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In the choppy waters of the global economy, the American ship seems adrift. U.S. trade balances have veered further into the chilly red latitudes than ever before. China looms out of the mist as a daunting industrial rival. The winds and currents of the Internet are opening new swathes of jobs and service industries to competition from India. Meanwhile, the Bush administration has offered a dispiriting mix of happy talk, steel tariffs, farm subsidies, and small-bore trade agreements.

You would think Americans would be worried. And yet, in the last two elections, Democratic appeals to job anxieties and fears of low-wage competition fell flat, even in the states thought to be most tightly gripped by global-economy anxiety. The Kerry-Edwards campaign's call for labor-rights and currency lawsuits against China achieved little in Ohio. Bids to extend textile quotas, by presidential contenders and a fistful of Senate candidates, meant even less in the Carolinas and the deep South.

How, then, does a good progressive manage the global economy? Attempts to return to the past -- to the smokestack economy of the 1970s, or even the dot-com boom of the 1990s -- are bound to fail. But a long tradition of progressive responses to global competition offers good lessons, and the germ of a program, for today.

In the 1790s, Alexander Hamilton suggested patent laws, labor-saving machinery, and cash rewards for innovators, so that American factories could beat low-wage competition through technology and productivity.

Twentieth-century progressive presidents from Woodrow Wilson and Franklin Roosevelt to John Kennedy and Bill Clinton mixed optimistic visions of global integration with practical domestic policy measures to keep America in the lead and ease economic adjustments. Wilson and Roosevelt combined tariff reduction with activist views of government's role in developing worker skills and infrastructure. Kennedy and Clinton offered a similar mix of ideas. They opened foreign markets through trade agreements and championed federal support for education, national scientific research programs, and training programs for dislocated workers.

A modern application of that progressive tradition would require some basic changes in Bush administration policy, and also shifts of emphasis in the prevailing progressive alternative to it.

First, level with the public. Any serious program must begin by conceding that America's competitors are good at what they do. Intellectual property piracy needs to be policed, currency rates need to follow markets, and violations of trade agreements need to be stopped. But American families are not fools who are easily tricked into buying shoddy foreign goods. They buy Chinese-made TV sets and clothes because they are cheap, reliable, and well-designed. Similarly, the technical advice they get over the phone from software consultants in Manila and Bangalore is usually helpful. Those very facts are at the root of America's anxiety about jobs and foreign competition -- and also the reason charges of unfair trade often ring hollow.

A credible progressive response to global competition must accept this. It should insist on strong enforcement of agreements and fair play in currency and finance. But it should also frankly state that our competitors are succeeding mainly on the merits, that America has weaknesses it needs to fix, and that the long-term solutions lie in improving America's competitiveness and helping workers who need assistance.

Second, restore America's scientific edge. Hamilton's view that a successful American response to low-cost foreign competition requires leadership in science and technology remains the right one two centuries later. We need more research and more intense training of scientists and engineers. Relative to the U.S. GDP, government spending on "hard-science" research in fields like physics, mathematics, and chemistry has fallen by more than 30 percent since the 1970s. It needs to go back up.

Early science education needs to be stronger; the Progressive Policy Institute has suggested creating 250 new scientific academies around the country by 2010. And with relatively few Americans choosing technical careers -- more than one-third of America's science and engineering Ph.D. holders are foreign-born -- America needs to scrap the visa restrictions that have recently cut international enrollment in American graduate schools.

Third, stabilize American finances. Since 2000, the Bush administration's budgeting has pushed national net savings to 0.9 percent of GDP: a low-water mark not seen since 1934. Meanwhile, our trade and current-account deficits have risen to 6 percent of GDP, which is an all-time record. The deficits present a large menu of risks, ranging from financial shock to long-term debt buildup.

The similar but lower imbalances of the 1980s faded as Japan and Europe revalued their currency rates, and the United States ditched Reagan-era budgets. Today's analogous response must combine greater currency flexibility in China, growthoriented reform in Europe and Japan, a departure from the Bush administration's fiscally reckless budgeting and taxation policies, and new measures to raise household savings rates.

Fourth, open the big markets. America needs to export more. The Bush administration's approach to the matter -- a string of free-trade agreements with 26 small to medium-sized economies -- won't do the trick. All 26 of those countries combined add up to only 12 percent of American trade. But rejecting trade agreements won't do it either.

A new approach needs to return the European Union, Canada, Mexico, China, and Japan, which together account for 70 percent of American trade, to the center of trade policy. To succeed in these markets, we should combine WTO negotiations with largescale services agreements and tougher enforcement in problem areas like Chinese intellectual property rights piracy. Complementing this approach should be initiatives to open up big economies like India and regions like South America and Southeast Asia, plus tariff reductions to promote development, abolish regressive taxes, and support economic reform and growth in the Muslim world.

Fifth, help more workers. The bargain implicit in the Trade Adjustment Assistance program -- as we open markets, the government provides job training and health support to workers who lose their jobs to import competition -- is reasonable and productive, but it is also a bit unfair and badly outdated. It has never been quite fair for a waitress who loses her job to a computer or a change in public tastes to receive fewer training and health benefits than a garment worker who loses her job to Honduran competition -- and the unfairness has grown as TAA benefits have improved.

Meanwhile, the distinctions are blurring as the Internet spreads global competition into services. Each day, trade becomes harder to pick out from other causes of job loss. The new environment requires a new adjustment system -- a universal one opening TAA-style benefits to all dislocated workers, including job training, health insurance support, and perhaps eventually wage insurance.

Finally, learn from the public. In America's global-economy debate, the public seems far ahead of both parties. The administration's insouciance lacks credibility. So does the left's now-reflexive dislike of trade and its nostalgia for the American economy of the past.

Public opinion surveys reveal a sophisticated, realistic public that wants trade, but also recognizes the need for policy responses to competitive challenges. A March 2006 Pew Center poll finds 66 percent of Americans viewing "free trade with foreign countries" as a good thing for the United States, just about the same figure as the 64 percent of 2000. Equally credible polls find Americans deeply worried that their jobs are vulnerable to foreign competition and that the country's competitive lead is shrinking.

In effect, a sophisticated and realistic public is looking for realism, balance, and adult supervision. That is what the progressive heritage offers.

Half a century ago, after the Sputnik launch and the creation of the European Community, the Kennedy administration responded with federal education support, the space program, and the Trade Adjustment Assistance program. In the 1980s, as trade deficits rose and Japanese competition moved beyond steel and cars to semiconductor chips and satellites, the early New Democrat movement called for restored control of the budget, open markets abroad and at home, and investments in science and human capital, which helped create a decade of unprecedented job creation and growth.

Today's challenges from China's low-cost factories and India's burgeoning software labs are not the same as those of European integration and Soviet science in the 1950s and 1960s or Japanese manufacturing in the 1980s. But the principles of a successful response are much the same. Progressives looking for the key to a successful future need only to learn from their past.

Edward Gresser is director of the Project on Trade and Global Markets at the Progressive Policy Institute.