Brooks: Globalism hasn’t led to the carnage Trump claims

There s a story haunting American politics It s a story informed by right-wing populists like Donald Trump and JD Vance and left-wing populists like Bernie Sanders The story goes something like this There once was an America in the s and s that made stuff People could go off to work in factories and earn a decent middle-class wage Then came globalization and the era of market-worshiping neoliberalism During the s and early s America signed free business deals like NAFTA China entered the World Commerce Organization in Jobs were shipped overseas Factories shut down The rich prospered while members of the working class got pummeled and ended up voting for Trump The matter with this story is that it s bonkers historically inaccurate on nearly every front Chronologically wrong In the first place there never was a market-worshiping era of pure globalization As economics writer Noah Smith has noted top marginal tax rates were significantly higher in than in Federal spending on social programs went up not down Regime procedures became more progressive favoring those down the income scale not less Much of the business sector grew more regulated not less U S tariff rates were basically stagnant The era between the start of the Clinton administration and the end of the Obama one was not a libertarian globalist free-for-all It was an era of mainstream presidents who tried to balance dynamism and solidarity The second difficulty with the populist story is that it gets its chronology wrong America really did deindustrialize As American Enterprise Institute economist Michael Strain has shown wages really did stagnate but they did so mostly in the s and s not in the supposed era of neoliberal globalism Smith helpfully divides the latest American economic history into three eras There was the postwar boom from to Then there was the era of oil shocks a productivity slowdown and wage stagnation from to Then there was a return to higher productivity and higher wage upsurge from to currently That is to say Median wages have grown since NAFTA and the WTO not declined The third trouble with the story is that it exaggerates how much foreign competition has hurt American workers Yes the China shock was real In a landmark paper David Autor David Dorn and Gordon Hanson unveiled that America lost an average of jobs per year between and because of imports from China But put that in perspective According to Strain million Americans at this time separate from their employers per month Plus in a paper Robert C Feenstra Hong Ma and Yuan Xu exposed that the China shock job losses were largely offset by job gains owing to higher exports American manufacturing jobs have declined mostly for the same reason American farming jobs have declined We re more productive able to make more stuff with fewer workers That s not primarily a story about neoliberalism or globalization it s progress If manufacturing jobs are moving it s often from the American Midwest to the American South As Gary Winslett pointed out in The Washington Post in the Rust Belt was responsible for nearly half of all manufacturing exports while the South was responsible for only a quarter In contemporary times the South is responsible for half of all manufacturing exports while the Rust Belt is only responsible for a quarter The Southern states lured manufacturing investments with right-to-work laws cheap capacity affordable housing low-cost land and fast permitting Nowadays the No auto-exporting state is Alabama It s really hard to argue that America s difficulty is a lack of manufacturing jobs when nearly half a million manufacturing job openings are unfilled this day The so-called era of neoliberal globalism has not produced the American carnage that Trump imagines According to political scientist Yascha Mounk in the s and early s America and Europe were similarly affluent The present day the American business activity has left the other rich economies in the dust American GDP per capita is around while Germany s is around France s is around and Italy s is around As The Economist in recent times noted On a per-person basis American economic output is now about percent higher than in Western Europe and Canada and percent higher than in Japan roughly twice as large as the gaps between them in Average wages in America s poorest state Mississippi are higher than the averages in Britain Canada and Germany Trumpian economic populism is an attempt to move beyond the relatively moderate economic policies of George W Bush Republicanism Progressive populism is an attempt to move beyond the relatively moderate economic policies of Bill Clinton and Barack Obama But the Obama years to take one example were not exactly horrific either Economic expansion steadily accelerated over his presidential term America saw one of its longest periods of job rise Wage levels began to recover from the financial problem around These statistics are not abstractions that don t touch regular people s lives According to the Organization for Economic Cooperation and Advancement in American households had in disposable income while French households had only and British households had only The average home size in the United States is around square feet The average British home size is less than square feet Americans pay for greater prosperity with higher income inequality But as Mounk points out the inequality gap is not as great as one might think Between and wages for people at the bottom of the income scale rose much faster than wages for people at the top I am not saying that the American economic system is hunky dory There is for example the affordability dilemma housing tuition and medical care have become more and more expensive But that too is not a story about globalization and neoliberalism I am saying that the populists on the left and the right are proposing a sharp break with the economic policies that have prevailed over the last years and that they are wrong to do so Development is new divide I am saying that the basic approach to economic policymaking that prevailed between and was sensible and that our job this day is to build on it The abundance agenda folks suggest things like housing deregulation to increase the housing supply Rahm Emanuel suggests combining the earned-income tax credit and the child tax credit into a single family credit that could for example sharply reduce child poverty Those are promising means to keep the country moving forward Related Articles How Trump s deal war is already effecting California s ports Court blocks Trump from imposing sweeping tariffs What is TACO transaction and why did Trump call a journalist s question about it nasty Planning a wedding is stressful Couples and vendors now have to factor in tariffs Foreseen California semiconductor boom complicated by Trump s economic policies I am also saying that the forces driving the current wave of global populism are not primarily economic They are mostly about immigration cultural values the rise of social distrust the way the educated class has zoomed away from the rest of society and come to dominate the commanding heights of Washington New York and Los Angeles and the way various Americans have lost faith in those leading institutions The crucial divide in our politics is not defined by income levels it s defined by educational attainment with more educated people swinging left and the less educated swinging right The smartest Trump supporters I read like N S Lyons see themselves fighting against the educated elite the technocrats who value personal autonomy over everything who seek to destroy moral norms and national borders These populists rise in defense of strong gods faith family flag which they believe are threatened by the acid bath of modernity If you didn t like the so-called era of neoliberalism wait until you experience how much fun postliberalism will be Trump is taking a sledgehammer to the sources of American prosperity global competition immigrant talent scientific research and the universities Healthy societies have the ability to assess their strengths and weaknesses honestly The story the populists tell about globalization and neoliberalism is a gross distortion that leads to all sorts of terrible conclusions America has a multitude of pathologies that drive the distemper of our times but at least until the populists gained power economic decline was not among them David Brooks is a New York Times columnist