Earlier this year, former Florida governor Jeb Bush travelled to my hometown of Detroit to explain his political philosophy. In a speech before local business leaders, Bush argued that the aim of government should be to promote “economic growth above all.”
“If a law or a rule doesn’t contribute to growth,” he asked, “why do it?” If a law subtracts from growth, why are we discussing it?”
The younger Bush brother is in good company. For the better part of a century, economic growth—as measured by the Gross Domestic Product (GDP)—has been the single most important guidepost for government decision-making. Nowhere is this clearer than in the current debate raging in Washington over the 12-nation Trans-Pacific Partnership (TPP) trade agreement, wherein the deal’s proponents from the Chamber of Commerce to the Treasury Department routinely reach for their trump card: “Trade is good for economic growth.”
There’s just one problem with this line of thinking. Economic growth—our raw output of goods and services—is a questionable measure of our success or well-being as a nation. Growth, in some cases, runs counter to priorities that matter deeply to our people. As a short-term measure of national production, GDP often tends to increase as rates of crime, pollution, and household debt rise. Both Hurricane Sandy and the BP Deepwater Horizon disaster arguably boosted economic growth because of the activity associated with cleanup and rebuilding.
As the House considers whether to “fast track” the TPP and other coming trade deals, I hope my colleagues will consider a broader set of questions than the one that Jeb Bush presented during his visit to Detroit. Instead of asking about implications for economic growth, I hope my colleagues ask: “Is this policy good for living standards? For the health of the planet? For creating jobs with dignity, promoting peace, and ensuring an educated populace?”
It’s hard to imagine the TPP passing muster when we consider values other than economic growth.
Start with jobs and living standards. What Nobel laureate Paul Samuelson wrote in 1955 rings true today: under a system of free trade, “national product would go up, but the relative and absolute share of labor might go down.” It’s a polite way of saying that free trade means more opportunity for big industry and investors, but that workers will face new threats to their jobs and wages. This is particularly true when we open up to direct competitions with countries like Vietnam—a TPP participant country where the minimum wage runs below 60 cents per hour. As economists David Autor, David Dorn, and Gordon Hanson have shown, increasing direct competition with a larger low-wage country, China, has increased unemployment and lowered wages in the United States. While workers disadvantaged by trade are supposed to be compensated with Trade Adjustment Assistance funding for retraining assistance and income support, the funding, at least since the NAFTA era, has never added up to the amount of the losses. Nowhere is this more evident than in my Detroit-based Congressional District, where outsourcing decisions in the wake of NAFTA have meant much more than lost jobs and wages: The trade deals have meant a vicious cycle of abandoned production facilities, lost population, a diminished municipal tax base, lower funding for key city services like drinking water, and, in turn, more population loss. “Adjustment assistance” can hardly begin to compensate for this. No marginal increase to GDP can justify the suffering and lost opportunity.