Free-trade laws : Schizophrenia in Congress

Quand tu lis cet article, les sénateurs et les représentants de la Chambre ne votent pas en fonction du bien commun, mais en fonction de garder leurs emplois.

Car pour élire un sénateur, ça prend plus de 10 millions de dollars, 45 % provient de Wall Street et une dizaine de % additionnelles parmi les grandes corporations

Alors son dilemme vote-t-il pour le peuple et risque de perdre son emploi ou de voter selon la volonté des financiers.

Méchant dilemme ?

Extrait de : Free-trade laws : Schizophrenia in Congress, H. G. London, The Economist, Oct 13th 2011

THE American public's view of free trade has been heading in one direction only for the past few years.

·         This blog covered a Pew report roughly a year ago which showed that 44% of Americans were against free trade and 35% were in favour.

·         As many as 63% of tea-partiers thought free-trade agreements were bad for America.

And yet most economists, even those who point out the harm that import competition can do, are still resoundingly against any protectionist measures.

On lui pardonne, provenant de la revue The Economist,
il a tendance à oublier tous ceux qui sont contres.

Congress is stuck between these two poles, torn between listening to the experts and listening to their bosses.

Expert c’est qui ?, Wall Street, Apple, HP, Cisco, GE, Wal-Mart …

Si le boss c’est le peuple, ça fait longtemps qu’ils n’écoutent plus !

Events this week only serve to illustrate the resulting schizophrenia. On Tuesday the Senate passed a bill that brings America closer to imposing tariffs on China. On Wednesday it approved long-stalled trade agreements with South Korea, Colombia and Panama.

A new paper by Paolo Conconi, Giovanni Facchini and Maurizio Zanardi explains how this ambiguity tends to gets resolved. Politicians in Congress listen to both camps, but the closer they are to an election, the more likely they are to vote "nay" on trade-liberalisation reforms.

Car, il risque d’avoir un ‘back-slash’ provenant du peuple.

The authors consider 29 congressional votes on trade between 1973 and 2005. They first examine the role of term length, comparing the voting behaviour of House members and longer-serving Senate members.

We find that senators in general are more likely to support trade liberalisation than House representatives. However, there is no significant difference in the voting behaviour of House representatives and senators who are in the last two years of their mandate.

They then examine the effect of the electoral cycle on senators, comparing those who are more than two years away from their next encounter with the voters (the first two "generations") and those who are less than two years away from an election.

We find robust evidence that senators of the last generation are significantly less likely to support trade reforms than senators belonging to the first two generations…..We obtain comparable results when we study the behaviour of the same legislator over time.

Furthermore to show that this effect is driven by re-election incentives they also look at senators who enjoy very "safe seats" and those who are retiring at the end of their term. When these senators are close to the date of an election they are no more likely to vote for protectionist measures than senators with four years left to run.

None of this should actually be that surprising. It is in line with what the founding fathers intended, that legislators serving longer terms in office may be better placed to deal with structural reforms such as trade liberalisation.

The authors quote James Madison (1788):

The objects of government may be divided into two general classes: the one depending on measures which have singly an immediate and sensible operation; the other depending on a succession of well-chosen and well-connected measures, which have a gradual and perhaps unobserved operation.

To deal with long-term policies, Madison suggested the creation of an additional chamber, the Senate:

The proper remedy for this defect must be an additional body in the legislative department, which, having sufficient permanency to provide for such objects as require a continued attention, and a train of measures, may be justly and effectually answerable for the attainment of those objects

Individual considerations are not the only ones guiding behaviour, of course. Party whips have a big say in how legislators vote, for example. The authors note that all but one of the bills they looked at on trade reform had been approved, although the margin of passage varies substantially across bills. This, then, is how the conflicting pressures on politicians appears to be managed: leaders in Congress ensure that bills pass while allowing the most vulnerable senators to cover their backs by voting "no" to liberalisation.