Except for the saints in our midst, everyone has prejudices, including the well educated and well-to-do. But when upscale folks have prejudices, they usually call them ideas, convictions or principles.
So how can you tell when a principle is merely a prejudice? When someone keeps making an argument even though the facts suggest it no longer holds up.
It is time to ask whether the overwhelming support for free trade and globalization among well-off, highly educated people is more a prejudice rooted in their own self-interest than a matter of high principle.
Okay, maybe that's too harsh. So try this: Even if globalization made a lot of sense during the buoyant 1990s, shouldn't the troubling economic developments since 2000 force people to modify their views? Is it not now undeniable that globalization has serious costs that are not merely "transition problems" and that these costs are borne disproportionately by certain parts of the country and the society?
Now, I don't want to be accused of prejudice myself, so let me stipulate that most educated folks really believe on principle in free trade. They can rely on reams of writing by intelligent economists to support their view.
Moreover, no one likely to hold power in our country would return us to the days of William McKinley and high tariff walls. The globalizers are right when they argue that too many Americans are now reliant on the global economy for such policies to work.
But it ought to be equally obvious that the globalizers in both political parties were too carefree when they asserted in the 1990s that, well, yes, there are "losers" from globalization, but there are so many more "winners" that we really shouldn't worry. Those who lost out in this grand process would eventually find their footing, the argument went, and government could help them make the transition. By the way, where was all that help? In any case the prophets of our bright future said the United States shouldn't worry about "old" industries such as steel or apparel. It should worry about leading the way in all that is "new" and "high tech."
Having grown up in Fall River, Mass., a place whose job base was once rooted in the apparel industry, I've always felt that writing off an industry as "old" is a lot easier for people who never depended on it. Maybe that's an "old economy" prejudice on my part, especially since my home town has been remarkably inventive in giving birth to new enterprises.
Still, it's not a form of prejudice to cite statistics showing that the sharp decline in manufacturing jobs over the past few years has been accompanied by a decline in overall family incomes.
Consider the Census Bureau's report for 2002 showing that U.S. household incomes had declined for the third year in a row and that the number of Americans living in poverty had increased by 1.7 million in a year. The old manufacturing states -- including Michigan, Illinois, Ohio and Missouri -- were among those hit the hardest. (Politicians take note: These are swing states.)
The economists reassure us that the poverty rate is a "lagging" indicator and that a robust recovery will start lifting people up again. But will it? Is it not just as plausible to worry that the flight of jobs to China and elsewhere, courtesy of globalization, has combined with big improvements in productivity to create an economy that leaves many of our fellow citizens behind even in flush times?
The Institute for Supply Management, which keeps some of the best numbers on manufacturing, pleased the stock market earlier this month with a report showing that economic activity in manufacturing grew in August, as it had in July. But its manufacturing employment index actually fell and remained below the 50 percent break-even point for job creation for the 35th consecutive month.
If supporters of globalization really do hold principles and not prejudices, they should admit that the facts make it increasingly difficult to say that everything will eventually get better for everyone, and that changes in the system will only make it worse. Worse for whom exactly?
Our tax and social policies are supposed to respond to inequities as they arise. But our current approach seems based mostly on begging China to fix its currency and praying for 5 percent growth. Michigan, as it sometimes has in the past, will just have to rely on a pass and a prayer.
The evidence suggests that we're not in the New Economy anymore but in a New New Economy with problems that weren't supposed to arise. The real lagging indicator is our economic thinking.