What seems most striking is that the angry working class — dismissed so often as myopic, unable to understand the economic trade-offspresented by trade — appears to have understood what the experts are only belatedly finding to be true: The benefits from trade to the American economy may not always justify its costs.
.. In theory, a developed industrial country like the United States adjusts to import competition by moving workers into more advanced industries that can successfully compete in global markets.
.. In another study they wrote with Daron Acemoglu and Brendan Price from M.I.T., they estimated that rising Chinese imports from 1999 to 2011 cost up to 2.4 million American jobs.
.. the case for globalization based on the fact that it helps expand the economic pie by 3 percent becomes much weaker when it also changes the distribution of the slices by 50 percent, Mr. Autor argued.
.. American manufacturing employment remained fairly stable in the years after Nafta came into force in 1994, plummeting only after China entered the World Trade Organization in 2001 and gained consistent access to markets in the United States.
.. Mr. Autor suggests that Americans’ low savings rate was a big part of the story, coupled with foreigners’ appetite for accumulating dollar assets, which helped keep American interest rates low and the dollar strong, in that way fueling a persistent trade deficit.
.. Germany’s highly skilled workers were harder to replace with cheaper Chinese labor, limiting though not totally eliminating outsourcing. Germany’s stronger labor unions also put up more of a fight.
.. The United States might have leaned against China’s export-led strategy, they argue, perhaps by insisting more forcefully that Beijing let its currency rise as its trade surplus swelled.
.. What Washington did, instead, was hitch the nation’s future to housing and finance.
Nafta May Have Saved Many Autoworkers’ Jobs
But the autoworkers’ animosity is aiming at the wrong target. There are still more than 800,000 jobs in the American auto sector. And there is a good case to be made that without Nafta, there might not be much left of Detroit at all.
.. “Without the ability to move lower-wage jobs to Mexico we would have lost the whole industry,” said Gordon Hanson of the University of California, San Diego, who has been studying the impact of Nafta on industries and workers since its inception more than two decades ago.
.. The industry lost 350,000 jobs, or about a third of its workers, over the period.
..The surge of Mexican exports in the 1990s was propelled by a sharp devaluation of the peso, which set off the so-called Tequila Crisis. The wave of immigration from Mexico into the United States, which lasted until 2005, was driven by a decline in government subsidies to farmers and an economic collapse that occurred just as millions of young Mexicans were entering their late teens and were desperate for jobs.
.. The truth is that autoworkers in Detroit were not just competing with cheap workers in Mexico. They were also competing with American workers in the union-averse South, where many car companies set up shop. They were competing with robots and more efficient Japanese and Korean automakers.
.. The Honda CR-V assembled in El Salto, Jalisco, for example, uses an American-made motor and transmission. Roughly 70 percent of its content is either American or Canadian, according to government statistics.
.. And if the real concern is China — another target of Mr. Trump’s ire — a truly integrated North American market would help keep it at bay.
..“It’s exactly the wrong time to blow up Nafta,” Professor Hanson argued. “We would be doing China an enormous favor.”
How the G.O.P. Elite Lost Its Voters to Donald Trump
But the story is also one of a party elite that abandoned its most faithful voters, blue-collar white Americans, who faced economic pain and uncertainty over the past decade as the party’s donors, lawmakers and lobbyists prospered. From mobile home parks in Florida and factory towns in Michigan, to Virginia’s coal country, where as many as one in five adults live on Social Security disability payments, disenchanted Republican voters lost faith in the agenda of their party’s leaders.
.. Many trace the rupture to the country’s economic crisis eight years ago: While Americans grew more skeptical of the banking industry in the aftermath, some Republicans played down the frustrations of their own voters.
While wages declined and workers grew anxious about retirement, Republicans offered an economic program still centered on tax cuts for the affluent and the curtailing of popular entitlements like Medicareand Social Security. And where working-class voters saw immigrants filling their schools and competing against them for jobs, Republican leaders saw an emerging pool of voters to court.
.. Republicans read Tea Party anger over Mr. Obama’s health care law as a principled rejection of social welfare programs, despite evidence that those voters broadly supported spending they believed they deserved, like Social Security and Medicare.
.. Between 2008 and 2012, according to the Pew Research Center, more lower-income and less-educated white voters shifted their allegiance to Republicans.
.. Advisers to the Kochs, finding that Mr. Romney had increased the party’s share of elderly voters, concluded that proposals to overhaul entitlements were not hurting Republicans.
.. For two decades, Mr. Luntz had instructed Republicans on how to talk about thorny issues. Do not say “estate tax.” Say “death tax.” Do not privatize Social Security. “Personalize” it.
“I told them to stop calling it free trade, and start calling it American trade,” Mr. Luntz said in an interview. “American businesses, American services — American, American, American!”
Trade, Labor, and Politics
It’s true that globalization puts downward pressure on the wages of many workers — but progressives can offer a variety of responses to that pressure, whereas on the right, protectionism is all they’ve got.
.. Serious economic analysis has never supported the Panglossian view of trade as win-win for everyone that is popular in elite circles: growing trade can indeed hurt many people, and for the past few decades globalization has probably been, on net, a depressing force for the majority of U.S. workers.
.. In fact, many of the bad things we associate with globalization in America were political choices, not necessary consequences — and they didn’t happen in other advanced countries, even though those countries faced the same global forces we did.
.. Part of the answer is that workers in Denmark, two-thirds of whom are unionized, still have a lot of bargaining power. If U.S. corporations were able to use the threat of imports to smash unions, it was only because our political environment supported union-busting.