March 31, 2016

The Disconnect: Personal Economy, Trade and the 2016 Election

Armstrong Robinson

Reading two items Monday dealing with the trade debate and its impact on the American economy as a whole (How Trade Made America Great, Fred Smith, Wall Street Journal Op-Ed) and the personal economy of individuals (The 89% Pay Cut That Brought Trump-Mania to America’s Heartland, Bloomberg, Thomas Black), I was struck by the conclusion that both are correct and yet, are completely disconnected from one another.  The concept of the ‘beltway bubble’ has been common to the lexicon in and about Washington, D.C. for a long time, but the last ten years has revealed an increasing discussion about the personal bubble of individuals and communities.  Social media was even atwitter this week with a personal test of your own economic bubble.  Regardless of who you are or where you live, unless you make a concerted daily effort to pierce it, chances are you are living in your own little bubble.

Both pieces, written essentially at the same time, offer important insights, through the lens of the trade debate, about what different Americans experience and how those experiences are reflected in American politics in 2016.  The Bloomberg piece (The 89% Pay Cut That Brought Trump-Mania to America’s Heartland) offers the stories of individuals in Kentucky and Mexico and their personal experience with NAFTA.  Fred Smith’s op-ed from the WSJ (How Trade Made America Great) describes the undeniable global benefits of increased trade to America as a whole and to the world.  However, I suspect if you asked the Williams from Scottsville, KY their thoughts on Mr. Smith’s defense of trade, the response would be something along the lines of “your sacrifice of my livelihood (and that of my neighbors) has improved the lives of millions of people in Mexico and China.”

Too rarely told is the U.S. equivalent to Ms. Gonzalez’s experience.  Are the stories of success as a result of expanded trade in America as specific and clear?  Are they commonly felt?  Usually they are not.  Compounding the difficult narrative, the pro-trade community revs its engines when pushing a particular deal or piece of legislation and then goes largely quiet.  In the interim, stories like the Williams’ persist and are told and retold in the media and at the lunch counter, often without personal counter point and thus become ingrained as fact among communities.  While the benefits of trade are real, they are not evenly shared.

The Economic Innovation Group (EIG) developed the Distressed Communities Index (DCI) to demonstrate a more complete picture on economic health in communities across America.  While not focused on trade, the DCI provides another indicator of the division in economic opportunity that millions of Americans experience every day.  The bottom quintile in the DCI represents 50.1 million Americans.  In the key years of the economic recovery (2010-2013), they experienced a 6.7% drop in employment and an 8.3% drop in businesses.  The DCI shows that even communities at the median level are significantly behind the pace set in the most prosperous communities.  EIG Founder John Lettieri summed it up this way: “The vast majority of Americans are living nowhere near that watermark that the national recovery has set.”

The trade narrative has obvious implications for anyone interested in that global agenda.  The electoral narrative may contribute to a result in the 2016 elections previously unthinkable.  But, the larger trends could persist and affect American economics, politics, and foreign relations for a generation.


 

 

Armstrong Robinson

Armstrong has been getting things done in Washington for more than a decade. Directly for Members of Congress and for Clients, he has developed astute game-plans including coalitions, communications, legislative and political strategies for positively affecting outcomes. Army works with Prime Policy Group’s  clients in areas including Tax, Energy, Healthcare, Appropriations, Budget, Financial Services, Technology and Data.