As a potential barrier to future trade liberalization and global prosperity, the anti-WTO protests in Seattle continue to worry me. (See David Frum’s excellent article [Link defunct]). The sovereignty issue that so upset the protesters is a red herring. What the protesters need to realize is that free trade helps the poorest nations the most. Prosperity, after all, is what makes progress possible on issues like health, education, the environment, jobs, wages, and growth. The poorest nations have the worst economic and environmental records. We learned that with the bankrupt Soviet Union and its East-bloc satellites.
A young person concerned about the need to promote ecology and improve economic conditions around the world should be in favor of free trade. That’s why all of this talk about the perils of globalization is misleading. Globalization expands the information superhighway across the world. WTO admittance specifically — and free-trade liberalization generally — offers a highway entry ramp for underdeveloped nations. Once they get on that highway, their economies will prosper, their wages will rise, and their environments will improve.
But it’s not only the protestors. President Clinton is also culpable; by pandering to leftward trade unions and the left fringe of the environmental movement. If Gore or Bradley follows the Clinton-Sweeney line, they are sure losers next November. The Investor Class favors free-trade globalization.
ROOT-CANAL McCAIN? John McCain is quoted in today’s Investor’s Business Daily saying that if he’s elected President, he will shut down the government, if necessary, to cut pork-barrel spending. It’s true that McCain has an excellent, pro-growth position on the Internet tax moratorium; but in other economic policies, he looks like the root-canal candidate. He’s opposed to marginal-tax-rate cuts; he doesn’t believe the U.S. economy can grow faster than the Congressional Budget Office (CBO) projections of 2.4% a year; and he’s been pulled in — hook, line, and sinker — by former Senator Warren Rudman’s deficit obsessions. The fact is, budget surpluses over the next ten years of internet-led growth are going to be almost twice as much as the CBO predicts. They could even be three times as much — if a Republican president and Congress return those dollars back to the taxpayers in the form of flatter and lower personal income tax rates, reduced payroll tax rates, and expanded IRA-type savings accounts. Warren Rudman and the Concord Coalition, who are McCain’s economic advisers, have the fiscal story all wrong. They remind me of Gerry Ford in 1976, who opposed tax cuts, obsessed over balancing the budget, and lost to Jimmy Carter. It’s a losing strategy, and McCain should reject it.