POLITICS

Anti-Globalism Has Its Day In DC

06/12/2015 04:32 pm ET | Updated Jun 12, 2015
SAUL LOEB via Getty Images

WASHINGTON -- The American capital isn't Madrid or Rome, let alone Athens. No people are massing in the streets, governments aren't collapsing and no one is threatening national bankruptcy.

Still, in its own way, the American political system on Friday dared (in at least one legislative vote) to question the benefits of globalization, reflecting the mood of European protesters that have soured on austerity and the power of the European Union.

The U.S. economy has recovered from the Great Recession more successfully than much of the rest of the world. But at the same time, the gap between the richest and the rest has grown into a chasm of historic proportions. In real terms, wages of average Americans haven't moved upward in more than a decade. Meanwhile, CEO pay has skyrocketed.

The House, led by President Barack Obama's erstwhile Democratic allies, derailed his push for a sweeping new trade agreement with 11 Asian countries, and other technical measures designed to enhance the global flow of investment, jobs, manufacturing and telecommunications.

After decades of supporting such deals -- backed by U.S. corporations, establishment opinion leaders and presidents past and present -- a coalition of Republicans and Democrats said no, for now.

The long-term benefits of unfettered global trade, such as they are, are less vivid and dramatically evident than a closed factory, a payroll cut in half or an American company unable to adapt to waves of cheap imports from Asia. This is especially true in the U.S. industrial heartland of the Midwest, but also in much of rural America, where patriotism and resentment of outsiders can sometimes play a larger role in the equation.

Past trade bills have “ruined millions of middle-class jobs,” said Rep. Sander Levin (D), whose Michigan constituency has been hard-hit.

There are numerous lesser reasons why Obama lost the vote as well. For most of his six years in office, he and his superbly credentialed -- but often arrogant and insular -- aides have shown nothing but disdain for the workings of Congress and its members. The president went to a baseball game here on Thursday specifically to plead his case with House Minority Leader Nancy Pelosi (D-Calif.), who represents a constituency -- San Francisco -- that is as ardently pro-free-trade as any in the country. He went to Capitol Hill Friday morning to plead his case en masse to Democrats.

Pelosi and a large contingent of Obama's own party, however, ended up voting against him.

In voting to put the trade deals on an unpalatable "fast track" earlier, the U.S. Senate inserted -- and the White House accepted -- a provision to pay for retraining workers by cutting federal health care spending by $700 million. That gave House Democrats the tactical opening they needed.

There was also the fact that the details of the deals are effectively secret: Members of Congress can only read them in a secure room without being able to make copies. That mechanism -- fairly routine in trade talks -- did nothing but add to suspicion and cries of elitism around the world.

But there are deeper issues at play.

Poll after poll shows that American voters know that free trade in theory can be a good thing -- and that in any case it's all but inevitable -- and yet they are increasingly skeptical about whether the benefits of it are spread equitably.

What good is a cheaper imported shirt from, say, Vietnam, if you don't have a good enough job to afford it in the first place? And what about the fact that the average CEO now makes more than 300 times the salary of the average worker -- 10 times the ratio of 20 years ago?

These are some of the same questions being asked across Southern Europe by populist movements that have shaken governments, particularly in Italy, Greece and Spain.

Here, there are no workers in the streets. In Washington's way, it was all handled by the lobbyists -- and for once (and it rarely happens these days), the labor unions and their allies won.

Obama & Co. will be back. The need to strengthen Asian trading ties as China rockets to supremacy in the East may in the end be the president's most urgent and effective sales point.

But if American workers are going to be put at risk in the process, Obama needs to admit it, and explain his case more clearly.

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