Dan,

No offense, but you're posing the question backwards. Edwards nearly pulled a rabbit out of his hat last night by responding to the understandable anxiety and pain of rust-belters who've had the rug pulled out from under them these past few years. If Kerry has to modify his stance on trade to garner their votes, it cannot be blamed on Edwards.

Look at Edwards' numbers--more men than women, more independents than Democrats (though Kerry outdid him in terms of working class v. middle class, interestingly). He's tapping into something already there, that Gephardt tried to access but failed.

And I don't think Edwards is going to shut off trade, just get it somewhat under control so we don't have rioting in the streets in ten years. This, to my mind, is a good thing (but I KNOW you don't agree).

One more thing. If (as he's suggested) Kerry has all but given up on winning the south (stupid decision, IMO) then he absolutely MUST take every rust-belt state. The ONLY way to do this is to attack NAFTA, the WTO and free trade in general (though we all "know" the president will never carry out a truly protectionist policy once he takes office--again, it'll be a tweaking thing, not a slamming of the gates).

Another hacktacular post. It's strange how every front-running Democratic candidate is supposed to be oh-so-bad on free trade -- until they start to be replaced by a new front-runner. Then the helpful Republicans tell us that the new front-runner is *even worse* on free trade. Where was this admission about Kerry's actual record back when he looked like he had the nomination in the bag? Oh, right, that was then, this is now.

Meanwhile, there is never any mention that any of the Democrats might well be in fact less protectionist than Bush is. After all, they don't have the Red State welfare kings to pay off with agricultural subsidies, and they don't need to buy votes in industrial states with steel supports.

Kerry can adopt any angle on any issue he pleases. After he gets elected he can then return to his core beliefs.

For example:

He might say he believes in "free trade" and then later, decide to protect the domestic steel industry.

Or he might say he doesn't "believe in nation building" and later decide to make democracy flower in some arabic hellhole.

What you say and what you do matter only in active, as oppossed to passive, democracies.

If I was Kerry, I would promise the good folk "free" college educations and public drinking fountains that deliver rootbeer.

Just get elected baby. And four years from now...find some suitable excuse to cover accountability.

Rich:

From what I can tell, Kerry may not be worse than Bush on trade. His predeliction seems to be pro-free trade. Does he have it in him to oppose his some of his party's interest groups on this? We'll see. My guess is that he'll straddle the issue in the campaign, then, if elected, use the cloak of multilateralism to get out of being a protectionist. All in all, not a bad result. But it's a gamble that we'll get there, since Kerry has shown a bad habit of being on all sides of an issue in the Senate. (And I'm showing a bad habit of being all over an issure in a comment, because the truth is that I really don't know, I am open to suggestions.)

As for Edwards? He doesn't have a chance, because he does not have Kerry's campaign money to capitalize on his better than expected showing. I would guess that the only reason he did this well was that the Drudge slime job put a slight pinprick in the Kerry electability bubble. With the quick flame out of that "allegation", Kerry should return on his merry way to nomination.

I'm an Edwards fan and I'd like to see him do well. On the plus side, he's much more dynamic as a campaigner and personality generally, his optimistic is good and I think he can tap into working class, Washington-outsider and Southern sources of support much better than Kerry. On the down side, he's relatively weak on funding (though that can change quickly if he gets internet contributors behind him), he's not a veteran, much less a war hero, and he is relatively inexperienced on the foreign relations front.

I'm an ABB guy. We'd be miles ahead with either Kerry or Edwards rather than Bush. If you could convince me that Kerry can get 2-3% points more votes than Edwards against Bush, I'd go with Kerry. But I'm not sure Kerry can do better than Edwards head to head with Bush. That is the real issue with me.

Edwards is now where McCain was in the GOP primaries four years ago: popular with the press, more appealing than the frontrunner to independents and members of the other party in states his own party's nominee is less likely to win in November, less popular than the frontrunner among members of his own party. If all Democrats were as likely to vote for Edwards as for Kerry this November, one could argue that Edwards would be more likely to beat Bush. But one could have said the same thing about McCain four years ago, and to Republicans it didn't matter.

McCain could, if he chose, have made it less likely that Bush would win in November. That's mostly what Edwards can do now. He has a shot at going after Democratic primary voters by running to the protectionist side of Kerry, and perhaps by slamming Kerry as a political weathervane (anticipating what is likely to be the Republicans line of attack in November). But it isn't a great shot. Trade issues are fudgable, and Kerry is an accomplished fudger; moreover his response to Edwards' attack's on his record is that Edwards has no record at all, and is simply saying whatever he thinks will get him votes. Also, Edwards "sunny, optimistic" message is close to being his identity as a candidate, and he would blur that identity if he decided to go negative now.

Kerry does have weaknesses as a candidate, and Edwards has a chance to stretch this race out. Does he have a chance to win? Not really.

#1 will be an easier question to answer this afternoon, when we know whether Dean will endorse Edwards (there have been somre rumors to that effect). If he does get that endorsement, it will generate a massive amount of press for Edwards, and he'll look like a serious contender for super Tuesday...

I think Edwards has some chance to win because while his WI showing was probably due to the Wisconsin primary system that puts all candidates in contested primaries from both parties on the same ballot, meaning and Republican who showed up to vote on a referendum or something probably just voted in the Democratic primary, as well, even if they didn't realize they would when the pollsters called. This does sort of put him the the McCain position, except that this election's key issue is electability. The media is no longer talking about the Kerry steamroller.

Dr. Drezner-

I hope you don't consider this rude, because it's a serious question I'd like to get out of a completely free trade advocate. I support free trade, but I also worry about the manner in which it is being done. I think people like Dean, who talk about trying to globalize worker's organizations as well as corporations, make a lot of sense, yet the free trade crowd pounces on anyone who dissents from the idea that corporations should do whatever they want. Gephardt's bizarre "International Minimum Wage" was coming from the same place. Taking these candidates at face value that free trade is the goal (easier with Dean that Gephardt, given their track records), what is wrong with the sorts of approaches they propose? And might not globalization of labor rights form part of a broader pro-democracy agenda, given the manner in which labor rights often serve to bolster developing democracies?

> he's not a veteran, much less a war hero,

"Flyboy" is none of the above, although he likes to pretend otherwise ("mission accomplished" aircraft carrier landings and all).

> and he is relatively inexperienced on the
> foreign relations front.

That's a good point, although it's hardly a showstopper (remember Cheney propping up Shrub in the foreign policy experience department during the 2000 elections?). Maybe Edwards & Sen. Bob Graham (Democrat, FLORIDA...) could do the trick. Or Edwards backed by Dick Gephardt (does he have foreign policy experience?).

> If all Democrats were as likely to vote for
> Edwards as for Kerry this November, one could
> argue that Edwards would be more likely to beat
> Bush.

But it seems this year's Democratic voters are much more obsessed with choosing the best candidate for the November elections than the Republicans were, four years ago! The GOP primary was much more bitter, ultimately settled by the social conservative wing of the party and "Shrub" had to work hard to mend fences with McCain afterwards. Most observers were predicting a bruising Democratic primary between Clintonista New Dems, left wingers and other fractions, yet it did not really happen.

MARCU$

I think Kerry will add some more anti-Nafta rhetoric to his speeches but, as has been pointed out above, would be a free trader as president. So too would Edwards.

Nafta gives candidates looking for a jobs theme a clean message. By decrying Nafta the blame is placed on the US government and, by implication, the Bush administration without appearing to be an attack on Mexico (and, er, Canada) for undercutting of the American workforce. If they were serious about protectionism they would be bashing the WTO and, in particular, China.

Taking these candidates at face value that free trade is the goal (easier with Dean that Gephardt, given their track records), what is wrong with the sorts of approaches they propose?

Mostly because those approaches are back-door protectionism. Wages rise to meet marginal value produced. These approaches are ways of instituting global First World-based minimum wages on developing countries that don't have enough productivity to justify such wages. Both the objective and the result is to slow down outsourcing and shifts in production, in order to protect existing incumbent industries in the US. The side effect, of course, is to keep people in poorer countries poor and unemployed-- and to make everyone in the US poorer off by denying the benefits of free trade, and the resulting broad-based wage increases.

The "approaches" cannot lead to free trade, because by their very nature they are ways of restraining and slowing down free trade.

By decrying Nafta the blame is placed on the US government and, by implication, the Bush administration

And, by implication, the Clinton administration as well.

Yes, I agree that it certainly seems likely that any Democrat elected president will try to tack back somewhat towards free trade away from the protectionist rhetoric. Still, as long as the Rust Belt states are seen as important swing states, this will have a negative effect on the prospects for free trade.

At some point, excessive amounts of rhetoric do make a difference.

Or he might say he doesn't "believe in nation building" and later decide to make democracy flower in some arabic hellhole.

When the facts change I change my opinion. Why, what do you do sir? Could there possibly have been an incident that would cause a rational person to change his mind, dear sir?

Here's Paul Krugman, before he went nuts, explaining why the Dean-Gephardt-Edwards plans are so horrible for the poor of the world by depriving them of the chance to get richer.

**By decrying Nafta the blame is placed on the US government and, by implication, the Bush administration**

*And, by implication, the Clinton administration as well.*

Why stop there? By implication? Clinton passed NAFTA, but it was #41's proposal.

John Thacker:

OK...I see what you are saying. But here's a question: Won't labor still be far cheaper just because the costs of living and everything are cheaper? What I'm saying is that there's a power relationship as well as an economic relationship. (Probably not good scholarly analytical categories, but bear with me.) Now, many on the left want to solve that by seeking to universalize standards, which I strongly oppose. If we universalize rights, however, that's putting power in the hands of workers in other countries. The jobs would still be there, because a good salary in a place like Jordan is nowhere near that in Pennsylvania. But you would start to see a much faster emergence of laborers as consumers, so that people in these countries could afford to buy more of what they make, and things would grow accordingly.

Another thing I'm thinking of is the political aspects. By making labor rights (again, not standards, but rights) part of the global order, aren't you automatically creating organized citizen groups outside government control which can serve as the basis of democratic institutions?

As to Kerry being forced to adopt one position or another, who cares? He already looks and smells like the bottom of my fishing boat; Flipping and flopping and smelling more than faintly fishy the whole while.

As a result of that,there were a lot of peple who simly could noot commit to Kerry, even among staunch Democrats.

Edwards got as close as he did because of last minute deciders... a large number of people who couldn't decide which they liked less... Kerry, Dean, or Edwards.

This is revealed by means of the exit polling which showed the largest number of last minute commitments going to Edwards.. to the tune of 65% or so, by one poll I noted on the tube last night.

To me this says Edwards has done the right a huge favor, showing Kerry's vulnerability even among Democrat primary voters, much less the general election.

He's done this by two means:

First, showing that the real bedrock support for Kerry, while likely sufficiant to win the nomination, is postage-stamp thin, and can be pulled off it's mark by some last minute ads and good, old fashioned campaigning, which Edwards did in Wisconsin.... the kind of campaigning that the President needs to do over the summer to get back into this thing... somehting he clearly has the money and the org to do. This alone would be enough for a victory in the general election, even discounting Bush's base... which I think is far stronger than is being projected by the major news outlets.

Secondly, the shift in question, as I've discussed previously, is by no means issue driven. All this kind of voter cares about is who will be elected/elecatble in November... not what said person will do once in office. This by it's nature means that the voters will be shifting loyalties based on minutiae. Support this thin and shifting is as likley as not to sit out the general election as to vote, which makes for a weak base, at best.

I submit that all of this adds up to it being Bush's race to lose in the general election.

You guys are all dancing around the question: What STATES does Kerry have sewn up? New England and the West Coast. What's that get him--squat.

Democrats don't seem to grasp this simple fact of electoral politics. If you don't have the Billy Bob vote (which Kerry most certainly does not) and you don't have the Joe six-pack vote (an open question) and you don't have the rust-belt vote (for which you have to throw NAFTA over the railing) you LOSE.

Edwards gets it, Kerry (right now) does not.

Absolutely not, and absolutely yes.

That wasn't so hard, was it guys?

I do not believe I have heard anyone support NAFTA or unlimited free-trade that stood much of a chance of being caught on the short side. Who's ox is getting gored? Some people seem to think that because voters say anyone but Bush, their support for a Democrat is very soft. Could it be that they are so fed up that they just don't care anymore? In this case it would seem better the devil you don't know then the one you do.

Brian Ulrich,

I think you're falling for the Unionized version of Democracy. While the assembly, the exercise of speech and the election process appear democratic, corruption in Union processes is just as likely as corruption via Corporations. Shifting the playing field to another country as Dean would have us believe would benefit Americans in ways such as higher retail prices due to higher labor costs as a result of union movements in other countries.

For the corporations they are more likely to move operations from third world country A to third world country B merely by the fact that they farm out a lot of their manufacturing to contracting giants. Since the goods most often in the spotlight are things like textiles and electronics the resources are imported almost entirely anyway for assembly in the third world countries. It's not like food products, timber or energy resources which are rooted in and beneath the soil.

You can view unions in anyway you wish, but as democracies I would pick that last. Unions are more of a spoils system in my opinion evidenced by family dominance of unions especially at the regional level. Unions suffer from the very same aristocratic deficencies as commercial board of directors.

I'm partial to foreign aid pacts during the Cold War. In exchange for US foreign aid we would place requirements for democratic progression in the form of representative government. It's true that a lot of this aid came back to the US in the form of Defense Weaponry exports. The real issue I see developing are these bi-lateral free trade agreements between the United States and other countries. Europe and Japan are still working out of trade prision cells. Europe, particularly "old europe" continues to build more bars to satisfy local political wars.

Lastly, my father told me he read a story that had some China watchers worried. The story stated that China, in trying to meet foreign demand for manufacturing goods, was running into major infrastructure problems due to heavily overloaded trucks on the roads. The trucks were carrying three times the weight limit and road repairs were costing more money and slowing down transportation to ports.

If the theory of every man desiring to be free is true - like anyone noticeable is advocating less freedom in the world - then the industrial wave of third world manufacturing will eventually create their own labor movements. Radical Labor activists already have training camps to export footsoldiers to take over any labor movement as the previous European Bolsheviks had done in coming to America to wrestle control of Chicago Labor movements.

On the political side I still think the ABB approach is the only chance there is to defeat President Bush. When was the last candidate to win a Presidential election on issues? Hah!

The second question, Dr. Drezner, rests on a false premise. You ask,

Even if Edwards doesn't have a chance, will he force Kerry to adopt a more protectionist stance on trade?

The premise of the question is that someone or something would have to "force" Kerry to take a politically expedient position, which in turn implies that he might otherwise in some way be resistant to doing so. I see nothing in John Kerry's political history which suggests that he possesses any principles which might have to be overcome by "force." Once exposed, the false premise of the question therefore dictates its answer, which, of course, is "Yes!"

I thank John Thacker for linking to the Slate piece by the once sane Paul Krugman. He and Brad DeLong are now considered Bush Lite by the Leftists who dominate the Democrat’s presidential nomination process. This sentence particularly caught my attention:

“And it might not even do that. The advantages of established First World industries are still formidable. The only reason developing countries have been able to compete with those industries is their ability to offer employers cheap labor. Deny them that ability, and you might well deny them the prospect of continuing industrial growth, even reverse the growth that has been achieved.”

Paul “Bush Lite” Krugman

http://web.mit.edu/krugman/www/smokey.html

“Another thing I'm thinking of is the political aspects. By making labor rights (again, not standards, but rights) part of the global order, aren't you automatically creating organized citizen groups outside government control which can serve as the basis of democratic institutions?”

There is already a tacit and cautiously understanding evolving to protect these workers. The problem, though, with your well meaning sentiment is that the far Left and the union bosses will use a global approach to virtually shut down industry in the Third World. These ideologues are not to be trusted. They will employ legal strategies which will simply demoralize the companies who wish to do anything. The red tape will prove too costly and the proposed project will be stopped in its tracks.

Let’s get something straight, the trade union bosses are only interested in protecting their turf and the socialists hate capitalism. The combination of these two forces will be devastatingly harmful to everybody.

“1) Does John Edwards have a chance to win?”

Nope, the nomination is John Kerry’s to lose. Edwards is running for Vice-President. The Democrat leaders are too invested in Kerry to back down now. I will also make this prediction: President Bush will very soon start going back up in the polls and may never again fall below a seven point lead. The Democrats will soon be enraged and bewildered by their collapse. The liberal media has done everything to slime the President---and they have essentially shot their wad. Now things will soon settle down. Questions about Kerry’s position on the United Nations and other issues will ultimately doom him.

"Will this force Kerry to adopt positions that he knows to be wrong?" Kerry is such a political animal that I'm not sure that the concept of a position being right or wrong would even occur to him.

Concerning Edwards: My main concern about him is that he is a trial lawyer, backed by other trial lawyers. Does anyone think he would realistically act to reduce the (very substantial) litigation burden on the U.S. economy?

Holy cow, I can’t believe how quickly my prediction of just a few minutes ago is apparently coming true. I just visited the Drudge Report and found this juicy headline, "Kerry loses a net of 6 points vs. Bush in 24 hours... ":

“February 18, 2004--President George W. Bush now leads Massachusetts Senator John F. Kerry by five points in the latest Rasmussen Reports Presidential Tracking Poll. As of this morning, Bush attracts support from 48% of the nation's likely voters while Kerry is the choice for 43%.

Today's reading is the largest lead for either candidate since John Kerry became the Democrat's front-runner. For most of February, the two candidates have been essentially even. Three days ago, Kerry assumed a modest lead that now appears to be statistical noise.”

http://www.rasmussenreports.com/Presidential_Tracking_Poll.htm

DT:

There's no way Edwards will be Kerry's VP. He adds nothing to the ticket that helps Kerry. What undecided voter is going to vote for the Dem based on Edwards? No offense to Edwards, who I like as a candidate, but his main qualification is that he seems that impossible thing -- a populist with a positive, pleasent demeanor. Who is going to pick Kerry based on the fact the Veep seems like a nice guy with a good heart?

Edwards should withdraw. There still might be time to run for his old senate seat.

“There's no way Edwards will be Kerry's VP. He adds nothing to the ticket that helps Kerry.”

I actually agree with you---but does Edwards? I suspect that he will force Kerry to more precisely define his positions, and that’s when the crap hits the fan. Presently, Kerry is enjoying a love fest with the Bush hating Democrats. He is something of a stealth candidate. They have basically agreed to pretend that everyone is on the same page. This is pure bull excrement. A more honestly defined Kerry will end his campaign.

According to Zogby, the news keeps getting worse for John Kerry:

“A new poll conducted by Zogby International for The O’Leary Report and Southern Methodist University’s John Tower Center from February 12-15, 2004 of 1,209 likely voters with a margin of error of +/- 2.8 percentage points found that if the election for president were held today, Democrat John Kerry would edge George W. Bush 46% to 45% in the “blue states” – or states won by Al Gore in the 2000 election.  In the “red states,” or states won by George W. Bush in 2000, however, Bush wins handily by a 51% to 39% margin.”

http://www.zogby.com/news/021804.html

President Bush has not even really started to fight back. And I think the Massachusetts senator is experiencing the highest poll numbers he will ever again see! It's all down hill from here on end.

*The liberal media has done everything to slime the President---*

But don't you agree that at least some of the President's problems are self-inflicted? Wasn't the Guard topic essentially a non-issue until he tried to defend himself? Hasn't he defined and redefined "WMDs" far too often? Doesn't the missing war money from the budget numbers create an issue? All I'm asking here is: hasn't he allowed himself to be put on the defensive by virtue of acting defensive (which seems like either a tactical mistake - or necessary)?

No, President Bush will do a totally awesome ninja move on John Kerry in March, causing lefties everywhere to realize what doody-heads they are! The Democrats will all become Republicans when they realize how much of a loser party they are, and President Bush will boldly lead America into an exciting future.

Edwards and Kerry could have a debate on free trade, and possibly educate us.

Brian Ulrich-- I agree that there are important hypothetical concerns when trading with an extremely non-free, i.e., totalitarian state. If all citizens are effectively prisoners of the state (such as in Cuba), there are certainly legitimate questions about the effectiveness of free trade.

However, there is a considerable body of evidence that free trade and rising incomes do lead to increased personal freedom and human rights. (Look at South Korea, Taiwan, etc.) Withholding trade in order to keep those countries poor until they develop freedoms, by contrast, does not have as good a track record.

Despite that, I would at least listen respectively to advocates of linking real personal liberty and democracy to trade. However, that's generally not what's being proposed. What's being proposed are forms of imposing First World standards of wages, environmental regulations, and other regulations upon Third World countries, preventing them from ever getting wealthier.

"Forces from the extreme Left, the extreme Right, environmentalist groups, trade unions of developed countries, and some self-appointed representatives of civil society are gathering around a common endeavor: to save the people of developing countries from development."-- former Mexican President Ernesto Zedillo

I think Edwards can win, really. In fact, if I had to bet on a candidate now it would be him over Kerry. I think Kerry is so vulnerable on so many issues...

War hero? No offense to Kerry's service, but all someone has to do is dig up a recording of Kerry protesting Vietnam and we'll hear lots of questionable lines from the war hero; I think that will put things in a whole new light.

Free trader? Somehow I doubt Kerry will make a principled stand on anything, let alone free trade in this economy.

Campaigning... Kerry certainly has the bucks to be effective, and he's now running a macro-campaign. But I think that means support for Kerry is skin deep at this point. The only problem is that the voters seem to like Edwards the more they see the guy.

Electability... hold up snapshots of Kerry and Edwards and ask yourself who's more likely to beat Bush. It's often troubling to think such things are a big factor in politics, but this isn't one of those times.

Chameleon vs. the New Kid... Edwards enjoys the huge luxury of not having the long, extensive record that Kerry has. In other words, he's not going to alienate very many voters. By contrast, Kerry is forced to have it both ways on almost every issue of substance. At some point in a one-on-one campaign each candidate must make a stand on something. Edwards is in a far better position to do that, and in the process simplify the decision before voters.

Money & Endorsements... Kerry is far and away the winner here. That makes him a huge favorite with Terry Mcauliffe, but I'l take being the underdog in this fight. Especially against a stationary target like Kerry.

In the end, I think we're headed for a brokered convention, and one that's a dog-fight. In the end I wouldn't be the least bit surprised if Dean's delegates and influence pay-off for Edwards before it's all over.

WishIwuz2-

But to beleive that you'd have to convince me that neither Rove, Gillespie, or the old fox himself didn't see that coming.

I think ol' Bill Occam would assert that the more likely scenario is that the president *and his entire staff* was 'tricked' into 'being forced to' release a packet of OERs that attest to what a great young officer he was.

What say you, David?

Wasn't the Guard topic essentially a non-issue until he tried to defend himself?

Iwish, would you be in favor of Kerry letting Drudge, Hannity, Rush, The Corner, and the rest of the VRWC run wild with the infidelity story?

just asking...

The bad news for Kerry and the Democrats just keeps on coming:

In a head-to-head contest, 55 percent said they would choose Kerry for president over Bush, who drew the support of 43 percent. Edwards led the president 54 percent to 44 percent.

new 2/18 poll (click on homepage)

Bush is masterfully lulling the Democrats into a false sense of security. Kerry will forget to campaign against Bush this summer, and will be totally unprepared when fall comes. As usual, brilliant genius President Bush plays dumb, his opponents underestimate him, and then he blows them away in classic Republican style.

CrisB: Whether or not I favor Kerry (or any candidate) getting deluged by a partisan media slam doesn't really matter. It's gonna happen this year. To Kerry's credit, he didn't overreact to the "affair" scrum, but rather let it play out.

I feel that Bush possibly did overreact on the Guard issue. For many non-loyalists, the flood of previously unobtainable records, just hours after he offered them to Russert ("..if anyone can find them. People have tried - believe me!") kinda changed the story from his Guard duty to his accounting for his Guard duty. The records were enough for the faithful; not enough for everyone else.

Rove's a genuis, but not %100 infallible.

Thank you not really David Thompson. You made my morning.

Dear Kelli,

You are absolutely right. The real danger is electoral college math. For any number of reasons, Edwards is a better candidate from that perspective. However Edwards is also untried which would be sure to be a campaign issue vs GW Bush. Democrats won the popular vote last time but lost the Presidency to electoral college mathematics, and it may happen again this time if the Democratic party picks Kerry.

Dear all,

Personally I think that the free trade advocates have their heads in the sand. There is no credible model or theory which says that you can run a systematic half a trillion a year trade deficit and come out ahead. Suppose the long term sustainable unemployment rating is 5%. Suppose we use real numbers instead of numbers dropping out people who want to work, but run out of benefits eligibility. (This happened this week. Jobless claims fell, but the number of people unemployed for over a certain time period grew. Meaning that the amount of time jobless was growing and the drop was due to people running out of eligibility to file claims not less demand for claims)

Suppose not every job will be offshored. Suppose that only 5-10% of the jobs in the economy will be offshored in the short term.

Can you truly imagine a real unemployment rate of 10-15% as a politically viable environment for free trade? All your hand waving fuzzy math arguments won't matter. Indeed, as the oldman predicted the leash has run out already ... the political viability of free trade is diminishing by the day.

The question is not whether or not Kerry will maintain his rather reasonable trade rhetoric, but whether or not Bush and the Republican leadership will abandon free trade - as they have already shown signs of willingness to do - in order to cater to the demands of the electorate.

Whoever wins this election, the position of free trade loses. Even if Bush wins, he's going to have to back down over trade. Personally, this is not what the oldman wants. Protectionism is not a solution. However, this is the doing of the idiotic vapidness of free trade proponents that have refused to address real economic and personal concerns of intelligent critiques.

So like all tone-deaf political movements that refuse to address sincere and real concerns except for issuing idealistic assertions that everything will work out, they will lose the agreement of the populace. If trade protectionism wins, it will be the fault of none other than the foolish free trade proponents that failed to comprehend that their position was somehow not divinely ordained to succeed and they failed to realize that they had to convince actual people to back their ideas in order to see them carried out.

Perhaps " Not REally David Thompson" hasn't seen the Zogby poll this morning?

http://www.zogby.com/news/021804.html

Oldman, you said: "There is no credible model or theory which says that you can run a systematic half a trillion a year trade deficit and come out ahead."

There are two credible economic models which say that you can run a systematic half a trillion a year trade deficit. The current account does not have to balance on its own.

1. A current account deficit is sustainable indefinately as long as capital returns are high enough to create sufficient capital.

2. A current account deficit is sustainable indefinately if another country is willing to subsidize their current account surplus indefinately via subsidized capital exports.

But as that account deficit climbs, doesn't it have a negative effect on those same capital returns that it depends on to sustain itself? And won't interest and bond rates also react negatively to climbing deficits, further affecting those capital returns? It seems to me that if the horse is correctly placed in front of the cart, the capital returns need to be established before they can sustain such deficits.

- an amateur

Stan,

You write two proposals but fail to address the most important part of my assertion - that it is impossible to run a systematic trade deficit and come out ahead.

Consider your second point. If another country is running a current account surplus financed by subsidies this is a red flag that the process is not market sustainable. Hence no credible model or theory would say that this is a long term beneficial strategy. Indeed, free trade / market advocates are always kvetching about subsidies while refusing to admit that their existence shows that free trade and free markets do not actually exist.

Consider next your first proposal: "A current account deficit is sustainable indefinately as long as capital returns are high enough to create sufficient capital. "

The returns on capital are historically well known. If the rate of the growth in the trade deficit exceeds this, then we have the case of something that cannot continue indefinitely - and so will not. Eventually the trade deficit will actually exceed the wealth creation. Until that point, it will merely dampen it. So no credible model or theory would agree that a deficit of this size and continuing growth to be sustainable.

So you see it's not about whether you can manage the current account balance. Obviously we are now. But you can't do it and come out ahead. That's the key point. You can't do it and come out ahead.

Oldman, I gave two economic models that show it is possible to sustain a systemic deficit. I may not understand what you mean by come out ahead but assuming full employment these models imply greater wealth for an economy. As this thread specifies, gains are not necessarily shared evenly.

In model one, an economy essentially uses its capital creation to purchase more things than, assuming full employment, it could produce. High rates of return and low risk may also attract foreign investment. The economy is therefore bigger than it would be in autarchy. The country is therefore wealthier than it would be otherwise.

In model two foreign countries are willing to give cheap money to buy their products. Essentially these countries are giving away free stuff. The money saved by accepting their discounted cash is available for investment or other purchases. Again the country is wealthier than it was before despite a deficit.

Both models imply more investment and/or consumption than would be possible otherwise. I believe I answered your key point.

___

wishIwuztoo, just because something is economically sustainable doesn't mean it has to operate that way.

*wishIwuztoo, just because something is economically sustainable doesn't mean it has to operate that way.*

Stan, I would have to agree. In fact, I believe that the existence of record high deficits makes that "something" less likely to be economically sustainable. I noticed that the 2 economic models you offered earlier contain the conditional statements "as long as" and "if". One of the biggest influences on those conditions is the fiscal health of that "something".

OK, I probably could not have worded that any worse, but I believe my point does get thru the butchered language.