A Closer Look: Nebraskans on U.S. Foreign Policy

Show Notes

U.S. Foreign Policy for the Middle Class: Perspectives from Nebraska, Carnegie Endowment for International Peace and the University of Nebraska

System Maker and Privilege Taker: U.S. Power and the International Political Economy by Michael Mastanduno

Failure to Adjust: How Americans Got Left Behind in the Global Economy by Edward Alden

The Great Exception: The New Deal and the Limits of American Politics by Jefferson Cowie

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Transcript

Transcripts are generated using a combination of speech recognition software and human transcribers, and may contain errors. Please check the audio before quoting in print and write yeutterinstitute@unl.edu to report any errors. Transcripts will be posted within one week of the show.

Jill O'Donnell: Welcome to Trade Matters, a podcast of the Clayton Yeutter Institute of International Trade and Finance at the University of Nebraska-Lincoln. I'm Jill O'Donnell. Our guest today is Salman Ahmed, senior fellow at the Carnegie Endowment for International Peace. He served as project editor for the report, U.S. Foreign Policy for the Middle Class: Perspectives from Nebraska, the topic of today's show. Okay, Salman, thanks so much for being on the Trade Matters podcast today.

Salman Ahmed: Thanks for having me. Great being on.

Jill O'Donnell: So we're going to dive in and take a closer look at the report for which you served as the editor and teamed up with the University of Nebraska to do with myself at the Yeutter Institute, as well as colleagues in the Bureau of Business Research, and the University of Nebraska Public Policy Center. And we traveled across the state last summer from Omaha to Scottsbluff to talk to over 130 Nebraskans about their views on the economic impact of U.S. foreign policy in Nebraska, particularly on the middle class.

The Carnegie Endowment convened a bipartisan task force of former senior policymakers to do this project, and I want to talk a little bit first about the background of it. The Carnegie Endowment for International Peace is a foreign policy research organization, so to study U.S. states is a bit unusual for Carnegie. So I'd like to start by asking you for a little background on why the Carnegie Endowment board decided to do a project like this one, and how the three states that you studied were chosen.

Salman Ahmed: Sure. Well, you're absolutely right. The Carnegie Endowment is a foreign policy research organization, and when it studies the United States, it's usually from the perspective of what the U.S. is doing outside of our borders, not what's happening within them. But the organization decided to slightly depart from that, the usual practice after the 2016 presidential election campaign, during which you had candidates on both sides of the political aisle essentially arguing for major changes in U.S. foreign policy because they contended that the approach we've been employing in the previous decade since the Cold War ended was no longer delivering enough economic benefits for America's middle class, and in some cases was doing more harm than good.

And so what the U.S. did abroad and what was happening inside our borders was no longer something you could treat as unrelated to each other. They're integrally connected. And we therefore decided to start a project, a research agenda on U.S. foreign policy for the middle class, studying that very question. Do we need to change our foreign policy to produce a better outcome for the middle class? When the debate started in 2016, or rather it didn't start then. When it intensified, you had people in the foreign policy community in Washington, DC whose immediate reaction was to say, "That's not quite true. We don't buy it," you had others who were convinced that the critique was founded.

And everybody on all sides of the debate were essentially making assumptions about what foreign policies were we talking about, who is the middle class, and how do those two things interact. But the assumptions weren't being put squarely on the table and being debated or being tested. And as somebody who's served in government myself, I can readily acknowledge that I made assumptions about these things, but didn't often get a chance to challenge those assumptions. And so that's the spirit behind the project, is, let's challenge the assumptions we're all making.

And one of the best ways to challenge your assumptions is to start hearing from people who are really well-informed on the topic, but who you don't normally talk to and hear from. And that was the impetus behind hearing from state and local officials, small business owners, community leaders, labor leaders, and rank and file employees in middle class households themselves, to get their take on how this foreign policy impacting their economic wellbeing. We decided to focus on states in the middle of the country because of the critique that too many of the policies in Washington, DC were being influenced by the perspective of the coastal cities. And so we thought, okay, let's focus in the middle of the country in the heartland.

We picked Ohio as a start because the plight of the American manufacturing worker as a result of trade policies in recent decades was front and center in the discussion, so we needed an industrial Midwestern state. But then we wanted something that was a good counterpoint, and Colorado proved to be a good counterpoint as our second state. It was more of a new economy which didn't have a heavy manufacturing presence. And then Nebraska, we wanted also a quintessential ag state, and Nebraska provided that. But in each of the three states' cases, they were not solely defined by these base industries. Each one has a set of diverse circumstances politically and economically that make them really very interesting. And when you put them together, they offer a bit of a microcosm of the debates that are playing out around the country.

Jill O'Donnell: Okay. So you talked about the spirit of this project as one of challenging assumptions, and I want to get into that in a second. But first, I think it's useful for our listeners to simply define foreign policy. And I think the composition of the task force that Carnegie convened for this project is a really good example of the foreign policy apparatus. You have former advisors to the White House, the State Department, the Treasury Department, the Commerce Department, the intelligence community, you have a former high ranking military officer who also served as the U.S. ambassador to NATO, you have a former trade negotiator, and you yourself have served in some of these places as well, the White House, the State Department, the United Nations.

So the levers of foreign policy, though, are far more expansive than they were in prior decades in this country's history, including when our own Clayton Yeutter was first getting a start in his career. So what's a concise definition, would you say, of foreign policy these days when to pursue the national interest requires so many different agencies, departments, and types of actors?

Salman Ahmed: So for the purposes of this study, we defined foreign policy as any policy, and any
internationally oriented policies developed in Washington, DC that affected Americans' wellbeing. And we made clear that that included international trade and investment policy, defense policy and defense spending, foreign aid, the diplomatic work that U.S. diplomats do around the world to negotiate major agreements on global challenges. But we also left it to the view of the people we were interviewing within that ambit to say, "Well, what do you perceive of as foreign policy within this scope?" And so sometimes people would mention, for example, immigration, which often is really treated as a domestic policy issue, but where the people we interviewed themselves saw it as a foreign policy related issue, we ran with it as such.

Jill O'Donnell: Okay. So let's go back to the assumptions here. What were some of the assumptions that you had going into the Nebraska portion of this project, or perhaps some of the assumptions that the task force had as well? And how were they challenged?

Salman Ahmed: So we assumed that trade would come out on top as the number one foreign policy related issue affecting the wellbeing of Nebraska's middle class, economically that is, as an agricultural state with major exports. It just stood to reason that would be the case, and that assumption was proven to be correct. Where we made assumptions that turned out not to be correct, I think there were two. We did not assume that immigration would come up as much as it did in Nebraska, because it came up in Ohio and Colorado, but not nearly to the degree as Nebraska. So that was not expected. The others, I think we assumed that there would be a rural, urban divide, that we'd hear one thing in Lincoln and Omaha that would bear little resemblance to what we might hear as you moved westward and got to Scottsbluff. But instead what we found is a lot more commonality of views being expressed than we had assumed.

Jill O'Donnell: Yes, I recall in a lot of the focus groups and interviews that we did, particularly as we began in the eastern part of the state, some folks in Lincoln and Omaha would say, "Well, you won't hear this out in Scottsbluff, for example," and we actually did in many cases, actually. So as you said, trade was the number one issue that was brought up when you start with a very broad question and just ask, "What kinds of foreign policies do you think have the greatest economic impact on the wellbeing of the middle class in Nebraska, in your community, in your own life?" And so trade came out on top. You mentioned immigration as a close second. Were there other foreign policy issues that were not mentioned, or mentioned very little, that you had expected to hear more about?

Salman Ahmed: So in part, we were looking to see how did Nebraska compare with the other two states we'd been in previously, Ohio and Colorado. In the case of Ohio, foreign direct investment came up a lot, and that's partially because, or largely because Honda is now the top manufacturing employer in Ohio, and foreign direct investment supports as many jobs as trade does. We didn't hear about FDI nearly as much in Nebraska, and that's in part because, while Nebraska does of course have important manufacturing activity, it's not really to the degree that Ohio has, and FDI or foreign direct investment tends to be concentrated in manufacturing.

The other thing that we were looking for was on defense spending, which came up a lot more in Ohio and Colorado as being vital for the economic wellbeing of communities. And when you look at it, it makes sense in that sure, you have Offutt, which is important economically for the eastern part of Nebraska, but it doesn't touch the rest of the state in the same way. So those were some important differences on defense spending and FDI that's just not coming up as much as they did in the other two states. We thought maybe foreign aid would come up a little bit more, given the extent to which the United States over the decade has provided in-kind food assistance to countries, which benefits Nebraska. And it did in fact come up in Nebraska, we thought it might come up a bit more. And maybe the reason it didn't is that the extent of that assistance that's given in-kind has diminished in recent years.

Jill O'Donnell: So you mentioned the frequency with which immigration came up as a bit of a surprise in the Nebraska study, as well as the lack of an urban, rural divide that was evident throughout all these conversations. Was there anything else that surprised you about Nebraska in particular?

Salman Ahmed: Well, the refugee issue surprised me. And I should say that I'm not an expert on Nebraska, I don't know your state well, I'm delighted that I had the occasion to get around the state and meet so many wonderful Nebraskans, but I hadn't really studied it beforehand. So it was a surprise to me to hear about the extent to which refugee resettlement is a really major issue, and especially in Lincoln and Omaha. That's not news to Nebraskans, but it was to me and some members of our task force, how big an issue it is. But I don't think that it's unrelated to immigration. I think in part it's part of the same discussion about, how is the state contending with workforce shortages and population declines, and then in some ways immigration and refugee resettlement plays some role in that.

And I guess the surprise for me was to try to understand, well, then why didn't it come up as much in Colorado, where they have agriculture, they have the tourist industry, they have seasonal workers who are coming in to help support their industries? And when we looked into the data, what we then get to understand is that in the case of dealing with population issues in Colorado, they've been having an increase, and largely because they have a huge influx of people from other U.S. states coming into the state. Whereas in the case of Nebraska, there's a lot less in-migration domestically, which puts a greater premium on international migration. So those dynamics were not something we were really sensitive to before doing this study, and became more so afterwards.

Jill O'Donnell: Okay. I'm going to segue a little bit, and I want to talk to you a little bit more about another finding that came up repeatedly in Nebraska, and I think was shared in the other two states too, in Ohio and Colorado, and that was a lack of trust, both in the news media, as well as official sources of information, and also a lack of trust more generally in Washington and foreign policy professionals. One quote that I think really captures the sentiments of a lot of people in the Nebraska report was this quote. Quote, "I don't think anybody knows what the truth is, and I don't trust Washington to tell me what the truth is," unquote.

I distinctly remember when that was said in one of our focus groups, and it was a common theme. And following on that, a lot of people made clear that even if they wanted to spend some time learning more about some of these foreign policy issues and formulate even more of an informed opinion, they did not know where they could access information they could trust. And so talk a little bit about that finding, and how surprising that might have been to you, and what you would advise people to do who do want to spend more time learning about this vast array of foreign policy issues, and how they could go about doing that.

Salman Ahmed: So the issue of trust had come up a lot in Ohio and Colorado as well, and so it was not surprising that it came up in Nebraska, although it was surprising for us for the study overall, that probably the trust issue was as important or even more so than any specific individual policies. And that's an important finding for our study. Now, why does it matter, first? I think people whom we interviewed in the three states were all very honest and candid to say, "Look, I don't have enough information about what the U.S. does around the world. I only see a small piece of it and how that affects me. I'm sure there's a lot else happening around the world that affects me, I just don't know, and I need to trust the foreign policy professionals in Washington, DC to manage that properly and look after my interests. But I'm not sure I can trust anymore that they know what my interests are or how I'm doing, and whether the judgments they're making are correct."

And that's a serious problem, because take something like Covid-19. I think that you had plenty of foreign policy professionals who were saying before this outbreak and before Ebola, "You need to invest a lot more in global health security to prevent these things from happening, because not only can they have a public health impact, they can have an economic impact." Now, if you're someone in any of these three states, you're worrying about your family, your community, your kid. You don't have time to think about what happens if there is an outbreak somewhere, so you need to be able to trust the foreign policy professionals when they say that.

When that trust breaks down, it really puts at risk, as a country, our being able to prevent the kind of events that might cause economic harm. So that's why we come out of this study believing that it's super important to rebuild that trust. Now, what can people, like the person who raised that question, do to contribute? Well, first is, I think that when people are talking about their economic interest, they do know best. They do have enough information. When we're talking to the bean farmer out in Gering-Scottsbluff about how tariffs are affecting his economic bottom line, he doesn't need to read it in the newspaper. He knows.

And that voice needs to be lifted up more, which is of the actual real experience of people. On the flip side is when you're dealing with issues that people don't have a personal experience in, they can't see, it's more distant, we find that they're tending to default more towards forming their views based on whatever media source they listen to. And I think there's no surprise or secret in our day and age, these are highly politicized media sources. And there, one can only suggest to mix it up a bit so that you're not relying on any one alone in order to get different perspectives. That's a deeper theme we can get into later, but we didn't delve into it in this report about the link between information and politics because we're really focused on economics and what people can comment on based on their personal experience. But it's clearly related, too.

Jill O'Donnell: So there's a concluding sentence in the report that I'll quote from here, and it says, quote, "It will be a tall order to regain this trust, because it is not just a matter of adjusting individual policies or communicating better, it will require rethinking traditional conceptual and bureaucratic barriers separating foreign and domestic policy," unquote. That gets a little bit at the point you made about how important it is to rebuild this trust. I think how you do that is a tall order, as the report says.

So what should the takeaway then be here for policymakers and officials in Washington beyond just communicating more or communicating better? Are there structural fixes in the way that foreign policy is made or given its traditional separation from domestic policy? Are there fixes that can be made to help rebuild that trust? And so what's the takeaway on the Washington side on this point?

Salman Ahmed: Well, so I think the takeaway, there are several takeaways. First is, if you want people to trust that you are keeping their interest at the forefront of your mind, you need to know what their interests are. And that's a big part of what our study was about, is to help people understand how do they see their interests. And a lot of what people were telling us is that they see their interests in terms of having jobs that pay enough to be able to sustain a decent middle class standard of living, especially as the costs of health care and education, child caring, housing are rising. And their interests are having to be able to put down roots in communities that are economically viable.

And too often, if you're in Washington, DC as a foreign policymaker, you might say, "Well look, I'm looking at the macro level economic statistics. Unemployment's low, growth is at 3%, everyone must be doing okay." And obviously employment matters, growth statistics matter, but they tell some of the story, they don't tell all of it. And if you really want to understand how people are doing, you have to get beyond those macro level statistics, especially because people in different parts of the country have different experiences.

So one is, if you want to build trust, make sure you are actively understanding what people's interests are, and how they're faring, and get out of DC more often and engage with people to hear from them directly, rather than relying on stats. I think the second is to not assume that it's somebody else's job on the domestic policy side to take care of everything. Now, I want to be clear. I do think that questions of health care of education costs, or even unemployment at home, most of those are going to be more influenced by domestic policy than foreign policy, but still foreign policy has more of a role to play in tandem with domestic policy.

A good example is trade policy. We made assumptions in government that you pursue trade policies that ultimately benefit the largest number of Americans you can. And where there are people who lose out, you have trade adjustment assistance programs, which are run by domestic agencies. [inaudible 00:20:29] that's a difference. And in all likelihood, the foreign policy professionals weren't paying attention enough to where these trade adjustment assistance programs were falling short in helping, let's say the small manufacturing towns and midsize manufacturing towns in a place like Ohio.

And so if they'd been paying attention sooner to what those deficiencies were, and being champions for addressing those shortcomings, we might have a slightly different dynamic in the trade debate today. That's just one example, but there are others. If you cut defense spending, there are programs for economic adjustment assistance for those defense towns to be able to diversify their economies. Are those programs working? And if not, what does it mean for that community if all of a sudden out of the blue they're dealing with a big shock to the drop in activity?

So those are clear links, but that requires the people who are in the Department of Labor who run these programs, or the Department of Commerce to be working with the Department of Defense, but also in the State Department as you're making deals that might have an impact on these considerations to be working together. And so that means really blurring the lines between domestic and international policy in a way we haven't in the past. Sometimes foreign policy and national security professionals are averse to getting involved in the domestic side because they're worried about getting involved in domestic politics. And what we're saying, "No, it's not about politics, it's about just understanding domestic reality." So those are some of the things that we're working on to address these divisions and overcome them, and they are relevant to rebuilding trust.

Jill O'Donnell: So how do you keep foreign policy professionals in particular, who are of course largely concentrated in Washington or embassies abroad, for example, connected to the domestic economic consequences of the policies they're pursuing, or simply just connected to how the American citizens they're serving see their own economic interests? How do you do that in practice, would you say? And would you say any resistance coming from that community to spending more time doing that?

Salman Ahmed: So no resistance we've encountered from that community, to the contrary. And I think it's really important to remember that American diplomats, American soldiers, intelligence officers, aid workers, they're Americans who come from all of these communities. They come from around the country. They care about what's happening back home. It's not because they're uninterested that they haven't been as focused on those economic realities, it's because they have another job to keep Americans safe, to deal with the threat of a nuclear war, they're posted overseas.

And so they themselves were the first ones to say, "Look, we know that it's easy to become disconnected." They're a big constituency for the research we're doing. We've been asked to do briefings for a number of those communities on what we're hearing and finding, so they want to be more engaged. It varies across the communities, though. For the military, it's a totally different ballgame because so much of the U.S. military presence in the military bases is spread out around the country, and so they're more likely to be involved.

But the U.S. diplomatic presence, most of it is deployed overseas in embassies, and so it's a pretty different dynamic. For the intelligence community, that's a totally different ballgame because they're restricted from being involved in domestic affairs, and so that's a more complicated exercise. Foreign aid, there too, it really depends on what kind of aid is being dispensed. And a lot of the U.S. foreign aid goes to American contractors who deliver the aid, and they are based in communities. It's just such a small amount of money relative to defense spending that people don't see the connection or have an immediate impact of it.

So it varies, but the bottom line is that everyone across these communities we've found wants to be more connected, and so we need to find more ways of both creating time and space for them to be able to cycle through communities to talk to people and hear from them, but also to bring governors, mayors, and others into DC to speak a little bit more often with the policymakers on the foreign policy side about how they're seeing things within their respective states. And we're looking at some process reforms that maybe could entail some better integration with those kind of actors.

Jill O'Donnell: Okay. So this leads me to another question about what you do with this information once you gather it. So for example, you have foreign policy professionals that maybe spend some more time in different U.S. states, or spend more time learning about what it feels like on the ground for those whose interests they are serving. But the national interest is broad. The U.S. is a really diverse country, as we all know. Even for this project, the heartland, is not a monolith by any means, and the three states you chose to study all have really important differences, as well as some similarities.

So what do you do with that information as someone whose job it is to pursue the national interest, and you don't want to pick winners and losers with different trade policies, for example, because you don't feel like that's your job to pick winners and losers through these sort of broad, macro level policies that have disparate impacts on different U.S. states. And this study's a good example, where Nebraskans were pretty unified on trade policy, with some nuanced differences here and there, but really fairly aligned on trade policy, much more so than Ohioans were who live in a state where there's a lot more manufacturing employment that has suffered pretty heavy losses.

Some blame trade policy for that over the last couple of decades. So in short, if you have the structure of the economy that is different in each state, and the impact of federal level trade policy, in this example, is different on those states, then how can foreign policy be made, broadly speaking, to work better for the middle class across the entire country, and how can foreign policy professionals integrate what they're learning more about these different states into what they're doing?

Salman Ahmed: Well, so that's a great question. I think that your emphasis on the national interest is super important, because what these foreign policy professionals are all trying to do is to advance the national interest. So that begs the question, how are you defining them? And in the past, people would just say, "Of course. I want foreign policies that advance the nation's economic interest." But in an age when economic growth slows, income inequality is high, wealth can be concentrated more in certain industries or in certain geographic locations around the country, it begs the question, then, what is your definition of a national economic interest?

And what we've tried to do, or what we're doing in our final report, is taking what we learned in the three states, seeing how that matches up with national level economic and polling data, and then offering our take on, how should you be thinking about a national economic interest that keeps the middle class wellbeing at the forefront of the tension? And a lot of that comes back to paying more attention to the impact on jobs, and on the impact on places. And in the past, there's been an aversion to look at the impact on regional economics or places, and trying to look at the country as a whole. But it was based on assumptions about mobility, that people just simply pick up and move to where things are working better, or it's based on assumptions about economic adjustment assistance working.

And I guess what we're saying is that, "You can't keep relying on those assumptions when they don't hold." And people don't want to pick up and uproot their families from communities all the time. Economic adjustment assistance programs don't always work. And so it means investing a lot more resources and analyzing the varied impacts economically on different places around the country and on different industries as you develop policies going forward. It's a more exhaustive, intensive process. So we think it's kind of necessary.

And it happens in part when you're also keeping closely engaged with Congress, because that's exactly what members of Congress are doing, is representing the interests more locally of these policies that are being debated. And so how do you structure that conversation in a better way? Now, you're never going to get around the fact that there will be winners and losers. You want to maximize the number of winners, you want to minimize the number of losers, but you also really want to be honest about it. And I think we're finding in this debate, is when everyone on any side of the foreign policy debate says, "Go forward. Here's what we need to do," they accentuate who's going to benefit from what they're proposing.

They're not always transparent about who's going to lose out. And the first step is to be more transparent, and then involve the communities concerned much earlier on in the solution of how to deal with it. Because what we've found talking to people is that a lot of it is where there was anxiety, where there was frustration, it wasn't necessarily just about trade policy or foreign policy or some specific policy there that may have affected them adversely. It's just this more general sense of a loss of control over their economic future. And they want to have more of a say, and they didn't want to be at the mercy of others, whether they're people in Washington or overseas who are taking decisions that affect their economic future.

And so be transparent about the communities that are going to be adversely affected. Figure out a way to involve them in designing the solution, and do it much earlier on so it's not after the fact when the crisis has hit and they've been devastated, but do it much before so they can be involved in making upfront investment, upstream investments to be prepared for when that moment might come.

Jill O'Donnell: Do you think there's a workable way to do that? I know for example, if you take trade policy, the U.S. Trade Representative's office has several statutory advisory committees that are designed to get stakeholder input on trade negotiations from the agriculture community, the private sector at large, from state and local government. So there are those structures in place, but I doubt your average citizen really knows much about them, or has any way of providing any input through those channels. And so do you see a workable way to provide a channel for anyone who's feeling like they want to, or feeling anxious about this, to provide some input? There are requests for public comment, of course, when USTR is determining what its trade negotiating objectives are going to be when it's considering undertaking a negotiation with a new country or set of countries, but how do you make that process more readily available to people?

Salman Ahmed: So on trade, I wonder if the most important moment has not passed already. And I say that because... I mean obviously we had two waves of shocks related to trade policy. One was with respect to NAFTA, and the other is with China. And I think the data quite clearly shows that China was the much, much bigger shock in the manufacturing industry than NAFTA, whose effects were quite beneficial for parts of the economy, and less severe for others, relative to the China shock.

So are we in for another China shock in future? I don't know. There are some who say that we're more likely in for another shock in manufacturing that's more technology related than trade displacement related, because the trade related displacement, the worst effects of it have already happened. Now, is that true or not? Is there another wave coming? I'm not sure. So I think we all need to put a lot more, certainly a lot of attention on what could be the next trade related shock that would come that would adversely impact the middle class. So that's the first step, is anticipating where it might come from, and then engaging the communities concerned.

I think if you want to be out front, we need to learn the lessons of what happens on trade adjustment with respect to the debate that's now ongoing about major changes in defense spending or on changes in energy due to the debate on climate change. And so we could learn the lessons from trade and say, "All right, well, that's what did and did not work on trade adjustment, so what about economic adjustment assistance in those realms?" That at least is what we're focusing on right now in our report, to try to see what the parallels are and where they do or do not apply. We're trying to think about in our final report also whether we're better off as a nation, rather than having these siloed approaches to economic adjustment assistance, is to have a wider approach to it.

So think about trade related displacements, energy related displacements, defense spending related adjustments, all those are practically the same thing. Because your solution sometimes might mean that, it may not make sense, for example, for a coal production facility to host a wind farm or solar farm. So that one-on-one transition doesn't quite work, but there may be other things in other realms that you could start mixing and matching a bit more that make sense in the individual communities concerned based on what their comparative advantages are in the local economies.

But honestly, it's going to take more federal investment supporting the efforts of states and local communities. And so one has to be honest about that. If you're going to invest in economic adjustment assistance and diversification, that means investing in workforce development, and it means investing in infrastructure and broadband. And it means making those investments early so that when the community loses the factory or it loses the defense base, it has already created the basis on which it can invite and attract alternative forms of employment. And the problem is, when you do that after the fact, it's too late.

Jill O'Donnell: Yeah, so it seems you're, and you've alluded to this earlier in our conversation, driving at a closer connection between foreign and domestic policy, where the appropriate domestic policies might be needed to kind of address the consequences of certain foreign policies.

Salman Ahmed: Right.

Jill O'Donnell: So you've mentioned your fourth report, which is going to draw lessons learned from these three states, Nebraska, Ohio, Colorado, and extract some analysis and recommendations. Can you just tell us a little bit more about what to expect from that report, and when we might be able to read it?

Salman Ahmed: Sure. We're looking to publish it in the fall. It's meant to try to be helpful to whoever wins the election in November and is in office in January. We're trying to focus first on explaining why does the middle class wellbeing matter to U.S. foreign policy, based on what we've learned through these case studies, but also reading more generally. Then we're trying to be pretty candid in saying, "All right. There was an approach over the last few decades. There are ways in which it really did help the middle class, as we learned in the three states, but there are areas where people lost out. Similarly, the kind of things that are being proposed in America first or by the progressives on the left. Here are the areas where people would benefit, and here are the areas where they wouldn't."

What we're trying to show is that none of these things on their own is a perfect solution, and that there is a mix and match that's probably needed if you want to yield a better outcome at large for middle class. And that's what we're looking to put forward and offer. We're also hoping that by doing something along those lines, that you might increase the chance of beginning to build back more of a broad-based bipartisan consensus on U.S. foreign policy. In the past, people around the world could count on certain continuity, even when one administration left and the next one came in, and that's no longer the case.

Now, you don't know whether the foreign policy pursued by one administration will survive the transition to the next, even within the same party. And that uncertainty leads our allies to hedge their bets. It leads adversaries to contemplate exploiting opportunities. It can make the world more generally, therefore, a more dangerous place. And so we believe that if we can offer a prescription that really grounds U.S. foreign policy in better delivering for the middle class here at home, you'll have a broader base of support, and therefore you can lead in the world from a position of greater strength, but on top of it, you have more unity behind it, and more predictability and consistency behind it, and therefore that allows any administration, Republican or Democrat, to better advance America's interests on the global stage.

Jill O'Donnell: Great. Well, we'll look forward to reading that for sure. As we wrap up here, I do want to ask you for some bonus material here for our listeners. So we spent hours and hours and hours listening to Nebraskans across the state, and not everything from that many conversations can make it into a final concise report. So I wanted to ask you, anything striking that you remember hearing during all those conversations that was interesting to you, but didn't make it into the final cut?

Salman Ahmed: As someone who's spent a lot of time in diplomacy, I pay attention not only to what people say, but what they don't say. And to me, then often their silence on certain issues can speak volumes. And so I found it interesting that the question of U.S. alliances really didn't come up that much in response to open-ended questions. Why is that? Because we were asking people what affects them economically. And they may think about alliances, even if they really deeply value them, from the perspective of American values, of American friendships, not in terms of, what does this mean for me economically?

But there were a lot of issues that fall into that category of where people did not have a view on the issues from an economic perspective, but if we, in followup questions, changed it a little bit and just asked them about it, then all of a sudden they did have things to say. And so it makes me wonder, it's something that we're just wrestling with in the final report, is also to determine how much does economic interest matter to people on their views about foreign policy? And the sense we have, and it didn't make it into the final report, because what I'm about to say is... It didn't make it into the Nebraska report because it's conjecture, this is my opinion now. It's not what our report was about.

But it's going to change moment to moment on how people answer this question. So take COVID-19. We did these interviews before the outbreak, and at the time, if we'd raised global health security issues, people would have more likely said from a public health point of view, from protecting their kids, "Yeah, prevent that disease overseas from coming here at home." They may not have seen the connection to what it could mean economically. I think of alliances in the same ballgame. If we didn't have alliances that increases the risk of, let's say, China blocking access to global shipping in the South China Sea, eventually you're going to have an economic impact at home.

And that is not something that's going to be clear and obvious to everybody. There were a few people we interviewed who saw the big picture in Nebraska, and they could spell it out really quite clearly, including on examples like this. But generally speaking, that's not how people saw it. So we didn't tease that out as much in the Nebraska report because, as I said, that would have been conjecture, and it's us trying to interpret what people didn't say. But it's something that struck me, and it's not in our Nebraska report, in our collective report, but something we look to take up a little bit more in our final report.

Jill O'Donnell: Right. And I recall the times, I remember very directly asking people, "Do you think foreign or domestic policy has a greater impact in your economic wellbeing?" And pretty much everyone said domestic, and one person said something interesting about how answering that question felt like a really tangled web to her, and she could sense that foreign policy probably mattered more than most people realized to their own economic bottom line. So that very much falls in line I think with your analysis of what wasn't said. So that's an interesting take on that. So in conclusion, Salman, this is a trade podcast, and I always ask everyone on the show what they've read lately about trade, book, article, report, that's been particularly striking.

Salman Ahmed: Yeah. So I have been trying to understand, how did we arrive at this moment where you have this backlash, at least in some parts of the society, towards our approach to trade of the past decade. And so there are some things that I've read that help explain that a bit. There was an article by Michael Mastanduno written in 2009, which I didn't read at the time, but I've read more recently. He's a professor at Dartmouth. It's called System Maker and Privilege Taker. It's about 20 pages, 30 pages. And the argument he makes is essentially that during the Cold War, we spent an enormous amount on the security of our allies, and they were 100% dependent on us for security.

And that in turn gave us leverage, which we used to shape the international economic trading system in a way that was very favorable to our economic interests and to American business. And as security dependence on us diminished after the Cold War ended, our leverage diminished too. There was Ted Alden's book on Failure to Adjust, and I know you've had Ted on the show, and he's terrific. And I think his book really helped me to understand where there were deficiencies in our approach to trade adjustment assistance, and not seeing the disruptions that were coming down the pike.

And then there was a book by Jefferson Cowie on... he's a professor at Vanderbilt, called The Great Exception. And what he writes about is, why is it that we have this middle class heyday in the 1950s and 60s, and why World War II and The New Deal, and the lack of foreign competition, that other factors all made that possible, but how it was really a pretty exceptional moment, and that it's not easily replicable. And so when you add these things together, and what I've read in these books, what it's led me to believe is that the moment that we arrived at by 2016 is not something that was the product of any one candidate, or one moment in time, or one trade deal, but it's something that's been building for decades.

And so at some point or another, we were going to have to contend with it. There are structural factors and other issues that were at play, that were beginning to build in the 1970s and 80s, and then they accelerated when the Cold War ended. So that certainly, I think, shaped my thinking a bit on where trade fits in. I don't think any of it, though, leads me to believe that our approach for trade has been bad for Americans or Nebraskans. To the contrary, my view is that balanced, those books, and everything I've read, and what I've seen in the States, is that there are still so many Americans who benefit deeply from international trade.

If anything, we need to be exploiting more opportunities to export more, to help more small businesses, take advantage of trade deals. But having said all of that, you have to look at the other side of the ledger, and who's going to lose out, and how are you going to contend with it. And we've had decades where probably have missed opportunities to do better, but we can learn the lessons and do better going forward.

Jill O'Donnell: Great. And Carnegie's fourth report is part of that, so we'll look forward to that. Salman, thank you so much for this really interesting conversation today. We really appreciate it.

Salman Ahmed: Thank you so much. And let me please take this opportunity to thank the 130 Nebraskans that were kind enough and generous with their time, and that they shared their insight. And it's just, it was a pleasure being able to get to know your state better. It's an awesome state.

Jill O'Donnell: Thank you. We look forward to welcoming you back one day when the situation allows. That's it for this episode of Trade Matters. Thanks for listening, and a big thank you to Bryce Doeschot and Jacy Thoman for helping produce this podcast. Please subscribe to Trade Matters on iTunes, Spotify, Stitcher, or wherever you get your podcasts. If you have ideas or topics you would like to hear about on Trade Matters, we'd love to hear from you. Send us an email at yeutterinstitute@unl.edu, or follow us on Twitter, @YeutterUNL. The opinions expressed on Trade Matters are solely those of the guests or host, and not the Yeutter Institute or the University of Nebraska-Lincoln.