Presidents are praised when the economy does well, and blamed when it does poorly. The average voter doesn’t realize that it usually takes years to feel the effects of policies, and sitting Presidents are usually presiding over the effects of the previous administration. Furthermore, the US President can’t do a whole lot on domestic policy without Congress. With that in mind, let’s revisit the Clinton years from 1993-2000. This is the first of three blog posts I will publish on Clinton’s legacy that we should consider before offering the White House to another Clinton. This first blog post will consider Clinton’s “free trade” policies and how they hurt America’s working class.
Clinton was generally a popular president, and is praised for the booming economy of the 90s. However, he had little to do with it. When Reagan and Tipp O’Neal reformed the tax code in 1986, they made it much easier for new businesses to emerge and pay a more modest tax rate in the mid 20 percentages, rather than nearly 70%. The Tech Boom that created all that 90s prosperity was possible in part thanks to Reagan and O’Neal working together.
So what did Clinton do?
When Clinton ran in 1992, America was at an economic crossroads. In short, do we protect our thriving manufacturing sector and unique blue collar middle class; or do we open ourselves to free trade in pursuit of cheaper goods, with the intention of maintaining that middle class by allowing cozy office jobs to replace the old manufacturing jobs? Bush wanted the later, Perot wanted the former. Clinton presented himself as a centrist on this issue, supporting freer trade with some protections for working people at home and abroad. Clinton won the White House in part on that platform.
How Clinton crippled America’s manufacturing sector
NAFTA, the North American Free Trade Agreement, was implemented in 1994. Many manufacturing jobs went to Mexico, but the American economy thrived. Many economists, therefore, believed it was a success. I may lose my job at the factory, but I can learn some new tech skills, put on a short sleeve white collared shirt and a tie and become Dilbert! Not bad, eh?
As Ross Perot noted, you can show me all the numbers you want, but if you look at what was happening on the ground, the people suffered. I don’t mean Americans (not yet anyway) but Mexicans. Where factories popped up in Mexico, so did poverty. So did pollution. So did long hours for low wages. There were few, if any, protections for exploited Mexican workers, and the profit margin for CEOs massively increased. We were told we’d get cheap stuff in America, but most of the cost savings of cheap labor was eaten up by upper management and shareholders. But that’s OK, we’ve got our tech jobs, right?
We might have survived NAFTA anyway. Mexico’s government is far from perfect, but it isn’t a dictatorship. They do have a Constitution, they do have rights, and the people were demanding better. Wages were starting to increase in Mexico over time. Their economy was picking up. In time, their living standards likely would have come close enough to American living standards that CEOs would no longer stand to make too much profit from outsourcing, and if anything would redevelop manufacturing in America to save on shipping.
They needed cheaper labor.
In 2000, Clinton’s last year in office, he did something much, much worse than NAFTA. Clinton signed a bill to “normalize trade” with China – to permanently lower tariffs and phase out quotas. Unlike Mexico, China is run by a strict oligarchy – the Chinese Communist Party (CCP). Elections are but a rigged formality where the candidates are chosen by the CCP, and the people “vote” for them. There is an official constitution, but it’s a joke. The people of China have as much rights as the CCP will allow them to have. Therefore, whereas Mexican workers can vote for better laws, form unions, etc. Chinese workers have no such recourse.
But for US, this was particularly harmful and couldn’t have come at a worse time. The tech bubble was bursting, a recession was beginning, and just when we needed to fall back on our manufacturing base, Clinton was handing it over to the Chinese Communist Party. As it currently stands, our trade deficit with China is astronomical. As you can see from the US Census, we import from China about 4 times as much as we export to China. They’re beating US 4 to 1!
Meanwhile, the American middle class is crippled. We were told that “free trade” would improve our standard of living. The only people who benefit are the uber-wealthy in both China and the US. CEOs these days are paid on average over 200 times what their employees are paid. In 1965, CEOs usually made about 20 times their employees. Ya know, back in the old days. Today, average wages in manufacturing are above $19 an hour, but these jobs now. Manufacturing made up nearly 40% of GDP when Clinton took office, but that has dropped to under 17%, so by more than half! Meanwhile, the average retail associate earned just above $9.50 an hour.
In my next blog post, I’ll discuss how Clinton favored Wall Street and banksters over the American people. I’ve broken this into three parts because as I did more research and developed more solid arguments to support my position, I realized that it was about to turn into information overload. My blog posts are often used to spur debate, and I’d like such debates to focus on one topic at a time.
While this politifact article rates Ed Shultz’s claim as “half-true”, it still acknowledges that at least 32,000 factories have closed since these “free trade” deals began
For further info on the plight of Chinese workers, visit www.chinalaborwatch.org/