BusinessWeek Champions Case Against Free Trade

     It’s this type of reporting that would make Lou Dobbs proud.

     The February 11 issue of BusinessWeek cast doubt on the advantages free trade for the United States. An article, “Economists Rethink Free Trade,” by Jane Sasseen ignored the benefits of free trade and the consequences of enacting anti-free trade policies.

     “Yet concern is rising that the gains from free trade may increasingly be going to a small group at the top,” Sasseen wrote. “For the vast majority of Americans, Dartmouth’s [Matthew J.] Slaughter points out, income growth has all but disappeared in recent years. And it’s not just the low-skilled who are getting slammed.”

     Sasseen referenced an article co-written by Slaughter in the July/August 2007 issue Foreign Affairs. What's Slaughter’s plan to combat the crisis? Slaughter sees “a need for some form of income redistribution to spread the gains from free trade to more workers”

      “In a controversial article Slaughter co-wrote last summer for Foreign Affairs, he proposed ‘A New Deal for Globalization’ in which payroll taxes for all workers earning below the national median income level would be eliminated,” Sasseen wrote. “Slaughter has talked with campaign advisers in both parties. So far, he has no takers. But it's one more sign of how far the trade debate has moved.”

     What else does Sasseen use to make the case that free trade isn’t such a good thing? Hillary Clinton’s chief economic adviser, Gene Sperling.

     “The question of whether spreading globalization and information technology are strengthening or hollowing out our middle class may be the most paramount economic issue of our time," Sperling said to BusinessWeek.

     Sasseen also included Barack Obama’s economic adviser, Austan D. Goolsbee, a professor at the University of Chicago. However, she did not include the perspective on free trade from any of the Republican candidates for president.

     Sasseen ignored the consequences of interfering with free trade. If we imposed some sort of barriers to promote a fair trade policy with one of our trading partners, like China for example, there would be unintended consequences according to James Sherk, the Bradley Fellow in Labor Policy at The Heritage Foundation.

     “If you were to require that we have no imports from China, then we’d have to take those resources to produce some things to export to China and instead use those to make Barbies instead,” Sherk told the Business & Media Institute on Aug. 16, 2007. “We wouldn’t be making as much computer chips or as much software or what have you. And on the whole, we would have less stuff in general.”

     Sherk also said U.S. labor is much more skilled and has more capital invested in it for tools (e.g. laptop computers, word processors, etc.) than the Chinese labor, and the market dictates which goods and services are produced where as a result of this.