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Why The Rust Belt Matters So Much


By just about every standard, from GDP growth to consumer confidence, the U.S. economy is in the midst of a torrid turnaround. That's encouraging news for George W. Bush, who faces the voters in just 11 months. "Our economy is strong," a charged-up President told campaign contributors on Dec. 1 in Dearborn, Mich., reciting a litany of positive indicators, "and it's getting stronger."

What Bush neglected to mention is the number that may be most important for many in Michigan: 224,300. That's the tally of manufacturing jobs the state has lost since he took office nearly three years ago. "Bush II may lose [Michigan] for the same reason that Bush I lost," says independent Lansing (Mich.) pollster Ed Sarpolus, "and that is jobs."

Bush's Michigan woes point to a conundrum of Election 2004. While an improving economy almost always helps an incumbent, many of the states crucial to Bush's reelection are still mired in a manufacturing slump. That is particularly true of a swath of eight states in the industrial heartland where more than 1.1 million manufacturing workers have been displaced during the Bush Presidency. The hardest hit -- Ohio, Michigan, Illinois, and Pennsylvania -- all have lost more than 20% of their manufacturing jobs.

UP FOR GRABS

In a politically polarized nation, with most states reliably Republican or Democratic, the Rust Belt battlegrounds are particularly important because all of them are up for grabs in '04. And they have 125 electoral votes, or 46% of the total needed to win. Bush carried three of these industrial swing states in 2000 (Ohio, Missouri, and West Virginia) and is targeting the other five in 2004. "As goes manufacturing in this election, so goes the nation," predicts Fred Nichols, political director of the National Association of Manufacturers.

The White House is well aware of the stakes in the industrial heartland, and the President has made dozens of visits to the eight targeted states, including a three-state, post-Thanksgiving blitz. His message: The manufacturing slump started on Bill Clinton's watch. And, Bush says, it would have been far more debilitating without the tax cuts and regulatory relief he pushed through. What's more, Republicans argue, tough talk on trade and dollar diplomacy of the past year has helped pull manufacturing out of its tailspin.

The Administration can also point to policies it has adopted with sure Rust Belt appeal. In Michigan, it angered environmental activists but delighted many by helping the auto industry defeat bipartisan attempts on Capitol Hill to mandate higher fuel economy standards. And the White House won applause from steelworkers in Pennsylvania, Ohio, and West Virginia by abandoning free-trade rhetoric long enough to slap temporary tariffs on steel imports in 2002.

FODDER FOR DEMOCRATS

The flip side is that the protectionist tariffs were criticized by manufacturers facing higher steel prices and possible retaliation by the European Union. Free-traders cite studies that conclude that U.S. job losses due to tariff-boosted steel prices totaled more than the entire workforce of the steel industry.

Bowing to conservative criticism -- and imminent sanctions -- the White House was preparing to lift the tariffs at press time. Bush will soften the blow with sweeteners such as making it easier for the steel industry to file antidumping cases. But that won't stop Dems from slamming Bush for abandoning steelworkers. "This is yet more evidence that President Bush does not have a strategy to reverse the massive declines in American manufacturing jobs," jabs Democratic candidate Wesley Clark.

Clark and other Democratic rivals have issued detailed prescriptions for restoring lost jobs. Among the common threads: tougher enforcement of trade pacts; tax credits for manufacturers that expand operations in the U.S.; a stronger line against China and other countries accused of manipulating their currencies to gain an edge in trade; substantial increases in worker retraining; and aid for dislocated workers.

Thus far, there are precious few signs of a Bush political recovery in the industrial heartland. A Nov. 20 Keystone Poll showed Bush's overall popularity in Pennsylvania declining to 49% from 63% in April. Still, strategists think the President can cobble together an industrial-state comeback by winning a few workers at a time. And while manufacturing continues to lag the recovery, early signs point to a snapback on the factory floor. Among the 21 states showing manufacturing growth in October was Michigan, with 3,800 new jobs.

A small success story, to be sure. But the White House is hoping that such numbers will convince worried voters in the industrial heartland that better times lie ahead. And, more important, that Bush is the candidate who can bring back all those jobs that have up and vanished since he took office. By Richard S. Dunham in Washington


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