Friday, April 18, 2008

McTeer on Free Trade

Bob McTeer, former Fed governor, has a good post on free trade:

Most educated people understand the benefits of free trade, and that probably includes educated politicians. However, many who understand are only too willing to pander to the many more that don't. The reason many don't is that the benefits of free trade are widely dispersed while the costs are more concentrated. Free trade helps almost everyone a little bit, but hurts a few a lot. Furthermore, the higher standard of living associated with, and attributable to, free trade is not easily identified — while a job lost at a plant moving to China is easily associated with it.

Theoretically, those benefited could use a portion of those benefits to help those harmed get trained for the new jobs created by trade. But, alas, it's easier for politicians to feed the ignorance than to try to educate their constituents, and that seems true for two-thirds of our presidential candidates.

Hopefully, the presidential candidates who claim to be against free trade won't follow through on their threats. Smoot/Hawley II we don't need.

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