RALEIGH — I wrote some time ago about the demise of the New Democrat, that often-touted but rarely spotted critter of the early 1990s who slipped into the White House with Bill Clinton in 1993 and somewhat managed to slip out again in 2001 (perhaps while hiding in a china hutch).
The passing of the New Democrats from the scene had a number of effects, mostly but not entirely negative, on the political scene. One of them was the resulting lurch into populist demagoguery on trade and other economic issues on the part of the Democratic Party (plus a few stray Republicans). It’s the kind of demagoguery that Ross Perot specialized in during his heyday, the kind in other words that sounded vaguely persuasive to some voters until challenged by free-market ideologues like Al Gore.
Yes, we have good reason to miss Bill Clinton. For example, when White House economic advisor Gregory Mankiw made a clumsy but essentially correct point about the economic value of an international market for labor, Democrats like John Kerry and John Edwards and a number of pandering Republicans blasted him for wanting to outsource American jobs overseas. Among Mankiw’s defenders, however, were many veterans of the Clinton administration’s economics and policy shops. They have wrong-headed views about fiscal policy, about taxes and deficits, about the cost-effectiveness (not to mention constitutionality) of federal programs. But as fellow denizens of the world that Adam Smith built, they understand how trade creates net employment gains and efforts to interrupt trade create unemployment and recession.
As economist Bruce Barlett has written, “Bill Clinton may have had his faults, but on trade he was superlative. He refused to pander to the squeaky wheels demanding protection from foreign imports, and pushed vigorously to open U.S. and foreign markets to increased trade.” It was in many ways the saving grace of his economic policy. NAFTA was a tax cut that helped to offset the costly tax increases Clinton and a Democratic Congress enacted in 1993. The declining trade barriers of the 1990s helped to accommodate a rapid rate of economic growth even as inflation fell. Democrats and Republicans still didn’t agree on other important matters, but at least they were getting it right on trade.
Now, we have the specter of Democratic frontrunner John Kerry referring to the heads of companies making use of international labor markets as “Benedict Arnold CEOs.” And we have challenger John Edwards plucking heartstrings at a labor-union gathering in New York, promising to fight for “working people” — apparently against the nonworking people of India, or something — and stressing that to him the trade issue “isn’t politics, it isn’t academic, it’s personal.”
Yep, all that academic book-learnin’ them pointy-heads learn you at those fancy-shmancy colleges about “e-co-no-mics” don’t mean nothing. It’s personal, y’all.
In political terms, I don’t think that the new protection racket that Kerry, Edwards, and others are running will pay off in the long run. There are worried workers, and jobless workers, and communities undergoing rapid and wrenching economic changes. But over time, and for the vast majority of Americans, the blossoming of international trade has been bringing and will continue to bring tremendous benefits in the form of lower prices, lower taxes, and more employment opportunities rather than fewer. I think voters essentially get this, even if they don’t recall the names of the theories involved or the historical fate of countries seduced into protectionism by the witless and the guiltless.
Ironically, while today’s Democratic wannabes are all about “feeling your pain,” President Clinton was able to move beyond that into the substance of economic policy. Who knew he’d be so missed?
Hood is president of the John Locke Foundation and publisher of Carolina Journal.