How Democrats’ NAFTA-Love Lost The Working Class

Greg Palast

From Armed Madhouse

Let’s be honest about it. George Bush didn’t kill Delco and the United Auto Workers, he only attended the funeral. (OK, he unplugged the life support of cheap interest rates and cheap oil.) Auto parts and other thing-makers were mortally wounded by the prior administration. It began in 1992, when the Democratic Party was seized by the Democratic Leadership Council, a group of business-class collaborators who believed the party could be saved if Democrats stripped off those New Deal ideals and dressed up in something a little more Republican.

The pro-business platform didn’t win many votes — the Bill Clinton–Al Gore ticket won a dismal 43% of the vote, but still won the presidency. In fact, it was a wipeout. George Herbert Walker Bush was pulverized, receiving the lowest percentage of votes (37%) of any Republican since Alf Landon lost to Franklin Roosevelt.

The difference between the Clinton/Gore low vote and the Bush lower vote was the Reform Party, the 19.7 million votes for Ross Perot. America hadn’t seen anything like it since 1860, when Abraham Lincoln’s new party destroyed and replaced the Whigs.

Perot, a quixotic billionaire, had fired up the resentment of his 19.7 million — and millions of sympathizers more — by a focused attack on “NAFTA,” the North American Free Trade Agreement. In 1992, seven years before the “Battle of Seattle” at the World Trade Organization confab, Perot went after “free trade,” the cornerstone of the new economic Darwinism. Perot alerted the nation that the wealthy had joined forces to cut your jobs and wages, to pit Detroit against Juárez in a competition to the bottom. His message woke up working-class Republicans by the millions; those guys in the mailroom and behind the lunch counter who voted Republican because of the corporate party’s platform of no abortion, no flag burning, no homosexuals and lots of country music. Perot told them to “think jobs” instead.

The night of November 9, 1993, a year after the election, Vice President Gore had the opportunity to change history. He was to debate Ross Perot on Larry King Live. It was the most-watched cable program ever. Here was the Democrat’s once-in-a-generation chance to win over that 19.7 million that was now up for grabs, to realign the entire party structure as Roosevelt had done in ’32 and, like FDR, create a working people’s majority led by the Democratic Party that could rule for decades.

Instead, I watched a swaggering, self-congratulatory Al Gore, snickering at the uncouth Perot’s warning of a “giant sucking sound” of jobs draining to Mexico. I felt my political soul rise up off the sofa — this was an out-of-body political experience. Perot and his 19.7 million workers who feared for their pensions and union cards were called ignorant fools, suckers for labor union fearmongering, confused, economic dummies, and cowards before history, trying to hold on to their shitty little jobs at Zenith Electric when the future awaited in writing computer programs for Microsoft.

Gore laughed at Perot, he guffawed, he mugged at the camera, snidely dismissing Perot’s prediction of a shift in the balance of trade. Gore, the rich prep-school kid, looked so pleased with himself, taunting the funny little man who’d made his way up from the working class. And 19.7 million Americans knew Gore was making fun of them, too, telling textile workers losing their health insurance they were unsophisticated little schmucks who understood nothing about economics. The Vice President knew jobs wouldn’t be lost. In fact, if we embraced the free-trade treaty . . .

“We can create hundreds of thousands more [jobs]. We know this [free trade] works. If it doesn’t work, you know, we give six months’ notice and we’re out of it.”

Gore singled out the auto parts industry: Delco workers would win big. More jobs were coming.

Here’s what happened: The border was erased, the economic levees burst. In 1992, the year before NAFTA’s passage, the USA had a $5.6 billion trade surplus with Mexico. In 2004, under the free trade pact signed by Bill Clinton, it reversed, and with a vengeance. In 2004, $45.1 billion more in goods came in from Mexico than the U.S. sold to Mexico, an unprecedented $50.7 billion swing to deficit.

And auto parts? I noted that China’s sales of auto parts to the U.S. (and purchase of almost none) had risen 300% in one Bush year, but China’s total remains relatively small. The $26 billion single-year tidal wave of auto parts that drowned the Delco/Delphi workers came overwhelmingly from the NAFTA nations, Mexico and Canada.

The macroeconomic modeling I did in my old academic days suggests that, very roughly, such a loss of income to the USA costs half a million jobs. You can quibble with the estimate, call it 300,000 jobs or 900,000. But a $50.7 billion crocodile is difficult to disguise as a pet gecko.

American workers could have done worse, of course, and they did. The trade deficit with Canada went from a small $8 billion before NAFTA to a Katrina-sized $73 billion in 2005.

The giant sucking sound was not, as Perot predicted, so much the jobs gone south, but the sound of cash vacuumed from the workers’ pockets in both nations to the owner class as workers in Juárez competed with workers in Detroit. Both lost. Real wages fell on both sides of the border, or, more correctly, all three sides, as U.S., Canadian and especially Mexican production wages were hammered. In Mexico, laborer’s pay per hour dropped 40% in the first seven years after NAFTA’s passage. At the same time, the wage-wealth jaw opened wide in all three nations as productivity rose, lifting the value of owners’ equity by several trillion dollars.

Wal-Mart’s own study, by the way, determined that the company had depressed U.S. wages by 2.2%. (This is offset, Wal-Mart quickly adds, by toasters and other goodies now costing, they claim, 3.3% less. That’s quite a bargain.)

Gore followed his put-down of labor unions, which unanimously opposed NAFTA, with praise for Rush Limbaugh as a “distinguished American” (really) and accolades for NAFTA-backer Lee Iacocca, Chairman of Chrysler Motors. Gore didn’t mention that Iacocca had moved Chrysler engine assembly work to Mexico in anticipation of NAFTA. But the unemployed Chrysler workers knew that.

And they didn’t forget. On November 2, 1994, a stunned Bill Clinton, incoherent and lost before the TV cameras, could not explain what had happened the day before. He and Al had dressed up in Republican drag but the 19.7 million Perot voters, given the choice of the Rich Man’s Party or the Richer Man’s Party, returned to “social” issues and the security of the Republicans’ pledge against gun control. Clinton had done what no Democratic President had ever accomplished: lost 70 Congressional and Senate seats — and both houses of Congress — to the Republicans. Maybe forever.

Admittedly, the entire decline in real wages can’t all be laid at NAFTA’s door. Clinton’s granting “Most Favored Nation” trade status to China was the bullet to the head of the U.S. textile industry. And the drop in real wages did not begin when trade laws were replaced by the laws of the jungle. But honesty requires that we recognize that a Democratic Administration rolled up the border and watched Delco jobs slide into the maquiladora trench.

November 9, 1993, was the Democratic Party’s “Munich,” the date on which the DLC’s stalking horse, hoping to appease the chambers of commerce, loosed the dogs of class war upon America’s hourly workers. I cannot get out of my mind how different our world might be today if Al Gore had listened to those 19.7 million, and instead of lecturing them, had invited them into the Democratic Party. But that was a Democratic Party he did not want to join himself, the New Deal Party. Gore’s Rasputin, his guide, was Republican Dick Morris, the guy who in 2004 dissed the polls showing Kerry won. He wrote Gore’s speeches, and it’s known that one time Morris tested out the words on one of the hookers he patronized. (I can’t imagine what a call girl would charge to listen to an Al Gore speech.) How would history have been different if a prep-school kid, his way into the Ivy League and into politics slicked by oil money and Daddy’s connections, became president? Yes, there’s a difference between Gore and Bush. Gore’s oil money, unlike Bush’s, came from Occidental Petroleum, the jungle marauders in Ecuador.

Maybe that’s a bit over the top. It’s personal jealousy and resentment, I suppose. Al Gore never had to fluff his own pillow or worry himself sick over losing a job he hated. I grew up near the GM-Chevy plant in Van Nuys. My dad sold Frigidaire refrigerators, then made by General Motors. If not for dumb luck, I’d be working there — or would have until the shutdown a few years ago.

In 2000, Gore won the election, but lost the presidency. Bush could swipe it only because the vote was so close. It shouldn’t have been close, but Gore lost the NAFTA-wounded states of Ohio and Missouri. Should you run into Al Gore, and he repeats his line that NAFTA didn’t cost American jobs, you might remind him, “It cost you yours.”

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Greg Palast has written four New York Times bestsellers, including Armed Madhouse, Billionaires & Ballot Bandits, and The Best Democracy Money Can Buy, now a major non-fiction movie, available on Amazon — and can be streamed for FREE by Prime members!

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