December 03, 2007
The Washington Post Discredits NAFTA
It strikes me as a problem that the editorial board of The Washington Post is either innumerate or dishonest -- there's just no other excuse for comparing Mexico's pre- and post-NAFTA GDP's in non-inflation adjusted terms. As Dean Baker says, "If we don't adjust for inflation, Zimbabwe's economy, wracked by hyperinflation of several thousand percent annually, is the fastest growing economy on the planet. If the Post editorial writers use a consistent measure, we can expect to see warm praise for Zimbabwe's extraordinary growth on the editorial pages in the near future." And, remarkably the editorial gets worse from there, cherrypicking poverty statistics, ignoring GDP growth, sidestepping distribution, and so on, and so forth. As Daniel Davies famously wrote, "Good ideas do not need lots of lies told about them in order to gain public acceptance." By this standard, The Washington Post is beginning to convince me that NAFTA was not a good idea. Otherwise, why would they have to make such a pathetically weak case?
Wait a second...Zimbabwe's GDP wouldn't be the fastest growing economy if you measure it in dollars, even if you don't adjust for inflation. It's the inflation of the measuring currency, not the country's own currency, that's at issue. And the WaPo didn't report the Mexican GDP in pesos, it reported in dollars. Surely real GDP was the more honest way to discuss this, but Dean's Zimbabwe example seems to me to be confused.
Posted by: Glenn | Dec 3, 2007 4:06:29 PM
Someone at Washington Post must consider NAFTA a good idea, of they would not be pimping it. If they are lying to do this, it is because they know that the public will not accept the actual reasons why they consider NAFTA to be a good idea.
For example, suppose subsidized corn for the US has helped drive peasants off the land in Mexico. If these people can't find work in Mexican cities either, then they become available as illegal aliens to undermine US labor. This is a good thing for US capital; but obviously the benefits cannot be explicitly stated to the public, hence the need for deceit.
Posted by: RLaing | Dec 3, 2007 4:42:04 PM
I vote for innumerate.
On the other hand, the Post performed a public service by quoting Mr. Edwards's claim that NAFTA has "cost us millions of jobs." Do you suppose Edwards is innumerate or dishonest? I vote for dishonest.
Posted by: ostap | Dec 3, 2007 6:03:25 PM
Hate to say "I told you so", but Ross Perot was pretty much right on all accounts about NAFTA. Nobody, including Bill Clinton, listened. They all thought there would be no downsides.
They were wrong
Posted by: El viajero | Dec 3, 2007 6:14:01 PM
Those of us dealing with it at the time remember the flexible use of data and "economics" to promote the anti-regulation treaty.
From "NAFTA and its Aftershocks", by Richard Rothstein, American Prospect.
Free trade promotion has been supported by computer modeling, an academic fad in which complex equations describing observed economic behaviors are fed into computers and "run" with alternate policies. A variety of models floated around Washington as NAFTA was being negotiated. The Hufbauer-Schott version made several dubious assumptions--for example, that dollars invested in Mexico would not otherwise have stayed in the U.S. but would have gone to Asia or the Caribbean. Thus Hufbauer and Schott calculated the new jobs in Mexico that would result from additional U.S. investment there, but declined to calculate American job losses from a corresponding investment decline here. Their assumption may have been valid in some cases (certainly Mexico's openness has attracted some investment from Asia), but when they assumed it would be true in all cases, they guaranteed that their computer analysis would predict exactly the free trade benefits they hoped for. Garbage in, garbage out.
Posted by: El Cid | Dec 3, 2007 7:17:17 PM
It seems ridiculous to judge NAFTA on what Fred Hiatt says.
This is a stupid post.
Posted by: Armando | Dec 3, 2007 8:43:12 PM
I'm pretty sure we all have plenty of reasons to say that NAFTA was a shitty deal already, Armando. That Hiatt needs to lie for a page and a half just confirms it.
Posted by: soullite | Dec 4, 2007 8:41:27 AM
Hiatt is an idiot. He could not argue effectively that the Earth revolves around the sun.
If Ezra wants to argue NAFTA is bad, pointing out that Fred Hiatt is an idiot is not a convincing argument.
Yet that is the argument presented.
Posted by: Armando | Dec 4, 2007 9:30:57 AM
Maybe it's just me, but I thought Ezra was trying to make a point by way of sarcasm, showing how the absolutely pathetic and intellectually dishonest arguments by said Hiatt should actually serve to undermine his point.
Though as a general principle, if I had to play odds and possessed zero information myself, taking the opposite view of whatever Hiatt advocated or claimed would probably work out pretty well.
Posted by: El Cid | Dec 4, 2007 9:33:21 AM
We were all told by Ross. Not with computer models or some tortured study. We were told in plain English and with common sense.
The Republicans liked NAFTA, the Democrats liked NAFTA and Clinton was on board. We all knew.
We have no one to blame but ourselves.
Posted by: El viajero | Dec 4, 2007 4:48:11 PM
A majority of House Democrats and Senate Democrats voted against NAFTA. This was "triangulation", in which the President (Democrat) would take a Republican position and push it through with nearly unified Republican support and a minority of (typically conservative) Democrats.
Posted by: El Cid | Dec 4, 2007 5:25:26 PM
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