Archive for February, 2008

There’s been a bit of clamoring behind the scenes here at Urbanagora for somebody to do a post about NAFTA, since there’s been some recent debate about it going on in the Democratic primary. I thought I’d toss up my views on the subject, which are admittedly a little scrambled. I’m not an economist, so perhaps my views on this should be taken with a grain of salt. I have studied NAFTA a little bit in different contexts, but generally more from an international relations point of view than an economic one.

Those caveats aside, my bottom line, as laid out in more detail below, is that (1) NAFTA has been an overall benefit to all the parties involved, (2) both the detractors and promoters of NAFTA overstate their case because ultimately NAFTA isn’t that important, (3) it would be a pretty bad idea for a president to push aggressively for a renegotiation and it would be a really bad idea for us to withdraw, (4) it’s important for the United States to respond to the negative consequences of free trade with greater access to public services, and (5) the US also has to focus more on reducing trade barriers not just to blue-collar industries but professional ones as well (something a lot of free trade advocates have been reluctant to do).

The first point is obviously a complicated one, and I have neither the space nor the knowledge to lay the argument out in its entirety. It’s mostly based on the assessment of people who know more about this sort of thing than I do and whose judgment I trust (e.g., Berkeley economics professor, former Clinton administration economic advisor, and blogger Brad DeLong, who can be seen talking about NAFTA here). But there have been some pretty clear benefits: a booming export industry for Mexico, Mexico becoming a safer place for foreign investment, etc. I would just add that those benefits are made even more clear if we don’t just look at it in purely economic terms, because there have been important non-economic results as well: NAFTA has helped Mexico develop a stronger respect for the rule of law (particularly property rights), and it’s created an incredibly solid platform for international cooperation among the US, Canada, and Mexico (it’s a lot more difficult to turn against one another when your economies are so integrated).

Having said that, the second point is just as important. NAFTA just isn’t that important for the United States economy either way. The economic woes of blue-collar workers in Ohio and elsewhere has far, far less to do with Mexico than it does with China, India, and the old Soviet bloc in eastern Europe. The same, incidentally, goes for CAFTA: trade with Peru doesn’t have a huge impact on our economy either way and politicians shouldn’t try to argue that it does. The countries where most of the pressure is coming from are countries we don’t have formalized trade agreements with, but because NAFTA and CAFTA are concrete policy proposals to point at, everybody focuses a lot of energy debating them. But the real problem isn’t coming from trade agreements, it’s coming from the fact that it’s a whole lot easier today to ship and transport and communicate and do all of the other things that used to present far more significant barriers to trade.

Which leads us into the third point. Canada and Mexico are affected a lot more by this agreement than the US is, and they are much more dependent on its continuance. For the United States to take out the big guns and start pushing for a renegotiation or threatening to pull out would have really bad consequences in terms of our relations with these countries, and in the end it could do us more harm than good. The Canadian Prime Minister has already declared that “[i]f any American government chose to make the mistake of reopening that we would have some things we would want to talk about as well,” presumably referring at least in part to the softwood lumber dispute. Just as NAFTA was a tool not just for economic change but for the promotion of friendly relations, for the United States to start rocking the boat would have broader consequences for diplomatic relations, which can affect issues well beyond NAFTA itself.

At the same time, the fourth and fifth points are important ones to make. As much as a lot of what I have said so far is likely to please our more conservative readers, NAFTA and trade with low-wage countries in general does to some extent promote inequality here in the US. I don’t propose responding to that with protectionist measures, but it does provide a stronger case for greater provisions of public services: health care, education, transportation, welfare, public housing, etc.

It is also undoubtedly true that NAFTA is to some extent an act of corporate welfare: the greatest beneficiaries in America of this agreement are foreign investors and the greatest losers are blue-collar workers. That’s because NAFTA and other free trade agreements only focus on the trade of goods without a similar focus on professional services like doctors, lawyers, etc. There are substantial barriers to the trade of those services, which, as is laid out extensively in this paper (PDF) by Dean Baker, is an issue of trade and not immigration. An excerpt describing the sorts of restrictions that need to be lifted in order to address the unequal consequences of our free trade policies:

1) Current law prohibits the U.S. government from hiring foreigners (including green card holders), unless no U.S. citizen could be found to do the job. A comparable restriction for goods would prohibit the government purchase of any imported item, as long as the same good was produced in the United States.

2) The requirement for a green card can be a substantial obstacle to employment for foreign professionals. The delays and the uncertainties in the process provide a strong incentive for employers not to hire foreign professionals.

3) Prevailing wage laws would prevent an employer (for example, a hospital) from explicitly hiring foreign professionals with the purpose of saving money. A comparable law for goods imports – one that prohibited companies from importing goods in order to save money – would be a blatant violation of numerous trade agreements.

And those are my two (okay, substantially more than two) cents on the subject. Thoughts?

I’m twenty-two years old. I don’t have any kids. I don’t even have a boyfriend. Taking care of a family is the furthest thing from my mind. So I fully recognize that this Hillary Clinton ad is not directed at people like me:

My question is: are the people this ad is directed at (mothers) going to find this persuasive? I mean, somebody looking at it from my perspective with my cultural biases looks at this and thinks it’s really hokey and dumb. And when I hear Barack Obama respond to it by saying, “I will never see the threat of terrorism as a way to scare up votes,” I want to cheer. But, again, I don’t have any “children sleeping safely in bed” or whatever. I do live in Washington, DC, and I do go to school down the street from probably the highest-priority target for a terrorist attack in the world (the Capitol Building), but I’m also young and invincible and don’t think about stuff like that.

I know there aren’t a huge number of parents who read Urbanagora, but for those of you who are out there: does this have any persuasive power at all? If not, is it just because you don’t find Hillary’s case for why she would be the best person to “answer the phone at 3 am” compelling, or is the ad itself just not persuasive (in other words, if it were a John McCain ad, would you be more persuaded?)? Just curious.

Update: Ezra Klein points out here that the maker of this Hillary ad is the same maker of the famous Mondale “red phone” ad that attacked Gary Hart.

“What’s lost … by embracing a tyrant who puts his people in prison because of their political beliefs? What’s lost is, it’ll send the wrong message. It’ll send a discouraging message to those who wonder whether America will continue to work for the freedom of prisoners. It’ll give great status to those … who have suppressed human rights and human dignity. The idea of embracing a leader who’s done this, without any attempt on his part to … release prisoners and free their society, would be counterproductive and send the wrong signal.”

-President George W. Bush, criticizing Senator Barack Obama on foreign policy

Hmmm. I feel like there must be a way of criticizing that statement, but I just can’t think how…

My buddy Ryan just sent me this link to an Obama St. Patrick’s Day shirt. This shirt is a fantastic celebration of St. Patty’s Day, and the Obama’ campaign’s sense of humor. And how much is it, you ask? $20.08.

Keep this in mind if you’re on campus at the University of Illinois for Unoffical St. Patrick’s Day, UIUC’s lovely liberal ladies will love this shirt.

I want to trademark calling Unofficial St. Patricks Day: “The University of Illinois’ Proudest Remaining Tradition.”

Warning for those visiting the University of Illinois for Unofficial: Stay out of the dorms, or Chancellor Richard Herman will drink your blood. Ok, maybe not, but he does look a lot like a vampire and none of us at the Agora have ever seen him outside.

Just to buttress Augur’s previous post with a far simpler explanation for Obama’s success, might I suggest it all comes down to his superb use of fonts? Consider this interview with a very impressed graphic designer:

Every time you look, all those signs are perfect. Graphic designers like me don’t understand how it’s happening. It’s unprecedented and inconceivable to us. The people in the know are flabbergasted…I’m not sure that the commander-in-chief proves his mettle by getting everyone at his rallies to set their signs in the same typeface, but as someone who knows how hard that is, I’m very impressed.

Just another data point to consider if you’re on the fence this year. And in case anybody’s worried that Obama’s really a secret militant Muslim bent on giving aid to the terrorists, consider his choice to use Gotham as the font on his campaign signs:

Unlike other sans serif typefaces, it’s not German, it’s not French, it’s not Swiss. It’s very American.

Personally, I’m a fan of Verdana. But, then, I’m also a traitor to America.