Barney Frank: “first I do want to comment on the irony of many of us being lectured about the value of free trade by supporters of the…”

“first I do want to comment on the irony of many of us being lectured about the value of free trade by supporters of the most anti-free trade, anti-poor people policy that the United States has, our agriculture policy. People who have voted for the American agriculture bill have less credentials to preach to the rest of us about being fair to poor people than anyone I can think of. I am here to speak against the Chile Free Trade Agreement, as well as the Singapore Free Trade Agreement, both for the reasons that we have heard from from others, but specifically because they have unfortunately become the embodiment of a purist, right-wing ideology gone mad. Chile, in fact, as we have known, has been a successful economy. Part of what Chile did as it was building its successful economy was to adopt some sensible controls on short-term capital flows. They did not want hot money coming in and out. Most analysts agree that the major cause of the problems in Asia in the late 1990s had to do with hot money going in and out. Sound economies, sound budgets were undermined when short-term investments had flowed in and there was a run on the country. Most economists today agree, including advocates of free trade, that it is wise for countries in some cases, particularly developing countries that may not have sound banking systems, to be allowed to put controls not on foreign direct investment, but on short-term hot money.”