Wow. You tell 'em, Dean.

Maybe at some point you could add in some analysis of how both economists & editorialists in general portray disagreeing with some particular "free trade" agreement as being prejudiced protectionism against working people in the 3rd world country under discussion -- no matter how many working people may be in that country protesting that same proposed agreement.

Dean,

Do not trade agreements, as other government actions, have the inevitable effect of picking winners and losers?

Identifying the winners and losers is not a great task. Calling the government to account for its choices seems to be difficult indeed. The role of the press should be to point clearly and effectively to the policies actually underlying trade agreements and other government actions. Those underlying policies are rarely, if ever, articulated by the government but are revealed in the systematic way in which the government's actions reward the winners and punish the losers.

Our problem, as you point out, is that our press all too often fails and refuses to dig for and then speak the truth. Our press, including the NY Times, is far to ready to act as the stenographer of record.

I don't think the song "The Best Things In Life Are Free" had trade in mind.

Mankiw said he spoke with some of his democrat economist friends who indicated they were pleased with the backgrounder Obama's aide gave the Canadians on Obama's NAFTA position. Dean, did you get a call?

Shag,

I'm afraid that I'm not in Greg's rolodex.

Dean,

I've been keeping up with your blog for more than a year now, and it's still not clear to me whether you support a) lowering barriers to trade of high-wage labor or b) increasing barriers to trade of low-wage labor. For example, do you think NAFTA should be extended to cover more of the economy or pulled back to cover less? (Or is it perfect how it is?)

Thanks, Dean, for your paper. Very well-argued. A comment on one point that you make a couple of times:

"To cover lost tariff revenue and raise revenue to pay compensation to losers, it is necessary to raise other taxes. These taxes are by definition distortionary"

1. Any tax (except maybe a "height" tax?) is "distortionary."

2. Nevertheless, we need taxes.

So, what "distortions" do we prefer? And, are they actually distortions, or are they just part of the (inevitably tax-affected) economic ecology within which market players operate?

On that question, I'd like to point you to some of Lane Kenworthy's excellent thinking:

http://trueconservative.typepad.com/trueconservative/2008/03/attributing-the.html

Dean, you should submit an op-ed to the Times lambasting their marginalization of critics of recent trade deals.

In answer to a few questions here:

1) I opposed NAFTA at the time, however having gone down this route, it is unrealistic to turn back. The best way to improve the plight of ordinary workers in this country is to expose highly paid workers to international competition.

2)I know Lane Kenworthy and his work -- good stuff in my book. It is too bad that it doesn't get more attention.

3) I do occasionally send pieces to the NYT. I have been completely shut out thus far. This does discourage further attemtps. I just don't think that I belong to the right fraternity.

Dean: Is it your argument that once professionals (and the social strata that, say, make trade policies) are as exposed to international competition as other strata, that it will be (a) the consumer savings which will "improve the plight of ordinary workers"; or (b) some sort of dawning of awareness among the professional and political classes of goose / gander dynamics?

Or neither? Or both?

Our host writes: I do occasionally send pieces to the NYT. I have been completely shut out thus far.

Have you been published in Letters to the Editor? And do you think your name makes you "poisoned goods" now? Will they ever consider your pieces for publication, and if the same works came from some other name would they be more likely to slip in?

Dean, I know this is off topic, but would you care to comment on this amazing deal?

JPMorgan to Buy Bear for $2 a Share
Sunday March 16, 7:36 pm ET
By Joe Bel Bruno and Madlen Read, AP Business Writers

NEW YORK (AP) -- JPMorgan Chase said Sunday it will acquire rival Bear Stearns in a deal valued at $236.2 million, a stunning collapse for one of the world's largest and most venerable investment banks.
JPMorgan Chase & Co. said the $2 a share, all-stock deal has received the required approvals from the federal government and the Federal Reserve. Bear Stearns shares close Friday at $30 a share.

The Fed will provide special financing to JPMorgan Chase for the deal, JPMorgan Chase said. The central bank has agreed to fund up to $30 billion of Bear Stearns' less liquid assets.

At almost the same time as the deal for control of Bear Stearns was announced, the Federal Reserve said it approved a cut in its lending rate to banks to 3.25 percent from 3.50 percent and created another lending facility for big investment banks. The central bank's official meeting is on Tuesday. Before the emergency move to lower the discount rate, which is the rate at which banks lend each other money, the Fed was widely expected to again cut its headline rate by as much as a full point to 2 percent.

The announcement from both the Fed and JPMorgan comes ahead of what some analysts expected to be a brutal day for global stocks. Already, before the announcements, New Zealand's markets opened drastically lower -- then began to recover after the deal was unveiled.

A collapse of Bear Stearns could have created a further crisis of confidence in world financial markets amid a deepening credit crunch. JPMorgan's acquisition of Bear Stearns represents roughly 1 percent of what the investment bank was worth just 16 days ago.

The deal represented a 93.3 percent discount to Bear Stearns' market capitalization as of Friday, and roughly a 98.8 percent discount to its book value as of Feb. 29.

"The past week has been an incredibly difficult time for Bear Stearns," said Bear Stearns Chief Executive Alan Schwartz in a statement. "This represents the best outcome for all of our constituencies based upon the current circumstances."

I just don't think that I belong to the right fraternity.

Concerning the current housing bubble deflation fueled mess, you were prescient. This has to count for something even for a (partially) right-wing rag like the NYT.

The best way to improve the plight of ordinary workers in this country is to expose highly paid workers to international competition.

Now if only you could see the light on this one!

However, it may not matter who wants what at this point. From what I see, neoliberal globalization -- the current global trading and worker suppression regime -- is heading towards the trash heap of history with its' utopian cousin who also had delusions of universalism. The cousin named Communism.

Thresher,

i do occasionally get letters in the NYT, just not opeds.

On the rescue, as you can see in my new note, I think the big issue is transparency. What promises were made? How bad is it?

Dean Baker wrote, Here is one for those interested.

There's an important error in that paper, however: you wrote there that

"The other interesting feature of lump sum taxes is that they do not actually exist in the world. In the real world we have to raise revenue by doing things like taxing income, sales, or property. These taxes all do lead to economic distortions, unlike lump sum taxes."

While your general point---taxes are typically distortionary---is true generally, it's not always true. In particular, land value taxes are not distortionary. This theorem rests on Ricardo's explanation of rent, but probably is of even earlier origin. Adam Smith wrote that

"Both ground-rents and the ordinary rent of land are a species of revenue which the owner, in many cases, enjoys without any care or attention of his own. Though a part of this revenue should be taken from him in order to defray the expenses of the state, no discouragement will thereby be given to any sort of industry. The annual produce of the land and labour of the society, the real wealth and revenue of the great body of the people, might be the same after such a tax as before. Ground-rents, and the ordinary rent of land, are, therefore, perhaps, the species of revenue which can best bear to have a peculiar tax imposed upon them."

The last time I remember seeing a NY Times article with an anti-"free-trade" slant was on December 6, 2004, when the Times published a column by Sen. Charles Schumer and the old conservative economist Paul Craig Roberts. In case anyone doesn't know who PC Roberts is, I suggest they look him up and start reading his columns. You may find his NT Times column that I refer to at http://query.nytimes.com/gst/fullpage.html?res=9A02E6DD1231F935A35752C0A9629C8B63.

Dean: "I know Lane Kenworthy and his work -- good stuff in my book. It is too bad that it doesn't get more attention."

Have you read his books? Run don't walk.

Peter Dorman has a nice critique of this:

econospeak.blogspot.com/2008/03/mankiw-vs-muggles.html

Dear Dean Baker,

Yes indeed, those economists who get the attention push the line of the oligarchy. The Main Strean Media is of course complicit in the censure of any views that contradict the 'free market ' mantra.

I read your paper on trade, interesting. Do you really think Congress will take on the Medical Professionals?

A much clearer and resonant course of action would be to call for tariffs, across the board. It sounds like you have nothing to lose in the case of the Main Stream Media and tariffs would cause much more of a stir to get your ideas on the table.

Tariffs would also decrease the trade deficit. We cannot continue to bleed 700 billion a year indefinetly. Taking on Doctors, even if successful, will take years to become the issue you want . Talking about tarifffs will also enable you to dispell the myths about tariffs such as Smoot Halley and the Great Depression and the fact that tariffs made this country, from Hamilton to Truman.

It's time for tariffs Dean Baker !

Have you ever tried reading Mankiw's Macro text? What isn't flat out lies or distortion is totally incomprehensible. THis guy couldn't write himself out of a paper bag if it were lying on its side. I bet his NY Times articles are ghost written. the fact that he is considered an expert, and that he teaches at Harvard, is a sad comment on the state of economics......