Views » May 16, 2008 » Web Only

Toward A New Washington Consensus

By David Sirota

You’ve probably heard that John McCain once said, “I know a lot less about economics than I do about military and foreign policy issues.” This line is regularly referenced by Democratic television pundits as evidence that McCain is unprepared to lead the country during a recession.

The criticism is certainly valid, but it ignores something more troubling. It’s not that politicians like McCain “need to be educated” about economics, as he admitted. It’s that they do not comprehend how economics impacts international affairs.

Behold McCain at a recent town meeting.

“We need our Canadian friends, and we need their continued support in Afghanistan,” he said. “So what do we do? The two Democratic candidates for president say they’re going to unilaterally abrogate NAFTA. How do you think the Canadian people are going to react to that?”

Opinion-makers, think-tankers and other assorted conventional wisdom spewers depict McCain’s thesis as unquestioned truth. They claim that though most Americans oppose our trade policies, the world’s masses love them, and if we change them, we will lose allies.

This rationale justifies the fabled Washington Consensus — the set of right-wing globalization measures currently destabilizing the world economy. And because our politicians’ international curiosity begins and ends with turning French Fries into Freedom Fries, this rationale goes unchallenged in America’s political debate.

Facts, however, are persistent things — facts like the Toronto Star report showing “almost half of all Canadians [believe] NAFTA should be renegotiated,” with 80 percent saying it has done little or nothing for workers. McCain wonders how Canadians will react to NAFTA criticism, but the results are already in: According to polls, they prefer the NAFTA-bashing Barack Obama by a five-to-one margin over the NAFTA-glorifying Arizona senator.

“Canadians believe NAFTA needs serious work,” said Jack Layton, leader of Canada’s New Democratic Party. The likely prime minister candidate told me he wants to reform the pact because it helps corporations overturn laws and because its lack of standards forces workers into a wage-cutting, environment-destroying race to the bottom.

“NAFTA has become the template for other trade negotiations,” Layton said. President Bush says that’s terrific — that, for instance, rewarding Colombia’s brutal government with a NAFTA-style pact will quell anti-Americanism from Venezuelan president Hugo Chavez. But Layton said these deals are “the real problem” for America around the world — and he has more pesky facts to support the assertion.

The Los Angeles Times reports that polls show animosity toward U.S. globalization policies is growing throughout Latin America. Mexicans now oppose NAFTA by a 2-to-1 gap — predictable considering their country’s plight. In the 14 years preceding NAFTA, Mexico was among Latin America’s fastest growing economies. In the 14 years since, it is among the slowest.

When I spoke with Costa Rican economist Otton Solis, he told me, “Many Latin Americans see these trade agreements as an imposition.” He pointed to accords helping agribusiness crush local farmers and pharmaceutical companies inflate medicine prices as typical examples of America foisting corporate-written edicts on poorer countries.

Solis narrowly lost his 2006 bid for Costa Rica’s presidency, and he plans to run again on anti-Washington Consensus themes. He noted that just like in the United States, the public in South America is not clamoring for lobbyist-written trade deals — “only the elites are.” Far from a diplomatic panacea, Solis said these policies help anti-American rulers like Chavez, who cite them as proof of imperialism.

Now there is the possibility of change. Come November, if Americans elect leaders who are serious about reforming trade policies — a big if — then we may get a government that understands the relationship between economics and foreign policy. We could see a new Washington Consensus: one that actually reflects public consensus at home and abroad.

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• Reader Comments

  From our current perspective, I would say that knowing more about military issues is a VERY BIG PLUS.

  Bush, by listening to Rumsfeld, Chaney and a few others who knew more about business, accepted their military strategies over those of professional military, long-term planning. We’ve now seen what a CEO run war is like. It seems the Middle Eastern opposition is less compliant than shareholders and a board of directors.

  “Opinion-makers, think-tankers and other assorted conventional wisdom spewers depict McCain’s thesis as unquestioned truth.”
  Yes, opinion-makers and think-tankers are where politicians get their “grasp” of economic reality.

  I just finished, “IKE, An American Hero”. For years he has been regarded as having presided our a “do-nothing eight year presidency. Nothing could be further from the truth. What Ike had going for him (and us) was a truly average American life experience in the best sense.

  He opposed dropping the A-bomb on Japan, but implied he would use it to end the Korean War. He urged watchfulness over a too close relationship between the military and corporations (makers of weapons). He had made an exhaustive study of US manufacturing capability, national transportation problems and quietly changed racial discrimination policies within the military and in Washington D.C.

  His family valued education so much he entered the military academy to get a college education which otherwise he could not afford. He had a natural curiosity for a wide range of subjects and was an avid reader. His interests ranged from sports to history, ideas to practical application, and a vision of big solutions to big problems. A big plus was his innate grasp of human nature and could unite diverse personalities toward a common goal.

  What we need in the White House is someone who doesn’t just accept “expert” advice, but is willing to do some serious investigative study of the issues facing “ordinary” Americans. Ike was born into “ordinary” America and never forgot what real life is all about.

  None of the three candidates appears to have any wide ranging qualities or interests. Hillary knows her way around the political board game. Obama knows how to arouse emotional support. Of the three only McCain’s military knowledge and experience is of real practical benefit to our nation.

  I, for one, want a better selection than I have seen since 1952. I want someone with the imagination and drive to rise above the politically pandering pledges of handing money to citizens, temporary price cutting or simply “feeling our pain”. Someone with long-term solutions to long-avoided problems.

  “Make no small plans, for they have no power to stir men’s souls.”— Daniel Burnham

  Posted by whattheheck on May 16, 2008 at 2:04 PM

  Amen, heck.  I’ve been astonished for a long tilme at the relative shallowness and lack of relevant experience of practically everyone who ends up as a presidential candidate and finally president.

  I know there are extraordinary minds and hearts out there among us.  The mystery is why the best of these don’t ever seem to rise to high office. 

  Ironically, thanks largely to a media overwhelmingly populated by left-leaning partisans, a president that actually did possess extraordinary and relevant life and work experience, a humble yet deep understanding of what makes America exceptional, and the courage to act both in word and deed in order to assert it, was portrayed as an “amiable dunce”.

  Posted by Natalie on May 16, 2008 at 8:54 PM

  While I don’t doubt that Canadians are aware, probably more than Americans as they have better media than here in the US. All you have to do is look to the 900 layoffs announced April 28th, following the 1,000 in January at the GM plant in Oshawa.

  But I have to take issue with the portrayal of Jack Layton in the article.  As likely leader of the NDP in the federal elections, he would be a prime minister (PM) if they won a majority of the seats, or could be PM in a minority situation like the current administration in Canada.  However, the NDP’s chance in winner take all member of parliament (MP) elections, means he has the same chance as Ralph Nader to lead his country, and politically comes from the same place.  The NDP would do better with proportional seating of MPs, where the percentages of the popular vote throughout the whole country, so that if they garnered 15% of the national vote, they would get 15% of the MP seats.  This would also reduce the Parti Quebecois number of MPs in Parliament.

  That being said, I think more people worldwide are looking at these trade policies as being for the benefit of the moneyed elites, not the nation or the general populace.  I think Jeff Faux’s book The Global Class War covers this topic very well, and I recommend it highly.

  Posted by chaoslegs on May 17, 2008 at 5:09 AM

  Yes, there is a populist uprising, and many of Obama’s followers seem to be part of it.  I’m amazed, though, that Sirota included Obama himself.  Since when is he “NAFTA -bashing”?  He had to be dragged, kicking and screaming, to even mumble something about renegotiating the trade agreements.  Remember his unfortunate remark about Pennsylvanian blue-collar voters?  He seems temperamentally incapable of recognizing the validity of a populist upsurge even when it hits him in the head.

  What I found most eye-opening is the list of Obama’s economics and domestic advisors that was published in the Chicago Tribune, Monday:

  http://www.chicagotribune.com/services/newspaper/printedition/monday/chi-obam ma_mon_nusep17,0,3844054.story?page=3

  Michael Froman - Citigroup bank exec., pro-free trade & “business-friendly”, former Pres. Clinton advisor

  Austan Goolsbee - professor of business at U. of Chicago

  David Cutler - Pres. Clinton health economist, opposes single-payer

  David Blumenthal - Director, Institute for Health Policy, Harvard Medical School

  Jeffrey Liebman - Economist, Harvard professor and member of Clinton White House Council of Economic Advisers. Research has focused on role of earned income tax credit in moving people from welfare to work

  Dan Tarullo - International trade expert, Georgetown law professor and former Bill Clinton economic adviser i.e. GATT & NAFTA proponent

  Eric Holder - Clinton deputy attorney general

  Cass Sunstein - University of Chicago law professor

  Laurence Tribe - Harvard law professor

  Cassandra Butts - Senior policy adviser to House Democratic leader Richard Gephardt

  Note the total dearth of labor economists, economic development experts, experts in “green” economics, environmental advisors, anyone to educate him on the opposition viewpoint to the current trade agreements or a single populist. Thanks to Bush & Co. we’re facing possible economic meltdown (and all the suffering that would accompany it) if the next administration doesn’t implement creative means to grow the U.S. economy, and restore some manufacturing (preferably green) in order to boost the demand side (purchasing power).  It’s what voters are looking for.

  Posted by ClearEye on May 23, 2008 at 1:32 AM

  Cleareye,

  Obama’s dismal list of econ advisors is typical of how presidents deal with the US economy. The only thing worse has been putting “successful” business leaders in charge of military operations.

  We’ve had Wall Street and university “experts” in the Fed (Greenspan and Bernake) Treasury (Paulson) while the mortgage fraud built, busted and now is bailed.

  If we can’t get someone willing to personally understands the problems we could probably do far better with the average housewife advising him on how get a dollar’s worth of anything.

  This list from the Trib is packed with the usual theoretical bozos (Think Long Term Capital) who never shop and are personally protected with tenure.

  Posted by whattheheck on May 25, 2008 at 1:16 PM

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