After Republican Mike Huckabee and Democrat Barack Obama won the Jan 3 Iowa presidential caucuses, the respected Reuters news service reported that as the primary election season unfolds, “anxiety about the state of the U.S. economy…is likely to influence voters’ view of the U.S. role in the global economy, say experts on trade and manufacturing.” The first expert Reuters reporter Nick Zieminski cited was Scott Paul, who asserted that “trade and globalization and anxiety about the future are top of mind for a lot of people.” Mr. Paul was identified as director of “the nonpartisan Alliance for American Manufacturing.”
Just a moment. The Alliance for American Manufacturing is not even close to being a neutral observer of the international trade scene. It’s a well-heeled Washington lobby group that is at the heart and soul of the American steel lobby, where bashing imports is a blood sport. The alliance’s main financial backers include Leo Gerard’s United Steelworkers of America, and the U.S. Steel Corporation. Scott Paul is a former trade lobbyist for the AFL-CIO, and was also the chief trade adviser to David Bonior, a former Michigan Democratic Congressman. Mr. Bonior was one of the most ardent advocates of trade protection in the House, and is now a top strategist in John Edwards’ presidential campaign. The USW has endorsed Mr. Edwards for president. The steelworkers’ political action committee has given 100 percent of the $199,000 it has donated to political candidates for this year’s elections to Democrats. U.S. Steel has given $94,628 to congressional candidates so far this year, according to the Center for Responsive Politics, 69 percent of which has gone to Democrats. In short, Mr. Paul’s alliance is “nonpartisan” much in the sense that Rush Limbaugh is nonpartisan. Mark another public relations accomplishment for the steel lobby at the expense of a gullible press.
Whether the steel lobby will accomplish its main policy policy goal of exploiting American anxiety about jobs to obtain a firm commitment from this year’s eventual winning presidential candidate to make a serious effort to roll back “unfair” import competition is another story. The last time that happened — eight years ago in the 2000 presidential race, when then vice-presidential candidate Richard Cheney won votes in the Ohio Valley by promising that, if elected, George W. Bush would adopt a protectionist agenda for steel — it didn’t work as promised. While President Bush did slap on 30% tariffs on imported steel in 2002, his steel plan ultimately collapsed in the face of protests from outraged American steel-consuming businesses, whose costs of importing essential raw materials shot up. Bush subsequently dropped the tariffs after they failed to withstand a legal challenge before a World Trade Organization dispute panel. So far this year, there has been a lot of protectionist rhetoric hurled around — but every candidate, with the exception of John Edwards, has also positioned himself or herself to move back to the mainstream center, if elected.
To understand why, take a closer look at the evolving economic fundamentals in the next two key primary states that turn out to be something less than the hotbeds of protectionism they are usually thought to be. In Michigan, where Republicans vote tomorrow, global sourcing, not protectionism, is the evolving Michigan economic model. On Saturday, Jan. 19 — when Republicans vote in South Carolina — five Chinese auto makers will be displaying their wares to Motown audiences at the North American Auto Show, along with the likes of Toyota, Hyundai, Honda, and BMW (which builds its sporty X6 Coupe in Spartanburg, S.C., where auto production is on the rise). And even South Carolina textile magnate Roger Milliken, one of the last true American economic nationalists left standing, hasn’t been able to escape becoming ensnared in global sourcing realities. When Americans buy tennis balls from major manufacturers like Wilson Sporting Goods, those balls may well have been made in China, with fabric supplied from a Milliken subsidiary in the United Kingdom. While the grassroots politics hasn’t yet caught up with the economics, a closer look at what’s going on suggests that that day is coming. To alter Bill Clinton’s famous slogan from the 1992 presidential race, It’s the economics, stupid!
Nowhere do the true economic fundamentals stand out more starkly than in Michigan, a state that has been bleeding jobs. Ironically, the job-loss problem that Republican Mitt Romney is now talking about originated more than four decades ago, thanks in part to weak executive leadership by his father, George Romney, who was president of American Motors Corp. from 1954 to 1962, before he was elected Michigan’s governor. Romney has boasted that if he is elected president, he would get Michigan “on the move again,” as his father had done. The historical record suggests that George Romney did help get Michigan moving — backwards.