Talking Truth On Trade

David Ignatius has a good piece on on why Clinton was right about trade in The Washington Post (annoying registration required). Ignatius has some hits and misses, but his overall point is dead on.

Clinton’s message during his 1996 reelection campaign was that there was no easy escape from global competition. Protectionism would only hurt U.S. workers in the long run. The answer was education and job training that would give U.S. workers the skills to compete — to “build a bridge to the 21st century,” as Clinton put it in the signature line of the 1996 Democratic convention.

Now, contrast Clinton’s blunt advice with the pandering and prevarication on trade issues of this year’s leading (which is to say, surviving) Democratic candidates, Kerry and Edwards.

Now, education and job training are important, but Clinton’s programs would have been more government pork. However, Clinton’s trade policies were truly progressive – one of the few policy areas in which Clinton’s administration wasn’t an utter failure. Clinton’s pursuit of increased global trade helped expand the US and the world economy. Had Clinton reverted to the paleoliberal concepts of protectionism the 1990s boom may never have happened.

This anti-trade talk is dangerous nonsense, and the Democrats should be embarrassed by it. It suggests to U.S. workers that there is an alternative to change and adaptation — to getting the skills that are necessary to compete in an increasingly competitive world. That’s wrong, most of all because it misleads people about their real options. Rather than helping workers build a bridge to the future, as Clinton tried to do, these Democrats talk as if they want to build a roadblock. Shame on them.

Shame on the Republicans, too, for disowning the administration’s chief economist, Gregory Mankiw. He made the “gaffe” (a Washington term for stating something that is true but politically embarrassing) of saying that “outsourcing” jobs abroad can be beneficial, by lowering costs and improving efficiency.

In economic terms, Mankiw’s statement was utterly noncontroversial (unless you imagine that it’s good for workers if companies have high costs and go out of business). But in the trade mania of the moment, it was death — and even President Bush seemed ready to throw Mankiw overboard. Clinton, it’s worth remembering, was attacked in pre-bubble 1996 for the slow growth of wages in the United States, much as Bush is now savaged for the “jobless recovery.” Clinton’s treasury secretary, Robert Rubin, responded, “The best answer to stagnant wages is consistent economic growth.” Sure enough, wages soon took off, and by some measures, the Clinton boom years benefited labor more than capital.

In essence, the Democrats (and some Republicans) are pandering to fear rather than painting trade as key to economic growth. The paleoliberalism of Kerry and Edwards is a disgusting throwback to the protectionism of the Smoot-Hawley Tariff. However, the GOP should know better, and rather than try to distance themselves from Mankiw they should be showing how trade deals expand the economy. Millions of people are employed not in spite of trade, but because of it.

As much as it pains me to say, the GOP could learn from Clinton on trade. Rather than make it a political liability, he made it part of an optimistic message against a negative and partisan challenger. In this time when President Bush is facing an equally negative and even more partisan Senator in his reelection bid, acknowledging the importance of trade is just as important now as it was then.