The bums, or at least many of them, have been thrown out. And so the political conversation turns naturally to the question of what the Democrats will do now that they again share power with a Republican president. And while it may be too soon to fully answer that question, we saw enough during the campaign to be alarmed about one tendency in particular: economic nationalism.
Many of the Democrats who recaptured seats held by Republicans have been described as moderates or social conservatives, who will be out of synch with Speaker-to-be Nancy Pelosi. The better term, with props to Fareed Zakaria, is probably illiberal Democrats. Most of those who reclaimed Republican seats ran hard against free trade, globalization, and any sort of moderate immigration policy. That these Democrats won makes it likely that others will take up their reactionary call. Some of the newcomers may even be foolish enough to try to govern on the basis of their misguided theory.
There is an important distinction to be made between economic populism and economic nationalism. Many of Tuesday’s Democratic victors stressed familiar populist themes: the little guy against the big guy; corporate misbehavior; and tough times faced by working people. Al Gore ran in 2000 as an economic populist and so, implausibly, did John Kerry in 2004. Raising the minimum wage (which Republicans stupidly failed to do before the election) is a classic populist position. Opposing Bush tax cuts for the wealthy is another. But in places where Democrats made their most-impressive inroads this year, one heard a distinctly different message of economic nationalism. Nationalism begins from the populist premise that working people aren’t doing so well. But instead of blaming the rich at home, it focuses its energy on the poor abroad. The leading economic nationalist today is probably Lou Dobbs, who on nights other than Election Night natters on against free trade, outsourcing, globalization, and immigration on CNN.
The most prominent nationalist candidate this year was Sherrod Brown, who unseated incumbent Sen. Mike DeWine in Ohio, a state that has lost 200,000 manufacturing jobs since Bush became president and where unemployment is nearly a percentage point higher than the national average. Brown is the author of a book called Myths of Free Trade: Why American Trade Policy Has Failed. Here is a snippet from one of Brown’s TV spots: “I’m for an increase in the minimum wage and against trade agreements that cost Ohio jobs. I support stem-cell research, tighter borders, and a balanced-budget amendment.” Announcer: “Sherrod Brown stood up to the president of his own party to protect American jobs, fighting against the Mexico and China trade deals that sent countless jobs overseas.” For some reason, economic nationalists never seem to complain about job-killing Dutch or Irish competition. The targets of their anger are consistently China and Mexico, with occasionally whacks at Dubai, Oman, Peru, and Vietnam.
One heard similar themes in the other pivotal Senate races. In Virginia, apparent winner James Webb denounced outsourcing and blasted George Allen for voting to allow more “foreign guest workers” into the state. In Missouri, victor Claire McCaskill refused to let incumbent James Talent out-hawk her on immigration. “Unfair trade agreements have sent good American jobs packing, hurting Missouri workers and communities,” she said in one of her ads. “We should be encouraging businesses to stay at home, not rewarding them for moving overseas.” In Michigan, vulnerable Democratic incumbent Deborah Stabenow survived while promising to set up a federal office to prosecute unfair trade by foreign governments.
An even harder-edged nationalism defined many of the critical House races, where Democrats called for a moratorium on trade agreements, for canceling existing ones, or, in some cases, for slapping protective trade tariffs on China. These candidates also lumped illegal immigrants together with terrorists and demanded fencing and militarization of the Mexican border. In Pennsylvania, Democratic challengers Chris Carney and Patrick Murphy defeated Republican incumbents by accusing them of destroying good jobs by voting for the Central American Free Trade Agreement and being soft on illegal immigration. “Fair trade” candidates also won back formerly Republican seats in Ohio, Indiana, Iowa, North Carolina, and Wisconsin. Jerry McNerney, who defeated 14-year Republican incumbent Richard Pombo in California, says on his Web site: “I am deeply worried about the way this nation is plunging head-long into the global economy without a plan or a national consensus.”
Economic nationalism is not unique to Democrats—nor is it a new theme. The protectionist wing of the party emerged in the 1980s when America’s manufacturing decline was first linked to imports and foreign competition. For years, the protectionist urge was exemplified by Richard Gephardt (who focused on Japan and Korea rather than China). But during his 1992 campaign, Bill Clinton made a key decision to support NAFTA. Clinton espoused a strong free-trade position and embraced globalization through his presidency. This set the direction for his party, despite significant resistance in Congress. Clinton’s argument was always that government should address the negative consequences of open trade through worker retraining programs and by providing benefits not tied to employers, like health care and portable pensions. But that human-capital part of Clinton’s globalization agenda never went anywhere, which partially explains the current backlash.
As a result of this year’s election, it now seems unlikely that the new Congress will extend George W. Bush’s “fast-track” trade-negotiating authority, which expires this summer. The results are further bad news for the Doha round and bilateral trade agreements with South Korea and other countries. It is possible that congressional Democrats will revive efforts to saddle China with punitive tariffs as punishment for “currency manipulation.” It would be going too far to say that the 2006 election ushers in a new protectionist consensus. But free trade has definitely left the building.