Fair Trade and Immigration
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November 20, 2006, 08:37 PM
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Nancy Snyder at Truthout writes:

As the many-faceted analyses continue to be examined in the wake of the 2006 midterm elections that propelled the Democrats to control both the House of Representatives and the Senate, a new factor came into play in campaign strategies: the issue of free trade. Incumbents who did not question the failed economic model of NAFTA that wrecked havoc on their communities found themselves on the losing end of this election. There were seven Senate seats and forty-four House seats that were won by fair trade candidates, and the issue was instrumental in the Democrats` winning in such solid numbers.

I think the issue here ultimately is jobs_ and the availability of "good jobs" In a more abstract since, distribution of wealth and income is a major issue. The Republicans failed in part because their economic agenda had questionable distributional outcomes. It is plausible that there was some net increase in production of wealth, but not enough to give a broad majority of the problem visible increases in their economic well bing.

Fair trade isn`t so much an issue in its own right, but is related to the results is expected to achieve. Trade is a major factor in changing the distribution of wealth and income in a developed countries. When a developed country like the US opens its borders, distribution becomes in the US becomes more like that in the rest of the world. The countries with the most equal distributions of wealth and income tend to be countries with relatively careful border and trade controls.

Now, I`d guesstimate the relative importance of the trade to immigration to be 2-1—trade is roughly twice as important at present as immigration.(I`m basing that on the NSF estimate of $100,000 cost per immigrant and comparing it to the trade deficit). However, improving the trade situation will be pretty dang slow-and the immigration situation can be made worse(or better) pretty dang rapidly.

I question whether a Democratic economic agenda will get the desired response if it involved an attempt to fix bad trade deals accompanied with an immigration amnesty or major expansion or immigration. It certainly would be better for some folks, but I can easily imagine big blocks would get left out in the cold. For the democrats to have a serious political success they`ll have to have an economic agenda that benefits 70-80% of all Americans(because a lot of folks won`t vote their economic interests but will vote for some religious or ideological value) and that whole program will have to manifest net positive results in a 2-3 year time frame.

Now, my personal experience is a bad immigration program like H-1b pretty much single handedly turned a solid, stable industry into a jobs disaster within a 2-3 year period. Trade is going to take time to handle. You don`t build export industries over night-or create local substitutes for imports overnight either. The trade deficit originated as a chronic problem, and it will take years to correct that situation(assuming we are lucky and the foreign bankers don`t seriously yank the chain of the US and destabilize the government before that happens).

Now even if trade and immigration are properly handled, tax, industrial and monetary policy will I expect become major issues again. Those have all been put on the back burner by "guns, butter and tax cuts too" set of policies facilitated by large scale foreign borrowing.