Readers -- am I being too optimistic?

It would seem that this might be playing out exactly as you hoped.

Your blog over the past few weeks reads as if you're bucking for a job in the new administration (any tax problems?).

You've always been quick to (rightly) point out the many idiocies of the Bush administration; considering the numerous missteps of the Obama administration's first weeks I'd have expected you to have a field day. But hey, maybe putting the best spin on things is just a coping mechanism as Obama and the left drag us under.

Although Obama still has to actually fight off the protectionists in his own party in Congress, you're probably right. The last time the Democrats had power in Congress they ended up supporting free trade over protectionism, so it is quite likely that this will end up being dropped.

I see it as supremely hypocritical on the part of many of the critics, though, who openly practice protectionism in the form of subsidies and unseen trade barriers.

Since Obama just appointed a Republican free-trader (by the CATO Institute's standards) to a department with a mission of "promoting and assisting international trade", I don't think you're being overly optimistic.

http://www.freetrade.org/congress?senator=51

http://dms.osec.doc.gov/cgi-bin/doit.cgi?204:112:f23c40e440fd58af1c94886c8dafe2a0115c34e0e318d0b74b9aa67fc54ea5be:288

Daniel, I think you are being too optimistic. You seem to spend all your time in the lofty foreign policy lairs of The Washington Consensus world where one and one always add up to two and logic prevails. I am guessing you don't spend enough time in the grubby nests of Big Labor wounded thugthink. Have you ever been to the blogs of the AFL-CIO or Change To Win? Do you know how intransigent and eerily shifty those people are? They have a union mentality, which is to say they don't believe in even one step backward on their core beliefs. To do so would challenge their manhood, and in any case, they always get away with it so it's always what they do, their formula for success. One core belief is hatred of free trade. They don't understand that trade involves buying and selling and therefore global economies link. They think that if they can just shut off the world, as well as shut off corporate leadership, paradise will beckon. They don't really know that good things like money ... come from somewhere. They think such things are always there and the rest of the world is the only obstacle to it. On Colombia, they are constantly shifting their free-trade arguments and all of them are either logical or deceptive. One day it's labor deaths, and you gotta ask yourself what a blue jeans manufacturer has to do with such things that he must remain poor because of them. Never mind that it's safer to be a union member in Colombia than a nonunion member, that is irrelevant when you have the news media slavishly reporting your talking points. And never mind the illogic of paying a government you think is busy killing trade unionists $1 billion in tariffs over not paying it those tariffs and just investing in the blue jeans guy instead with that exact same cash. Next day, if it's not labor unions, it's 'job-killing' free trade, as if Colombia is this big scary behemoth that will eat America alive. Day after that, it's the need for worker retraining, putting all the blame for factory shutdowns in the US on that instead of tech or China. Oh and they always mix up China trade with free trade, they love obscuring that one.

Daniel. Do you know how much power they have in the Democratic Party? It's immense power. The paid out $400 million in campaign cash to get Democrats elected. They have been doing this for years, but never on this scale. All the previous times, they felt burned. After all, any good president would ignore their irrational prescriptions and all have had to. But they still felt burned. They vowed that this time it would be different. They are insisting on control of policy this time. And having hung out in the union halls and Democratic Party precincts from time to time I can tell you, I think they do serve as a font of ideas and a driving force - particularly since Democrats can no longer be quasi communists without being discredited, the labor agenda fills the purpose now. I think they have made the Democratic Party their zombie and now they are controlling it like an irrational madman. Is Obama going to face them down over this? He never has shown a lot of courage or pugnacity. I think he will try to do some half measures to placate both the allies and the union thugs, but the reality is, there is no middle ground here, any protectionist measures, which will screw Big Emerging Markets most of all, even as Europe is relatively protected by existing global treaties, will be met by more protectionist measures. I don't think Obama has the will to stop this.

1. The trade deficit is falling. In these circumstances this is evidence of slowing global trade.

2. The trade deficit doesn't mean anything. The henny pennies who holler about it don't know what they are talking about. They holler because they want protectionist measures and this is a convenient whipping boy. It never makes any difference one way or another, it's just a record of this much buying and this much selling, but some people like to get excited about it.

That's not an argument, J Thomas. You need to explain why the budget deficit and jobless rate don't matter. I have the experience of history to support my argument. You don't.

Monica,

I think it will help if you do take some of what J Thomas is saying to heart.

The trade deficit not meaning much , is the viewpoint of some prior to this financial mess. I doubt those same people in their RIGHT mind now would be making the same statements.

The evidence is overwhelmingly in front of our eyes that American Financial sector/Banking has dangerously leveraged the eagerness of the American consumer to spend, to the point where they have cut open the proverbial golden goose.

I agree with some of what you say about free trade, etc. but you cannot just pick and choose some truths .. we all have to be well informed about as many truths and realities that confront us now .. the more veils that lift for us, the more minds/intellects that work on this the better. I do believe that America will find its solid ground again, but not until there has been a macro shift and definitely not by 2010. This is at the least a 5yr recovery if not more.

It might help if you read the articles/posts from these two links for a different perspective.

http://www.thebailouteconomy.com/content/bailout-economy-forum-topic/care-explanation/why-does-us-owe-so-much-china

http://news.goldseek.com/EuroCapital/1235765498.php