Dave Weigel comes dangerously close to saying things we know are untrue in this Reason story:
The main selling point of Hillary Clinton’s campaign, ratcheted up after Barack Obama started scaring her up a ladder, had been her “35 years of experience,” along with a certain nostalgia for the 1990s, which both Hillary and Bill smugly described on the campaign trail as having been “pretty good.” The linchpin of that claim was the economic boom of the Bill years. Yet last fall Hillary began to soft-pedal or sweep under the carpet the very policies that made the boom possible…
It’s not a mystery how NAFTA is working, actually. America’s GDP and industrial production have grown about 50 percent since the trade pact took effect. Total U.S. unemployment was 6.9 percent in 1993, before NAFTA went into effect; today it’s 4.9 percent. Hillary Clinton once considered this an accomplishment.
The correct way to write that paragraph would have been:
But it’s hard to believe the doom and gloom. America’s GDP and industrial production have grown about 50 percent since the trade pact took effect. Total U.S. unemployment was 6.9 percent in 1993, before NAFTA went into effect; today it’s 4.9 percent. How much damage could NAFTA have done?
But Weigel didn’t write the paragraph to deny the claims of NAFTA opponents; he wrote it in a way that implies a causal relationship between NAFTA and overall US economic performance. Are we meant to believe that NAFTA is one of the policies that made the productivity boom possible? That an agreement that barely lowered trade barriers and was phased in over 15 years reduced unemployment by two percent?
THESE CLAIMS ARE NOT TRUE AND NO RESPECTABLE ECONOMIST HAS DEFENDED THEM. Paul Krugman has been debunking them since 1993: “NAFTA will have virtually no effect on the U.S. economy, good or bad.” Repeat after me: Trade affects the composition, not the number, of jobs. In theory, this is because trade economists very frequently assume perfectly competitive factor markets. In practice, this is because the Fed controls employment via monetary policy.
NAFTA opponents aren’t pretending that the agreement affects total employment, but Reason has printed three articles in the last seven months (Weigel in September, Steve Chapman in December) that imply that NAFTA had significant macroeconomic effects. Why is the magazine running stories about international trade that will mislead readers who don’t follow the issue?