Tag: obama

Springtime for U.S. Trade Policy?

In a Cato paper to be released on April 28 (here’s a link to related policy forum), Scott Lincicome and I explain how President Obama can help restore the pro-trade consensus in America. “How?” is one question, but a skeptic might also ask: Why would the president want to do that given his anti-trade campaign rhetoric and the preferences of many fellow Democrats in Congress for a moratorium on trade liberalization and a focus on enforcement?

The answer is quite simple: we believe the president understands the importance of both trade and U.S. trade leadership to the broader objectives of economic growth and good will among nations.  Since he is inevitably going to alienate some of the constituencies who helped get him elected by embracing trade openness, he could be forgiven for his perceived apostasy if he can articulate his rationale convincingly.

The most comprehensive and convincing articulation would begin with the moral case for free trade: that every American has the right to transact with whomever he chooses, regardless of the nationality or location of the other party.  Voluntary exchange between consenting parties is inherently fair, while government coercion in that process on behalf of some citizens at the expense of others is inherently unfair, inefficient, and subversive of the rule of law. We are not holding our breath that this president will make this principled case for free trade.  But his articulation of other pro-trade arguments, after so many years of hyperbole, myth-making and fear-mongering from his colleagues on Capitol Hill, could go a long way toward correcting and reversing Americans’ artificially-induced aversion to trade.

Why are we so sure that President Obama is going to embrace trade openness? Well, we’re not so sure, but it’s more than a hunch. Here are two broad reasons:

First, like all presidents in the modern era, Obama takes a national perspective on economic matters, and not a local or regional perspective, as most members of Congress do. Unlike a candidate or a member of the opposition party in Congress who is free to criticize the incumbent administration’s policy errors without having to seriously consider the pros and cons of the alternatives, the president has to concern himself with the consequences of policy changes. It’s potentially his mess to clean up. As a senator and presidential candidate, Obama promised to aggressively pursue remedies to China’s alleged currency manipulation. As president, Obama declined to act accordingly when given the explicit opportunity, knowing that provocation in that regard would inject more uncertainty into financial markets and could spark retaliation. A protectionist measure that briefly benefits producers in Illinois (which is why a Senator Obama might support it) could have consequences that penalize an array of interests across the country (which is why a President Obama might oppose it).

Second, President Obama—like all Democratic and Republican presidents in the post-WWII era—sees trade policy as a tool of foreign policy. And from his early trips abroad, Obama has learned that to many countries around the world, U.S. trade policy is the most consequential aspect of U.S. foreign policy. So a president who appears determined to repair the damage caused by eight years of unilateralist foreign policy can only embrace trade openness.

In our paper, Scott and I present several other reasons why we are “audaciously hopeful” that the president will help restore the pro-trade consensus. But some nascent support for our audacity can be found in the following examples:

1. President Obama spoke out against the protectionist Buy American provisions in the original “stimulus” package, and Congress subsequently removed its most egregiously protectionist aspects.

2. The president has encouraged Congress to resolve the Mexican trucking ban and bring the United States into compliance with its NAFTA commitments.

3. The Obama Treasury declined to label China a currency manipulator in its first semi-annual report on the topic

4. The president informed Mexican president Calderon last week that he did not think NAFTA would need to be reopened—contrary to his campaign rhetoric.

5. The president said as much to Canadian PM Stephen Harper back in February.

6. There are increasing signs of interest and promise from the White House and Congress that the long-frozen bilateral trade agreements with Colombia, Panama, and South Korea could start moving soon.

The pro-trade environment is not certain, and it could be fleeting, but there’s a case to be made that it’s not as dire as some predicted it would be. If the president intends to facilitate a liberal trade agenda, he should start laying the groundwork with strong pro-trade arguments now.

Arne Duncan Wins the Chutzpa Award …

arne-duncan1Arne Duncan has an op-ed in the WSJ today headlined, “School Reform Means Doing What’s Best for Kids: Let’s have an honest assessment of charter schools.”

So how about an honest assessment of how the DC voucher program is doing?

I guess I won’t hold my breath, since Duncan already neglected to bring the findings to light during the debate in Congress and then he tried to bury and spin away the positive results when they did come out. And then he needlessly prevented 200 poor kids from enjoying good schools for at least next year.

President Obama and Duncan’s unwillingness to address the facts show that they have been hypocritical and dishonest on education.

I can’t say it any better than Juan Williams did:

By going along with Secretary Duncan’s plan to hollow out the D.C. voucher program this president, who has spoken so passionately about the importance of education, is playing rank politics with the education of poor children. It is an outrage …

This reckless dismantling of the D.C. voucher program does not bode well for arguments to come about standards in the effort to reauthorize No Child Left Behind. It does not speak well of the promise of President Obama to be the “Education President,’ who once seemed primed to stand up for all children who want to learn and especially minority children.

And its time for all of us to get outraged about this sin against our children.

New at Cato

Here are a few highlights from Cato Today, a daily email from the Cato Institute. You can subscribe, here.

  • “Bright Lines and Bailouts: To Bail or Not To Bail, That Is the Question”: Vern McKinley and Gary Gegenheimer have a new Policy Analysis that discusses the failure of bank bailouts.
  • Nat Hentoff reports on Obama’s broken promises of transparency in the Washington Times.
  • In Tuesday’s Cato Daily Podcast, foreign policy analyst Benjamin Friedman discusses the record of Defense Secretary Robert Gates under Obama.

NEA Asks President to Nationalize Industries

The NEA demands that “a dying laissez faire must be destroyed,” and calls on the president to nationalize the credit agencies, utilities and major industries (see AP story at right), and we hear hardly a peep from the punditocracy. Strange.

Well, okay, I’m not actually surprised. This is a real story that actually ran on March 1st… 1934. I tweaked the image to refer to president Obama rather than FDR.

It’s taken three quarters of a century, but the NEA’s plan to nationalize the credit agencies and major industries seems to have finally gotten under way, particularly given the recent assertion of federal control over GM.

One advantage of the delay is that we now have generations of experience with another state-run industry, education, as a guide for what to expect from the latest state takeovers.

And since the president (Obama, not FDR) is starting with GM, it seems only fitting to take a look at the public schools of Detroit. Rather than give you the typical statistical wonkery, though, I thought I’d point readers to this compelling photo essay.

After flipping through it, do you think the Detroit auto industry would have worked better over these past 75 years if it had been run like the Detroit public schools?

Why President Obama Won’t Save Urban Catholic Schools

In today’s Washington Post, Checker Finn and Andy Smarick ask President Obama to save the nation’s vanishing urban Catholic schools. Their commentary does a good job of explaining why he might want to do that: Catholic schools are typically bastions of excellence in otherwise educationally blighted inner-city areas. Economist Derek Neal has shown that black children attending these schools are 26 percentage points more likely to finish high school, and twice as likely to graduate from college, than similar students attending urban public schools.

Finn and Smarick also suggest ways that president Obama could bring the option of private schooling, including Catholic schools, within reach of all families – supporting the spread of state tax credit and scholarship programs around the country, for instance.

What Finn and Smarick don’t do is explain why the president will continue to ignore the evidence and their plea, instead letting the educational prospects of inner-city children erode even further. Three possible explanations occur to me:

  • The president is unfamiliar with the evidence on the superiority of private and especially urban Catholic schools
  • He thinks that his administration will succeed in dramatically improving public schools all over the country, despite the failure of all his predecessors’ efforts
  • He thinks that making it easier for poor parents to choose private schools would hurt him politically

Personally, I don’t believe the first explanation. I can believe the second, but wish I couldn’t (wouldn’t it be nice to have a realist in the Oval Office)? And I can certainly believe the third, but if so, the president simply hasn’t done the political math.

Coming out strongly in favor of public and private school choice at the state level would win Barack Obama substantial new support from independent and moderate swing voters who seem to have been drifting away from him, while costing him very little from his base. The NEA might reduce its level of support, but they’re not going to flip and back Republicans. And few if any Democratic voters would switch party allegiance over a Democratic president’s desire to help poor kids with the most effective policies.

New at Cato

Here are a few highlights from Cato Today, a daily email from the Cato Institute. You can subscribe here.

  • Scott Lincicome discusses how the Obama administration has put U.S. leadership in free trade in jeopardy.
  • Ted Galen Carpenter discusses President Obama’s recent trip to Mexico to meet with President Felipe Calderon.
  • Appearing on PBS, Cato Chairman Robert A. Levy debates the state of American gun laws.
  • In today’s Cato Daily Podcast, John Samples discusses what the “Tea Party” protests mean for the GOP.