(What’s Left of) Our Economy: More Crucial Details on the U.S. (and Heavily Female) White Die-Off

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2016 election, Angus Deaton, Anne Case, cities, coal, death rates, Donald Trump, health, Jobs, manufacturing, mortality, mortality crisis, Populism, rural areas, small towns, Trade, wages, whites, women, {What's Left of) Our Economy

Everyone should be grateful to the Washington Post for following up – in heart-breaking detail – on one of the most tragic and important stories of our time: the mounting mortality crisis among working- and middle-class middle-aged white Americans. At the same time, the Post‘s findings raise as many questions as they answer, significantly complicating the story – and the challenge of reversing these dismaying trends.

This white mortality crisis, you’ll recall, first broke into the news last fall, when Princeton University economists Angus Deaton (the latest Nobel prize winner) and Anne Case published a report solidly documenting the trend and linking it to growing economic insecurity combined with ever more paltry pension plans. Deaton and Case noted pointedly that, although other high-income countries, especially in Europe, had also experienced financial crises, productivity slowdowns, and widening inequality, the worsening white death rates in the United States, which provides fewer social and retirement protections, were unique. The authors also suggested that declining economic expectations hit white Americans’ psyches especially hard, and that non-whites, whose expectations were never as high to start with, found harder times easier to cope with.

As observers – like yours truly – noted, the implications for American politics seemed profound. In particular, I wrote, the Deaton-Case results indicated that outsider Republican presidential candidate Donald Trump was more on-target than even he suspected when he kept complaining that America was getting “killed” by job- and wage-killing trade policies. And in fact, a strong relationship between rising white mortality and resurgent U.S. populism was made clear by the Post last month, when it found a high correlation between concentrations of the mortality problem and support for Trump.

Today’s report, however, adds crucial details indicating that other factors may be at work as well. One such finding: that “the most extreme changes in mortality have occurred among white women….” Women, after all, haven’t suffered nearly as much manufacturing job loss as men – whether it stems from trade policy mistakes or other causes (like factory automation). At the same time, since so many women have entered the U.S. workforce in recent decades – as manufacturing employment has faced more trade and technology pressure – they could well be affected indirectly by industrial job loss, as laid off manufacturing workers had to start competing for jobs in service sectors where women were more numerous.

Also muddying the picture is the big (and overlapping) rural-urban white health divide found by the Post (with “rural” including “small-town America”). In important ways, this geography of the white mortality crisis is consistent with the trade and manufacturing-centered interpretation. As is known by anyone who has traveled extensively around the “rust belt” or the American South, lots of factories have been and still are located in small towns and semi-rural areas, in part because land is cheap.

And reinforcement for this view is found on this map accompanying the Post article.

So many of the orange-brown and dark grey areas in the map on left — which signify counties and regions with the fastest rising white female mortality rates — are places like southern Michigan (think “auto industry”), northern Ohio (autos, steel, and industrial machinery), northwestern Indiana (steel), north central and western New York State (industrial machinery, heating and cooling equipment, railroad equipment, steel), and the Carolinas (where the plunge in textile and furniture jobs hasn’t nearly been offset by newer – often foreign – investments in sectors like aerospace, automotive, appliances, and electronics assembly). (The map on the right shows counties and region where white female mortality is falling.)

Nonetheless, so many of the biggest orange-brown stretches are regions dominated by other parts of the economy. Clearly, the coal industry’s woes bear lots of blame for the mortality crisis in Kentucky, southern Ohio, and West Virginia. And Nebraska, the eastern half of Utah, and the western half of Kansas have never been manufacturing strongholds (though Wichita has long been a major aerospace center).

The variety of local and regional economies involved shouldn’t be surprising. Anything as big as a mortality crisis in such a large segment of the population is bound to have multiple causes – and to resist talking-point-deep explanations and slapdash remedies. But that doesn’t mean the mainstreams of the two major parties shouldn’t be addressing the rapidly deteriorating health of so many Americans much more comprehensively and energetically.

 

Following Up: Can Climate Change Challenge be Met Without Curbing China’s Trade?

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China, climate change, coal, Following Up, greenhouse gases, Nature Climate Change, Obama, Peterson Institute, The New York Times, Trade, Xi JInPing

Time for a little back-patting – which also has the virtue of presenting a crucial link between issues that’s way too often ignored by policymakers, especially in Washington. It’s the link between U.S. trade policy on  the one hand, and China’s responsibility for mounting world levels of greenhouse gas emissions and widespread concerns about global warming on the other. More specifically, the case has just been strengthened for an argument I made years ago that fending off the global warming challenge didn’t seem possible without major limits on exports of China’s emissions-intensive products.   

For years it’s been evident that China’s jaw-dropping economic development has been a major contributor to global greenhouse emissions in recent decades. That’s not grounds for condemning Chinese practices per se. After all, even though Beijing’s environmental policy record is unmistakably terrible, strong grounds existed for believing that China was simply behaving similarly to the United States and other currently wealthy countries – which had the undeserved good fortune to enjoy their own industrialization takeoffs, and the high living standards they made possible, way before such climate concerns emerged.  As a result, they could emit to their heart’s contents without any apparent costs to the planet’s future.

But there’s been another crucial difference between the U.S. emissions record and the Chinese emissions record, and one that can’t justify continued passivity over the latter: America’s 19^th century industrialization stemmed mainly from the operation of free market forces. China’s ongoing industrialization phase has been planned and carried out overwhelmingly by government, meaning that its course and structure have reflected national policy choices.

The point here isn’t to tout the superiority of markets. Instead, it’s to note that, as a result, China’s modernization is an especially artificial creation, along with the resulting volumes of emissions. They’re not the consequence of the kind of natural economic evolution undergone by earlier generations of developed countries, even when – as has been the case especially in Europe – government was hardly an economic bystander.

I was thinking about these patterns of development several years ago when I came across a research report that documented my instincts. Moreover, this Peterson Institute study emphasized not only the state-directed nature of Chinese industrialization. It showed how the nation’s move into emissions-intensive heavy industries like steel and cement and chemicals clashed violently with how free markets would have shaped China’s economy. For China’s overwhelming natural, competitive advantage – the assets from which early industrial success should have originated – was a huge pool of low-cost labor.

As a result, a freer China both would have started off in labor-intensive industries and stayed largely in those sectors for many years. The kinds of industries China rushed into, however, were capital-intensive industries – where China had major natural disadvantages that Beijing tried to offset with a wide range of trade barriers to fend off foreign competition, and with subsidies aimed at speeding up progress whether much demand existed for Chinese products or not.

In fact, the study found, these heavily emitting industries had grown so enormous that their greenhouse gas-boosting role greatly exceeded even that of China’s breakneck adoption of personal cars, air conditioners, and other signs of growing consumer prosperity.

Most important for U.S. policymakers, because these and other parts of China’s economy were so export-oriented (since like other low-income countries, China lacked the wealth to finance its own development adequately mainly by supplying its own demand), China’s stunning export success had turned into a major engine of global warming. And this engine’s immense scale, and carbon footprint, also owed mainly to Chinese government interventions that flouted not only free market norms but free trade norms – typically at the expense of U.S. and other foreign industries and workers.

So in early 2008, I wrote an article for a syndication service that advocated using trade policy to fight global warming by slowing the Chinese export machine with tariffs on Chinese imports. Seven years later, I’m pleased to report the emergence of new evidence linking China’s emissions growth to its export growth. As this New York Times article summarizes, economists and climatologists now agree that up to a third of China’s total emissions come from its exports. But a September study in the journal Nature Climate Change also found that China’s exports generate eight times the emissions levels of its imports. For the United States, the ratio is 0.5, and even for India, another very low-income country, it’s only 1.3. Therefore, consuming goods from China adds much more to climate change dangers than consuming goods from elsewhere.

China’s outlier status, the Nature Climate Change authors conclude, results overwhelmingly from China’s coal-based energy mix and the very high emissions intensity (emission per unit of economic value) in a few provinces and industry sectors.” Therefore, they’re optimistic that the greenhouse gas dangers created by China’s trade can be reduced with targeted efforts to improve production technologies.

But they also allow that “reducing trade volumes” from these sources may be needed, and one major finding suggests that broader trade curbs may be needed: the fact that “production in China is several times as carbon intensive as the same production in other countries” regardless of product. In fact, although the emissions intensity of Chinese exports from wealthier provinces is much lower than that for products from poorer provinces, even these levels are three, four, and even five times higher than U.S. levels.

President Obama seems to have other ideas. His summit last month with Chinese leader Xi Jinping produced a statement that Beijing would launch a national cap-and-trade system by 2017, saw a reaffirmation of an earlier Chinese promise to stop the rise in its emissions by 2030 at the latest, and elicited a promise by China to spend more than $3 billion helping other developing countries to deal with climate change. Mr. Obama and Xi also offered a “common vision” for progress at an upcoming United Nations meeting to create a framework for a new international climate change agreement. But given China’s penchant for breaking international agreements, it’s still clear to me that if you’re serious about attacking climate change, you need to be serious about dramatic curbs on China’s exports.