March 23, 2008
Are the Democrats miscalculating on trade?
Ron Brownstein asks whether the Democrats’ increasingly strident anti-trade line might be a political mistake as well as an economic one (the link expires in a week). Writing from Miami, he notes the signs of international connectedness wherever he looks. Can Democrats plausibly tell their supporters in such places that they would be better off if the US retreated from world markets?
This is the side of the international economic story that Barack Obama and Hillary Rodham Clinton obscured in Ohio with their spiraling denunciations of free trade. But many of America’s most vibrant communities are benefiting enormously from their connections to the global economy. What’s more, most of these communities, the places that would suffer most if America tried to wall out the rest of world, are becoming Democratic strongholds. This means that in seeking to retreat from globalization, Democrats are threatening the interests of voters and communities increasingly central to their electoral coalition. “The Democrats are in all the globally connected places,” says Robert Lang, director of the Metropolitan Institute at Virginia Tech University. “They are biting the hands that feed them.”
Lang and his colleagues, in a paper dated March 21, identified the 20 American metropolitan areas most thoroughly integrated into the global economy. The researchers ranked the cities along four dimensions: the presence of global service firms (such as advertising, law, and financial services); whether the area has a major port; whether it has an international airport; and the value of exports that pass through it.
At the top of the list stand New York, Chicago, Los Angeles, San Francisco, and Miami. They are followed by Atlanta, Washington, Boston, Dallas, and Houston. The second 10 start with Seattle and Philadelphia and end with Phoenix and San Jose, Calif.
These globally connected cities retain many differences. But they generally share an expansive outlook marked by receptivity to foreign markets, foreign investment, immigration, and ethnic diversity. “They are the places where when you walk into a building, they have clocks set all around the world,” Lang says. In the 1980s, as Hispanic immigration surged, a popular South Florida bumper sticker read, “Will the last American to leave Miami bring the flag?” Today, notes Ojeda, most Miami leaders of all races recognize “that our international [population] base has given us the economy we have.”
I don’t see that these measures of ‘global connectedness’ really demonstrate benefits to voters.
Trade is usually justified on the basis of increased growth (with the spoils seen as going disproportionately to a small group of shareholders and top management) and lower priced consumer goods through imports (seen as increased competition for domestic producers).
High exports and employment by multinationals may be perceived as vulnerability to outsourcing by most voters.
Multicultural cities could be expected to vote democrat based more on cultural and values-led issues with less importance attached to economic issues.
Posted by: David | March 25th, 2008 at 10:04 am | Report this commentI’m not an economist, nor am I a trade specialist. But it seems to me that the public dialogue on trade is fundamentally distorted.
The lion’s share of the focus is on the negative impacts, with a negligible focus on what the benefits are. By this I don’t mean impenetrable economic analyses, but an explanation in ‘popular’ terms that the lay person will understand and care about.
We have never seen such variety and affordability of consumer products as we have now. This applies whether you look at garments in Wal-Mart (or more upmarket brands), TVs/PCs/cameras/phones in Best Buy, or any of a whole host of other product categories. My understanding is that a major enabler of this affordability is the international trade system.
Someone needs to balance the debate by talking about the greater access Americans have to the things they like to own, that would be less affordable otherwise.
There are real negative impacts of international trade, for the US and for its trading partners. But unless the public debate at least attempts to weigh the pros and cons in a balanced manner, then the distorted debate will undoubtedly lead to distorted policy response. Some political leadership (and a robust media strategy) on this front is sorely needed.
Posted by: DKM | March 25th, 2008 at 10:46 am | Report this comment