Naked Economics by Wheelan, Charles (spanish books to read .txt) 📕

presidency, former Treasury secretary Robert Rubin reflected, “The economic benefits of the tariff reductions we negotiated over the last eight years represent the largest tax cut in the history of the world.”6

Cheaper shoes here, a better television there—still probably not enough to get the average person to fly somewhere and march in favor of the World Trade Organization (WTO). Meanwhile, those most directly affected by globalization have a more powerful motivation. In one memorable case, the AFL-CIO and other unions did send some thirty thousand members to Seattle in 1999 to protest against broadening the WTO. The flimsy pretext was that the union is concerned about wages and working conditions in the developing world. Nonsense. The AFL-CIO is worried about American jobs. More trade means cheaper goods for millions of American consumers and lost jobs and shuttered plants. That is something that will motivate workers to march in the streets, as it has been throughout history. The original Luddites were bands of English textile workers who destroyed textile-making machinery to protest the low wages and unemployment caused by mechanization. What if they had gotten their way?

Consider that at the beginning of the fifteenth century, China was far more technologically advanced than the West. China had a superior knowledge of science, farming, engineering, even veterinary medicine. The Chinese were casting iron in 200 B.C., some fifteen hundred years before the Europeans. Yet the Industrial Revolution took place in Europe while Chinese civilization languished. Why? One historical interpretation posits that the Chinese elites valued stability more than progress. As a result, leaders blocked the kinds of wrenching societal changes that made the Industrial Revolution possible. In the fifteenth century, for example, China’s rulers banned long-sea-voyage trade ventures, choking off trade as well as the economic development, discovery, and social change that come with them.

We have designed some institutions to help the greater good prevail over narrow (if eminently understandable) interests. For example, the president will often seek “fast-track authority” from Congress when the administration is negotiating international trade agreements. Congress must still ratify whatever agreement is reached, but only with an up or down vote. The normal process by which legislators can add amendments is waived. The logic is that legislators are not allowed to eviscerate the agreement by exempting assorted industries; a trade agreement that offers protection to a few special interests in every district is no trade agreement at all. The fast-track process forces politicians who talk the talk of free trade to walk the walk, too.

The unfairly maligned World Trade Organization is really just an international version of the fast-track process. Negotiating to bring down trade barriers among many countries—each laden with domestic interest groups—is a monumental task. The WTO makes the process more politically manageable by defining the things that countries must do in order to join: open markets, eliminate subsidies, phase out tariffs, etc. That is the price of membership. Countries that are admitted gain access to the markets of all the existing members—a huge carrot that gives politicians an incentive to say no to the mohair farmers of the world.

Cut the politicians a break. In the fall of 2000, a promising political career was launched. I was elected president of the Seminary Townhouse Association. (Perhaps “elected” is too strong a word; the outgoing president asked if I would do it, and I was too naive to say no.) At about that time, the Chicago Transit Authority (CTA) announced plans to expand an elevated train station very close to our homes. The proposed expansion would bring the station into compliance with the Americans with Disabilities Act and allow the CTA to accommodate more riders. It would also move the elevated train tracks (and all the accompanying noise) thirty feet closer to our homes. In short, this plan was good for Chicago public transportation and bad for our townhouse association. Under my excellent leadership, we wrote letters, we held meetings, we consulted architects, we presented alternative plans (some of which would have required condemning and demolishing homes elsewhere in the neighborhood). Fullerton Avenue eventually got a new elevated train station, but not before we did everything in our power to disrupt the project.

Yes, ladies and gentlemen, we are the special interests. All of us. You may not raise Angora goats (the source of mohair); you may not grow corn (the source of ethanol). But you are part of some group—probably many of them—that has unique interests: a profession, an ethnic group, a demographic group, a neighborhood, an industry, a part of the country. As the old saying puts it, “Where you stand depends on where you sit.” It is facile to declare that politicians should just do the right thing. The hoary old cliché about tough decisions is true. Doing the right thing—making a decision that generates more benefits for the nation than costs—will not cause people to stand up and cheer. It is far more likely that the many people you have made better off will hardly notice while the small group you have harmed will pelt your car with tomatoes.

In 2008, my unpromising political career got more interesting (but not necessarily any more promising). President Obama appointed Congressman Rahm Emanuel to be his chief of staff, which left an opening in the Illinois Fifth Congressional District. That’s my congressional district, and I, along with more than twenty other candidates, decided to run in the special election to fill the seat. (Our race should not be confused with the vacant Illinois Senate seat that former Governor Rod Blagojevich tried to sell.) I figured that if I was going to write books like this one that criticized public policies, then I ought to be willing to step into the ring, rather than just cast rocks from the outside. (For the record, I opposed the ethanol subsidy—a relatively meaningless position given that the Fifth Congressional District is entirely urban and has not a single farmer.)

The punch line of this chapter can be encapsulated in a single experience from that