The presumably Democratic economist, Laurence J. Kotlikoff, has a new look at the Fair Tax.  I fully plagiarized the op-ed title he used for my blog entry - "Why Democrats should love the Fair Tax."  Don't tell Hillary Clinton. 

The Fair Tax is one of several ways to do a border adjustable tax that would be quite good to level the playing field in trade.  The Coalition for a Prosperous America has identified the VAT-tariff issue as a predominant problem in trade.  Most of the debate on the tax focuses upon domestic tax policy issues, which does not necessarily drive the CPA position.

The full op-ed is reproduced below the fold (hit "read more").  Yes, yes Mr. Boston Globe lawyer, this full reproduction may be a copyright violation over and above "fair use", but if you want me to take it down, send me an email.

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The establishment is hyperventilating over the tough trade talk of Clinton and Obama.  The NY Times endorsed Hillary Clinton and John McCain about one month ago.  Now Hillary is deriding NAFTA and saying we need a time out on trade agreements.  Heresy!

Like a child holding her ears and singing loudly to avoid hearing uncomfortable truths, the NY Times editorial board repeats... and repeats... and repeats its faulty world view over... and over... and over.  "It Must Be Ohio," is the Board's still-in-denial title of their editorial entry in today's Sunday Times.

The faux-Economics-101 editorial rant denounces Clinton and Obama statements in Ohio that NAFTA was a bad deal.  Never mind the evidence.  Repeat world view here:

Trade opens foreign markets for American producers and gives consumers more choices, while competition spurs productivity growth at home.

They are so 1992.

Forget about correcting the trade problems.  Burial Insurance!  We need more and better Burial Insurance!  Pay people who are crushed by trade.

The Democrats’ posturing on trade threatens to divert the nation’s attention from what is really needed: a set of domestic policies to help American workers cope with the dislocations wrought by globalization and technological progress.

The editorial establishment still cannot believe that we have trade deficits in virtually every category of goods.  Low-tech, high-tech, green-tech, whatever-tech.  They never mention it. 

But the folks on the ground get it.  This assessment of why Obama's candidacy is roiling the Clinton campaign could have easily been applied to the establishment-vs-the-citizenry dynamic occurriing now on the trade issue.

In South Carolina, where last fall she was up 20 percentage points in the polls, she relied on top-down endorsements and the patina of inevitability, while the Obama campaign built a landslide-winning organization from scratch at the grass roots.

The grass roots is rejecting the establishment on trade.  The establishment's impotent, noisy rage is increasingly comical. 

Democratic primary voters in Wisconsin were asked about trade.

THUMBS DOWN ON GLOBALIZATION ...

Wisconsin Democratic primary voters were not big fans of globalization. Seven in 10 said U.S. trade with other countries takes more jobs from Wisconsin and fewer than one in five said it creates more jobs for the state. One in 10 said international trade has no effect on the state either way. But those skeptical about globalization didn't vote much differently in the primary than those who said they think it's a good thing.

The CNN report has a bit more detail.

The exit polls showed 44 percent of Democratic voters said the economy was the most important issue in deciding their vote -- followed by the war in Iraq at 28 percent and health care at 26 percent.

Fifty-five percent of those who cited the economy voted for Obama, compared to 44 percent for Clinton.

An overwhelming 90 percent of the Democratic voters polled said the nation's economy is either "not so good" or "poor."

And 71 percent said U.S. trade with other countries causes the loss of American jobs, while only 17 percent said it creates jobs and 9 percent said it has no effect.

Those who felt trade causes job loss also favored Obama, 55 percent to 43 percent.

The fast growing Chinese telecom company, Huawei, and Bain Capital tried to buy 3Com.  The bid has now failed.

Huawei grew fast because of substantial Chinese government support:

With the benefit of an expanding Chinese telecom sector driving basic revenue growth and substantial economic support from China's government, Huawei has been able to broaden its product line and address emerging market opportunities throughout the globe with such speed an power that the global telecom supplier market has been able to do littlemore than watch in stunned silence.

This was not capitalism at work, but foreign government strategic policy.

The Coalition for a Prosperous America sent a letter to the appropriate U.S. regulator, the Committee on Foreign Investment in the United States (CFIUS), opposing the deal on national security grounds.  (The full text of the letter is below the fold... hit "read more").

The CFIUS did not approve the deal.  This is good news.  Not enough overall, in light of all the massive technology transfer and foreign government procurement of U.S. assets.  But good news.