The Power of Charisma

I suppose I was heartened, in a partisan sense, to read Sebastian Mallaby proclaim Barack Obama the candidate of growth, but this part of the argument isn't really very convincing (other parts, I think, are pretty much right) now is it:

Provided that Obama finds a way of crawling back from his embarrassing talk of reopening NAFTA, the gap between his trade views and McCain's doesn't much matter.

One could say much the same about all the areas of dispute between Obama and McCain -- if we assume that one of the candidates doesn't actually mean what he's proposing, then there's not much daylight between the two of them! To me, though, the widespread belief among Obamaphilic free traders that he doesn't really mean what he says about trade policy is a curious phenomenon. You look at Hillary Clinton's anti-trade rhetoric and you see it coming from a woman with a long association with the free trade faction of the Democratic Party and maybe think, "well, she doesn't mean that."

But Obama's trade-skeptical rhetoric is perfectly consistent with his record. Admittedly, it's a pretty short record. And maybe he doesn't mean what he's saying. Or maybe he does mean it, but could be talked out of it once in the White House. But maybe not! Really, who among us is in any position to say? But he's a charismatic guy, so people see what they want to see.

Comments

There is some particular reason to think Obama might not really mean his criticism of NAFTA, because one of his advisors told the Canadian government just that:

http://www.slate.com/id/2185753/entry/0/

Posted by rea | June 5, 2008 2:51 PM

I agree. Jesus was very charismatic. I see him as a slayer of homosexuals and a proponent of low taxes. Oh, and he tithed. A lot. All the damn time. Daily. As should all of you! To me. Now!

Posted by pat robertson | June 5, 2008 3:01 PM

I generally think Obama will be a good President, but I also tend toward the free trade side of the relevant debates. And my belief is that Obama is going to continue to depart significantly from my hypothetical ideal on these matters as President. But for good or ill, it turns out my hypothetical ideal President is not running.

rea,

Goolsbee and Obama have claimed that DeMora's memo is inaccurate. Short of a recording or transcript emerging, we will never know for sure, but again as a free trade person myself, I take no comfort from DeMora's account of that conversation.

Posted by DTM | June 5, 2008 3:01 PM

I think another part of the belief in Obama's secret anti-NAFTA view is a type of yuppie identity politics. Obama is someone who is well-educated and has moved in a cultural milieu as a law professor that makes it unlikely that he would neither know nor care about the consensus among economists that protectionism is a terrible idea. Whereas someone like Edwards seems like the type of person who wouldn't necessarily see academic economists as the correct authority on trade policy, Obama seems like he would (incidentally I think the yuppie identity politics thing has helped make him particularly popular among media elites, particularly bloggers). I think the idea of Obama's secret trade policy is similar to the notion that he (and most other politicians, democrat or republican) is really more pro-gay rights then his public political position.

Posted by Josh M | June 5, 2008 3:05 PM

But Obama's trade-skeptical rhetoric is perfectly consistent with his record.

And this is a bug how? I like to have summer fruit from Chile in the middle of winter as much as the next feller and trade (we buy summer fruit from them in the middle of our winter and they buy summer fruit from us in the middle of their winter) is a good thing.

But, "free trade agreements" are neither agreements nor free nor really about trade (discuss, saith Linda Richman). Moreover, the "comparative advantage" arguments are based on flawed analogies, not the best statistical measures of economic growth (who cares about total growth or mean growth ... what about median growth?) and have always been more window dressing for imperialism than anything else.

The strongest periods of economic growth have always occured either behind walls of tarrifs or in nations that were economic hegemons. Since we are not hegemoneous anymore, maybe so-called free trade is not to our advantage?

What would you say if your doctor prescribed you medicine that was the opposite of that which had historically been shown to work and justified that prescription with "but it works in theory", especially if the theory was some 250 years old? Maybe you'd be suspect?

Why should economic prescriptions be any different?

We can't be isolationists or protectionists, but blind support for anything just because the free-trade label is slapped onto it is just stupid.

Posted by DAS | June 5, 2008 3:06 PM

Obama doesn't have any "trade-skeptic rhetoric."

He has a Washington-Consensus-approved position in support of making environmental and labor standards part of trade deals.

Posted by joe from Lowell | June 5, 2008 3:15 PM

Sebasitan Mallaby is an idiot about trade. I think these sorts of things should be noted -- it gets old ,but it should be noted. He likely thinks that extending patent protections to developing markets is free trade.

Posted by david | June 5, 2008 3:19 PM

There are several pieces of evidence that suggest Obama is more free trade than he let on during the primary campaign:

*The Audacity of Hope includes a lot of centrist "globalization is inevitable; we need better social insurance to ameliorate its distributive effects" talk.

*In the "bittergate" remarks, he bracketed anti-globalization and anti-trade sentiments with anti-immigrant and racist ones.

*He was a University of Chicago law prof.

*His main economic adviser is Austan Goolsbee.

He may, nonethelss, prove to be a protectionist, but those who hope otherwise are not without some evidence.

Posted by Pithlord | June 5, 2008 3:21 PM

Given Obama's track record of being pragmatic and listening to others, that's why I discount any sort of anti-free trade rhetoric he makes.

Posted by Andy | June 5, 2008 3:22 PM

But Obama's trade-skeptical rhetoric is perfectly consistent with his record. Admittedly, it's a pretty short record.

I'll echo what some of the other posters have said. And in general, Obama appears to be more from the Bill Bradley/John Kerry liberal wing of the party. He's a man of intellectual gifts with a pedigree firmly rooted in the eastern academic establishment. Such people are almost never really opposed to trade liberalization in principle. And yes, there's the whole Goolsbee/Nafta thing.

Posted by Jasper | June 5, 2008 3:24 PM

Personally, I think his public skepticism of NAFTA is a bunch of boo-hockey. We tend to draw artificial, and meaningless, distinctions between jobs lost to trade/outsourcing and those lost to advances in technology. I didn't see candidates rushing to the defense of bank tellers by protesting the widespread use of ATMs.

I think most of us assume that Obama is smart man who realizes that the only long term solution to inevitable obsolescence of particular jobs (or industry sectors) is to invest in 'upgrading' the workforce and 'upgrading' what our economy can deliver, be it goods or services.

Would he be in favor a of a temporary roadblock to off shoring or certain items of trade? Sure. The temporary respite might even help families better cope with the transition. But his long term goal will, I believe, be a further liberalization of our trade policy.

p.s: I never understood why Democrats don't tie trade policy to universal healthcare. Is it so hard for people to see the connection? In an era of increasing global competition, Americans will have less job security than they have been historically accustomed to. Given the challenges of this brave new era, shouldn't every American worker be given the assurance that the loss of a job won't also leave their loved ones wanting for basic medical care?

Posted by Nathan A | June 5, 2008 3:25 PM

Wow, the comments on that article are a hoot! "Tax & spend!" "Liberal!"

Someone's been Left Behind.
.

Posted by Grand Moff Texan | June 5, 2008 3:25 PM

oh DAS, you sound just like pat buchanan with your confusion of correlation and causation when it comes to trade and growth.
the thing is, what would McCain do on free trade that Obama wouldn't. McCain might push for some regional agreements, which DAS is correct to point out do little or nothing for the cause of 'free trade' per se, and the Democratic congress will probably block these anyways.
Re-negotiating NAFTA would be a bad idea, for sure, but Obama is likely to only make symbolic gestures in this direction.
The WTO process is unlikely to be resolved no matter who is president.
Keeping farm subsidies is really the only serious daylight that will have any effect on free trade that I can see between McCain and Obama.

Posted by jamie | June 5, 2008 3:25 PM

Personally, I think his public skepticism of NAFTA is a bunch of boo-hockey. We tend to draw artificial, and meaningless, distinctions between jobs lost to trade/outsourcing and those lost to advances in technology. I didn't see candidates rushing to the defense of bank tellers by protesting the widespread use of ATMs.

I think most of us assume that Obama is smart man who realizes that the only long term solution to inevitable obsolescence of particular jobs (or industry sectors) is to invest in 'upgrading' the workforce and 'upgrading' what our economy can deliver, be it goods or services.

Would he be in favor a of a temporary roadblock to off shoring or certain items of trade? Sure. The temporary respite might even help families better cope with the transition. But his long term goal will, I believe, be a further liberalization of our trade policy.

p.s: I never understood why Democrats don't tie trade policy to universal healthcare. Is it so hard for people to see the connection? In an era of increasing global competition, Americans will have less job security than they have been historically accustomed to. Given the challenges of this brave new era, shouldn't every American worker be given the assurance that the loss of a job won't also leave their loved ones wanting for basic medical care?

Posted by Nathan A | June 5, 2008 3:28 PM

I think joe from lowell was correct in that what Obama might at best be skeptical about is the religious ideology propagated for over a decade that no other considerations can be included with agreements on trade, or that 'free trade' must include maximum incentives for any corporation to outsource portions of the labor process to lower wage and lower regulation countries.

As to whether or not this is mainly a rhetorical skepticism about stupid and failed arguments and is likely to be followed up by what would likely be a screaming cat fight with Congress, the media, and Wall Street in order to do anything about it, well, I don't know.

Posted by El Cid | June 5, 2008 3:42 PM

From Barack Obama's website:

----------------------
Trade

Obama believes that trade with foreign nations should strengthen the American economy and create more American jobs. He will stand firm against agreements that undermine our economic security.

* Fight for Fair Trade: Obama will fight for a trade policy that opens up foreign markets to support good American jobs. He will use trade agreements to spread good labor and environmental standards around the world and stand firm against agreements like the Central American Free Trade Agreement that fail to live up to those important benchmarks. Obama will also pressure the World Trade Organization to enforce trade agreements and stop countries from continuing unfair government subsidies to foreign exporters and nontariff barriers on U.S. exports.

* Amend the North American Free Trade Agreement: Obama believes that NAFTA and its potential were oversold to the American people. Obama will work with the leaders of Canada and Mexico to fix NAFTA so that it works for American workers.

* Improve Transition Assistance: To help all workers adapt to a rapidly changing economy, Obama would update the existing system of Trade Adjustment Assistance by extending it to service industries, creating flexible education accounts to help workers retrain, and providing retraining assistance for workers in sectors of the economy vulnerable to dislocation before they lose their jobs.

------------------------

Ooooh, scary protectionism. Or not. Add labor and environmental standards to trade treaties, "fix" NAFTA, retrain workers who get laid off. Obama has wisely adopted populist rhetoric on trade, but his policy positions steer clear protectionist idiocy.

Trade is a topic where virtually every academic and expert across political lines (despite heated disagreement about other details) broadly agrees that protectionism is stupid, but a broad swath of uneducated voters (e.g. Hillary's base) have other ideas. Consequently, many smart politicians play a tightrope walking game with trade, trying to match heated rhetoric with tepid policy positions. Obama is playing that game too. Mallaby is right to think Obama's rhetoric probably doesn't reflect his real feelings on the matter, and Matt is being surprisingly obtuse in not understanding what Mallaby is getting at.

Posted by J.B. | June 5, 2008 3:44 PM

p.s: I never understood why Democrats don't tie trade policy to universal healthcare. Is it so hard for people to see the connection?

You can note, in addition: shouldn't American companies be allowed to compete on an equal footing with companies from nations that have universal health care? Good for the working man and the business man - sounds like a winner to me!

Posted by Josh R. | June 5, 2008 3:51 PM

Josh R.,

Word. Given all the smart people in Democratic politics, I find it hard to believe that no one believes these arguments carry weight or political benefit. Am I missing something? Maybe politicians are afraid for running for election while also telling Americans that new reality is that they'll have not one or two job throughout their career, but ten to fifteen? Is that the fear?

However, I think this fear isn't grounded in reality. I come from a rather humble upbringing and went to college with a lot of smart, but not so well off kids. Most of our parents were of modest means and lived in the Midwest. Almost all of out parents are union members and strong Democrats. That said, not one of them believes a word Democrats say about trade policy. They KNOW Democratic politicians who push protectionist rhetoric are full of it. I got a lot of 'I told you so' after the Goolsbee/NAFTA flap. So much for me promoting Obama as a 'new kind of politician'. Despite their distrust of Democratic politicians when it comes to trade policy, they believe Democrats mostly care about working folk and fondly remember the Clinton economy. That's why they'll vote for Obama, even if they think he's full of s*** on trade. If Obama is afraid that voters can't stand to hear the truth, he's dead wrong. I think he'd get fervent volunteers.

Posted by Nathan A | June 5, 2008 4:08 PM

jamie, I come off sounding like Pat Buchannan? That'd tickle ol' Pat pink to know that a lefty Jew sounds just like him ...

Really, I am skeptical of so-called trade agreements, not a full bodied, rabid protectionist. Why the exclusion of any actual middle in American political discourse even as said discourse celebrates a mealy-mouthed and ultimately stupid centrism of "both sides are bad"/"both sides have a point and the truth is somewhere in the middle"?

There is a middle ground between "isolationist" and "unilateral interventionist". There is similarly a middle ground between "protectionist" and "free trade kool-aid drinker". In the former case, the liberal tradition of Cold War (e.g.) containment is such a middle ground. In the latter case, Nathan A., J.B. and Josh R. all support trade while asking for sensible conditions to be attached to said trade to keep the playing field level and ensure trade actually is beneficial as the academics would claim it to be.

Of course, the reason why a certain middle is excluded from our body politic is that this middle is actually liberal position. That the foreign policy debate becomes framed as "if you are not an interventionist, you are an isolationist" simply reflects the division amongst reactionaries about foreign policy. Similarly, with the exclusion of reasonable positions on free trade.

We as liberals should be careful not to accept the conservative frame of either foreign policy or free trade debates. Interventionist/Isolationist and Free Trader/Protectionist are both dichotomies which plague the right to which the left provides a sensible middle way. This should be our selling point. And Obama is selling things precisely this way. OTOH, HRC belongs to one of the conservative camps but is pretending to belong to the other conservative camp in order to appeal to a certain group of people.

Obama's not my favorite candidate, but I'm glad he won, given the choices. Now if only the media would manage to talk about the fact that many, like me, who preferred Obama didn't prefer him because we have some Messianic conception of the feller but because, even if HRC is more "experienced", she's simply been on the wrong side of many issues (in some cases, like trade, she's been on each wrong side!) while Obama, in what little experience he has, has some how managed to be right fairly consistantly.

Posted by DAS | June 5, 2008 4:17 PM

Ooops .. in my shout outs, I forgot to also give props to El Cid for his good point about trade as well!

Posted by DAS | June 5, 2008 4:19 PM

I think Obama's choice of economic advisors and the fact that nobody disputes he's a very smart person, gives us "Obamaphilic free-traders" plenty of comfort that he doesn't mean everything he says on NAFTA and trade.

At the very least, he doesn't mean the most extreme interpretations. He may very well want to have much more stringent protections of workers' rights and the environment in future trade agreements, which would both help people in the partner country and workers here, by removing an unfair competitive advantage enjoyed by producers in countries with lax regulation. But he's not going to end NAFTA; at the very least, he knows as well as anyone that free trade with Canada and Mexico isn't responsible for the woes of the U.S. manufacturing sector.

You'll notice that recently he spends much more time talking about worker retraining, higher education, and "green jobs that can't be outsourced", all far more sensible approaches to dealing with the ongoing transition of the United States from manufacturing to service economy.

But like Nathan above, I do wish he'd bracket the above by saying "Look people, the United States is never again going to be a primarily manufacturing-based economy because there are places in this world where people enjoy a lower standard of living than us, and as a result will do the same work for less. But America's strength has always been its ability to innovate, and we will continue to do so, expanding our economy into areas where these countries can't compete with us. And to facilitate this, we're going to put money into research for technology and education and training for workers, so that we can stay a step ahead of the world."

Too late now I guess. This is why I wish Clinton had dropped out before Ohio - Obama simply wouldn't be in this box. But while he can't say the above so plainly, at least for some time, he can certainly govern that way and I believe he will.

Posted by TH | June 5, 2008 4:23 PM

But like Nathan above, I do wish he'd bracket the above by saying "Look people, the United States is never again going to be a primarily manufacturing-based economy because there are places in this world where people enjoy a lower standard of living than us, and as a result will do the same work for less. But America's strength has always been its ability to innovate, and we will continue to do so, expanding our economy into areas where these countries can't compete with us. And to facilitate this, we're going to put money into research for technology and education and training for workers, so that we can stay a step ahead of the world."

He can say the above things, but it won't help him with voters. When people hear that, it just seems like some out of touch elite talking about nebulous solutions as if there were some great elixir. No one knows what the industries of tomorrow will look like, or where they will be located. It doesn't seem like a solution as it does an academic discussion that doesn't take their hardships into account.

To move from seemingly abstract solutions (technology, education), towards conveying a sense that people's hardship are being taken into account, you need to address people's fears. How will I provide for my kid's treatment? Can I afford to keep my house if I decide to retrain for a new job? What happens if those cool new jobs don't reach Ohio? The answers to those questions HAVE TO BE A PART OF THE DISCUSSION. Democrats need to talk about more than Trade Adjustment Assistance. Rebooting one's career is scary as hell when you have a family. He needs to break some new ground in talking about these concerns.

Posted by Nathan A | June 5, 2008 4:51 PM

It might be helpful to note that BHO supports Bush's SPP.gov, aka "NAFTA on steroids".

Everyone else can now return to ignoring the fact that BHO supports a secretive, highly questionable Bush trade scheme.

Posted by TLB | June 5, 2008 4:57 PM

"Obama is someone who is well-educated and has moved in a cultural milieu as a law professor that makes it unlikely that he would neither know nor care about the consensus among economists that protectionism is a terrible idea."

He was a professor at U of Chicago, for chrissake. The Law School there is practically an annex of the econ department - you can't find a more free-trade, free-market oriented law school in the country. And almost all law schools nowadays - including Harvard, where he studied- have many professors of the "law-and-economics" variety, which teaches that the law is, or should be, a sort of applied neo-classical economics. Of course he knows and cares about the consensus about protectionism in the econ profession.

Posted by Bloix | June 5, 2008 5:20 PM

DAS, I was referring to your argument that the strongest growth occurred behind protectionist walls...that was an argument that Pitchfork Pat did make in one of his books (don't ask me how I know this, it was a Christmas present from an aunt). Correlation does not = causation.

Posted by jamie | June 5, 2008 5:59 PM

jamie,

it certainly is true that correlation does not = causation, but it still is the case that periods of growth did occur behind protectionist walls and moreover, those who were most responsible for said growth were the ones who were the most adamant about those walls being maintained: are you suggesting that these people didn't know on which side their bread was buttered?

I'm not advocating putting those walls back up, but I think it would behoove us to understand that there are some advantages to protectionism and that we should make sure that we try to get back those babies that we previously threw out with the bathwater of protectionism by more careful consideration of trade deals going forward.

Posted by DAS | June 5, 2008 6:49 PM

Nathan A said:

Maybe politicians are afraid for running for election while also telling Americans that new reality is that they'll have not one or two job throughout their career, but ten to fifteen? Is that the fear?

Yes, and all the disruption this entails.

To move from seemingly abstract solutions (technology, education), towards conveying a sense that people's hardship are being taken into account, you need to address people's fears. How will I provide for my kid's treatment? Can I afford to keep my house if I decide to retrain for a new job? What happens if those cool new jobs don't reach Ohio? The answers to those questions HAVE TO BE A PART OF THE DISCUSSION. Democrats need to talk about more than Trade Adjustment Assistance. Rebooting one's career is scary as hell when you have a family. He needs to break some new ground in talking about these concerns.

Both candidates need to, but they won't. Which ever one "goes honest" first would be liable to get hammered by the other candidate, the media, and most voters. Most wage earners don't want their working lives to be that much of a hassle. When you throw in the panoply of social services needed to keep the in-between-careerists off the street, that's more social democracy than the Democrats can handle, or that the GOP can conceive of.

In the macro-econ view, paying for a social-democratic state almost demands a degree of protectionism. As it stands, net economic value is being transferred out of the US, with the business elite and certain professions gaining wealth by skimming a percentage of the transfer off the top.

When I hear anyone - Aaron Sorkin, Richard L. Nolan, whoever - talk about creative destruction of the economy, I usually see someone who doesn't know what they're talking about. Nathan A pointed out that there's really no difference whether someone loses their job to outsourcing or to new technologies.

That's true up to a point. If the resource freed up are reinvested to create even more value within the economy, that's a gain. But, that's not what's happening in the aggregate. Raw value, overall investment, and R&D investment are leaving. Value added activity is moving elsewhere. We seem to be approaching the point where we really are just shining each other's shoes.

Posted by cmholm | June 5, 2008 6:55 PM

Obama isn't going to do anything to jeopardize NAFTA. He's not that stupid. The stuff on his website about "working with the leaders of Canada and Mexico" to "fix" NAFTA is vacuous guff intended to appease protectionists.

Posted by Mixner | June 5, 2008 9:04 PM

While Obama's voting record was a little more protectionist than Clinton's, he and Clinton were closer together on trade than he was to John Edwards, for example. Another decent reason to believe he isn't an actual protectionist is that he isn't just a product of the liberal academic elite consensus on issues like trade, but is an actual cosmopolitan who lived abroad in a poor country and grew up in a multicultural household.

Nathan, I too share your confusion as to why not Democratic politicians don't hammer enough on the need for universal health care in a globalizing world. The only major writer I can remember ever really making that case strongly is Paul Krugman. For me, this is the second-biggest reason I support UHC.

Posted by Reality Man | June 6, 2008 3:57 AM

is an actual cosmopolitan who lived abroad in a poor country and grew up in a multicultural household. - Reality Man

Which means he's very unlikely to be a Buchannanite protectionist, that's for sure.

But it also may very well mean that he's seen the downsides as well as the upsides of trade, has some knowledge of how free-trade rhetoric has historically translated to the removal of liberty via economic and eventually military imperialism, etc. It means he may ask "who gets to decide what the comparative advantage of a poor country is?". IOW, it means, if he is perceptive and not merely basing his views on what benefits the cosmopolitan class, he might have very good (and not just politicking) reasons to be somewhat of a sceptic regarding so-called free trade agreements.

And -- just as, in some quarters, calling into question a doctrine of militant interventionism gets you labeled an isolationist; in many of those same quarters, calling into question the "if it says free in it, it must be good" approach to trade issues gets you labeled a protectionist.

Obama's no Pat Buchannan, in part because of his upbringing, but likely due to that very same upbringing, he'll bring to the table a level headed scepticism that'll cause the newsmedia, et al., to tar him as tantamount to Pat Buchannan.

Posted by DAS | June 6, 2008 10:06 AM

Good point DAS. That likely means that Obama is all for things like labor protections being put into American trade deals. I haven't liked Obama's protectionist rhetoric in the Rust Belt (which likely didn't gain him many votes, considering how Democrats usually come off as disingenuous when they spout it), but he seems like he could be the type of guy to re-think how the type of "free trade" affects other countries negatively and how free trade actually comes in many forms.

Posted by Reality Man | June 6, 2008 12:33 PM