PREMIUM SEARCH Search by job title, geography and build a list of executive contacts
FEW OPTIONS. At his core, Bush is a free-trader, and he won't back down on trade liberalization. But he will press the WTO to crack down on unfair practices from Asia to Europe. Trouble is, other countries have a slew of complaints about U.S. protectionism, too. So an excessively get-tough policy could exacerbate already raw trade frictions, especially with Europe, and hurt the global economy.
If Bush doesn't have many good options, neither do his Democratic foes. Representative Dennis Kucinich (D-Ohio) wants to cancel the North American Free Trade Agreement and pull out of the WTO the day he becomes President. Ain't gonna happen.
On the more viable left flank, former Vermont Governor Howard Dean says he would reopen trade pacts to force new concessions from allies on labor and environmental issues. But rival Joseph I. Lieberman says Dean's policy would transform the Bush recession into "the Dean depression."
"STOP THE BLEEDING." Tough-talking Missouri Representative Richard A. Gephardt says he would push the WTO to enact an international minimum wage. Each nation would be required to pay workers a living wage based on the economic strength of the country.
In theory, such a wage would help workers in developing nations. It also, theoretically, would help U.S. manufacturers by raising the price of foreign-made goods. But it's pure fantasy. No country will allow an unelected world trade body to tell its companies what to pay their workers. Can you imagine what the U.S. Congress and the Chamber of Commerce would say if the WTO told them that the U.S. had to pay all workers at least $20 an hour because America is the most advanced country in the world? Forget it.
Lieberman's approach is more Clintonesque: Targeted tax breaks to reward companies that keep a high percentage of their manufacturing jobs in the U.S. And he would eliminate capital gains taxes for some small- and midsize manufacturers that expanded in the U.S. "Stopping the bleeding of American manufacturing jobs demands a tough stand, not more lip service," says Lieberman, the first 2004 White House wannabe to come up with a comprehensive manufacturing strategy.
TALK IS CHEAP. Dems are more likely than Republicans to enlist the federal government in the attempted revival. Senator John F. Kerry (D-Mass.) would spend more federal money on retraining and reeducation. These plans may have some merit, but it's uncertain whether they would reverse the decline or simply slow it down.
The 2004 campaign is now coming into full flower, however, and on the stump, something that sounds good is often more important than something that's workable. Candidates know that the manufacturing decline is a big issue in many regions. After all, key swing states such as Pennsylvania, Michigan, Ohio, Illinois, Missouri, and Wisconsin are all heavily dependent on manufacturing economies.
Magnified by this Electoral College dynamic, the manufacturing crash could become "a much more important issue in the 2004 campaign than we had imagined," says Terry Madonna, a political scientist at Millersville University in Pennsylvania. So get ready for the candidates to talk the talk. Trouble is, they really aren't walking the walk.
Dunham is a White House correspondent for BusinessWeek's Washington bureau. Follow his views in Washington Watch, only on BusinessWeek Online Edited by Douglas Harbrecht
Copyright 2003, Bloomberg L.P.
Printer-Friendly Version
