The Washington Post editorial board is on the war path once again, attacking Barack Obama for suggesting that trade deals like NAFTA have been harmful to the nation's workers. Of course the fact that the pattern of trade in recent years has had a negative impact on the bulk of the U.S. workforce is not really disputed these days by serious economists. The predicted result of exposing less-educated (non-college educated) workers to competition with low-paid workers in the developing world is an upward redistribution of income to the more highly educated workers (e.g. doctors, lawyers, editorial writers) who are still largely protected from such competition. The dispute among economists at this point is the extent to which trade has been responsible for the upward redistribution of recent decades, not whether it has been a factor. It is also probably true that the high dollar policy initiated in the Clinton-Rubin years was far more important in undermining the wages of less-educated workers than trade deals like NAFTA. But the Post will tolerate no questioning of its policy of selective protectionism, which it insists on calling "free trade" to make it sound palatable to those harmed by it. The Post has never printed a news story, oped, or editorial that discussed the economic costs of the protections that restrict foreign competition in highly paid services like those provided by doctors, lawyers, accountants, and economists. Yet, the models that show protection in items like clothes and steel are bad are the exact same models that would show that protection for doctors is bad. The main differences are that the cost of protection for doctors is much greater and this protection shifts income upward. The Post has also never printed a news story, oped, or editorial that discussed the economic costs of the strengthening of patent and copyright protections which has been an important part of recent trade deals. In addition to the direct economic costs, the higher prices for drugs in developing countries that result from stronger patent protection also can impose an enormous cost in lives. But these protections also shift income upward, so they escape the scrutiny of the Post's editorial board. It is unfortunate that the Post editorial page still has any credibility in discussing trade. After all, when arguing the virtues of NAFTA this crew told readers that Mexico's GDP "has more than quadrupled since 1987." According to the IMF, the correct figure is 84.0 percent. In short, these folks either just make up numbers to support their policy positions or are so utterly lost on economic issues that they could not possibly distinguish a successful policy from a disaster. Either way, a Washington Post editorial has no place in a serious discussion of trade policy.
--Dean Baker
