We’ve not been following the U.S. elections — so I was surprised to see such uninformed posturing by Obama. Here’s Greg Mankiw — I agree that trade is an excellent “canary” for bad policy:
An open question in my mind is whether Barack Obama is going to align himself with the economic centrists in the Democratic party or with the populists on the far left of the party. A key litmus test is trade, and so far it does not look good.
Here is Barack Obama yesterday:
we know that the status quo in Washington just won’t do. Not this time. Not this year. We can’t keep playing the same Washington game with the same Washington players and expect a different result â€“ because it’s a game that ordinary Americans are losing….
It’s a game where trade deals like NAFTA ship jobs overseas and force parents to compete with their teenagers to work for minimum wage at Wal-Mart. That’s what happens when the American worker doesn’t have a voice at the negotiating table, when leaders change their positions on trade with the politics of the moment, and that’s why we need a President who will listen to Main Street â€“ not just Wall Street; a President who will stand with workers not just when it’s easy, but when it’s hard.
By contrast, here is Larry Summers on the issue, expressing a view closer to that held by most economists:
I think the decision to support NAFTA was a crucial one because it was really a watershed as to whether America was going to stand for larger markets, was going to stand for forward defense of our interests by trying to have a more integrated global economy [in] which countries were growing. So [a] watershed in our relations with Mexico and establishing a real partnership with a country with whom we had a 2,000-mile border. I think it resulted in a profound change in the internal political dynamics in Mexico in favor of the progressive forces that believed in the market and friendship with the United States as opposed to the forces that believed more in socialism and opposition to the United States. And NAFTA didn’t cost the United States a penny. It contributed to the strength of our economy both because of more exports and because imports helped to reduce inflation. It didn’t cost the budget anything. It was a very worthwhile investment for our country.
More attacks on NAFTA by both Democratic candidates.