Bernie Sandersâ and Donald Trumpâs campaign criticisms of our countryâs disastrous trade policies are resonating with voters. In response there has been a flurry â a blizzard â of op-eds from noted celebrity, âestablishmentâ 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 âfree lunchâ 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 âanti-trade,â even âanti-commerce.â Many of them not only repeat the same arguments, they actually even use the same words.
This weekâs Fact-Check This: Arrogance Of Elites Helps Drive The Trump Phenomenonexplored Glenn Kesslerâs âfact checkâ that awarded Trump âfour Pinocchiosâ for claiming that our countryâs 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 âAmericans want to buy these products from overseasâ when the reality is that companies move jobs and production out of the country to get around paying our countryâs wages, taxes and environmental protection costs. (And we let them do that because âŚ ?)
Last weekâs Has The Election Finally Killed TPP And Corporate âFree Tradeâ? 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 âŚ talking about how great a deal the TPP is, writing, ââŚ if we eliminate 18,000 tariffs weâll be able to keep more production at home and sell more abroad. [. . .] Our workers can compete if we level the playing field âŚâ Theyâll 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 thereâŚ
A Bunch More
Those were just a couple of examples, a flurry before the blizzard. Here are more.
Mark J. Perry, in âTrump is completely wrong about the U.S. trade deficitâ 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 canât accurately be referred to a âloss,â because itâs 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 âlostâ 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 âlostâ a net amount of $366 billion of goods that ended up being consumed and enjoyed by Americans.
This batch of bamboozlement explains that if youâre a baker who makes a deal to âtradeâ 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 whoâs 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 whoâs counting?
Cokie and Steve Roberts offer another rationalization for the lost jobs and wages, in âDonât discount the benefits of trade.â They wrote, âThere are always winners and losers, and the losers are both more visible and better organized.â (Laid-off workers are better organized than the Wall Street billionaires who get to pocket their paychecks?)
Their examples of their winners include, âthe mom who buys cheap sneakers from Bangladesh.â 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 Americaâs corporate trade negotiators benefit from doing that?)
The Robertses continue, âMoreover, many of the workers losing manufacturing jobs belong to unions, and organized labor has become the most vociferous foe of new trade deals.â 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 tradeâs âmost vociferous foeâ?
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, âThe clock cannot be turned back. Lost manufacturing jobs will not return.â
Speaking of âjobs that arenât coming back,â Ben Casselman, Chief Economics Writer at FiveThirtyEight, writes that âManufacturing Jobs Are Never Coming Back.â Casselman explains that we should just give up, suck it up, and accept our sorry fate. âA plea to presidential candidates: Stop talking about bringing manufacturing jobs back from China. In fact, talk a lot less about manufacturing, period.â
He writes that we donât need manufacturing anyway, because service sector jobs something.
Itâs 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, thereâs 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 manufacturingâs 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. âIn 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.â
Cassleman says candidates should start âtalking aboutâ making a service-based economy âwork for workers.â With talk like that, no wonder voters are fed up with Americaâs corporate-favoring trade policies that sending our jobs, wages and ability to make things â including a decent living â out of the country.
This blog originally appeared at ourfuture.org on March 13, 2016. Â 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.