Archives: 03/2008

Senators Suddenly Pro-Trade

Four influential senators have written [$] to the French Ambassador to express their displeasure at France’s ongoing restrictions on genetically modified (GM) corn, warning that the issue could spark litigation.

America and the European Union have been at loggerheads over GM foods for years now, culminating in a dragged-out WTO dispute (summary available here) that was resolved with a partial-loss for the EU because they took too long to make a decision on allowing certain products into the european market, and because the EU didn’t base some of their restrictions on scientific evidence, as required under WTO rules. Now the victorious parties, including the United States, Canada and Argentina, are waiting for practical resolution and for trade to start flowing.

The French, however, are continuing to resist approving products made from agricultural biotechnology, ostensibly in the face of public opposition to the foods. French President Nicolas Sarkozy has spoken publicly in support of a ban on growing GM crops in France, and the French yesterday proposed scrapping the current EU approval process for genetically modified organisms in favour of tougher standards.

Enter the senators, who see what tougher restrictions would mean for GM-happy American farmers and are incensed at what they see as a flouting of trade rules. Ironically, among them is Saxby Chambliss (R-GA) who favors the continuing support of American cotton growers, even in the face of WTO rebukes for the manner in which that support is delivered. Similarly, Senate Finance Committee Chair Max Baucus (D-MT) has refused to countenance passing any trade deals unless and until he gets his way on trade adjustment assistance (you can see what I think of his ideas for TAA here).

Senator Obama isn’t the only member of that august chamber with two faces on trade.

(D) All of the Above

As an advocate of free trade, I feel slightly vindicated by reports that the Obama campaign quietly assured the Canadian government that the Senator’s strident words about NAFTA in last week’s debate were merely political rhetoric. We’ve long been saying that opposition to trade is mostly an artifice of politics. But the story begs the question: Is Obama (a) economically illiterate; (b) dishonest, or; (c) naïve. The answer is (d), all of the above.

Obama blames faulty trade agreements, like NAFTA, for the loss of 3 million manufacturing jobs since 2000. But one can check that claim easily by turning to page 280 (Table B-46) of the Economic Report of the President, 2008 [.pdf]. There one will find that in the 14 years since NAFTA took effect, the number of U.S. manufacturing jobs declined by 2.7 million. In the 14 years prior to NAFTA (between 1979 and 1993) the number of manufacturing jobs declined by 2.7 million. No difference at all. In both periods, there was a decline of 193,000 net manufacturing jobs per year.

Although U.S. manufacturing employment peaked in 1979 and has been trending downward since, there was an uptick in employment in the first few years after NAFTA took effect. Between 1993 and 1998, 500,000 net jobs were created in manufacturing. Did NAFTA create those jobs? I wouldn’t make that claim, but it certainly has more empirical support than the opposite claim—that NAFTA cost jobs.

Three million jobs lost since 2000? Look again [.pdf]. During the pronounced manufacturing recession of 2000-2003, there was a precipitous drop of 2.8 million manufacturing jobs, but it’s hard to blame NAFTA for that. Manufactured imports from NAFTA countries were flat during that period: imports in 2000 were higher than the average for 2001 through 2003. Again, if you must blame NAFTA, look to the export side of the equation. U.S. exports dropped 11 percent from 2000 to 2003.

And for the record, since 2004, there has been a decline of 300,000 manufacturing jobs nationwide. That rate of 100,000 per year (vs. the rate of 193,000 per year during the entire post-peak period of 1979-2007) suggests that even the basis for the political rhetoric is about five years too stale.

That Obama asserted he would take a “sledgehammer” to NAFTA because it is broken and then say just kidding to the Canadians is dishonest. Some are cynical enough to excuse that as par-for-the-course pandering, but I don’t. The reason that there is a backlash against trade – that there is even a debate – in this country is that lies like those are uttered with such frequency that they are believed. Those myths are all the more reinforced when spoken by someone as apparently likeable and charismatic as Senator Obama.

Finally, the attempt to smooth things over with the Canadian government raises questions about the candidate’s naïvete. Did it not occur to him that a conservative Canadian government might favor a McCain presidency and might make political hay out of the “disregard-the-NAFTA-belligerence” comments?

At least Senator Clinton knows enough to wait until after Ohioans vote before winking at our NAFTA neighbors.

The Arms Race Myth?

Richard Perle has an interesting op-ed on missile defense in Monday’s Washington Post. The point is that arms races aren’t all that they’re cracked up to be; arms controllers’ belief in an iron-clad law of politics saying that rival states engage in arms races is wishful thinking driven by opposition to arms. He’s more right than wrong.

Perle does overstate his point. He claims that there was not arms racing during the Cold War. Wrong. The US-Soviet nuclear weapons dynamic during the Cold War, to use Sam Huntington’s famous distinction, can be accurately described as a quantitative arms race until the 1970s, when the competition became more qualitative. All along, because US nuclear weapons policy consistently aimed at making a preemptive first strike against Soviet nukes possible (mutually assured destruction was a lot of talk never reflected in weapons policy), you could reasonably call our behavior arms racing. Early on, the Air Force largely based its preferred number of bombers and ICBMs on the number of Soviet nuclear weapons launchers – whether bombers or missiles – and routinely exaggerated those numbers for bureaucratic purposes. Later, when arms limitations talks like SALT occurred, we limited total numbers of platforms but strove for higher accuracy to maximize our ability to pull off a disarming strike.

But Perle’s overall point is still accurate. The Cold War was unique. Today pundits often argue that if we build a missile defense system that works against their missiles, the Russians and Chinese will just build more missiles to overwhelm it. Maybe. But this begs the question of why the Russians have been letting their nuclear arsenal (particularly early warning radar) decay since the Cold War, to the point where people like Keir Lieber and my former Professor Daryl Press can write that we have gained a first strike capability against Russia. One reason the Russians let this happen, presumably, is that they were broke, which would imply that they’ll fix things now that they’re not. Another explanation, however, is that the Cold War ended, and they stopped caring about the nuclear balance.

If that condition holds, Russia might view our missile defense system as a nuisance not worth great expense. They probably still dislike an image of weakness, largely because of Russian domestic politics. Putin may therefore bluster that he would never let the US get too large a nuclear lead, but that is more about symbolism that true responses. Where the rubber meets the road, they may avoid investing enough to match us. No arms race. Maybe they’ll settle for simple qualitative steps like developing decoys that can overwhelm the system. That could be called an arms race, but not much of one.

Likewise, since it built nuclear weapons, China has lived under the shadow of a possible disarming first strike from us (and for years, probably the USSR). They have showed little inclination to deal with this situation by making their missiles mobile, building far more, or deploying nuclear missiles on submarines. Today they are moving anemically toward developing those submarines, it appears, and making their ICBMs mobile. But they are not investing heavily in those capabilities. If they’re in a race to assure a deterrent capability against us, it’s a very slow one. Perhaps this is a legacy of our friendly late Cold War relations. Maybe it’s a hedging strategy born of poverty, which is disappearing. Maybe they figure 20 ICBMs is enough to keep us from getting too confident. Whatever the case, it is hardly inevitable that their reaction to our missile defense efforts will be to build-up to overwhelm our system. That depends on lots of conditions, especially the state of bilateral relations. The more we label them as the object of our arms, the more likely this buildup is.

Unlike Perle, by the way, I’m not for national missile defense – not twelve billion a year of it, anyway. It’s wasteful. One reason is that the conditions of hostility likely to make it useful vis-à-vis rich states are precisely the conditions that would cause those states to arms race enough to overwhelm it (assuming, heroically, that it worked). But neither am I alarmed by missiles defense’s independent implications for international relations. That depends on a lot more than defense systems.

Learned Helplessness

Like many newer office buildings, Capitol Hill’s Hart Senate Office Building has automatic doors that make access for handicapped people much easier. They are activated by a pressing large blue button, which causes the glass double-doors to swing outward.

On several occasions recently, I have noted able-bodied Senate staff taking advantage of this convenience. Though they could open the doors themselves and enter more quickly, they press the button and pause a moment as the doors slowly open.

There is a lesson here for policymakers (including those Senate staff): Offered help, people of all abilities will accept it, whether they need it or not. Over time, their abilities to help themselves may atrophy.

So it goes with economic and social policies. A few years ago when Social Security reform was a hot topic, my father (who still wants to be a trucker when he grows up) observed casually that the truckers he talks to wouldn’t know what to do if they were responsible for their own retirement. The complexities of investing are too much for them.

I believe the contrary, that given responsibility for their retirement security, truckers would swarm over the problem and figure it out. The CB radios of the nation would crackle with investment advice. Like most cohorts, this group is fully capable of handling savings and investment. And just as able-bodied Senate staff can get through doorways more quickly on their own, truckers in aggregate would have more retirement security and more comfortable retirements. But they’ve been offered enough help (indeed - mandated to accept it) that they’ve ceded the field.

Assistive devices for the handicapped are a good thing, but I rue the day when able-bodied Americans come to expect automatic doors and regard it as an imposition or impossibility to reach forward, grasp a handle, and pull. Something to think about the next time you’re standing on an escalator because the stairs make you winded.

More on the Moving Goalposts of FISA

I’ve noted before that the current FISA debate is an example of the goalposts being repeatedly shifted in the direction of ever more executive power and ever less executive oversight. Glenn Greenwald documents just how far the goalposts have been moved over the last 30 years. Back in 1978, the venerable conservative columnist William Safire wrote this of the newly-proposed Foreign Intelligence Surveillance Act:

Predictably, opponents of warrantless wiretapping cheered; the act seems to require a court warrant before tapping can begin. But nobody is reading the fine print, which adds up to the most sweeping authorization for the increase and abuse of wiretapping and bugging in our history.

Conservatives like to assist law enforcement, and to curtail espionage; we do not like to make it harder for “our side.” But this natural inclination to help the law must be outweighed by a responsibility to protect the law-abiding individual from the power of government to intrude. And this bill would turn every telephone instrument in every home into a suspected household spy.

Huey Long once said that if fascism ever came to America, it would come in Democratic form; in this bill, Big Brother is on the way, and he is cloaked in the mantle of civil liberties.

Since Safire wrote those words, FISA has been repeatedly amended to further reduce judicial oversight of eavesdropping, most importantly with the Patriot Act in October 2001. The law on the books in early 2006 was even more permissive than the legislation Safire is blasted as an assault on civil liberties. Yet the Bush administration has been so successful at shifting the terms of the debate that even a lot of self-described civil libertarians are conceding that FISA still places too many restrictions on domestic wiretapping activities. The debate is now between a House bill that further waters down judicial oversight over Americans’ international communications and a Senate bill that virtually eliminates judicial oversight of international calls.

One of the lessons here, I think, is that civil liberties won’t be preserved through compromise. The partisans of ever-increasing executive power aren’t likely to go away any time soon. If Congress compromises and agrees to further expand executive wiretapping powers, a future president will come back to Congress and argue that the law is still too restrictive and still more compromises are needed. President Clinton did it in the 1990s. President Bush is doing it now. At some point, Congress just has to say no.

Anti-Universal Coverage Club in the NYT

Today’s New York Times features an article by Kevin Sack that mentions the Anti-Universal Coverage Club and addresses the very question that Club members raise:

The skirmishing between the Democratic presidential candidates over the mechanics of universal health coverage will soon give way to a quite different general-election debate — about whether universal coverage should even be a national priority.

Sack notes that “at least twice as many Americans are estimated to die each year from medical errors as from lack of access to care.”  He quotes economists Helen Levy and David Meltzer’s conclusion that there is “no evidence” that expanding coverage would be the best way to improve health and save lives.  And he cites polling data (which I discuss here) showing that the public is not necessarily on board with the idea of universal coverage.

Sack also quotes Len Nichols, director of health policy studies at the New America Foundation, in support of universal coverage.  According to Nichols:

The right question is: would coverage expansion add enough social and economic value to merit the investment? The literature suggests a resounding yes.

The literature suggests no such thing.  If there is no evidence that expanding coverage would deliver the biggest improvement in health for the money, then expanding coverage could actually increase death and disability compared to a superior policy.  I’ll be debating Nichols tomorrow at a meeting of the National Association of Business Economists.  Should be a good time.

Sack also quotes Joe Antos of the American Enterprise Institute as making skeptical comments about universal coverage.  I’ll have to ask Antos if he wants to be counted as a member of the Anti-Universal Coverage Club.