Kevin Drum, among others, is excited by the news that some economists appear to be recanting on their support for McCain's economic plan:
Now, this is good sport, to be sure, but there's also a serious side to this stuff. Somebody who's not me ought to start dialing up the other 280+ signatories and find out just how much of McCain's plan they really support. Do they think the current Social Security funding mechanism is a disgrace? Are they in favor of a gas tax holiday? Do they think his multi-trillion tax cut will increase revenues? Inquiring minds want to know.
I wouldn't get too excited. I got the same press release, and I've been wondering whether to blog it, because running an eye down the list of signatories, it doesn't look like the Politico exactly dialed at random. I'm familiar enough with about a quarter of the list to be able to confidently predict their reaction if telephoned, and to a first approximation, pretty much all of them would enthusiastically support McCain over Obama. Most of the article seems to be making a mountain out of a molehill--Gary Becker supports McCain's plan without having studied in detail every single provision. This is news? How many of the economists who signed the John Kerry letter four years ago could have given you chapter and verse on his economic plans? I bet I could have beaten 99% of them in a quiz on Kerry's policies--aye, even things which made the second page of his position paper. Nor, when pressed, would very many of them have been willing to put their professional credibility on the line by supporting every provision of it.
The economists who signed the letter aren't choosing "John McCain's platform over The Platonic Ideal Economic Policy". They're stating whether they prefer it to Obama's plans. And overwhelmingly, they seem to--the Politico found one out of twelve who says he'll probably vote for Obama, and given where he teaches, this was probably one of their better shots.
If anyone bothers to call them, I'm pretty sure they'll get a few not-very-political types who were recruited by enthusiastic colleagues, and then a boring litany of "Maybe not perfect, but a lot better than the alternative". Listening to that being said 300 times will not exactly bolster the case for Obama.
Why can't Obama (and other politicians) just accept the economic consensus that free trade is better overall than protectionism?
Obama is much nicer to listen to than McCain and friendlier or at least more empathetic. But I'd rather have curmudgeonly McCain fighting such evils as the ethanol subsidies and protectionism.
With McCain we'll at least have a chance of gridlock to prevent Congress from acting too stupidly which is probably the best we can hope for in the current environment. With Obama I feel that we'll just get a bunch of politicians trying to outspend each other and scapegoating business and trade to gain our votes.
Megan, what McCain did was dishonest, that's the whole problem. He asserted that those economists supported his "plan," so-called, which they had not even seen and which in many cases they did not in fact support. Despite your casual assertion over at Kevin's site that "Kerry did it too," Kerry didn't (as you essentially concede here; you owe Kevin a correction over there). Kerry had a list of economists who signed a letter of support for him generally (which McCain and Bush did as well). He did not then assert, dishonestly, as McCain has, that those economists supported the elements of some "plan" they had not seen must less indicate their endorsement of. That's wrong and you know it, or you ought to.
"But I'd rather have curmudgeonly McCain fighting such evils as the ethanol subsidies and protectionism." Well, he'll fight them until he changes his mind. Like he's fighting the Bush tax cuts.
Nelson:
There is a difference between free and fair trade. Any Democrat I know favors fair trade. So, stop invoking the protectionism straw man.
Yeah, and what is "fair" will be determined by the same political dynamic which gives us ethanol subsidies, sugar cane tariffs, etc., etc., ad nauseum.
Joe, why not just come out and say it? You
think buying and selling stuff should only
be done with the permission of Tom Harkin, Robert Byrd, Mitch McConnell and few other hacks?
Megan, you're missing the point here. These guys clearly support McCain overall. But if they don't support his specific proposals, or don't think they'll accomplish anything, then that's news. When Hillary signed onto McCain's gas tax holiday, she couldn't find a credible economist to support the idea. Of course, many economists still supported Hillary, but their absence on that narrow issue hurt her. Drum is hoping for the same thing to happen to McCain. And because it's precisely the same issue, I imagine he's got a decent shot.
Why can't Obama (and other politicians) just accept the economic consensus that free trade is better overall than protectionism?
Ahh but better for whom? In most of the arguements that I've had with my friends (I usually take the free trade side) this is what the question boils down to. Not everyone will necessarily benefit from trade. People who will benefit are probably relatively well off anyway while those that will be hurt are middle class blue colar workers. Or that is what my liberal friends say (and they are not buying the cheap prices at Walmart retort).
Joe:
"Fair trade" is a term that defines all voluntary trade. If trade is unfair and voluntary, the party getting the short end of the stick would choose not to participate.
MS:
That is virtually the same argument that has been made for centuries. It's similar to the argument that was made against industrializaton. Unfortunately, it has been proven wrong time and time again. Yes, some workers will be hurt in the short-run, but the long-run benefits for everyone far outweigh any short-run pain.
The truth is that people at the lower end of the income scale will benefit as much, if not more than those at the top of the pay scale in the form of lower prices.
Two parties will trade with each other if they find the terms to be "fair", otherwise the trade won't happen at all. The "Fair Trade Crowd", on the other hand, wants to count themselves as parties to a bilateral trade, even when they are not making the exchange- it is rent-seeking, nothing more, nothing less.
Rob:
It's not fair trade when China isn't open to US markets, or they have tarriffs that make US goods very expensive, yet they can dump super cheap goods on the US market.
The truth is that people at the lower end of the income scale will benefit as much, if not more than those at the top of the pay scale in the form of lower prices.
As to your other point, have you ever gone to the area northeast of Allentown, PA? If you haven't then you'd know why your statement isn't true. How do lower prices help much when the jobs leave and don't come back? Or when the jobs that remain don't pay nearly as well as what used to be there? Hell, even wages, minus inflation, have been flat for the past 30 years(So says government data).
This is what Megan said about McCain's ploy at Kevin Drum's site:
"Ummm . . . , Kerry did exactly the same thing." [Emphasis added]
I don't want to put too fine a point on it, but the evidence indicates that this is ..., well, I mean, ... it's a lie.
If Megan thinks it's not, she might trouble to explain herself.
"Fair trade" is a term that defines all voluntary trade. If trade is unfair and voluntary, the party getting the short end of the stick would choose not to participate.
I agree with you to the extent that trade is voluntary that it is 'fair.' However consider;
1. Is prison labor voluntary?
2. If a CFL factory in China releases large amounts of mercury into the environment creating an externaltiy, is that voluntary?
3. If a company does not inform employees of the dangers associated with work, is that voluntary?
4. If a company isn't honest (lets say that they don't pay their workers what they promise or gain large amounts of land via what amounts to theft) is that 'fair.' Wouldn't trading with such groups in the same manner as we trade with other nations encourage further abuse? Could anyone even buy something made in, say, North Korea and say that it was produced 'voluntarily?'
If the people of Allentown made light bulbs does this mean we should block out the sun, since the sun unfairly competes by dumping free light on us and doesn't buy our products? Would this blocking of the sun make us better off?
This is a trivial distinction--economists voicing support for John Kerry as economists are presumed to be supporting his economic plan--but similar stunts in 2004 found the signees equally confused: http://www.sptimes.com/2004/10/20/Columns/Economists_mirror_pol.shtml
Nelson:
I dig the Bastiat reference (if that is in fact what you are referring to).
Candlestick Makers' Petition
http://bastiat.org/en/petition.html
There are a lot of economists in the US. To gather 300 signatures is not that hard. I took a look at the top ten economics departments in the US (per Econphd.net) and counted their faculty and how many signed this statement.
Harvard - 5 / 53
U. of Chicago - 5 / 38
MIT - 0 / 39
Cal - 1 / 60
Princeton - 2 / 57
Stanford - 3 / 42
Northwestern - 1 / 54
U. Penn - 1 / 35
Yale - 1 / 50
NYU - 1 / 46
Out of the top 20 economists (per IDEAS 2008) 2 are on the list. Out of the top 50, 8 signed.
Trade was brought up in these comments. Well, in trade, out of the BIG names, Ricardo, Hecksher, Olin, Stolper, and Samuelson, only Samuelson is still alive (he did not sign). Nor did Krugman, but that isn't surprising (but he is one hell of a trade economist). Don't see Grossman, Helpman, Rodrick or any other of the half-dozen names that popped into my head either.
Sure, there are a few big name economists on here, but there are a ton more NOT on there.
Not even Mankiw, a Bush appointee, was on there.
Overall, many of the names are people you'd expect, but its not a list thats really going to impress anyone, and hardly a list that shows that McCain is the conclusively the choice of economists.
Joe:
See Bastiat’s petition that I posted. It's enlightening (pun intended).
It's not fair trade when China isn't open to US markets, or they have tariffs that make US goods very expensive, yet they can dump super cheap goods on the US market.
So to summarize, the US consumer is getting quality products at super low prices. Sounds terrible. Whether or not China allows its population to reap the benefits of free trade is irrelevant. Why should the US raise prices on its population simple because China chooses to?
As to your other point, have you ever gone to the area northeast of Allentown, PA? If you haven't then you'd know why your statement isn't true. How do lower prices help much when the jobs leave and don't come back?
I never said that some people wouldn’t be hurt in the short-run. Actually, I said the exact opposite. There will always be a period of transition. In addition, if some people choose to live in an area with no jobs or refuse to educate themselves in an industry that still exists, it’s their own fault. The major industries in Allentown have been in decline for over 2 decades now. Simultaneously, the rest of the country has been enjoying significant economic growth and declines in unemployment.
Hell, even wages, minus inflation, have been flat for the past 30 years(So says government data).
I would love to see how one comes to this conclusion given that virtually everything is far cheaper than it was 30 years ago. If wages have been flat, how is it that we can buy more stuff goods and services today with the same amount of money? Could it have something to do with the elimination of many trade barriers and the inflow of cheaper goods?
Ryan W.,
Talk about imperialism!!! You want to enforce labor, contract, environmental, wage and property law across the globe unilaterally via our trade policy! I know people have said we were an empire, and while I am with Colin Powell on that point, but if this is the policy the 'fair' trade movement wants to pursue, then they are the imperialists.
I think we should start calling it the 'empire trade' sine we should get veto on all their local laws before they can sell their goods to us. That way everyone can run their countries like we know they should, and everyone will be better off.
Ryan W:
I actually wrote an essay on this subject in college. If you really want to impact another nation/culture, trade with them. Isolationism has proven unsuccessful time and time again (see Cuba and N. Korea).
Thanks Rob! I'm glad someone caught it :-)
Joe K 's comments are reminiscent of every undergraduate political science class I've ever taken (I live in Canada). How do people get these odd notions? And how do they maintain them if they are reading this blog. Anyone seeking truth should maintain a more dynamic fundamental belief system - or just give up and keep your insane biases to yourself.
Its the same argument that Bastiat painstakingly (and creatively) tore apart... but how does it persist? That is the real mystery to me. Maybe they just haven't read Bastiat? Or read at all?
Sorry, missed Megan's attempt at a riposte: "This is a trivial distinction [claiming that economists support a specific plan when all they have actually done is support general principles which differ from the plan]--economists voicing support for John Kerry as economists are presumed to be supporting his economic plan--but similar stunts in 2004 found the signees equally confused: http://www.sptimes.com/2004/10/20/Columns/Economists_mirror_pol.shtml"
Maybe Megan presumes that when people sign a document endorsing what it says, it's honest and fair to say that they are actually endorsing some different document that says some different things. I certainly don't, and I don't think most people do.
McCain has claimed that 300 economists support his "plan," which includes for example, a gas-tax holiday that, I venture to say, very few of them actually support. That's deceptive, and it's just plain wrong. Sorry you don't want to trouble your little head with moral questions, but there it is.
(And it's not what Kerry or Bush did in 2004, must less explicitly so and you had the temerity to claim on Kevin Drum's site.)