When he signed the finalized NAFTA agreement in September 1993, U.S. President Bill Clinton was backing away from a campaign promise he made months before. He famously explained his decision to do so by arguing that the marriage of finance and technology had wrought major changes in the global economy. “Nothing we do in this great capital,” he added, “can change the fact … that people can move money around in the blink of an eye.” That is why, he argued, the United States had no choice but to accept the disruptions NAFTA might impose.
But while Clinton was right to stress the disruptive impact of frictionless capital flows on the American economy, he drew the wrong conclusion.
