Campaign Protectionism

David Brooks offers a strong condemnation in today's New York Times of the current "protectionist drift" characterized by the thinking and prognosticating of Lou Dobbs &c. He has taken to calling this approach Dobbsianism, noting with fear that its popularity is increasing even now, during a period of relative economic well-being. "...you can imagine how attractive it’s going to seem if we enter the serious recession that Larry Summers convincingly and terrifyingly forecasts in yesterday’s Financial Times. If the economy dips as seriously as that, the political climate could shift in ugly ways."

Many of the presidential candidates have moved along with the shifting tide of Dobbsianism. I have begun to think of this as Campaign Protectionism. As Brooks notes, "Their speeches constitute a symphony of woe about lead-painted toys, manipulated currencies and stolen jobs," rather than the increases in living standards and improved environmental standards that globalization fosters. Campaign Protectionism is a cynical tact because it plays on innate fears and ignores empirically verifiable gains from trade.

...not every economic dislocation has been caused by trade and the Chinese. Between 1991 and 2007, the U.S. trade deficit exploded to $818 billion from $31 billion. Yet as Robert Samuelson has pointed out, during that time the U.S. created 28 million jobs and the unemployment rate dipped to 4.6 percent from 6.8 percent.

That’s because, as Robert Lawrence of Harvard and Martin Baily of McKinsey have calculated, 90 percent of manufacturing job losses are due to domestic forces. As companies become more technologically advanced, they shed workers (the Chinese shed 25 million manufacturing jobs between 1994 and 2004).

Paul Krugman is Brooks's colleague at the New York Times and a noted economist in his own right. While the two are rarely in agreement on political issues, they do concur, as Krugman recently told NPR, that politicians should "cool the rhetoric" on globalization.

So do we have to be protectionist to make workers' lives better? No. All the evidence says that you can be a full participant in the global economy while still paying good wages.