Dishonest Trade Talk

Listening to the debate between John Kerry and John Edwards over who would be best at fencing off the United States from the realities of the global economy, it's hard not to be nostalgic for Bill Clinton. On this subject, at least, Clinton told the country the truth.

Clinton's message during his 1996 reelection campaign was that there was no easy escape from global competition. Protectionism would only hurt U.S. workers in the long run. The answer was education and job training that would give U.S. workers the skills to compete -- to "build a bridge to the 21st century," as Clinton put it in the signature line of the 1996 Democratic convention.

Now, contrast Clinton's blunt advice with the pandering and prevarication on trade issues of this year's leading (which is to say, surviving) Democratic candidates, Kerry and Edwards.

In the run-up to last week's Wisconsin primary, Edwards was proclaiming himself the anti-NAFTA candidate, which to me is the economic equivalent of joining the Flat Earth Society. A defensive Kerry was almost apologizing for his support for the 1993 free-trade pact with Mexico and blasting "Benedict Arnold CEOs" who export jobs overseas in an effort to cut costs.

This anti-trade talk is dangerous nonsense, and the Democrats should be embarrassed by it. It suggests to U.S. workers that there is an alternative to change and adaptation -- to getting the skills that are necessary to compete in an increasingly competitive world. That's wrong, most of all because it misleads people about their real options. Rather than helping workers build a bridge to the future, as Clinton tried to do, these Democrats talk as if they want to build a roadblock. Shame on them.

Shame on the Republicans, too, for disowning the administration's chief economist, Gregory Mankiw. He made the "gaffe" (a Washington term for stating something that is true but politically embarrassing) of saying that "outsourcing" jobs abroad can be beneficial, by lowering costs and improving efficiency.

In economic terms, Mankiw's statement was utterly noncontroversial (unless you imagine that it's good for workers if companies have high costs and go out of business). But in the trade mania of the moment, it was death -- and even President Bush seemed ready to throw Mankiw overboard. Clinton, it's worth remembering, was attacked in pre-bubble 1996 for the slow growth of wages in the United States, much as Bush is now savaged for the "jobless recovery." Clinton's treasury secretary, Robert Rubin, responded, "The best answer to stagnant wages is consistent economic growth." Sure enough, wages soon took off, and by some measures, the Clinton boom years benefited labor more than capital.

It's a delicious irony of Washington that Clinton's heir in the trade debate is the balding, obscurantist, Ayn Rand-reading chairman of the Federal Reserve, Alan Greenspan. He gave a speech last Friday in Omaha that should be required study for every Democrat this year. It expressed the hard fact that escapism isn't an economic policy.

The Fed chairman began by agreeing with the trade-worriers that intense global competition has brought stress and anxiety. "There is a palpable unease that businesses and jobs are being drained from the United States, with potentially adverse long-run implications for unemployment and the standard of living of the average American," he said.

Greenspan went on to summarize some of the growth statistics that make economists so confident that the long-term benefits of free trade and open markets outweigh the short-term costs. But he counseled workers that they must have the skills to compete. "By far, the greatest contribution during the past half-century to our average annual real GDP growth of three-quarter percent has been the ideas embodied in both our human and physical capital." And he warned that if workers don't get the skills required by a changing economy, the result will be growing inequality of incomes.

Greenspan's gospel is simple, and backed by hard numbers: "Over the long sweep of American generations and waves of economic change we simply have not experienced a net drain of jobs to advancing technology or to other nations." That was Clinton's faith, too, and it gave him the discipline to resist politically popular policies that would have undermined economic growth.

Democrats are right to challenge the poor economic record of the Bush administration, which has squandered many of the gains of the 1990s. But they should base their critique on sound economics and honest advice to America's working people -- not on the false hope that the United States can somehow opt out of a world that is growing more competitive by the day.

davidignatius@washpost.com