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Battleground over Globalization

Author: Robert McMahon, Editor
Updated: April 22, 2008

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Pennsylvania was not only the last large delegate-rich state up for grabs in the Democratic presidential primaries, it also provided one of the biggest battlegrounds yet for an intensifying national debate on revitalizing the U.S. economy in a globalized world. Sen. Hillary Clinton (D-NY) won this round (Politico) on April 22 by a solid margin over Sen. Barack Obama (D-IL) and exit polls showed Pennsylvanians viewing her as most capable of repairing the economy (CNN), their top concern. Obama, meanwhile, was expected to retain the overall edge in delegate votes needed in the contest to secure the party’s nomination.

To be sure, both Clinton and Obama largely agree on the reasons for the malaise in once robust manufacturing states like Pennsylvania and the prescriptions for reviving them. A larger debate still looms with the presumptive Republican candidate, Rep. John McCain (R-AZ), over free trade policy and the best ways to stimulate job growth in a globalized economy.

In the steel mills, meeting halls, and working class towns of Pennsylvania, Obama and Clinton have repeated attacks on the fifteen-year-old North American Free Trade Agreement (NAFTA), calling for its renegotiation. In early April, Clinton unveiled a plan to step up enforcement of trade laws, including measures to crack down on what she called China’s “unfair trade practices.” Obama has also singled out China, at one point threatening to shut off access (Reuters) to the U.S. market to end currency manipulation practices. Both supported the April 10 move by House Speaker Nancy Pelosi to freeze the Colombia free trade deal, which Democratic leaders linked to deeper discontent over the struggling U.S. economy.

In comments to the Alliance for American Manufacturing in Pittsburgh, Clinton and Obama emphasized they favored trade deals that were “fair” to U.S. workers and included labor and environmental protections (Bloomberg). Both also support cutting subsidies to companies that outsource jobs overseas and incentives for those maintaining operations domestically. They have proposed investing about $150 billion on alternative energies such as wind and solar power, which the campaigns estimate would create 5 million jobs in the next ten years. McCain

McCain traveled to Carnegie Mellon University in Pittsburgh in the week before the primary to issue a rebuttal. In a speech detailing his economic policy proposals, McCain defended the Colombia free trade agreement as a source of stability in the hemisphere and criticized Obama and Clinton for promoting “economic isolationism.” His other proposals for boosting competitiveness were not so far from Democratic policies such as improving unemployment insurance for those displaced by trade and using funds from federal accounts “to give displaced workers of every age a fresh start with new skills and new opportunities.” McCain also called for suspending federal taxes on gasoline from Memorial Day to Labor Day this year to serve as an added stimulus and introduced “gas tax holiday” legislation. On the eve of the Pennsylvania vote, Clinton said such a gas tax holiday was worth considering but Obama called it a bad idea (WSJ) and said any price reduction would be short lived.

Experts say the diverse landscape of Pennsylvania offers a useful laboratory for exploring ideas on reviving the U.S. economy. Like Ohio, a previous battleground state won by Clinton, Pennsylvania has taken a hit to its manufacturing base—losing 200,000 jobs since 2000. An official with the United Steel workers told Reuters: “We've got declining benefits. We have limited retirement security, disinvestment in our infrastructure and outsourcing.” But the state also has revived in a number of ways. A new study by the Brookings Institution says several of the state’s metropolitan areas, including Philadelphia and Pittsburgh, are well configured to thrive in the global economy due to concentrations of “innovation, human capital, and knowledge economy jobs” (PDF). The report calls for federal assistance in strengthening such metro regions and helping states grow more of them, through a combination of improved transportation, education, and housing policy.

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