Editors note: Peter Navarro is CPA’s hero too!
If you Google Peter Navarro, President Trump’s trade guru (he is actually called “assistant to the president and director of Trade and Manufacturing Policy”), you might read that he is considered a “heterodox” economist. We suppose this means out of sync with many or most professional and academic economists. They regard “free trade” or unregulated, unnegotiated trade, as an article of faith.
[The Editorial Board | August 28, 2019 | The Toledo Blade]
But shouldn’t economists, of all people, be the opposite of doctrinaire? Should economics not be utterly empirical?
And shouldn’t the national interest outweigh any abstract doctrine?
As the national media piles on regarding Donald Trump’s trade policy — protectionist in the words of some pundits and negatively nationalist in the minds of others — Mr. Navarro has become the whipping boy for an approach to trade that we are told is impractical, naive, and bound to trigger a recession.
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Actually, to assume that any market will entirely regulate itself, righting any and all unfairness or inequality, has long been thought naive by liberal economists and social critics. And the result of most of the “free trade” agreements made in the last 30 years would seem to verify that critique.
In truth, the gradual and structural recession that has plagued the American worker for those same years — known as de-industrialization — is the permanent recession; the recession that that keeps on hurting.
Mr. Navarro is portrayed by some of the media as an economic gadfly (read “nut”) when he is actually a Harvard PhD whose views were, for a long time, very much in the mainstream. They may again become the prevailing common sense. That is because they are sensible.
“This country is built on manufacturing,” he has said again and again. “I’m talking about a constant renewal of manufacturing. High-tech manufacturing. And what we’ve seen since 2000, 2001, is we’ve seen the exodus of our factories and jobs.”
This is fact. It is empirical.
This nation had some 17 million manufacturing jobs in 2000, considered the (down) turning point, and has a little under 12 million now. We’ve lost 5 million factory jobs in less than 20 years.
At one point — the late 1970s — almost 20 million Americans worked in manufacturing. In 1960 one in four Americans were factory workers. Today, one in 10 are.
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Mr. Navarro, a liberal Democrat, makes what used to be a classical liberal Democratic argument about the multiplier effect of manufacturing jobs. “A manufacturing job,” he told NPR a few months ago, “has inherently more power to create wealth.
“If you have the manufacturing job as the seed corn, then you have jobs in the supply chain. Then towns spring up around that where you have the retail, the lawyers, the accountants, the restaurants, the movie theaters. And what happens is when you lose a factory or a plant in a small or medium-sized town in the Midwest, it’s like a black hole. And all of that community gets sucked into the black hole, and it becomes a community of despair and crime and blight rather than something that’s prosperous.”
This, too, is simply true.
He makes a second classical liberal Democratic argument: that by surrendering in the trade war, the U.S. government transferred wealth overseas and from American workers to foreign companies. If calling that stupid and irresponsible is “protectionist,” so be it. If our government is not here to protect us, what is it here for?
Finally, Mr. Navarro makes the point that de-industrialization is a national security issue. During World War II we vastly outproduced Germany and Japan. This would not be possible today. We could not — we probably would not have the resources or the heart — fight the war today.
To view the industrial base as central to the nation’s defense is not radical or new. It is rational and traditional. In 1952, when faced with a strike by the United Steelworkers, Harry Truman issued an executive order for the secretary of commerce to seize the nation’s steels mills to ensure the continued production of steel. Our industrial base is our security base.
Finally, some 60 years ago, when the writer Michael Harrington wrote his book, The Other America (praised by John F. Kennedy), it was considered enlightened, or simply decent, to have concern for the poverty of rural America, though there was no power elite there. Yet when Mr. Navarro and Mr. Trump seek to revive the emptied-out heartland and its silent factories, we are told they are selling empty promises.
Why should this be so? Why shouldn’t America build things again, even if it cannot regain its once overwhelmingly dominant position in manufacturing? Why should it not be considered mainstream to protect the economic future of Americans who are not powerful and progressive to seek to create jobs, real jobs, for American who have, for so long, been forsaken?
We are told that fighting the trade war just isn’t worth it. It makes Wall Street nervous. Maybe if your job and town are gone, the fight is worth it.
Read the original article here.
