Why NAFTA Is An Anger Point Fueling The Uprising

I'm home for a day and a half here in Denver before heading out for the Midwestern leg of THE UPRISING book tour.

One of the things I've been finding when talking to groups is a palpable anger at our current trade and globalization policies - an anger from both progressives and conservatives that I meet. And yet, we continue to get this kind of nonsense from Serious Thinkers in major newspapers:

"All discussions of the victims of trade ignore the considerable benefits: the exports we sell and the lower prices for consumers at home. Since poorer Americans spend a higher proportion of their incomes on low-wage imports (shoes from China, for instance), trade can also be seen as favoring the less well off. If only politicians would stop preaching to them otherwise."

In reading this, our reaction should be if only insulated journalists would stop preaching fact-free rhetoric, perhaps we could actually have a discussion about the real impact of our current trade policies.

You'll notice that the author of the piece, Roger Lowenstein, offers no actual facts to back up his assertion that so-called "free" trade "favors the less well off" - other than a flippant Freakonomics-ish reference that seems smart merely by being counterintuitive. Yes, we are led to think - corporate lobbyists are crafting trade deals to help poor people. Of course that has to be true if someone as Serious as Lowenstein is writing something so absurd. If it's that absurd yet in a major newspaper, it just HAS to be true, right?

Wrong.

What Lowenstein and other Serious Trade Thinkers refuse to discuss is how inflation has been outpacing wages during the era of "free" trade. What that empirically proves is that, in fact, ordinary workers are losing out in the "free" trade deal.

The "free" traders' argument says that while NAFTA-style policies drive down wages and eliminate jobs, those policies are ultimately a good bargain for all workers because the wage-cutting, environment-destroying competition brought on by these policies lowers the price of goods.

However, if inflation (aka. the price of goods) is outpacing average wages (aka. how much workers get paid), that means on the whole workers are losing out in the deal. Sure, some goods may be priced lower because slave labor in China is now making more goods, but domestic wages here are EVEN lower than that, meaning the whole scenario screws over ordinary people. Wages, after all, are only as good as their purchasing power.

Lowenstein's rhetoric is merely one drop in the ocean of fact-free propaganda in our economic debate today. As economist Ha-Joon Chang shows in his book "Bad Samaritans," despite the well-known history of our country (and every other industralized country) using fair trade policies and strategic tariffs to build our economy into the powerhouse it is, we continue to be told that "free" trade is the only way forward.

But as I said to start this post, the public is starting to figure out just how much it is being lied to on trade and globalization. Polls show rank and file Republicans and Democrats are angry at the NAFTA nonsense from the media and from politicians - and that anger has become one of the impulses fueling the uprising I write about in my new book. The question now is whether that uprising is going to force the next Congress and the next president to change.

This is an ongoing blog series from the national book tour of The Uprising. You can order The Uprising at Amazon.com or through your local independent bookstore.

Comments

[TruthBeHeard]

David,
Actually the 'cheap shoes' from Wal-Mart end up being the most expensive shoes because they are so cheap that they aren't meant to last more than a few months so shoes have to be replaced much more often than should need to be replaced. One more of the rip-offs of 'cheap goods'.

[appleknocker]

There's another aspect of NAFTA that I haven't heard mentioned recently: immigration. If I remember correctly, one of NAFTA 's selling points was that it was going to at least mitigate the immigration "problem" by making Mexico so prosperous that its people wouldn't have to risk their lives sneaking across the border. It hasn't quite worked out that way, has it?

[Dustee]

Yeah, what it did was put Mexicans out of work and they had to come here for work to feed their families.

[dexxjones]

thank you mr sirota. there is palpable anger about EVERYTHING. we need mass firings in our elected offices. Nancy "the getaway driver" Pelosi this means you too.

[kingcityguru]

The unemployment rate in Canada and the US is LOWER than before NAFTA was signed and the average unemployment rate since a year after its signing is LOWER than any similar period of time until WWII.

The world is changing. Make the best of it, because you can't stop evolution.

[racom]

As has been said before, 'even slaves had jobs'!!! The real measure is, are you better off with nafta or without. With our living standards sinking, real income lowering and working conditions worsening nafta has been disastrous for the US and Mexico, workers that is. Corporations love the increased income flowing in.

[BBackSoon]

You know if you had a manufacturing job making 30k to 60k a year and you lose that job and then work at Wally World or McBurger Joint for $10 an hour, in the governmental stats that is a one-to-one JOB comparison. Do you really think you can live at the same standard on $20k a year?

The current government has not told us the truth on anything. They cook the books to make things either better or worse than they really are. They will present data that supports their next action plan. I don"t see how we can believe the National Weather Service or the Post Office at this point.

[RS]

Hey kingcityguru--you obviously don't realize that over the last thirty years, high-paying manufacturing jobs have been replaced by menial, low-paying, dead-end retail and service sectors jobs, including "McJobs" and jobs at Wal*Mart. It's very, very easy for people like you to talk the way you do when you probably have virtual job security--that is, I'll willing to bet big $$$$ that you are probably employed in a field where the jobs CANNOT be duplicated overseas (or in Mexico or Central America) at a very low price--for example, doctors, accountants, lawyers, journalists, bankers, entertainers, etc.

[laurenc]

Is it true Obama just said that he's a "free-trader" and "free-marketer?"

Whoa, guy! You're there partly because you convinced unions to support you, esp in Nevada and afterwards. You better talk to them about this ridiculous self-description, don't you think, David?

[Serfie]

You are right. Obama has stated repeatedly that he is a free trader and has told Americans that we are too ignorant about globalization to be pissed off about it.

But David will never attack his political allies for this stance, only the Clintons and the Republicans are evil in his book.

[SamEllison]

You must not have heard, David got Mayhilled.