The campaign key-issue conundrum: “Gains from global trade to the people who have benefited are enormous … [but] the adverse consequences in the U.S. must be taken seriously”.
Those adverse consequences could very well sway the U.S. presidential election.
MIT economist David Autor and three research co-authors have concluded that U.S. voting patterns have shifted most in parts of the country that lost the most jobs as a result of increased trade with China.
See “A Rebounding Economy Remains Fragile to Many“.
And those parts of the country mainly represent swing states in the presidential campaign.
In those states, Mr. Autor elaborates, “There is this an undercurrent of economically-driven dissatisfaction that works to the benefit of candidates who are non-centrist and particularly right-wing candidates.”
The Times summarized the Autor study* as concluding that, “voters in districts with heavy job losses have tended toward ideological extremes, replacing moderates with more conservative or liberal representatives”.
With job losses the overriding issue in these regions (mainly the U.S. Rust Belt and Appalachia) other impacts of global trade — benefits to workers in developing countries and lower-priced good for American consumers — have become secondary in the campaign.
Even the dramatic national improvement in the U.S. workers’ income reported this week may not have affected the regional voters with economic grievances.
Hillary Clinton and Donald Trump have presented significantly divergent strategies for improving the lot of these workers. Their plans for U.S. coal communities are indicative:
Clinton has issued a comprehensive “Revitalizing Coal Communities Plan” — “a $30 billion plan to ensure that coal miners and their families get the benefits they’ve earned and respect they deserve, to invest in economic diversification and job creation, and to make coal communities an engine of US economic growth in the 21st century as they have been for generations.”
Donald Trump’s plan emphasizes a re-birth and expansion in coal production, and fossil fuels generally, mainly via trolling back energy-environmental regulations. In an address last month to the Detroit Economic Club, Trump “promised to repeal a host of energy and environmental regulations, save the coal industry, and lift restrictions on energy sales,” according to The Wall Street Journal.
The same Journal article rightfully concluded with the macro context for these seminal policies: “The struggles of the coal industry aren’t chiefly due to regulation, in the view of most analysts, but rather sweeping national and global trends.” [emphasis added]
Only one plan — Clinton’s or Trump’s — will prevail post January 20th.
*Focusing on Congress but surely relevant to the presidential race.