Obama Defends Capitalism and International Free Trade in 'Economist' Essay

PHOTO: President Barack Obama makes a statement on the Paris Agreement at The White House, Oct. 5, 2016, in Washington. Chris Kleponis-Pool/Getty Images
President Barack Obama makes a statement on the Paris Agreement at The White House, Oct. 5, 2016, in Washington.

As the U.S. election campaign enters its final weeks, President Barack Obama has penned as essay in the Economist defending immigration, innovation, globalization and free trade, while adding that more help is needed for those who have suffered in the changing economy.

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Noting that "the world is more prosperous than ever before and yet our societies are marked by uncertainty and unease," the president wrote that, "it is important to remember that capitalism has been the greatest driver of prosperity and opportunity the world has ever seen."

In his essay Thursday in the Economist, a 173-year-old British newspaper which openly advocates for free trade and free markets, the president vowed to pass major trade deals with Asian and South American countries, as well as the European Union.

"While some communities have suffered from foreign competition," he said. "Trade has helped our economy much more than it has hurt."

Today is also the opening day of the biannual meetings of the World Bank and International Monetary Fund (IMF), where economic and finance leaders from around the world meet to discuss trends.

Earlier this week, the IMF released a report expressing concerns over increasing anti-international trade rhetoric in the U.S. and abroad.

The president also noted this sentiment and the views of those outside the U.S.

"Wherever I go these days, at home or abroad, people ask me the same question: what is happening in the American political system?" he said.

He described the view of a polarized American public, where both conservatives and liberals are veering toward more extreme views. "Why have some on the far left and even more on the far right embraced a crude populism that promises a return to a past that is not possible to restore -- and that, for most Americans, never existed at all?"

Though the president defended free and open markets, he did not dismiss the economic frustration many Americans have expressed, which have contributed to those more extreme views.

"Some of the discontent is rooted in legitimate concern," the president said, pointing to "declining productivity growth and rising inequality" that he said has squeezed lower and middle income families by slowing income growth.

But the president said that much of the anxiety was "driven by fears that are not fundamentally economic," saying that "anti-immigrant, anti-Mexican, anti-Muslim and anti-refugee sentiment" harkened back to "eras in which Americans were told they could restore past glory if they just got some group or idea that was threatening America under control."

Though the president did not mention candidates Donald Trump or Hillary Clinton by name in the article, he said that "much of it [is] fanned by politicians who would actually make the problem worse rather than better."

Throughout the U.S. election campaign, international trade policies like the Trans-Pacific Partnership (TPP) have come under heavy criticism from the left and the right.

Trump has been a fervent critic of international trade, going so far as to say that a pending free trade pact, the TPP was supported by "special interests who want to rape our country."

Meanwhile, Clinton reversed her earlier support of the TPP, after facing pressure from Bernie Sanders and his supporters, who have strongly opposed it.

Along with his full-throated defense of capitalism, the president also made the case for some degree of regulation.

"The profit motive can be a powerful force for the common good," the president said. "But, by itself, this will not lead to broadly shared prosperity."

The solution to the problems and anxieties of today, he said, must also recognize that the economy is complicated and extreme change would be harmful at every income level.

PHOTO: President Barack Obama has penned an essay in the Economist newspaper defending immigration, technological innovation, globalization and free trade.The Economist
President Barack Obama has penned an essay in the Economist newspaper defending immigration, technological innovation, globalization and free trade.

"As appealing as some more radical reforms can sound in the abstract -- breaking up all the biggest banks or erecting prohibitively steep tariffs on imports -- the economy is not an abstraction," he said. "It cannot simply be redesigned wholesale and put back together again without real consequences for real people."

Describing the presidency as a "relay race," Obama laid out four challenges that his successors would need to address. Those included boosting productivity, addressing inequality, ensuring access to jobs as well as making the economy “resilient” against shocks and capable of nurturing future growth.

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