Democrats, protectionism’s a bad idea

Marketplace Staff Dec 12, 2006

KAI RYSSDAL: Monthly trade figures came out this morning. Falling oil prices trimmed the usual imbalance by about eight and a half percent. Our deficit with China continues to grow. And Beijing doesn’t seem to be any mood to change that. Today China rejected an American report that says China isn’t living up to its commitment to open markets. The timing of that report’s not opportune. Treasury Secretary Henry Paulson leaves tomorrow for a series of economic meetings with the Chinese. And the fear is if he can’t get trade concessions, the new Democratic Congress might throw up barriers of its own. Commentator Bruce Stokes says it’s not quite that simple.

BRUCE STOKES: In Washington these days, the GOP is crying wolf. It’s suggesting that the new Democratic majority is a bunch of anti-free traders.

Now, it’s true that some new members of Congress are trade critics, and they replace trade-friendly incumbents. But their protectionist intensity is certainly open to question. During the recent election campaign, only about half the Democractic trade critics actually spent money running TV ads criticizing trade. It seems the GOP accusations have everything to do with politics, and very little to do with economics.

You see, protectionism is a slur. By using it, Republicans hope to paint Democrats as backward, out of touch and fearful of the world. And the GOP knows that such slander works. They hope to undermind the Democrats’ natural fundraising advantage now that that party is back in power — and do to so especially on Wall Street and in California’s high-tech community, where liberals’ deep pockets have long funded the Democrats.

In 1988, Richard Gephardt won the Iowa Democratic caucuses by strongly criticizing unfair foreign trade practices. The next day, headlines labeled his victory a “triumph for protectionism.” Gephardt’s campaign contributions dried up immediately, despite his frontrunner status. Moneyed check writers who’d made their fortunes from globalization didn’t want to be associated with someone who The New York Times editorial board considered beyond the pale. Pinning a scarlet P, for protectionist, on Gephardt’s chest scuttled his presidential hopes.

Today’s Democrats would be wise to learn from that experience. They need to position themselves to be known for what they are for — helping Americans cope with, and benefit from, globalization — ot by what they are against.

RYSSDAL: Bruce Stokes is a columnist for the National Journal.

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