I nominally like Fareed Zakaria at Newsweek, but I can’t help but think he’s way wide of the mark here, and exhibits more than a little elitism in his dismissal of the Democrats’ protectinoist rhetoric.
He seems to be operating from a basic philosophy that is the obligation of the United States of America to create a rising economic tide to lift all boats; that is is our responsibility to create better economic conditions perhaps everywhere else in the world, or at least everywhere we can. At its most basic level, I don’t buy that - I believe the responsibility of the American government is to Americans first. And if the policy benefits the majority of Americans, and the county as a whole - and it happens to benefit the rest of the globe - then fine.
But Zakaria and other free-traders seem to think people oppose free trade out of myopia, tha they don’t see what wonderful things it does in, say, Guatemala. And I’m sure it work wonders there, and no, people don’t see it. They see what it does in their own country and their own community, and they believe - not unreasonably - that they are the poorer for it.
It is a simple mathematical fact that if you are a producer, it behooves you and perhaps your shareholders to produce at the lowest cost possible. And if that means moving your production facility to Central America or to China, then you may ultimately produce lower-cost goods for the American market. You may elevate living standards in whatever country you choose to move to. But the simple fact is that the people who might have previously worked in the plant when it was here, they are just screwed. Some may be out of jobs for decades, but it’s not just that; it’s that such facilities no longer provide stable jobs, no longer bolster regional economies. Well, times change, the economy evolves. Fine. You’re going to have dislocation.
But Zakaria sort of breezily dismisses these concerns, in a manner I’ve heard so many free traders use:
And isn’t the point of leadership to educate and elevate people, not to pander and drag them into the swamp of ignorance and fear? There is a way to speak about the pain of globalization—and about the need for investments in retraining, education, health care and infrastructure—so that we can both compete but also absorb the shocks of a changing global economy. Unfortunately that is not what the Democratic candidates are talking about.
No offense, Fareed, I’m not real sure you know what you’re talking about.
We’re so blithe here - oh, all they need is retraining. Retraining to do what, exactly? Work as a nurse, third shift, maybe? That’s going to take several years and lots of money; shall it be entirely subsidized by the government, by tax dollars? Or are we going to train 50-year-olds all to be IT wizards, fixing computers at the likes of Newsweek’s corporate headquarters?
“Infrastructure” also requires massive infusions of tax dollars. Where’s that coming from, again? The same could be said of “fixing” health care. To provide their own “cure,” shall we levy additional taxes against those who, as a result of deindistrialization, are least able to bear the additional burden? Where shall we get the money from, then?
America can only “compete” in terms of manufacturing if our wages are as low as wages will be in those other countries; we can only compete if in fact manufacturing costs will be lower here, and they cannot be. That is the basic reality. We can pretend that in the future, we can all be tech wizards or entrepreneurs, but the reality is, we can’t be. And if this magical “training” doesn’t somehow magically replicate the jobs lost, in terms of salary and in terms of benefits, then it is a net loss for those communities.
When the history of this era is written, it will be replete with the unimaginable riches that accrued to those at the top of the food chain, as American policy made it easier for them to move their means of production outside our borders; it will tell of the professional, elite educated class which reaped the rewards in terms of its investments, at the very least its 401k. It may or may not talk of those who don’t have a 401k, who aren’t elite and educated and who really can’t afford the additional expense of getting from here to there. What we are doing is endorsing, via policy, a reduction in the general living standard in this country so that the few here, and the many overseas, may see an increase in their own.
Maybe Zakaria is right, and we need to be concerned about what people in India think. But per both Hillary and Obama, I’m far more concerned about what people in Cleveland think.
