In '08 Campaign, It's the Global Economy, Stupid
The current fights over immigration reform, the new U.S.-Korean free-trade agreement and the vast profits but limited taxes paid by private-equity firms are all previews of the 2008 election. What they have in common is that they all deal in one way or another with the impact of globalization.
And the political dynamics of the issue are being reshaped before our eyes. Pundits who are focused on health care and Iraq, which are of course critically important, should realize: Globalization is the sleeper issue in the race - and it could wake up, big-time.
Until recently, our path to globalization was guided by our political and big business leaders with the acquiescence of the public. But with the fierce popular rejection of the immigration bill, the public is demanding a larger role. Every Red State Democrat in the Senate running for reelection - and 23 of all 33 senators running for reelection in 2008 - voted against the Bush-Kennedy-McCain immigration legislation. Similarly, senators running for reelection in 2008 are more likely than their colleagues to oppose the renewal of the President’s fast-track trade authority, which makes it easier to pass international trade agreements.
Globalization has been a net plus for the American economy. But its social and economic costs have been disproportionately imposed on middle- and lower-middle-class workaday Americans who are squeezed between the arrival of low-cost immigrant labor, on the one hand, and outsourcing and foreign competition on the other. Meanwhile, the benefits of low-cost labor and expanded foreign trade have gone largely to already well-to-do executives and financial managers.
The full political impact of globalization has been obscured because it’s generally Republicans who have picked up on the social costs, generally Democrats on the economic costs. It was largely Republicans who led the fight against the legalization of 12 million undocumented immigrants. It has been largely Democrats who have fought free-trade agreements and favorable tax treatment for private-equity firms.
But it is America at large that has been roiled by the impact of globalization, and both parties will be maneuvering to take advantage of the backlash. That’s because globalization, for all its virtues, threatens to devalue American citizenship, reduce American sovereignty and exacerbate economic inequality.
U.S. citizenship means far less to the country’s globe-trotting elites than it does to the average American. That’s why so many voters saw the immigration-reform bill as a fire sale on citizenship. Both left and right are sensitive to the loss of American sovereignty. The right is fearful of turning over part of American foreign policy to the moral swamp at the UN, and the left worries about the ways in which the World Trade Organization, which seems to benefit China more than the U.S., limits our ability to protect American workers.
The Democrats, and to a lesser extent the Republicans, are increasingly sensitive, at a time of vast new fortunes but slow income gains for the middle class, to growing disparities in wealth - symbolized by the big money being made on Wall Street by international private-equity companies whose benefits for the overall economy are questionable.
There will no doubt be warnings that in 2008 the public’s provincialism could push the country in the direction of Lou Dobbs-like isolationism. But the mood of the country is skeptical, not isolationist.
Much of the public is asking its would-be political leaders to put up a yellow caution flag to slow down the process of global integration so that we can better adapt to the changes it imposes. The 2008 presidential nominees will have to explain to a doubting public just how they hope to navigate the choppy waters between the Scylla of isolationism and the Charybdis of breakneck globalization.
This piece originally appeared in New York Daily News
This piece originally appeared in New York Daily News