On June 28, Donald Trump was in Monessen, Pa. Trump gave a major campaign speech on trade, focusing on the decline of the US steel industry.
Trump’s opposition to free trade agreements such as NAFTA and the Trans-Pacific Partnership has been one of the major issues of his presidential campaign. (Trump’s other big issue, of course, is animus towards immigrants and Trump’s pledge to build a “beautiful” wall on the U.S.-Mexico border.)
Trump spoke at Alumisource, a small company which recycles aluminum for reuse by industry. Trump spoke in front of a backdrop of what looked like Christmas tree tinsel, but which I presume were crushed aluminum cans.
Monessen is an archetypal former steel mill town, 27 miles southeast of Pittsburgh. Twenty thousand people lived in Monessen in 1940. Today, with the close of most of the mills, Monessen’s population has shrunk to about 7600. Monessen perfectly represents Trump’s constituency: white blue collar workers who have seen their incomes decline as they have lost jobs and homes.
On trade, Trump says things the left has been saying for years. On the very day that it reported Trump’s Monessen’s speech, the New York Times carried an op-ed by Senator Bernie Sanders assailing free trade in much the same vocabulary as Trump. Sanders writes:
In the last 15 years, nearly 60,000 factories in this country have closed, and more than 4.8 million well-paid manufacturing jobs have disappeared. Much of this is related to disastrous trade agreements that encourage corporations to move to low-wage countries.
National Public Radio (NPR), which fact-checked Trump’s speech (and which is no friend of Donald Trump), notes that “manufacturing employment [in the US] is down by 37% since its peak in 1979.” Trump said (and NPR agrees) that one third of those job losses have occurred since 1997.
Between 1979 and 2015, according to the Economic Policy Institute, US GDP climbed 149% and productivity increased 64%. Most of those gains have been captured by the top 1% of Americans. As Sanders comments:
Despite major increases in productivity, the median male worker in America today is making $726 dollars less than he did in 1973, while the median female worker is making $1,154 less than she did in 2007, after adjusting for inflation.
Where Trump’s Case Against Free Trade Falls Short
Free trade deserves all the opprobrium Trump heaps on it. But Trump’s critique of free trade falls far short of what’s needed.
First, Trump directs all his fire at the Democrats, particularly Bill and Hillary Clinton. Trump blames the Clintons for NAFTA and for China’s entry into the WTO. “Crooked Hillary,” as Trump affectionlessly styles her, has been a longtime supporter of the Trans-Pacific Partnership. She has called the TPP the “gold standard” of trade agreements. (If TPP is the Gold, I’d hate to see what took the Bronze.)
Then, on October 7, 2015, Hillary Clinton came out against the TPP. In an interview with Judy Woodruff of PBS, Clinton said of the TPP: “As of today, I am not in favor of what I have learned about it.” Only a cynic would doubt that this is a sincere, lasting conversion in no way influenced by the popularity of Senator Bernie Sanders’ stand against free trade.
Trump predicts that Clinton will revert to her former support for the TPP once she reaches the Oval Office. Hillary, Trump said in Monessen, will “make a small token change, declare the TPP pact fixed, and ram it through.” Trump challenged Hillary during his Monessen speech to declare that “she is willing to withdraw from the TPP her first day in office and unconditionally rule out its passage in any form.”
Significantly, Clinton appointees on the Democratic Platform Committee voted down a plank opposing the TPP last week.
Odious as the Clintons are, focusing exclusively on Bill and Hill and their fellow New Democrats gives a pass to the Republicans who supported those “bad deals” as Trump describes NAFTA and TPP and their kin. Bill Clinton pushed NAFTA through Congress, but negotiations on NAFTA began under the first President Bush.
Reagan, too, escapes the censure he deserves. Trump praises President Reagan for slapping a 45% tariff on Japanese motorcycles and a 100% tariff on Japanese semiconductors. Trump fails to note that the deindustrialization of the United States began in the 1980s aided and abetted by Reagan’s policies. In 1993, the conservative Heritage Foundation called passage of NAFTA a “victory” for Ronald Reagan’s “vision” of free trade. Bruce Springsteen’s “My Hometown,” released in 1984, is partly about the pain American workers felt as jobs vanished not just in steel, but in manufacturing generally (“They’re closing down the textile mill across the railroad tracks. Foreman says these jobs are going boys and they ain’t coming back.”). Springsteen’s description of “Main Street’s whitewashed windows and vacant stores” could have been written about Monessen.
Second weakness of Trump’s Monessen speech: when Trump talks about manufacturing jobs lost in the US, he does not say that these were union jobs. Those jobs paid well because of labor unions. Trump did not call for restrengthening unions in his Monessen speech. It would be surprising if he had. Trump’s line of clothing and even Trump’s signature “Make America Great Again” campaign hats are manufactured in non-union shops in China. Trump has fought union organizing in his businesses.
Trump rejects Republican free trade orthodoxy, but on other issues he offers the same old Republican snake oil. In Monessen, Trump repeated his laughable charge that the US is “one of the highest-taxed nations in the world”: “We tax, and restrict, and regulate our companies to death.” What regulations does Trump have in mind for the ax? We can guess. On November 6, 2012, Trump tweeted: “The concept of global warming was created by and for the Chinese in order to make U.S. manufacturing non-competitive.” In Monessen, Trump defended cars and coal. The TPP is bad because it prevents the US from selling more cars overseas. Hillary Clinton is bad because she supposedly wants to shut down the coal industry. A Trump Administration will mean more cars, more coal, more carbon pouring into the atmosphere, and more climate change.
A pull-out quote in the June 29 New York Times declares: “Trade is only partly to blame in the loss of factory jobs.” True enough. Foreign competition from Europe and Asia, particularly Japan, also killed jobs in the US steel industry. So have automation and more efficient production methods in US mills. Rejecting free trade is not enough. We will also have to do something about the trend of robots displacing human workers.
Like the answer to the joke “What do you call a hundred lawyers at the bottom of the ocean?” eliminating the TPP, NAFTA, and the WTO will be a terrific start. Unfortunately, that’s where Trump stops. Renewing American industry will also have to revitalize labor unions, boost the minimum wage, and protect the environment. Benefits from increased economic productivity must flow to workers rather than “rewarding” workers with unemployment. Inequality also needs to be attacked directly. Trump does not and cannot attack inequality because he is committed to defending capitalism. This leads to a fundamental inconsistency in Trump’s proposals: Trump attacks corporations for outsourcing, but exonerates corporations for everything else. Instead, Trump proposes to lavishly reward corporations by slashing taxes and regulations.
Above all, as Senator Bernie Sanders wrote in his Times op-ed, we need change untainted by anti-immigrant and anti-Muslim bigotry. Trump delivers part of the right message on trade and the economy, but he is the wrong messenger.