Sep 1 2008

Media Push an Unpopular Trade ‘Centrism’

Contradictory counsel for Obama

Photo Credit: Flickr Creative Commons/BorderExplorer

Photo Credit: Flickr Creative Commons/BorderExplorer

As America heads toward a critical presidential election, “free trade” advocate Robert Reich, who as Bill Clinton’s labor secretary in 1993 fought hard for passage of the North American Free Trade Agreement (NAFTA), glumly admitted that the constituency for “free trade” has severely eroded.

“I’m still a free trader, although I will tell you . . . there are fewer and fewer of us,” he told MSNBC host Chris Matthews wanly (Hardball, 10/8/07). “It’s a very unpopular position.”

Unpopular with the public, but certainly not the media. Leading pundits and editorial writers for corporate media have persisted in counseling Democratic presidential candidate Barack Obama that victory will be achieved through embracing precisely this “very unpopular” position—advice consistent with the usual election-year counsel to Democrats to shift to the right (Extra!, 7-8/06).


‘You can’t go there’

The lack of popular support for “free trade” can be traced to its most visible and visceral effects: the loss of U.S. manufacturing jobs, the decline of industrial communities and the downward pressure on American wages.

Moreover, the devastating economic and social effects of trade pacts have been felt most severely by constituencies among which Obama will need to reverse recent erosions of Democratic support (blue-collar voters and moderate and low-income evangelicals) and increase previously low turnouts (Latinos). In 1999, six years after NAFTA’s ratification, a remarkable 47 percent of the workers certified as having lost their jobs due to the trade deal’s impact were U.S. Latinos (Labor Council for Latin American Advancement and Public Citizen, 8/04), suggesting that a powerful attack on “free trade” would help Obama to activate Latino voters.

Obama’s career has been marked by an acute level of ambivalence on trade issues. At one point, Obama served as a community organizer on Chicago’s South Side among workers displaced by corporate outsourcing and U.S. trade policies, and he voiced sharp anti-“free trade” rhetoric in the Democratic primaries, calling for renegotiation of NAFTA and other trade deals. But in late 2007 the New York Times editorial board (12/23/07) was heartened by a speech in New Hampshire in which Obama declared, “Global trade is not going away, technology is not going away, the Internet is not going away.” The Times hailed Obama for “offer[ing] the most resistance to the easy path of blaming imports from foreign countries for the woes of the American middle class.”

During the primaries, USA Today (4/9/08) denounced the Democratic candidates’ “willingness to pander on free trade—and their party’s growing willingness to accept the labor movement’s defeatist anti-trade positions.” A Seattle Times editorial (4/3/08) noted that the paper had endorsed Obama, but demanded that he “must state that he will not backtrack on trade.”

After sewing up the nomination, Obama quickly declared himself to be a “pro-growth, free-market guy” who “love[s] the market” (CNBC, 6/10/08). He reinforced that image by appointing Jason Furman, director of the pro-“free trade” Hamilton Project at the Brookings Institution, as his chief economic adviser (New York Times, 6/12/08). A few days later, Obama was quoted in a Fortune interview (7/7/08) saying that the anti-NAFTA rhetoric during the primaries had become “overheated and amplified.”

Such comments have delighted journalists like the Washington Post’s Charles Krauthammer (6/27/08):

Back then, in the yesteryear of primary season, he thoroughly trashed the North American Free Trade Agreement, pledging to force a renegotiation, take “the hammer” to Canada and Mexico and threaten unilateral abrogation. Today the hammer is holstered.

NBC foreign affairs correspondent Andrea Mitchell (MSNBC, 7/1/08) flatly declared that “the kinds of conditions that he has promised labor he would try to negotiate are really non-starters”—conditions like strong labor and environmental standards—“because once you open up these trade agreements—if you were to reopen NAFTA, for instance—all bets would be off. You can’t go there.”

The media case for ‘free trade’

The New York Times’ Roger Lowenstein (6/15/08) offered one of the more comprehensive arguments for why Obama should move to the “center” on corporate globalization. Obama’s stance on trade in the general campaign will be a fundamental test of his political and economic acumen, he argued:

According to Political Science 101, candidates run to extremes in primary season and crowd the center in November. A good test will be whether the apparent Democratic nominee, Barack Obama, tries to reclaim a moderate position on trade.

Lowenstein flippantly dismissed the anti-“free trade” and anti-NAFTA points advanced in the primary by Barack Obama and Hillary Clinton as beneath serious consideration: “Given that most economists think NAFTA, and trade deals like it, have been good for the country, their pandering to the opponents of trade was faintly humorous.” Lowenstein chose to ignore a growing chorus of influential economists, including Nobel Prize-winner and former World Bank chief economist Joseph Stiglitz, Princeton professor and New York Times columnist Paul Krugman and MIT’s Paul Samuelson, who have begun to challenge a once-solid consensus on “free trade” in the abstract.

Lowenstein did point to one member of that chorus of critical economists, Harvard’s Dani Rodrik, but only to buttress his argument, claiming that “even Dani Rodrik . . . who, like Hillary Clinton, favors a time-out on new trade deals, isn’t antitrade.” Rodrik responded vexedly on his blog (6/14/08):

I could have tried to explain how meaningless this characterization is: You can be anti-WTO, anti-trade agreements, antifree trade, but anti-trade? I don’t know of a single soul who wants to move the U.S. to autarky.

Lowenstein acknowledged that “the supposed consensus [on trade] was never so broad” as it seemed, but he attributed a good portion of the growing dissatisfaction to general economic problems during the Bush years. This resentment against trade agreements is misplaced, he wrote: “Since poorer Americans spend a higher proportion of their incomes on low-wage imports (shoes from China, for instance), trade can also be seen as favoring the less well-off. If only politicians would stop preaching to them otherwise.” Obama had offered a sharp retort to this view on the campaign trail in December (Fortune, 2/4/08): “People don’t want a cheaper T-shirt if they’re losing a job in the process.”

Further, Lowenstein portrayed the central core of the “free trade” debate as the lifting of tariffs to create more mutual access to markets. But economist Dean Baker of the Center on Economic and Policy Research maintains (Truthout, 7/7/08) that tariffs are in most cases a trivial factor motivating trade agreements, with investor protections for the outsourcing of U.S. jobs much more central:

In most cases, the tariff barriers to imports were already low. The point of these deals was to set up an institutional framework that would facilitate foreign investment in manufacturing in these countries for the purpose of exporting back to the United States.

Political losers

But Lowenstein insisted that the Democrats’ experience in recent presidential elections should teach Obama that an anti-“free trade” stance is a sure loser. “Obama may soften his populism in the fall, given that protectionists of late have not been winners in national elections.”

It is difficult to imagine which “protectionists” Lowenstein had in mind among Democratic presidential candidates. Bill Clinton straddled the trade issue in 1992, spouting “free trade” rhetoric yet claiming to stand for worker protections (which wound up relegated to unenforceable “side agreements” in NAFTA). Meanwhile, in 2000, Al Gore had well-established credentials as a corporate globalization advocate through his ardent support of NAFTA and the Permanent Normalization of Trade Relations with China; though Gore narrowly won the popular vote, he lost among non-college-educated voters by 16 percentage points.

In 2004, John Kerry jettisoned his early and effective attacks on “Benedict Arnold CEOs” who abandon U.S. workers and communities, and succeeded in losing both the election and non-college educated voters by an even larger 23-point margin (Brookings Institution, 4/08). In the elections of 1996 through 2004—during which time the Democrats were regarded by many citizens as the party enacting globalization—the Republicans maintained control of both houses of Congress.

However, in 2006, opposition to trade deals became a central thrust of the campaigns of such Democratic Senate candidates as Sherrod Brown of Ohio, James Webb of Virginia and numerous House candidates. All of the seven new Democratic senators and 30 new House members ran on “fair trade” platforms (Global Trade Watch, 11/08/06).

Disbelieving in gravity

Nonetheless, media continue to brand opposition to “free trade” as a mystifying extremism, akin to refusing to believe in gravity. It may be hard to match the New York Times editorial page (4/6/08) for its simple-minded recitation of fairy-tale economics: “Trade is good for the economy, providing cheap imports . . . and raising living standards.”

This “trade is good” mantra not only conflates trade in general with corporate-friendly “free trade,” it neglects the data—sometimes reported on the Times’ own news and opinion pages—that the vast majority of economic growth under “free trade” is being vacuumed up by what Times columnist Paul Krugman (2/27/06) called a “narrow oligarchy” in the U.S.: “Income at the 99th percentile rose 87 percent; income at the 99.9th percentile rose 181 percent; and income at the 99.99th percentile rose 497 percent.” Times journalist David Cay Johnston reported (11/28/06) that while the average income of the top 5 percent rose by 53 percent from 1979 to 2004, those in the bottom 60 percent actually saw their incomes decrease, earning less than 95 cents in 2004 for every dollar they made in 1979.

But connecting such disturbing trends to U.S. trade policies is labeled “posturing,” which is “bad policy and counterproductive” (New York Times, 2/24/08), and nefariously “turning to Karl Rove’s playbook” (New York Times editorial, 4/6/08).

Similarly, USA Today (2/29/08) flatly declared in an editorial, “The reality is that NAFTA has relatively little to do with either the overall job losses or jobs gains,” and asserted that it was “cheap pandering” when Obama blamed NAFTA for the loss of 20 percent of Ohio’s manufacturing jobs since the agreement was enacted in 1994. Criticism of NAFTA was portrayed by USA Today as an attempt to “scapegoat Mexico and Canada,” rather than a critique of U.S. corporate and government policies.

Especially disturbing to many media outlets was Obama’s denunciation of the proposed Free Trade Agreement with Colombia, based on the extreme violence directed against unionists and other nonviolent dissidents by paramilitary groups often linked to official military and intelligence services. According to Human Rights Watch (4/7/08), some 2,500 unionists have been slain since 1985 (euphemized by the Milwaukee Journal Sentinel—4/12/08—as a “history of cracking down” on union activity) and under 100 convictions have taken place (New York Times, 4/14/08).

With this backdrop, Obama denounced the proposed FTA in strong terms at a meeting of the Pennsylvania AFL-CIO (Wall Street Journal’s Washington Wire, 4/2/08): “The violence against unions in Colombia would make a mockery of the very labor protections that we have insisted be included in these kinds of agreements.” Obama’s statement provoked a harsh rebuke from a Washington Post editorial (4/8/08), which accused him of “a particularly egregious libel” against the Colombian regime. (See Extra!, 7-8/08.)

Even Colombia’s ongoing murders of civilian labor and community leaders have not dimmed the continuing enthusiasm for trade pacts among U.S. opinion-shapers in the major media. The Bush administration’s proposed Free Trade Agreement has gathered the fervent support of more than 70 newspaper editorial pages (Roll Call, 5/8/08), including the New York Times, Washington Post, Wall Street Journal, USA Today, L.A. Times and Chicago Tribune.

Pundits vs. the people

This consensus among the media elite ignores the growing consensus among voters—centrist, liberal and conservative—that trade deals like NAFTA harm U.S. workers, communities and the nation. A recent Pew Research poll (5/1/08) found that “a 48 percent plurality said that free-trade agreements are a bad thing for the country, compared with 35 percent of the public who call them a good thing.” Respondents said by more than six-to-one that these trade deals result in job losses rather than gains.

Notably, the Wall Street Journal’s Real Time Economics blog (5/1/08) pointed to “a finding that may have implications for the presidential race”: “the negative view of free-trade deals by independents. A majority of independents, or 52 percent, had a negative view of free trade, compared to 50 percent of Democrats and 43 percent of Republicans.”

And the Chicago Council on Global Affairs concluded after a study of U.S. voters (4/25/07), “The U.S. public is nearly unanimous in its support of requiring that both labor (93 percent) and environmental standards (91 percent) be included in trade agreements.”

Public opinion on the issue clearly transcends party lines and political labels. This should create a conundrum for pundits: If the public is nearly unanimous on supporting trade agreement conditions that NBC’s Mitchell called “non-starters,” how can they advise the Democrats to repudiate such a position in the name of sensible “centrism”?

Roger Bybee, a frequent contributor to Extra!, is a Milwaukee-based freelance writer and consultant who often writes about corporate globalization.