Bryan Caplan  

Who Will Be Less Bad for Trade?

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Bhagwati says Hillary's worse than Obama:

[W]hereas Mr Obama’s economist is Austan Goolsbee, a brilliant Massachusetts Institute of Technology PhD at Chicago Business School and a valuable source of free-trade advice over almost a decade, Mrs Clinton’s campaign boasts of no professional economist of high repute. Instead, her trade advisers are reputed to be largely from the pro-union, anti-globalisation Economic Policy Institute and the AFL-CIO union federation.
My assumption is that neither candidate would actively promote free trade, so the greater evil is the candidate who can "get things done." Given Obama's winning personality, and Hillary's divisiveness, I'm fairly confident that Hillary would do less harm. She may want moderately worse policies, but she'd have a lot more trouble getting others to go along with her. (In fact, I suspect that most Republican protectionists would start defending NAFTA just to spite her!) At minimum, Obama would have a one-year honeymoon period to do harm; Hillary would be lucky if her honeymoon lasted a week.

Oh well, as long as Obama doesn't turn out to be the next FDR, I'll count myself and the world lucky.

HT: Mankiw.


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COMMENTS (15 to date)
Floccina writes:

IMO FDR was almost the USA's Juan Perone. If he had just a little more power he could have implemented programs that by now would have resulted in today's USA economy looking like today's Argentine economy.

spencer writes:

Over the last century the only party to implemet anti-free trade policies have been republicans, ranging from the smooth-hawley tariff to the Bush tariff on steel.

Boy, you are never confused by the facts are you.

i challenge you to show me a single piece of democratic anti-free trade legislation.

peter writes:

I know this is unrelated to the subject, but I argued with my socialist chemistry professor (I know, smart move) today and claimed that taxation is an act of force (I know that most of us around here believe that). His response was, you're free to leave when ever you want. So my libertarian brethren, I am confused. Is choosing to live in a country the equivalent of giving permission for the govt. to take your money? How would you all respond to this?

Josh H writes:

Peter, even if you leave the US, you still have to pay US taxes. I know, I don't live in the US.

Eric writes:

Spencer --

I don't think that anyone claimed that McCain would be good for trade, or that Republicans were 'better' for trade than Democrats. (The only mention of Republicans in the post was of Republican protectionists!)

I agree that the Republican party is dishonest about trade (although frankly there's a lot of protectionist rhetoric there too). I wish more pro-trade Republicans realized that.

But I also HOPE that the Democrats are being dishonest about trade. Hopefully they will prove me (and Caplan) wrong, and start drumming up support for free trade!

peter writes:

Yeah, Josh, but I think he meant that I should try to become a citizen of another country (he's a British expat who showed us Sicko today in our pre-med seminar and called Tony Benn his hero).

Eric writes:

Peter --

It's a stupid argument ("if you don't like it here"). The best thing to do is laugh at the person making it because we're not 10 years old anymore.

The next best thing is to point out that it's not relevant: "Hm. Maybe I will leave. But that doesn't mean taxation is not a use of force." It is almost never relevant.

I also like TGGP's suggestion.

Josh H writes:

Peter, I'm also an Israeli citizen, and I still have to pay US taxes. In fact, if I leave Israel and go live in Spain, I'll probably have to pay US, Israeli and Spanish taxes all at once.

Putting that aside, many people do not have the resources or opportunities to pick up and live in other countries, and become citizens of other countries.

I wonder, if a mobster tells someone he better leave town or face violence, is that alright since the victim is given the choice of leaving town?

shayne writes:

To Peter:

I've heard the same "leave, if you don't like it here" quip from folks as well. I usually respond with, "Oh, I'll stick around for awhile, but my capital has already fled."

During the 1990's, there were 10's of Billions of dollars per month flowing into U.S. mutual funds and subsequently U.S. investments. Today, 10's of Billions of dollars are flowing into investments outside U.S. borders. My own investment portfolio is about 70% in foreign holdings - and rising.

People my not as readily flee, but capital always flows to the points where it is treated best. Explain that to your socialist chemist.

Horatio writes:

Peter

If fascists invade your country and you decide to stay, are you giving them permission to tax you? What if fascists slowly take over the government of your country through democratic processes i.e. mob rule processes? The patriot would argue that he is bound by honor to remain and help fight off the fascists. The American pragmatist would argue that his country is still far better than most.

Print out some international comparisons on cancer and heart disease survival to show your fascist professor. You're far more likely to survive serious illness in the US than Canada or Western Europe. Our survival rates would be even greater if the government weren't paying for 50% of all medical expenses and crippling the market with restrictions.

liberty writes:

Josh:

The idea is that you renounce your citizenship of the country you are leaving (then you don't have to pay taxes).

But the argument is stupid. Your mobster description is dead on.


Spencer:

That is absurd. First of all, its not true on the face of it. You can't say that Reagan wasn't less protectionist than Carter. I don't know specific policies, but I am sure that Carter signed something protectionist by a narrow definition into law. Not saying Republicans haven't been protectionist, but your claim is not accurate.

Second, you can't exactly distinguish between anti-trade and other anti-market programs. For example farm subsidies (created by FDR). How could agricultural trade be free if no trade partner has the free market to compete with American farmers? Subsidies are no different than tariffs for trade. Similarly, other kinds of regulation of business, nationalization, etc.

Tom writes:

Spencer, the Democrats block free trade agreements:

"The Central American Free Trade Agreement, which was such a high priority for the Bush administration that the president personally lobbied Congressional Republicans on the issue Wednesday, passed the House by two votes.

Those two votes came from members who can best be described as "Bush Democrats."

The final vote on CAFTA was 217-215 in favor of the deal, the closest margin possible -- as a tie vote would have prevented approval.

Of the 217 supporters of the bill, 202 were Republicans and 15 were Democrats.

Of the 215 opponents of the bill, 187 were Democrats, 27 were Republicans and one was an independent, Vermont's Bernie Sanders."

**********************
FINAL VOTE RESULTS FOR ROLL CALL 443
(Republicans in roman; Democrats in italic; Independents underlined)

H R 3045 RECORDED VOTE 28-Jul-2005 12:03 AM
QUESTION: On Passage
BILL TITLE: Dominican Republic-Central America-United States Free Trade Agreement Implementation Act

Ayes Noes PRES NV
Republican 202 27 2
Democratic 15 187
Independent 1
TOTALS 217 215 2

Douglass Holmes writes:

Both parties have their issues. In 1993, the US House was still controlled by Democrats. NAFTA passed, but 156 Democrats voted against it. 102 Democrats voted for it. 132 Republicans voted for NAFTA, while 43 voted against it. In the Senate, 27 Democrats voted for it, 28 against. Republicans voted for it 34 to 10 all (figures from http://en.wikipedia.org/wiki/NAFTA). Bill Clinton lobbied heavily for it. I had to admire him for it because I didn't think the benefits would appear so quickly and Clinton was going against his base. But our economy BOOMED. Then we got a Republican president who imposed tariffs on steel. It is ironic that Bill Clinton's wife wants to renegotiate the agreement that helped make her husband's presidency such a success.

There is an old Vulcan saying: Only Bill Clinton could get NAFTA passed. Or was that something about Nixon and China?

fling93 writes:

Given Obama's winning personality, and Hillary's divisiveness, I'm fairly confident that Hillary would do less harm. She may want moderately worse policies, but she'd have a lot more trouble getting others to go along with her.

I might buy that argument if we had a Republican-controlled Congress, but we don't. I think she'll have a little more trouble, not a lot more. And the policies she'll be able to get enacted will be a lot worse, not a little.

Holly writes:

I think Hilery might stand in the way of free trade especially with our negative relationships with countries we are at odds with. Hilery profiles!

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