Bernanke: Risin' Up to the Challenge of Our (Trade) Rivals

Ben Bernanke's latest: "Embracing the Challenge of Free Trade: Competing and Prospering in a Global Economy." The well-footnoted speech provides a good survey of some of the issues (in addition to handling monetary policy, Bernanke serves as a walking, talking version of the Journal of Economic Literature). He usefully notes some of the benefits beyond the standard "comparative advantage" gains you know (and love) from principles:

In practice, the benefits of trade flow from a number of sources. By giving domestic firms access to new markets, trade promotes efficient specialization, permits economies of scale, and increases the potential returns to innovation...

Another substantial benefit of trade is the effect it tends to have on the productivity of domestic firms and on the quality of their output. By creating a global market, trade enhances competition, which weeds out the most inefficient firms and induces others to improve their products and to produce more efficiently.

Also, the long run answer to the worry that we're "losing jobs":

If trade both destroys and creates jobs, what is its overall effect on employment? The answer is, essentially none. In the long run, the workings of a competitive labor market ensure that the number of jobs created will be commensurate with the size of the labor force and with the mix of skills that workers bring. Thus, in the long run, factors such as population growth, labor force participation rates, education and training, and labor market institutions determine the level and composition of aggregate employment.

Conspicuous by omission is another prominent trade-related worry - the (stupendously huge) trade deficit. Of course, that's the issue where Federal Reserve policy might actually matter. Bernanke did offer an interesting hypothesis a couple of years ago (before he became chairman, of course).
Although the speech was given to the Montana Economic Development Summit, Bernanke failed to note Montana's gains from its comparative advantage in dental floss ranching.
Here's Macroblog's take on the speech.
Separately, two prominent Harvard economist/bloggers, Dani Rodrik and Greg Mankiw (nothing like tenure and a low teaching load to encourage blogging!) have been having a back-and-forth on trade issues. Economist's View has a summary and links.