The Krugman Defence

Paul Krugman uses intellectual gymnastics to prove that John Kerry is actually saving free-trade from the populist-protectionist tendencies of the US Congress. On this view the American voter has to make up his mind on whether they prefer a dishonest John Kerry with good free-trade credentials, or (if Krugman is wrong) an honest John Kerry with Jurassic ideas on free-trade.

But Krugman does make a point on a public policy response to globalisation and free-trade in general, and offshoring/outsourcing in particular

First and foremost, we need more jobs. U.S. employment is at least four million short of where it should be. Imports and outsourcing didn’t cause that shortfall, but if the job gap doesn’t start closing soon, protectionist pressures will become irresistible.

Beyond that, we need to do much more to help workers who lose their jobs. It didn’t help the cause of free trade when Republican leaders in Congress recently allowed extended unemployment benefits to expire, even though employment is lower and long-term unemployment higher than when those benefits were introduced.

And in the longer run, we need universal health insurance. Social justice aside, it would be a lot easier to make the case for free trade and free markets in general if, like every other major advanced country, we had a system in which workers kept their health coverage even when they happened to lose their jobs.

The point is that free trade is politically viable only if it’s backed by effective job creation measures and a strong domestic social safety net. And that suggests that free traders should be more worried by the prospect that the policies of the current administration will continue than by the possibility of a Democratic replacement.[NYT]

Krugman has left those “effective job creation measures” as an exercise for the student. However, I dont think even he can defend John Edwards, the other contender for the presidential candidature,

‘There is a difference between Senator Kerry and myself,’ said Mr Edwards, who has campaigned across the industrial Midwest blaming unfair trade deals for the loss of hundreds of thousands of manufacturing jobs.

He said that he had voted against giving fast-track authority to the President while Mr Kerry approved it.

‘I voted against the Chilean trade agreement; he voted for it. I voted against the Singapore trade agreement; he voted for it. I voted against the African trade agreement; he voted for it. I voted against the Caribbean trade agreement; he voted for it,’ Mr Edwards added.

He also cited his opposition to the 1994 North American Free Trade Agreement (Nafta) between the US, Mexico and Canada as a candidate in his 1998 Senate race.

‘These agreements did not have the kind of labour and environmental protections that needed to be in the text of the agreement and be enforced.'[Straits Times]