Not All Politicians Took Economics

From yesterday's Washington Post, an article "How Free Trade Hurts," by two "Lou Dobbs Democratic" senators, here is an excerpt:

"Free-trade agreements have protected drug companies, international investors and Hollywood films, yet failed to protect our communities, our workers and our environment.

We believe there is a better way. Fair trade is not the enemy of more trade. It's how we expand international trade without reversing U.S. economic progress.

The result (of free trade policies) has been a global race to the bottom as corporations troll the world for the cheapest labor, the fewest health, safety and environmental regulations, and the governments most unfriendly to labor rights."

See Greg Mankiw's critique here.

See a discussion on Cafe Hayek here: "But what relevance do facts and logic possess when political grandstanding must be done to appease the greedy interest groups who are so vital to keeping arrogant, obnoxious, and utterly repulsive politicians in power?"

A few comments of mine:

1. Notice that the article NEVER once mentions the primary beneficiaries of free trade and globalization: CONSUMERS. The politicians ONLY mention the groups that are most threatened by trade and globalizaiton: workers and unions. Notice also there is NO politicial payoff (more votes) to politicians being champions for the U.S. consumers, who are unorganized and dispersed, but there IS a political payoff (more votes) being a champion for the organized groups like unions.

Even though there are NO economic reasons for protectionism, there are HUGE POLITICAL reasons for protectionism, and this article is a perfect example of the political payoffs possible when supporting protectionism for well-organized, domestic special interest groups like unions and domestic industries.

2. Almost any time somebody (Lou Dobbs, politicians, unions, etc.) says they supports "fair trade" over "free trade," it is almost a sure signal that: a) they don't really understand free trade, and/or b) their idea of "fair trade" means using the political process to support some type of unfair, biased, government-managed PROTECIONIST LEGISLATION to protect an inefficient, uncompetititve domestic industry from more efficient foreign producers, at the expense of the unorganized American consumers.