Economy

By John R. Mitchel

An economic and political analysis of NAFTA and Fast Track exposes them as ineffective, not to mention a plethora of broken promises.

In contrast to a "command economy" such as those in totalitarian states, public policy implementation in a democracy is a difficult and fragile process. Although public officials in a command economy often implement policies that are destructive to the working. poor and middle class (if there is a significant middle class in such an economy), they are rarely held accountable. On the other hand. in a democracy, lawmakers are periodically held accountable through free elections. However, this in itself, can create serious problems, not the least of which is the "tyranny of the majority". But as we look back on the wisdom of our founding fathers, we can be reassured by the fact that they created safety valves to mitigate the impact of the occasionally vociferous majority inflicting their sometimes narrow and self-serving interests upon others. These safety valves can be characterized by "checks and balances", which are manifested in many ways including the presidential veto, advise and consent, the capacity to recall or impeach elected or appointed officials, and although quite cumbersome, procedures to amend the constitution.

One outcome in a democracy that the founding fathers may not have sufficiently anticipated is a "tyranny of the minority" where a very small sector of society achieves an overwhelming share of economic and /or political power, and uses that power to gain further advantage at the expense of those who are either too apathetic or too consumed by their efforts to survive. Public policy regarding the increased trends in globalization is one such issue that polarizes the powerful elite from broad sectors of society. More specifically, expanding the North American Free Trade Agreement (NAFTA) has again surfaced as one of those hotly debated topics that could have a significant impact on a large majority of Americans, regardless of their social or economic class. Unquestionably, NAFTA performance will have a great deal to do with the success of any effort to expand it.

Recent commentary describes a wide range of NAFTA results, and is often designed to embellish one viewpoint over another. These extreme contradictions, despite seemingly straight-forward measurement criteria, should cause us all to be skeptical, especially those of us who claim to be serious students of economic theory. Therefore, my purpose in writing this report is to accomplish an objective economic and political analysis of NAFTA, and to use that analysis to predict the outcome of the debate to expand it through Fast Track negotiation authority.