Peter Feaver raises a very interesting issue in his recent post on choosing an optimal policy for Syria. He suggests that we should not dwell on policies that would require a vigorous wartime leader, since he doubts President Barack Obama's ability to play that role.

At one level, this seems an eminently pragmatic suggestion. Different leaders have different strengths. As a nation, Americans just made a leadership choice -- why not recognize the constraints that choice may pose and limit the policy discussion accordingly?

And yet ... this line of argument puts me in mind of the summer of 2008. Friends who worked for the Treasury Department or White House at that time have told me that they could see the signs of economic trouble on the horizon and knew they did not have tools adequate to the task. Recall that a major reason George W. Bush's administration did not bail out Lehman Brothers in September 2008 was that it did not think it had the authority to do so.

But there was advance warning of the economic crisis that exploded that fall. Bear Stearns had failed in the spring of that year, six months before Lehman broke. Bear and Lehman had been two institutions noted for their very high leverage ratios. When the first went, there were more than a few hints that the second might follow.

So, if Bush administration officials felt themselves ill-equipped, why did they not seek greater authority from Congress that summer?

The answer I've gotten is that it seemed futile to make the request. The Congress of that time was controlled by Democrats who were in no mood to expand Bush's authority. The president's public standing and political capital were at low ebb. So the administration took a pragmatic approach of the sort Feaver advocates and did not bother to ask for additional tools. They took their constraints as given.

That was likely a disastrous decision for the Republican Party. It may have cost the 2008 election and thus, in turn, the 2012 election. Had the Bush administration yelled that danger was approaching and had Congress subsequently refused a well-thought-out request to act, there might have been a very different narrative in the fall of 2008. Instead of "reckless Bush administration deregulation driving the economy into a ditch," it could have been "farsighted Bush administration stymied by petty Congress."

Perhaps that's fantasy. It would have required an objective media, for example. Proposed financial legislation may not have been enough to quell the tingling in the legs of the media we actually had. But it's hard to believe that it wouldn't have been better to push Congress to do the right thing, rather than sitting quietly and looking inept and culpable.

I wonder whether there's an analogy with Syria. If we all sit around and accept that we're at a constrained optimum and the constraints bind, we effectively excuse leadership failure. Doing that can have long-run repercussions, particularly when we next make choices about our leaders.

The policy world has turned on Ken Rogoff and Carmen Reinhart with a vengeance. The two are the celebrated authors of multiple studies showing that very high levels of government debt have historically been associated with slower growth. After a review of one of their articles revealed a spreadsheet mistake, the ever-temperate Paul Krugman was driven to ask: "Did an Excel coding error destroy the economies of the Western world?"

John Maynard Keynes once said that "even the most practical man of affairs is usually in the thrall of the ideas of some long-dead economist."Apparently, this bondage is felt even more acutely when those practical men are in the thrall of a living, breathing pair of economists. Now that Rogoff and Reinhart have been discredited, the thinking seems to go, the masses who had been suffering under the yoke of austerity are now free to spend as they had always wished.

There are a number of reasons to see this as an overreaction. The episode is a bit analogous to a researcher finding that a daily Twinkie adds 10 pounds over a year. A subsequent study finds that, with different methodology, a daily Twinkie might add only 5 pounds over a year. Then the baying pack howls that they knew Twinkies were good for you all along, they abjure dieting, and stuff themselves with cake and cream filling. [Reinhart and Rogoff respond to the criticisms and put the dispute in the context of a broader literature without resorting to any talk of dessert cakes.]

An odd strain of the discussion has been the implication that the only restraint on unbounded budget deficits has been the Reinhart-Rogoff admonition that it could slow economic growth. In fact, there are other constraints. How much can Portugal or Greece or Cyprus spend beyond current tax revenue? They can spend the money they have in savings (negligible) plus the amount they can borrow in the open market (negligible) plus the amount that other countries or international financial institutions (IMF, ECB) are willing to lend them. The limitation, then, is not Harvard researchers' findings but rather the willingness of other leaders to risk their funds, as their thoughts teem with admonitions about "sending good money after bad."

Of course, countries such as the United States, France, or the UK can borrow on open markets. That does not free them from all non-academic constraints, however. If borrowing is excessive, a country begins to look riskier. The United States was downgraded in 2011, France in 2012, and the UK last week. Even the IMF, cheering now for a spending boost, has argued for offsetting medium-run budget cuts.

The Reinhart-Rogoff episode has prompted deeper ruminations about how grounded our economic beliefs really are. In the Wall Street Journal, Carl Bialik elicits a confession from the editor of the American Economic Review that peer review rarely involves line-by-line checks of authors' calculations. Bialik lays bare some of the inherent vagaries of working with historical macroeconomic data -- there are no controlled experiments and the numbers can be unreliable.

It is thoroughly healthy to review the limitations of empirical macroeconomics. It is the part of economics that deals with the most moving parts and has the least opportunity to isolate treatment effects from confounding variables. Economics does far better as a field when conditions are more favorable -- predicting how an auction will work, for example. Yet citizens and policymakers want to know what will happen with inflation, unemployment, and growth, and how these will be affected by government spending, taxes, and the money supply. These are all macroeconomic questions.

Let's stipulate, then, that macroeconomic point estimates should be treated as somewhat fuzzy. That was always acknowledged in the formal economics (standard errors), but it does not usually make for good newspaper copy. If multiple studies, using different data sources and different techniques, find similar results, then we will have steadily more confidence in those findings. This has always been true too, though in public debate participants tend to prefer a single bold study to a lengthy lit review.

The newfound caution about macroeconomic findings has, so far, been curiously selective. Foes of austerity argue that, after slaying the dreaded Reinhart-Rogoff result, they are not even bound by warnings of credit downgrades. After all, if only we adopt new fiscal stimulus, it will promote growth and pay for itself (debt/GDP will fall as GDP rises faster than debt).

How do we know this? Why should we believe that the stimulative effects of new spending will overcome people's worries about the new taxes that will inevitably follow? How can we calculate how much stimulus is appropriate? Are tax cuts or spending increases more appropriate? If we do not see booming economic growth after stimulus has been tried, how will we know that the stimulus was worthwhile, that it saved us from an even worse fate?

We have macroeconomic findings. Precisely calculated macroeconomic findings. Based on historical data. Published in peer-reviewed journals. Worked out on spreadsheets. Let the spending commence.

Yesterday the IMF chided the United States and the United Kingdom for their recent pursuit of austerity. The organization released its latest World Economic Outlook in anticipation of the annual World Bank-IMF spring meetings in Washington, when global financial dignitaries gather.

The IMF put forth top officials to discuss the organization's forecast -- which I'll take up in another post -- and also to critique the state of fiscal affairs in major countries. Carlo Cottarelli, the director of the IMF's fiscal affairs division, described 10 economies with serious fiscal problems -- debt in excess of 90 percent of GDP and rising. These 10 -- the United States, Japan, the UK, France, Italy, Spain, Belgium, Greece, Ireland, and Portugal -- account for 40 percent of world GDP (for all the headlines they draw, Greece, Ireland, and Portugal account for very little of that global GDP).

Cottarelli warned that there were numerous studies indicating that when debt hit 80 to 90 percent of GDP, growth would suffer. This seemed an oblique reference to the bubbling controversy over the work of Ken Rogoff and Carmen Reinhart. Count the IMF in the camp that think Rogoff and Reinhart are basically right. Cottarelli's conclusion, given his reading of the broader evidence, was that a country should not seek to stabilize debt/GDP at the 90 percent level, but rather should aim for significantly lower levels of debt.

While that might seem to support a call for austerity, the IMF's short-term policy conclusions were just the opposite. As the Wall Street Journal reported it:

"...the International Monetary Fund on Tuesday called on countries that can afford it -- including the U.S. and Britain -- to slow the pace of their austerity measures ... it warned euro-area policy makers against focusing too much on hitting tough deficit targets, saying they risked further deepening their downturn. ‘Fiscal adjustment needs to proceed gradually, building on measures that limit damage to demand in the short term,' the IMF said."

There were two interesting caveats to this call, however:

1. This recommendation to back off austerity only applied to countries that are not currently subject to market pressures.

2. Short-term easing needs to be paired with credible medium-term restraint. (Borrow more today; pay it back tomorrow). 

Those caveats are critical and raise all sorts of questions. Fortunately, I was at Cottarelli's press conference and got to ask.

Take the "market pressures" exception. You know a country is experiencing "market pressures" when that country's bondholders are panicking, a debt sell-off is underway, and interest rates on sovereign debt are soaring. When no one wants to buy or hold your debt, it is an awkward time to try issuing more. On this, there is broad agreement.

But how do you know when investors are about to lose faith in your debt? Is there any reason to expect advance warning? When should preparations begin?

Cottarelli's response was that we do not really know in advance. We have to guess. There are some indications of vulnerabilities -- a country whose debt is held more by international investors is more vulnerable -- but it's an art, not a science.

An honest but unsatisfactory reply. It does little good to say that we know market pressures when we see them. Once the market has turned on your debt, it's too late. Budget processes are slow, with long lags from initial discussion to actual spending. If interest rates were to spike on U.S. debt in September 2014, borrowing for that time period is covered by the budgets currently under discussion in Congress. And, for the record, Federal Reserve data show that in 2011 roughly 46 percent of U.S. debt was held by international investors. 

On the question of repaying additional short-term borrowing with medium-term frugality, I asked about judging the credibility of fiscal plans. The U.S. fiscal stimulus of 2009 was supposed to be a temporary measure, but worked itself into spending baselines. Congress regularly adopts measures that ‘balance' 10-year budgets, only to repeal those measures when the time comes. A classic example is the attempt to cut payments to Medicare providers, requiring a regular "doc fix" when it turns out there is a limit to the pro bono services doctors will provide.  So how do we know that medium-term promises are credible?

Cottarelli suggested that a first step was to look at whether a plan contained sufficient detail. Beyond that, though, he acknowledged it was a much more difficult issue. His recommendation was to look at a country's past record of implementing fiscal adjustment.

Other than the recent austerity, to which they object, it was unclear which episodes in recent British or U.S. fiscal history offer reassurance on this count.

The rationale for the IMF's call to set aside austerity is pretty clear -- large parts of the world are slumping, central banks are doing all they can on the monetary side, so the IMF would like to see a boost to demand through looser fiscal policy (lower taxes or higher spending). The Reinhart-Rogoff controversy is a sideshow here. The IMF is not embracing ever-rising debt levels; it is pushing select countries to adopt a temporary slump-busting burst.

Yet if one runs through the IMF's own check-list of pre-requisites for short-term relaxation -- current debt at sustainable levels; freedom from worry about a market panic; credible medium-run plans for cuts -- none of them seem to apply. The IMF prescription appears less a careful calculation than a double gamble. It is a bet that further short-term measures are appropriate to address a slow-down that has now dragged on for five years, and also a bet that those who adopt the prescription will not have to pay a hefty price down the line.

A couple months ago, the New Yorker posted a story and wonderful online video about a master pickpocket. This person was willing to demonstrate his art on camera. Even so, he moved so quickly that it can take multiple viewings to see just how he relived his target of his possessions. The key to it, of course, is misdirection. The pickpocket makes sure your attention is directed somewhere other than where the action is taking place.

This came to mind when reading Dan Drezner's rejoicing about recent polls showing improved U.S. public sentiment about trade. I welcome a new public receptiveness to trade as much as anyone, but Dan, in his euphoria, concludes:

"The spike in public enthusiasm from last year is politically significant. At a minimum, it suggests that President Obama won't face gale-force headwinds in trying to negotiate trade deals. Which means I could win my bet with Shadow Government's Phil Levy. Which is the only thing that matters."

Nor was Dan the only one to wax optimistic about trade prospects this past week. Mike Green thought things had gone rather well with Japanese Prime Minister Shinzo Abe's summit meetings with President Obama in Washington.

"Even on the trans-Pacific Partnership (TPP), where expectations were low, there was much more substance than met the eye.... The Japanese delegation had a quiet spring in their step after the summit and were keen to move on TPP in a matter of weeks..."

This, too, is promising. Peter Feaver had it exactly right when he noted that engagement with Japan could be an essential part of delivering on Obama administration promises of attention to Asia.

So, as far as public wisdom and the Asian pivot are concerned, these are both healthy developments. Yet, when it comes to prospects for trade policy accomplishments over the remainder of President Obama's term, anyone laying odds or taking wagers should pay close attention to where the action is. To that end, here are four questions to help maintain focus:

1. What will Japan's entry do for TPP prospects?

Japanese entry into the TPP, if it happens, will be a good thing. It will dramatically increase the economic significance of the TPP, and it will establish the agreement as the premier accord governing trade liberalization and economic rules in the Asia-Pacific region.

If Japan does not join, we have problems. The administration had previously suggested that Japan could enter in the next round, after this version of TPP concludes. That, however, would pose serious difficulties. Japan is no small economy able to sign on to an agreement with a few innocuous accession talks. If the TPP reaches a successful conclusion soon, after four or more years of negotiation, will there really be an eagerness to reopen the deal in the near future? But the size and complication of Japan's economic relations also mean that the task of concluding the TPP just got much harder. One former USTR recently opined at a conference that if Japan joins the talks the TPP will not be concluded in President Obama's term.  

2. What do key interest groups think?

While it does not hurt to have the public embracing trade, U.S. agreements are not decided by referendum. I will leave it to all the political scientists buzzing around this site to provide details, but a more sophisticated approach would focus on the dynamics of the Congress. A more sophisticated approach would still think about the relations with key constituencies, such as organized labor. From the time President Obama first took office, it appeared clear that he had the votes in Congress to pass the pending FTAs with Colombia, Panama, and South Korea. Yet he did not put them forward until late in 2011, despite loud complaints from the business community. This at least suggests that there was something more than vote counting going on.

Along these lines, there was an alarming bit of news in the Hill recently. One promising feature of a trade deal with Europe was that it would seem immune from divisive questions about labor standards that had plagued FTAs with developing countries such as Colombia. The Hill, however, reported that "unions want to use negotiations on a U.S.-European Union (EU) trade deal as leverage to win stronger labor laws here in the United States."

If so, this does not bode well. Those are among the worst trade fears of Republicans on the Hill -- the prospect that labor legislation that could not pass a straight vote could instead be slipped in through the back door of a trade deal.

3. How are Congressional relations these days?

Per the constitution, trade is Congress' domain. Congress can try to delegate some of the negotiating power to the executive branch but ultimately must approve of any deal that is struck. If this is to work through periods of detailed negotiations, there must be good, open communication between the Hill and the White House. In particular, the committees that deal with trade -- House Ways and Means and Senate Finance -- must be on board. As it happens, these are the same committees that deal with the sort of taxation issues that have been a recent struggle. I'll leave it to the reader to grade the degree of comity between branches.

One less subjective measure, however, is whether Congress grants the executive trade negotiating authority (known as TPA -- trade promotion authority). The administration has also been saying for years that the idea of TPA is a reasonable one, but the time is not ripe. In the 2013 trade agenda, released today, the administration said it would work with Congress on obtaining such authority. That will be a contentious fight, since it will raise issues such as the permissible scope of labor provisions in an accord. The document does not set a date.

4. Who's your USTR?

It is also helpful, when negotiating complex trade agreements, to have a representative who will go forth and conduct the negotiations. The incumbent USTR, Ambassador Ron Kirk, reportedly just held his going-away party. Though there have been rumors, the administration has not yet named a new USTR, much less confirmed one. That could prove an obstacle to racing ahead with complex agreements.

So I see the trade policy landscape a little differently than Dan Drezner does. He may want to keep in mind that, if you don't keep your eye on where the action really is, someone may take your lunch money. 

The conquering of the euro crisis seems like something out of a fairy tale. Faced with a gut-wrenching peril, our hero closes his eyes and chants an incantation: "Whatever it takes!" Suddenly, once-insurmountable troubles melt away and everyone lives happily ever after.

So what happened? Was it all in our minds? Was the episode anything more than a panicked bunch of bond traders, stampeding toward a precipice but now safely pacified and redirected?

As last summer turned into fall, Italy and Spain were wobbling. The two countries -- the third and fourth largest economies in the eurozone -- saw their bonds shunned by global investors. For the heavily indebted pair, a bond sell-off meant that interest rates rose and disaster loomed. At some point, the high price of borrowing would become unbearable. The eurozone nations had gathered funds to try to avert a crisis, but the sum would not be enough to cover the needs of such large member economies.

Then Mario Draghi, head of the European Central Bank, stepped in to save the day. He announced that the ECB would do whatever it took to save the currency. If extra funds were needed, the ECB would provide them through a program it called Outright Monetary Transactions -- the unlimited purchase of troubled nation bonds once those countries asked for help.

The effect of his announcement was dramatic. Bond yields fell as buyers relaxed. While the previous bailout fund might have been limited, the ECB's ability to print money and buy bonds was not. The restoration of calm was so successful that the ECB did not have to actually do a thing -- the mere announcement that it was willing to act relieved the pressure on Spanish and Italian borrowing.

It is hardly a novel idea to think that a dangerous market panic could be settled by words alone, so long as those words were credible and uttered by the right person. So, do we mark this up as an instance of judicious intervention? A daring move by Mario Draghi that saved the European project and merited his selection as the Financial Times' Person of the Year?

Maybe. The problem is that the sovereign debt problems plaguing Spain and Italy were only one part of a multi-dimensional crisis. The other problems remain, two in particular. First, the untenable contradictions of the eurozone's approach to banking have not been resolved. Second, the beleaguered countries along the eurozone's periphery are being asked to endure potentially unbearable levels of unemployment and economic stagnation.

The banking problem can seem the most obscure part of the problem. Yet as the global financial crisis demonstrated, the provision of credit is the lifeblood of an economy. Cut off credit and economic asphyxiation sets in quickly. Europe's additional discovery was that, in a single currency zone, money could flow very rapidly from any bank perceived as risky to others perceived as safe. Any hint that a bank's host country might leave the euro or that the bank might have gorged itself on dubious sovereign debt would be enough to start the exodus of funds. No funds, no credit, no economic activity.

Eurozone leaders resolved to fix this with a banking union. And then they ran into politics. Banking regulation is sensitive. There was little appetite for ceding control. Last week, discussing a recent bilateral move by France and Germany to coordinate their banking policies, the Financial Times' Wolfgang Münchau wrote:

"My suspicion is that the ultimate intent of the Franco-German legislation is to secure the position of their national champion banks ... The most important signal sent by the unilateral legislation in France and Germany is the lack of political will to sort out the banking mess, which is at the heart of the eurozone crisis. Instead, governments are seeking refuge in symbolic gestures ... The renationalisation of banking means that the monetary union is as unsustainable today as it was in July last year -- and now the policies needed to fix this problem have been abandoned."

This was one danger of Draghi's move. By alleviating the sense of impending doom, he also may have undermined the impetus for overcoming entrenched opposition to reform.

The growth and unemployment situation is not much better. A story this week, contrasting positive Spanish sentiment with dismal performance, detailed the economic turmoil in the country:

"...in the last quarter of 2012 ... the number of companies declared bankrupt soared by almost 40 per cent to 2,584. It was the highest number since the crisis began, suggesting that the situation for credit-starved Spanish companies is not only getting worse -- but getting worse faster than before ... Nor has there been any sign of a turnround in Spain's dismal unemployment numbers, which continue to rise towards 6 million, or more than 26 per cent of the workforce ... The IMF expects a drop in GDP of 1.5 per cent this year -- a worse recession than in 2012."        

We also come upon another danger of Draghi's move: By restoring confidence in the euro, he paved the way for the currency to rise, which did no favors for eurozone exporters. That's hardly the cause of Spanish economic woes, but it is no help, either.

And then, as always, the democracies of Europe have politics. Spain's governing party is caught up in a political scandal. Italy is moving back to electoral politics after a technocratic interlude. It is not clear that difficult political choices will get much easier in either case.

The list of eurozone perils is alarmingly long. Yet a remarkable sense of calm prevails in the markets. Perhaps this will be a crowd-pleasing story book ending, the sort in which impossible obstacles are overcome and everyone goes home happy. Or perhaps it will be the kind of story one rarely sees out of Hollywood, in which our blissful hero opens his eyes, only to find that he had dreamt his salvation and the threats remained, more menacing than before.

President Obama's apparent selection of his current chief of staff, Jack Lew, to be the next Treasury secretary reflects some interesting choices. One that has received ample attention is the choice between a denizen of Pennsylvania Avenue versus someone from Wall Street. The Washington Post led with this facet of the selection:

"President Obama recently said he would love to hire a top executive into his administration. But for the job of Treasury secretary, he didn't pick a corporate executive, a famous economist or a former politician -- he has decided to tap a trusted adviser ... an expert on the nation's ongoing budget wars."

Given Lew's budget expertise and his background at State, the president had no need to choose between domestic and international qualifications for the post, but his limited time in the private sector is different from the background of some financial titans who have previously held the job.  

The most interesting choice, though, may have been between insider and outsider. Here the choice of Lew stands in contrast to the selection of Sen. John Kerry (D-MA) for State. Whereas Kerry's prominence comes from his chairmanship of the Senate Foreign Relations Committee and his candidacy for president, Lew's top positions (including his directorship of the Office of Management and Budget) have been in the Executive Office of the President, serving the president.

The Treasury secretary job is so broad that any nominee would be lacking experience in some dimension -- financial markets, international dealings, budget and political matters. That can be at least partially offset by a willingness to listen to broadly, and listen closely to the right people. It may be significantly harder to suppress strong tendencies to carry out the president's wishes and risk confrontation through presenting a contrary view. The Wall Street Journal expressed some skepticism about Lew in this regard.

It is not clear how much this independence, or lack thereof, will matter at the margin for international economic policy (loosely defined as those matters on which Dan Drezner and I wager). From the outset of the Obama presidency, Treasury and State officials privately acknowledged the necessity of moving ahead with the three pending free trade agreements. One could hardly doubt Secretary Clinton's independence or willingness to voice her views. Yet the completed agreements took almost three years to pass.

When it comes to the second term agenda of concluding Trans-Pacific Partnership talks, launching and completing a U.S.-EU. free trade agreement, or making progress at the WTO, the next secretaries of Treasury and State will have a major role to play, but the domestic political obstacles loom large. These agreements are broader than the formerly-pending free trade agreements, they are not pre-cooked, they present more challenges in international negotiation, and they may face equal or greater domestic political obstacles. To overcome all this, Lew and Kerry will need to be even more adept than their well-qualified predecessors.

A relentlessly-optimistic Dan Drezner has thrown down the gauntlet! (Well, more like a dinner napkin, really, but same idea). He defends the prospects for trade progress in President Obama's second term and descends from generalized good cheer into specifics. With a meal on the line, he writes:

"I'm willing to bet that at least two out of the following four things will happen during Obama's second term: 

1)  A Trans-Pacific Partnership that is ratified by Congress;

2)  Bilateral investment treaties with India and China;

3) A transatlantic integration agreement;

4)  A new services deal within the auspices of the WTO."

I accept.

Now, for those of you wagering at home -- not that Foreign Policy condones such behavior -- the question is not just which of us has the clearer crystal ball; you also want to think about the point spread. Over at Cato, Simon Lester offers some initial guidance to eager bookies:

"I would rate the chances of seeing completed China/India investment treaties or a U.S.-EU FTA at close to zero; a ratified TPP at around 10 percent; and a WTO services agreement at around 25 percent."

While I like the implication -- a 97.5 percent chance that I feast at Drezner's expense -- I would differ a bit on the odds.

The challenge of handicapping these events is that they are not precisely defined. A "transatlantic integration agreement" could run anywhere from an accord that promises modest services integration and regulatory cooperation to a full-fledged free trade agreement between the United States and the European Union. A bilateral investment treaty could range from a new consultation mechanism to adoption of the complete U.S. model BIT.

Thus, a central question: How readily can the Obama administration push through a minimalist version of any of these trade measures? There is a clear incentive to do so. Agreements ought to be easier if you can drop the hard parts. Signed and passed agreements constitute a legacy. Only quibbling trade geeks will ever weight the virtue of those agreements by the extent of their coverage. This is one reason for the long history of bilateral or plurilateral trade agreements around the globe that delivered very modest amounts of liberalization: they all delivered a signing ceremony for leaders.

Yet there are some significant obstacles to "going lite." Here are four:

1. Commercial significance. It would be dramatically easier to negotiate the TPP if issues such as intellectual property or state-owned enterprises were omitted. Those issues are divisive both within the United States and between participating countries. Yet they are on the agenda because key industries care about them and see opportunity in regulating the behavior of trading partners. While the Obama trade legacy will not be significance-weighted, there needs to be a minimum level of business enthusiasm to get an agreement through.

2. Balance. Any agreement has to offer something for each party. The narrower the agreement, the less likely all the participants come away with something they like. This is a problem with a services-only deal within the WTO: Usually developed countries are demandeurs for services market access while developing countries are demandees. Of course, the developed countries could go off on their own and sign a plurilateral services agreement among themselves (still under WTO auspices), but that poses some problems. It does not win domestic services firms the market access they crave, it ticks off the developing countries who have been circumvented, and it may limit negotiating space for any future, broader WTO agreement that might draw the developing countries in.

3. Leverage. In the early days of post-war trade talks, agreements came along every couple years. If your industry's concerns were not taken up in one round, you could be reasonably confident you could push for them in the next. In the last forty years, though, there have been only two completed global trade agreements (the Tokyo and Uruguay Rounds). FTAs have been concluded more frequently, but generally only one per country pair. Now suppose you're a U.S. agricultural producer with longstanding concerns about European agricultural practices. How do you react to the prospects of a limited U.S.-EU trade deal that leaves out agriculture? You hate it. You probably think that this is your moment of maximum leverage to reform EU policies; a limited agreement gives that leverage away. The argument would be similar for a modest BIT with India or China; anyone with investment concerns might see a limited agreement as worse than no agreement at all, since the chances of revisiting the topic would be small.

4. Precedents/Congress. The United States has been relatively formulaic in its approach to trade agreements, moving from the NAFTA model, to "NAFTA+" to "Chile+" - the same basic structure, with a few improvements. No major deviations from the same 'high standards' model of a trade agreement. That was one of the attractions of the TPP -- it was a group of countries who had committed to a fuller, deeper version of trade liberalization, matching the U.S. standard of depth and breadth. A standardized approach solves two particular challenges for U.S. trade policy. First, the country undertakes multiples negotiations, spread over time. Second, any administration must reach an understanding with Congress, which has constitutional authority over trade. A fixed template makes it harder for successive trading partners to try to exempt sensitive sectors. It also means that carefully negotiated understandings with Congress need not be reworked with every agreement. While an FTA- or BIT-lite may ease external negotiations, it can complicate discussions with Congress and with future trading partners.

So a 'lite' approach may be hard to swallow.

There is certainly more to chew on as we think over trade prospects for the next term. I have yet to cook up a full alternative set of odds. But am I confident in my skepticism? You bet.

On the eve of the election, Dan Drezner offered a wonderfully optimistic vision of foreign economic policy to come. He backed the view that we would see the issue move to the forefront and progress made, whatever the outcome of the vote. He catalogued the trade and investment deals that are currently mid-negotiation and concluded that success was likely:

"All of these deals are being negotiated by the Obama administration, so I think we can assume that the president has signed off on them ... Furthermore, regardless of who wins Congress, these are the kinds of deals that still fall under that shrinking category of 'doable in a reasonably bipartisan fashion.'"

I found it all very sweet. Dan was writing from Paris. Like Proust's madeleine, his hopeful predictions stirred up memories of 2008 and of 2010 -- more innocent times gone by, when my Democratic friends held great hope on the international economic front. In 2008, post-election, they would explain that President-elect Obama had multilateralism in his blood and that his recalcitrance on trade agreements had just been an election tactic to win over the unions. Why, they explained, we'd probably see the pending free trade agreements (S. Korea, Colombia, Panama) passed in lame duck session.

Two years later, with those same agreements still pending, there were hopeful murmurings that President Obama, chastened by the 2010 midterm election losses, would triangulate, just as President Clinton had in 1994. He would seek out areas of bipartisan agreement with the Republicans. What area seemed more promising than advances on trade? Of course, the agreements did eventually pass, but only after a bitter partisan conflict on the Hill. All that was accomplished was the completion of the 2006-2007 trade agenda; the administration and its allies in Congress explained that it was 'premature' to talk about measures such as renewed Trade Promotion Authority (normally a prerequisite for passage of any serious agreement). There was no forward progress. The WTO talks were left to linger. The vaunted Trans-Pacific Partnership (TPP) is actually a revived Bush administration project; participants hoping for a November 2011 conclusion saw the date come and go.

Thus, a recurrent disconnect between hope and experience. I was not going to be so churlish as to take issue with Dan's reveries, until I saw Shadow Government guru Will Inboden actually take them seriously last week. So duty calls.

Reasons for skepticism about trade negotiation progress in President Obama's second term:

-If, on a 10-point scale, the first term free trade challenges were a 'degree of difficulty' 2, then this term's challenges are an 8 or a 9. In the first term, to be called a free trader, the president just had to get a willing Congress to vote on three pre-packaged, already complete agreements. That took him 2.5 years and ended up in a bloody fight. Even so, it really just required a weekend's lobbying for a vote. Getting a TPP or a US-EU trade agreement would require sustained engagement, starting very soon, and the expenditure of substantial political capital. There are divisive, difficult issues such as intellectual property protection and the treatment of state-owned enterprises on the table in TPP; there's the question of agriculture with the EU. If the president and his team could barely handle the first term tasks, those of the second look technically much more daunting. It is difficult to list the issues on which the president has shown the kind of sustained political engagement that would be required (e.g. working to persuade reluctant groups like Pharma or farmers to live with an agreement they viewed as problematic). Perhaps health care is an example, though even then the president was criticized for tossing it to Congress and walking away while members fought.

-It may be useful to distinguish between President Obama's political cost/benefit of negotiating a trade and of concluding one. Negotiating a "21^st century trade agreement" makes one look visionary and constructive. Everyone can imagine that the ultimate deal will be filled with the things they like and devoid of any deal breakers (even if all those doing the imagining have sharply conflicting visions). Concluding such a deal means not only resolving such conflicts, but also alienating President Obama's political base. The 2011 votes on the pending FTA's discredited the old notion that House Democrats were split in their views on trade; instead, they seemed relatively unified in opposition. I am not sure what evidence Dr. Drezner is reviewing that promises bipartisan support for upcoming trade agreements. Of course, President Obama might decide that he will largely pass his second term agenda with Republican support in the House, leaving Democrats to seethe, but if that it is his strategy, his early post-election statements have concealed it well. If, instead, President Obama is determined to pursue a partisan line, he needs his forces united, not divided. Nothing will split them more readily than a good trade fight. And all of this assumes that the president's reluctance to advance the trade agenda was politically instrumental, as opposed to a reflection of his true beliefs.

-Trade agreements take time. If the president is to get anything completed, he needs to start right away. TPP is nowhere near ready, despite years of talks; most of the hard, most controversial issues have been deferred. The president is surely aware that the window for second-term presidents to achieve things is narrow. Does he want to devote that time to trade liberalization? He has not seemed inclined even to attack the divisive issue of environmental change, something he seems to care significantly more about.

We can be grateful that the president has indulged in more protectionism than embracing futile tariffs on Chinese tires and endorsing the "Buy America" concept. The problem is that U.S. trading partners will not be infinitely patient in awaiting the conclusion of the deals under discussion. From a broader foreign policy perspective, the TPP is absolutely central to the administration's pivot to Asia. Europeans are eagerly backing the idea of an FTA as one of the few positive signals they might send to investors amidst the still-looming euro zone crisis. There will be serious foreign policy consequences if the president fools us thrice on support for trade.