Obama economic advisor economic advisor Daniel Tarullo has strongly disputed the characterization of Obama as an economic protectionist. He suggests that the Obama wants a trade policy that shifts the benefits of globalization more in favor of labor, and argues that there are both economic and ethical considerations behind renegotiating NAFTA. Doing so, he argues, would help level the playing field by making it easier to eliminate practices like child labor and lax environmental regulation in foreign countries, both of which put American workers at a disadvantage. One has to wonder why Obama’s surrogates would say things like this, if protectionism has such rave reviews, and is so widely supported amongst the general population.
Former Democratic South Carolina Senator Fritz Hollings has said about protectionism, “We financed the country’s development with tariffs. That’s how we–that’s the Treasurer’s Building is the best building here in Washington. The best building in Charleston is the custom house. The best building in Brooklyn is the custom house. Treasury had the money. Teddy Roosevelt said, “Thank God I am not a free trader.” Oh, Lincoln, everybody says, I’m either for Roosevelt, I’m a Lincoln Republican. He was a big protectionist. Oh, he raised tariffs. They were gonna build a transcontinental railroad on the Abraham Lincoln. And they said we could get the steel cheap from England. He said, ah - wait a minute, we’re gonna build our own steel mills, and then we’ll have not only a steel capacity, but we’ll have the railroad. And so he was a builder. Everybody was a builder. Eisenhower, he protected oil. Jack Kennedy, I went to him, and he protected textiles. Ronald Reagan, he protected computers and Harley Davidson. He saved it. I saw George W. the other day about three weeks or a month ago, he was at the Harley Davidson plant, but protectionism saved it. That’s why they were making money at Harley Davidson.”
Current Democratic Senator Sherrod Brown of Ohio believes he won Ohio, and John Kerry didn’t by running on a populist economic message (Brown has also denied being a protectionist, but he always votes no on pro-corporate trade deals and even advocates getting out of the WTO), “I think you can really take the country in a very different direction building a progressive message around that kind of economic issue… We won 32 or 33 more counties than John Kerry did mostly in small towns in rural Ohio where they were very responsive to a populist progressive message. One town in particular — this is something that just happened — there’s a company called American Standard, they make toilets, plumbing fixtures, you’ll see them in near any public restroom anywhere. They’re in Tiffin, Ohio, town of 20,000. They’ve just announced back around 3 months ago, the closing of the plant. It was bought by some investors, they’re moving offshore, they’re honoring the union contract as far as they have to, which is those who already have their 30 years. If you have less than 30 you’re pretty screwed — they give you something, but you can’t get to the 30 years because they close the plant. And the company that came in and bought it was Bain Capital, Mitt Romney’s firm…. These investors come in, take millions of dollars out of the company, and you know, it’s pension and healthcare. And those are going on all over the country. And this is a town of 20,000. I carried that county, Kerry didn’t. They had already laid off some people… It’s those kinds of situations that cause small town Ohio to vote for somebody like me regardless of the social issues.”
Ronald Reagan, the godfather of contemporary American conservatism, was not a free trader. Reagan often broke with free-trade orthodoxy. He arranged for voluntary restraint agreements to limit imports of automobiles and steel. He provided temporary import relief for Harley-Davidson. He controlled imports of sugar and textiles. His administration pushed for the “Plaza accord” of 1985, an agreement that made Japanese imports more costly by raising the value of the yen. Each of these measures prompted strong criticism from free traders. But they succeeded, and by the early 1990s, doubts about Americans’ ability to compete had been impressively reduced.
Not only was Ronald Reagan not a free trader, but two-thirds of the current Republican party membership are opposed to free trade. In 2007 a Wall Street Journal poll found that by a 2 to 1 margin Republican voters believed that foreign trade had been bad for the economy. Rank and file Republicans have been going through a transition, and have come to their opposition to free trade over the last decade. A similar poll question was done in 1999 that found that 37% of Republicans said trade deals were good for the U.S., while 31% said such deals have effected the economy negatively and 26 percent said the trade deals made no difference.
Thomas Jefferson put it eloquently when he said, “Every society has a right to fix the fundamental principles of its association.” He went on to say (talking about people who would object to the previous statement), “…say to all [such] individuals, that if they contemplate pursuits beyond limits of these principles and involving dangers which society choose to avoid, they must go somewhere else for their exercise; that we want no citizens, and still less ephemeral and pseudo-citizens [like corporations], on such terms. We may exclude them from out territory, as we do persons infected with disease.”
Economics professor Ravi Batra has said this about international trade, “Competitive protectionism is a proven idea with a lot of success. Free trade is historically a relatively new idea with a lot of failure,” Dr. Batra added. “Free trade has done to the us what Hitler and imperial Japan could not do during the war,” he said. Batra has further argued that because of liberalization of America’s trade policy we’ve seen the rise of what he calls agrification syndrome. This can be characterized as Americans continuing to lose manufacturing jobs, and continuing to work harder at the jobs they do have, but suffering declining wages, despite increases to their productivity.
Protectionism is villainized by the Republican right (and even the center by groups like the Democratic Leadership Council), but all protectionism really is, is democracy functioning in the economic arena. It’s the regulation of market forces, to reign them in to benefit the many (instead of the few). Protectionism is done to provide quality jobs to workers, and good environmental and safety standards too. Hopefully Barack Obama can come to understand all of this, and decide to stop sending his surrogates around talking as if protectionism is a horrible plague. Obama has talked about being concerned more for Main Street than Wall Street, but will Obama walk the walk, now that he has talked the talk?