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A Failure to Adjust

January 15, 2019 in Economics

By Scott Lincicome

Scott Lincicome

A debate has erupted, particularly on the right, in response to
a recent Tucker Carlson monologue on how “Washington
elite” policy choices, in particular international trade
liberalization, have systematically (and perhaps nefariously)
harmed members of America’s working class, dooming them to
lives of drugs, isolation and despair. If this view were assigned
to Carlson and his supporters alone, a few tweets in response would
suffice. It has not, however, remained on Fox News, instead being
promulgated and praised, though refined, by more thoughtful
commentators and analysts. Among those is the University of
Virginia’s Brad Wilcox and the Niskanen Center’s Sam
Hammond in a new essay in The Atlantic called
“What Tucker Carlson Gets Right.”

I tend to agree with this essay’s larger points, having
myself written about the serious, and relatively new,
problems that Americans face when forced to adjust to severe
disruptions, whether they come from trade, technology, culture or
anything else—problems caused or exacerbated by bad
government policies in desperate need of reform. On the specific
issue of trade policy, however, I fear Wilcox and Hammond go far
off course when they target the “elite policy choice”
of liberalized U.S. trade with China for particular scorn. While
Chinese import competition worked out great for America’s
wealthy, they argue, it was a disaster for the working class:

The work of the MIT economist David Autor and his colleagues, in
particular, indicates that dramatic and sudden increases in global
trade with China starting around 2000 affected both men’s
earnings and their marriageability. In their words, “Trade
shocks to manufacturing industries have particularly negative
impacts on the labor market prospects of men and degrade their
marriage-market value along multiple dimensions: diminishing their
relative earnings—particularly at the lower segment of the
distribution—reducing their physical availability in
trade-impacted labor markets, and increasing their participation in
risky and damaging behaviors.” They add that “adverse
shocks to the supply of ‘marriageable’ men reduce the
prevalence of marriage … but raise the fraction of children born
to young and unwed mothers and living in poor single-parent
households.”

These intertwined problems, then, were not the fault of a
spontaneous decline in personal virtue. They were the fault
of Washington elites who pursued a naive path of normalized trade
with China that, in a matter of years, gutted millions of
moderately educated workers of their decent-paying jobs, and
without support in the way of adjustment assistance or wage
insurance. Our elites had too much faith in a laissez-faire
ideology that sees labor markets as automatically self-correcting
but, in fact, exacted a terrible toll on scores of working-class
families across the United States
. (emphasis mine)

The “policy choice” here, which I subsequently
confirmed with …read more

Source: OP-EDS

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