Sep 16 2008

You Make The Video Call: McCain vs. Obama on Free Trade

13 Responses to “You Make The Video Call: McCain vs. Obama on Free Trade”

1. # Justinon 16 Sep 2008 at 6:36 am

   NAFTA isn’t free trade. Its managed trade.

2. # Steve Latteron 16 Sep 2008 at 6:48 am

   Hi Justin,

   I would be interested in what you mean by saying that “NAFTA isn’t free trade, it’s managed trade”? I have never heard that description.

   Being an American citizen, I am able to buy any product that I choose and many of them are from Mexico and Canada, all now duty and tariff free.

   Thanks for responding.

3. # Justinon 16 Sep 2008 at 8:25 am

   Maybe preferred trade is a better description. The United States strikes deals with countries that they like for trade. And those countries get first dibs… its still protectionism… just amongst the countries our government decides we need to have “free” trade with. Free trade that requires thousands and thousands of pages of regulation.

   I don’t want to take up too much space, so I’ll link you to something that explains more fully. In all honesty, the fact that you haven’t heard of this argument against NAFTA is a great example of how economics has been hijacked by corporatist propaganda. The same people that say we have a free market now have NO idea what a free market is. And I doubt we’d be in the mortgage mess we are in now if we had true free trade and sound money.

   http://www.fee.org/PUBLICATIONS/THE-FREEMAN/article.asp?aid=5031

4. # Steve Latteron 16 Sep 2008 at 4:50 pm

   Thanks for the additional post, Justin. And thanks for the link which I read.

   It sounds like writers position in the link above is that free trade is the way to go which is the primary point that many citizens do not understand.

   I think your point is that “free trade” agreements are not always “purely free” as the countries’ governments that sign the trade agreements can never really get rid of their “protectionist” tendencies, thus countries signing the agreement often work some protectionism clauses into the voluminous trade agreements. Yes, that is almost always true, so if that is what you mean by “managed trade” then I agree that we can call NAFTA a managed trade agreement.

   But, keeping our eye on the bigger picture maybe we could agree that purely “free trade” is the ideal in economics to promote competition and generate rising standard of livings, whereas “managed trade” would do the same but at a lesser extent.

   NAFTA, whether you call it “free trade” or “managed trade” has been acknowledged by almost all economists as having increased the standard of living for all three countries.

5. # Justinon 16 Sep 2008 at 7:15 pm

   Right, I agree that NAFTA has helped, the freer that trade is the better for the people involved.

   I kinda sympathize with the Austrian School though. I’m about as lazziez faire as you can possibly get. Anarcho-capitalist I guess.

   Glad you enjoyed the article!

6. # Nicholas s.on 17 Sep 2008 at 2:38 am

   Above Barack Obama talks about his idea of trade agreements, he seems to be either explaining an idea of “utopian Free trade ” where no one loses from organizations such as NAFTA or suggests that they should pick and chose in a ‘free market’ about whom to trade with based on benifit and structured around legislation put into place by the government in which they have intervened and secured jobs, looked out for consumers and the environment etc. Now i understand the need for the legislation against unsafe goods, and environmental protection, however it would only be in the interests of Obama to secure jobs in order to gain voters, as we know the market would allocate the dismissed workers new jobs which they would be more effective in.

   Obama’s idea of free trade seems to be more like managed trade/protectionism

7. # Dimitri Da Ponteon 17 Sep 2008 at 3:19 am

   John McCain opens with a straight ‘NAFTA is good.’ He states it has been good to all three countries involved (Canada, USA and Mexico) and is vital to the continued prosperity of the country. Yet as the clip goes on, McCais starts mentioning the people that have been laid off, and how we have to support these people by providing jobs, better education and a support to those that have been downgraded. Now this is a mixed message. At first we are set to think NAFTA is great and dandy, yet soon the people that have lost their jobs because of the free trade start being mentioned and how the state must help them gain jobs or help them in their financial problems. The contradiction is that a free market has laid off many people and John McCain, and advocate of free trade, is proposing a course of action similar to that which a command economy would use to help those people that have been laid off.
   Barack Obama on the other hand is completely against NAFTA, explaining it is the cause of thousands of lost jobs and the degradation of many cities in Ohio. He declares that NAFTA has allowed for the signing of trade agreements that harm the environment AND the labor force. These agreements, proposes Obama, should be controlled by the government, to protect the people. Again, another course of action tipping towards command economy.

8. # Steve Latteron 17 Sep 2008 at 5:10 am

   Dimitri,

   Great summary. Thanks for viewing the two clips.

   Bill Clinton always explained trade the way it was supposed to be explained which was a strong support for trade to improve our standard of livings and economy, but acknowledging that there would be domestic companies that would be adversely affected.

   McCain is trying to explain this same thing like Clinton but he is not as eloquent. McCain’s message is actually not contradictory. McCain say correctly that trade is beneficial and increases standards of living, but he also acknowledges correctly that there is a loss of employment as some domestic industries that lose out to better, foreign competition and will lay off workers or close their businesses.

   Most all economists, whether Democrat (liberal) or Rebublican (conservative) say that it is prudent for any nation to have some “socialism” built into their new trade agreements which allows for the Government to spend taxpayer dollars to help retrain the nation’s workers who were displaced by the new trade agreements. The debate then becomes one of HOW MUCH money should be allocated. This is a generalization but the “conservative or Republican” would tend to say less money should be allocated for retraining the displaced worker, with the liberal or Democrat usually favoring more aid.

9. # Lisa Gon 19 Sep 2008 at 1:23 am

   These two videos show two different approaches to free trade and the NAFTA. ( im am going to focus on Mc Cain) McCain states that he is all for free trade but when he explains his view, it becomes clear that what he wishes to implement is not true free trade. In his speech McCain say that with free trade it is natural that people have lost jobs and more people will continue to los job. This is true, but then he says that ‘no one can be left behind’, meaning that he will stop unemployment from happening. How exactly does this work? How is his free trade? What I understand is that Senator McCain wishes to have and enjoy benefits of free trade, but does not want to ‘leave anyone behind’. Meaning that companies can never actually outsource jobs or move to other place, where wages or the factors of production would be cheaper, because they would have to fire the people currently working in the firms. Unless the firm would move with all its workers with it, which is impossible, they could not move to become part of free trade. As free trade would enter the country, a lot of firms will he outcompeted because they are not allowed to lay of workers. McCain also says that with free trade the farming in Iowa will have a comeback as it can compete in the global market. But we all know that subsidies are not part of free trade, it is protectionism as these farms could not compete in the market without government help. One thing that he said is that he wishes to protect people who have suffered from a large change in income. Personally I think this is really stupid, why is he wishing to reward people that obviously not go at their high paying job? If they got laid of and can only get a lower paying job, doesn’t this show that they were not qualified in the first place? And if one was qualified for the job, shouldn’t they be able to find a suitable job for their abilities? Being an advocate of free trade, I fail to see how this is all free trade, I think McCain is confused…

10. # Steve Latteron 19 Sep 2008 at 5:05 pm

    Hi Lisa G.

    Excellent post!

    McCain is not very eloquent in this clip (or in any clip for that matter!) so it does sound confusing.

    I think what McCain is trying to say is what former President Clinton always said which is he supports free trade but a nation has to allocate some of its tax dollars to help retrain those Americans who are displaced from their jobs because of trade agreements. Most economists support this. In a simple analogy, let’s say that a trade agreement increases a country’s standard of living by $100….McCain is saying that we should spend $15 of the $100 back to the workers who lost their job for “humanistic” reasons. I think that is what he means when he says that we can’t leave the Americans behind.

    Steve

11. # Julianna Sparrowon 10 Oct 2008 at 6:48 am

    I think that anyone would agree, regardless of their political standing, that Obama is a better speaker than McCain. I watched each video a couple times so that I could jot down quotes and ideas about them, but the first time I watched Obama’s I just listened. It wasn’t until I was writing down all his remarks that I realized that I disagreed with much of what he said. Obama has an uncanny way of wording things in such a way that he sounds like he knows what he’s talking about, even if he is wrong. So Obama wins for diplomacy, but I think that McCain’s arguments are the better ones when comparing these videos. I think that it spoke well of McCain that he mentioned the down side of NAFTA, such as the loss of some jobs, as well as the good aspects; obviously, no organization is flawless, and if he had skated around the issues of NAFTA he would have sounded ignorant. I like the idea of free trade between countries – as McCain said, it is beneficial to all the countries involved. I also agree with McCain’s idea to implement training and education programs in community colleges and in work places so that those who lost their jobs to NAFTA have a chance of becoming employed again, probably in a more fulfilling job than they had before.
    Mr. Latter, in the beginning of the article you stated that “if Economics were a required high school course in every state in the United States, our politicians would not be able to “BS” us to get our vote.” I completely agree with this statement. After thinking about Obama’s arguments, it seems like his answers may be a political ploy rather than his actual opinions. When he says things about providing tax breaks to businesses who invest only in America, almost any American’s first reaction would be “Wooh go America!” even before they realized that this idea is not necessarily the most beneficial to the American economy, because it could discourage competition on the international level. I know I caught myself doing the “Wooh America!” thing a couple times, just because what he says sounds like it should be right… but when I look at his arguments logically, I don’t think they are. One thing that surprised me was when Obama said that outsourced production leads to “toys with lead paint and medicines that make people sick instead of better.” I could be wrong, but I don’t think this is the case. I am sure that some places do make these kinds of faulty products, but that is the exception, not the rule, of outsourcing. Most of the objects in my house were NOT made in America, and nobody here has run into any sort of defective product which is a danger to our health. I think that Obama may have exagerated on some of the issues so that uneducated Americans would be scared into or “Wooh America”-ed into supporting him, without really thinking about the issues at hand.

12. # Julia McDonaldon 10 Oct 2008 at 7:51 am

    Many may agree that Obama is trying to influence economically uneducated voters with his viewpoints of NAFTA. A large number of Americans believe that NAFTA has caused American job losses. Some feel this is a low blow by Obama. Although NAFTA is causing job losses in some areas, it has resulted in job opportunities in other areas.
    However, I agree with many of Obama’s concerns regarding NAFTA. A lack of regulations in foreign countries has resulted in imports of questionable quality and potential danger, such as lead paint toys and contaminated medications. Because of other countries lack of labor standards, American workers have to compete against near slave labor. Foreign factories often have little concern for the environment. Both candidates address the issue of inadequate support and retraining of displaced workers. Job loss is often inflicted upon people who are least prepared to bear such a burden. Although NAFTA has supplied America with less expensive goods compared to the American made alternative, we have paid the price in other ways. Overall, I agree with Obama’s outlines of the negative effects of NAFTA.

13. # Nick Barberoon 11 Oct 2008 at 11:24 am

    McCain’s point on NAFTA seems to make more sense to me. He states that it will help the economy, because it will open many job opportunities. What McCain says about NAFTA is completely factual. Free trade will give jobs, because trading is a mutual concept, which means both parties will benefit from the outcome. In McCain’s speech he presents the idea of NAFTA better than Obama. Obama starts out informing voters of NAFTA by criticizing it with a couple of specific cases. I am sure there could be a law passed to deal with the lead paint in toys and contaminated medications. Regulating foreign trade is too detrimental to the economy not only of the United States, but the rest of the world.
    Many people do agree with Obama’s view on the regulations of foreign trade due to the lead toys and contaminated medications. There should be regulations on foreign trade until the United States can find a different way to avoid the bad effects of some of the foreign of the goods. If the only way to protect people is to regulate foreign trade, and there is no other solution, then the United States should use that method. Though Obama’s response is personable and the net cost is devastating, it is misleading because both Obama and McCain will tell the voters what they want to hear. There could be negative implications as this can be the shortsightedness effect.

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