In any case, a job lost because of foreign competition is no more of a misfortune than a job lost because of productivity-boosting technology. Neither is it a stronger justification for crying foul and demanding the sort of government intervention that John Kerry seems to be contemplating when he promises to review all free trade agreements and faults President Bush's "secret plan to send more American jobs overseas."
That "secret plan" is neither secret nor a plan. As N. Gregory Mankiw, Bush's chief economic adviser, noted in February, it is simply "the latest manifestation of the gains from trade that economists have talked about" since Adam Smith: "When a good or service is produced more cheaply abroad, it makes more sense to import it than to make or provide it domestically."
In this light, Mankiw said, "Outsourcing is just a new way of doing international trade. More things are tradable than were tradable in the past, and that's a good thing."
For making an observation with which any economically literate person would agree, Mankiw was pilloried by both Democrats and Republicans. He quickly apologized for not emphasizing that "it is regrettable whenever anyone loses a job." Regrettable but unavoidable, if we want to enjoy the benefits of a free market, which over the long term creates more jobs than it eliminates.
It is therefore troubling to hear Bush talk about "free and fair trade." If he means the legal ground rules for trade should be fair, with no tariffs, quotas, subsidies or government-protected monopolies, he is being redundant (not to mention hypocritical, given his support for steel tariffs and agricultural subsidies). In this sense, free trade is fair by definition.
But it seems the president is suggesting that the consequences of free trade will be perceived as fair. That false promise stokes the unjustified resentment underlying "the old policy of economic isolationism" that Bush rightly calls "a recipe for economic disaster."