Trump’s trade representative should not be a role model for conservative economic policy-makers.
Trump’s trade representative should not be a role model for conservative economic policy-makers.
H arry Scherer at the American Conservative recently wrote something of a hagiography for Trump administration trade representative Robert Lighthizer. Lighthizer was a keynote speaker at ISI’s American Economic Forum in late July, where he was introduced as “one of Washington’s greatest statesmen” and gave a lengthy speech advocating protectionism, sounding many of the same notes as in Scherer’s article.
But it’s worth taking a step back to look at some more details on Lighthizer’s views and career.
Scherer writes:
For Lighthizer, a focus on maximizing consumption might make sense in a time of scarcity, “but we’re not in that time. What it does now is it feeds more materialism [and] excess consumption, [a]nd materialism is the opposite of conservatism. Materialism is about consumption and the neglect of values.”
The top economic concern right now is Americans’ purchasing power being eroded by inflation, and Lighthizer is telling journalists that we have excess consumption. Workers are concerned about rising food costs, soaring energy prices, and declining real wages right now, not what a wealthy lawyer thinks about materialism.
Scherer writes, “Riffing on Oliver Wendell Holmes’s quote about taxation, Lighthizer called tariffs ‘the price you pay for family and communities.’” First, conservatives should not be riffing on Oliver Wendell Holmes, whom William F. Buckley Jr. called “the benign old wrecker of the ordered society.” And they should especially not be riffing on that particular quotation from Holmes (“taxes are what we pay for a civilized society”), which is engraved above the main entrance of the IRS building in Washington, D.C.
Aside from the history, Lighthizer’s claim lacks much in the way of compelling evidence. Families and communities are clearly important in their own right, and to the nation, but there’s little reason to believe the balance of trade has much of an effect on their condition one way or the other. Countless American jobs depend on international trade, and plenty of them are located near places such as Memphis, Louisville, or Columbus, not just New York or San Francisco.
But even if we grant Lighthizer’s premise, it’s far from clear that tariffs would be a solution. The tariffs we do have (in the 4,000-plus-page Harmonized Tariff Schedule — some “market fundamentalism” that is) harm American families by driving up the costs of goods. Poorer families are especially hard-hit by MFN tariffs, which are principally levied on necessities such as clothing, shoes, and household goods. The MFN tariffs aren’t effective at increasing domestic employment, either.
Scherer notes, “The last time tariffs were mentioned at the Republican National Convention with Lighthizer-level enthusiasm was at the 1932 convention that nominated President Hoover.” Absent from his article are two key names: Reed Smoot and Willis Hawley. Those Republican members of Congress sponsored one of the largest tariff increases in U.S. history, which was then signed into law by President Hoover in 1930.
While economic historians dispute the extent to which the Smoot–Hawley tariffs worsened the Great Depression, you won’t find anyone who thinks they eased it. And the failures of the Hoover administration were part of the reason that Republicans were shunted into the electoral wilderness for 20 years while the New Deal Democrats remade the federal government. It should not be surprising that Republicans stayed away from the topic for decades.
Scherer makes a point of Lighthizer’s appeal among Democrats, noting support from Sherrod Brown and “members as far to the Democratic left as New Jersey’s Cory Booker and Hawaii’s Mazie Hirono.” Why conservatives should place any value whatsoever on the judgment of Mazie Hirono is left unsaid.
But the feeling has been mutual at times for Lighthizer, who has donated to Democrats in the past. Representative Sander Levin (Mich.) in 1994 and 1998, Senators Max Baucus (Mont.) and Jay Rockefeller (W. Va.) in 1995, Senator Fritz Hollings (S.C.) in 2000, and Senator Ben Cardin (Md.) in 2005 have all received campaign contributions from Lighthizer. He has also made numerous donations to his longtime employer’s PAC, which consistently donates more to Democrats than to Republicans.
About Lighthizer’s career, Scherer writes:
Most recently, Lighthizer served as the United States Trade Representative (USTR) under President Trump. Before that, he was a partner at a major law firm focusing on international trade law, deputy trade representative under Reagan’s Bill Brock, and chief of staff for the Senate Finance Committee when it was chaired by Bob Dole.
That’s accurate, but it lacks important information and doesn’t give a true sense of how well Lighthizer has played the Washington game.
Lighthizer graduated from Georgetown Law in 1973. After working for a D.C. law firm for five years, he worked for the Senate Finance Committee from 1978 to 1983, under Senator Bob Dole. Then, he worked as a deputy trade representative in the Reagan administration from 1983 to 1985.
From there, he became a partner at Skadden, Arps, Slate, Meagher, and Flom, one of the top law firms in the country. While there, he lobbied on the same topics on which he worked when he was on the government payroll (financial services and international trade), something that’s hardly unusual in Washington.
When Dole ran for president in 1996, Lighthizer got back into the political side of things, as a fundraiser and adviser. After Dole’s defeat, Lighthizer stayed at Skadden, continuing to lobby. But in that Washington way, he reentered government when Trump nominated him as his trade representative.
Two Republican senators, Ben Sasse (Neb.) and John McCain (Ariz.), opposed Lighthizer’s nomination in 2017 on the grounds that his trade-war policies would harm American farmers by restricting their export markets. (Cory Gardner of Colorado was the only other Republican to vote against his nomination.) Their fears turned out to be justified when U.S. agricultural exports declined by $27 billion due to retaliatory tariffs under Lighthizer’s watch. Seventy-one percent of those losses were from soybean exports, and farmers had to be bailed out in 2019. Direct farm aid ballooned to $32 billion in 2020, larger than the entire Department of Agriculture’s discretionary budget. And American soybean farmers are still feeling the effects now.
As trade representative, Lighthizer hired a number of former colleagues from Skadden and pursued steel-industry protectionism that must have been pleasing to his former clients, which include U.S. Steel, Bethlehem Steel, and the National Steel Corporation. All the protectionism has not stopped two of those three firms from going out of business, but it has raised prices and cost Americans jobs because, as Ramesh Ponnuru wrote in 2017, “Industries that use steel are much larger than the steel industry, and . . . protection for the second group hurts the first.”
With lines such as “America became great by using subsidies, but mostly tariffs, and an America First policy,” Lighthizer is telling Scherer that he fundamentally holds the same view as the Left on how economic growth happens. It was Barack Obama who told American entrepreneurs, “You didn’t build that,” and pointed to government policies as the ultimate source of economic prosperity. If subsidies make America great, then the billions of dollars in green-energy subsidies the Biden administration is doling out are smart policy, and subsidies for baby formula should be producing a thriving and resilient market.
In one important sense, Lighthizer is no different from the radical environmentalists who want to raise energy prices and transportation costs. Both want to make you poorer for your own good. They would define “good” differently, but the instinct is the same. It’s an instinct conservatives ought to reject. We ought to believe in the American people and their ability to create, adapt, prosper, and enjoy the fruits of that prosperity without the heavy hand of government to guide them.