“Nosotros somos América..”

May 2, 2006

El movimiento hispano en los EE.UU. habla de las Metamorfosis de los conceptos de Nación y de Patria, indisociables de otras trágicas formas de integración.

Ben Bernanke, de la Federal Reserve, estudioso de la Gran Depresión, expone al Wall Street Journal (www.wsj.com., online de pago) el punto de vista clásico de los anarco-capitalistas norteamericanos: “Nuestra sociedad está basada en las oportunidades, la flexibilidad de los mercados laborales, la flexibilidad de los mercados, y en un mercado honesto y libre. Por todas esas razones, sería peligroso que una proporción creciente de nuestra población creyese que no comparte los beneficios de nuestro modelo”.

El New York Times o la BBC no dicen otra cosa, de este modo:

Ellos son América”. “Creemos formar parte de esta nación aunque algunos no lo quieran reconocer. Y amamos a esta nación aunque para amarla no haya que tener un papel”.

Este es el artículo del Wall Street Journal (2 mayo 2006):

Crossroads

Trade and Immigration Battles
Of the Past Offer Lesson for U.S.

In 1920s and 1980s, as Today,
Political Response Is Key;
Crackdown vs. Compromise

Inadequate Potato Protection

By GREG IP
May 2, 2006.

Surging immigration unsettles workers and prompts calls to stop the flow. Congress ponders higher tariffs to protect struggling industries. National-security fears heighten anxiety about foreigners. A growing gap between the rich and the middle class fuels angst about globalization.

It sounds like today, but it could also be the 1920s. After a backlash against immigration and a “Red Scare,” the U.S. sharply limited the inflow of immigrants for years. The Smoot-Hawley Tariff, conceived to protect farmers, then helped trigger a trade war that deepened the Great Depression.

It could also describe the 1980s. With factory layoffs blamed on imports and public cries to limit illegal immigration, Ronald Reagan struck compromises. His administration persuaded Japan to agree to “voluntary” export restraints, coordinated a drop in the value of the dollar and toughened immigration enforcement while granting amnesty to some. The U.S. kept its doors open to goods, capital and people — and its economy prospered.

As America faces similar pressures today, what are the lessons? Buffeted by similar political and economic tensions, these two periods had different outcomes, largely due to how political leaders responded. These days, leaders know better the dangers of closed borders than their 1920s predecessors, and a return to that degree of isolationism seems unlikely. But they also lack the political assets of their 1980s counterparts, and that could make it hard to resist calls to restrict or even reverse America’s traditional openness to foreign goods, services and people.

[Coming to America]“The potential for an explosion in protectionist sentiment is greater now than it was” in the 1980s, says William Brock, who was Reagan’s U.S. Trade Representative after representing Tennessee in Congress for 15 years. “This is the least constructive atmosphere in my 40 or 50 years in and out of government. People want to find someone to blame for almost everything.”

Romano Mazzoli, a former Democratic congressman from Louisville, Ky., who co-sponsored immigration legislation in the 1980s, worries that a failure to deal with illegal immigration could hurt the legal kind. “I like to think we’ve come so far since the 1920s that we could never repeat” that era’s racially motivated immigrant quotas, says Mr. Mazzoli, whose father emigrated from Italy in 1914. But, he adds, “The guy whose job is on the line…may not have an economics degree from Harvard. What he does have is the vote. And people like him can make troublesome noises on Election Day.”

American ambivalence about trade and immigration is nothing new even when the economy is doing well. While globalization — the increased movement of goods, capital and people across borders — may benefit society as a whole, it tends to harm specific groups. Cheap imports, for instance, are good for consumers but threaten U.S. companies making rival products. And those harmed, whether farmers in the 1920s, auto workers in the 1980s or small manufacturers today, can be vocal.

The 1920s backlash followed decades of heavy immigration from Eastern and Southern Europe, which labor leaders and others believed threatened the wages of native-born Americans. The 1980s backlash came after the emergence of large, intractable trade deficits, in particular with Japan, which were blamed for turning the industrial Midwest into the Rust Belt.

Today, immigration rates are back to levels not seen consistently since the early 1920s, fueling an increasingly divisive debate highlighted by demonstrations across the U.S. yesterday campaigning against the possibility of new restrictions on immigration. At the same time, imports now command their largest share of U.S. gross domestic product in two centuries, according to Douglas Irwin, an economist specializing in trade history at Dartmouth College. Cross-border merger deals are sparking fears that overseas companies, some state-owned, could control vital U.S. assets.

President George W. Bush has shown both protectionist and pro-globalization streaks. He raised steel tariffs and tightened restrictions on Chinese textile imports. But he also opposes broader tariffs on China, unsuccessfully defended a proposed acquisition of some U.S. port operations by a Dubai-based company and is lobbying for a guest-worker program, the details of which he has left vague. Yet his lack of popularity, political capital and bipartisan support makes it harder to prevail in Congress, or even with his own party.

Senate Finance Chairman Charles Grassley, an Iowa Republican, supported the 1986 immigration reform but opposes Mr. Bush’s guest-worker program. In 1986, “I was told amnesty along with employer sanctions would solve our problems, and…it just led to an 11-million-person problem,” he says in an interview. “I’ve been burned once and am not going to be burned twice.”

The 1920s: Perils of Protection

The period from 1871 to 1914 is sometimes considered globalization’s golden age. With the United Kingdom leading the way, international trade and finance flourished. As the U.S. became an exporter of manufactured goods, it warmed to free trade. Before becoming president, William McKinley was a leading protectionist in Congress. But by 1901, as president, he began to espouse the benefits of reciprocated free trade, most notably in the speech he gave in Buffalo the day before he was fatally shot.

Woodrow Wilson reduced tariffs in 1913. But World War I ended the era of globalization. Britain lost economic leadership. The gold standard was abandoned. Republicans, then the party of protection, took back Congress in 1919 and the White House in 1921. Determined to keep the U.S. free of foreign entanglements, they refused to join the League of Nations and after a deep recession, raised tariffs sharply in 1922.

The rest of the 1920s were prosperous for the U.S. and for the rich in particular. But farmers struggled. Many took on debt to expand when prices were high; foreclosures soared after the war when prices collapsed. Herbert Hoover campaigned in 1928 for “limited tariff relief” for farmers. In the subsequent Republican landslide all sorts of industries demanded protection and Congress gave it. A year and a half later, Congress passed the Smoot-Hawley Tariff of 1930, which raised 890 tariffs.

Legislators wanted to protect favored industries and largely ignored the ramifications of their actions, says Mr. Irwin. “The inadequately protected potato is a nationwide issue,” intoned Rep. Carroll Beedy, a Maine Republican. Willis C. Hawley, a Republican from Oregon and a co-sponsor of the tariff bill, said the law did not “exclude foreign products from our markets, but does propose that such products shall not come into this country to the detriment of the American producers and wage earners.”

Over 50 countries sent letters to the U.S. government to protest, Mr. Irwin says. Smoot-Hawley helped bring a new government to power in Canada that retaliated against the U.S. All this contributed to a collapse in global trade and exacerbated the Great Depression, although historians differ as to the extent.

“Congressional trade policy is very heavy-handed, doesn’t take into account all the interests at stake and can lead to an incredible foreign backlash that can be very difficult to unwind or defuse,” says Mr. Irwin.

The 1920s also saw a reaction against immigration. The annual arrival of about a million immigrants from 1905 to 1914 aroused resentment among native-born workers and resistance from labor unions that felt the competition depressed wages. The reaction was drenched with racism. “Russian Jews, Hungarians, Greeks and Italians were viewed as inferior to earlier stock immigrants: the Irish, English, Scandinavians and Germans,” says Daniel Tichenor, a political scientist at Rutgers University.

As Mr. Tichenor wrote in his 2002 book “Dividing Lines: The Politics of Immigration Control in America,” Congress passed its first immigration quotas after being galvanized by a 1920 State Department warning of a wave of “filthy” and “unassimilable” Jews fleeing European persecution. Just as terrorism adds fuel to the issue today, the 1920 “Red Scare” sowed worries that such immigrants carried “Bolshevik revolution, anarchy and other forms of political radicalism,” Mr. Tichenor wrote.

The first attempt to reduce immigration, a literacy test, was vetoed by Wilson in 1915, but Congress overrode him in 1917. Shortly after Warren Harding took office in 1921, Congress passed the Quota Act, dramatically cutting inflows. In 1924, it dictated that immigrant inflows should reflect the ethnic makeup of the U.S.

The consequences were profound. Many Jews fleeing Nazi Germany could not enter the U.S. As it happens, fears that immigrants wouldn’t assimilate proved unfounded, Mr. Tichenor says. “Over the next decades they assimilated culturally, politically, economically, educationally just fine.”

The 1980s: Benefits of Compromise

After World War II, the U.S. abandoned its isolationist stance and helped create the United Nations, the General Agreement on Tariffs and Trade and the International Monetary Fund. In the two decades that followed, a wealthy and open U.S. facilitated a new era of globalization.

But as economic growth slowed in the 1970s, the U.S. saw its competitive edge slip. Congress rewrote trade laws allowing industries to more easily obtain protection from overseas competition. When Reagan took office in 1981, there were many proposals in Congress to slash the flow of imported cars from Japan, recalls Mr. Brock, the former trade representative.

Reagan “at his core, really detested any government intervention in the marketplace,” Mr. Brock says. He recalls telling his Japanese counterparts that although Reagan would be challenged by Congress, “no restraints would pass over his veto.” To maintain good relations with the U.S., the Japanese agreed in 1981 to limit exports of automobiles to the U.S. to just below their 1980 levels for three years. Similar agreements were reached covering motorcycles, semiconductors and machine tools.

Mr. Brock says Reagan was popular enough to veto any trade bill he didn’t like. That contrasts with Congress’s willingness to defy Mr. Bush’s veto threat when it moved to block the recent ports deal.

At the same time, U.S. manufacturers complained that the strong U.S. dollar and weak Japanese yen gave Japanese companies an unfair advantage. In 1985, to fend off protectionist sentiment from Congress, Reagan’s influential Treasury Secretary James Baker coordinated an international effort to drive the dollar down, principally through massive selling of dollars by world central banks. That eventually helped narrow the trade deficit by making imports more expensive and exports cheaper.

Gary Hufbauer, a trade expert at the Institute for International Economics, a Washington, D.C., think tank, says Reagan “opportunistically allowed protection, to deal with congressional pressures at the moment.” Free trade made little progress but it didn’t suffer lasting setbacks either.

A similar dynamic occurred with immigration. By the 1980s, Mexico’s stagnant economy and growing population led between three and six million Mexicans to seek a new life in the U.S., albeit an illegal one. That sparked a growing clamor to crack down. In 1981, Mr. Mazzoli and Wyoming Republican Senator Alan Simpson introduced a bill that would punish employers for hiring illegal immigrants, require Americans to show an identification card to get a job and put some illegal immigrants on the path to citizenship.

Pro-immigration critics of the bill compared the ID card to “dog tags” or “bar codes” while anti-immigration critics said it would reward lawbreakers and displace Americans from their jobs. Mr. Mazzoli says it passed because of broad, bipartisan support: The bill was rooted in the recommendations of a Carter-era bipartisan commission, sponsored by a Republican senator and a Democratic congressman, and signed by Reagan. Ultimately, about three million illegal immigrants took advantage of the amnesty, and immigration — both legal and illegal — rose over the next two decades.

Today: At the Crossroads

These compromises allowed globalization to advance but did not remove some underlying irritants. Income inequality has continued to widen. Domestic auto makers have lost more market share to foreign brands. The trade deficit has ballooned to new records. The number of illegal immigrants has soared. Gordon Hanson, an economist at the University of California at San Diego, says the 1986 law may have unintentionally “legitimized” the hiring of illegal immigrants because it didn’t require that companies ensure the authenticity of their employees’ documentation.

President Bush has emphasized the dangers of turning away from the world. “What I hope you don’t see is a nation that loses its nerve and becomes isolationist and protectionist,” Mr. Bush told an audience in Irvine, Calif., last week, defending his proposed guest-worker program. “What I hope you don’t see is a nation that loses its confidence in the capacity to trade with countries like China.”

Yet progress on opening borders has been difficult under Mr. Bush. The U.S. has signed an array of bilateral and regional trade deals but hopes are fading for a broader world-trade pact before Mr. Bush’s negotiating authority expires in mid-2007. Congress is now drafting tighter restrictions on foreign investment in the U.S., and the fate of Mr. Bush’s proposed guest-worker program is uncertain.

Although some of these setbacks are beyond his control, Mr. Bush’s lack of personal popularity and bipartisan support has hampered his ability to promote pro-globalization policies. Rep. Sander Levin, a Michigan Democrat who has supported trade deals in the past, has opposed many negotiated by Mr. Bush. Unlike Reagan or Bill Clinton, he says, the president hasn’t accommodated Democrats’ concerns, such as worker protection in trade pacts.

Federal Reserve chairman Ben Bernanke, a scholar of the Great Depression, recently warned Congress that growing inequality threatens the U.S.’s commitment to open markets. “Our society is based on opportunity, it’s based on flexibility in labor markets and product markets, it’s based in open and fair trade,” he told lawmakers. “And all of those things are at risk if a growing portion of the population feels they’re not sharing in the benefits from those changes.”

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: