If you missed Sunday night’s CNN Democratic presidential debate between Hillary Clinton and Bernie Sanders, here is a rough recap of the portions devoted to foreign economic policy:
CLINTON: Imports are bad.
SANDERS: Imports are VERY bad!
CLINTON: I oppose trade deals like CAFTA and the TPP!
SANDERS: I WILL OPPOSE ALL TRADE DEALS UNTIL OUR SUN IMPLODES.
CLINTON: Exports are good!
SANDERS: I suppose in theory exports are okay, but they benefit large corporations and so I AM CONFLICTED!
CLINTON: Still, to sum up, trade is bad. Except for exports.
SANDERS: TRADE AND WALL STREET AND MILLIONAIRES AND BILLIONAIRES AND CORPORATIONS ARE BAD.
It was not the most enlightening of debates on this front.
I’ve written before about how Republican candidate Donald Trump campaigns on a Big Lie about the global economy. What is striking about Sanders, however, is that he’s campaigning on Two Big Lies about the global political economy.
First, a caveat: Sanders raises a valid point. There is no denying that freer trade has had distributional effects within the United States, and that trade with China in particular has hurt American workers more than Economics 101 would have predicted. So when candidates such as Sanders point out the problematic effects of past trade deals, they’re not completely wrong.
The problem is that they are mostly wrong, and even when they are right, they offer the wrong remedy. Bloomberg News’s Noah Smith — an economist who has not been afraid to criticize the free trade consensus among economists — explains that even if one concedes that freer trade with China hurt American workers, it can’t be undone:
Trade isn’t always good for the U.S., but it usually is. Before 2000, most workers displaced by trade managed to find new employment. But that didn’t happen after the U.S. started losing jobs to China. China was probably a special case because of its undervalued exchange rate, heavy government promotion of exports, very low income and enormous size. It presented U.S. workers with a challenge unlike any they faced from Japan, Europe or even Southeast Asia.
But that challenge is over, for the most part. China’s growth has slowed, its trade has flatlined, its wages have skyrocketed and its currency is now overvalued instead of undervalued. All the manufacturing and supply chains that could relocate to China have already done so, and now some are even returning to the U.S.
(There is another post to be written here about whether economists have squandered their public intellectual capital because they have been cheerleading for free trade for so long that no one believes them anymore, but that’s a topic for another day.)
Furthermore, if Donald Trump has been campaigning on a big lie about the global economy, Bernie Sanders has been campaigning on two big lies. Sanders’s first lie, akin to Trump, is that he thinks trade protectionism will trigger a massive inflow of manufacturing jobs, when most of those jobs have disappeared from the face of the Earth.
Sanders’s second lie is that he pretends that there would be no foreign policy consequences from a U.S. shift back to the days of Smoot-Hawley. The good senator from Vermont talks a lot about how his top foreign policy priority is addressing climate change. Indeed, his platform on climate change says the following:
The United States must lead the world by working with China, Russia, India and the rest of the international community to transform our energy system away from fossil fuels toward energy efficiency and sustainable energy. We need a global commitment to reduce carbon pollution emissions.
The U.S. needs to lead the international community in the fight against climate change to maintain American economic strength and global security.
Such a global policy would require significant U.S. concessions, but would require even more significant adjustments from the nation’s trade partners such as — wait for it — China. And I am super curious to know how Sanders thinks he would simultaneously be able to erect high U.S. trade barriers and yet still persuade the rest of the world to cooperate on tackling climate change.
Because if we’re telling the truth, the only way President Sanders would help address climate change is by slowing down global economic growth and impoverishing millions and billions of people.
And that seems like an inefficient and radically unfair way of tackling the problem.