End the Echo weblog

As John Nichols of the Nation writes about John Edwards’ chances in the Iowa caucus.

No serious observer of the December 13 debate in Des Moines doubted that the standout performance, and the standout message, was that of Edwards.

Indeed, undecided voters assembled in focus groups that watched the debate for the major television networks rated Edwards off the charts.

As an Edwards supporter, it makes me happy to see that he is connecting with undecided voters.  That means his message, a decidedly populist message, is resonating.  So here is a bit of his message,

Edwards summed up his increasingly aggressive and powerful anti-corporate themes with a declaration: “What makes America America is at stake: jobs, the middle class, health care, preserving the environment in the world for future generations.

“But all those things are at risk. And why are they at risk? Because of corporate power and corporate greed in Washington, D.C. And we have to take them on. You can’t make a deal with them. You can’t hope that they’re going to go away. You have to actually be willing to fight. And I want every caucus-goer to know I’ve been fighting these people and winning my entire life. And if we do this together, rise up together, we can actually make absolutely certain, starting here in Iowa, that we make this country better than we left it.”

As I have stated in a previous post, Edwards seems ready to fight the corporate interests, not make nice like Obama, or is already deeply entangled with them like Hilary Clinton, but fight for us, the average American.  Trade policy is a good example, and here is what he said at that same debate on the topic.

Turning a broad question about human rights toward the specific issue of trade policy, the former senator said that human rights, human needs and human values “should be central to our trade policy.”

“But,” he added, “if you look at what’s happened with American trade policy, look at what America got: Big corporations made a lot of money, are continuing to make a lot of money in China. But what did America get in return? We got millions of dangerous Chinese toys. We lost millions of jobs.

“And right here in Iowa, the Maytag plant in Newton closed. A guy named Doug Bishop, who I got to know very well, had worked in that plant, and his family had worked in that plant literally for generations. And his job is now gone. The same thing, by the way, happened in the plant that my father worked in when I was growing up. It is so important that we stop allowing these corporate powers and corporate profits to run America’s policy, whether it’s trade policy, how we engage with China. This is not good for America. It’s not good for American jobs. And it’s not good for working people in this country.”

Even Paul Krugman’s column today highlights how trade can have a downward pressure on American worker’s wages.

 But for American workers the story is much less positive. In fact, it’s hard to avoid the conclusion that growing U.S. trade with third world countries reduces the real wages of many and perhaps most workers in this country. And that reality makes the politics of trade very difficult.

No before you go thinking this has been Krugman’s thinking all along, he explains in his column that he used to have less reservations about the negative impacts on domestic wages due to trade [emphasis added].

All this is textbook international economics: contrary to what people sometimes assert, economic theory says that free trade normally makes a country richer, but it doesn’t say that it’s normally good for everyone. Still, when the effects of third-world exports on U.S. wages first became an issue in the 1990s, a number of economists — myself included — looked at the data and concluded that any negative effects on U.S. wages were modest.

The trouble now is that these effects may no longer be as modest as they were, because imports of manufactured goods from the third world have grown dramatically — from just 2.5 percent of G.D.P. in 1990 to 6 percent in 2006.

And the biggest growth in imports has come from countries with very low wages. The original “newly industrializing economies” exporting manufactured goods — South Korea, Taiwan, Hong Kong and Singapore — paid wages that were about 25 percent of U.S. levels in 1990. Since then, however, the sources of our imports have shifted to Mexico, where wages are only 11 percent of the U.S. level, and China, where they’re only about 3 percent or 4 percent.

Now Krugman isn’t seeking protectionism, but just wants us to think more clearly about trade and for editorial boards to stop their knee jerk reaction to politicians that question the benefits of free trade [emphasis added].

So am I arguing for protectionism? No. Those who think that globalization is always and everywhere a bad thing are wrong. On the contrary, keeping world markets relatively open is crucial to the hopes of billions of people.

But I am arguing for an end to the finger-wagging, the accusation either of not understanding economics or of kowtowing to special interests that tends to be the editorial response to politicians who express skepticism about the benefits of free-trade agreements.

It’s often claimed that limits on trade benefit only a small number of Americans, while hurting the vast majority. That’s still true of things like the import quota on sugar. But when it comes to manufactured goods, it’s at least arguable that the reverse is true. The highly educated workers who clearly benefit from growing trade with third-world economies are a minority, greatly outnumbered by those who probably lose.

I don’t know how many caucus goers read Krugman, but it is clear that Edwards’ message of fighting tooth and nail to get American workers needs in the forefront of policy decision is connecting with them.

-Josh