NP debt and free trade

[Jane Sweet]

Doug Millison wrote:
> 
> This may have escaped ridicule since many of the
> educated folks who make fun of the President are
> just as dumb as he is about "free trade."
> 
> Advocates of "free trade," when they are honest
> and competent, admit that "free trade" is not
> about job creation, as Federal Reserve Chairman
> Alan Greenspan asserted in his recent testimony
> before Congress. 

Most people, free traders and projectionists agree, trade
has no relationship to 
employment. So, I think what Greenspan said, is that we
should not credit or blame 
or even connect trade policies to employment rates. This
makes sense and is born out by the facts. 



Unemployment is largely
> determined by the economic policies of the Fed.

Who says? 

> What "free trade" does is move people from one
> area of employment to another. The relevant
> question is who wins and who loses from these
> shifts and whether the costs outweigh the benefits
> for the majority of people.
> 
> A recent report from the Economic Policy Institute
> estimates that the U.S. lost half a million
> manufacturing jobs during the operation of the
> North American Free Trade Agreement due to
> increased trade deficits with Canada and Mexico.

Doesn't this contradict the use of Greenspan's testimony
above? 

It does. 





> Surveys indicate that when workers displaced by
> trade liberalization do find new jobs, their wages
> fall, with earnings declining by an average of
> over 13%. "Free trade" may lift some, but
> definitely not all. Poor workers in the U.S.,
> having fewer skills, are the most likely to lose.
> 
> Economic theory predicts that national income will
> rise as a result of trade liberalization. But the
> predicted gains are so tiny as a share of our
> economy that they probably can't be measured, and
> the majority of people are likely to see their
> incomes fall.


I doubt this is likely at all, but then I think Mr.
Greenspan is correct on this. 
We have to fight the projectionist reactionaries from the
extreme Right and Left--both are in the projectionist's bed
and have no real stake in what happens in the developing
world. Both extremists inflate the crisis with evangelical
or bleeding-heart rhetoric and very little in the way of
objective facts. 

http://www.federalreserve.gov/boarddocs/testimony/2001/200104042/default.htm

http://www.federalreserve.gov/default.htm