With more than a year to go in his term of office,
it’s premature to look at his floundering international economic policy
and pronounce President George W. Bush a failed president. Still, going on
three years, the administration is still scrambling awkwardly to find its
voice. Treasury Secretary John Snow sounds like a Commerce secretary when
he shills for the likes of the domestic textile lobby by pressuring
China
to devalue its currency — turning a delicate matter of international
finance into pork. And when Commerce Secretary Don Evans spoke to a
Detroit
business audience last month, he offered mainly PR blather about how
wonderful American workers are. Some of Evans’ ideas actually would cost
jobs. Meanwhile, the president struggles to explain why nearly three
million Americans have lost their jobs on his watch. In sum, Bush’s
model for making international economic policy seems to be the same as his
Indiana Jones strategy for the reconstruction of
Iraq
: make it up as you go along.
Democratic Party strategists are sharpening their knives. They know
that Bush — like his father before him — goes into an election year
with serious economic vulnerabilities. The problem is, some Democratic
presidential challengers are pandering to the unelectable protectionist
wing of their party. Howard Dean and Richard Gephardt have suggested that
the
United States
should trade only with high-wage countries. Even more bizarre, Dennis
Kucinich says that he would “cancel” the WTO. This is the biggest gift
that the Republicans could hope for.
But last month, the pro-trade Democratic Leadership Council opened
a withering line of attack on Bush, and also on some of the Democratic
demagogues. This is worth watching closely. The DLC is fighting inside the
party for a centrist Democratic campaign that could allow Wesley Clark, or
John Kerry, or Joe Lieberman, to sink Bush by portraying as economically
undisciplined and incompetent.
If Bush’s term ended today, this would be his legacy: (1) high
steel tariffs that hurt American businesses and cost jobs, (2) the most
exorbitant taxpayer-funded farm subsidies in history, (3) a WTO Doha Round
in intensive care, (4) a handful of inconsequential “free trade”
preferential bilateral deals (5) and a failed “Free Trade” area of the
Americas — that failure attributed to Bush’s unwillingness to reform
U.S. antidumping regime and to open America’s embarrassingly closed
sugar market to free-market competition from Brazil. Not to mention the
nearly three million lost American jobs that have tanked so far on
Bush’s watch.
Last month, the president fumbled on the question of jobs.
“We’ve lost thousands of jobs in manufacturing” during his
presidency, George W. Bush lamented to a Labor Day audience of union
workers in
Richfield
,
Ohio
on September 1. Ouch.
Bush blamed the massive loss of American jobs on foreigners who
don’t play fair: “One way to make sure that we — the manufacturing
sector does well is to send a message overseas — say, look, we expect
there to be a fair playing field when it comes to trade.” He added:
“See, we in
America
believe we can compete with anybody, just so long as the rules are fair,
and we intend to keep the rules fair.”
The president claimed that he had thought through a plan to bring
these jobs back. “So I told
Secretary Don Evans of the Commerce Department, I want him to appoint an
assistant secretary to focus on the need of manufacturers, to make sure
our manufacturing job base is strong and vibrant.”
What an idea. Does Bush seriously believe that for the want of one
assistant secretary of Commerce, some 2.5 million Americans have lost
their jobs? It was the Bush Commerce Department that helped dream up the
president’s steel plan that threw up high tariff barriers against
foreign steel — costing three American jobs for every one created in the
steel industry, according to Glenn Hubbard, the former chairman of
Bush’s Council of Economic Advisers. Bush, his eye on electoral college
votes in the
Ohio
Valley
, must have known this all along.
In prepared remarks for the Detroit Economic Club on September 15,
Commerce Secretary Evans blasted
China
as an “unfair” competitor. The previous day in
Cancun
,
U.S.
Trade Representative Robert Zoellick had rightly praised
China
for having played a constructive role in trying to make the WTO
ministerial a success.
Beijing
clearly takes its WTO membership seriously. But Evans sees votes in
bashing
China
.
“We are going to aggressively target unfair trade practices
wherever they occur,” Evans declared. Evans said that he was going to
create “an Unfair Trade Practices Team, within the International Trade
Administration.” This will “allow us to track detect and confront
unfair competition.” Again, what an idea. Evans is apparently unaware
that every serious study ever done has documented the unpleasant fact that
Commerce’s antidumping regime costs American jobs.
If it is up to the centrist Democratic Leadership Council, the
Democrats will roast Bush as a fiscally irresponsible advocate of high
tariffs that hit the poor the hardest. That’s basically the advice set
forth in a brilliant political analysis the DLC sent in a “New Dem
Daily” e-mail to political junkies on September 26. Written principally
by Ed Kilgore and Ed Gresser, the New Democrats began by pointing out what
isn’t always obvious to many in their party: “Trade Is Good.”
The 1990s worked in
large part because of centrist trade policies and fiscal discipline, the
e-mail noted. But during the Bush administration, “trade policy has
floundered,” the New Dems charged. “Meanwhile, the administration has
consistently said one thing while doing the opposite, loudly, and often
gratingly — calling for free trade in theory, but in reality spreading
new industrial tariffs and farm subsidies around like a malevolent Johnny
Appleseed.”
But Democrats won’t be able to exploit these openings with the
economic ideas of challengers like Richard Gephardt, who “boasts that he
led the opposition to every trade-opening initiative of the
Clinton
administration prior to the U.S.-Jordan bilateral trade agreement of
2000,” the DLC e-mail warned. Every Democratic president “since the
Civil War,” the DLC analysis noted, “has favored expanding trade.”
The DLC knows what the AFL-CIO does not: Gephardt is unelectable.
The e-mail was also withering in its criticism of Howard Dean and
Dennis Kucinich for “embracing what can only be called dangerously bad
economics,” the DLC warned. “Democrats cannot have it both ways. You
cannot achieve the economic performance of the
Clinton
administration with the trade policies of the
Hoover
administration,” the e-mail noted bluntly.
If the Democratic Party returns to its centrist roots, George W.
Bush could be a one-term president.
