While I am a huge fan of Paul Krugman's political writing, I have been less of a fan of his writing on economics. I've noticed recently that even Krugman, who has in the past been an orthodox "free trader" is starting to change his views. Free trade will lose support in the United States if only the rich and multi-national corporations benefit. Congress is finally reacting to the voters in their districts who are seeing their jobs moved overseas. Free traders constantly bleat that protectionism is not the answer. Yet they provide no other answer to the erosion income in the United States. So there should be no surprise that there is political reaction.

I think credibly threatening tariffs is a good first step. Actual tariffs may not be necessary. It is clear that China will do nothing to significantly loosen the peg without heavy pressure, and a tariff threat may be that pressure.

I continue to be skeptical that we have enough of a democracy that a credible tariff threat is even a possibility. I continue to think that we've sold our democracy to corporatists, and they will not allow tariffs. But the fact that a bi-partisan group of tariff-supporting Senators went to China has begun to change my mind on this point.

If the choice is to implement tariffs or implement social policy that helps workers deal with globalization, obviously in the real world only the former is possible. This society to resistant to considerations of social welfare and addicted to tax cuts for the rich, virtually ruling out any effective social program for globalization shock.

If we have enough of a democracy to be able to credibly threaten tariffs, and if the Chinese don't blink, tariffs will be the policy.