Whose Party Is It Anyway?
Reducing trade barriers allows each to specialize in what they do more efficiently, and this specialization generally leads to national-level gains for both countries — that is, increased efficiency, worldwide production and total consumption. This is essentially chapter one in trade textbooks. However, a later chapter in the textbook points out that, when the United States exports financial services and aircraft while importing apparel and electronics, it is implicitly exchanging the services of capital for labor. This exchange bids up capital’s price — profits and high-end salaries — and bids down wages for the broad working and middle class, leading to rising inequality and wage pressure for many Americans.
According to Bivens, the downside is immense:
Even if trade flows begin to balance and there is less job loss in the future, the integration of the U.S. economy with those of its low-wage trading partners will pull down wages for many American workers, and will contribute to the ever rising inequality of incomes in the U.S. economy.
.. Bera’s dilemma is that while he has given strong support to labor historically, with an 86 percent lifetime rating from the A.F.L.-C.I.O., in 2014 he received substantially more money from such pro-trade interests as electronics, finance and agribusiness, according to the Center for Responsive Politics.
.. Trade always implies job destruction — this is the whole point of trade, namely to destroy jobs in import competing sectors to create them in exporting sectors, thus allowing for reallocation to sectors with comparative advantage, leading to an increased efficiency, the basis for the gains from trade.
.. The amount of money contributed to the Democratic National, Congressional and Senatorial Committees by organized labor is pocket change — $5.4 million in 2013-14 — compared with the $42.7 million from the pro-trade computer and electronics industry; $62.8 million from finance and securities; and over $11 million from other pro-trade interests, according to the Center for Responsive Politics.
.. While the left is ascendant, the likely scenario for a resolution of the intraparty disagreement over trade is as follows: Until she secures the nomination, Hillary Clinton will voice the level of criticism of the TPP necessary to prevent the issue from serving as a mobilization tool for her rivals.
.. The real question, then, is how long will left and right within the Democratic coalition tolerate an inherently unstable posture on such a core issue as how this country does business abroad, and how it provides a livelihood for its citizens.