Charles Schumer, Senator, D, NY wants your vote.

From: Zalek Bloom (ZalekBloom_at_hotmail.com)
Date: 01/07/04 

Date: Wed, 07 Jan 2004 01:32:07 GMT

But will he vote against big corporations interest?

Here is what I found:

http://www.nytimes.com/2004/01/06/opinion/06SCHU.html

Second Thoughts on Free Trade
By CHARLES SCHUMER and PAUL CRAIG ROBERTS

Published: January 6, 2004

 
 I was brought up, like most Englishmen, to respect free trade not
only as an economic doctrine which a rational and instructed person
could not doubt but almost as a part of the moral law," wrote John
Maynard Keynes in 1933. And indeed, to this day, nothing gets an
economist's blood boiling more quickly than a challenge to the
doctrine of free trade.

Yet in that essay of 70 years ago, Keynes himself was beginning to
question some of the assumptions supporting free trade. The question
today is whether the case for free trade made two centuries ago is
undermined by the changes now evident in the modern global economy.

Two recent examples illustrate this concern. Over the next three
years, a major New York securities firm plans to replace its team of
800 American software engineers, who each earns about $150,000 per
year, with an equally competent team in India earning an average of
only $20,000. Second, within five years the number of radiologists in
this country is expected to decline significantly because M.R.I. data
can be sent over the Internet to Asian radiologists capable of
diagnosing the problem at a small fraction of the cost.

These anecdotes suggest a seismic shift in the world economy brought
on by three major developments. First, new political stability is
allowing capital and technology to flow far more freely around the
world. Second, strong educational systems are producing tens of
millions of intelligent, motivated workers in the developing world,
particularly in India and China, who are as capable as the most highly
educated workers in the developed world but available to work at a
tiny fraction of the cost. Last, inexpensive, high-bandwidth
communications make it feasible for large work forces to be located
and effectively managed anywhere.

We are concerned that the United States may be entering a new economic
era in which American workers will face direct global competition at
almost every job level — from the machinist to the software engineer
to the Wall Street analyst. Any worker whose job does not require
daily face-to-face interaction is now in jeopardy of being replaced by
a lower-paid, equally skilled worker thousands of miles away. American
jobs are being lost not to competition from foreign companies, but to
multinational corporations, often with American roots, that are
cutting costs by shifting operations to low-wage countries.

Most economists want to view these changes through the classic prism
of "free trade," and they label any challenge as protectionism. But
these new developments call into question some of the key assumptions
supporting the doctrine of free trade.

The case for free trade is based on the British economist David
Ricardo's principle of "comparative advantage" — the idea that each
nation should specialize in what it does best and trade with others
for other needs. If each country focused on its comparative advantage,
productivity would be highest and every nation would share part of a
bigger global economic pie.

However, when Ricardo said that free trade would produce shared gains
for all nations, he assumed that the resources used to produce goods —
what he called the "factors of production" — would not be easily moved
over international borders. Comparative advantage is undermined if the
factors of production can relocate to wherever they are most
productive: in today's case, to a relatively few countries with
abundant cheap labor. In this situation, there are no longer shared
gains — some countries win and others lose.

When Ricardo proposed his theory in the early 1800's, major factors of
production — soil, climate, geography and even most workers — could
not be moved to other countries. But today's vital factors of
production — capital, technology and ideas — can be moved around the
world at the push of a button. They are as easy to export as cars.

This is a very different world than Ricardo envisioned. When American
companies replace domestic employees with lower-cost foreign workers
in order to sell more cheaply in home markets, it seems hard to argue
that this is the way free trade is supposed to work. To call this a
"jobless recovery" is inaccurate: lots of new jobs are being created,
just not here in the United States.

In the past, we have supported free trade policies. But if the case
for free trade is undermined by changes in the global economy, our
policies should reflect the new realities. While some economists and
elected officials suggest that all we need is a robust retraining
effort for laid-off workers, we do not believe retraining alone is an
answer, because almost the entire range of "knowledge jobs" can be
done overseas. Likewise, we do not believe that offering tax
incentives to companies that keep American jobs at home can compensate
for the enormous wage differentials driving jobs offshore.

America's trade agreements need to to reflect the new reality. The
first step is to begin an honest debate about where our economy really
is and where we are headed as a nation. Old-fashioned protectionist
measures are not the answer, but the new era will demand new thinking
and new solutions. And one thing is certain: real and effective
solutions will emerge only when economists and policymakers end the
confusion between the free flow of goods and the free flow of factors
of production.

Charles Schumer is the senior senator from New York. Paul Craig
Roberts was assistant secretary of the Treasury for economic policy in
the Reagan administration.