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by Paul R. Hollrah, Lincoln Heritage Institute Fellow
Who can forget the 1992 presidential campaign, a rare instance when a third party candidate made a credible run for the presidency? Many Republicans like to think that their candidate, George H.W. Bush, lost to Bill Clinton because H. Ross Perot siphoned conservative votes away, but study after study has shown that to be a false assumption.
George H.W. Bush and Dan Quayle lost the election for two reasons: 1) The people thought they’d be getting a continuation of Ronald Reagan by electing Bush…they didn’t; and 2) The Bush-Quayle team chose to take the low road in the campaign, leaving the high road to the likes of Bill Clinton and Al Gore.
But what is most memorable about that campaign is Ross Perot and his ever-present charts. When the question of the North American Free Trade Agreement (NAFTA) was raised, Perot’s blood pressure went off the charts. Who can forget Perot pointing to his charts and saying in his whiney, high-pitched voice, “That loud sucking noise you hear is the sound of American jobs going south to Mexico.”
Some of that has occurred, but not to the extent that Perot envisioned. Why? Either because business executives have not totally bought into what they teach at Harvard Business School – which is that national frontiers don’t count anymore; the only thing that matters is the corporate “bottom line” – or because the economic benefits of closing existing plants and offices and relocating south of the border are not sufficiently favorable. So, many of the jobs that may have gone south are still here, while millions of Mexicans migrate north to find low-wage, labor-intensive jobs.
But the truth about NAFTA is the same today as it was in 1992, which is that it is impossible to maintain a free-trade relationship between a prosperous nation, with the world’s highest standard of living, and a very poor neighbor whose workers are willing to work for subsistence wages. What any thinking person understands – NAFTA’s dirty little secret – is that the only way NAFTA could elevate the quality of life in Mexico is if the standard of living in the United States declined, and that most of those downward adjustments would come from incomes of the lower and middle classes.
For example, the New York Times reported the latest income statistics from the federal government in its August 21, 2007, edition. The report tells us that, ”Americans earned a smaller average income in 2005 than in 2000, the fifth consecutive year that they had to make ends meet with less money than at the peak of the last economic expansion.… The average income in 2005 was $55,238, still nearly 1 percent less than the $55,714 in 2000, after adjusting for inflation.”
The story goes on to say that, “The combined income of all Americans in 2005 was slightly larger than it was in 2000, but…the growth in total incomes was concentrated among those making more than $1 million.… These individuals, who constitute less than a quarter of 1 percent of all taxpayers, reaped almost 47 percent of the total income gains in 2005, compare with 2000.… Nearly half of Americans reported incomes of less than $30,000, and two-thirds make less than $50,000.
The Times quotes Tony Fratto, a White House spokesman, as attributing the drop in average incomes to
“…the significant wrenching that our economy took in 2001 and 2002.” Fratto went on to say that the fact that nearly all the growth in incomes was among those in the upper levels of income distribution, and that the majority of investment tax breaks went to those making more than $1 million, “is not a very interesting story.” Well perhaps not to Fratto and the other Ivy League elitists in the Bush White House.
But NAFTA is not the only culprit. The American workforce is now made up of people, most born since the end of World War II, who have never been made to understand that when they, their children, and their children’s children graduate from high school or college and enter the workforce, they are not competing for jobs only against other Americans; they are competing for jobs against every Chinese, Japanese, Indian, and Korean graduate in the world – all of whom are much better educated and much more able to make a real contribution in the workplace.
No, the next voice that the American people hear will not be the voice of Ross Perot echoing back from the past, nor will it be the “loud sucking noise” he predicted. Unfortunately, the next voice they hear will be the lamentations of our own people, mourning the fact that we have wasted nearly half a century in the pursuit of creature comforts, playing the role of the world’s policeman, and “dumbing-down” our children so that they are unable to compete in a world economy.
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