I attended a panel on Jobs, Trade, and American Votes at the NYU Stern School of Business last night. The panel was jointly sponsored by the Economist magazine and the Council on Foreign Relations website. I was hoping to hear more about immigration, but the panelists stuck primarily to trade issues. The moderator noted more than once the lack of disagreement on fundamentals among the panelists: free trade is a net good for the U.S. and its trading partners and efforts to stymie free trade are usually attributable to the inability of the political system to balance diffuse benefits against concentrated costs.
While agreeing myself with some of their assumptions, I became convinced that they must inhabit some fantasy world where the median American voter reads the Economist every week and laughs knowingly at Lou Dobbs over pinot noir on the next expensed Maxjet flight to
Matthew Bishop of the Economist thought that recent anti-trade noises from Congress are just so much puffery. Despite expressing antagonism to trade, no significant political faction has passed the Wal-Mart Test, which is to pass policies that would raise prices at Wal-Mart. Democrats perceive they have a lot to gain by “pandering” to interest groups, but when it comes time to vote, they will vote for open trade as they always have.
Amity Shlaes, a fellow at CFR, raised the specter of Chavez, Venezuela’s “Castro with oil,” to argue that the U.S. needs to increase its influence in the region [!] by passing a trade deal with Colombia over protests that trade unionists have been murdered there at an alarming rate.
Stern dean Thomas Cooley expressed concern that the current
Bishop lamented the failure of political leaders in the rich countries to stand up for free trade, causing me to wonder whether he has heard any public speech by any politician in the
Cooley stated matter-of-factly that increased trade inevitably brings increased inequality due to greater rewards to human capital. He argued that this is why we need to invest in education to take advantage of this trend so as not to end up with the short end of the stick. Trade adjustment assistance was mooted as a necessary sop to voters, but the panelists seemed not to place much importance on it.
Bishop pointed out that the
Shlaes asserted that you don’t see old immigrants fighting against new immigrants as they have during past periods of tension, causing me once again to wonder what country she has been living in lately. According to Shlaes, you don’t hear racial hatred like you used to in the bad old days—things are great now. This was apparently ridiculous enough to give Cooley momentary pause, as he asked, What about Lou Dobbs? before going on to predict that, absent a significant financial meltdown, trade will largely be absent from the campaign next year.
To the panelists, the gains from trade to the American public are so massive and self-evident, that only those blindly opposed to progress or selfish workers with vested interests in outdated sectors would stand in their way.
The long-standing problems of global inequality that the
Overall this was a remarkably unaware and blinkered assessment of