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For the second time in a week, the Obama administration has discarded a major
campaign pledge on international economic policy. In its decision last week not
to name China a currency manipulator, and now to forswear renegotiation of
NAFTA, the administration avoided two potentially costly mistakes. In the short
run, this is cause for rejoicing. In the long run, this approach may portend
There is no doubt about the original pledges. In the case of China, President
Obama had been so clear as a candidate that his nominee for treasury secretary
had no choice at his January confirmation hearings but to repeat the boss’s view
that China was manipulating its currency.
In the case of NAFTA, Obama said in a primary debate: “I will make sure that
we renegotiate… I think we should use the hammer of a potential opt-out as
leverage…” He differentiated himself from his current secretary of state by
arguing that he had been a consistent opponent of NAFTA while she had
occasionally seemed to favor the agreement.
These vows were not trivial. Key battleground states such as Indiana,
Michigan, Ohio, and Pennsylvania had suffered substantial manufacturing job
losses. Rightly or wrongly, groups of voters there blamed those losses on trade
with China and agreements like NAFTA. They were deeply unsatisfied with the Bush
administration’s trade policy, which stopped just short of labeling China as a
manipulator, and which argued that NAFTA could be improved upon, but that the
agreement should not be reopened.
Obama spoke of China’s perfidious practices. He spoke of how NAFTA cost a
million jobs. He promised change. And now, with no new facts to justify the
switch, Obama has adopted the very positions he attacked.
Does this matter? The election is long past. Perhaps it is just naïve to
think that politicians will keep their word. This is hardly the idealism that
Obama ran on.
But would we really rather he stick with bad positions just for consistency’s
sake? Had the Obama administration fingered China as a currency manipulator, it
would have done nothing to accelerate China’s currency adjustment but would have
greatly annoyed the Chinese and invited retaliation. Had the administration
followed through on its commitment to renegotiate NAFTA, it would have soured
relations with our two closest neighbors, with no evidence that the desired
change (incorporating labor and environmental commitments into the body of the
agreement) would have any real benefit.
Put differently, though, the answer may seem less obvious: Does it matter
whether a leader persuades the public of a policy’s merits? Is it a viable
approach to convince the citizenry that a policy is bad, and then to pursue that
very policy? It will depend on the extent to which a president can act
autonomously, without relying upon either firmly-rooted public support or the
support of institutions that are more sensitive to public opinion, like
Even a purely pragmatic politician would have at least one good reason for
honoring commitments: credibility is valuable. There will be times when he must
woo legislators with promises. There will be occasions when foreign leaders have
to decide whether the politician means what he says. It helps if they consider
his word to be his bond.
So long as a majority of the public embraces Obama and holds that he can do
no wrong, there will be little domestic price to pay for his reversals, and he
will enjoy the benefits of pursuing policies more sensible than those he
campaigned on. How will we know when trouble looms? Perhaps when members of the
president’s own party begin to introduce legislation aimed at reversing his
decisions. Or when other countries fail to take the president’s concerns
seriously. Or when the president’s fans lose faith in his infallibility.
Once squandered, credibility can be hard to regain.
Philip I. Levy is a resident scholar at AEI.
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