Trade

The UI provisions in the House Dems' Trade and Globalization Assistance Act of 2007, introduced yesterday, look pretty good:

The UI provisions in the bill are designed to encourage and reward States for taking specific steps to improve UI coverage for low-wage, part-time and other workers. The bill responds to a GAO finding that unemployed low-wage workers are only one-third as likely to receive UI benefits, but more than twice as likely to be unemployed as higher wage workers. Rather than requiring States to implement reforms, the bill provides financial incentives for those States enacting reforms designed to: count workers' most recent wages when determining UI eligibility; end discrimination against part-time workers; allow separations from work for compelling family reasons (such as fleeing domestic violence); and provide extended benefits during approved training for high demand employment. Funding for the incentives is raised by an extension of a current-law unemployment tax (the FUTA surtax) that President Bush has proposed extending.

The Trade Adjustment Act changes in the bill include: 1) extending Trade Adjustment Assistance to service sector workers; 2) improvements in TAA's Health Coverage Tax Credit; and3) increased funding for job training under TAA (from $220 million to $660 million in 2010).

The Galbraith-Faux debate on trade is worth checking out. Galbraith is essentially arguing for a reframing of the progressive position on trade. In his view, trade policy is less important than it seems to accomplishing progressive goals like raising wages for U.S. workers, goals that can only be met by improving labor standards for U.S. workers.

The populist objective is to raise American wages, create American jobs, and increase the fairness and security of our economic system. In that sense, I am, and have always been, a populist’s populist. The best way to achieve these things, let me suggest, is to do them—directly. Nothing in our trading system prevents this. In fact, our privileged financial position ought to make it comparatively easy.

Seen in this light, the Chinese willingness to supply us with cheap goods is a magnificent gift. It means we can truly have full employment without inflation.

Let me put the point even more starkly. It was imports, it was globalization—and not the Federal Reserve—that cured America's inflation problem in the early 1980s. That was painful, but the adjustment has been made. The war on inflation, which the Fed continues to pretend to fight, is actually over, and it has been over for several decades.

Why not take advantage, as we did in the late 1990s, when we drove the unemployment rate below four percent for three years, while wages rose? Nothing bad happened. And certainly nothing on the trade front is stopping us from doing it again.

Indeed, rather than being spooked by the supposed effect of trade on wages, let's consider how that relationship works when you take it the other way around. What is the effect of wages on trade? Suppose that instead of building a trade policy to help with wages, we built a wages policy to help with trade. Does that sound far-fetched? It isn't. If you did that, you would have what economists call the Scandinavian Model.

The Scandinavian countries are egalitarian. They have universal unions, high minimum wages, and a strong welfare state. But they also are highly open. They practice free trade. Business there is free to import, export, and outsource. Business there is free to hire and fire. And yet the Scandinavians enjoy, most of the time, the lowest unemployment rates in Europe.

The secret is in the wages. If you are a business in Sweden or Norway, there is one thing you are not free to do. You are not free to cut your wages. You are not free to compete by going after cut-rate workers, either native or immigrant. You are not free to undercut the union rate. Successful businesses must, therefore, find other ways to compete. They do it by keeping productivity high. This means that advanced industries thrive in Scandinavia, while backward ones die out. (And that progressive businessmen prosper, while reactionaries fade away.) As a result, the economies stay competitive. The tax and welfare systems then make sure that everyone has enough to live on.

We are not Sweden or Norway—we are much larger and will always be much more diverse—but the economic principles are exactly the same. And we have, in fact, applied them in the past. As Dorgan and Brown correctly state in their essay, this is how the American middle class got built in the first place. It was done through unions, laws, regulations and, yes, standards. But the standards weren't imposed on other people. They were imposed at home, where they can be enforced—and the rest of the world adjusted to what we did here. The problem, in short, is not foreigners and trade. The big problem is simply that unions, laws, regulations, and standards have been undercut by conservative policymakers, right here at home.

In certain industries, with advanced technologies and strong unions (think aircraft, or telecommunications), high wages persist. Yet those sectors remain competitive. This is how the model works—high wages mean that business has no alternative but to stay on its competitive toes. We can, if we choose, spread that model more widely. How? Let's start with a higher minimum wage, a union-friendly workplace, universal health care, and stricter corporate governance. Let’s pass the Employee Free Choice Act. And let's have enough new credit and research support to create the new industries that the future—especially the environmental demands of a changing planet—will require.

Will we lose some jobs to trade? Sure. But unlike the Scandinavians, we don't have to balance our current account. Given the dollar's global position, we can improve our living standards, our productivity, and our competitive position—and still run a substantial trade deficit. For now.

This is a reality-based populism. Our goal should be shared prosperity through egalitarian growth, based on our own efforts and imagination. Let's therefore stop scapegoating the Mexicans and the Chinese, and accept that they must have their role, which they will largely determine by their own actions, in the world in which we all live. Let's also stop talking obsessively about trade agreements with tiny countries that don't really matter much.

Let's concentrate, instead, on getting things right for workers right here. Let's raise wages, create jobs, support unions, deliver services—and especially, let's cut the inequalities in our structure of pay.

If we do that, one still can't guarantee that our trade position will come out all right in the end. But based on the economics and the politics, it's probably our best shot.

I'm fairly sympathetic to much of Galbraith's argument (although I admit to having only a basic understanding of trade as an issue), but the part of Faux's response that focuses on strategy is also compelling:

... Democrats consistently fail to use their leverage to bring American businesses to the table. If Bill Clinton had demanded their support for national health insurance in exchange for NAFTA and his balanced budget, we might at least have been able to save the five percent of our GDP we are pouring down the drain of a dysfunctional health care system. Today, we have less leverage, since so many are busy shifting their operations to other countries.

Regardless of who I ultimately side with, this is an important debate and a good example of how progressives can have useful debates about what their positions should be on big issues.

In a press conference last night, Congressional leaders and Bush Administration officials announced a new deal on trade. According to the WaPo report:

Congressional Democrats, who only six months ago struck a combative stance with the Bush administration on trade policy, reached a deal with the White House yesterday, clearing the way for approval of trade pacts with Peru and Panama.

....

The key to the agreement, said those involved, was the Bush administration's reluctant assent to Democratic demands for more stringent labor rules. Under the new policy, enforceable labor provisions will be written into the texts of trade deals to protect the rights of workers abroad to organize unions and bargain collectively, while banning forced labor, child labor and workplace discrimination.

The Bush administration resisted such rules, reflecting the fears of business interests that they could boost the power of U.S. labor unions, opening a backdoor for them to rewrite U.S. law to their advantage. But the administration concluded that it had to swallow the labor rules lest its trade deals die in a Congress controlled by the other party.

The deal also includes an agreement between the White House and Congress to develop a "strategic worker assistance and training initiative" that would increase job training and financial assistance for communities that suffer job losses to overseas competition and automation. Democrats said those programs would go beyond existing benefits, but they provided few details.

....

Yesterday's bipartisan compromise caught many interest groups by surprise, with labor and business associations generally withholding comment until they could review the details.

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The AFL-CIO is saying that it will "reserve final judgment until we have reviewed the agreements in their entirety", while the Chamber of Commerce and other conservative business groups are sounding more positive notes.

For the latest, check out the new fair trade blog Eyes on Trade

The staff of Public Citizen's Global Trade Watch recently unveiled a new blog on globalization and trade that's definitely worth bookmarking. Like OMB Watch's excellent Budget Blog, Eyes on Trade is really what Robert Kuttner calls a "crog"—for carefully-researched weblog—one that provides big-picture perspective, while also keeping a close eye on the day-to-day happenings on trade policy.

In an entry from this weekend, Todd Tucker notes that free-trade booster (and former Clintonite) Alan Blinder is now having second thoughts, particularly about offshoring—here's Blinder:

I'm a free trader down to my toes. Always have been. Yet lately, I'm being treated as a heretic by many of my fellow economists. Why? Because I have stuck my neck out and predicted that the offshoring of service jobs from rich countries such as the United States to poor countries such as India may pose major problems for tens of millions of American workers over the coming decades. In fact, I think offshoring may be the biggest political issue in economics for a generation.

....

Improvements in technology will raise living standards, just as they have since the dawn of the Industrial Revolution. And the availability of millions of new electronically deliverable service jobs in, say, India and China will help alleviate poverty on a mass scale. Offshoring will also reduce costs and boost productivity in the United States. So repeat after me: Globalization is good for the world. Which is where economists usually stop.

And where my alleged apostasy starts.

For these same forces don't look so benign from the viewpoint of an American computer programmer or accountant. They've done what they were told to do: They went to college and prepared for well-paid careers with bountiful employment opportunities. But now their bosses are eyeing legions of well-qualified, English-speaking programmers and accountants in India, for example, who will happily work for a fraction of what Americans earn. Such prospective competition puts a damper on wage increases. And if the jobs do move offshore, displaced American workers may lose not only their jobs but also their pensions and health insurance. These people can be forgiven if they have doubts about the virtues of globalization.

....

In terms of policy, Blinder hasn't changed his tune that much: he says "trade protection won't work" and then shifts to arguing that "we need to rethink our education system" and improve the quality of the social safety net for displaced workers. But I think Blinder's shift in emphasis (from the benefits to the costs of trade) is an important one, even though as Tucker correctly notes it seems driven primarily by concern about the impact of offshoring on highly skilled workers.

The trade deficit is bigger than the budget deficit, but it's rarely mentioned in the mainstream media, and when it is, rarely with the teeth gnashing that accompanies most discussions of the budget deficit.

So a tip of the hat to Senator Byron Dorgan (D-ND) for having something to say about the trade deficit—here's the CongressDaily write-up of the hearing he recently held on trade:

Hoping to lay the groundwork for changes in presidential trade negotiating authority, Senate Commerce Trade Subcommittee Chairman Byron Dorgan, D-N.D., held a hearing today on whether current trade treaties have hurt U.S. jobs. Dorgan's premise is that trade deals have done just that. "Over the last two decades, under the leadership of both political parties, 'free trade' policies have lead us to trade deficits that now stand at $838 billion a year," Dorgan said in his opening statement. "Our deficits are now well beyond a level that [former Federal Reserve Chairman] Alan Greenspan described as dangerous and unsustainable three years ago. I think that the term 'free trade' has become synonymous with trading away America's national sovereignty, and allowing multinational corporations to pole vault over the standards that have allowed American to develop a strong middle class: fair labor laws, a safe working environment, clean air, clean water."

Dorgan invited several freshmen senators, who campaigned against trade treaties, to attend his subcommittee's hearing. Among them was Sen. Sherrod Brown, D-Ohio, who beat former Republican Sen. Mike DeWine partly over the issue of trade, which Brown said has led to lost jobs in Ohio. Brown said he is seeking a new direction for trade agreements, including rescinding normal trade relations with China. The current trade negotiating authority law, which gives proposed trade agreements a fast track to congressional approval, expires June 30. Congress must vote on whether to extend the authority.

...

For testimony from the hearing, check out the subcommittee's website. The testimonies of Leo Hindery and Lori Wallach are the ones to read.

Dean Baker gives Washington Post columnist Sebastian Mallaby an economics lesson:

[Mallaby] criticizes the suggestion by my former boss, Lawrence Mishel, and Harvard economist Dani Rodrick, that it might be desirable to have a "strategic pause" before we rush ahead with new trade agreements. Mishel and Rodrick argue that such a pause might be desirable because it would allow us to improve the safety net to ensure that the losers from trade are protected.

Mr. Mallaby argues that the problem with such an approach is that other countries will continue to move ahead with trade deals, from which the United States will be excluded. Okay, what does trade theory say about this scenario? Well, according to most trade models, if other countries work out deals that make their economies stronger, while the U.S. is sitting on the sidelines, then the United States is better off than if they didn't work out deals. In general, standard trade implies that the United States economy is helped by anything that helps the economies of our trading partners.

In other words, if Mallaby understood his own religion better, he would know that he is actually weakening the argument against a "strategic pause." We should be more concerned if the withdrawal of the United States as an active participant in international trade negotiations meant that all such deals would grind to a halt. Mr. Mallaby assures us that this will not be the case, therefore any possible damage from a "strategic pause" will be more limited.

From today's CongressDailyAM:

The two main U.S. labor umbrella groups Tuesday proposed scrapping presidential trade negotiating authority and advanced a new framework that gives Congress more say in the process of negotiating trade agreements.

That process is laid out in separate but similar resolutions approved by the executive councils of the AFL-CIO and the Change-to-Win Coalition Tuesday.

"We will vigorously oppose any attempt to extend the current flawed Fast Track authority. We cannot simply continue the status quo approach, which has resulted in bad trade agreements, lost jobs, stagnating wages and a spiraling trade deficit,"according to the AFL-CIO resolution.

The groups proposed several procedural changes they argued would make trade deals more beneficial to U.S. workers.

Their plan calls on Congress to set forth eligibility criteria that trading partners must meet before the United States launches free trade negotiations.

It would require that negotiating objectives be made mandatory -- in contrast to objectives in the current fast-track authority, which the groups said are merely advisory. And it would have Congress certify through a vote before the agreement is signed that those objectives have been met. If that certification does not occur, the trade deal would then not be protected from amendment by Congress as in the current trade negotiating authority.

Finally, the groups called for a mechanism to allow for re-opening existing agreements if Congress does not believe they are operating properly.

In a comment on my earlier post excerpting a bit of Robert Kuttner's review of recent books on trade and equality, Todd Tucker mades this point about what how ungrand in terms of scale previous bargains on trade have ended up being:

I think the most interesting part of the [Kuttner] article is the point mentioned by Harold Meyerson elsewhere:

"In the March issue of the American Prospect (which I edit), my colleague Robert Kuttner calculates that [European] nations devote roughly 15 percent more of their GDP to governmental outlays than the United States does. That pencils out to roughly $2 trillion a year that we'd have to shift to the public sector to build an economy in which globalization wouldn't be viewed as so dire a threat. Neither Rubin, a true believer in balanced budgets, nor anybody functioning in the real world of American politics is calling for anything this far-reaching to reshape the U.S. economy."

Consider the most generous previous grand bargain promise—Daddy Bush on NAFTA, WTO—was for $4 billion a year for trade adjustment assistance (TAA). This was never delivered by Bush, nor by the Clinton administration, which in the '92 debates had called the TAA promise a "foxhole conversion." Even a decade later, in Baby Bush's 2002 attempt at a "grand bargain," adjustment assistance just topped $1 billion a year—a sum that was celebrated universally in DC's cult of low expectations.

It's good that Kuttner/Meyerson et al have run the numbers of a $2 trillion price tag: it provides a useful corrective to the ridiculously low beginning "grand bargaining" position of many in this town.

Robert Kuttner, in a review of seven books on issues related to trade and equality—seven books that add up to 2282 pages! how Kuttner has any time to write I don't know—makes this interesting point about the workability of a grand bargain on trade:

... Representative Barney Frank offers a more explicit bargain: freer global trade in exchange for business support of social programs such as universal health insurance and enforcement of the right to unionize.

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Could such a bargain work? the European experience holds instructive and paradoxical lessons. Europe has twice the trade relative to gross domestic product as the United States. If the American center-left is correct and trade corrodes the welfare state, Europe's social model should be collapsing. But Europe, despite its death notices in much of the American press, is doing surprisingly well.

Jonas Pontusson's Inequality and Prosperity suggests that recent market liberalization (of which trade is only one element) has only slightly increased Europe's income inequality. And the most comprehensive welfare states are Europe's best performers. In Pontusson's account, the European welfare state has had to work more creatively to keep offsetting market-generated inequality, but though Europe's entire social model was given a premature burial in the late 1970s and 1980s, Europe bounced back surprisingly well and with little sacrifice of its social protections.

Pontusson's exemplary book is rich in both data and narrative. He carefully differentiates the variants on Europe's model and anatomizes the continuing political and fiscal strains. Much of the success of social Europe, especially Nordic Europe, he points out, reflects its labor-market policies, which produce a skilled and competitive workforce. Despite the high wages and social protections, the most advanced welfare states do not have job shortages. Norway, Sweden, Denmark, and Finland have a slightly higher ratio of working-age population employed than the United States does.

As for wage equality, it was actually slightly better in 2000 than in 1980 in Norway, Finland, Belgium, and Germany, almost identical in Denmark, and a little worse in Sweden and the Netherlands. The United States was already far more unequal than Europe in 1980, and that gap has dramatically widened over the past two decades. Meanwhile, the U.S. lead over European productivity has continued to narrow. Challenges to Europe's social model remain, Pontusson concludes, but they are far from insurmountable.

I'm trying to bone up a bit on trade policy—a subject I admit to knowing little or nothing about—including what the current policy targets are and what "fair trade" might mean when it comes to specifics. If you're a trade newbie like me, one important think to know about is that a big upcoming policy target in Congress involves the expiration of fast-track trade authority on June 30. President Bush wants it renewed, Senator Baucus has already said "me too", and things seems a little bit more muddled when it comes to the overall position of the Congressional majority.

Wikipedia has a nifty little just-the-facts entry on fast track that includes U.S. code citations and the legislative history. It turns out that fast track is basically the trade policy equivalent of the budget reconciliation process. Under fast track, Congress can vote up or down on a trade agreement, but it can't amend or fillibuster the agreement.

I don't know enough yet to have an opinion on whether fast track should be reauthorized—but if it is reauthorized, I'm fairly convinced that it needs to happen only as part of an effort to move us more toward a national policy of promoting "fair trade." In a new online TAP piece, Robert Reich sketches out what this might mean as a practical matter:

Step one is to borrow from standards already issued by the International Labor Organization—which bar slave labor, forced labor, and the labor of very young children. ILO standards also recognize the right of free association, which means the right of all workers to form unions. Much of the world already recognizes these "core" labor standards, so it wouldn't be too much of a stretch to require all our trading partners to do so as well.

Step two is to encourage developing nations to raise their labor standards as their economies grow. The easiest way to do this is to require that they set a minimum wage that's half their median wage. With this standard in place, more of their people will share the gains from trade. America would benefit in two ways by putting this "minimum half median" labor standard into all trade deals.

First, it would enable more people in developing nations to afford to buy our exports. Second, this standard would help these nations build larger middle classes—thereby providing political stability and laying the groundwork for democracy.

Of course, the "minimum half median" standard would be difficult to monitor and enforce. Most developing nations don't have minimum wages to begin with, and don't keep careful track of what people are paid. So we might have to help them. This would be true of almost any labor standard.

If something along these lines seems right—and it does to me—there's still a strategic question about how to get there. Along these lines, it seems very important for Congressional Dems to stake out a tough negotiating position on fair trade and fast track, one that doesn't give away too much, too soon, a la the extraordinarily depressing minimum wage fight that continues to drag on in Congress. Given how that's been going, a good cop, bad cop approach may be called for, as Leo Hindery Jr. and David Sirota suggest in a recent op-ed:

If Congress is serious about reforming our trade policy so that it lifts both the American and the world economies, then lawmakers must refuse President Bush’s request to extend fast-track authority. At the same time, Congress must enact legislation to separate trade negotiations from trade-agreement enforcement.

Refusing to reauthorize fast-track authority and strengthening trade-agreement enforcement is not anti-trade, just as protecting jobs is not protectionism. But what is assuredly anti-American worker are foreign-trade agreements without worker and environmental protections.

In business, the two-pronged, tag-team approach often wins at the negotiating table. Our Founding Fathers, who created the presidency and Congress as co-equal branches of government, likely understood that the same principle would eventually work well on the international stage. That’s why the most constructive role congressional Democrats can play right now when it comes to America’s position in the global economy is to help our presidents get the best deals for our nation’s workers by restoring the “good cop, bad cop” dynamic and rejecting President Bush’s request for fast-track trade authority.

The Nation wisely selected James K. Galbraith to kick off a series of essays "outlining a new progressive economic policy." Galbraith's piece, What Kind of Economy?, starts with this helpful overview of what the Hamilton Project gets right and where it falls short, as well as acknowledging the weaknesses in the current progressive economic agenda:

In a debate over the Democratic future, no one should confuse the Hamilton Project with the Republican past. Robert Rubin and his associates have invited a broad dialogue on economic inequality and strategic investment, and on many specific policy questions—including education, health, taxes and wages—they will define the high-profile, wholly respectable neo-Clintonian position in the season ahead. There's nothing wrong with that.

But these advances come at a price, which will be exacted in two areas: the world trading system and domestic fiscal policy. Both of these are far more fundamental to the Hamilton mission than any particular social policy reform. Indeed, one purpose of the Hamilton Project, it seems clear, is to propose just enough creative social advances—such as wage insurance, better teacher pay and healthcare reform—so as to divert discussion from the bedrock commitments to free trade and a balanced budget.

Progressives shouldn't let this happen. And yet we have our own work to do: Our trade position is obsolete, and there is for now no clear progressive fiscal policy. We need to be talking trade and budgets, not simply because they are too important to bargain away, and not just to contest Rubin's worldview, but to build one of our own that is realistic, compelling and also serves larger purposes, including environmental survival and social justice.

Galbraith's identification of fiscal policy and trade as two extremely important areas in which progressives lack a coherent vision is right on.

On trade, he concludes:

The facts are clear: NAFTA is a done deal, and China is a success story we have to live with. Progressives need a trade narrative that moves past these two issues. Broadly, this means accepting manufactured imports and dropping the idea that we can control—or that it matters much—who assembles television sets or stitches shirts. Standards to guard against flagrant abuses such as child and prison labor are fine, but it's an illusion to think they will, or should, dent the flow of goods from China. A progressive trade agenda should focus, instead, on building stronger world markets for our exports, and in ways that do not trample on the needs and rights of poor people in poor countries. That should provide plenty of room for future fights with free-trade absolutists.

On fiscal policy, he makes the case against balanced budget fundamentalism:

Today, many Democrats are converts to balanced budgets and pay-as-you-go budget procedures, and many accept that when Democrats return to power, deficits must be cut before anything else is done. But the world has changed, and while this formula appeared to work for Bill Clinton, it probably won't work for Hillary if she gets that far. Clinton was able to preside over a largely private-sector boom--the information-technology bubble--that can't be repeated, in a time when we weren't yet aware of the wolves at our door. But, just as Alexander Hamilton proposed to build America with public works, today we require major public investment for the vast challenges we face. Of these, as Al Gore warns, the largest is to transform our patterns of energy use and defend against climate change.

Deficit-fetishism also bolsters the perennial campaign to cut the Social Security system, now taken up by the alarmist David Walker, head of the Government Accountability Office, and by Ben Bernanke, chair of the Federal Reserve System. Here the Hamilton Project strategy document is extremely reticent--it barely mentions Social Security by name. But it is riddled with code words about the long-term "entitlement problem," which, it avers, can be solved only by a "bipartisan commission" acting on well-known options, behind closed doors. This is not reassuring.

In fact, Social Security is in better financial shape than ever, holding vast stocks of Treasury bonds on which interest can and will be paid. No economic or budget imperative requires that Social Security be cut, now or later. In private discussion Hamilton leaders let on that they understand this. But they are prepared, nevertheless, to include Social Security cuts--pension cuts for America's elderly, many of whom would otherwise be poor--in some sort of grand deficit bargain. Progressives must be absolutely categorical in rejecting any such deal.

Healthcare costs are a big problem. But they are a problem affecting both public and private healthcare, not Medicare and Medicaid alone. And it's highly unlikely that the problem of rising healthcare costs will extend to the point projected by Bernanke and Walker, who imply that healthcare will absorb one-third of the GDP within a generation--two or three times as much as in any other country. If that happens, as Dean Baker, co-director of the Center for Economic and Policy Research, has pointed out, we could cost-effectively contract out medical care to the Canadians and the French.

Is there anything really wrong with fiscal policy right now? Present deficits are small, and it's obvious from low long-term interest rates that financial markets do not take the exploding-deficit stories seriously. The greater risk is that a continued fall in home-building and prices could bring on recession, requiring a more active fiscal policy and bigger deficits than we have now. Sure, Congress should let the Bush tax cuts mostly expire, and if one wants to raise future tax rates just to make the long-term projections look better—well, fine. But that's a cosmetic gesture, with no current impact, and easily changed if need be by any later Congress. Our main task is to deliver on the real needs of the country. If we do that, fiscal transgressions will be forgiven. If we fail, fiscal probity will neither excuse nor save us.

Unfortunately for our democracy, hardly any one inside the beltway is making this kind of case these days.

Democracy: A Journal of Ideas, Kenneth Baer and Andrei Cherny's new quarterly, is quickly becoming indispensible. Dedicated to building a big-tent and values-driven progressivism, it aims, in Cherny and Baer's words, at "upsetting tired assumptions, moving past outdated and obsolete divisions, and stretching the envelope of what is accepted by and of progressives." I have to admit to some initial skepticism about whether the substance would live to the ideals. The DLC for example uses a lot of this kind of language, but too often ends reinforcing past outdated and obsolete divisions and hewing to a set of assumptions that have become just as tired. But Democracy has delivered.

Two pieces from the latest issue provide good examples—one, by EPI founder and NAFTA critic Jeff Faux argues that we need to accept and reform North American economic integration; the other, by Aaron Chatterji and Siona Listokim argues that the Corporate Social Responsibility movement has been insufficiently strategic and diminished its impact as a result.

In my mind the immigration debate in the United States should really be in large part a debate about how to best foster economic development in Mexico so living standards there ultimately reach US levels. (Of course, it's important to accomplish that in a way that doesn't involve regressing U.S. living standards to a mean between current ones in the US and Mexico). This would be a better debate than the most recent one about how big the fence should be.

But what can the U.S. do to foster economic development in Mexico? One of the answers was NAFTA. In a recent commentary piece, however, self-proclaimed neo-liberal Brad DeLong has second thoughts about the benefits of NAFTA for Mexico. It's worth reading in full, but here's the key elements of the argument:

Six years ago, I was ready to conclude that the North American Free Trade Agreement (NAFTA) was a major success. The key argument in favor of NAFTA had been that it was the most promising road the United States could take to raise the chances for Mexico to become democratic and prosperous, and that the US had both a strong selfish interest and a strong neighborly duty to try to help Mexico develop.

I was born in Fargo, North Dakota, so I like to think that Sen. Byron Dorgan is my Senator too. David Sirota has a Q and A on trade with him in In These Times.

Sirota: How do you account for the false debate on trade issues, where it’s either people who want trade or people who don’t want trade?

Dorgan: The other side has stolen the language. We’ve seen that happen in politics with the term “liberal,” where they make the term mean something it doesn’t mean. We see this stolen language on free trade. They have had accomplices—the major newspapers that have corporate ties and interests. They describe the circumstances of our participation in the global economy, and those who don’t sign up for their version of that are labeled protectionist “xenophobes” or “isolationists.”

As you may recall, David Brooks made this claim on Sunday: "When you ask orthodox liberals about wage stagnation, they never tell you exactly what they would do to counteract the epic forces of globalization and technological change, but they seem to imply they can restructure the economy with the right trade, minimum-wage and union rules to create middle-class wealth."

Dean Baker isn't necessarily an "orthodox liberal", but he's smart:

I might be missing something here, but a higher minimum wage, respect for the right of workers to organize unions, and a restructured trade policy (described below) seem like fairly specific policies. Brooks may not like these policies, or not think that they would be as effective as do the orthodox liberals he criticizes, but they are specific policies. Like most progressives, my list is longer. For example, it includes full employment monetary policy, reformed rules on corporate governance, and reformed rules on intellectual property, but Brooks’ list is a good start.