Left Flank

On the Diane Rehm Show, three economists, Fred C. Bergsten, Alan S. Blinder, and Jeff Faux debated the Impact of Free Trade on American Workers. With the emails and call-ins, it was a very informative discussion. Although like Blinder testified, I tend to espouse a «quasi-religious» free trade stance, it's clear also that federal and state governments can do more. As Bergsten argued, the US economy, with low inflation and high employment, can't improve much more. Bergsten also added, that Germany and Japan are both high wage states that also compete more effectively than the US, so it's not only low-wage states that have an advantage.

Some of the extra benefits accruing to US capital must be used by the government to improve labor, that is, more money for programs the US has never traditionally done well, like re-training and wage insurance. But, I disagree with Jeff Faux, that these improvements have to come «on-the-fly», that is, as the US continues to pursue more free trade agreements. Faux, though did rightly emphasize, that today's world is full of horizontally-integrated economies, not separate economies as in Adam Smith's day. The US needs to pay down the budget deficit, encourage private savings and reduce consumption, correct the housing market, and reduce corporate and agricultural welfare. Finally, Blinder had the best advice for high school students planning for a career: personal service jobs, where people are proximate, like surgeons, are occupations that cannot be outsourced.

I don't think any of the contributors discussed how any move towards protectionism would actually undermine the fairness most voters want, or how America's military spending and commitments affects free trade.