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The Price of Nostalgia
America’s Self-Defeating Economic Retreat
By
Adam S. Posen

May/June 2021
Dan Bejar
A new consensus has emerged in American politics: that the United States has recklessly pursued international economic openness at the expense of workers and the result has been economic inequality, social pain, and political strife. Both Democrats and Republicans are now advocating “a trade policy for the middle class.” In practice, this seems to mean tariffs and “Buy American” programs aimed at saving jobs from unfair foreign competition.
Any presidency that cares about the survival of American democracy, let alone social justice, must assess its economic policies in terms of overcoming populism. The protectionist instinct rests on a syllogism: the populist anger that elected President Donald Trump was largely the product of economic displacement, economic displacement is largely the product of a laissez-faire approach to global competition, and therefore the best way to capture the support of populist voters is to firmly stand up against unfettered global competition. This syllogism is embraced by many Democrats, who are determined to recapture an industrial working-class base, and many Republicans, who use it as evidence that the government has sold out American workers in the heartland. For politicians of any stripe, playing to districts where deindustrialization has taken place seems to offer a
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ADAM S. POSEN is President of the Peterson Institute for International Economics.
MORE BY ADAM S. POSEN
More:United States Globalization Political Economy Trade
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Trade Wars May/June 2021 01 Globalization’s Coming Golden Age 02 Can Trade Work for Workers? 03 The Price of Nostalgia 04 How Not to Win Allies and Influence Geopolitics 05 Data Is Power