This Day in Labor History: November 11, 1978

On November 11, 1978, President Jimmy Carter vetoed HR 9937, which prohibited US trade negotiators from reducing textile tariffs. This typically terrible decision by the Carter administration on issues of trade and labor opened up space for Reagan to win textile towns, part of the larger fleeing of working class Americans from the Democratic Party in the late 70s and early 80s.

By the 1970s, the enormous American economic expansion that dominated the nation after World War II finally came to an end. There were many reasons for this. There was no longer a need to rebuild western Europe and Japan, who were now economic competitors as well as political allies. There were larger issues around the impact of the Vietnam War. But also, as the historian Judith Stein explored in great detail, American policymakers routinely promoted the needs of American allies over American workers. In other words, for geopolitical reasons it promoted imports that directly put Americans out of work.

Jimmy Carter was no friend of labor. He had risen to power in Georgia without any meaningful help from unions and he did not see their needs as particularly important when he became president. He owed them little and he was very much not the kind of politician who sought the need to expand his ally base. A very self-dependent politician who fundamentally believed in himself, he took the advice of few traditional members of the Democratic Party. Rather, he surrounded himself with the new prophets of neoliberalism, which he himself believed in far more than he did in protecting American workers’ jobs. Carter then routinely either watered down or vetoed bills that would support the American working class, most notably the Humphrey-Hawkins Act that would have provided a real full employment bill for the first time. That passed, but only in a shell form, with more in it to reduce inflation than create jobs. He blew the last chance to enact laws that would reinforce the New Deal state before the far right made that impossible and his political strategies to save himself by not reinforcing the New Deal state ended up doing nothing to help him politically. Really, it was a total disaster.

The textile industry is a great way to explore these questions. The U.S. Industrial Revolution was built on the textile industry, first in New England and New York and then moving to the South in the early twentieth century. Unions had always struggled to organize in the South, but by the 1970s were having real success in the textile towns. Both unions and workers had a strong interest in keeping textile factories open in states such as Alabama, Tennessee, and South Carolina. But textile factories are a low-capital enterprise and had already started fleeing to Mexico after the creation of the Border Industrialization Project in 1965. Moreover, other allied nations in Asia and Latin America were investing in their own textile industries to build up their economies. By 1979, China was already the 6th largest textile importer to the U.S. and the American government wanted to build this to increase the divide between the Chinese and the Soviets. At the same time, American textile towns, both in the South and those left in New England, were just getting decimated and the government showed almost complete indifference to the plight of people cast aside due to deindustrialization.

With nearly the entire southern bloc of politicians on board, Congress began to act. This helped bring about the Multifibre Agreement in 1974 that limited how many textiles any one nation could import to the U.S. That would exist until 2000, when it was not renewed by an equally indifferent president to American workers, Bill Clinton. But the MFA was a limited tool and it did not really stop imports, just spread them around. Still, a lot of textiles were produced in the U.S. So in September 1978, Senator Ernest Hollings of South Carolina, along with House allies, attached a rider to a bill that prohibited trade negotiators from reducing textile tariffs. Now, the southern politicians thought Carter would be on board since he was one of them. But Carter was not. Not at all. There was a heavy push on many fronts for this bill. That included from Tip O’Neill, for Massachusetts still had some textiles after all.

But Carter’s neoliberal advisors despised bills like this and he was fully in their grasp. Stuart Eizenstat told Carter that signing the bill would create the precedent that other industries would want this kind of protectionist legislation. Office of Management and Budget director James McIntyre said the same thing and also that it would contribute to inflation, which is all Carter really cared about at this time.

So Carter vetoed the bill on November 11. He stated in the veto that he would help the textile industry in other ways. The two big textile unions issued statements with their disappointment but with hope that Carter would be as good as his word. He would not.

Moreover, this veto just devastated Carter with southern voters. The Democrats were already losing popularity in the South due to their support of at least some level of some civil rights. But unions were the one thing that could cut against the racial identity that has dominated the South for most of its history. There were a lot of working class white southern voters in these towns who were still voting for Democrats up until this time. But if Carter was going to offer them nothing except unemployment then why? Reagan wasn’t any better, but of course Ron could channel their resentment in other ways. Moreover, historians have been able to move these statements beyond conjecture to find a lot of letters to politicians such as Hollings saying this very thing. Carter’s promises were total lies and that was obvious by 1980. The textile towns were left to rot while Carter administration officials such as Council of Economic Advisors Charles Schultze were working to grant Most Favored Nation status to China.

It was not until the Biden administration that the Democratic Party began to shift back toward actively helping American workers and American unions. As for Carter, the rise of political tribalism and his status as a very old man with a great post-presidency has created a lot of defensiveness among liberals about his presidency. But if there’s one thing that historians of modern America basically all agree on is that Carter was a disaster. If you are questioning this, I’d start with Rick Perlstein’s Reaganland and go from there. Carter combined a true belief in himself with absolutely disastrous political instincts. He did a ton of kill the political brand of Democrats in the white working class and the party has not recovered to the present.

I borrowed from Timothy Minchin, Empty Mills: The Fight against Imports and the Decline of the U.S. Textile Industry to write this post. This is another book that will give you an impression of Carter as basically terrible.

This is the 503rd post in this series. Previous posts are archived here.