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Tea partiers and union Democrats agree: Trade is bad. What does this mean for America?

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J. Scott Applewhite / AP / file

(Read caption) People gather at in Washington for a "Remember in November" rally to express opposition to government spending, Sept. 12. Nationalism and isolationism tend to follow economic uncertainty and wealth inequality.

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Smoot-Hawley here we come.

Willis Hawley and Reed Smoot, you may recall, sponsored the Tariff Act of 1930 that raised tariffs to record levels on more than 20,000 imported goods. The duo said this would protect American jobs and revive the economy. It did the reverse, plunging the nation into an even deeper depression. Other nations retaliated. Global trade plummeted. Americans got poorer, as did millions of others around the world.

Why do I think we’re on the way back to Smoot-Hawley? Because with Republicans and blue-dog deficit hawks gaining ground after November 2, the chance of boosting the economy with an “infrastructure bank,” another big spending package, or even a big round of middle-class tax cuts is roughly nil. This means a lousy economy — possibly for years.

And that leaves trade as a sitting duck.

High unemployment turns the public against trade. In a recent Wall Street Journal/NBC News poll, more than half of those surveyed (53%) said free trade hurts America. That’s up from 46% in 2007, and just 32% in 1999.

Traditional big-business Republicans support trade. But the tea partiers who are taking over the GOP don’t. An astonishing 61 percent of people who describe themselves as “Tea Party sympathizers” say trade is bad for America. That’s close to the 65 percent of union families who are against trade.

Think about it. The ground troops for both parties – tea party Republicans and union Democrats – believe free trade is bad.

The tea party movement represents the isolationist wing of the GOP. It’s a direct descendant of Mr. Smoot and Mr. Hawley. Not only are tea partiers against trade; they’re also against immigrants. At the first national convention of Tea Party Nation last February, former Colorado congressman Tom Tancredo brought the crowd to its feet by denouncing America’s so-called “cult of multiculturalism” and accusing immigrants of threatening America’s Judeo-Christian values. “This is our country!” he declared, to wild cheers. “Take it back!”

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Neither trade nor immigration has been responsible for the huge job losses of the Great Recession. These losses have been due to the bursting housing bubble and collapse of domestic demand.

But dig deeper and you’ll find a longer-term truth about trade. While all of us have benefited from access to lower-cost products made abroad, the burdens of free trade have fallen disproportionately on what we used to call the working class.

Globalization is part of reason the median wage of male workers hasn’t risen in three decades, adjusted for inflation. Starting in the late 1970s, technologies like cargo ships, containers, and satellite communications, followed by computers and the Internet, enabled companies to efficiently parcel out work around the world wherever it could be done most cheaply. The result has been to undermine unions and destroy many good-paying routine jobs in America.

Meanwhile, the biggest benefits have gone to the top – to executives of U.S. global corporations, Wall Street financiers, big-name entertainers, and the most successful digital entrepreneurs. All have been sufficiently educated and well-connected, or lucky enough, to find a huge and growing global market for what they sell.

The consequence has been a degree of inequality not seen in this country since the late 1920s.

The winners from globalization have gained so much that they could have fully compensated the losers and still come out ahead. They could have financed better schools and free higher education for most Americans, along with wage subsidies that brought almost everyone up to a higher standard of living.

But they didn’t. Instead, they fought to keep their tax shelters, loopholes, and lower marginal rates, and they fought against more outlays for public investments and social safety nets. Wall Street got bailed out but Main Street got zilch.

So we’re on the cusp of new isolationism that’s likely to hurt all of us – a backlash against free trade, immigration, and maybe even international bodies such as the World Trade Organization, the World Bank, and IMF.

Isolationism and nationalism are the handmaidens of an economically anxious and frustrated middle class. That was the lesson we learned 80 years ago, but forgot.

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The Christian Science Monitor has assembled a diverse group of the best economy-related bloggers out there. Our guest bloggers are not employed or directed by the Monitor and the views expressed are the bloggers' own, as is responsibility for the content of their blogs. To contact us about a blogger, click here. This post originally ran on www.robertreich.org.


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