Market Mad House

In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. Friedrich Nietzsche


Trade is a Dead End for Democrats

Donald J. Trump’s success has made Democratic leaders obsessed with trade policy. That might lead them to a dead end and a new round of defeats in the future.

The best example of this obsession is the U.S. Senate Democrats’ manifesto A Better Deal. The Better Deal webpage fails to discuss such issues as Social Security, HealthCare, Student Loans and education but includes an extensive list of promises about trade policy. To add insult to injury, it makes a brief mention of the minimum wage but fails to commit to a meaningful minimum wage increase.

Worst of all, A Better Deal provides a list of policy recommendations that look ripped from a Trump campaign web page. They include:

  • A trade prosecutor who will go after countries like China that cheat the rules and hurt American companies and workers.


  • An American Jobs Security Council that would stop foreign companies from buying an American company if it were to result in harm to U.S. businesses, including job losses.

  • A plan to renegotiate NAFTA so that it supports more American jobs and exports and leads to higher wages. Any new agreement must clearly demonstrate how it will enforce rules that lead to better jobs and wages.


  • New penalties for federal contractors that outsource jobs.


  • Buy America requirements for all tax-payer funded projects. Cracking down on countries that manipulate their currency and hurt American manufacturers.

  • Ending tax benefits and clawing back tax breaks for outsourcers, and creating incentives to bring jobs home.

Such recycled Trumpism might help Democrats if the next election was held only in Ohio and Michigan; but how is that supposed to play in Colorado, or Texas or Florida? What good are those promises to a single mother who lives in Tampa, works at Walmart, and has no health insurance? Or a retired school teacher that lives in Oregon and worries about the future of his pension?

Are factory workers suddenly the only people who vote in America? One has to wonder what country and century the Senate Democrats are living in.

Why Democrats Should Leave Trade to Trump

The best strategy for Democrats in 2018 and 2020 will be to leave trade to the Donald and find some other issues with broader appeal. One such issue would obviously be Social Security expansion.

There were 61.47 million Americans receiving Social Security in July 2017, according to the Social Security Administration. The National Association of Manufacturers estimated that there were 12.3 million manufacturing workers in the United States in 2016.

Simple math tells us that there are around five Social Security recipients for every factory worker. Basic logic should tell Democrats to tailor their campaign to the Social Security recipients.

If Democrats were serious about winning they’d revise A Better Deal to include raising the average Social Security payment to $2,000 a month and throw the trade talk out. The current number is now $1,256.94 a month, which provides a yearly income below the federal poverty line.

WASHINGTON – AUGUST 11: Marion Crawford (L) and Eleanor Moultrie (C) attend a rally to mark the 70th anniversary of the Social Security Act and to call on U.S. President George W. Bush not to privatize the system August 11, 2005 on Capitol Hill in Washington, DC. Bush’s social Security reform legislation is facing tough opposition from legislators. (Photo by Alex Wong/Getty Images)

Just imagine how many new votes Democrats would attract if they filled the internet and airwaves with ads promising a $2,000 a month Social Security payment. That would persuade a large percentage of seniors; including many wearing “Make America Great Again” hats and Trump buttons, to vote Democrat.

One has to wonder if Democrats even know how to count. Or if they know the year is 2017 and not 1896. Disturbingly, A Better Deal looks like a piece of literature for Republican William McKinley’s 1896 Presidential campaign, which was devoted to tariffs. It demonstrates how hopelessly out of touch the Senate Democrats are.

Why Democrats should Stay Away from trade

There’s another reason why Democrats should stay far away from trade issues. Most economists agree that automation, not trade is the main reason why factory jobs are disappearing.

Only 13% of manufacturing job losses were directly attributable to trade, a study from Ball State University determined. Ball State professors Michael J. Hicks and Srikant Dervaraj found that productivity increases are the biggest killers of factory jobs.

That means there would be no new jobs and drops in employment if all the trade ideas in A Better Deal were recommended. Such an outcome would destroy any politician focused on trade, and might ultimately doom Donald to oblivion. If Democrats follow his lead they’ll find themselves with a lot of egg on their faces and no support at the ballot booth.

Benefit Expansion, not Trade Should be Democrats’ Rallying Cry

A better strategy for Democrats would be to expand popular benefits and offer some new benefits. An obvious winner is extending Medicare to all Americans; another would be free college tuition. These combined with a Social Security expansion would lead to a New Democratic Majority rivaling or exceeding that of the New Deal years.

Unfortunately, such programs would require tax increases, which might drive away wealthy Democratic donors. Therefore Democrats; like Trump, get on the trade bandwagon which leaves taxes and benefits the same but does not scare away wealthy donors.

One has to wonder if Democrats are serious about winning elections anymore, or simply coddling wealthy donors. Beyond that, I have to wonder what level of defeat do Democrats have to suffer before they realize that trade like the rest of the Trump agenda is a dead end.