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Don’t Blame Trade April 15, 2008

Posted by tkcollier in Geopolitics, Politics.
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A Speech About Nothing – New York Times
Barack Obama delivered a speech in Pittsburgh on Monday on the economic stresses facing American workers. In the speech, he devoted one clause in one sentence to the single biggest factor affecting the workplace: technological change. He then devoted 45 sentences to one of the least important: trade deals.

Economists differ over how much outsourcing will change the American job market in the future, but there is little evidence that trade has been a major cause of job loss or even wage stagnation so far. As Robert Z. Lawrence of the Peterson Institute for International Economics wrote in a recent study: “The recent increase in U.S. inequality … has little to do with global forces that might especially affect unskilled workers — namely, immigration and expanded trade with developing countries.”

And yet all Democratic domestic policy discussions have to start with trade and, in 99.9 percent of the cases, end with trade.

We’re in the middle of a series of historic economic transformations.

A string of technological revolutions have made American workers much more productive. Over the past 30 years, steel producers have reduced the number of hours it takes to produce a ton of steel by up to 90 percent.

A social revolution has radically increased the number of women in the work force and pushed down the wages of men.

A medical revolution has led to enhanced diagnosis and treatment but also rapid health care inflation that burdens American employers and eats into workers’ weekly paychecks.

An information revolution has increased the economic rewards of education and punished those who lack it.

A pedagogical revolution has led to ferocious competition to get into the top universities but a decline in quality at the primary and secondary levels. For the first time in the nation’s history, workers retiring from the labor force are better educated than the ones coming in.

All of these huge social forces have had profound effects on how Americans work and live. All of them have combined to create a mass upper class, but also a struggling working class. They have all contributed to rising living standards — and also to the feelings of anxiety that show up in poll after poll.

You would think that if you were a thoughtful presidential candidate, addressing voters in an economically complicated state like Pennsylvania, you would want to describe how these pervasive forces are shaping the lives of voters and how government should respond. But, then again, you are not trapped in a campaign bubble. You have not outsourced your brain to political tacticians.

Barack Obama delivered a speech in Pittsburgh on Monday on the economic stresses facing American workers. In the speech, he devoted one clause in one sentence to the single biggest factor affecting the workplace: technological change. He then devoted 45 sentences to one of the least important: trade deals.

Economists differ over how much outsourcing will change the American job market in the future, but there is little evidence that trade has been a major cause of job loss or even wage stagnation so far. As Robert Z. Lawrence of the Peterson Institute for International Economics wrote in a recent study: “The recent increase in U.S. inequality … has little to do with global forces that might especially affect unskilled workers — namely, immigration and expanded trade with developing countries.”

And yet all Democratic domestic policy discussions have to start with trade and, in 99.9 percent of the cases, end with trade.

And we have not even begun to plumb the insignificance of Obama’s emphasis on Monday. He wasn’t even talking about trade in general. He was talking about the Nafta- and Cafta-style trade agreements whose negative effects on the American economy are barely measurable. And, to make matters even more inconsequential, he wasn’t even taking a clear stand on such deals themselves.

Obama stuffed his speech with the textbook clichés that Democratic consultants tell their candidates to use when talking about trade — warnings about Chinese perfidy and lead paint in toys. But instead of following those clichés into the realm of economic populism, he hedged.

He wound up in the no-man’s land between Lou Dobbs-style populism and Bill Clinton-style free trade. He made a series of on-the-one-hand/on-the-other-hand distinctions about which sort of trade deals he’d support and which he wouldn’t. It added up to a vague, watered-down version of economic light beer. In the end, he suggested a few minor tweaks in the U.S. tax code that would have a microscopic effect on outsourcing, and a few health and safety provisions which might have teenie-weenie effects on investment decisions. The ideas he sketched out in the speech aren’t dangerous. They’re just trivial.

We all know why Obama spoke the way he did on Monday. The forces transforming the American economy are big and hard to control. If you think your listeners aren’t sophisticated enough to grasp them, it’s much easier to blame those perfidious foreigners for all economic woes. It’s much more heroic to pretend that, by opposing Nafta, you can improve the lives of middle-class voters. Furthermore, these trade deals have become symbolic bogies for union activists. Instead of concerning themselves with the tidal waves washing overhead, they’ve decided to insist on bended-knee submission in the holy war against Colombia.

What I don’t understand is why the political consultants prefer this kind of rhetoric. Aren’t there windows in the vans they use to drive around the state? Don’t they see that most middle-class voters are service workers in suburban office parks, not 1930s-style proletarians in the steel mills?

American voters aren’t so stupid as to think their problems are caused by foreigners and malevolent lobbyists. When Obama speaks down to his audiences, it makes me so bitter I want to cling to my laptop and my college degree.

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