The Politics of Trade in Ohio
Watching Barack Obamaand Hillary Clintoncompete with each other to say the nastiest possible thing about the Nafta trade deal has made me think about the politics of abortion.
In campaign after campaign for more than 30 years now, Republicans have been denouncing Roe v. Wade. Yet even though they have held the White House for most of that time — and made 12 of the last 14 Supreme Court appointments — abortion remains legal.
This straddling has served Republicans well. They have been able to win over voters who care about abortion above all else without alienating swing voters, most of whom, polls show, think it should be legal at least some of the time. Talking tough and governing gently helped the party build a majority.
Now come Mr. Obama and Mrs. Clinton, campaigning across Ohio with a similar kind of tough talk about foreign trade. Based on what they’re saying, you’d have to conclude that they believe that Nafta and other trade agreements have caused Ohio’s huge economic problems.
“She says speeches don’t put food on the table,” Mr. Obama said in Youngstown. “You know what? Nafta didn’t put food on the table, either.” Later, he went further, claiming that Ohio’s workers have “watched job after job after job disappear because of bad trade deals like Nafta.”
Mrs. Clinton’s advisers, meanwhile, have been putting out the word that she tried to persuade her husband not to support Nafta — which liberalized trade with Mexico and Canada — when he was running for president. (He did support it, aggressively, and signed it into law in 1993.) “I’m not just going to talk about what’s wrong with Nafta,” she said in Youngstown, the day after Mr. Obama had been there. “I’m going to fix it and I have a four-point plan to do exactly that.”
But when you read this plan, or Mr. Obama’s trade agenda, you discover none of it is particularly radical. Neither candidate calls for a repeal of Nafta, or anything close to it. Both instead want to tinker with the bureaucratic innards of the agreement. They want stronger “labor and environmental standards” and better “enforcement mechanisms.”
It’s a bit of an odd situation. They call the country’s trade policy a disaster, and yet their plan to fix it starts with, um, cracking down on Mexican pollution.
The question this raises is what Mr. Obama or Mrs. Clinton would really do about Ohio’s troubles if one of them became president — and whether it would make a difference.
There is no doubt that trade has hurt many people in Ohio. In just the last few months, Alcatel-Lucent has announced plans to close a telecommunications equipment factory in Columbus and move some of the jobs to China, while a steel-door plant near Youngstown shut its doors and shipped some of its equipment to Mexico.
Back in 2000, the typical Ohio family was still making more money than the typical American family, according to Moody’s Economy.com. But over the last eight years, real median income in Ohio has dropped almost 10 percent, to about $47,000, leaving it $2,300 below the national median.
“Trade has winners and losers,” said Alan Blinder, a former vice chairman of the Federal Reserve and a Democrat, “and there have been a lot of losers in Ohio.”
The first problem with what the candidates have been saying is that Ohio’s troubles haven’t really been caused by trade agreements. When Nafta took effect on Jan. 1, 1994, Ohio had 990,000 manufacturing jobs. Two years later, it had 1.03 million. The number remained above one million for the rest of the 1990s, before plummeting in this decade to just 775,000 today.
It’s hard to look at this history and conclude Nafta is the villain. In fact, Nafta did little to reduce tariffs on Mexican manufacturers, notes Matthew Slaughter, a Dartmouth economist. Those tariffs were already low before the agreement was signed.
A more important cause of Ohio’s jobs exodus is the rise of China, India and the old Soviet bloc, which has brought hundreds of millions of workers into the global economy. New technology and better transportation have then made it easier for jobs to be done in those places and elsewhere. To put it in concrete terms, your credit card’s customer service center isn’t in Ireland because of a new trade deal.
All this global competition has brought some big benefits, too. Consider that cars, furniture, clothing, computers and televisions — which are all subject to global competition — have become more affordable, relative to everything else. Medical care, movie tickets and college tuition — all protected from such competition — have become more expensive.
So what can be done for Ohio?
There is actually a fair amount of agreement among economists on this question. The solution should involve more government investment in infrastructure, the medical sciences, alternative energy and other areas that could produce good new jobs. A more strategic approach to investment, one less based on the whims of individual members of Congress, would also help.
“While our competitors — China and others — are investing heavily in infrastructure,” Donald Plusquellic, the mayor of Akron, the world’s onetime rubber capital, told me, “we’ve done a terrible job reinvesting in America.”
But as Mr. Slaughter, a former adviser to President Bush, points out, the payoff from these investments won’t come for a long time. They will do little to help former factory workers who have had to take lower-paying jobs — which is one reason that calling for new investments doesn’t bring nearly the cheers on the campaign trail that denouncing Nafta does.
The best way to help those workers, Mr. Slaughter argues, is to cut their taxes and make the tax code more progressive. This would allow global trade to continue expanding the country’s economic pie, while making sure that high-income workers weren’t the only ones benefiting.
Here, finally, is where we get to the good news about the Ohio campaign. Mr. Obama and Mrs. Clinton favor all these ideas. They both want to invest in infrastructure, science and alternative energy, and they both want to cut taxes for everyone but the affluent. Mr. Obama, in particular, has proposed a cut in payroll taxes, perhaps the most regressive part of the tax code.
Over the last week, the candidates’ talk has, at times, been silly and even inaccurate. And Ohio’s problems would certainly be easier to solve if, as Luis Proenza, president of the University of Akron put it, the candidates were “more true to reality and less prone to invective.”
But the larger problem is that Ohio’s voters have good reason to be angry. For years, they have been promised that globalization was making the United States a richer country. They’re still waiting for their share of the bounty.