Archives: 01/2010

Was Bill Clinton Also an “Extremist” on Trade?

This has not been a good week for the national Democratic Party. Along with losing the Massachusetts Senate seat, the party took another step toward making hostility to trade liberalization a plank of party orthodoxy.

As my Cato colleague Sallie James flagged earlier today, the Democratic Congressional Campaign Committee issued a press release yesterday criticizing a Republican candidate in upstate New York for contributing to the Cato Institute. And, of course, everyone knows that Cato is “a right wing extremist group that has long been a vocal advocate for extremist, unfair trade policies that would allow companies to ship American jobs overseas.”

Among our sins, in the eyes of the DCCC, is that Cato research has supported tariff-reducing trade agreements, such as the North American Free Trade Agreement (NAFTA). Our work has also advocated unilateral trade liberalization—getting rid of self-damaging U.S. trade barriers regardless of what other countries do—which violates the conventional Washington wisdom that we can’t lower our own barriers without demanding “reciprocity” and “a level playing field” from other nations

There is nothing extreme about our work on trade. It fits comfortably within mainstream economics expounded not only by Adam Smith and Milton Freidman but by such liberals as Paul Samuelson and Larry Summers.

In fact, for decades, the Democratic Party embraced lower barriers to trade:

  • In the 1930s and ’40s, President Franklin Roosevelt and his Nobel-Peace-Prize-winning Secretary of State Cordell Hull lead the United States away from the disastrous protectionism of President Hoover and a Republican Congress.
  • Democratic Presidents Kennedy, Johnson, and Carter all supported successful agreements in the General Agreement on Tariffs and Trade to reduce trade barriers at home and abroad.
  • Bill Clinton, the only Democrat to be re-elected president since FDR, persuaded a Democratic Congress to enact NAFTA in 1993 and the Uruguay Round Agreements Act in 1994, which created the World Trade Organization. Clinton also championed permanent normal trade relations with China in 2000, which ushered that nation into the WTO.
  • In the previous Congress, scores of House Democrats co-sponsored “The Affordable Footwear Act,” which would have unilaterally lowered tariffs on imported shoes popular with low-income Americans. Liberal Democrat Earl Blumenauer of Oregon visited the Cato Institute in July 2008 to speak in favor of the bill. (Will he be the next target of a DCCC press release for cavorting with “extremists”?) In the current Congress, a similar bill in the Senate is currently co-sponsored by such prominent Democrats as Dick Durban (Ill.), Chuck Schumer (N.Y.), and Mary Landrieu (La.).

To learn more about why Democrats (and Republicans) should support free trade, I highly recommend two books: Mad about Trade: Why Main Street America Should Embrace Globalization, by yours truly; and Freedom From Want: Liberalism and the Global Economy, by Edward Gresser, a trade expert with the Democratic Leadership Council.

Democracy Will Survive Citizens United

At Politico Arena, today’s focus is on the Court and campaign finance.

My comment:

The ink is barely dry on today’s Citizens United opinion, and the hysteria has already begun.  Set aside the misunderstandings we’re seeing in some of the comments here at the Arena – corporations still cannot, for example, contribute directly to campaigns – even some of those who understand the law and this decision would have us believe that the world as we know it is coming to an end.  Thus, the inimitable Rick Hasen, whose knowledge of these issues is second to none, tells us that “today’s Supreme Court opinion marks a very bad day for American democracy.”  And attorneys at NYU’s Brennan Center, which made its reputation promoting campaign finance “reform,” head up their post with this: “After the Flood: How to Save Democracy Post Citizens United.”  One imagines the Dark Ages just beyond the gloaming.
 
Over on the Hill, meanwhile, Senator Russ Feingold, who’s having a bad day in what must for him be a bad week, promises darkly, “In the coming weeks, I will work with my colleagues to pass legislation restoring as many of the critical restraints on corporate control of our elections as possible.”
 
Relax.  Half of our states, states like Virginia, have minimal campaign finance laws, and there’s no more corruption in those states than in states that strictly regulate.  And that’s because the real reason we have this campaign finance law is not, and never has been, to prevent corruption.  The dirty little secret – the real impetus for this law – in incumbency protection.  How else to explain the so-called Millionaire’s Amendment, which the Court struck down in 2008.  That little gem in the McCain-Feingold “reform” package exempted candidates (read: incumbents) from the law’s strictures if they were running against a self-financed “millionaire,” who could not be prohibited from spending his own money campaigning.  Thus, the nominal rationale for the incomprehensible edifice we call “campaign finance law” – to prohibit corruption – suddenly disappeared if you were running against a millionaire.  Well, the Court, fortunately, saw right through that.  And a majority on the Court saw the light in today’s decision, too.  The First Amendment is not a “loophole.”  It’s the very foundation of our democracy, and we are the stronger today for this decision.

The Empire Strikes Back

The Citizens United decision is barely out, and incumbent members of Congress are vowing to restore restrictions on political speech.

Sen. Russell Feingold (D-WI) said: “In the coming weeks, I will work with my colleagues to pass legislation restoring as many of the critical restraints on corporate control of our elections as possible.”

In the House of Representatives, Robert Brady, Chairman of the House Administration Committee - the panel responsible for campaign finance regulations - sent out an email that said: “I will be working directly with my colleagues, the Leadership and the White House to study the Court’s decision and to put together a timeline for legislative action that ensures the Court’s decision will not define the ways elections are conducted in 2010.”

It is difficult to see how Feingold, Brady and other members of Congress will be able to get around the clear and certain language of the Citizens United decision. But they will try. Nothing worries members more than free and critical speech, especially when the upcoming election already looks really bad for incumbents.

Machine Gun Nests in the War on Terror

Terrorism is a strategy of the weak. Without power of their own, terrorists seek to goad states into overreactions that bestow favors on their otherwise inconsequential movements and ideologies.

When a state goes to war, for example, this wastes its own blood and treasure, driving the costs of its own policies higher and weakening its own military and economy. Overreaction drives support to terrorism when innocents or perceived innocents are harmed or killed by overreacting states. And overreaction tends to energize and promote terrorism worldwide by confirming the narrative that incumbent powers are evil—the portrayal of the United States as an occupier of Muslim lands and exploiter of Muslim people is an example.

With the logic of terrorism in hand, the appropriate responses come into focus. Constant pressure on terror groups worldwide; cool, phlegmatic response to terrorist attacks; constant study of terror groups, their relationships, plans, and methods; counter-rhetoric exposing the venality and bloodiness of terror groups themselves; exploitation of fissures among the many different groups that have been drawn to the “al Qaeda” brand; and so on.

Unfortunately, many people focused intently on prosecuting the war on terror have yet to digest the nature of the challenge or orient their responses accordingly. Presuming a large, united terrorist front with substantial technical and logistical capabilities, they urge the reactions that would be appropriate for an invading state. They deride as dangerous the tailored responses dictated by sound counterterrorism strategy.

Unfortunately, they are counseling overreaction to this enemy, which is far less lethal than a state, if harder to locate and extinguish. The guns of terror warriors are the wrong caliber, and they’re pointed the wrong direction.

Daniel Popeo writes today in the Washington Examiner that legal activism aids terrorists. It doesn’t. It shows that the United States is not frightened, and is not thrown off its game, by attacks and attempts like that of December 25th. Indomitability, not ferocity, will be the hallmark of our counterterrorism success.

Review our recent forum on counterterrorism here, and our counterterrorism conference of a year ago here.

Supreme Court Ruling on Hillary Movie Heralds Freer Speech for All of Us

Today the Supreme Court struck a major blow for free speech by correctly holding that government cannot try to “level the political playing field” by banning corporations from making independent campaign expenditures on films, books, or even campaign signs.

As Justice Kennedy said in announcing the opinion, “if the First Amendment has any force, it prohibits jailing citizens for engaging in political speech.”

While the Court has long upheld campaign finance regulations as a way to prevent corruption in elections, it has also repeated that equalizing speech is never a valid government interest.

After all, to make campaign spending equal, the government would have to prevent some people or groups from spending less than they wished. That is directly contrary to protecting speech from government restraint, which is ultimately the heart of American conceptions about the freedom of speech.

No case demonstrates this idea better than Citizens United, where a nonprofit corporation made no donations to candidates but rather spent money to spread its ideas about Hillary Clinton independent of the campaigns of primary opponent Barack Obama, potential general election opponent John McCain, or any other candidates. Where is the “corruption” if the campaign(s) being supported have no knowledge, let alone control over what independent actors do? – be they one person, two people, or a large group?

Today’s ruling may well lead to more corporate and union election spending, but none of this money will go directly to candidates – so there is no possible corruption or even “appearance of corruption.” It will go instead to spreading information about candidates and issues. Such increases in spending should be welcome because studies have shown that more spending — more political communication — leads to better-informed voters.

In short, the Citizens United decision has strengthened both the First Amendment and American democracy.

For more background on the case, here’s a primer:

Reading Reality

Today, Politico Arena asks:

“Do they get it?”

My response:

Do the Democrats get it?  A good many of them, like so much of the mainstream media, have long taken their cue from The New York Times editorial page. This morning the Great Gray Lady sallies forth, ideological blinders in place, to pronounce that,  “To our minds, [Tuesday’s result] is not remotely a verdict on Mr. Obama’s presidency, nor does it amount to a national referendum on health care reform.”  Not remotely?  Those Democratic office-holders who continue to sip from that purblind well will soon have plenty of time to do so.

But Republican performance in recent years has hardly inspired.  To their credit, however, Republicans tend to subscribe to principles about government that are closer to the nation’s founding principles – if only they would abide by them.  And so one hopes that, after Tuesday, they will come better to “get it.”