Bernie Sanders’ and Donald Trump’s campaign criticisms of our country’s disastrous trade policies are resonating with voters. In response there has been a flurry – a blizzard – of op-eds from noted celebrity, “establishment” pundits, explaining that moving millions of jobs out of the country is good for us because it means lower prices for those who still have paychecks. They sell these lower prices as a “free lunch” that we will never have to pay for.
These opinion pieces present corporate-negotiated trade as an all-or-nothing proposition, as if there were no balanced, fair-trade alternative approaches we could take instead. In these op-eds, proponents of fair-trade agreements are called “anti-trade,” even “anti-commerce.” Many of them not only repeat the same arguments, they actually even use the same words.
This week’s Fact-Check This: Arrogance Of Elites Helps Drive The Trump Phenomenonexplored Glenn Kessler’s “fact check” that awarded Trump “four Pinocchios” for claiming that our country’s corporate-negotiated trade policies and trade deficit are costing our country jobs, wages and wealth. Kessler wrote that the reason we import so much is that “Americans want to buy these products from overseas” when the reality is that companies move jobs and production out of the country to get around paying our country’s wages, taxes and environmental protection costs. (And we let them do that because … ?)
Last week’s Has The Election Finally Killed TPP And Corporate “Free Trade”? took on a Thomas Friedman op-ed promoting the Trans-Pacific Partnership (TPP):
It seems as though Thomas Friedman got in a cab driven by the head of the Chamber of Commerce … talking about how great a deal the TPP is, writing, “… if we eliminate 18,000 tariffs we’ll be able to keep more production at home and sell more abroad. [. . .] Our workers can compete if we level the playing field …” They’ll be buying a lot from us for sure with that $150 a month, you betcha. Meanwhile companies here that want to pay $150 a month will be closing factories and moving them there…
A Bunch More
Those were just a couple of examples, a flurry before the blizzard. Here are more.
Mark J. Perry, in “Trump is completely wrong about the U.S. trade deficit” at the Los Angeles Times, argues that our enormous, humongous $758.9 billion goods trade deficit is actually good for us, a free lunch that we will never have to pay for,
When American businesses and consumers voluntarily purchase more products from China than Chinese businesses and consumers buy from us, it does lead to a U.S. trade deficit with China. But the trade deficit can’t accurately be referred to a “loss,” because it’s based on millions of mutually agreeable individual exchanges that took place between a willing seller and a willing buyer.
In fact, you could make a strong case that China “lost” last year on trade with America, not vice versa. After all, we acquired $482 billion of merchandise made in China and they acquired only $116 billion of merchandise made in the U.S., for a net merchandise surplus of $366 billion in our favor. China “lost” a net amount of $366 billion of goods that ended up being consumed and enjoyed by Americans.
This batch of bamboozlement explains that if you’re a baker who makes a deal to “trade” by buying supplies from your neighbor in exchange for providing bread, and you buy flour and sugar from your neighbor who then presents you with a huge bill and says he used your money to set up his own bakery and advertise to your customers, this is a good thing, because now you have to come up with a way to pay that bill. Got it?
Robert J. Samuelson, writing at The Washington Post in Trade myths and realities, explains to us that moving so many jobs out of the country is good for us because the 2.4 million jobs lost to China in the last decade were only 2 percent of total payroll employment. (We lost way more than 2.4 million, but who’s counting?)
Samuelson explains that we export, and exports create jobs, ignoring the huge trade deficit that is the result of so many more imports than exports. Exports are great, but he ignores that trade must be balanced or it drains our country of jobs, wages and wealth. Worse, when imports exceed exports for decades we lose (and have lost) important parts of our overall manufacturing ecosystem. But who’s counting?
Cokie and Steve Roberts offer another rationalization for the lost jobs and wages, in “Don’t discount the benefits of trade.” They wrote, “There are always winners and losers, and the losers are both more visible and better organized.” (Laid-off workers are better organized than the Wall Street billionaires who get to pocket their paychecks?)
Their examples of their winners include, “the mom who buys cheap sneakers from Bangladesh.” Never mind the dangerous, near-slave conditions for workers in Bangladesh, and the downward pull on our own wages as Americans try to compete with that. (We could demand that Bangladesh pay decently and protect workers before we allow imports from there, but how would America’s corporate trade negotiators benefit from doing that?)
The Robertses continue, “Moreover, many of the workers losing manufacturing jobs belong to unions, and organized labor has become the most vociferous foe of new trade deals.” This begs the question, if free trade is so great for jobs and brings with it so many higher-paid export jobs, then why would organized labor be free trade’s “most vociferous foe”?
The Roberts pair offer one that we hear over and over. We should just give up, suck it up, and accept our sorry fate because, “The clock cannot be turned back. Lost manufacturing jobs will not return.”
Speaking of “jobs that aren’t coming back,” Ben Casselman, Chief Economics Writer at FiveThirtyEight, writes that “Manufacturing Jobs Are Never Coming Back.” Casselman explains that we should just give up, suck it up, and accept our sorry fate. “A plea to presidential candidates: Stop talking about bringing manufacturing jobs back from China. In fact, talk a lot less about manufacturing, period.”
He writes that we don’t need manufacturing anyway, because service sector jobs something.
It’s understandable that voters are angry about trade. The U.S. has lost more than 4.5 million manufacturing jobs since NAFTA took effect in 1994. And as Eduardo Porter wrote this week, there’s mounting evidence that U.S. trade policy, particularly with China, has caused lasting harm to many American workers. But rather than play to that anger, candidates ought to be talking about ways to ensure that the service sector can fill manufacturing’s former role as a provider of dependable, decent-paying jobs.
Casselman explains that our economy is already replacing well-paid manufacturing jobs with low-paying service sector jobs. “In 1994 there were 3.5 million more Americans working in manufacturing than in retail. Today, those numbers have almost exactly reversed, and the gap is widening. More than 80 percent of all private jobs are now in the service sector.”
Cassleman says candidates should start “talking about” making a service-based economy “work for workers.” With talk like that, no wonder voters are fed up with America’s corporate-favoring trade policies that sending our jobs, wages and ability to make things – including a decent living – out of the country.
This blog originally appeared at ourfuture.org on March 13, 2016. Reprinted with permission.
Dave Johnson has more than 20 years of technology industry experience. His earlier career included technical positions, including video game design at Atari and Imagic. He was a pioneer in design and development of productivity and educational applications of personal computers. More recently he helped co-found a company developing desktop systems to validate carbon trading in the US.
