In the most scurrilous ad of a scurrilous campaign, President Obama’s allies at the Democratic super PAC Patriot Majority have released a new ad denouncing Mitt Romney as an “economic traitor” — their actual words — while the president identifies his own policies as the “new economic patriotism.” Of course it is not patriotism but nationalism, albeit nationalism of a funny sort — nationalism for people who do not regard the nation itself as anything particularly remarkable.
At issue is an automotive-sensor plant located in Illinois. The plant had been owned by Honeywell, which in 2011 sold its automotive-sensor operators to Sensata, a worldwide manufacturer that had never intended to keep the Illinois plant open and had made no secret of the fact. The Massachusetts-based Sensata manufactures all over the world, but 75 percent of its automotive business is in Asia, and so it is consolidating the related manufacturing there — hardly an unexpected decision, especially given that Illinois is one of our least competitive and most highly taxed states. Jesse Jackson of course was immediately on the scene, and Sensata employees and other protesters began attempting to occupy the plant, leading to two dozen arrests and causing the company to consider shuttering the facility ahead of schedule. Leave it to Jesse Jackson to conclude that if a particular location is economically uncompetitive, the natural solution is a mini-riot.
Sensata is itself a relatively new firm, having been created by Bain Capital out of the sensors division of the struggling industry giant Texas Instruments, which is offloading some of its non-core businesses in order to concentrate on its most profitable lines. (It is said to be in talks with Amazon to sell its wireless division, which supplies processors for the Kindle.) Which is to say, Sensata represents precisely the sort of good that private-equity firms do in the world: discovering value in troubled enterprises and liberating it from underperforming firms and mediocre managers.
In 2011, there was other business occupying Mitt Romney’s time, of course, and he’d long since given up his day-to-day role at Bain. But even if he had not, the Sensata episode is nothing to be ashamed of: While we are sympathetic to the workers in Illinois, the country — the patriot’s supposed object of concern — is not made better off in the long run by maintaining inefficient or uncompetitive economic arrangements. The president of the United States is charged with looking after the national interest, not the interest of specific persons who happen to live in a state that is politically important to him and who are useful as pawns in an embarrassingly low-rent political campaign.
President Obama speaks as though he believes, or does not mind appearing to believe, that there is wealth to be had from preserving underperformance, thus his pride in propping up such moribund corporations as General Motors rather than letting the firms go through a proper restructuring and emerge on the other side more competitive and profitable. This is of a piece with his eagerness to use taxpayer money to enrich unviable enterprises such as Solyndra, on the theory that he knows the power-equipment market better than the people who buy and sell in that market do. As investors go, Mitt Romney was a considerably more adept manager of his shareholders’ money than President Obama has been of the taxpayers’ precious capital.
The theory that we can somehow make ourselves better off by propping up uncompetitive corporations and industries is sometimes known as “economic nationalism,” and is very much in vogue on the left at the moment. Economic nationalism includes a spectrum of policies with the bailouts on the mild end, Hugo Chávez’s regime in the middle, and North Korea as its logically consistent final expression. All of them involve putting politicians in charge of private economic decisions, elevating political expediency over economic reality.
Economic nationalism is a deeply anti-humanistic tendency. The division of labor is what makes human life possible at a level of civilization higher than that enjoyed by Robinson Crusoe, and trade is how labor is divided across communities and across countries. Mitt Romney is too busy engaging in China-hawkery to say so, but trade makes us better off even when the trading partner on the other side of the exchange maintains restrictive economic practices such as manipulating its currency or maintaining an oppressive police state, both of which are true of China. (And trade makes poor Chinese people better off, too, something decent people would be celebrating rather than despairing over.) Comparative advantage and gains from trade are facts of economic life; those who would deny them are the economic equivalent of flat-earthers.
Economic nationalism is catnip to the Obama administration for the same reason that it attracts the small Buchananite faction of the Right: It provides a simplistic master narrative for explaining complex economic challenges to people not intellectually inclined to do the work necessary for understanding them, it is fueled by resentment and anxiety, and, most important, it gives politicians somebody to blame. As economics it is indefensible; as political rhetoric it is, unfortunately, immortal.
The United States and China are the largest manufacturing nations in the world. Among the top ten manufacturers, only two — China and India — are poor, low-wage countries. If there is a race to the bottom on manufacturing wages, somebody forgot to tell Germany, Japan, Italy, the United Kingdom, etc., or the U.S. manufacturing industry for that matter, which produces about 20 percent of world output, vs. about 15 percent for China. Those who would restrict trade for political purposes threaten to hold the entire U.S. economy hostage: The United States is by far the world’s largest trading nation, one of the largest importers and one of the largest exporters. Interfering with that benefits nobody other than politicians and the occasional union boss.
Calling a political rival a “traitor” marks a new low in an election season that has been full of them. The ironic thing is that all of this irresponsible and corrosive talk of “patriotism” and “traitors” suggests only that the Democrats love power more than country. “New Economic Patriotism”? We’ll take the old-fashioned kind of patriotism.