PRESIDENT BUSH'S VISION OF SOUND economic policy has remained remarkably constant over the last five years--tax cuts, free trade, and a generous amount of immigration. And why not? Low taxes, free trade, and new immigrants have benefited our economy over the past quarter century, and helped produce a remarkably successful economic performance after the shock of 9/11.

Yet all does not seem to be well. Americans are unhappy about the president's management of the economy and pessimistic about the future. Maybe popular sentiment is simply shortsighted, or uninformed. But there is another, more rational reason for voter discontent: Times have changed, and Republicans have either not noticed or not adapted to the new realities.

Consider, for example, the thinking behind the president's recent trip to South America. He risked all of the bad images that his staff had to know would result from the protests skillfully organized by a Castro-loving Venezuelan president and a cocaine-loving Argentine footballer to visit a region with which we already run a staggering trade deficit, to urge it to accept trade deals that offer it even better access to our markets. The president undoubtedly believed he needed to push his free trade agenda. After all, free trade is one of the policies in which he believes deeply, and for good reason. No need here to rehearse the best-known passages from Adam Smith, or to tout the contribution that the liberalizing of trade since World War II has made to our prosperity, and to the prosperity of those countries

What may have gone unnoticed by the president, though, is that the world has changed since he decided to take on the trade unions and protectionists. For one thing, we have learned that our enthusiasm for freer trade is not exactly matched by our trading partners. The European Union will not, no matter how many meaningless concessions its rather unreliable negotiators make, do anything to expose its farmers to the rigors of international competition. Or to stop the flow of subsidies to Airbus, subsidies that make life difficult for Boeing. And it is clear the Chinese have no intention of ending the pilferage of our intellectual property.

Add those up and you have a world where the industries in which we have a real advantage--the three A's of agriculture, aircraft, and audiovisual products--are facing an uphill battle. Throw in a bit of currency manipulation by the Chinese, the Treasury's recent denial notwithstanding, and you have good reason to wonder whether the president should be spending political capital on new trade deals. True, any good economist will tell you that U.S. consumers benefit from free trade even if our partners choose to be foolish enough to enrich us by subsidizing their exports. But any really good economist would respond with two important caveats.

First, leaders must concern themselves with political economy, not economics. In addition to efficiency, relatively easily measured and understood, there is the more elusive issue of equity. It is Americans' sense that equity matters, that ours should be a society in which opportunity should be equally available to all. Hence the appeal of calls for "fair" as well as free trade. Never mind that these calls come from self-interested, protectionist trade unions and environmentalists, the former eager to protect their members from foreign competition, the latter eager to stop the economic growth that they mistakenly believe causes environmental degradation. A recitation of the efficiency and growth-inducing consequences of free trade is not an adequate rebuttal. Voters understand that there is more to life than efficiency, and want their leaders to make deals that are fair as well as economically productive.