Back to Willem Buiter's Maverecon homepageIf Jagdish Bhagwati’s purpose in writing his FT column on March 3, Obama’s free-trade credentials top Clinton’s, was to cheer up those who support multilateral free trade and had become dismayed at the avalanche of protectionist drivel from both the Obama and the Clinton camps, he failed.
Professor Bhagwati writes: “… no Democratic candidate during the primaries can be anything but a protectionist. The only question is: of the two, which is likely to be friendlier as president to the cause of multilateral free trade? Careful scrutiny suggests that the odds are in favour of Mr Obama….”
This means the following:
First, the median voter in the Democratic primaries is now so protectionist, that only a candidate professing to be a rabid protectionist has any hope of gaining the Democratic nomination.
Second, protectionist labour unions in the US have, through the financial and other support they offer the candidates, disproportionate influence on the positions taken by the candidates.
Third, Obama is willing to lie about and to deceive the voters about his true views on trade policy and about his future policy intentions, should he be elected president. You can only become the Democratic candidate for the US presidency if you are prepared to act in a dishonest and unprincipled manner. Obama is willing to pay that price. While Obama plays tough cop on NAFTA in Ohio, his chief economic advisor Austan Goolsbee (whom I knew when he was an undergraduate at Yale University and one of the bright young lights guided by Jim Tobin) plays nice cop at the Canadian consulate in Chicago. There’s a useful lesson here for young Austan, one that anyone interested in becoming active in hands-on politics should heed: there is no such things as ‘off the record’.
Fourth, the voters in the Democratic primaries are stupid enough to be deceived by this charade.
The only bit of good news is that there is a chance that at least my fourth point may not be entirely correct. Barack Obama’s losses in Ohio and Texas may have been due to the fact that the American electorate does not like its presidential candidates to speak with a too obviously forked tongue. So Hilary Clinton lives to fight another day - proof, like the House of Lords, of life after death. If such is indeed the case, I remain depressed on the substance of what the Democratic constituency now stands for : protectionism. I am, however, more upbeat about the form the Democratic constituency insists on: honesty.
Professor of European Political Economy, London School of Economics and Political Science; former chief economist of the EBRD, former external member of the MPC; adviser to international organisations, governments, central banks and private financial institutions.
