A former deputy United States trade representative discussed the future of the global economy in a lecture Monday afternoon, railing against perceived “political gyrations” that say the American economy is unhealthier than in the 1980s.
Ambassador John Veroneau, a 1983 University of Maine graduate, Maine Law School graduate and U.S. deputy trade representative from 2007 to 2009, appeared in front of 40 people in Room 115 of the Donald P. Corbett Business Building as a part of the School of Policy and International Affairs Lecture Series.
His speech, titled “Law and Politics of a Global Economy,” lasted nearly 15 minutes followed by a 40-minute question and answer session.
Veroneau, currently a lawyer working out of Washington, D.C., has served as chief of staff to Sen. Susan Collins, R-Maine, and worked in the Clinton administration as an assistant secretary of defense.
In his speech, he struck an optimistic tone, touting America’s continuous productivity in a time when many manufacturing jobs are being lost overseas.
“People talk all the time about America in decline and ‘We’re losing our manufacturing base.’ The reason I don’t really buy into that is because every day, more and more people are plugging in,” he said. “We’re becoming much more productive. We produce more manufactured goods than we did 20 years ago.”
According to an October report by The Heritage Foundation, while American manufacturing jobs have declined by one-third over the past decade, net productivity has increased by 38 percent per hour over that time. U.S. production has risen by 46 percent since 1987, which has made American-manufactured goods more affordable.
Veroneau said American workers make more cars today than in 1980. Over that same period of time, he said, four times as many people worldwide have become serious players in the world economy.
The report cites the manufacturing industry’s substitution of “brains for brawn” — a transition to fewer highly skilled and well-educated workers rather than a workforce composed of many unskilled laborers. Veroneau said this trend also translates to agriculture with the advances of new equipment.
“Seventy-five years ago, a third of [Americans] were farmers. Today, only 3 percent of us are farmers. We produce by a factor of multiple more than we produced back then,” Veroneau said, adding that the country is moving to “for lack of a better term, a suburban service sector innovative economy.”
He said former Third World countries experiencing rapid economic advances, such as China, Brazil and India, are not necessarily growing at America’s expense. As their citizens accumulate the wealth to move to a global consuming economy, the U.S. Veroneau said, could be helped.
“If China is moving up the economic food chain, tens of millions of people are moving from subsistent farming to the early ladders of middle class,” he said. “That’s not a bad thing for us.”
“If the U.S. is a tree – maybe other trees are growing, but we’re going to be the tallest tree for a long time,” he continued. “More importantly, we shouldn’t think of the growth of other trees as somehow adverse to our own.”
According to Investors’ Business Daily, President Barack Obama was criticized by Chinese and Russian officials at a recent G-20 meeting in Seoul, South Korea for the Federal Reserve’s “quantitative easing” policy — a plan in which the federal government would print money to buy $600 million worth of government bonds in order to jump start the economy.
Critics say the move could devalue the dollar and cause a larger than usual flux of American money into foreign national economies.
Obama defended the policy by saying it would “grow the economy,” which is “not just good for the United States — that’s good for the world as a whole.”
“What’s precarious about it is that we got into this problem, in part, because of the gap in what we were spending versus what we were saving,” Obama said.
Upon questioning about the plan from SPIA Director of External Outreach James Settele, Veroneau criticized “protectionist” national Democrats, saying they have opposed free trade agreements with other countries due to the party’s historic labor constituencies like unions, which have an interest in safeguarding American manufacturing jobs.
“I think [the government as a whole is] going to flounder on this issue at least for the next two years,” he said, referencing the partisan-divided legislative branch after the recent Republican takeover of the U.S. House of Representatives; the U.S. Senate is still held by Democrats. “Congress is more divisive on trade issues than I think people are.”
He characterized the political dialogue in America as being heavily dominated by partisan voices on the left and right. He said elections have become “about winning the primary.”
“You get far fewer moderate, centrist, middle-of-the-roaders in Congress,” he said. “It is an institution that is harmful, but it is reflected on how people perceive trade.”
He said government needs a “nuanced, new approach” to trade, involving not just traditional political arguments of “less government” or “more government,” but “less government here, more government there.”
Veroneau said the high level of political debate surrounding the nation’s economy has been confusing to a populace concerned about government spending and generational financial burden. He said the result of that concern was the overwhelming GOP victory on state and national levels after the most recent election cycle.
“People aren’t sure what’s really happening in our economy, aren’t sure what’s going on, aren’t sure the youth and the new generation are going to have as a good a lifestyle as we — your parents’ generation — had,” Veroneau said. “I truly believe you will have far more opportunities than we did even in terms of benefiting from a global economy.”