Should-Read: Dani Rodrik: The Trouble With Globalization

Should-Read: This from the very sharp Dani Rodrik seems to me to be largely wrong. The 1990s did not see dislocated workers fall into poverty: the 1990s saw, for the most part, workers pulled into higher-paying jobs and occupations by the then high-pressure economy. It was the Reagan deficits of the 1980s that started the midwest on its decline—but the idea was to blame the Japanese rather than St. Ronnie and his feckless policymakers. The China shock of the 2000s was a big deal. But the crash of 2007-2009 and the slow recovery since an even bigger one. And the long, slow decline of manufacturing and other traditionally male blue-collar jobs—a decline overwhelmingly independent of globalization—that was the biggest deal of all. I write about this. But here is Dani:

Dani Rodrik: The Trouble With Globalization: “The United States, too, could have moved aggressively to compensate dislocated workers in the 1990s, when it opened its economy to imports from Mexico, China…

…and other low-income countries in a major way. Instead, under the sway of market fundamentalists, the United States let the chips (and workers) fall where they may. By now, the compensation approach has been tarred as “burial insurance.” The trade adjustment assistance programs that are habitually tacked on to trade agreements have provided inadequate aid — and to just a sliver of the affected population. That is partly by design: politicians have little incentive to implement strong compensation programs once trade agreements are approved.

American workers have been the weak party in the bargain all along — if they’d had enough clout to obtain a robust safety net, they would have had the clout to reshape trade agreements in worker-friendly ways in the first place…