Larry Summers (a senior member of Clinton I's economic team) explains why in a think piece in the Financial Times. We agree fully with Summer's explanation of the cause but do not necessarily agree with the solution proposed....
But I suspect that the policy debate in the US, and probably in some other countries as well, will need to confront a deeper and broader issue: the gnawing suspicion of many that the very object of internationalist economic policy - the growing prosperity of the global economy - may not be in their interests. As Paul Samuelson pointed out several years ago, the valid proposition that trade barriers hurt an economy does not imply the corollary that it necessarily benefits from the economic success of its trading partners.
When other countries develop, American producers benefit from having larger markets to sell into but are challenged by more formidable competition. Which effect predominates cannot be judged a priori . But there are reasons to think that economic success abroad will be more problematic for American workers in the future.
