Hey, since I haven't commented enough already (oh, come now, I kid), I have to ask, if Bhagwati is so concerned about his party's trade policy, why doesn't he advise or lend his services in some other way to the ticket? Having one of the most respected international economists help the ticket certainly wouldn't hurt.

posted by: Brian on 09.16.04 at 12:28 PM [permalink]


Your comments on Matt's point about Bhagwati taking sides confuse me. Well, yes, Bhagwati isn't saying nice things about about Kerry. And look, Kerry trying to promote and get out the far left/anti-globalization people, while bring peopl like Laura Tyson on board, shocking. A politician say something to one constituency and not another? You obviously missed the Republican convention.

Kerry's inconsistency wasn't Matt's issue. Matt's issue was Bhagwati, economist, making poltical judgements about Kerry...that were really about Bush. You may note in in a couple places (like your review and your letter) that Bhagwait claims to be arguing X but really is addressing Y. That, I believe, is what Matt is really drawing attention to. I think your comment obscures the issue. The issue is that Bhagwati has an agenda, and in an election year, you push your agenda by taking sides. Props to Bhagwati for doing it in such a way as to try to influence both candidates...while shoring up his credentials on the Republican side.

And Dan, what are you doing talking about Free Trade? Let's be real here. We have Trade w/Tarrif, and Trade with Lesser Tarrifs. Unless you and Bhagwati are talking about NAFTA, let's stop with the false dicotomy between Fair and Free trade, ok? Instead ask what the candiates think about tariffs and subsudies...and compare their records.


posted by: c. on 09.16.04 at 12:28 PM [permalink]


I'm not really referring to any specific policy plank of Kerry's. It's just that in discussions like this, I often hear people deride the idea of enviro/labor standards as protectionism in disguise. In this thread, Matthew Yglesias mentioned that a Kerry staffer had told him that as President, Kerry would "resist pressure to incorporate labor and environmental standards into the WTO", and he presented it as an obviously good, pro-trade thing to say.

I've just never heard a real defense of that idea. Since environmental and labor standards haven't been an obviously negative thing in any domestic context I know of, and many knowledgable people argue that they've actually been economically beneficial over the long-run, I don't understand why they are so often and so casually dismissed as anti-trade decoys in the international context.

posted by: Dave (The Dave that's not The Other Dave) on 09.16.04 at 12:28 PM [permalink]

So, what's your likelihood of voting for Kerry at current?

posted by: Marc on 09.16.04 at 12:28 PM [permalink]

Timshel-- All you need are a few more down to earth Blog. resources. You don't have to be an educated to idiocy idiot to be considered smart. All the paper professionals hemorrhaged this country. Common sense, a skilled trade, moderate values, and reading a variety of sources for citizenzship role will serve you well.
The educated idiots conned this country for 35 years+. They conned a generation + of people who didn't think they were smart enough to take them on. Required degrees required to make full secured employment ever increasing the pricing to make full employment for univ staff and programs. They are a fraud. Those who attend the univs are too young and too inexperienced to know anything. They all should be required to be in National Guard for four years (for several reasons) to learn to def. the country here. They should have to work for seven years before able to get any degree.
They're ranting about their false religion and fallacious theories propagandized to them in outdated univ systems and profs. None would know what genuine productive work was if it hit them on the head like a two by four. Free enterprise, etc. does not exist in these other countries in real life. Several countries are kicking our butts --because of all these paper professionals idiots.

posted by: Alex on 09.16.04 at 12:28 PM [permalink]

Outsourcing and the High Tech Bust:

A new report by the Center for Urban Economic Development at the University of Illinois, Chicago, shows that U.S. high-technology workers are still facing chronic unemployment and a serious jobs deficit despite an economic recovery being declared three years ago.

The report, entitled "America's High-Tech Bust," found that the U.S. high-tech economy continued to lose a whopping 200,000 jobs after the recession was declared over in November 2001 by the National Bureau of Economic Research.

The report cited offshore outsourcing as contributing to the lack of strong job creation in this sector.


posted by: bhaim on 09.16.04 at 12:28 PM [permalink]


"Since environmental and labor standards haven't been an obviously negative thing in any domestic context I know of, and many knowledgable people argue that they've actually been economically beneficial over the long-run, I don't understand why they are so often and so casually dismissed as anti-trade decoys in the international context."

I will probably re-read certain portions of Bhagwati's book to make sure I know them better, but to summarize some of his points, I'll say that people are often unrealistic and economically unsound in their desires for certain environmental and labor standards. Does that mean everything? Well, no, or at least probably not.

posted by: Brian on 09.16.04 at 12:28 PM [permalink]

What is the political science on the binding effect of campaign rhetoric? It's not my specialty, but I recall that the effect is fairly small. Primary campaigning tends to the extreme, general election campaigning tends to the center, and moderation (usually) rules for elected officials. So I'm not generally worried about Kerry being bound by protectionist stump speeches.

There are other reasons to be sanguine. As mentioned above, Kerry's economic advisors are mostly free-traders. And he has carefully gauged his language; e.g. Kerry promises to review all trade agreements within 180 days, not to revoke them. I see nothing wrong with reviewing trade pacts. Indeed this may have the ironic effect of stabilizing liberal expansion, if you believe the bicycle theory of trade.

posted by: JR on 09.16.04 at 12:28 PM [permalink]

Regarding the comment about one candidate supports x and the other opposes x:

The situation is far from that simple. What is really going on (and why Bush does not have the free trade vote) is:

Bush says he supports free trade, but takes SOME action that indicates his support is lukewarm

Kerry does not say as unequivically that he supports free trade, but his votes and team indicate that he does.

So the question is who do you believe? I am not convinced myself which one I believe, but I am convinced that neither is the clear answer.

posted by: Rich on 09.16.04 at 12:28 PM [permalink]

Rich and Company:

This is a real tough question -- do you believe Kerry -- who, let's face it, has a reputation of changing his opinion when expediency demands it -- when he speaks vaguely protectionist things; or do you believe his record, which, on this issue is fairly consistently free trade. My honest answer is an "I don't know", and a large degree of annoyance at Democrat sophisticates who whisper to us knowlegeable but puzzled voters in allyways, telling us to pay no attention to what the candidate says, he doesn't exactly mean it. Gee, after convincing me that Bush can't be counted on to tell the truth (or even recognize it), Kerry suppoters whisper to me not to believe their guy either...this Pat Buchanan stuff is just for the rubes in Toledo...

OK, enough righteous outrage...

There are several ways of looking at this question. One is to say his record will determine what he does. Another is to look at the pressure groups that influence Kerry and figure out what's important to them, and what they will force a hypothetically malleable Kerry to do. The final is to determine that Kerry's advisors are the most important interest group, and use their prejudices to determine what Kerry will do.

Looking at the question all these different ways gets me crosseyed, and, frankly, one may come to a conclusion that Kerry's approach might well be an unpredictable combination of conviction and expediency which means no prediction is possible. answer to Dan's question ... what I'd do is throw up my hands, because the answer is unknowable. After all, I'm sure our host voted for Bush thinking there would not be steel terriffs. I'd vote on the basis of trends in current policy under Bush, the likelihood of at least a more rational economic policy process under Kerry, and move on to other considerations...

posted by: Appalled Moderate on 09.16.04 at 12:28 PM [permalink]

Is Free Trade a concept based in valid historical fact, or is it an experiment in econimics on a grand scale? Which past country/government has proven this to be a valid economic course of action? No on appears to want to answer this question? Well?

posted by: Dan P on 09.16.04 at 12:28 PM [permalink]

As both an ardent free-trader and Kerry supporter, I'll offer a defense. Whether its the best or even acceptable, I leave to others.

The concerns with Kerry on matters of free trade are legitimate, make no mistake. Promising to review all trade agreements and put a pause on any new ones for 120 days while allegedly taking that goodwill overseas in search of military allies does not strike me as entirely logical.

But on the other side, am I to take Bush's bromides for free trade at face value after seeing how quickly he'll offer up a protectionist measure in the past? ... and am I to believe he'll succumb to the WTO any sooner than he would the UN over a piddly subject such as farm subsidies?

The bottom line on this issue for me is not so much the particulars of the candidates' stated policies, but in reviewing how much that rhetoric has been reflected in their actual policies and votes. On that front, I'm not yet to a point where I believe Kerry would be trapped by his rhetoric.

Case in point ... the 120 review period. Should Kerry make some progress with an allie who's offering a few thousand troops to switch for ours in Iraq, do I honestly think President Kerry would find good cause to keep the eyeshades on in reviewing our trade agreement with said allie? No ... I think that foreign policy rhetoric is far more binding than the trade one, as it would be for any President.

Beyond that example, its a guess as to how damaging Kerry would let any shortage of free-trade purity hamper anything dramatically in regards to the economy. But by that same measure, its the same with Bush. Heck, when Harley Davidson was hurting, it was Ronald Reagan who came to the rescue for them with protections. Point being, this isn't a debate between purity and John Kerry's position. Its a debate between George Bush's and John Kerry's. To the degree that I see differences in rhetoric, my view is that Bush is offering unrealistic promises and oversold trade agreements as opposed to Kerry's occassional sop to manufacturing industries, labor unions, and others who would like to see more protections than they would ever realize under a Kerry administration.

posted by: Greg Wythe on 09.16.04 at 12:28 PM [permalink]


Jobs are outsourced (to another country, or another state, or another city, or even contracted out to another company) when they can be done more cheaply there. This lowers prices in general, because jobs go to where they are most efficiently done.

Decreasing prices means more real purchasing power for every consumer, which means a demand for more and better products and services, which means new, more valuable jobs being created to produce these products and services (these new jobs are often more valuable because the skill they require are also new, and in short supply).

The major cost to individuals comes from the need to constantly retrain in order to remain highly paid in the work force. But the benefits from free trade (between countries and individuals) is enourmous - a minimum wage worker may think he can't afford shit, but I would guess he can afford a thousand times more than a rich man could afford in the 1900's. A crappy pair of shoes from Walmart that cost 1-2 hrs of minumum wage would have cost someone in 1900 around 20 hours work at the average wage.

As new technologies and other innovations reduced prices and increased quality, many jobs were lost, but new ones were created to create new products for people.

When a government puts restrictions on trade, not allowing you to sell something at a particular price to someone in China, or Nevada, or across the street, your incentive to become better at making your product, or come up with a new product, decreases.

Taken at the extreme, the government of 1900 could have tried to freeze all wages, prices, and trade. We may been able to save those factory jobs (which we would today regard as horrible), but we'd be left with the same wages, the same expensive products, no computers, no fridge, no heating, and no time for leisure or fun as we know it.

I know I'm talking about two extremes, here, but I think the protectionist policies of all governments have kept everyone's standard of living at a point somewhere between the standard of 1900 and somewhere much higher than we are today (even more so here in Canada).

posted by: Pedro on 09.16.04 at 12:28 PM [permalink]

A strong economy, technological prowess, EXPORTS, genuine investments, developing and maintaining good jobs is as important to U.S. as its national defense as defense of its borders, soil, air. Archaic outdate univs and their staff and all the paper so-called professionals have ruined and hemorrhaged the country. So-called free trade theories, outsourcing, funny moneys with no genuine investments, inflated housing prices, everything (even for their home repairs) made elsewhere, etc.etc. is not good for U.S.

posted by: Alex on 09.16.04 at 12:28 PM [permalink]

"Point being, this isn't a debate between purity and John Kerry's position. Its a debate between George Bush's and John Kerry's."

That's actually quite a good point.

posted by: Brian on 09.16.04 at 12:28 PM [permalink]

Dan P:

The largest free trade zone in history, and most successful economy in history, is the United States of America. There are no trade barriers between New York and Mississippi to keep the latter from "stealing" the former's jobs.

posted by: David Nieporent on 09.16.04 at 12:28 PM [permalink]

You are Just wrong about this topic.
I agree with you about alot of the academy but Bhagwati is is spot on about this one.

Just look at cell phones -- you probably have one.
When they were made in the US by Motorola many years ago they were quite expensive and rare. Now that they being manufactured off shore they are cheap and plentiful. The real money in the cell phone business is the monthly payments and fees not the sale of the phone.
In my own business we design all our products here in the US, We have them manufactured offshore (for about 16% of the cost of doing it here including shipping), assemble the various parts here, mark them up 6 to 8 times and sell them all over the world.
If it weren't for the fact that we could work this way we would probably not be in the high tech business (we are a debt free company with no outside investors that completely bootstrapped ouselves) or if we were, our products would be so expensive that nobody would buy them.

Free trade and outsourcing is the best thing since sliced bread.
The last time we limited free trade in any meaningful way we ended up with the depression.

posted by: thedaddy on 09.16.04 at 12:28 PM [permalink]

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