Democrats yearn for the bounteous days of Bill Clinton's
presidency, when the economy was flourishing, there were good jobs at good
wages, and poverty was on the wane. So it's a puzzle that on one of his
signature achievements -- the North American Free Trade Agreement -- the
party's presidential candidates are sprinting away from his record as fast
as they can. It's as though Republicans were calling for defense cuts while
invoking Ronald Reagan.
Even Hillary Clinton can't bring herself to defend the deal her
husband pushed through. Asked during a recent debate if she thought it was a
mistake, she did everything but deny she'd ever met the man.
"All I can remember from that is a bunch of charts," she
chortled, in possibly the least believable statement of the 2008 campaign.
"That, sort of, is a vague memory." In the end, though, Clinton declared
that "NAFTA was a mistake to the extent that it did not deliver on what we
had hoped it would."
She has plenty of company. Barack Obama is on record as saying
he "would not have supported the North American Free Trade Agreement as it
was drafted." John Edwards has flogged the treaty like a rented mule,
calling it "a complete and total disaster." And Dennis Kucinich thinks all
copies of NAFTA should be humanely shredded and used as compost on
shade-grown fair trade coffee, or something like that.
What did NAFTA ever do to deserve this abuse? Critics claim it
destroyed a million jobs -- forgetting that its implementation coincided
with the longest peacetime expansion in American history. During that
period, the unemployment rate fell to its lowest level since the Vietnan
War. If that was a disaster, I'm Hannah Montana.
Ordinary workers, contrary to myth, benefited from NAFTA. In the
decade before it took effect, according to the Bureau of Labor Statistics,
average hourly earnings (adjusted for inflation) fell by 5 percent. In the
decade after, they rose by 10 percent.
Even supposing the deal did eliminate a million jobs, that
actually doesn't amount to much. Every year, millions of jobs vanish and
millions materialize, as old companies cut back or close and new ones
sprout. What counts is net growth, and since 1994, the total number of jobs
in this country has risen by 26 million.
Candidates blame NAFTA for pushing American companies to close
plants here and move production south. But from 1994 through 2001, reports
the Cato Institute, U.S. manufacturers invested $200 billion a year at
home -- and only $2.2 billion a year in Mexico. After NAFTA passed, U.S.
manufacturing output soared, and it's now at the highest level ever.
American farmers have seen their exports boom.
From listening to the Democrats, you'd never guess that our
exporters got more out of the deal than Mexico's did. NAFTA actually made it
easier for U.S. companies to stay here and sell products in Mexico. How? By
phasing out tariffs on goods shipped there -- which, on average, were 2.5
times higher than ours. We gave nickels to get dimes.
Edwards and Co. hold fast to the superstition that tariffs and
other trade barriers are essential to our prosperity. Reality is that
admitting imports makes Americans more prosperous by reducing prices of
consumer and capital goods. It also strengthens American companies by
forcing them to be more efficient and innovative.
So why do so many people, including approximately 100 percent of
those who turn up at Democratic debates, hold this and other trade
agreements in such contempt? One obvious reason is they want to appeal to
labor unions, which generally prefer protectionism.
But Gary Hufbauer, an economist at the Peterson Institute for
International Economics, suspects one reason lies in a different issue:
illegal immigration. Some NAFTA supporters thought it might generate enough
growth in Mexico to keep Mexican workers at home. When the tide of illegal
immigrants grew, it bred resentment here.
That reaction partly helps to explain the Democratic retreat. By
denouncing NAFTA, the presidential candidates can appeal to Americans
alarmed about our porous borders without offending Hispanic voters.
But they should remember two crucial things: Bill Clinton
presided over an era of enviable prosperity, and he did more to expand free
trade than any president since Franklin D. Roosevelt. If they want to get
back to the land of Oz, Democrats would be advised to follow the same Yellow
Brick Road.