It’s a bit amazing in these days of burgeoning state control of the economy, but you still hear politicians–the same ones who foisted corporate-welfare stimulus and bailout plans on us–cursing protectionism and singing odes to free trade.
To be fair, many free-trade defenders these days are real laissez-faire types fighting to prevent yet another assault on economic liberty, but so many who rail against “protectionism rearing its ugly head” seem to believe in an odd distinction: the government can intervene internally in the economy, heightening regulations, mandates, and subsidies; but once we get to the borders, hands off.
But even that gives them too much credit. Many “free traders” support subsidies for our exporters. My column today in the Washington Examiner looks at lobbying records and legislative records, and analyzes this odd dynamic:
For instance, newly confirmed Commerce secretary Gary Locke, during his two terms as Washington State governor, was very close to Boeing and Microsoft. In 2003, he pushed through a $3.2 billion package of special tax breaks for Boeing. More to the point, he heads an agency that spends taxpayer dollars to support American companies. Nevertheless, Locke has long espoused “free trade.”…Last November, weeks after bailing out Wall Street and while pushing a $34 billion bailout for U.S. automakers, President George W. Bush, signed an agreement with other world leaders proclaiming, “we underscore the critical importance of rejecting protectionism and not turning inward in times of financial uncertainty.”…But this mindset—protectionism bad, corporate welfare good—is inconsistent only if you look at it from a principled mindset. If you look at it from a practical perspective—that government ought to help our biggest multinational corporations—it’s perfectly consistent.
But the businessmen, I find, are not duplicitous in this way. I called Cal Cohen, CEO of the Emergency Committee on American Trade, whose members include the CEOs of Boeing, GM, and Caterpillar, and asked him if there was an inconsistency between the free-trade talk employed against “protectionism” and the bailouts and subsidies these companies enjoy. His response was frank:
“ ‘Free trade’ is a theoretical construct. What we’re talking about is practical business transactions.”