The Lou Dobbs Democrats

[Kevin R]

This is very worrisome. The recent trend among Dems to turn away from free trade and globalization is regrettable. This was one of Clinton's most admirable traits as he understood that free trade and globalization benefit America and the poorest individuals in other nations. Many Reps, it should be said, have similar views. It would be an unspeakable tragedy to have the newly minted Congress reverse direction on these issues.



http://www.slate.com/id/2153271/

[RebLem]

Oh, yes, it would be "unspeakable tragedy" to try to prevent China from entering the "free market" for human organs with the bodies of their political prisoners.

Yes, it would be an "unspeakable tragedy" to impose environmental standards on the third world that would actually allow a sustainable future for humanity.

Yes, it would be an "unspeakable tragedy" for us to insist countries respect the rights of their workers to organize unions as a condition for our trading with them. See, justice for workers abroad would help create a peaceful world in which our defense industries would just wither and die. Where would the American economy be without billions of people to kill all over the world? How could they sell the latest tanks and hardware to foreign governments if those governments were not threatened by their own oppressed people? Yes, an "unspeakable tragedy" indeed!

[Lilith]

"This is very worrisome."

Not worrisome at all to me. A welcome change in direction where life is not totally dictated by corporate interests.

[Kevin R]

Oh, yes, it would be "unspeakable tragedy" to try to prevent China from entering the "free market" for human organs with the bodies of their political prisoners.

I assume among the hyperbole your point is that China is a repressive regime. We agree. I also assume that we would both like to see democratic reforms bring a more representative government. Now how do we go about it? The most famous formulation in this regard is the so-called Lipset hypothesis. Basically, prosperity makes democracy possible. As the standard of living increases (as we have been seeing in China for the last 20 years) the demand for greater participation will also increase. Since trade is the engine of growth (to quote Dennis Roberston), having China engaged in trade is the best avenue to a democratic China.

Yes, it would be an "unspeakable tragedy" to impose environmental standards on the third world that would actually allow a sustainable future for humanity.

This is a typical leftist copout (with no evidence). The sustainable case has so many holes in it to make it worthless.

Yes, ot would be an "unspeakable tragedy" for us to insist countries respect the rights of their workers to organize union as a condition for our trading with them. See, justice for workers abroad would help create a peaceful world in which our defense industries would just wither and die. Where would the American economy be without billions of people to kill all over the world? How could they sell the latest tanks and hardware to foreign governments if those governments were not threatened by their own oppressed people? Yes, an "unspeakable tragedy" indeed!

I love leftist talk about workers in other nations. I see you are reading directly from the protectionist Dem playbook. You want justice for workers in other nations? If you do, insist on more sweatshops. It is far better to have workers in third world nations toiling in a factory, when the alterative is starvation. There was a nice article on this point by Nick Kristof (certainly no conservative), I'll dig it up and post it. It is a powerful argument against the weepy, economic illiterate fair trade crowd.

Billions of people to kill? Where do you come up with this garbage? Hard facts would be nice.

The bottom line, which you are forced to ignore, is the following: Trade and globalization has, for the first time in human history, reduced the number of people living in poverty. Also, inequality has lessened. As a progressive I would think that would be reason to celebrate? Why aren't you rejoicing? Could it be that it has been achieved by non-collectivist principles? That sounds right.

[Kevin R]

"This is very worrisome."

Not worrisome at all to me. A welcome change in direction where life is not totally dictated by corporate interests.

The old corporate interests argument. Not a surprise.

I'll ask you the same question I asked above, with the spectacular results achieved by free trade and globalization, why would you even consider the leftist arguments on trade? Why aren't you celebrating this incredible story?

[Kevin R]

This was written during the 2004 campaign.

"Fair Trade" Crushes the Poor
By Nicholas D. Kristof
New York Times | February 2, 2004

PHNOM PENH, Cambodia -- I'd like to invite Richard Gephardt and the other Democratic candidates to come here to Cambodia and discuss trade policy with scavengers like Nhep Chanda, who spends her days rooting through filth in the city dump.

One of the most unfortunate trends in the Democratic presidential race has been the way nearly all of the candidates, including Howard Dean, the front-runner, have been flirting with anti-trade positions by putting the emphasis on labor, environmental and human rights standards in international agreements.

While Mr. Gephardt calls for an international minimum wage, Mr. Dean was quoted in USA Today in October as saying, ''I believe that trade also requires human rights and labor standards and environmental standards that are concurrent around the world.''

Perhaps the candidates are simply pandering to unions, or bashing President Bush. But my guess is that they sincerely believe that such trade policies would help poor people abroad -- and that's why they should all traipse through a Cambodian garbage dump to see how economically naïve these
schemes would be.

Nhep Chanda is a 17-year-old girl who is one of hundreds of Cambodians who toil all day, every day, picking through the dump for plastic bags, metal cans and bits of food. The stench clogs the nostrils, and parts of the dump are burning, producing acrid smoke that blinds the eyes.

The scavengers are chased by swarms of flies and biting insects, their hands are caked with filth, and those who are barefoot cut their feet on glass. Some are small children.

Nhep Chanda averages 75 cents a day for her efforts. For her, the idea of being exploited in a garment factory -- working only six days a week, inside instead of in the broiling sun, for up to $2 a day -- is a dream.

''I'd like to work in a factory, but I don't have any ID card, and you need one to show that you're old enough,'' she said wistfully. (Since the candidates are unlikely to find the time to travel to the third world anytime soon, I put an audio slide show of the Cambodian realities on the Web
for them at www.nytimes.com/kristof.)

All the complaints about third world sweatshops are true and then some: factories sometimes dump effluent into rivers or otherwise ravage the environment. But they have raised the standard of living in Singapore, South Korea and southern China, and they offer a leg up for people in countries like
Cambodia.

''I want to work in a factory, but I'm in poor health and always feel dizzy,'' said Lay Eng, a 23-year-old woman. And no wonder: she has been picking through the filth, seven days a week, for six years. She has never been to a doctor.

Here in Cambodia factory jobs are in such demand that workers usually have to bribe a factory insider with a month's salary just to get hired.

Along the Bassac River, construction workers told me they wanted factory jobs because the work would be so much safer than clambering up scaffolding without safety harnesses. Some also said sweatshop jobs would be preferable because they would mean a lot less sweat. (Westerners call them ''sweatshops,'' but they offer one of the few third world jobs that doesn't involve constant
sweat.)

In Asia, moreover, the factories tend to hire mostly girls and young women with few other job opportunities. The result has been to begin to give girls and women some status and power, some hint of social equality, some alternative to the sex industry.

Cambodia has a fair trade system and promotes itself as an enlightened garment producer. That's great. But if the U.S. tries to ban products from countries that don't meet international standards, jobs will be shifted from the most wretched areas to better-off nations like Malaysia or Mexico. Already there are very few factories in Africa or the poor countries of Asia, and if we raise the bar higher, there will be even fewer.

The Democratic Party has been pro-trade since Franklin Roosevelt, and President Bill Clinton in particular tugged the party to embrace the realities of trade. Now the party may be retreating toward protectionism under the guise of labor standards.

That would hurt American consumers. But it would be particularly devastating for laborers in the poorest parts of the world. For the fundamental problem in the poor countries of Africa and Asia is not that sweatshops exploit too many workers; it's that they don't exploit enough.

[Lilith]

"the spectacular results achieved by free trade and globalization"

?????????????????????????????????? Spectacular results - for who. Not for our country.

[BWV 1080]

This is so elementary, that it is a wonder any honest thinking person could disagree with it. Its a testimony to a widespread economic illiteracy.

For more than two centuries, economists have steadfastly promoted free trade among nations as the best trade policy. Despite this intellectual barrage, many practical men and women of affairs continue to view the case for free trade skeptically, as an abstract argument made by ivory-tower economists with, at most, one foot on terra firma. Such people "know" that our vital industries must be protected from foreign competition.

The divergence between economists' beliefs and those of (even well-educated) men and women on the street seems to arise in making the leap from individuals to nations. In running our personal affairs, virtually all of us exploit the advantages of free trade and comparative advantage without thinking twice. For example, many of us have our shirts laundered at professional cleaners rather than wash and iron them ourselves. Anyone who advised us to "protect" ourselves from the "unfair competition" of low-paid laundry workers by doing our own wash would be thought looney. Common sense tells us to make use of companies that specialize in such work, paying them with money we earn doing something we do better. We understand intuitively that cutting ourselves off from specialists can only lower our standard of living.

Adam Smith's insight was that precisely the same logic applies to nations. Here is how he put it in 1776:

It is the maxim of every prudent master of a family, never to attempt to make at home what it will cost him more to make than to buy... If a foreign country can supply us with a commodity cheaper than we ourselves can make it, better buy it of them with some part of the produce of our own industry, employed in a way in which we have some advantage.

The case for free trade among nations is no different. Spain, South Korea, and a variety of other countries manufacture shoes more cheaply than America can. They offer them for sale to us. Shall we buy them, as we buy the services of laundry workers, with money we earn doing things we do well—like writing computer software and growing wheat? Or shall we keep "cheap foreign shoes" out and purchase more expensive American shoes instead? It is pretty clear that the nation as a whole must be worse off if foreign shoes are kept out—even though the American shoe industry will be better off.

Most people accept this argument. But they worry about what happens if another country—say, Japan—can make everything, or almost everything, cheaper than we can. Will free trade with Japan then lead to unemployment for American workers, who will find themselves unable to compete with cheaper Japanese labor? The answer, which was provided by David Ricardo in 1810 (see Ricardo in Biographies section), is no. To see why, let us once again appeal to our personal affairs.

Some lawyers are better typists than their secretaries. Should such a lawyer fire his secretary and do his own typing? Not likely. Though the lawyer may be better than the secretary at both arguing cases and typing, he will fare better by concentrating his energies on the practice of law and leaving the typing to a secretary. Such specialization not only makes the economy more efficient, it also leaves both lawyer and secretary with productive work to do.

The same idea applies to nations. Suppose the Japanese could manufacture everything more cheaply than we can—which is certainly not true. Even in this worst-case scenario, there will of necessity be some industries in which Japan has an overwhelming cost advantage (say, televisions) and others in which its cost advantage is slight (say, chemicals). Under free trade the United States will produce most of the chemicals, Japan will produce most of the TVs, and the two nations will trade. The two countries, taken together, will get both products cheaper than if each produced them at home to meet all of its domestic needs. And what is also important, workers in both countries will have jobs.

Many people are skeptical about this argument for the following reason. Suppose the average American worker earns ten dollars per hour, while the average Japanese worker earns just six dollars per hour. Won't free trade make it impossible to defend the higher American wage? Won't there instead be a leveling down until, say, both American and Japanese workers earn eight dollars per hour? The answer, once again, is no. And specialization is part of the reason.

If there were only one industry and occupation in which people could work, then free trade would indeed force American wages close to Japanese levels if Japanese workers were as good as Americans (and who doubts that?). But modern economies are composed of many industries and occupations. If America concentrates its employment where it does best, there is no reason why American wages cannot remain far above Japanese wages for a long time—even though the two nations trade freely. A country's wage level depends fundamentally on the productivity of its labor force, not on its trade policy. As long as American workers remain more skilled and better educated, work with more capital, and use superior technology, they will continue to earn higher wages than their Japanese counterparts. If and when these advantages end, the wage gap will disappear. Trade is a mere detail that helps ensure that American labor is employed where, in Adam Smith's phrase, it has some advantage.

Those who are still not convinced should recall that Japan's trade surplus with the United States widened precisely as the wage gap between the two countries was disappearing. If cheap Japanese labor was stealing American jobs, why did the theft intensify as the wage gap closed? The answer, of course, is that Japanese productivity was growing at enormous rates. The remarkable upward march of Japanese productivity both raised Japanese wages relative to American wages and turned Japan into a ferocious competitor. To think that we can forestall the inevitable by closing our borders is to participate in a cruel self-deception.

Americans should appreciate the benefits of free trade more than most people, for we inhabit the greatest free trade zone in the world. Michigan manufactures cars; New York provides banking; Texas pumps oil and gas. The fifty states trade freely with one another, and that helps them all enjoy great prosperity. Indeed, one reason why the United States did so much better economically than Europe for two centuries is that we had free movement of goods and services while the European countries "protected" themselves from their neighbors. To appreciate the magnitudes involved, try to imagine how much your personal standard of living would suffer if you were not allowed to buy any goods or services that originated outside your home state.

A slogan occasionally seen on bumper stickers argues, "Buy American, save your job." This is grossly misleading for two main reasons. First, the costs of saving jobs in this particular way are enormous. Second, it is doubtful that any jobs are actually saved in the long run.

Many estimates have been made of the cost of "saving jobs" by protectionism. While the estimates differ widely across industries, they are almost always much larger than the wages of the protected workers. For example, one study estimated that in 1984 U.S. consumers paid $42,000 annually for each textile job that was preserved by import quotas, a sum that greatly exceeded the average earnings of a textile worker. That same study estimated that restricting foreign imports cost $105,000 annually for each automobile worker's job that was saved, $420,000 for each job in TV manufacturing, and $750,000 for every job saved in the steel industry. Yes, $750,000 a year!

While Americans may be willing to pay a price to save jobs, spending such enormous sums is plainly irrational. If you doubt that, imagine making the following offer to any steelworker who lost his job to foreign competition: we will give you severance pay of $750,000—not annually, but just once—in return for a promise never to seek work in a steel mill again. Can you imagine any worker turning the offer down? Is that not sufficient evidence that our present method of saving steelworkers' jobs is mad?

But the situation is actually worse, for a little deeper thought leads us to question whether any jobs are really saved overall. It is more likely that protectionist policies save some jobs by jeopardizing others. Why? First, protecting one American industry imposes higher costs on others. For example, quotas on imports of semiconductors sent the prices of memory chips skyrocketing in the eighties, thereby damaging the computer industry. Steel quotas force U.S. automakers to pay more for materials, making them less competitive.

Second, efforts to protect favored industries from foreign competition may induce reciprocal actions in other countries, thereby limiting American access to foreign markets. In that case export industries pay the price for protecting import-competing industries.

Third, there are the little-understood, but terribly important, effects of trade barriers on the value of the dollar. If we successfully restrict imports, Americans will spend less on foreign goods. With fewer dollars offered for sale on the world's currency markets, the value of the dollar will rise relative to that of other currencies. At that point unprotected industries start to suffer because a higher dollar makes U.S. goods less competitive in world markets. Once again, America's ability to export is harmed.

On balance the conclusion seems clear and compelling: while protectionism is sold as job saving, it probably really amounts to job swapping. It protects jobs in some industries only by destroying jobs in others.

About the Author
Alan S. Blinder is the Gordon S. Rentschler Memorial Professor of Economics at Princeton University. He wrote, from 1985 to 1992, a regular economics column for Business Week and is the coauthor of one of the best-selling textbooks on economics. He has served as vice-chairman of the Federal Reserve's Board of Governors and as a member of President Clinton's Council of Economic Advisers

[Lilith]

"many practical men and women of affairs continue to view the case for free trade skeptically, as an abstract argument made by ivory-tower economists with, at most, one foot on terra firma"

Thats correct- exactly how I view it. Its a juvenile, one size fits all theory that doesn't work in a world of nuance and complications. It especially doesn't work if you believe nationalism has a place in today's world.
I do. I'm an unapologetic USA nationalist.

[Kevin R]

"the spectacular results achieved by free trade and globalization"

?????????????????????????????????? Spectacular results - for who. Not for our country.

Lilith,

Unlike RebLem, you at least attempted to address those pesky facts.

"Spectacular results - for who."

Spectacular results for individuals in other nations who are lifted out of poverty. What didn't you understand when I stated that for the first time in human history the number of people in poverty (worldwide) has fallen? I consider that to be one of the monumental achievements since the IR. You don't?

"Not for our country."

How can you possibly say that?

[Dennis Spath]

Your statement regarding a worldwide decrease in poverty is of great interest to me Kevin. Can you tell us how this is measured...by what criteria? Does it have anything to do with a societally relevent "standard of living", or does it depend upon increased "per capita" income levels??

[Kevin R]

Your statement regarding a worldwide decrease in poverty is of great interest to me Kevin. Can you tell us how this is measured...by what criteria? Does it have anything to do with a societally relevent "standard of living", or does it depend upon increased "per capita" income levels??

Dennis,

Yes, this is one of the great stories of recent memory, yet the media ignores it. If the trends were reversed, the media would be having nightly stories. There would be reports on the failure of capitalism and the need to try more central planning. But poverty falls, and we get silence. Why is that?

There are a few different methods out there, but some of the recent work of the renowned Columbia University economist Xavier Sala-i-Martin has been lauded by many. In a recent blockbuster paper “The World Distribution of Income: Falling Poverty and.......Convergence, Period” which appeared in the May 2006 issue of the Quarterly Journal of Economics he explains it as follows:

“We construct the WDI by estimating an annual income distribution for each of 138 countries, and then integrating these country distributions for all levels of income. The starting point of our analysis is the population-weighted income per capita, which we will use as the mean of each country’s distribution. As a measure of income, we use the PPP-adjusted GDP per capita from the Penn World Tables 6.1.”

Surjit Bhalla estimated a similar rapid decline of poverty a few years ago in his book “Imagine There's No Country: Poverty, Inequality, and Growth in the Era of Globalization.” Bhalla claimed that from 1980 to 2000, world poverty declined from 44% to 13%! And Bhalla uses a different model! Other economists show similar rates in poverty trends.

Just to look at the latest 2006 tabulations from Sala-i-Martin, he shows how the number of people in poverty (using a $2.00/day rate) declined from 1 billion in 1970 to 600 million in 2000 (more than 400 million people!). This is good news Dennis. It shows what happens when nations enter the global marketplace. This is a win-win situation. Yet, many of the Dems going to Congress ran on protectionist themes. My goodness, what a collection of Union controlled lunkheads.

[Lilith]

"Yes, this is one of the great stories of recent memory, yet the media ignores it. If the trends were reversed, the media would be having nightly stories. There would be reports on the failure of capitalism and the need to try more central planning" Kevin

Another Media Conspiracy charge?

[Kevin R]

"Yes, this is one of the great stories of recent memory, yet the media ignores it. If the trends were reversed, the media would be having nightly stories. There would be reports on the failure of capitalism and the need to try more central planning" Kevin

Another Media Conspiracy charge?

Of course not. That would involve complicated planning on a scale beyond the intelligence of most members of the MSM.

I see two possible answers. One, there is a general ignorance of economic matters (see this thread as an example) at play. Second, the recent success against global poverty has been achieved by measures promoted by the likes of Smith and Ricardo.

[Dennis Spath]

You should recall, Kevin, that I'm not terribly impressed with the selective use of statistical data to establish the inherent superiority of what is euphemistically referred to as the "American Free Enterprise System". Never forget that including Bill Gates in averaging our net worth tends to distort reality. By the way, what do you think of our Comptroller General, David Walker, and his truth-telling with regard to U.S. Fiscal Health?

http://www.gao.gov/govaud/ybk01.htm

[Dennis Spath]

Oooops.....Provided the wrong link!! Check out the following from Mr. Walker, which is the text of his November 7th presentation to International Association of CPA's in Washington, DC. It is also available from C-Span in video format on DVD.

http://www.gao.gov/cghome/d07220cg.pdf

[Kevin R]

You should recall, Kevin, that I'm not terribly impressed with the selective use of statistical data to establish the inherent superiority of what is euphemistically referred to as the "American Free Enterprise System". Never forget that including Bill Gates in averaging our net worth tends to distort reality. By the way, what do you think of our Comptroller General, David Walker, and his truth-telling with regard to U.S. Fiscal Health?

http://www.gao.gov/govaud/ybk01.htm

Dennis,

Almost every economist who has looked at this issue in any detail shows a decline in worldwide poverty. And this decline had been achieved with the universal principles of free trade (they are not exclusive to the US).

[Kevin R]

Oooops.....Provided the wrong link!! Check out the following from Mr. Walker, which is the text of his November 7th presentation to International Association of CPA's in Washington, DC. It is also available from C-Span in video format on DVD.

http://www.gao.gov/cghome/d07220cg.pdf

Dennis,

I read excerpts of his speech when it first came out. I wasn't that impressed.

Check out the Skeptical Optimist

http://www.optimist123.com/optimist/2006/04/index.html

Neat debt clock

[Lilith]

"This is very worrisome. The recent trend among Dems to turn away from free trade and globalization is regrettable. . It would be an unspeakable tragedy to have the newly minted Congress reverse direction on these issues. " Kevin


Well worry on Kevin, because its a very strong possibility. People are no longer fooled by this simplistic ludicrous concept of free trade.
So, bite your finger nails and toss and turn at night because it looks like we are going to consider US interests over corporate sponsored concepts of the Brave New World.

[Dennis Spath]

I did check out "The Skeptical Optomist" Kevin, and also his debt to GDP "Debt Clock" which shows how vibrant and healthy our U.S. Economy is purported to be. It may be useful to point out that Mr. Walker has NOT been claiming U.S. Economic collapse is just around the corner, given there are so many of our trading partners awash in U.S. Dollars buying our Treasury Bonds.

He does indicate that current fiscal policy is unsustainable for a number of reasons, and calls our attention to "Unfunded Liabilites" of 47 Trillion dollars hanging over the heads of our children and grandchildren....most of which resulted from Bush's 2003 "Medicare Reform" legislation. It is for this reason that Comptroller General Walker has joined the Concord Coalition in their "Fiscal Wakeup Tour" appearances in major cities around the U.S.

[Kevin R]

"This is very worrisome. The recent trend among Dems to turn away from free trade and globalization is regrettable. . It would be an unspeakable tragedy to have the newly minted Congress reverse direction on these issues. " Kevin


Well worry on Kevin, because its a very strong possibility. People are no longer fooled by this simplistic ludicrous concept of free trade.
So, bite your finger nails and toss and turn at night because it looks like we are going to consider US interests over corporate sponsored concepts of the Brave New World.

Which is like you saying 2+2=5. But to give you the benefit of the doubt, can you advance even one argument that shows the harm of free trade?

And I'm not sure why you would want more poverty in the world. Puzzling.

[Lilith]

"Puzzling." - Kevin

Well, puzzle on, Kevin. Maybe you can read another book and figure it all out.

[Kevin R]

"Puzzling." - Kevin

Well, puzzle on, Kevin. Maybe you can read another book and figure it all out.

So I take it you can't advance one argument against free trade, even though you say it has been harmful. So your argument is founded on what?

[Dennis Spath]

I'm not one to question the good intentions of the Supply Siders/Globalists who appear to be directing current Administration fiscal policy, but I find it instructive to have the likes of Warren Buffet, David Walker, Robert Rubin, and the Concord Coalition, among others, express some misgivings with regard to the long-range health of our debt-burdened economy. Given my age and a long memory, it's not too comforting to recall those days of yore when Republicans were rightfully famous for their fiscal conservatism and dedication to balanced Federal Budgets.

[Kevin R]

Dennis,

Pete nails it!

Protection Racket
Free trade is a key to prosperity. Why do Democrats fight it?

BY PETE DU PONT

Wednesday, November 22, 2006 12:01 a.m. EST

"Free trade is the most important single way to promote growth," Milton Friedman said in an interview a few weeks before his death.

But the new Democratic congressional majority doesn't understand that. Just a week after the elections one of the first actions Congress took was to vote down the new trade agreement with Vietnam. Ninety-four Democrats voted against it, 90 of them for it; and that is before some 16 newly elected House Democrats opposed to free trade are even sworn in. As Charlie Rangel, the incoming House Ways and Means Committee Chairman, put it, "We need to be angry as hell and try to protect American industry."

Five new Democratic senators share similar views on free trade. Ohio's Sen.-elect Sherrod Brown wrote a book entitled "Myths of Free Trade," arguing that trade agreements should only be allowed if those nations pass laws "guaranteeing enforceable labor and environmental standards." John Edwards is a protectionist zealot; John Kerry said in 2004 that unless the treaties had the standards in them he would as president veto them.

Republicans aren't always better: several years ago half of GOP senators voted for an amendment (which failed) forbidding the federal government from awarding contracts to companies that outsource any of their work overseas. And President Bush in his first term imposed tariffs on imported steel, which saved the jobs of 5000 U.S. steelworkers but caused higher steel prices that eliminated 23,000 jobs in the steel-consuming industries.

Fortunately, President Bush has become more trade focused. The Central American Free Trade Agreement, allowing freer trade with the Dominican Republic and five Central American nations, was approved in 2005; and a dozen other bilateral or regional free trade agreements with foreign nations have been put in place. Eleven more are under negotiation, with two of the agreements and the granting of normal trade status to Vietnam awaiting congressional approval.

These trade agreements expand America's marketing opportunities and the jobs that go with them. As a Wall Street Journal editorial pointed out last week, Peru already has broad duty-free access to U.S. markets, so by the new Peru agreement "80% of U. S. industrial and textile products, and more than two-thirds of U.S. farm exports would enter Peru duty-free immediately." That's a good deal for both countries and for their people.

Simply put, markets work. A recent Global Insights analysis concludes that Wal-Mart's 1985-2004 expansion of sales resulted in a 9.1% drop in the price of food at home, a 4.2% drop in the price of other goods and commodities, and a 3.1% decline in consumer prices overall, saving the average working family about $2,329 per year. And with that came a net increase of 210,000 Wal-Mart jobs in 2004 alone.

And trade agreements open market opportunities. The North American Free Trade Agreement, signed into law by President Clinton in 1993, has expanded total trade between the U.S, Canada, and Mexico by 172%. U.S. exports to Mexico have grown by 189% and to Canada by 111%. U.S. agricultural exports to Canada have doubled, to $10.6 billion from $5.3 billion, and to Mexico even more--to $9.4 billion from $3.6 billion. More than one million jobs were created in America by NAFTA.

Overall the U.S. Trade Representative's office says that 10.4% of the 2005 American GDP is the result of U.S. exports of goods and services. The Peterson Institute says that globalization boosts the U.S. economy $1 trillion annually, or about $10,000 per household. There is no question that trade both increases jobs in some areas and decreases them in others, both internationally and domestically. When cars replaced carriages, computers replaced typewriters, and E-ZPass replaced toll-takers in America, some jobs were lost and other were gained.

The new Doha round of World Trade Organization talks has been delayed by America's and France's refusal to agree to reducing agricultural subsidies. Perhaps these are negotiating positions, but would the U.S ever agree to reduce farm subsidies for greater international trade access? In a Pelosi-Reid Congress certainly not--U.S. farmers received $47 billion from the U.S. government in 2004, about 18% of farm income--but for the American people free trade and lower agricultural subsidies would be a substantial step forward.

Another rallying cry for the antitrade lobby is "outsourcing," putting together companies in other nations that can provide services to American people at lower costs than can be provided at home. Two years ago, as an example, radiologists in India were analyzing American patients' X-rays at one-fourth the cost of radiologists in the United States, and they were using U.S. computers and software. Protectionists would argue that this kind of thing must be stopped, but lower costs for customers are a good thing. And of course job outsourcing works both ways: outsourcing by foreign companies has created more than 6.5 million jobs for American workers-- the Honda automobile plant in Ohio and BMW's in South Carolina being two large employment examples.

In short, trade helps people while protectionism hurts them. Imports give people a wider choice of goods, often at lower prices; protectionism helps local industries--steel companies in the Bush protectionism case--maintain higher prices at the expense of broad social and economic prosperity.

Milton Friedman was right, and the protectionists are wrong. Free trade is essential to economic growth and opportunity.

Mr. du Pont, a former governor of Delaware, is chairman of the Dallas-based National Center for Policy Analysis. His column appears once a month.

[Lilith]

Just can't wait til the Dems start gutting Unfree Trade.

[Dennis Spath]

Your enthusiasm for advocating your firmly held economic principles is well known and always consistent Kevin, and your effort to educate the misguided among us is always appreciated. For the interested observer of this discussion, however, I would call attention to another "Pete" whose opinions carry far more weight with a thoughtful and teachable American audience....Pete Peterson of the New York Federal Reserve and the Blackstone Investment Group.

http://pbs.org/now/transcript/transcript_peterson.html

[Kevin R]

Your enthusiasm for advocating your firmly held economic principles is well known and always consistent Kevin, and your effort to educate the misguided among us is always appreciated. For the interested observer of this discussion, however, I would call attention to another "Pete" whose opinions carry far more weight with a thoughtful and teachable American audience....Pete Peterson of the New York Federal Reserve and the Blackstone Investment Group.

http://pbs.org/now/transcript/transcript_peterson.html

Thanks.....I think

[Dennis Spath]

For those of you who bothered to read the link I provided, and were incredulous with regard to Pete Peterson's claim of a $25 Trillion unfunded Treasury liability, it might interest you to know that Comptroller General David Walker now puts that number (the legislated debt burden upon our grandchildren) at $47.4 Trillion....with the massive increase resulting from the artfully titled "Medicare Reform Bill" passed in the dead of night to curry the elderly vote in the 2004 election cycle. And I'm confident our friend Kevin, the unapologetic Libertarian, is equally disturbed by such blatant disregard for fiscal sanity.