Posted by
Michael on Sunday, February 03, 2008 10:38:34 PM
According to Business Week, many economists are second guessing free trade:
Many
ordinary Americans have long been suspicious of free trade, seeing it
as a destroyer of good-paying jobs. American economists, though, have
told a different story. For them, free trade has been the great
unmitigated good, the force that drives a country to shed unproductive
industries, focus on what it does best, and create new, higher-skilled
jobs that offer better pay than those that are lost. This support of
free trade by the academic Establishment is a big reason why
Presidents, be they Democrat or Republican, have for years pursued a
free-trade agenda. The experts they consult have always told them that
free trade was the best route to ever higher living standards.
But something momentous is happening inside the church of free trade:
Doubts are creeping in. We're not talking wholesale, dramatic
repudiation of the theory. Economists are, however, noting that their
ideas can't explain the disturbing stagnation in income that much of
the middle class is experiencing. They also fear a protectionist
backlash unless more is done to help those who are losing out.
"Previously, you just had extremists making extravagant claims against
trade," says Gary C. Hufbauer, a senior fellow at the Peterson
Institute for International Economics. "Now there are broader questions
being raised that would not have been asked 10 or 15 years ago."