It is easy to assume that making foreign policy work better for the middle class is largely about making international trade policy work better for manufacturing workers. And that is indeed an important part of the story, as often told in interviews across the three states, especially Ohio. But this study also hopefully illustrates that it is about a lot more than that.
Many other aspects of foreign policy affect middle-class well-being. A foreign policy that works better for middle-class Americans includes the pursuit of international economic policies that will grow the global economy and lead to new middle-class jobs and increased wages (see box 4). It involves domestic investments in R&D and workforce development to enhance the competitiveness of U.S. workers and small businesses in a global economy. It requires massively scaling up assistance to SMEs to exploit new market openings, export more, and generate export-related jobs. It entails promoting international tax policies that make it harder for corporations to shelter profits in tax havens that might otherwise help to finance such public investments. It requires employing the right diplomatic, development, defense, and intelligence strategies to detect and head off global economic shocks that could devastate middle-class households and their communities. It means avoiding drawn-out military interventions that cost too many lives and taxpayer dollars. And it requires investing in the resilience of American communities to better weather unforeseen shocks and the side effects of necessary policy decisions, including changes to repurpose defense spending or new regulations to combat climate change.
Box 4: Implications for U.S. Government Reforms
This report touches on numerous obstacles to responsive policy formulation at the national level. It suggests that the U.S. government is not currently structured to pursue a foreign policy for the middle class as effectively as it could be. While the development of a detailed plan for government reorganization is beyond the scope of the task force’s remit, some broad areas should be the focus for future reform efforts:
- Reorienting policy processes at economic agencies, including a major revamp at the Commerce Department so that it can lead whole-of-government efforts to raise long-term competitiveness and a significant effort at the Treasury Department so that it can lead an inclusive growth agenda, address long-term middle-class priorities, and strengthen strategic frameworks guiding financial and economic statecraft.
- Strengthening trade enforcement activities, including stronger leadership of interagency processes, an upgrade of enforcement authorities, and new tools to fast track critical decisions.
- Breaking down barriers between foreign and domestic policy silos, especially around U.S. competitiveness initiatives, to improve coordination and better manage resources.
- Fostering policy innovation and creative financing solutions—perhaps through policy labs and mini Advanced Research Projects Agencies—to respond better to the problems facing middle-class communities.
- Revamping diplomatic capabilities to better address middle-class interests, particularly related to heading off global shocks, and to build flexible international coalitions around emerging issues.
- Improving the integration of intelligence across foreign and domestic spheres—perhaps through an economic intelligence fusion center—to bolster the warning function and protect economic security.
And it is not even just about foreign policy. “Foreign policy” is too restrictive a term, because the line between domestic and foreign policy is artificial. Many of those interviewed across Colorado, Nebraska, and Ohio perceived issues such as trade adjustment assistance, foreign direct investment, and immigration as “foreign policy” issues, even though they tend to be dealt with in the domestic policy arena. And they saw a clear connection between domestic and foreign policy. When economic growth slows and inequality deepens at home—due in no small part to a failure of domestic and fiscal policies—then it stands to reason that the United States must rethink its foreign policy ambitions abroad.
Many of those interviewed across Colorado, Nebraska, and Ohio . . . saw a clear connection between domestic and foreign policy.
Further, the American middle class is not monolithic or static: it expands and shrinks as people struggle to reach and maintain a middle-class lifestyle. The manufacturing sector still provides among the best-paying jobs for the approximately two-thirds of the American workforce who do not possess a college degree or advanced degree. But the number of manufacturing jobs will continue to decline steadily in the face of technological advances. Meanwhile, middle-class jobs will continue to expand in sectors as diverse as cybersecurity, information technology, nursing and telemedicine, and professional business services. Many American middle-class jobs in the twenty-first century may be found online, not on the assembly line. And the interests of such middle-class workers will not always align with manufacturing workers or other important constituencies constituting middle-class America, including the majority of Americans who work in nontrade sectors but are consumers of traded goods and services and care about their affordability and availability.
So much of what is required to make U.S. foreign policy work better for the middle class will not be visible to, or verifiable by, most Americans at the local level. And in many instances, it will require working through difficult trade-offs, where the interests of industries, workers, or communities do not align. The American people need to be able to trust that U.S. foreign policy professionals are managing this tremendous responsibility as best they can, with the interests of the American middle class and those striving to enter it at the forefront of their consideration. The problem, however, is that such trust has steadily and significantly eroded over the last several decades.
None of the individual foreign policy recommendations in this report will solve all the struggles and anxieties confronting America’s middle class. And none, individually or collectively, can substitute for the domestic and fiscal policies that matter more for middle-class well-being. But taken together, the proposed new ways of thinking can stimulate discussion among U.S. foreign policy professionals about how to win back Americans’ trust.
They will also help to rebuild the trust of U.S. allies and partners, which no longer have confidence that the deals struck with one U.S. administration will survive the transition to the next and are therefore increasingly hedging their bets—trying to stay in the United States’ good graces while also keeping their options with China and other U.S. rivals open.
The best and perhaps only viable path right now to rebuilding such support lies in making U.S. foreign policy work better for the middle class.
The recipe for restoring some predictability and consistency in U.S. foreign policy lies in building broad-based political support for it. And the best and perhaps only viable path right now to rebuilding such support lies in making U.S. foreign policy work better for the middle class. The ideas in this report represent a starting point for discussion—one that will hopefully lead to healthy debate and bring many more innovative and actionable ideas to the table.