Clinton Is Right: Bash Japan!

February 23, 1994|By RICHARD REEVES

NEW YORK — New York. -- This is my choice for the headline of the year:

''Trade Gap With Japan Termed No Problem'' -- the New York Times, Feb. 15, 1994.

Silly me. Here I've been worrying for the past 10 years and more, and it turns out there was no problem. The Times found economists who said this is complicated and in the larger scheme, etc., etc.

Silly Bill Clinton. The president got all upset because once again Japan refused to keep commitments it had made on opening its domestic markets to American companies and products, this time a 1989 agreement involving Motorola Inc. and its cellular telephones. No problem, Mr. President, just one company, etc., etc.

It was not just the New York Times. As soon as the president announced he might actually do something to level the free-trade playing field with Japan, television and radio were flooded with the usual suspects, some of them paid by Japanese interests, saying that Americans just had to work harder and longer for less money and try to understand that checking up on promises and numbers was hurting Japanese feelings. Understand their culture, a trade war could cost hundreds of thousands of jobs, etc., etc.

On the other side of the country, the Los Angeles Times' editorial the next day was ''The War That Has No Winners.''

The argument was this: ''A trade war is a mutually destructive game of economic chicken. Consumers are always the biggest losers . . . Washington must move prudently in this confrontation.''

True enough. Economics 101. But that argument, beloved by professors, business leaders, editorial writers and lobbyists, is rotten to the core. And this is the core: Do we want to be a nation of ''consumers,'' or do we want to be a nation of working people with decent jobs and a decent chance to send our children to college and a productive life of their own? We have already lost millions of jobs in exaggerated pursuit of free-trade theory -- little things such as Japan banning skis made in the U.S.A. because Japanese snow is ''different.''

In unbelievably patronizing phrasing, the New York Times said: ''Sophisticated economists working for President Clinton quietly insist that they are engaged in a form of diplomatic sleight of hand, blustering about unfair Japanese trade practices.'' The subtext, of course, is that the president himself is a blustering fool of a politician.

After some thought, I realize that I would prefer to be ruled and frustrated by foolish politicians than sophisticated economists.

At least most politicians understand that the point of this exercise in free trade is not good numbers but good jobs -- and, in extremis, preserving the American middle class and perhaps even the United States itself. Foolish politicians know a few other things, too: You can't eat statistics or proven theories, and that people whose minds and hands are judged useless to the greater good will turn on the system. A crisis like that, a crushed middle class, will not be economic, it will be political.

I agree with the Los Angeles Times that the United States has not been engaged in a trade war. But Japan has. We drained too much energy and treasure fighting the Cold War. We wanted to run the world. The Japanese just wanted to own it.

That is not going to happen. The Japanese economy and its relative world position have probably peaked and will be diminished now by the rise of newer developing economies, particularly China's, with opportunities to exploit cheap labor in a free-trade world market -- as the Japanese themselves did over the past couple of decades.

But we could be in steeper decline. On Feb. 17, the economists told us that the 1993 U.S. trade deficit with Japan was $59.3 billion, which amounted to 23 percent more than in 1992. ''Sophisticated economists,'' like Laura D'Andrea Tyson, chairman of the White House's Council of Economic Advisers, immediately stepped up to say that the reason for this was that the U.S. economy was improving and we had more money to spend for imports.

Some of us did. ''More money for imports'' is a euphemism for fewer decent jobs (and work-related benefits) for Americans.

Richard Reeves is a syndicated columnist.

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