Friday, April 29, 2016

Might the Voters of Alabama's Fifth Congressional District be Better Served by Promoting Liberal Politics Rather than by Attempting to Drown Government in a Bathtub?

The Alabama Fifth Congressional District is served by one of the most conservative members in Congress. Are they backing the wrong horse?

The U.S. House of Representatives has 435 members, each representing one Congressional district. Congressional districts are redrawn every 10 years following the U.S. census to assure that each district continues to represent one 435th of overall U.S. population (currently about 733,000).  Alabama's Fifth Congressional district is located in the northern part of the state, extending from the Mississippi river on the west, all the way to to the Georgia border and Nickajack Lake.

Nickajack Lake, TN river
From Reconstruction until the 2010 election, the Fifth Congressional District was represented by Democrats. Since 2010, however, the District is represented by Morris Brooks, a Tea Partier.  Brooks endorsed Ted Cruz for president last November and serves as chairman of Cruz's election campaign in Alabama.

District 5 came out strong for Donald Trump on Super Tuesday (March 1, 2016). Is it all on account of a short memory?

Let's Recall: This is A Region that was Benefited by Strong Liberal Programs

Prior to the Great Depression (1933) northern Alabama counties were predominantly white, rural, and poor. The region was hit particularly hard by the Great Depression. In May 1933, Congress chartered the Tennessee Valley Authority to provide navigation, flood control, electricity generation, fertilizer manufacturing, and economic development to the Tennessee Valley, a region that included Alabama's Fifth Congressional District.

The TVA slowly changed the demographics of northern Alabama to include technical and engineering employees. The federal government located space exploration and rocket programs in Huntsville, including the Redstone Arsenal where the first large U.S. ballistic missiles were produced. In the 1960's NASA built its Marshall Space Flight Center in the Huntsville-Decatur area.

Private industry, including manufacturing, followed. A joint venture between Boeing and Lockheed Martin established United Launch Alliance to build space launch vehicles for the U.S. government.

The New York Times this week reported:
As the South industrialized in the second half of the 20th century, poor Alabamians who once toiled on farms were able to secure a toehold in the middle class. In the shadow of Tennessee Valley Authority dams that supplied cheap power, thousands of workers sewed jeans and T-shirts, and could earn upward of $20 an hour in heavily unionized factories.
But not just clothing: the region is blessed with jobs in the automotive industry, the chemicals industry, distribution and logistics, plastics, metal fabrication, food processing, packaging, wood products, and life sciences.

Today the per capita income in Northern Alabama is $40,037/year. The region is still white (77.7%), but it is no longer rural and poor. The area has benefitted greatly from the liberal federal policies that also served to stimulate and attract private industry.

....And Along came NAFTA, China's Entry to WTO, Global Trade, and the Great Recession

More recently, the federal government has promoted free trade policies that may have hurt some in the area. In 1993 the Clinton administration negotiated the North American Free Trade Association agreement (NAFTA) with Mexico and Canada.  In 2001 China became a member of the World Trade Organization (WTO). These agreements exposed U.S. private manufacturers--including those of Alabama's Fifth Congressional District--to competition from countries with an abundant supply of cheap labor.

Manufacturers of clothing, electronics, rubber and plastic goods in places like the Alabama Fifth Congressional District found it difficult to compete with similar goods manufactured at a lower cost in Mexico and China. And free trade competition came from other countries as well.

So whereas the northern Alabama counties were much assisted by U.S. government policies for the 60 years from 1933 to 1993, the free trade policies of the government in the past 20 years appears to have adversely affected some voters in the area. Memories are short.

The overall benefits of free trade for the U.S. economy are much debated and are difficult to quantify. At Working Economics Blog they point out that President Clinton argued that, although NAFTA would result in the loss of U.S. manufacturing jobs in isolated areas, this would be offset by increased high value exports. Twenty-three years later it is still debated whether the promise of NAFTA has been fulfilled.

What is clear is that when China gained entry to the WTO in 2001, it's share of world manufacturing exports tripled from 4.8% to 15.1% in 2010. [See data HERE]  Many areas in the U.S. experienced disruption from this increased China trade, and in pockets (like Alabama's Fifth Congressional District) this disruption was very significant.

The NYT article (above) suggests that "humming factories" in Northern Alabama were battered by Chinese imports. They published photos of empty buildings to drive home the point:
[T]he collapse of the apparel industry here in the first decade of the 21st century, following China’s entry into the World Trade Organization in 2001, reversed that process [of manufacturing growth]. Nearly 10,000 manufacturing jobs disappeared. At 7.4 percent, the regional unemployment rate is well below its peak of 12.8 percent in 2010, but remains far above the national average of 5 percent.
[The civilian labor force for the U.S. is approximately 158,000,000 or approximately 50% of total population.  Meanwhile the labor force participation rate of this work force has ranged from a high of 67% in 2007 to 63% today.  If we look at this at the level of the Fifth Congressional District, this would suggest they have a labor force of ~350,000, with 231,000 employed (at 66% labor force participation). This means a loss of 10,000 manufacturing jobs in Alabama's Fifth Congressional District represents approximately 4.3 % of jobs lost for the area as a result of Chinese competition alone. Any way you look at this, that's a lot; it's enough to put the region under significant economic stress]

The Effect of Economic Stress on our Politics

In a new study, The Electoral Consequences of Rising Trade Exposure, the authors present evidence that exposure to "trade shock" results in a more polarized politics. This means Republicans who are elected are significantly more to the right than their predecessors, and Democrats who are elected are slightly more liberal than their predecessors.  Today, there is no overlap between the parties. The most liberal Republican in Congress is more conservative than the most moderate Democrat. 

The study found that this rightward shift among elected Republicans is especially pronounced in Congressional districts with a majority white voter base, such as Alabama's Fifth Congressional District (77.7% white). Notably, the study found that most Congressional districts throughout the country continue to have a majority white voter base. 

Congressional districts with a dominant minority population have polarized to the left, although polarization was less on the left. 

Would Voters in Alabama's Fifth District be Better Served by More Liberal Policies?

Lawrence Mishel is president of the Economic Policy Institute He has co-authored all 12 editions of The State of Working America, much touted by former U.S. Labor Secretary Robert Reich. Mishel took note of the New York Times article and suggests that their lamenting the polarization of our politics as a result of "trade shocks" is shedding crocodile tears. "Ignoring the losers was deliberate," he says.  Supporting the areas hardest hit with good old fashioned liberal policies would have helped, a lot, but Congress didn't help: 
In 1981, our vigorous trade adjustment assistance (TAA) program was one of the first things Reagan attacked, cutting its weekly compensation payments from a 70 percent replacement rate down to 50 percent. Currently, in a dozen states, unemployment insurance—the most basic safety net for workers—is being unraveled by the elites. Only about one unemployed person in four receives unemployment compensation today. 
... Trade theory tells us that globalization’s impact is much greater on the wages of all non-college grads (... two-thirds (to) three-quarters of the workforce).... The damage is widespread, not concentrated among a few. Trade theory says the result is a permanent, not temporary, lowering of wages of all “unskilled” workers. You can’t adjust a dislocated worker to an equivalent job if good jobs are not being created and wages for the majority are being suppressed. Let’s not pretend.

The winners have never tried to fully compensate the losers, so let’s stop claiming that trade benefits us all. Globalization is one of several policy actions that has suppressed wage growth in recent decades. We would have better been able to weather its impact if we had better overall policies to support wages and workers and their families. .... If free-traders had actually cared about the working class they could have supported a full range of policies to support robust wage growth: full employment, collective bargaining, high labor standards, a robust minimum wage, and so on. They could have strengthened social insurance. And they could have done all that before administering “shocks” by expanding trade with low-wage countries. But they didn’t, and still won’t. Elites on both sides of the aisle have never even sought to restore TAA after the GOP assault. These economists do not really have a clue as to what has damaged working families, nor do they acknowledge the extent these families have been betrayed by a bipartisan elite crowd for which many economists provide intellectual cover.
All these policies for mitigating trade shocks that Mishel describes, of course, are liberal policies.

The NYT article describes how the last Democratic representative from Alabama's Fifth Congressional District, Parker Griffith, sought refuge from the storm by switching parties: he was elected as a moderate Democrat, and he switched parties to save his hide as a moderate Republican.

In 2009-2010 Griffith repeatedly voted against the extension of unemployment benefits, he voted against Obamacare, he voted against mortgage relief for homeowners, he voted against the Dodd-Frank reforms of Wall Street, he voted against increasing the debt ceiling to meet national obligations, he voted against appropriations for infrastructure and transportation programs, and he voted against the Lilly Ledbetter fair pay act. In other words he voted against liberal proposals that might have helped those hardest hit by our free trade policies.

The lesson from the Electoral Consequences study, it seems, is Griffith might have better served himself by turning hard left than by becoming a moderate Republican, and by doing so he might also have better served the voters in the Fifth Congressional District.

TVA map 
h/t to Brad DeLong.

Follow me on Twitter @RolandNikles

2 comments:

  1. I went to high school with Mo. An unbelievable opportunist.

    ReplyDelete
  2. Thank you for reading and your comment.

    ReplyDelete