In lucrative paid speeches that Hillary Clinton delivered to elite financial firms but refused to disclose to the public, she displayed an easy comfort with titans of business, embraced unfettered international trade and praised a budget-balancing plan that would have required cuts to Social Security, according to documents posted online Friday by WikiLeaks.
.. Mrs. Clinton comes across less as a firebrand than as a technocrat at home with her powerful audience, willing to be critical of large financial institutions but more inclined to view them as partners in restoring the country’s economic health.
.. In the excerpts from her paid speeches to financial institutions and corporate audiences, Mrs. Clinton said she dreamed of “open trade and open borders” throughout the Western Hemisphere. Citing the back-room deal-making and arm-twisting used by Abraham Lincoln, she mused on the necessity of having “both a public and a private position” on politically contentious issues.
Global Trade War, Trump Edition
Legions of Trump supporters have legitimate grounds for discontent. As my colleague Peter Goodman wrote last week:
Trade comes with no assurances that the spoils will be shared equitably. Across much of the industrialized world, an outsize share of the winnings has been harvested by people with advanced degrees, stock options and the need for accountants. Ordinary laborers have borne the costs and suffered from joblessness and deepening economic anxiety.
.. The story of Trump’s amazingly successful movement is also the story of how Democrats turned their backs on their working-class roots and sided with the elites on the crucial economic question of our times: Who would win from globalization, and who would lose?
.. Trump’s strategy is essentially one of withdrawal from the world economy. He wants less trade and less outward foreign investment. He offers no plans for how to improve our export performance. This is protectionism, pure and simple.
Erik Brynjolfsson, an economist at M.I.T.’s Sloan School of Management, was more forceful:
No nation can succeed by trying to protect the past from the future. We will succeed by having the confidence to embrace competition, and leveraging our comparative strengths, which are numerous. We have the largest, most productive and most technologically advanced economy that’s ever existed on this planet. The more open the world economy is, the more we have an opportunity to leverage our many strengths.
Looked at this way, Trump’s stance is an implicit admission that he and his followers do not “believe in America” — an argument that the United States cannot compete successfully in the world arena unless protected by the imposition of high tariffs and punitive taxes on foreign production and foreign competitors.
.. Trump’s trade proposals, Reich argues,
assume the U.S. can’t compete and must erect trade barriers lest other countries flood America with better and cheaper products. That’s the opposite of believing in America.
.. Free trade is not surrender, and not something that only suckers do. In fact, just the opposite. Closing our borders would be surrender to a nonexistent enemy. It would make us poorer without bringing back the jobs.
.. Many economists share the view that Trump’s trade proposals would beruinous to the American economy, but in order to retain union support, Hillary Clinton has not been able to directly challenge Trump on these grounds.
.. “Withdrawing from global competition is a particularly terrible idea for the United States right now, since we are on the verge of introducing much more capable robots into the manufacturing process,” Daron Acemoglu, the lead author of the research paper “The Race Between Machine and Machine” and an economist at M.I.T., wrote by email.
Once the advances in robotics are achieved, Acemoglu wrote,
many of the tasks now offshored to China or other low-wage economies can be performed even more economically by robots in the United States. This won’t bring back the semi-skilled jobs that have left (and gone for good whatever Trump says he will do) but might just ensure that a whole slew of non-production jobs and supporting production jobs surrounding these tasks locate back to the United States.
.. Trump has a vastly exaggerated sense of the contribution of trade and trade policy to the decline of manufacturing in the U.S. In terms of real manufacturing output, the U.S. has actually done pretty well.
.. If the United States were to impose a 35 percent tax on Mexican imports, according to Summers, the economies of both countries would suffer:
It would be one of the best things that ever happened for Asian and European competitors.
.. Trump’s trade proposals reflect his bullying style and his technologically uninformed approach to tackling America’s competitive vulnerabilities
How to fix the most controversial element of trade deals
Under the Equitable Investment Act, in contrast, a U.S. court would be empowered to set aside the arbitrators’ award if Argentine consumer groups showed it would harm their interests in a stable financial system back home.
.. Moreover, in a separate scuffle, a bipartisan coalition is poised to override President Obama’s veto of a bill shredding the sovereign immunity in U.S. courts of foreign states linked to terrorism. With this standoff, legislators have shown themselves willing to strain diplomatic ties and risk loss of foreign sovereigns’ investment in the U.S.
.. Most important, the Convention would fix ISDS’ double standard. Instead of foreign investors enjoying rights that domestic investors, unions and environmental groups don’t, the pact would level the playing field. Just as an investor can now ask a tribunal to determine whether capital controls violate a state’s obligations, a union would be able to request a second opinion on collective bargaining rights. An environmental NGO could shine a spotlight on weak carbon emissions plans. And domestic investors could complain about preferential treatment received by wealthy foreign companies. These rulings will allow citizens to name and shame bad governments without compromising sovereignty.
The Coming Anti-National Revolution
I think the next such revolution, likely sometime in the twenty-first century, will challenge the economic implications of the nation-state. It will focus on the injustice that follows from the fact that, entirely by chance, some are born in poor countries and others in rich countries. As more people work for multinational firms and meet and get to know more people from other countries, our sense of justice is being affected.
.. Thomas Paine’s pamphlet Common Sense .. The idea that hereditary monarchs were somehow spiritually superior to the rest of us was decisively rejected. Most of the world today, including Britain, agrees.
.. Thomas Paine’s pamphlet Common Sense,
.. We also need to protect the losers to foreign trade in our existing nation-states. Trade Adjustment Assistance (TAA) traces its roots in the United States back to 1974. Canada experimented in 1995 with anEarnings Supplement Project. The European Globalization Adjustment Fund, started in 2006, has a tiny annual budget of €150 million ($168.6 million). US President Barack Obama has proposed to expand the TAA program. But, so far, this has meant little more than experiments or proposals.