BASE SCAM #1: If I were running for office, I'd take a videographer around with me to examine the non-existent infrastructure improvements in my district where Trump scammed The Base. Investment in community infrastructure would have created far more jobs than what Trump was actually doing: Pouring money into weekend golfing trips, charging the government for administration staff hotel R&B and golf buggie rentals at his
properties, stiffing local communities across the country for his Campaign Rally security costs, and pouring money into the weapons industry.
If you're listening, GSA, how much have we spent maintaining Trump in office?
Better still: Publish the Trump Maintenance Costs vs the Obama Maintenance Costs.
20
Could Trump have been more successful at boosting manufacturing? Well, things might look very different if he had actually followed through on his campaign promises to make big investments in infrastructure, which would have created a lot of sales for U.S. manufacturing.
BINGO!
11
I think Dr. Krugman needs to get out more.
He tell us, "And farmers, who export a large fraction of what they grow...".
Not around here! Some of the cattle in these parts may get finished in Texas and Kansas. But most farm products here don't leave the county.
I think Dr. Krugman gets into trouble when he tries to draw political and social conclusions from his economic data. Sure, a large fraction or our country's FARM PRODUCTS end up overseas, in terms of volume. But only a small fraction of our FARMERS produce goods that are exported overseas. The relatively few, industrial "farmers" in the country may have excessive political influence here (looking at the Farm Bill alone). But they get no more votes than any other farmer in our society and shouldn't be catered to any more than they already are. Everyone knows, bad news is better than no news (just ask Bernie or Tulsi.) And good or bad, we only hear from our corporate news about corporate "farmers". The lives of real farmers, who glean nothing from any Farm Bill, are rarely in the news here or in Dr. Krugman's calculations.
5
I’m commonly bothered by how to reach Red state voters with the complex reality that Trumpism has done nothing constructive for workers.
The evidentiary argument that pertains to businesses and farmers is actually reaching a very small number of voters (businesses are run by few persons relative to workers involved; farmers are a small number of voters in a big sector of the economy).
Trump claims credit for a healthy economy (such as it is), which journalists seem to grant to him, just because, apparently, the status of the ecomony is a presidential privilege (or yoke). But the reality that Trumpism is merely riding the wake of Obama years is very complicated for many workers to understand.
Red state voters need to understand how Trump’s “voodoo” is done: how cynical marketing is made into suckering of the voter as perpetual public relations; how sleight-of-hand about what’s relevant works to insult voter intelligence; how dramatic focus on disputable detail conceals larger context (and renders “elitist” complexity irrelevant); how swampy showmanship does its pretense of credible authority. Red state voters need education in the mechanics of swampy rhetoric.
6
I think business leaders have sized up Trump as someone who invariably comes out the wrong side of the zero-sum gaming he claims to dominate. He is ignorant, unprepared, unhinged, inherently corrupt, totally inconsistent, and lies through his teeth. You’d have to be nuts to invest your company’s future with someone like that in a position of economic power.
99
You needn’t start off the article with a fake news about ghastly unwarranted and bully “dominance” of men, that lie has been circulating for most of my lifetime. Take the hair shirt off Paul, it does not befit you.
Trump's a failure, a Loser, across the board: as president, as an American, as a human being. Nothing is more blindingly obvious to most Americans. One day the tenuous grip Republik-ans have on power in DC will slip. Some righteous payback will be in order. Every day, that glorious day gets closer.
6
Many economists have cheered as manufacturing left our shores. Most economists assert that the balance of trade doesn't matter. But America has suffered decades of large trade imbalances. They do matter.
Since 1970, manufacturing has declined from almost 30% of our economy to about 10%. This loss of manufacturing has been devastating to many parts of the country.
Our idiot president gets credit for being one of the first politicians to understand how the loss of manufacturing has destroyed communities. It's manufacturing that made America an unbeatable military power during the 20th Century.
Many countries, such as China, Japan, South Korea and Germany recognize the importance of protecting their manufacturing. American leaders need to do the same. But it will take years to build back a strong manufacturing economy. The invisible hand of the market will not do it. Federal and state governments need to promote policies that recognize the value of manufacturing and encourage it to stay within our shores.
8
Switch to metric system. USA and Myanmar only use this
idiotic system. Not many people can figure out what a three
quarter horse motor with a 2 and 5 /16th inch pulley look like.---Must be big--horses are big.
3
In the end, T will do all he can for Putin, thus the new slogan: "Make Russia Great Again."
5
There his another angle to this debate.What do workers in the manufacturing sector really want for their future? I have a manufacturing company which makes giftware for retail stores....45 employees....all in America.Nearly 1/3 of them are of Asian-American heritage.Their parents and grandparents came to the US in the 80's after Vietnam.They show an interesting pattern.They work hard ...every bit of overtime they can get...for two years.Then they start taking courses at the local junior college and switch to working part time for us(we've created a night shift for them).Finally, after completing 4 years of college they almost invariably go into the healthcare field.One has even gotten her MD.This pattern has been followed by nearly every one of the Asian-Americans we have hired over the last 20 years.The Hispanics we have hired are on the same track although they have more variability depending on family size.Those of European ancestry,like myself,show no such pattern.They simply ,with a couple of exceptions, are not interested in college.Summing up...many of our best employees who have started in manufacturing are moving on to careers.I think this might actually be a good thing.
Most likely ,in the future, we'll have to consider shorter workweeks which will still give workers a livable wage.Face it..we have entered into a period of economic disruption comparable to the industrial revolution. Of course the nature of work is going to change.
4
It's a little insulting to reduce our farm chores to 'manly work for manly men'. There are very few academic males that could handle the daily physical demands that my wife performs on our farm (full-time; I have to also work another physical job.) We have friends in academia who offer to come to the farm for a "working vacation"! Not only would their bodies revolt, but they'd have to be here more than a month before they were no longer liabilities - and NOT for physical reasons. Farm work requires way more knowledge and judgement, specific to each farm and its livestock, than academics like Dr. Krugman seem to appreciate.
8
'Manufacturing job are not great again', so nicely exposed by Paul Krugman. I owe a 'thank you' to him. As a matter of fact, his article tickled in my poise to add a few words merely as catalysis. Perhaps many people are not aware a good many factory products sell bearing the ticker, 'made-in- America', albeit in reality it is not so and it can't be so because of the stiff price-competition it has to face with the similar products of other countries! Say for example, Ford vehicle is very much an American product by all means, but its assembling facility was set up in Mexico to obtain cheap labor. In similar case say, 'B' Freezer Co. has to import some petty but important parts from other country at lower cost. When the vehicle/Freezer are fully assembled they obviously become price-competitive. This process holds good to any industrial products all over the world. However, in Donald Trump's Presidency import restriction, closer of off-shore facilities triggered loss of revenue, lay off and capacity-cut to varied industrial companies. Punitive tariff against steel and aluminium import from China played significant role to lower our industrial output. To consider revival of fossil fuel, coal it is not only environment polluting but also not cost- competitive! It was President Trump's merely a campaign agenda! S. A. Samad USA.
1
His supporters will blame it on “liberal democrats”, or Pelosi, or “socialists”, or the boogeyman. Anyone else except Trump and their wealthy Republican congressmen licking the boots of their wealthier donors. It doesn’t seem useful to even try pointing out what’s right in front of their faces. You can’t get people to believe what they don’t want to know.
8
https://www.nytimes.com/2017/10/14/us/union-jobs-mexico-rexnord.html
To understand how Paul Krugman helped to bring this about read
A Primer : Why Economists Favor a Free Trade Agreement
https://www.nytimes.com/1993/09/17/us/a-primer-why-economists-favor-free-trade-agreement.html
In which accused opponents , that included Industrial Unions that correctly forecast the disappearance of manufacturing of telling “Whopping Lies”
To understand what would manufacturing back study agricultural US trade policy, It is protected by tariffs
US corners in Iowa are in business because an steep import tariff on bio ethanol from Brazil protects the US corn ethanol from corn from cheaper imports from Brazil
Latest tariff protecting US farmers : An 19% import tax on Mexican Tomatoes leveled by the Trump administration , on request of Florida tomoato growers on imports of good made with cheaper labour
On balance, US farmer overwhelmingly benefit from tariffs. Picking selected examples - as Krugman does here - is a gross distortion of reality
1
Trump does almost nothing. He relies, as Paul noted, on the magic of tax cuts for the rich. But also on the magic of cutting regulations and the so-called magic of his big mouth. It's all hot air. Not once have we seen this President dig in on a policy really learn about it and speak eloquently about it. The same goes for manufacturing jobs. He had no plan; he has no plan and he never will have a plan. He knows he can go out to one of his rallies tell a bunch of lies and his base will eat it up. And we just have to hope that his base is shrinking, just a little bit.
5
If you think its bad now, wait till he gets re-elected and knows he never has to run for office again, that's when the red states will see the real Trump. You know all those rallies he loves to have, surrounded by the adoring people in MAGA hats, all that ends. And all the promises to farmers and factory workers...all out the window. A trump who never has to run for office again is Americas true nightmare. Free of any obligations to even pretend to care about the working poor and middle class in places like Iowa and Ohio, he will spend his time either golfing or doing quid pro quo deals with the rich and powerful. The white House will have to install a turnstyle for all the bag men arriving to bow to Trump. All pretensions will be gone. And if the worst possible comes true, if Trump wins back the House and keeps the senate, then ObamaCare is history and the Supreme Court will belong to the republicans for the next 30 years. So vote democrat one year from now like your life depends on it, and the life of your country depends on it.
4
To understand why manufacturing in the US will never be great again , read
Becoming a Steelworker liberated her. Then her Job moved to Mexico
https://www.nytimes.com/2017/10/14/us/union-jobs-mexico-rexnord.html
To understand how Paul Krugman helped to bring this about read
A Primer : Why Economists Favor a Free Trade Agreement
https://www.nytimes.com/1993/09/17/us/a-primer-why-economists-favor-free-trade-agreement.html
In which accused opponents , that included Industrial Unions that correctly forecast the disappearance of manufacturing of telling “Whopping Lies”
To understand what would manufacturing back study agricultural US trade policy, It is protected by tariffs
US corners in Iowa are in business because an steep import tariff on bio ethanol from Brazil protects the US corn ethanol from corn from cheaper imports from Brazil
Latest tariff protecting US farmers : An 19% import tax on Mexican Tomatoes leveled by the Trump administration , on request of Florida tomoato growers on imports of good made with cheaper labour
On balance, US farmer overwhelmingly benefit from tariffs. Picking selected examples - as Krugman does here - is a gross distortion of reality
To understand why manufacturing in the US will never be great again , read
Becoming a Steelworker liberated her. Then her Job moved to Mexico
https://www.nytimes.com/2017/10/14/us/union-jobs-mexico-rexnord.html
To understand how Paul Krugman helped to bring this about read
A Primer : Why Economists Favor a Free Trade Agreement
https://www.nytimes.com/1993/09/17/us/a-primer-why-economists-favor-free-trade-agreement.html
In which accused opponents , that included Industrial Unions that correctly forecast the disappearance of manufacturing of telling “Whopping Lies”
To understand what would manufacturing back study agricultural US trade policy, It is protected by tariffs
US corners in Iowa are in business because an steep import tariff on bio ethanol from Brazil protects the US corn ethanol from corn from cheaper imports from Brazil
Latest tariff protecting US farmers : An 19% import tax on Mexican Tomatoes leveled by the Trump administration , on request of Florida tomoato growers on imports of good made with cheaper labour
On balance, US farmer overwhelmingly benefit from tariffs. Picking selected examples - as Krugman does here - is a gross distortion of reality
I feel like a nitpicker pointing this out, but I constantly see statements like this being written by journalists...
“trump unexpectedly won by tiny margins in 2016, putting him over the top.”... or “ there was a 2015-16 dip in manufacturing... Still, it probably contributed to Trump’s win.”
His “win” was decided by the electoral college, not voters... he lost the popular vote to an unpopular opponent.
The citizens chose one way, and that choice was negated by a group of individuals who decided otherwise.
6
In other news, today’s jobs report was strong even with GM strikers omitted, and the job numbers from the prior two months were revised substantially upward. Real wage growth continues at a healthy clip with people at the lowest rungs and ethnic minorities experiencing faster than average growth
There is indeed a manufacturing slowdown most likely triggered by Trump’s trade wars. But as to Krugman’s broader thesis that there have not been real or sustainable economic gains from tax and regulatory policy, he’s just wrong. The “sugar high” thesis has itself turned out to be sugar water
I imagine Krugman cringed when he saw today’s strong report - he has taken a lot of “Ls” over the past 3 yrs and it’s inconvenient for him that things remain pretty good despite Trump’s stupid trade policy
When leaders can change every 4 years, and congress is just two bickering parties (only two viewpoints allowed, with nothing moderate where disagreements exist), it's clear that the less federal government the better. They do not love you.
Be the adult. Push for liberty and equal protection, not more government control that just is a mess when the parties swap out and both parties attempt to buy votes with promises of tax cuts or handouts.
I'm sure this has probably been brought up before but why does Prof Krugman insist on using the term "voodoo economics" so often? I think it was in his previous column as well. He uses it to describe economic policy he thinks is terrible. Voodoo or Vodun, happens to be a religion practiced widely in West Africa and Haiti. It makes no sense that a highly educated person would need to resort to such a trite phrase.
You need to go back to 1980 and talk to GHW Bush.
Why is it that we never hear politicians talk about the biggest single cause behind the decline of the manufacturing sector -- automation. Renegotiate all the trade deals you like, bring back all those factories -- whatever. It won't matter. Robots will be the ones doing the work on the factory floor -- not human beings. In ten years they'll be replacing truck drivers and pizza delivery people. The entire wealth-distribution mechanism that we have depended on for generations -- the exchange of labor for liquid wealth -- is breaking down because those with the wealth don't require the labor any longer.
This is going to take a radical reworking of the economy if the bulk of the American working class is not to descend into absolute poverty. And yet we hear nothing about it. I suspect the reason is that nobody has any clue whatsoever on how to avoid a social and economic catastrophe. I hope I'm wrong. But I think I'm right.
1
Professor Krugman's article talks a lot about how Trump's policies are not really helping farmers, manufacturers, and miners, which is true. But except for suggesting investing in infrastructure, Professor Krugman also does not offer any practical solutions to the mitigate the economic plight facing these industries.
2
Four guys sitting in a tavern in a small town in central Michigan having a beer and ruminating about having lost their manufacturing jobs, not recently but as king as two years ago. To a man they are ardent trump supporters and have themselves convinced that trump will get them their old manufacturing jobs back. They remain steadfast in that conviction. Just how do you get through to these people that this will never happen and that they need to move on with their lives.
1
Mr. Krugman you are, of course, correct about the damage Trump has done to our economy by his naive and ill informed trade "policies." And also you are correct that his position on infrastructure spending is the one thing that could have helped this economy. What your article left unsaid, however, is that a large infrastructure bill would have never passed the republican congress and republican senate of Trumps first two years in office. And since he doesn't really feel very strongly about anything other than what will benefit him personally, I am sure Trump was quickly talked out of that one by his republican handlers the day he took office.
3
@Paul
This is where this country’s leadership is very lacking, other industrialized nations actually invest in their infrastructure, while at the same time providing outstanding K-12 education, college, access to healthcare, and while they aren’t without their problems, the citizens there break out their pitchforks when the government tries to take away access to those things. And they aren’t free either, the people pay up front, but the government pays less for healthcare per person than the US does. And ask any European if they would like an educational system, or a healthcare system, or a rickety infrastructure like we have here, when they got done laughing, they would say no.
Young people see what this country could be, but to make that happen, we need to get the old men that currently occupy congress and the White House, out, period. This country needs to move into a more progressive tax system, the more you make the more you pay, with a cap. The democrats need to sell their ideas for healthcare, not in terms of how much of tax increase, if you added a VAT tax for example, if democrats explained it in a way that makes sense. For example, the money that is taken out of their paycheck for their end of the premiums, would new be left in their paychecks, that’s on average a $1,500 a year that they are currently not seeing. Nothing is free, but a healthier, better educated population is the only thing that will MAGA, not old white men beholden to corporate money.
1
Almost everything I read in the media outlets I peruse - and I peruse many, on both sides of the ideological spectrum - seems to be written with the sound of wringing of hands and gnashing of teeth. How is it that we still wonder why this guy does what he does? Why do we still wonder and try to explain how we got to where we are now?
It was clear from before his election what would happen when the current occupant of the Oval Office moved in; we all sounded hopeful that he would "become more presidential" without having one bit of evidence to demonstrate that he could, indeed, change...and a lifetime of behavior validating just who and what he is.
We cannot change what he has done. We will have a very tough time changing the damage that has occurred as a result of his incompetent appointees and the tribalism of his ardent, low-information-needed followers. We really should stop that journey. The only change - and it is difficult and probably unlikely - would come from a complete, long-term change of administrations.
But even on the Democratic side, we continue to see the I-am-not-Trump line of thinking, with many (most?) of the candidates focusing on the wrong topics. It is not a winning solution and none of them seem to want to change.
We are in trouble, big.
Agreed: It makes no sense why manufacturing workers, farmers, and other economically struggling Trump supporters continue to favor and even cheer Trump when his economic policies have failed them. These people are in our extended family, and the more they are being harmed by Trump's wing-it economics, the more fervent they are about how great Trump is.
Makes no sense. But maybe that is the point. These are not rational, logical, common sense people in almost any aspect of their lives. They think with their emotions, as far as I can figure; some claim to be guided by their religion and prayer--preferring biblical quotes to secular information, evidence, and reason to defend their downward mobile status in Trump world.
But Trump is as illogical and idiosyncratic in his anti-rational, emotional approach to decisions as they are--eschewing facts, data, truth, and solid information before making some impetuous (often bad) decision without even imagining the options or consequences of those decisions ahead of time.
Basically, with certain people in our country, culture and psychology trump education and economics--even one's stagnant or declining economic situation.
Trump will always be their guy--a kindred spirit of sorts. But we just shouldn't let them take the rest of us and our country with them, so vote No Trump!
3
You're right, the only thing in short supply is modern infrastructure (and love, sweet love). Private companies really have no reason to spend on more production or retail facilities.
And the voters in those states will indeed probably swing just as they always do, because it affects them directly. Because they're expecting someone else's policies to directly benefit them. Not the racism, not the lies, not the utter corruption, but because they themselves will benefit. And when the next election happens and they still haven't improved their lot in life, they'll swing again, and we'll be subjected to several years more of swing voter stories. Between them and welfare queen farmers, the level of government dependence is just incredible.
2
Paul Krugman and others who write about these things here and elsewhere ought to put out some pieces about how temp jobs, age discrimination, the lack of affordable decent housing within a reasonable commute, and our society's absolute refusal to provide realistic help to people when it's needed, affect our economic futures.
How can we plan anything when our jobs can disappear tomorrow and we may not ever find another decent job? How can we keep the economy going when our politicians refuse to create or augment real job retraining programs, create a universal health care system that doesn't force us to do wallet biopsies, and when they continue to side with their largest donors rather than the people who elected them? What kind of country are we that we prefer to spend money locking people up, forcing them to choose between necessities like shelter, food, and medicine, while our politicians give out corporate welfare?
The entire country is not doing well. The economic elites are fine. But the CPA, the police officer, the teacher, the janitor, the IT helpdesk person, the people who keep the country's lights on, are not doing well at all. Please stop telling us that the economy and jobs are great when they aren't.
10
@hen3ry
You will find the truth in the blogs of well known economists and not the newspapers some write for.
1
Trump’s insistence on lowering interest rates has had a significant negative impact on our savings accumulated over years of hard work. If our savings play such an important role in sustaining our economy, why aren’t they worth more. Finally I wonder how much Trump benefits from lower interest rates.
4
Case in point on the failure of the tax cut: the ability to write off new investments immediately (expensing) should have prompted a surge in equipment investment, if tax breaks matter. But businesses apparently has not invested because of the substantial tax break, instead looking at market-driven rather than tax-driven incentives. Expensing has long been sought by conservative economists (along with capital gains breaks) and it appears to be part of the longstanding voodoo that Krugman so rightly describes.
1
In many respects, manufacturing in America has become like coal. Manufacturing's heyday, and ultimately its pay day, have been replaced by less expensive labor elsewhere along with the marriage and ready availability of high and low technology.
Reinforcing this has been the propensity for American companies to focus increasingly on short term results, along with the inclination to manage them for tax-impact rather than the contributions that real, substantive growth can make to the bottom line.
What Donald Trump has failed to do is connect the dots. He is a simple man who thinks like a checkers player rather than a chess player. He does not do strategy; he does tactics. Those tactics don't appear to result from what might be termed integrated thinking, but rather emanate from impulsive, ill-considered-if-at-all-considered decision making.
Trump's policies are designed to pander to this or that segment of the electorate for his own short-term political benefit, which ultimately will not prove to be for Americans' longer term economic benefit.
So it is with manufacturing as it is with coal. Trump doesn't really care. He is running a long con, and he's good at it, even as he is, arguably, even better at running the country into the ground over the long term, manufacturing be damned.
1
The interesting thing here in the South is his fans don't care about the truth. They no longer have the economy with 1.9% GDP. Wages & investment are anemic.
If you point out Roe will still end up in blue state white women getting abortions and those same judges will take away your children and grand kids employment rights (non-compete) and ability to sue for harm etc.
If you point out toughness is not his thing. Putin, N Korea, China and Iran have played him like a banjo. They shut down and go right back to Trump 2020.
And when you point out the only thing left is race & bigotry they deny they hate the "other" more than anything else.
That's it, his base is never ever going to leave him as long as he hates the "other".
1
@DP When things aren't going your way you can reform or start anew.
It wasn't a huge step for rural America from Reagan's "government is the problem" to Trump's iconoclasm.
And you can't say Trump isn't delivering on taking the system apart.
2
Here's another reason - manufacturers are moving assembly plants to places they used to export to in order to avoid the backlash tariffs. I was in China last month and saw both a brand new Tesla plant and a new Ford plant. The Chinese are happy to buy American brands that are made in China, and it is cheaper for the companies to make the poducts where they are being sold. So there's a number of job that have been exported because of the trade war...
2
So Trump is hurting the people he promised to help. The flaw in your logic, MR. Krugman, is that you are making a claim based on FACTS and EVIDENCE. This is the president who has commanded his voters to not believe what they see and hear. These are voters who get their news from partisan sources. How do you address the problem of post-truth politics. This is why, despite the evidence, Trump supporters still believe Obama was born in Africa and Trump had a bigger crowd size. How do you square this circle?
3
Those 40% Assistance Programs to farmers have been given mostly to Big Ag companies.
The Tax Reform bill did nothing for investment in business, because these Corporations were busy buying back stocks to boost the Stock Market, thereby increasing the value of the stock. I think this is what is called a "rigged system"
At this point the only thing that will give a true boost to the economy is serious Infrastructure programs. Promise not kept by Trump or the Republicans.
3
That "many of Trump’s economic promises were obvious nonsense" should be the focus of Democrats trying to swing Trump voters. Trump's idiocy, narcissism, and moral corruption are such easy targets but should not be the focus. Trump voters already know his personality traits. They accepted them long ago. Now they need clear and frequent reminders of how his policy promises were flat out lies and have negatively affected the average American's life.
IMHO, the phrase "make america great again" does not refer to particular industries or racism, but rather the idea that Americans should feel good about their country and not persist in the notion that America is now a "loser." That was a smart political strategy, because it means something different to each individual: for racists it can mean returning to all white; for coal miners it can mean reopening the mines; for auto workers it can mean bringing back production to the US.
Meanwhile, putting pressure on China and other trading partners is not unmitigated stupidity. While a trade deficit might not be evil per se, strategic considerations and overall economic health related to trade also matter. The problem is that a simple-minded trade war is insufficient to fix decades of wrong-headed industrial policy, and this administration has not come forward with any coherent industrial policy. Of course, neither has any other administration probably since the time of Eisenhower.
1
Good review of things. Problem is its too complicated, Trump types don't do complicated they do simple. Trump does simple and they love it. China is paying billions to us for the! Yes directly to the government! They don't connect the higher consumer prices, the welfare to farmers with his policy. They see the Fed (whatever that is) as the culprit. Deficit? not the tax cut its the liberals congress spending. Kurds? who cares we don't owe them anything and they are costing us money.
1
I generally don't agree with Krugman much but I agree wholeheartedly with his opposition to crony capitalism.
Krugman's condemnation of Trump for practicing crony capitalism is spot on. I think Trump is despicable for his actions. However, Krugman writes as though crony capitalism isn't practiced by every other politician. Corruption is a core behavior of all politicians regardless of party. The only difference between Trump and all other politicians is that Trump is less deceitful about it. He announces his desires to punish or reward specific companies. All the other politicians go to great effort to hide that they are doing the same thing, and when caught they deny their guilt. Trump waives his guilt like a flag.
This is absolutely not a defense of Trump....he should be impeached for his corrupt behavior, then prosecuted criminally if statutory violation exists......so should all the other politicians.
The big problem with Trump's trade war is that his ideas are simplistic and punitive. He and his "experts" have no idea how weirdly dysfunctional our trade laws are.
An example: I sell Italian and German produced steel products in the USA. There are anti dumping duties on the product originating in Asian Nations like China and Taiwan. My only real competition is from one American manufacturer. That American manufacturer must rely on foreign melted steel to compete on the market. Trump's punitive tariffs against China raised the American producer's cost +25%. So, Dear Leader has effectively put my one American competitor out of business. Genius!
1
The essence of the Mr. Krugman's opinion, is the author of "the Art of the Deal," the greatest business man of our generation doesn't know what he is doing.
Needless to say I'm shocked the king has no cloths, truly a frightening image! Right Stormy?
But that is not the scary part, it is, the evil men do lives long after them.
Totalitarianism on the rise, with a counter serge of people's movements. Upon which side do we support. Simply having to ask the question is absurd. But the answer is utterly horrifying. Putin, Muhammad Bin Salman, Erdogan, Kim!
Our "strong economy" is a potemkin village.
Our education system is failing to prepare people for the jobs of the future. The base wants their "manly" industrial jobs, they are not coming back.
The president wants a self contained economy as if Just in Time Manufacturing and Global Supply Chains and Comparative Advantages between nations never existed.
Ignoring the Green Economy, the future of our energy
Ignoring climate change as if its not coming.
Using every stimulus, (except good governance), to juice the economy to get him over Nov 3, 2020, so when the recession comes there will be no tools in the tool box.
Most of this will metastasize in the next administration.
So for the third time in thirty years a Democrat will have to pick up after a republican cluster.. And Republicans will criticize him/her for not doing it fast enough!
3
What? An article on manufacturing and nothing about USMCA (aka NAFTA 2.0)? There are provisions in there that 'attempt' to protect manufacturing jobs. Does it go far enough? Will labor support it?* Will it be viewed as a Trump 'win'? Will Democrats attempt to add provisions - (make it theirs) before passing it in the House? How this all plays out next year in places like Michigan & Ohio could have 'yuge' effect on the election.
* Asked what provisions he wanted included in the USMCA, (AFL-CIO President) Richard Trumka said this Monday he was looking for the same assurances the AFL-CIO has been asking for 10 years. “There’s three levels. The first level is: Can Mexico enforce their own laws? If they can’t, deal off. Second level is, you gotta stop the panel blocking." Which allows member countries to block the formation of dispute settlement panels. "The third one is the Brown-Wyden mechanism that allows workers to be able to stop products that are produced under violation from coming into the country.”
I hope I’m wrong, but I worry that if/when the manly white men realize that the jobs have not returned, Trump will just blame the Democrats for some made up and fallacious reason, and the unemployed manly white men will nod in agreement and vote for him again.
I’m a manufacturer, Krugman is an activist. Not only do we manufacture, but we also import many jobs from China, and have been for years. Lead times have shrunk drastically, many jobs are coming back
“Dominance of white people”?
I don’t know any Trump supporters who believe that.
I’m sorry to tell you this guys but China especially, and Europe in different ways are absolutely overtaking America at the moment.
China has actually been consistently investing in education, infrastructure, technology, research, and science. It is now ahead of the US and Europe in quantum computing, hypersonic tech, even stuff like mobile networks now. It also hasn’t invaded 30 countries since WW2. No matter what you think you know about how China works, it has lifted millions out of poverty and created the largest, increasingly well educated middle class in the world.
Whilst the US, UK and Australia argue petty politics, fake left versus fascist right, science versus not science — I mean what? Just come on, what a ridiculous thing to waste your energy on in 2019 — no matter what you opine about ‘Communism’ (FYI China self-describes it’s system as ‘Socialism with Chinese Characteristics’, but OK boomer), or European ‘socialism’ as you think it, the rest of the world can see the wilful ignorance in a lot of these comments — at delusional levels — and America will continue to slide in all our eyes, whilst Europe, Asia and China just get on with actually trying to make people’s lives better. Pull your head in America.
1
the US looks more and more like Argentina..... no wonder businesses are not investing....
“He’s a promoter of crony capitalism across the board, constantly threatening to punish businesses he sees as political enemies while rewarding businesses that do him political or personal favors.”
No clearer example of that can be found than the recent recanting by two of the (American) Big Three automakers due to pressure from Trump and one of his minions, Andrew Olmem, for revenge against the biggest Blue State. So if you would rather have dirtier air, by all means buy a Chevy or Dodge.
See also https://www.nytimes.com/interactive/2019/10/24/climate/air-pollution-increase.html
This story notes that some of the increase in the western USA — including my state — is due to years of increasing wildfires. But guess what causes those?
1
Employment is good. Corporate earnings are good. And, of huge importance, consumer spending and the retail sector are going gangbusters. As for GDP, which declined, it did better than expected. Krugman and his ilk are predicting recession and they are clearly jumping the gun. Things are not good for the relatively small widget-making industry. So that’s what Krugman writes about. Don’t be fooled. He’s a wet towel who enjoys being the bearer of bad news even though the news, on the whole, is quite good. And subprime lending is old news. Clearly, Krugman is a widget guy. Maybe he has a cousin in the widget business.
1
‘For many supporters it meant restoring the political and social dominance of white people, white men in particular.’
Indeed. The not-so-secret “cherry on top” that made the rest of his bunk so easy to ignore and his lies to forgive.
And the Trumpers will respond - MAGA!
There is nothing that this administration has made better. Nothing.
2
Look on the positive side, a financial crises of the order of our 1930’ depression will send the Republican Party to wander in the woods for 40-years (and hopefully for much longer) while our body politic sorts out the mess they have made of America. The Democrats just need to find their Hercules to clean the sables of Washington. It may be possible to use social media to fool many folks, but you can't fool their wallets no matter what lies our Quisling president abetted by his Fifth Column GOP and Fox propaganda tell.
1
Trump's slogan is really "Make Americans Hate Again" rather than "Make America Great Again."
Simplified? The 0.1% paid for this Presidency, so surely they should expect to be paid back with interest.
The details from Dr. Krugman are always interesting and useful about what the government might do if it weren't for Citizens United. But we have to fix that first.
3
The conversations are lively civil and informative. I look forward to an article on employment: who has what kinds of jobs for how long and at what pay. Somehow there must be an explanation for apparently low unemployment and inadequate wage growth. I fear that we are not educating people for the jobs of the future.
1
An aspect that I think is missing is the overbearing influence of Wall Street on company leadership in the US.
Boeing is a great example of how short term greed and high quality manufacturing are often at odds and how perpetual focus on quick results eats away at a company's innovation and quality.
The contrast couldn't be starker with exceptional leadership like Steve Jobs', who replaced a Wall Street type CEO when he came back and who single-handedly held back the release of the first iPhone until it was a fantastic, innovative product. Most companies would have released a "good enough" product to shore up sales in the next quarter.
4
I would submit that there is a third reason why Trump's policies have not benefited American manufacturing: Aside from tariffs and the abrogation of trade agreements, they are doctrinaire Republican policies consisting largely of increasing tax favoritism toward corporations and the wealthy and reducing or eliminating protection of worker's rights.
But it is workers who buy the things our manufacturers produce. Manufacturers do not expand because they are paying less in taxes. They expand because the market for the products that they produce grows and they need to expand capacity.
This is a fact that Republicans, whether Trumplings or those who we tend to describe as more mainstream, utterly reject in their never-ending quest to lower the cost of labor and the "burden" of regulation.
You do not expand by downsizing,.
4
And just how much employment in manufacturing could be created by reducing the cost of healthcare?
Universal single-payer healthcare would reduce the cost of employing large manufacturing workforces. This is a deep structural cost that undermines manufacturing competitiveness.
4
One of the things that has surprised me most about the obscenity is that he hasn't increased infrastructure spending. The pork barrel spending is historically one of the ways that party politicians secure their popularity. The Republicans clearly don't care about the deficit. And it would give him a lot of chances to cut ribbons with giant scissors.
But then I've been surprised by his lack of public relations acumen overall. He seems to funnel all of his energy into speaking to the same crowd at his rallies rather than making any effort to win over America.
3
Totally agree on the points regarding the Trump admin's misleading promises and insane non-solutions.
However it is also true that over reliance on economic models is a major factor in getting us to this point.
Susan Houseman of the Upjohn Institute has identified serious flaws in the way we have been calculating manufacturing employment statistics for years.
As a result we have been overestimating the amount of manufacturing employment while underestimating the impact of globalization and free trade on the domestic manufacturing sector.
We may now be approaching the point of no return.
Garbage in, garbage out.
For better or worse politics and economics are joined at the hip. Trump accurately saw the problem (before most economists did), but doesn't have a clue about the remedy. Economists couldn't accurately see the problem but might have some useful input on solutions.
Economists need to stop their alchemic search for philosopher's stone of equilibrium - it just doesn't exist.
They would be much more useful if they thought of themselves more like mechanics on a particularly finicky engine. To keep it running smoothly they need to listen to real time groaning, grinding and banging.
More reality and less utopia please.
1
You don’t need a degree in economics to know Trump was not going to turn back time. Robotics, cheap global labor and the crushed labor unions are problems for the American manufacturing industry’s lack of a resurgence.
5
Trump promised to bring steel manufacturing back to Pittsburgh. Why would you bring back jobs to a region that cannot compete against lower cost producers elsewhere? There is a reason that the United States lost manufacturing jobs and it is related to the higher cost of production. People in the region believed his hollow promises because they also believed that he is a great businessman. If the Democrats don't run a sensible candidate and campaign for the presidency then we may wake up to another four years of this nonsense.
3
There is a nugget of a comment in here that deserves its own column. The fact that 40% of farm income will derive from government assistance lays bare the fallacy that the Republicans don't like socialism. The truth is, as Dr. Krugman has said many times, they don't like it for people who are not their base. Wall Street bailouts are socialism, as are government contracts for planes, weapons and myriad other things that the government buys. Democrats should be repeating these facts loudly. The Republicans are socialists, too. They just deny it, much as they deny climate change, evolution and many other facts. They are the fake news, not CNN or the NYT.
9
We talk about bringing manufacturing back bet we also realize that it isn’t all coming back. What the government must do though is to incentivize the production of strategic items. These would include rare earth metals, antibiotics and infrastructure communication equipment. Right now all of our antibiotics are made in China or India. If we were to go to war without antibiotics available, our wounded will die as if they were flies. This should not be a partisan issue!
Only high quality manufacturing is financially sustainable, at least for now, in advanced economies. Think of Germany, with BMW, Audi, Porsche, VW but also Miele, Siemens, Bosch, etc. Germany has a trade surplus with China.
We can't compete with developing economies in low end and mediocre products unless our market has trade barriers in place such as is the case for for trucks (25% import tax) or public transportation (Buy American Act).
I feel like a lot of engineering and manufacturing know how has been lost in our country over the years.
We need more companies like Apple, which directly and indirectly employs nearly 2.5 million people in the US.
If only they would pay their share of taxes instead of hiding in Luxembourg, Ireland, ...
4
Manufacturing is in a recession and investment spending has been chronically low for years. Many speak of "secular stagnation". Perhaps the menu of private investment opportunities, opportunities that can be privately owned and used to market private securities, is limited and it was a mistake to direct massive amounts of purchasing power to private investors through tax cuts, deficit reduction and monetary policy.
Does the Green New Deal seem so unrealistic now?
1
it's simple, industrial states keep voting in politicians who say what they want to hear instead of "doing" what needs to be done.
Wages don't match the costs of living. Healthcare is on an uncontrolled skyrocket, school programs are being cut, social safety nets like daycare is underfunded, infrastructure like roads and trains that get people to work are falling apart.
All we hear from MAGA heads is tax cuts for the rich. We need the wealthy who profited astronomically from this country to start putting back in.
The great American fabric company Woolrich is a great case study of owners not investing in the company and the community. They sat by comfortably for decades, licensing out to overseas companies, while returning little in keeping up their factories or training their workers to adapt to 21st century production. Fast forward to today, the company is shutting down US production even though the owner received massive tax breaks.
What's interesting is the same will happen to white collar jobs, computer coding is quickly become a commoditized job like a shop worker. You now have hundreds of people competing for a coding job that was once considered highly skilled, highly paid.
There are so many opportunities if we look forward, sadly in today's unicorn overnight billions mentality we're too busy looking for the fast buck than building for the future.
3
"surging imports did play a significant role in displacing industrial jobs after 2000."
"Surging imports", a euphemism for finding cheap labor overseas. Pure neoliberal-speak.
2
Tax cuts will create good well paying jobs. Neo-con rubbish. Manufacturers will take the least expensive way to make their products, wherever on the planet that may be, and they will keep as much of the profit as they “legally” are able, and will pay as little taxation as is possible with the help of the willing and able politicians and lawyers, who are essentially on the payroll. So yes, a surge of imported labor can be interpreted as goods made with cheap foreign labor, just don’t blame the neo liberals. Let’s face it, who would be the better choice to change the direction of the country to move towards a 21st Century economy and take on the challenges ahead, Warren,( I have a plan for that), or Trump,( plan, what plan....oh yeah, tax cuts).
As an engineer for nearly 40 years, I can tell you why American manufacturing has suffered: lack of investment. How can a steel mill or chemical plant built in 1950, or even 1930, survive against one built in 2000? How do these companies built these plants overseas: they use American engineering know how.
We need government to incentivize and penalize investment elsewhere. Just like challenging the health care industry to manage costs, politicians are incapable of solving these problems. In part, our great founders built their own trap: the Constitution was never designed to support the interests of labor only capitalists, and now oligarchs.
Churchill was right when he commented that American democracy works only in crisis. Look at 2008: we rose to the challenge but missed solving the underlying problems.
7
There are several problems here that transcend Trump.
1) Decades of conservative opposition to government playing any role in industrial policy - unless it puts money in their pockets at the expense of the public.
2) Conservative opposition to government spending on things that come under the heading of "the public good" - like reforming health care.
3) Utter refusal to confront the Climate Crisis. We will be spending vast sums of money coping with the increasing disruption; we could be spending on addressing it which would rebuild our infrastructure, create good jobs, create opportunities for business and save the planet.
At the bottom, it all comes down to people with too much money and too much greed for their - and our - own good. They are the people Trump is truly serving; he is their best investment ever.
7
@Larry Roth
Thank you for pointing out that it's not just Trump, but the Republican party; in my 38 years of voting, I have never seen Republicans spend on anything that helped the middle class or those in poverty.
Their only economic plan has remained trickle-down economics; it didn't work for us in the 80s and it sure isn't working now. After nearly 4 decades, they still don't see the light.
7
What worries me is that mechanical innovation results in the destruction of blue collar jobs but almost never creates any. At the same time, college education is increasingly unaffordable here.
The US has to rely heavily on service jobs and increasingly the gig economy to keep its citizens productive.
While I was driving out of Midway airport I reflected on how one just doesn't see jobs like people sitting in a booth at a parking exit in Europe. That kind of work is all automated.
I don't see how we can increase the minimum wages by much here without similarly losing those types of jobs.
How can someone like Elizabeth Warren put us on track to a more Northern European style advanced society, with the ever looming danger of angry voters handing the keys back to Republicans as our systemic problems stand in the way of quick results?
2
"What’s holding back investment? ... Trump’s trade war. ... probably even more important, however, is the uncertainty created by Trump’s erratic actions..." Actually, business investment was pretty anemic before Trump's election. That was due then, and continues to be largely due now, I suggest, to a worldwide (ex China) lack of growth in consumer demand (https://fas.org/sgp/crs/misc/IN10882.pdf). Slowing demographic growth, bad economic strategies around the world, and a continuing rapid growth of inequality in the advanced nations has greatly slowed consumer demand, a process that dates back before 2008.
3
While there have been modest gains in manufacturing jobs under Trump, there’s been nothing close to what he bellowingly promised. There never will be, which is why he’s running around bobbing for scapegoats.
And fer crying out loud, will Trumpists please learn to recognize a trend line on a graph? Like the one from 2009 to today, or the air pollution and global temp increases over the lasr three years?
6
@Robert
So enjoyed your comment!
Looking at the graphs of both the stock market and unemployment, any gains during the first couple of years of trumponomics was just momentum from the Obama years. The past year ( probably more attributable to trumps policies or lack of them) were up and down with the gains leveling off.
We will see what effect that has on voters in the traditionally republican areas of the country and in the 3 swing states which elected him by "narrow margins".
2
If you want to see something funny, point out to these farmers that they are benefiting from socialism. After they sputter and fume for a while, they try to come up with all sorts of reasons why the payments they are getting from the government for doing nothing aren't socialism. As if giving it another name makes it not socialism.
7
@Philip Greider
It is actually more of an investment in national security than an act of socialism. The alternative is to do nothing and let the farmers go bankrupt, with the result that we no longer produce those crops. This continues until the US can no longer feed itself and we must import grain to feed the populace.
@Philip Greider
I certainly hope whoever the Democratic candidate is, they call this out when they debate Trump. He is already using the Socialism rhetoric against the Democrats.
1
@Philip Greider The subsidizing of farming is no different in Europe and there is something to be said for the strategic and quality control importance of having a large enough domestic food chain.
Same thing for the US military, probably the largest socialist institution in the world with over 2 million people on government payroll.
It's funny how most people working in both are die hard Republicans.
1
Outsourcing of pharmaceutical manufacturing terrifies me the most. It's not a "manly man" type of industry like steel, but it used to be a source of good paying jobs for skilled American workers. When drugs were manufactured within the USA there were strict standards for purity of the ingredients and stringent testing and quality controls before the product left the plant.
We no longer have control of the contents of the medicine we take. There have been reports that hospitals cannot get the life-saving medicines they need to do surgery and treat critically ill patients. There is no American supplier. Everything comes from Asia. Read the label on the bottle of aspirin or blood pressure medicine or other drug you take every day.
We are at the mercy of the ethics of a foreign manufacturer, or even a glitch in the long, complex supply chain. Can you imagine the widespread damage that could be done to our population if lax quality control or malfeasance resulted in contamination of a common medicine before the "quality control seal" was put on the top of the bottle and it was sent to every retail outlet in our country?
6
I’m a middle class American, working at a very large corporation that received those big tax breaks. My personal income taxes went up; my income has not...it didn’t even keep up with inflation. I made more at the same job, at the same company, in 2009 - 2016. Oh, wait, that was a different president’s economy. For which he should receive no credit, per the dumpster fire. Good to know the stable genius is now advising the UK...who wouldn’t benefit from his help, right?
6
It is astonishing to me that I haven't heard any of the Democratic Presidential Candidates talk about infrastructure. How it would put people to work in good-paying jobs; how it would fire up US manufacturing, especially with a requirement for using US-made goods; how it would set up the country for the future given that a great transportation and, then, an electricity network powered American commerce into world-leading status; how not a single manufacturer anywhere in the world that hopes to compete still uses machines from the 1930's/40's/50's/60's/etc. Just like the NYC subway, we have let the life-blood of American commerce fall into disarray. What is holding Democratic candidates from pushing this issue?!
8
The idea of bringing American manufacturing back was always a farce designed to appeal to a certain type of voter. I'm not a Yang fan, but he's the only candidate directly addressing the threat to jobs posed by automation. Perhaps two cycles from now, his prescience will get the credit it deserves.
2
There are two problems with Krugman's opinion.
1. The Trump trade war has bipartisan support and is the only way to combat China's harmful policies. It is fine to criticize it but what is the alternative? Krugman has none.
2. US farmers are indeed getting hammered. But the trade war by itself is not the real issue here. With the advent of S. America as a major source of inexpensive and abundant crops, the Chinese do not have to purchase US grain or soy products. Any purchases (above a low baseline) from the Chinese are "goodwill" in nature and will require concessions from the US. Not exactly the free economy that Krugman bases his arguments on.
1
1. It’s nonsense to claim that trade war is necessary. And, TPP.
2. And why did SA suddenly get all the farm trade with China, pray tell?
1
So unemployment is at all time lows, the stock market is at all time highs and Federal Reserve has dropped its rate three times this year on its way to zero. Last year manufacturing drove 11.6 percent of our economic output to the tune of $2.3 trillion; it doesn't stop there. Every dollar spent in manufacturing adds another $1.89 in growth in other sectors such as transportation, retailing and other business services. The big issue holding manufacturing back in the United States today is the lack of qualified people to fill manufacturing jobs thanks in large part to right years of Obama pushing manufacturing jobs offshore and telling us that some jobs won't be coming back.
I fact checked your claim of manufacturing employment having fallen significantly in WI, MI and PA over the past year with ALFRED and you are incorrect Paul. There has been no significant movement of manufacturing jobs in those states over the past year, up or down. However, since Trump took office manufacturing jobs in those states are up.
So why are you misleading the public Paul?
2
the shortage of qualified workers is a problem long in the making and not an Obama problem. Schools have long failed to teach the necessary skills to succeed in this economy partly because communities fail to invest in their youth and partly because companies fail to invest in their workers. Too many people have serious addiction and mental health problems and for all practical purposes are unemployable. Communities are failing to address these issues. Unions have diminished in stature partly of their own making and partly because they struggle in a climate that is unsupportive of unions. This has been an issue since Reagan became president. Corporate welfare is farreaching and does nothing for workers and communities in which corporations and other businesses reside while people welfare is stingy at best and precludes many potentially talented people break out of the poverty cycle. This is a widespread problem fed by government policy from the federal level all the way down to the tiniest municpal level. Only if we change the way we value economic "growth" will we once again live in prosperous times. Otherwise we face ongoing decline.
3
@Kurt Pickard Sources please for manufacturing jobs holding steady?
2
@Kurt Pickard
I disagree that Paul is misleading the public. He has quite a bit of experience as an economist and we have no idea what your experience is. I also take issue with your claim that Obama pushed manufacturing jobs offshore. Businesses in the US make their own decisions regarding where they manufacture their goods...or did you miss it when the clothing industry left...remember the slogan, "Look for the union label..." That was because the manufacturing jobs were leaving decades ago and have continued to do so.
2
I assume Trump will just tell his true believers to "be patient" all this great income is coming, just vote for me again. I'm sure it will work, at least in the red states.
2
@M.S. Shackley
Yes, just as they are waiting for second coming and he is "the chosen one," as he has said himself.
It seems to me that there are only two types of prosperity big enough to make a large country prosperous: manufacturing and resource extraction. What else can bring in and support the millions of middle-class jobs that keep the people busy and solvent?
America still does a fair bit of manufacturing, but we buy more than we sell. We extract resources, and we grow and sell lots of food. Our computer, music, and movie industries seem robust, but in the places where those jobs exist, housing is far too expensive. The rank and file are struggling there too.
I'm groping to figure out what, if anything can be done about it. I also wonder if there is an upper limit to both budget and trade deficits, and whether we're testing it now. Economists assure us that they are both OK, but isn't there an upper threshold where they could damage our economy? Do we want to find it the hard way? Shouldn't we try to reverse the trend towards smaller deficits, and if so, how?
Some say that we're all supposed to work harder to get ahead, but what needs doing so badly that we all need work harder to get it done?
If this sounds like a stream of consciousness, so be it. There's a lot of conflicting information coming at us from a lot of different places. It's hard to know what is true, what is fantasy, and what is intentional misdirection.
Thanks to Mr. Krugman for trying to sort it out. However, I'm not there yet.
1
Imports in many Industries are still prominent. Manufacturers do not want to hire American labor which comes with their Unions.Most manufacturers no longer manufacture their products, it is more profitable to buy their products off shore. Whatever is manufactured here is done by Robotics.Trump lied to them, which is nothing new for Trump.
2
All work is under threat from globalization as well as an inept and self-dealing administration. Automation threatens even service workers.
I am a retired family doctor who lived through much of this change along with my cohort. When I entered medicine, it was a highly patriarchal and hierarchical system in which the doctor was a king if not a god. While this needed to end, we cashiered the good parts along with the bad. Medicine became piece work and throughput and "patient satisfaction" became the watchwords of good practice. Patient care became secondary.
Automation, the internet and digital data made it possible to replace a radiologist here with a cheaper one in India, for example. Only interventional radiologists who must actually touch patients have secure jobs.
In primary care, the expansion of physician extenders has made the experience of a clinician of decreasing value--the PA or NP can see many more patients at lower cost to the organization.
Nationally, we fight over health care access but rarely talk about the quality of the care to which we either have or gain access to.
Think about this: has your health care provider ever stopped to ask you what your goals are for treatment? Who chooses a treatment plan? If it is not you (at least in large measure), why? What are your fears about illness? Immiseration? Pain? Disfigurement? Death itself? Why do we ignore these things and dwell on costs, reimbursements and coverage?
5
In reality, there are very few ways that any President can directly boost the economy or various segments of it, including manufacturing. However, there are a million and one ways that a President can stunt the economy, and we're seeing that play out right now for perhaps the first time in modern history.
Hopefully all those swing state voters are paying attention, and not just main-lining the 24/7 IV drip of Kool-aid that is Fox news.
4
Although your points are well taken, they will be ignored by the right and those in the conservative base (the blue collar and agricultural workers) - until the dems take the white house and possibly the Senate. Then the GOP will use bullhorns to shout those same tired mantras about deficits, national debt and the need to cut taxes (mostly at the top) instead of smartly adjust the tax laws to address the gross inequities and damage caused by too many years of the voodoo Reagonomics on steroids.
5
Trump does not understand business obviously.
If tariffs for imports of China are increased, the companies just shift the production of their parts to other countries of similar economy, with cheap labor and hard working people; as it has happened; not bringing back those companies to expensive labor in the U. S.
Trump has shown in his business, having loses for ten years, that he knows nothing about business. And he has increased the "welfare for the rich" like -most of- the farmers.
5
After the 2008 economic meltdown on Wall Street and the impending bankruptcies in the US Automotive industry, both Bush and Obama put in place governmental help for those industries. The US Treasury gave billions of dollars to help stabilize Wall Street and Detroit. Now, due to his own bad policies, Trump is handing American farmers billions of dollars in handouts to keep farms alive during Trump's Chinese Tariff debacle. The difference between the Wall Street/Auto bailouts and the Farmer bailouts is Wall Street and the Automakers paid back the US Treasury, with interest. They did, they paid back their loans as promised. However, farmers do not appear to be held to the same conditions. They do not appear to be under any obligation to pay back American Taxpayers for the loans and handouts given by Trump. So, the farmers are "takers" or Socialists in every sense. These are proud people forced into their situations by Donald Trump. How can they even think of voting for him again?
11
In the face of all of this, which they must understand, the CEOs of major corporations (I believe including many manufacturers, though I haven't seen a breakdown) who in the past donated to Democratic Presidential candidates are ready to shift their donations to Trump if a "leftist" candidate like Warren (Sanders?) is nominated by the Democrats. What this tells me is that these CEOs and other corporate leaders value their personal and corporate tax advantages (esp ultra low long term capital gains and dividend taxes), their wealth ("wealth tax" fears) and, perhaps most of all, the kind of regulatory rollbacks* and general regulatory laxity under Trump more than having a sane President. Frankly, that is astonishing to me. They're not, generally at least, extreme ideologues. They know that Trump is off his rocker and is a danger to this country. So, it seems crazy for them to take this position. It's not like they would have donated to a Warren campaign - she wouldn't take direct corporate contributions anyway - but withholding from Trump or even donating to the DCCC and DSCC would have an enormous impact (of course they may not want to contribute to giving a President Warren the Congressional support she would need to pass her agenda - which is going to be difficult even with a Democratic house and Senate). So it goes.
*Of course what Trump and his crowd call "regulatory relief" is the gutting of environmental, safety and consumer protections to the rest of us.
4
Every economic report has some version of:
"And to the extent that we are seeing growth, it’s being driven by consumer spending".
Do none of your economic great minds understand that in 2019 consumer spending is the result of consumer debt????
Amazon and its ilk many be the very worst thing to happen to us all. No need to go to the store and actually look at something to see if its worth the money. to read the required label about content and source.
Now we can all sit at our devices and play magician, click, order, and bingo the stuff arrives in tree remnants aka boxes.
We don't even have to remember our credit card no. because its on file for automatic use , making it so so easy to accumulate debt.
America the owing, with debt from sea to shining sea.
All to pretend our economy isn't failing.
6
@Nshsandy. And taking that a step further...Wall Street has replaced CMOs, Collateralized Mortgage Obligations, which helped bring down the market, with CLOs, Collateralized Loan Obligations, similarly dangerous sliced and diced traded securities.
@Nshsandy. And taking that a step further...Wall Street has replaced CMOs, Collateralized Mortgage Obligations, which helped bring down the market, with CLOs, Collateralized Loan Obligations, similarly dangerous sliced and diced traded securities.
The reason manufacturing has dropped is declining demand. Even the manufacturing and exporting juggernaut Germany is suffering from declining demand. Consumers buy toothbrushes, not machine tools.
3
So how do the farmers feel, being the victims of somebody’s failed 5 year plan? If Trump’s tool of choice is centralized market planning, at least he should try to do it in a competent way. I wonder what simulations he ran before launching his calamitous trade war? Which economists did he consult? Which past trade wars did he study for insight? Hey, stop laughing. Doing something that affects the lives of so many people is a deadly serious business.
6
@Debbie I think Vladimir Putin had a lot to do with our current failed economic policies.
Investment is the whole deal. 2007 set up a new economic (macro) reality from which there is escape I can see. The economy is now driven by credit and investment provides the (potential) underpinnings. Consumerism is, as it always has been, a weak, unsustainable basis of economic strength. People go broke, the whole thing can shut down overnight - like turning off a faucet. Techno-goldmines are creating crazy wealth for the fortunate few but in the long term it's more like staring down a gradual slide into world recession. Have to invest.
3
What exactly is "trade assistance"? Is that just trade? Sales of their product? Why is that being lumped in with disaster assistance and the farm bill?
1
"almost 40 percent of farm income will come from trade assistance, disaster assistance, the farm bill and insurance indemnities."
Wow. I had no idea the percentage was so high. How in the world can farmers accept this help wile at the same time voting for politicians who promise to reduce the safety net for others?
8
@LSR I hate to say this, but farmers stick with Trump even while he humiliates them because of racism. Trump hates the same ethnic groups that farmers hate. It's the tie that binds.
1
While Mr. Krugman has offered trenchant critiques of Trump's economic policies, citing the need for infrastructure investment and the weakness of low levels of unemployment, we need to shift our thinking to look at economics as a generational issue.
Our economy has evolved mainly due to technological change and globalization. That changed the employment opportunities of generations in a single one. Older people lost employment and could not find similar paying jobs because their skills and experience did not match the emerging economy. Younger people either came out of schools hollowed out by conservative budgeting or have been saddled with crushing debt on their first day employed.
At the same time, our economic “growth” has been fueled by fossil fuels, releasing carbon into the atmosphere and warming the planet. We have structured our cities to become carbon emitters on an unprecedented scale. Our economies are deeply intertwined with carbon-based energy. We are only at the leading edge of the storm of troubles we have wrought.
We have to change economic thinking to look beyond the next quarter or year or even decade. Our power is such that our actions—or inaction—determine the fate of generations to come. We should not be fretting about the stock market but fashioning infrastructure and incentives for the long term.
If you think the millennials are angry now, imagine what their grandchildren will feel.
3
Many republicans wax nostalgic when describing the role of factories in making america a great country, they see the demise of smokestacks as the central problem of our economy. They do not like to have pointed out to them that worker wages have essentially been stagnant for the past forty years and that unions that protected factory wages have seen declining memberships.
Republicans in championing trickle down economics and tax cuts have turned a blind eye to the principal driver of the american economy, the american worker that as a consumer is the real motor of the economy. Republicans rant about globalization and how american labor is too expensive, yet it is the most productive labor in the world. Republicans seem to want to go to the time of low paid factory labor. When republicans say "make america great again" they actively mean they don't want to see wage increases.
The past few weeks has seen auto workers and teachers go out on strike. Not one republican has joined these workers on the picket line, not one republican has said that the minimum wage is too low. Instead republicans continued to attack "health care for all" that would benefit low paid workers and focus on tariffs and other economic walls that hurt american workers directly and do nothing to improve the wages of low paid americans. The american workers found in factories and in the service sectors are the best in the world and they deserve to see the wage increases that they have earned !
5
I’m a Democrat & agree with most of your comment. However, the American worker is not better than workers around the world. I’ve worked with IT professionals from around the world & they are just as good as we are. We need to strive to stAy up with the rest of the world.
2
When manufacturing is moved back onshore it doesn't necessarily bring jobs with it. When production is automated it matters less where that production happens. The closer to the consumer the better.
To veer the subject a bit, I wonder how much our manufacturing sector is affected by the fact that many of our goods now last much longer due to better manufacturing methods ? For example, it used to be that the lifetime of electronic products, like radios, was rather limited, but now solid state components allow them to last for much, much longer. Ditto with cars; remember automatic chokes, you know those devices which kept cars from starting, and ignition systems they should have been called obsolescence systems; now the entire car, it seems, is under the guidance of solid state electronics - which lasts a long time. Then there were electro-mechanical calculators which made a great whine when their gears announce their demise; now all electronic - and they run without wires ! Vacuum cleaners, refrigerators, etc; what is their longevity compared to ancient times ? I wonder.
1
For many supporters it meant restoring the political and social dominance of white people, white men in particular.
That was and is the core of Trump's support. Basically the fear and hate of others. Trump's supporters may not be doing well financially because of Trump's actions, but financial reasons are not why they voted for him in the first place, or why they will vote for him again.
9
Large, expensive commercial products, like Boeing aircraft (sorry!), are profitably manufactured in the US, but small items for everyday use, like the stuff people buy at Walmart, cannot be made competitively here.
Don't despair! Widget manufacturing is a dead end business that advanced nations cannot sustain. The return on investment is too low to attract capital, and the work is low-pay, tedious, seasonal, and cyclical.
The service jobs to package, distribute, and promote imported widgets are more appropriate and desirable for advanced nations.
For the US, services, not manufacturing, is the growth industry of the future.
1
@AynRant Service jobs do not pay well and allow giant corporations to exploit American workers. There needs to be realistic wage and benefits for every sector. In most cities, $20/hr is barely enough to live on, yet corporations freak when told they must pay $15/hr!! In our current system, companies can choose to give employees health insurance or not. There needs to be a law stating that if you employ a person, full or part-time, comprehensive health insurance must be part of the pay package, no avoiding it. If our health care system is "employer-based" each and every employee must be covered, period.
2
Globalization promised so much – less war, less famine, less disease, and better, more fulfilling lives. I am a believer.
Then the greed-is-good crowd, well, unleashed their greed. They hijacked globalization and zealously pursued the zero-rate labor policy. They hoarded income, wealth, and power. Labor in poor nations were exploited. Labor in wealthy countries were discarded. Labor came to distrust government and corporations. Nationalism and populism gained. Corrupt, self-serving politicians thrived often by promising a return to the per-globalism days. And the promises of globalization vanished.
There is no turning back. Either we right the wrongs or we
continue the regression.
6
Paul,
You wrote, "So it wasn’t crazy to imagine that protectionism would bring some of those jobs back, even if it made America as a whole poorer."
America as a whole?! You seem to have not gotten the memo; the only people who care about aggregate GDP anymore are: 1) people who hate Trump so much that they are okay with rooting against their own country, and 2) the very extremely highly wealthy who are happy to distract the common person from economic inequality. Note: I am NOT saying that Trump is doing anything to lift those at the bottom or reduce our intolerable economic inequality. But neither are you. And you're supposed to know better.
A lower GINI index is what will be good for "America as a whole."
3
It really is astounding how the trump supporters, many of whom are in shaky financial condition, cling to him even though he, and the GOP oligarch 'donors', are purposefully working to reduce their situation even more. This editorial sums it up nicely, 'his domestic economic agenda has been pure, orthodox Republican voodoo. That is, it was all based on the belief that cutting taxes on rich people and corporations would have a magical effect on the economy.' This is the 'trickle down' fantasy. Any trump/gop supporter who is halfway honest will acknowledge the the plain historical facts that they have seen for their whole life, something does 'trickle down', but it is not money or anything of value. The oligarchs and oligarch wannabes keep the wealth for themselves, while all the time mouthing this or that platitude to make the suckers support 'the trickle theory'. It is truly amazing that these people are unable to see clearly enough to defend their own interests.
5
@Paul I have one word to help you understand your observation: Racism. In studies done after Trump was elected, economic prosperity was down the list as reasons people voted for Trump. The number one reason was racism or bigotry. He started his campaign by making highly racist and bigoted remarks about Mexicans, right?
We are very fortunate that the world is quite forgiving but equally unfortunate that we are on the whole blind to its benevolence. Almost every big disaster is foreshadowed by a lot of little disasters. As it plays out, it seems that it took about ten years of secrecy and corruption for Boeing and the FAA to become so incompetent that they designed and certified the perfect flying coffin. We have been aware of the global warming and other associated changes in climate and weather for at least forty years, but the sunk capitalists have deluded us into ignorance and now see can see that cities that house hundreds of millions of people are on their way under water. Once upon a time science fiction writers imagined that global peace would come when we all faced a common enemy, an invasion from outer space. We are facing a common enemy now, but the invaders are among us, the 1% trying to protect and expand their wealth at the expense of our world. Neoliberal economics has been tried and failed for at least a century, but we go on doing it because it makes the rich, powerful and corrupt richer, powerfuller and corrupter. It is clearly time for some revolutionary green politics. President Trump is our wake-up call, the paragon of polluters, the king of the corrupt. Let leave the deck chairs where they are and get to work lightening our load on Earth before we go under.
4
I lie awake at night thinking how are we going to bring back the Fairness Doctrine? Wasn't it Bob Dylan, among others, who said "you can fool all the people some of the time, some of the people some of the time, but not all the people all the time". This thought I find comforting these days.
@Garry W Abe Lincoln said those words in a speech in 1858.
"Now, many of Trump’s economic promises were obvious nonsense. The hollowing out of coal country reflected new technologies, like mountaintop removal, which require few workers, plus competition from other energy sources, especially natural gas but increasingly wind and solar power. Coal jobs aren’t coming back, no matter how dirty Trump lets the air get."
It's germane to note that big-time Trump supporter Bob Murray's coal company, Murray Energy, just filed for bankruptcy protection in Ohio, and one of the reasons given in court for the company's losses was Trump's stupid trade war. Here's an excerpt from the filing, which was written by Robert Moore, Murray Energy’s current president and CEO, and signed under penalty of perjury:
"Overall weakness in the global demand for coal has been driven by a number of factors, including: low liquefied natural gas prices; a recent trade war driving Russia to increase exports; mild weather across the Northern Hemisphere led to a reduction in demand for heating in both Europe and Asia; higher freight costs; and a prolonged monsoon season in India which kept demand depressed while conditions cleared for a record eight months."
Also noteworthy is the citing of an unusually prolonged monsoon season; this, by a company whose founder is a climate-change denier who went so far as to claim the Earth is actually cooling, not warming. I think meteorologists would tell him the record high temperatures in India generated more monsoons.
4
Trump University lured customers with outlandish promises and then abandoned its "students" after collecting their tuition.
I don't know who the "University's" principals were, but I imagine that they are serving long prison sentences.
Or not.
This seems to be a Business 101 maxim: Find a model that works, and then scale it up, for indeed there is a sucker born every minute.
5
Here in Michigan we've seen the decline of the auto industry for nearly fifty years, and yet people still cling to the notion we'll soon again see factory jobs that'll provide a house, vacation home, two cars and money for everyone's college education. It's pitiful. Worse, it's willfully ignorant
As reader Mark Bau of Australia has pointed out here, there's not a state in America that wouldn't be served by a government-led investment in infrastructure. Who cares what the source of the financial impetus is that gets people to work in jobs that would benefit everyone? Instead, those suffering most continue to listen to Trump and people like the current CEO of GM who makes $20 million a year and is now gearing up to attack California (currently on fire) and its mileage standards alongside the president who gasses Air Force 1 each week for golf trips in Florida.
6
Yes, every reason Dr. Krugman presents for a disappointing economy is correct and, figuratively speaking, right on the money. But in hindsight Trump's exaggerated promise to Make America Great Again was predictable. All one had to do was to research his past business failures and ill-fated enterprises. But beyond that we must go back to this man's character or lack thereof. He's a liar, was a liar, and will always be a liar. He is an evil genius in the art of persuasion. He not only knew the needs of struggling blue collar workers as well as the challenges of our farmers, he understood how to exploit and manipulate them, not for their good but instead for the power and control he needs to feed his egomania and perverted sense of self. It remains to be seen how these followers will vote in 2020. We have to ask ourselves if they have learned the harsh lessons of deceit. I have my doubts, but perhaps they are the result of close to three years of horror and disgust. Maybe I underestimate those across the proverbial political aisle. I hope so.
6
Trump never really had a plan, beyond self-promotion, wholly unwarranted.
Snake-Oil Salesmen have been doing this for eons.
6
The top comments here are all in agreement that the worker has been taken to the cleaners by employers and I agree. Yesterday driving home from my low-paid customer service job this highly micromanages even when I may pee, I heard a story on npr about changing union strategies from being unions negotiation with one company but across industries for pay and conditions for say all customer service workers and all patient care workers. This must be made a centerpiece of discussion by workers for workers as it will not allow individual companies squelch and quash collective bargaining state by state as republican leadership has gotten them.
It's how they do it in Europe. We need to do it here.
5
So the question becomes whether the James Carville maxim, "It's the economy, stupid!" is stronger than racism, isolationism, and the fear of being wrong. I think it is. But the Dems have to pound the message and stay away from the extremes. We shall see.
3
So this is just an op-ed where Krugman hates on Trump. Like I needed a Nobel Laureate to hate on Trump.
Do you have anything to talk about other than Trump? Or is all that matters is that Trump offended your well-education professional sensibilities and since you are well off you have no other cares in the world? Trump isn't the main reason for the bad economy and our country's troubles. (Bad economy in that everyone is in a rat race to the bottom. GDP doesn't matter beyond indicating how much money we are giving the 1%.) We've had decades of corporations doing what is best for their shareholders at the expense of workers and the public. We've had decades of bad government policies. We've had problems long before Trump and the Democrats are major contributors to those problems. So please find something to talk about other than Trump.
1
K would be on safer ground if he remained focused on the effect of trade policy. There was plainly a surge in business investment following tax changes but trade wars have undercut both confidence and actual business results. The Journal’s “Adam Smith’s Revenge” editorial from yesterday presents a clearer view of what has actually happened
First of all, I understand very well that Trump's policies won't lead to a substantive revival of supply chains, industrial innovation or industrial competence. Yet, this article is extremely misleading. The main reason is that a host of indicators suggest that Trump did not something. I kindly suggest that any interested reader look at this link: https://fred.stlouisfed.org/series/MANEMP Plug in January 20, 2018 and look at the somewhat dramatic rise in manufacturing employment after July 2017, i.e. after Trump had been in office. We see a rise from 12,386,000 in February to 12,850,000 in September 2019. Yes, Trump is evil, incompetent, lacks an authentic industrial policy and all the rest, yet he will use these statistics in his campaign and nothing in this article belies that. I do agree, however, that Trump's pro-manufacturing policies are superficial, weak and consist partially of symbolic politics. Yet, one has to know one's enemy in order to defeat them. I contend Professor Krugman's article does not give us sufficient information.
This was all predictable considering Trump's several own company bankruptcies. He is clueless.
3
When Trump promises people that coal, steel mills, and manufacturing are coming back, they have to know its absurd and will never happen.
That doesn't matter though. Let's be honest, all his supporters are interested in is that he continues to try to keep brown people out of the country. As long as he does that, 40% of the American people will gladly tolerate his incompetence, thuggishness and amorality.
4
Farewell to the fields where we've sweated and toiled
At pulling and shoving and lifting,
They'll soon have machines and the travelling queens
And their menfolk had better be shifting.
Ewan McColl, 1964
That is what happened, and Trump cashed in on the nostalgia.
Part of the reason for Trump and his followers that love his wrecking ball approach is that voters feel, on both sides of the Aisle, that politicians treat their campaign donors as constituents, rather than the voters. The bills passed don’t seem to be focused on what Voters what, nor what is the public good.
Dems need to campaign a platform of:
1. Honesty, constantly illuminating Trump’s thousands and thousands of lies, show video
2. Anti-corruption by promising legislation against family members (outside of the spouse), serving in the White House, beefing up anti-emolument clause in the Constitution, etc. Stop cozying up to tyrants and autocrats.
3. Respect and a return to civil governing: show Trump’s inflammatory and belittling talk, run the tape of him claiming to grope women with impunity, Trump saying other countries and cities are filth, crime-ridden, etc. Telling American citizens (the four) to go home, etc. Dems committed to work across the Aisle.
4. Infrastructure, infrastructure, infrastructure - Put American to work with a massive bill that fix America from one end to the other. Massive money for every state. INFRASTRUCTURE.
5. Talk about a strong border (everybody wants that), but stressing compassion, valid asylum rules, and paths to citizenship. That ICE will concentrate on criminals, NOT hardworking community members.
6. Honor and strengthen our international relationships, our allies.
7. Tax the rich ! (Most American's believe in that),
5
No mention of automation? That’s odd.
1
Let's remember, America was not stripped of their manufacturing jobs by a single party or President.
America has been devastated by the "What you should do..." corporate culture of people who sit at desks writing about how they feel everyone else should live their lives.
Never does a member of the "What you should do..." movement have any context, idea or interest in the other sides needs or wants.
You can see these people everyday, they're the Baby Boomers, they're white, well off. and despite being a generation that got almost everything they have from good-ole Uncle Sam's government, they feel like they're the only ones who are entitled to anything.
2
Is it possible for the common man, through his labors, to support his family in a world gone mad?
2
One of the sure signs of an empire in decline is when the elite pillages the treasury.
1
This year almost 40 percent of farm income will come from trade assistance, disaster assistance, the farm bill and insurance indemnities.
A political bailout by any other name, of Trump&Co. How fortunate to have billions of tax payer dollars available to cover your misguided and/or corrupt administration's behind? As for the plutocrats in farmer's clothing cashing these unearned cheques, how many of them will be venting their moral outrage over the evils of socialism in family get togethers this coming Thanksgiving?
4
You could use this column and add it to the mounting list for the
reasons for impeachment.
Paul,
Partisanship has gotten so bad that the Republicans are opposed to any Democratic legislation no matter how good for America it might be. Even if they get can share the credit, if it benefits the Dems in any way, they'll be opposed.
I'd like to say that the same is not true of the Democrats, but that would be a lie. (I know, in my case it would be; the most important thing in the short term is to get this vile, dangerous man out of the White House, and anything that gives him the least amount of credit would jeopardize next year's election.)
It's all about the wins. When the president lost on health care, what did Republicans and the press talk about the most? - the President needs a win. That's why he and his party picked tax cuts as next on their agenda. It's a sure winner for the base; no Dems would vote for it (and thus get some credit); and, best of all, it could be done quickly (infrastructure would take a looong time).
And what about the deficit hawks in the Republican party who knew it would blow up the deficit?; the ones that railed against Obama for his more moderate deficits? Nevermind. The president needs a win. We're on board.
1
In an earlier column, Krugman acknowledged the "sugar high" of deficit spending would lead to growth, and even said this was a Democrat policy (outside of recession mitigation). Krugman now has to address the fact that we have low unemployment in many regions. Keep it simple: how would infrastructure spending benefit more Americans.
1
The disdain for rural Americans by the author and his following is palpable. I wonder if they would agree with the assessment of Georg Groehl's editorial article yesterday (which I agree with) that two thirds of the rural Americans are reasonable people with good intentions. They are NOT extreme right wingers, much less xenophobic or bigoted. (The other third may have some issues....) If so, how can Dr. Krugman and so many NYT writers and commenters believe that their cultural/regional stereotypes that are based on a minority of a group NOT result in unwanted social repercussions? Isn't it reasonable to conclude that these predjudisms (ironically, against predjudice people who are not representative for that group) may be a basis for the adversarial and polarized condition of our country now?
2
I am not a Trump supporter but the loss of manufacturing jobs across the country happened well before he became President.
China was treated as a fair trading partner when in fact it wasn’t and their was no push back from previous administrations.
List for me how many Companies have attempted to bring back manufacturing jobs to the United States? And look at the wages that the new Technology sector pays, not close to what union wages were.
Lowest unemployment in 50 years doesn’t count those who gave up looking or doesn’t consider a $10 or$12 hourly wage acceptable.
Over the past 10 years income inequality has soared off the charts.
So let’s be real the majority of Americans have been forgotten by both Parties and neither one has a plan to reverse the situation
5
Yes, its sad to consider what might have been, had this president actually tried to remedy some of the problems he acknowledged, used in his campaign.
When my box of toothpicks says Made in China, protectionism, new trade agreements, didn’t sound too bad. When my winter tomatoes come from either Canada or Mexico, I wondered where Texas, California had gotten to- no American tomatoes? (A promising development, that giant greenhouse in Kentucky- doesn’t even merit a tweet, evidently).
Immigration. He was for the Dreamers, until he wasn’t. He was for using E-Verify, until he wasn’t. Did I miss the campaign promise to put children in cages?
And the Deep State. Who knew he meant non-lobbying, professionals that didn’t toady, stroke his ego? Never mind the history of the...1880s civil service fix to rampant political job seekers. We’ve revived the Way-Back machine (the 1950s cartoon escapes me).
So much he could have done. But maybe, as you say, by turning farmers into welfare farmers, they might begin to empathize with urbanites- reduced to assistance by factors out of their control. Maybe.
4
We can’t go backwards to create jobs for an economy that doesn’t exist anymore. A gig economy is here to stay if health care insurance is universal and not dependent on employment.
1
What's the point of the fed lowering the interest rates to stimulate the economy when the credit cards charge over 20 percent APR to those even with good credit ratings (albeit after a brief zero percent teaser rate).
3
Infrastructure investment and the demand for manufactured goods that it produces is dependent on one thing that is anathema to the present day GOP, and to too many Democrats who call themselves centrists: taxes to pay for it. Trump skates around the issue with smoke and mirrors talk of public-private partnerships. Well, maybe a big corporation will pay for naming rights to a publicly funded sports arena, but I doubt your going to see private money coughed up for naming rights to a sewage system, lead free water works, or even a stretch of highway., or that any such contribution would offset the heavy cost in public dollars, for which taxes are necessary. In short, globalization has created a super-wealthy oligarchy that sees no need for public investment, that is building gated communities for itself and hiring private security and fire protection.
The only remedy for this distortion of our way of life is a revised, highly .progressive tax structure. Don't hold your breath.
7
The engine that makes the economy work is by those that produce goods that can be made and sold at a profit. The work and profit are taxed so that all the other facets of society maybe employed teacher police firemen and state employees.
3
@Sean Daly Ferris The supply-siders believe that the engine that makes the economy work is by those who provide the capital, where labor is simply another cost to be eliminated. That's why they constantly push to eliminate taxes on wealth (capital), shifting the burden of taxation onto those whose income is from wages/salaries/tips. And they call teachers, police, firefighters, courts, and regulators "government waste."
5
@Kevin Brock well the supply sides are wrong
It is very difficult to get back what we have lost in manufacturing, but we can turn the tide on technology jobs which have been rapidly shifting offshore over the past decade. While IT professionals in the US are very good the cost advantages are incentivizing corporations to transfer these jobs to lower cost countries like India and China. Since these jobs are key to the future, we should treat them as the strategic keys to the future that they are. Instead of outsourcing them to other countries, we should be creating technology jobs throughout our country and encouraging innovators to immigrate to our country. IT hubs created in economically challenged area of our country would energize other industries necessary for the future.
3
Trump sold my rural midwest farmer neighbors and manufacturers the fake news and they bought it. They still believe it, all the way to bankruptcy and the auction house. Farm bankruptcy is up 40% in our area. That is the problem.
8
I'm surprised that Paul Krugman, who is usually cautious, falls in line with the bulk of commentators looking for the causes of "Trump’s win." There is scant evidence that actual votes in 2016 were NOT hacked. There's plenty of evidence that the voting systems themselves were. We are only still discovering the extent of Putin's desperation not to see Hillary win. Krugman just compounds the fallacy when he says, "Wisconsin, Michigan and Pennsylvania — precisely the states Trump unexpectedly won by tiny margins in 2016." Yes, that observation is a premise for much analysis, but not for the obvious one: How do we know he actually received those "unexpected" victories. The same fallacious premise dominates the media, but it's just that - a fallacy.
2
The author in his daily zeal to paint all things Trump in its most negative light makes the basic error of attributing temporary shocks to permanent shifts in modality. Let’s fast forward Professor so you can start preparing your future thought pieces now to the obvious chain of future events — the trade war is temporary, and Trump will come to some deal with the Chinese in the coming months — the result will be a big boon to the heartland and all you cite as currently negatively impacted. The timing of the deal will probably be very useful for the election and help lift Trump’s campaign. Despite the trade war growth has averaged over 2% and over 3% in 4 quarters since his term started. As things pick up next year from the end of the trade war this column will have to get even more creative in its content creation, which is becoming more and more difficult to take seriously.
I will agree with Dr. Krugman that the 2017 tax cut for the wealthy did not produce a booming economy, growth rate of more than 3%, for most Americans. But for the executives, the white-collared executive employees, and the wealthy investors--the cut seems to have given them a growth rate of well above 3% as an immediate and limited stimulus to the wealthy elite growth rate of well above 3%. For the "slobs" who wait tables or wash dishes, maintaining a livable income requires more than one or two jobs---and for small farms or small manufacturers bankruptcy threatens and growth is elusive.
Additionally, the massive tax cut has been taken from the weapons the Fed could have used when the economy starts to lose jobs as the deficit has grown too much to think lightly of more cuts . We would have been stronger for the masses of workers if we had used these slow but growing times to grow a surplus for the inevitable serious downturn of the Business Cycle. But Republicans focus on the today (especially with the imminent elections0 and not the tomorrow.
3
If you watch documentary films in Netflix, you will know why American manufacturing jobs won't come back.
The largest Chinese glass manufacturer bought an old GM manufacturer's warehouse and started a new glass manufacturing business. The people in town were happy that they have jobs again. Once they settled in the new jobs, union people sneaked in. It took the new owner tons of money and effort to eventually satisfy the workers. Only after several years, the glass company started to make a profit barely.
The lesson is that we demand more than we really earn. In a globally competitive market, our labor is just barely competitive to the rest of the world.
@Usok
Union people "sneaked in"? You are aware that US citizens have the legal right to form and join a union, right?
1
How can America trust the economic wisdom of a president who personally declared bankruptcy multiple times ?
Not to mention his nebulous economic status having precluded Americans to view his tax returns ?
Deutsche Bank , Russian oligarchs playing some dubious role in the economic make up of this individual ?
Too many unanswered questions that should raise alarm in the GOP senators , before they allow their president to bankrupt the country .
I feel sorry for average Americans, who have infrastructures similar to third world countries, healthcare and education unaffordable and an environment in free fall .
5
In the never-ending search for profits and dividends, CEO's have no choice but to go overseas where pay rates are up to 10 times less than our average wages. In effect, a "manufacturing" company becomes just like a big-box retailer, importing everything while paying minimum wages to low-skill “fulfillment” workers in warehouses. Tariffs simply shift suppliers away from China to the nearest low-wage country without tariffs. Starting at at least thirty years ago, good manufacturing jobs have disappeared as a result, especially in small businesses without the resources to establish plants in low-wage countries.Small businesses in manufacturing with less than 300 people employ more than half of all such workers in the USA. Rather than penalize them through tariffs on critical imported goods, why not provide a government funded incentive instead, aimed at small businesses but available to all domestic operations, linked to the proportion of US labor used, with strict limits on use of funds for working capital only.
Help for US businesses competing with international corporations that outsource every last manufacturing job is a massively better way to use government funds than border walls, endless wars, and tax policies benefiting international conglomerates. A return on this investment will be immediate, as jobs with a living wage will result. Done.
6
All true. Yet, talk to any Republican, and the first thing they'll say is that the economy is doing great.
2
Pressure from shareholders, forces most US corporations to focus only on the next quarterly financial report. Beyond that nothing matters. But in order to make anything, long term commitments are required by leaders who actually know something about production.
Add this to the fact that traditional US manufacturing is outdated. The new economic mantra of the modern world has shifted to green energy, food, and goods manufacturing with an eye on the future not the past. Those countries that are ahead of the US in this have better jobs and better living standards. You cannot make America great again by living in the past and burying your head in a coal pit.
4
Manufacturing in the U.S. is not going to have a revival regardless of who's in the Oval Office, who's in charge in Congress and who you personally voted for to fill those seats. As a whole, the U.S. economy has evolved and moved off manufacturing to support the country's GDP and more to a service industry. Asking for manufacturing jobs in great numbers to return is akin to coal miners asking to open up new sources of coal to mine... it's not going to happen and no politician's promises from either side of the aisle nor wishful thinking of years gone by is going to change that. The same people asking for manufacturing jobs to return are the same people buying $19.99 pairs of jeans made in Thailand or China at Walmart because they don't want to pay $89 or more for the same pair made with U.S. labor. That is the simple, hard and plain truth.
8
I think most middle Americans are hanging on with Trump based on the hope that eventually all this (tariffs, tax cuts, fewer immigrants, etc) will kick in and we will be off to the races. Jesus will have turned the water into wine. But I think there are other things happening here: do people think the export market will turn around the longer the trade war goes on and other countries view Trump as a tariff temper tantrum guy. Or will they stick with other places, perhaps making less profit, to have a more reliable trading situation rather that returning to the unreliable U.S? All the new jobs....aren't they service, low paying jobs providing few benefits and when the economy slows so goes the jobs. And those supports the government provides.....they are next on the chopping block. Leaving them right back where they started from. But with no safety net. Because that was only for minorities and immigrants. They would never need that stuff. Trump promised. That wine Trump made for them tasting an awful lot like household vinegar.
6
as the article hints, US business investment/manufacturing (and GDP) are dependent on the shale oil/gas boom.
see these articles :
- "Rising oil prices are helping drive the US business-investment rebound", WSJ, 25/01/2018
- "Poof ! Trump investment boom is gone", MarketWatch, 24/05/2019
investment boom is gone because shale boom is slowing (according to Schlumberger/Halliburton/others), probably. in addition to uncertainty due to trade war.
3
Dr. Krugman states that Trump's "domestic economic agenda .... was all based on the belief that cutting taxes on rich people and corporations would have a magical effect on the economy." Did Trump really "believe" that? Did his enablers? I doubt it. Rather, they "believed" exactly what Dr. Krugman believes about the effects of cutting taxes. But in order to win votes they lied.
6
The key for growth is productive capital investment.
How do you know it's productive?
Because it generates cash flow to pay for itself.
Almost everything else is financial engineering.
3
In case anyone missed the news, Murray Energy, the largest privately held coal producer, declared bankruptcy last week. Based in West Virginia, which has more than its share of economic, social and health issues, already, Murray couldn't compete with natural gas, emerging wind and solar power, and the high costs associated with reliance upon digging for coal seams while safeguarding miners (if it ever did).
You will hear nothing about this in the lead up to the 2020 election. But "Bring Back Coal" will be a staple message at Trump's beer hall-style rallies; why? Because as PK so rightly explains, this Administration prefers to evoke times gone by, rather than focusing on opportunities ahead as the nation transitions away from fossil fuels. That past includes air and water pollution, environmental degradation and extremely dangerous working conditions, of which Murray Energy is the poster child of management neglect.
This is the Trump regime's sorry legacy and pathetic record. Trump hasn't led or managed or inspired. He has presided over failure that he created.
8
"The magic failed"? Really? Last I heard, rich people are still getting richer. That's all it was ever intended to do.
10
Regarding the comment that production has shifted from China to places like Vietnam. Although we would have obviously preferred the manufacturing to shift back to the US isn't it possibly in the US long term interest to shift such manufacturing from China, not a friend of the US, to places like Vietnam, still not necessarily a friend of the US but somewhat more closely aligned with us. Probably still not worth the overall pain that Trumps policies have caused.
1
As always, Mr Krugman is right on the money. In the state of Australia where I live, we have been repaid many times over by major spending on infrastructure projects. Infrastructure spending is the gift that keeps on giving. It creates many jobs, both in construction and supply and after the project is finished it continues to benefit because the new road, rail projects increase productivity.
9
"And to the extent that we are seeing growth, it’s being driven by consumer spending."
And the reason for that is due in large part to the working, middle and upper middle class tax cuts.
https://www.nytimes.com/2019/04/14/business/economy/income-tax-cut.html
With consumer spending representing over 70% of the economy, the only tax policy that makes sense is trickle up.
If you cut taxes on consumers, they will spend.
4
An army marches on its stomach so the federal taxes go to the military and agriculture. Try telling the Republicans an army has to cross bridges and it's time to cross the Rubicon and spend on infrastructure.
3
There's no money for infrastructure. Tax cuts for the wealthy have seen to that. Sure they spend on the military but most of the budget is spent on Operation and Management and Procurement and Research and Development. That nearly Trillion dollar budget is going in large part to wealthy defense contractors and they aren't building infrastructure for Americans. They are building weapons which are sold throughout the world and are largely responsible for keeping the war machine rambling on in so many disparate place in the world - particularly places with oil but sometimes with other resources too. Global hegemony isn't cheap, or very attractive for that matter. At least not to poor Americans that never get any piece of the pie but somehow vote like their turn is coming.
3
In an interesting column the most startling bit of information is that the American farmers have become the new "welfare queens".
To add insult to injury, the American farmers and ranchers were doing far better under the administration of Barack Obama. According to the Farm Bureau article cited, net incomes in 2019 will be 29% lower than in 2013 and bankruptcies are up 24% compared to last year.
Perhaps it's time that American farmers return to their roots and vote for a few Democrats? But, probably not.
5
This year's deficit was almost 1 trillion, and deficits in this ballpark have to be the norm going forward with anything above 2% real GDP growth appearing less and less likely to be sustainable.
1 trillion is a critical number in this context because 2% real growth plus 2% inflation means nominal GDP is growing by around 850 billion. This is happening for the first time since immediately after the 2008 crisis and is likely to continue, since, for debt to not grow faster than GDP in nominal dollar terms the US needs to sustain 3% growth on top of 2% inflation with the current govt income and spending picture, tax rules, aging population, turbo defense spending, etc.
So as soon as a Democrat swears in as president, we will be hearing hysterical GOP cries about the deficit. Then Medicare, medicaid, social security and all other kinds of social and retirement spending will be in the crosshairs of the plutocracy.
5
You can't kill something twice. The manufacturing jobs that have left to off shore are never coming back. Out standard of living is declining. Instead of pipe dreams, Americans need a comprehensive plan to create high value work to match worldwide demand. We need an approach more like Germany had used for decades. Educate people for meaningful work. Incentivize investment in means of production. Not more tax cuts for stock buybacks and more money for the top execs. Immediately create work for infrastructure improvement. Promote more immigration, not less. So, we can shore up Social Security for an aging population.
All we lack is the political will. Remember that when you vote.
12
"The heartland endures another mini-recession".
And once again the heartland will vote for Trump.
I guess humans never learn.
8
At my work, a US mid-cap OEM manufacturer, thanks to Trump messing up the global economy, we've laid off about 15% of our work force so far this year. I expect another round after we announce our 3Q results.
13
@Tyrone
Are the layoffs due to lack of sales or greed?
Why do we have to keep listening decade after decade about manufacturing as if it hasn’t been in decline since the 70s. It’s been 50 years. We didn’t see a strong call for wagon makers to be bailed out when everyone was driving around in fords and chevys in the 1950s.
Manufacturing will go to wherever it is the cheapest. China, Mexico, Vietnam....it doesn’t matter. And it has much more to do with loyalty to shareholders than loyalty to fellow countrymen. I feel like people are constantly looking for the man in the moon ala a President to fix this. It is the boardroom and a change in ideas that needs fixing.
We own a labor-intense manufacturing co but one of the fastest and most needed positions are in client relations and CAD (computer automation). Our company has had to change 3-4 times in the past 20 years, a little by choice, but a lot by circumstance.
I simply don’t get some areas where every indication screams for change, modernization and we’re looking backwards.
9
The market sets all time high records almost monthly. Unemployment remains at historic lows, yet Krugman insists we are in a recession. Trump Derangement Syndrome needs to be included in the DSM.
4
@Registered Repub You're a prime example of why those of us who believe in words and facts can't take most Trump supporters seriously. Krugman did not "insist we are in a recession." He said "we're experiencing another "mini-recession" and then went on to explain what he means by that: manufacturing employment is falling in some key Midwest states. If you want to be taken seriously you should learn to read more carefully.
The stock market was setting monthly, all-time highs at a regular clip when Obama was president, too. And how come you trust those unemployment numbers? When Obama was president, Trump declared them to be phony. I guess he doesn't think so any more.
8
@Registered Repub
How about a few facts:
Real Median Family Income, 1999 = $61,526
Real Median Family Income, 2018 = $63,179
Real Increase of $1,653 over 19 years OR
A spectacular increase of $87 per year.
https://fred.stlouisfed.org/series/MEHOINUSA672N/
Or maybe the St. Louis Fed is one of "deep state" things?
3
@Registered Repub
Wall St is not Main St. Michigan has been in a Depression now for going on 40 years. State government has done everything it can to ensure it persists.
This is not about Trump. He is just the puppet clown du jour. His masters are the problem and they want this Depression to last for decades to come because it makes them richer.
4
Minimizing labor costs is fundamental to capitalism. We cannot expect capitalists to return to the days of relatively high labor costs out of the goodness of their hearts. I have read Krugman's editorial criticizing people who warn of jobs being taken over by robots and there is a lot of truth in what he says. In manufacturing, robots are taking over the jobs. Robots are even taking over jobs in China, where labor is relatively cheap. Manufacturing jobs are going the way of farming jobs. We need to find new jobs for people.
3
"So it wasn’t crazy to imagine that protectionism would bring some of those jobs back, even if it made America as a whole poorer."
But for the last 30 years making America as a whole richer meant increasing billionaires' fortunes while gutting the middle class. One billionaire and 999 beggars have an average income of a million bucks. One multi-billionaire and 999 beggars have an average income of 2 million. But how is that an improvement?
5
"...restoring the kind of economy we had a generation or two ago..."
People who are against our President feel that what took a generation or two to leave will come back overnight.
It won't.
However, you have to start somewhere and Mr. Trump has started that process.
When he wins in 2020, it will continue. After that, it will be up to his successor to carry the torch and give back to America and Americans what was taken from them: Good jobs.
Failure to do that is a failure of our country. China will win and our children and grandchildren will grow under the auspices of whatever they want us to have.
1
"...restoring the kind of economy we had a generation or two ago..."
People who are against our President feel that what took a generation or two to leave will come back overnight.
It won't.
However, you have to start somewhere and Mr. Trump has started that process.
When he wins in 2020, it will continue. After that, it will be up to his successor to carry the torch and give back to America and Americans what was taken from them: Good jobs.
Failure to do that is a failure of our country. China will win and our children and grandchildren will grow under the auspices of whatever they want us to have.
1
Krugman: "That is, it was all based on the belief that cutting taxes on rich people and corporations would have a magical effect on the economy." As you point out, this is orthodox Republican voodoo economics. However, I doubt that Trump was thinking of what trickle-down economics was supposed to do for the economy. He just wanted a big tax cut for himself and his wealthy friends. With Trump, It has always been about Trump. This was no exception.
3
As a 60-year old white male who has always been a Democrat, I was of course devastated by Trump's election to the presidency. I lost a lot of sleep that night.
In the morning, I thought that maybe things were going to be okay, that Trump had this unique opportunity to bring the country together, that he was not as bad as his campaign and that he ran it to win it, no matter what the means.
He had the chance to reach across the aisle and and propose a sweeping infrastructure bill that the Democrats could not have said no to. He had a chance to restore economic strength to the country, real, strong and lasting economic strength.
That moment, which never really was because of who Donald Trump really is, is gone. Our country's infrastructure is in shambles. All that money that was given back to to rich is gone and our country is poorer for it. Another economic collapse is on the horizon.
How different would our country feel right now if a huge infrastructure bill had been passed in the first thirty days of the Trump administration? How different would our national conversation be.
Pipe dreams.
4
@Miffed in Mass
And how different it would have been had McConnell and the GOP allowed funding back in Obama's early years for national infrastructure projects. But I recall the Republican hand wringing about the additional increase in public debt (not so much these days). Haven't forgotten McConnell's stated goal to ensure Obama was "a one term president" either.
Manufacturing will not come back as long as many small industries are owned by large hedge funds and the like. This is a type of "shadow" banking that controls how decisions are made. It makes economic sense to relocate manufacturing elsewhere. The effects on every day individuals is forgotten. Why did small blouse factories relocate to south east Asia? There was greater profit to be made at the top. We could have competitive industries but how will this cut into the profit margin? By taxing the "top earners" less and less, the incentive to innovate and locate jobs within out borders has eroded. Money is money, greed is greed.
3
Krugman's constant refrain is, 'it is a waste to bring manufacturing back'. This is the official line of the Corporate Democrats, Pelosi, Schumer et al. Incidentally that is also the propaganda from Wall Street. Following this approach since the 1990s brought us GOP ascendancy, a Right Wing Supreme Court, endless wars and Trump. How many jobs will infrastructure spending create and for how long? Can Krugman give us intelligent solutions to create jobs without manufacturing? It is getting a little tedious to countenance this mantra of 'cannot bring manufacturing back, cannot bring manufacturing back'. Supply chains over the globe came into existence BECAUSE we outsourced manufacturing. Krugman does not know this? Manufacturing is the basic engine of innovation. It does not simply provide high paying jobs for the unskilled but it creates thousands of ancillary industries which provide more jobs. It creates R&D investment. Does Krugman want people with PhDs to go work on road building and bridge building? I am a PhD and I write software for Embedded Systems and I can tell you that the Democrats have managed to destroy jobs here also by H1-B visa imports and exporting as many R&D jobs as possible to Bangalore and Pune. Krugman's columns are a wonderful testament to the kind of ivory towers in which these academics live in. They are either clueless or completely disingenuous and dishonest.
6
@Paul Art: Read the article. Krugman isn't writing about PhDs and R&D jobs. He's writing about American blue collar workers who lost their jobs when manufacturing was exported to low wage countries. Do you want American those blue collar workers to study for PhDs in Computer Science instead?
3
Success breeds complacency; happened somewhere in the 70's. Complacent means instead of investing the profits from oil and gas into sun and wind you buy another house or boat, maybe an island, even a congressman.
Industries which grew and blossomed began with people of vision, the willingness to work hard, enough belief and patience to enjoy the struggle. But once people achieve middle class thru hard work they want to enjoy life and help their children do better, so we 'settle'.
Meanwhile, other people have less and are willing to work harder. In Asia, new industry grew because so many people needed work they were willing to work for less.
Eisenhower began the interstate hi way system in the 50's, generating growth in highways, automobiles, and single family homes. America was happy, successful, and growing. We trusted government. It was the last major infrastructure investment. Since then, 'vision' has extended only to the next quarterly report.
It's not too late; America has great potential.
But infrastructure investment requires money. Since Raegan tax breaks for the rich have not produced investment. Only more willing lackeys in congress.
Can't snap your fingers and create new industry.
Vision.
Targeted investment.
Belief in the future.
Enthusiasm.
Taxes.
8
How can US manufacturers compete when they have to pay for their employee health insurance? The US spends double on health care compared to most other western countries.
7
Most American companies require employees to contribute, often substantially, towards the cost of associated with health care insurance. If those companies even offer healthcare insurance.
4
In Germany every employer pays about half of the mandatory health insurance premiums for each and every employee. Nevertheless Germany is a top contender on the world markets for cars, machinery, chemicals etc. So - where is the problem?
10
The problem is, as the commenter stated, that we pay double. The first chart I looked up shows that the US spends about $10,500 per capita and Germany spends $5,300 per capita.
Professor Krugman is being too kind in merely pointing out the technical and tactical errors made by Trump.
The subtext is that Trump really doesn't know anything about economics. He does know how to cheat on his taxes and defraud his investors thereby enriching himself and his spawn.
Making money does not necessarily equate into a deep, fundamental knowledge of the complex forces which cause the global economy to rise and fall. One would have to actually study and read to become literate therein.
MAGA is a great slogan that sells a lot of hats and tee shirts but that's all it is; a marketing gimmick, not some grand master plan.
23
@Emile deVere Lets remember that Donald Trump did not earn his fortune. He inherited it from his father. He would now be much richer had he just plopped his inheritance into a Vanguard Index Fund.
Last year I was on work assignment in central Michigan, which today is essentially a manufacturing "zombie land." The local and state economic councils are trying desperately to bring back manufacturing and good-paying jobs to the State. They are not succeeding despite their best efforts.
I think there's something a lot of people don't think about. I happen to work for an aerospace manufacturer and did some outreach at the schools to encourage young people to go into manufacturing (especially the trades). Here's the bottom line: parents don't want their kids to grow up to be machinists (sounds like a song doesn't it?). Sure, the machine programmers are in high demand, but they leave for greener pastures in the remaining manufacturing clusters in other states. Essentially, we have reached a point in the de-evolution of manufacturing in the U.S. in which there has been no focused investment in manufacturing trades; no investment in the factories themselves (many facilities in the U.S. are shabby and outdated); no investment in infrastructures or education. Basically, the manufacturers did the calculus and know that their margins lie in other countries.
No amount of political rhetoric or empty promises by Captain Bone-spur and his minions are going to bring back the manufacturing sector to the U.S. And the real sad thing is that the education system is currently producing a population of Americans ill-prepared to compete in the global marketplace.
14
As always, spot on. These could be talking points for Democrats in Red States. So, why are so few of the Democrat candidates even addressing them? It is so frustrating to listen to them mouthing off on stuff that is irrelevant to most people’s lives, let alone most mid-Westerners’ lives (not necessarily the same) when the solutions are right in front of us. The “Progressives” drive me up the wall with their certainty...and their blindness.
10
Will. My sentiments exactly. Democrats / Progressives are so out of touch. Next we will see election promises to make it mandatory to install toilet paper so it rolls out from the outside down. Just so no one is offended. I am having a hard time deciding to vote for any of the top three candidates.
So just in the farm sector, instead of Making America Great Again,Trump had in fact massively increased the cost of supporting the farming community in assistance payments. It is the same case where ever one looks. Trump's policies do not aid anyone. In various ways they cost the American taxpayer very dearly without taking in account the hidden costs such as the increased damage to the environment and species and habitat loss.
14
Manufacturing isn't coming back because the monopolies that control manufacturing in this country are not going to pay American workers more than they are paying foreign workers to make the same product.They'll talk like they will.They'll funnel money to politicians who can fool the public into thinking that they will.They'll push for enormous tax breaks for themselves so that they can supposedly invest in the American industry.But....it's all a big hoax folks.....don't you believe it. Sound familiar?
37
You are spot on in your assessment. The long stated truth wages have not truly risen for most is defined by what you have said. The funny part is watching those same deciders expecting to make more money off of you without your wages rising. Good luck with that.
8
@Iamcynic1 You speak of monopolies. Perhaps they really have taken control of our economy. But why would any business, monopolistic or not, pay American workers more than foreign ones if the foreign ones can do as good a job? Altruism? Patriotism? These don't aid the bottom line hence capitalists will never care about them.
I'm afraid you seem rather naive about these matters.
We can erect tariff walls and force our capitalists to manufacture at home. And if they invest heavily in automation? After foreign countries retaliate and devastate farming and tech? What then?
I don't claim to have the answers but I do know that if we don't ask the right questions we will never find the right answers.
@Jack Toner Tariffs are forcing China to trade with other countries.We are not Chinas' biggest trading partner...the EU is ,followed by the 11 Asian nations that would have been part of the TPP.They have moved into Africa for raw materials,South America,Mexico and even the Middle East."Our Capitalists" are not our capitalists anymore.We have to face the fact that we are not the only player at the table.Globalism is here to stay whether we like it or not.The path to our success in the future is not looking backwards with old tactics(tariffs) but moving forwards with new technologies and a well educated work force able to work in those new technologies.Solar has 300,000 jobs,coal has 20,000.Let the Chinese (and Vietnam) make doormats for Walmart to sell...we're moving on.Trump is still living in the 50's.
1
Let's forget what Trump did or did not say or do. The man has no clue about anything except "playing his base" whatever that means.
If you want the heartland to recover from the loss of manufacturing then you need to do three things:
1) Make college and education affordable, or free. Make sure people can (re) educate
2) Ensure everyone has access to affordable health care.
3) Invest in the infrastructure there. The investments will help the transition from manufacturing to other industries.
The GOP and Trump do none of that. Instead they make life even worse for those that voted for them. I wonder what it takes for these voters to open their eyes to the reality that the GOP isn't there to help them.
28
It comes down to this: Chaos makes for a poor investment climate.
Despite Trump's and Peter Navarro's blaming of Jerome Powell for all of their collective failures, interest rate cuts won't make a manufacturer invest if he fears a trade war with no end, constant fights with our economic allies and that uncertain policy-making will destroy demand in his end markets. So manufacturers took their Trump tax cuts and bought back their own stock, paid out bigger dividends to shareholders or paid down debt. They created few jobs and make little in capital investment. They refused to invest in Trump's culture of chaos.
Unbelievably, I still hear everyday from his supporters down here in Florida how they believe everything Trump is doing is part of some grand global economic plan. Decades of his business history shows he knows absolutely nothing about business or economic strategy. The closest thing to a strategic business plan Trump ever devised was when he bought a beauty pageant in Russia to get strategically closer to young women he wanted to sleep with and Vladimir Putin. It appears that neither strategy worked.
10
We need a Green infrastructure—build up a smart power grid, solar and wind generation. Build essentially all of it here—solar cells, wind turbines, construction equipment, smart switching and power storage, electric transportation, etc. Fund community colleges to train the trades. We need millions more skilled tradespeople, and machine operators, not gig service workers with high school diplomas and humanities degrees with skill sets and life experiences with little relevance to manufacturing or construction. Displaced fossil fuel economy workers and health bureaucracy workers (see below) may provide a sufficient pool. If U.S. citizens don't step up in sufficient numbers, there are millions south of our borders who are not afraid of working with their hands or assembly line work.
Encourage physical, occupational and educational mobility with a system of universal health care, day care, housing assistance and relocation incentives. Tax the wealthy to pay for it all. Tax corporate profits, individual wealth, income, luxury spending. After all, in the long run, revitalized manufacturing and infrastructure are still going to benefit the wealthy more than anyone. You can call this socialistic, but it's still all within a capitalist structure.
3
Just wait and see what happens when our auto makers aren’t allowed to make fuel efficient cars anymore and then see who buys anything “American.” It’s not just the products that are naturally being replaced by other, similar and cheaper products produced elsewhere. Trump is going to destroy the market for products that currently do well on the international markets like our cars. And what for? Because Obama hurt his feelings.
19
Protectionism for an advanced economy is like helicopter parenting, it doesn't produce strong offspring.
The Netflix documentary "American Factory" tells the story of a Chinese company starting up a factory in Ohio. The factory struggled under Chinese management until the US born supervisors visited one of their Chinese factories and saw a different workplace culture. Its not always about wage rates.
Some American manufacturing has suffered from a long term lack of investment, management incompetence and antagonistic worker relations. Erecting tariff barriers and other interventions to make up for these failures does not help in the long term.
Fortunately, new technologies offer new opportunities. This isn't about paying workers as little as possible or paying newer workers far less. It is about the workplace culture, making workers part of the team.
Many companies have figured this out, but the legacy industries have been too slow to change.
3
The fact is Mr Trump can talk the talk, but he can't walk the walk, to borrow an aphorism
Those base members who voted on the basis of his manufacturing jobs promises are finding this out slowly, but surely. For those who voted on the basis of whiteness or religion, this is simply the price to be paid for what they really want.
4
I believe it is true. The opposite would be surprizing in fact. Even if production was going up the number of jobs would be going down. How many people does it take to make cars or washing machines or TVs or computers these days? Not nearly as much as ten years ago. Consolidations also means less people managing supply chains centralized engineering capabilities,...
Manufacturing can never be as large as a fraction of the labor market it once was because it got automated, designs are developed for value engineering with include reducing labor input and cutting material costs. So it is not just cheap labor that reduces the number of jobs it is technology and product design.
Making prototypes on the other hand is staying expensive because custom fabrication with limited number of machine shops keep those shops busy. 3D printing not there yet.
I hope there will be more mass market for custom built stuff in the future so we can all be designers of sorts, paying more but supporting more local jobs not just in advertising, IT and hospitality.
4
Manufacturing ain’t great again? Technology advances in automation combined with tax cuts for the wealthy. (Mic drop!)
If Trump continues listening to Putin, I’m sure Putin will give him some not so sound economic advice that will finally push us over the edge. I have no doubt Trump will sell the U.S. out in a minute if it will get him what he wants, which seems to be hotels in Russia, a resort in North Korea and more goodies in Turkey like hotels and oil.
6
Yes, the tax cut disaster coupled with the tariffs does not help. But two things that hurt growth in manufacturing even more are corporations sheltering income overseas and lack of government support for advancing technologies.
US researchers invented and developed solar panels and big windmills, but after Solyndra became a political football thanks to GOP deficit hawks (most of whom voted for the tax cuts that gave us our shiny new Trillion $ annual deficit). Panels mostly come from China and windmills from Europe. Government support created and grew the internet, but we off-shored all that tech gear manufacture.
So now Trump gives us the worst of all of the above: deficits, tariffs. no infrastructure growth, and no advances in high-tech manufacture. And no progress in collection tax on income companies make in the USA.
14
Supply side economics does create jobs. It just creates those jobs overseas. Pro-capital policies attract capital to the US. And the flip side of a capital account surplus is a trade deficit. A stronger dollar increases the cost of US labor relative to foreign labor. If the goal is to revive manufacturing or increase wages, we need to prioritize US consumers over foreign capital.
6
How's this for a proposal? We'll outlaw modern labor-saving developments in manufacturing, rolling our production back to like it was in, say, 1995, back when everyone had a job and there really weren't enough workers. We'll hire all of these discouraged blue collar workers back into their widget-making jobs. Just for kicks, we'll increase tariffs on stuff like cordless drills or lamps made anywhere else but here, just to keep their 2020 technology from competing with our 1995 technology on an even footing.
Everyone will be working the jobs that were available in 1995. While our stuff will be more expensive than things we could buy made using 2020 production techniques, all these displaced blue-collar workers will have jobs. Everyone will be happy. Of course, no-one will want to buy our machinery anywhere else in the world, because they'll be able to get it for 20% (or greater) less from companies that use 2020 production techniques, but hey, we don't need to sell stuff to the rest of the world, right? We got it all right here: raw materials, manufacturing, and consumers.
Of course, at some point, let's say 2050, our soviet union industrial analogue will collapse, and our blue-collar 1995 worker's paradise will be completely irrelevant on the world stage. But hey, men will get to be men again. For a while.
12
Trump's a builder and he didn't go for the low hanging fruit by tackle infrastructure? He said he was going to implement a trillion dollar infrastructure plan but didn't know that public/private investment in infrastructure was severely limited and could only cover a third of the infrastructure bill. When he found out that the rest would have to be from government spending, and the congressional Republicans found out, the whole push for infrastructure literally collapsed.
215
Are you kidding me? What makes you think that Republicans would entertain that idea? They aren’t going to do anything that might make the Dems look good, no matter how good it would be for the country. And they sure aren’t going to spend money on anything the Dems suggest
52
@greg I loathe Trump and was scared that there was an EASY (IMO) reelection strategy for him. Part of his MAGA world, he could have instituted a "rebuild the rust belt" (but with a better name, LOL) and done a limited infrastructure plan for PA, OH, MI, WI. I think even the tightest Repub would've allowed it to get through. If he had managed that, he'd be untouchable at the polls in those states, the only ones that matter next year. Luckily, he's who he is, no real plan. I still fear it's a 50/50 proposition next Nov.
21
@greg
When Trump took office, he probably wanted to do something on infrastructure, but Congressional Republicans controlled both branches of Congress, led by House Speaker Paul Ryan and Senate Majority Leader Mitch McConnell, wanted nothing to do with infrastructure except as what could be done to encourage the private sector to build what it could make a profit at (e.g., toll roads and bridges) where users could be directly charged without interference from government.
As an example, Republicans had no interest in building Trump's "Wall across the Mexican border." It was only when Democrats took power in the House that Trump got excited about building his Wall, shutting down the government for the longest period ever, in an attempt to bully the Democrats into giving him the money to build it, but without giving the Democrats anything in return.
The Republicans had wasted Trump's "capital" to do anything for the public with their failed attempt to repeal the Patient Protection and Affordable Care Act ("Obamacare") and passing the nearly $2 trillion tax giveaway to the wealthiest individuals and corporations, both Republican fetishes that did nothing for the economy or for Trump's status with the voters.
The TCJA did satisfy Republican billionaire campaign donors, so the 2020 Republican campaigns will be flush with cash, and the media channels will be full of propaganda lies from the Republicans, hoping to pull yet another Lucie and Charlie Brown football kick stunt.
15
Trump is not just passively threatening business that he perceives as his "enemies." He directly retaliates against them. Witness Amazon and the DoD contract for cloud computing that he openly interfered with, and prompted the award/selection of the contract in favor of Microsoft.
390
@RDNZL I hope we'll have hearings, and maybe a whistleblower or two, on that one. Amazon isn't anyone's idea of a sympathetic victim, but the principle of the thing matters enormously.
206
@Paul Krugman
The principle of the thing? You're funny, Dr. Krugman! These are Republicans we are talking about!
22
@Paul Krugman Thanks for responding. Very much agree!
6
People cheered at Trump rallies at the mention of the tax cut stimulus, cheering on their own demise. If they'd studied economic history, it would be clear to them that the age old con of trickle down economics benefits only the few. The many have always paid the price. So now we've had the tax cut stimulus, trillion dollar annual deficit spending, and now pressure to reduce interest rates. All this to achieve 1.9 % GDP growth! Only options now include even lower interest rates - and the consequences therein, or increased spending, or a combination of the two. Not a pretty scenario any way you look at it, and THAT is why business investment is dropping, unpredictability, uncertainty and distrust of Trump and the process.
9
Why do we always hear that benefits from cutting taxes on high earners will result in trickle-down benefit to lower earners (thoroughly debunked by experience) but never hear that cutting taxes to lower earners will enable them to buy stuff that will benefit the companies owned and run by high earners? Why don't we test that theory for a few generations?
873
@Joe Scientist As Upton Sinclair said, it's difficult to get a man to understand something when his salary depends on his not understanding it. Trickle-down economics has been refuted by tons of evidence, but there's good money in ignoring that evidence. The economic payoffs from social programs, especially aid to children, are very well documented, but strange to say not many billionaires put money into disseminating that research.
242
@Registered Repub
You said, "The tax cuts resulted in increased revenue to the federal government."
Actually, the deficit is going from $600 Billion to $1 Trillion.
The projected 10 year increase in the debt is $12 Trillion which is $80,000 per taxpayer.
To be paid for by us our children and grandchildren.
Every Republican senator voted for it. Not one Democratic senator voted for it.
I wouldn't mind if Trump voters got fleeced but the rest of the country is getting fleeced, too.
46
@Roger : "It is pretty easy to redistribute some of the wealth -increase minimum wage..."
Do you think it's the job of the federal government to tell any employer what your minimum worth is in terms of labor?
"...bring the taxes on excessive wealth back..."
Can you quantify the phrase "excessive wealth"? Where would this "excessive wealth" go - our all-knowing federal government? How would you personally redistribute that money?
"...and lower taxes on the lowest wages, increase income tax credits for the poor."
How about lowering taxes on everyone and reducing government spending at the same time? We could start at the top by eliminating those cabinet departments that have no constitutional mandate. It's a start.
My Dad was part of the last and final generation who made a living in manufacturing. When he retired in the 1970s, manufacturing in Northeast Ohio was already on the skids. When I returned at Cleveland with a graduate degree in STEM, we tried to staunch the loss and turn it around. We (largely) failed. Cleveland needed to reinvent itself in health care among other fields. Manufacturing is still stagnant or declining further, 3 decades later.
Trump's empty promises got votes, but those same voters are still left behind three years later. The GOP shows no interest in the common man or woman except as a source of tax cuts for the rich. (Mortgaging the middle class future, actually.)
Voters need to realize that those jobs are gone and they ain't coming back. (Apologies, Bruce.) The country needs first-world health care and an economic Marshall plan. It's time to reinvent.
547
@PJD Doing something like reclaiming out lead in renewable energy rather than trying to prop up coal mining would certainly make more sense. But it's not going to get senate votes from West Virginia or Wyoming.
33
@PJD I also grew up in NE Ohio (worked summer jobs in Ford engine plant near airport) and left to get a STEM grad degree... so truly agree and emphasize!
However, I don't think that manufacturing left NE Ohio (and the industrial upper Midwest); rather I think many lower skilled jobs were automated away as mfg. remains above 40% of the economy (even higher than the mid-1970s), while output efficiency (measured by labor productivity) quin-tripled.
NE Ohio has thousands of open, unfilled manufacturing jobs... BUT they require trade (electricians, welders, mechanics) or advanced manufacturing (e.g., CNC/PLC programmers/operators, software coders, robotics repair, floor engineers, etc.). The number of openings will surely soar larger as Boomer workers retire allowing plants to upgrade. Most of these jobs need only a two-year Associates degree or certificate/cred.
These jobs pay, on average, about twice that of current low-skilled line workers/maintenance folks so actually are "breadwinner" wages from which middle class families can be be raised.
14
@Andrew
Actually, wind promoters have shown that installing wind turbines on WV mountains instead of removing them would provide more long-term jobs at better wages than continued coal extraction by mountaintop removal, but the politics has largely not moved in their direction, yet.
I remember a "town-hall" meeting type program on MSNBC's "All-In with Chris Hayes" in WV where a coal miner complained about the hazards of his job but said he wanted it, for the money he earned, even if coal was worse environmentally as well as economically. He wanted the government to make sure coal was mined as long as it could be.
No one asked him how much of his taxes he would want spent on the descendants of horse-buggy whips so they could continue making them.
28
Anyone who has worked in a large American corporation knows why manufacturing is not coming back. The event horizon in a US corporation is the next quarter, beyond that nothing matters. In order to succeed in making anything it takes a long term commitment and requires somebody to actually know something about what is being made, not just finance. Also, nobody actually believes cutting taxes on the wealthy will improve the economy, it's just a fabrication and it will only make the rich richer.
418
Succinct. Love it.
Smoking is terrible for our health but humans still do it. Why can’t we stop doing what is known to be wrong?
24
Oh, but there are a lot of people who believe it which is why we are where we are now.
9
@Tibby Elgato this is the result of vulture capitalism. Corporations bought on leverage, broken up, and the pieces sold off. Anyone who builds and invest in a business and acquires the necessary assets, promotes workers health and retirement benefits, and gives more then lip service to investing in the community and environmental protections; risk a hostile takeover! We need to get back to a focus on people, not short term profit.
10
The Electrolux plant in St. Cloud Minnesota is closing today. This is one of daily manufacturing plant closings across the nation. I predict that trump will be remembered as the "did nothing" president.
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@osavus
Wouldn't it be a good idea for the NYT to publish a daily list of plant closures? With the number of workers directly affected? And an estimate of the knock on effects (families, but also suppliers, services, customers, etc.)?
23
@osavus: oh, he’s done plenty...or the R Congress has with his backup. It’s just that it’s in the wrong direction. Trickle down was nonsense when Reagan came up with it. We have three huge things we could put people into real jobs for many years working: rebuild the entire US infrastructure, greening of utilities, and restructuring health care. I’m sure there are more, but trump has fought all three. He’s destruction personified. And I’m betting the jobs picture doesn’t note that a lot of people are working two jobs with no benefits to make ends meet.
3
@osavus He's done a lot worse than nothing.
4
Dr. K,
In your columns and newsletter you continue to write the facts on the performance of the U.S. economy. Anyone who has a lick of sense realizes that a tax cut for the highest income earners in our society would not and has not improved the economy. So sad is the long standing problem of inequality which is harmful to the economy because wealth concentration of slows investment in quality of life improvement projects like non-fossil energy innovations, infrastructure, education, etc. It is not just failing to use tax reform for broadly shared purposes but ignoring the opportunity for improving the economy if we had formulated and passed a tax cut for wage earners who have not received an increase in real average take home pay for decades.
Denying global warming is also wrong headed. U.S. industry could be designing and manufacturing its own mass transit like superconducting Maglev to take the load off of our increasingly inefficient roadways in and around our metro areas. There is an obvious need for developing much more efficient and versatile solar cells. Fires in California are creating a necessity for a much improved power distribution system. The necessity of scrubbing the atmosphere of CO2 creates a great manufacturing opportunity. It could be as big as the current HVAC global market.
Everyone knows that the biggest drag on the economy is the macroeconomic instability of unilateral tariffs. I think tariffs have only benefited a few inside traders.
5
It's more than manufacturing that's not great again. As someone who has been looking for a job whether I've been employed or not there are some interesting, if not downright alarming, things I've seen. I'm in IT. Employers are constantly complaining about the quality of applicants and the quality of the people they do hire. If manufacturing is anything like IT and some other fields, employers aren't willing to pay for the skills they want. And they aren't willing to pay to train the employees they have. It's too easy to fire people and hire someone younger and cheaper. Doing that doesn't improve the company or employee morale.
Unemployment in America is higher than the statistics we're being quoted every month. The jobs that are being created are, for the most part, not good jobs for anyone. The gig economy is perfect for employers who expect loyalty but won't give any. One job is listed on multiple sites online with multiple "agencies". How is that job counted: as the one it is or as 20 jobs? Temporary jobs make it next to impossible to plan for the future.
The pattern in America is quite clear and has been for decades. The biggest corporations cry wolf, hire lobbyists to write laws and regulations in their favor. Unions and employees lose which means that working Americans lose. The biggest fake news in America is coming from the GOP and its supporters. The tax overhaul didn't help 99% of us. The tariffs are hurting us.
10/31/2019 7:25pm first submit
778
@hen3ry - Here in Silicon Valley, even the fast food places are advertising jobs paying $16 to $18 an hour. Now, let's say you get a "full time" job doing that - 40 hours a week. Benefits are meager, and you'll make $720 a week, before taxes. After taxes, call it $650 a week to be generous. The average rent on a one-bedroom apartment around here is about $2700 a month. So there goes your entire income. I suppose if they feed you at work, and you walk there and home, then you're all set. Too bad you have $0 of 'disposable' income. And probably no health care insurance, either. But hey, "the economy is booming" is what you hear from Trump - "best economy ever!" Just another Trump lie... after so many, they all blur into one disjointed Trumpian unreality.
263
Same thing here. The numbers are smaller, rent is a lot less here, but so are wages. The upshot is people spend so much just to keep a roof over their head they can’t spend on anything else.
Many of these jobs have unpredictable schedules, which makes taking a second job nearly impossible, as well as planning a budget. Every employer thinks they are your most important job. But none of them want to pay you enough that you don’t need multiple jobs just to scrape by.
136
@hen3ry Here in Minnesota the largest employer in the state is the Mayo Clinic. The state has invested about $500 million in the Clinic as part of a Destination Medical Center plan. So far the results have not been spectacular or visible to me. Real estate speculation has increased and builders are building homes that most people cannot afford. Older "starter" homes are being snapped as investment properties and young people cannot afford either the rents or the down payments. IBM, once a large employer, has all but shut down its operation.
78
What keeps me awake is what happens if we have a 2007-2008 with the current people in charge?
Our system can fail, and such has happened throughout history: A mag 9 earthquake, another 9/11, a horrific drought, a nuke from N. Korea, an epidemic of something like Ebola, some mistake in the South China Sea, a Cat5 or EF5 in a major city. I have the disquieting sense we are living on borrowed time.
America has a lot of strengths, but mess around with the system enough, and it will fall apart, Maybe it will fall apart with a whimper, but probably with a tweet.
351
@Mike S. Of course any of those catastrophes are possible but Trump is a catastrophe that is actually happening right now and he has the potential to bring America to its knees.
20
@Mike S.
When we have a repeat of 2008/09 I can only hope that the clowns running our government to the right thing and let everything crash and burn. The banks should not have been bailed out. Investors are gambling with their money and need to lose it if they make bad decisions.
And yes this will be painful for everyone, very painful. However, our government, financial systems, and public assistance systems, to name only a few, are broken beyond repair. Greed for money and power brought us here. We need sustainable systems. Making $600 a week with rents for a lowest end cubbyhole apartment being more than $2000/month is not sustainable.
Krugman's Ivy Leaguer students can figure this out as they have superior brains. Have them design a sustainable economy that includes jobs where people get dirty at work and we make real things that can be touched and used.
8
@Mike S. I worry about this a lot. If we have a financial crisis, for example, we'll be depending on the wisdom of Steve Mnuchin and Larry Kudlow. God help us all.
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Both Democrats and Republicans made a strategic error in allowing American manufacturing to rush to Asia. An economy needs to know how to make stuff, if for nothing else than for self-protection. In the event of the disruption of global supply chains due to war, natural disasters, or climate change, we need to be able to make steel and electronics and tools and clothing. Trump is not wrong in addressing this, but his ability to bring Americans together to solve this issue are nonexistent.
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@Lee Rentz America currently manufactures more than at any time in its history. Look it up. But our manufacturing is now highly automated and doesn't need as many workers. This will not be reversed no mater how much we penalize China
34
@Marc
Automated or not, many more people would be working if textile jobs came back not to mention the metal working, car parts, etc.
7
@Lee Rentz It's important to realize that even completely eliminating the trade deficit would only bring back a couple of million manufacturing jobs, which actually isn't much in a country as big as America. We're not going to become a manufacturing economy again. But there should have been policies to mitigate and slow the "China shock" from around 1999-2007.
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Ta-Nehisi Coates said it best:
“Trump won whites making less than $50,000 by 20 points, whites making $50,000 to $99,999 by 28 points, and whites making $100K or more by 14 points. He assembled a broad white coalition that ran the gamut from Joe the Dishwasher to Joe the Plumber to Joe the Banker.”
It was never about “economic anxiety.”
That’s why those farmers and coal miners are still firmly behind trump.
237
@Chris I try to never miss a day reminding my friends (Facebook and real) that 90% of House Republicans are White males. That tells you almost all you need to know about Trump and the Republican Party
5
We'll get "infrastructure week" just as soon as we get that "beautiful healthcare plan that is cheaper and better than Obamacare," that Trump promised over three years ago.
7
Hey, haven't you heard? Make America Great Again has worked wonderfully- as along as you're rich. If you 're not, who cares? Nobody else counts, after all. Only the rich. Corporate government is there to support them, and only them.
8
One presidential term can't change markets on a global scale or manufacturing timeline. Doesn't matter who the Pres is. Of Course Trump believed his Tariff Mantra would spellbind the world. Instead he just duped Midwest voters. No wonder we can't compete with the world, we can't tell a joke so nothing's funny about clowns running the circus.
The next decade starts in 8 weeks. The world is on the brink once again. At least winter should give pause to a complete conflagration in every sector private and public.
1
The total number of persons employed in manufacturing has been improving since 2010, with the exception of 2016.
Manufacturing job creation per month on average, in thousands:
2014: 17 xxxxxxxxxxxxxxxxx
2015: 6 xxxxxx
2016: -1
2017: 16 xxxxxxxxxxxxxxxx
2018: 22 xxxxxxxxxxxxxxxxxxxxxx
2019: 5 xxxxx
Trump had a great 2018, with the tax cuts and promise of protectionism likely creating a sense of euphoria among the primarily Republican CEO's who's companies got their taxes cut by one-third.
Plus, we were just getting closer to maximum employment and people had more money to spend on stuff, thanks to the consistent job creation, and total jobs in record territory since May 2014.
This great story probably got cut short by the trade wars, with our allies and competitors alike.
However, in terms of total jobs created, Obama is far ahead, with 7.2 million jobs created in his last 32 months, vs. 5.5 million in Trump's first 32, after the big recent downward revision for 2018-2019.
https://fred.stlouisfed.org/series/MANEMP
4
Time for “trickle up” economics. Help the middle and they buy more, creating profits and jobs.
3
Trump administers Vodoo to fire up his base who did not know there is no winner in a trade war and there are only losers. After decoupling the global supply chain the manufacturing index(PMI) for China, Europe, and the US all dip below 50% suggesting we are in a manufacturing recession already now. Worst of all, the PMI for the US has dived more than that of China. The trade war is easy to win prescribed by the tariff master did not work out as expected and most victims are those who voted for Trump and supported the trade war.
3
It won't matter. Bringing back "manly" jobs was just lipstick; the pig--the ability to assert white male authority without regard to merit or justice--was always Trump's real selling point for his base. And it still is.
8
At least he built 'the wall.' Wait...that promise didn't happen either. Oh well...MAGA.
3
If your kid is not going to get a goverment job, police or fire, or tenured professor slot at a state school, or go into a licensed rent seeking profession like law or medicine with barrier to entry the future is dim in the US. Luckily Krugman probably has tenure. The reality is that our standard of living and wages and demographics will gradually approximate Mexico and Central America. Go to our Southwest. Visit towns like Barstow Ca. or San Bernadino.
4
@as So why is a country like, say, Denmark doing well?
BTW have you ever heard of Tech?
All of this hollowing out of our resources, our environment and our kid's future and all for a measly 1.9% GDP growth in the last quarter. Who thinks this is sane, sustainable or smart? Oh right, stupid people.
11
Back in 2016, I remember seeing the UAW workers on CNN talking about how they voted for Trump to save their jobs. And THAT is exactly why I bought a used Prius V.
Trump supporters love to put a 99 cent American Flag sticker on a Honda made in Asia. Idiots.
5
Many Hondas are manufactured in the U.S.
Dr. Krugman...an excellent column that provides much needed context. I know that President Trump is and will always be - to put it kindly - full of it. Articles of this kind aid in better understanding the "it" that he is full of. However, the unfortunate thing is that those who are being hurt by these policies likely will continue to support him unconditionally and realize only after it is far too late that they have been played by a master con man who never truly gave a tinker's damn about them.
5
For the most part, people in the US have enough manufactured stuff. Even most poor Americans have household appliances, consumer electronics, a car, etc. Many Americans are even into de-cluttering now, because we have so much stuff. And no one complains that stuff is too expensive; instead, we complain that services like healthcare are too expensive. Since we have enough stuff but not enough of some services like healthcare, it seems that we should be spending fewer resources on manufacturing and more on producing the services that are in short supply and hard to afford. Propping up manufacturing of goods that we already have enough of seems foolish. Especially because modern manufacturing doesn't even create tons of jobs any more; the new $5 billion plastics plant in Pennsylvania is only going to create a few hundred jobs; that ratio of jobs to investment isn't much better than Instagram's.
Manufacturing is only going to come back if we start building way more housing and infrastructure (which we actually do need), or if we help third-world countries that aren't over-saturated with stuff yet develop so they can afford to buy stuff.
6
I don’t know which poor people you know but most of the ones I know really could use a newer car. If they have one at all, it’s on its last leg. They just can’t afford it.
4
@Smilodon7
I said a car, not the newest one. I have never heard any politician campaign on reducing car prices. If anything, it seems that most politicians want to increase car prices, whether through tariffs on the right or environmentalism on the left. This tells me that Americans do not perceive a need for more cars in the US.
This article fails to mention one of the main reasons manufacturing is never going to come back is for the simple reason that technology has grown exponentially to the degree that industrial workers are obsolete. Your job is obsolete, get used to it, quit blaming politicians for things that are outside their control. Quit believing the lies that say we are going to go back to the "Golden Era", in which high school graduates had solid Middle Class incomes and could afford to buy all the furnishings of the American Dream. Those days are done, gone, finito. You had best find yourself a Recession Proof job like anything in the Medical field, or technology, or figure out something people need, and be an entrepreneur. We need people who are problem solvers, who are creative, who have a positive vision for what our future will become.
14
@Valerie Wells
If automation killed the jobs, then as much of the manufactured items we buy now would say "Made in USA" as they did 20 years ago.
Made in USA by robots.
The Industrial Revolution was a ruthless job-killing machine, but more than a century into it there were more jobs than before.
What changed was exporting jobs from the system, undermining labor's power and allowing a race to the bottom on wages.
5
If service jobs is what we are going to have, they need to pay more. We will never fix the economy if most people are working poor.
5
@mtbspd Add to the automation as a causative agent the propensity of American Corporations to focus on greed, thus finding the cheapest labor possible. As well, add the average American's attitude that Walmart was/is the bomb, not understanding that the cheap wares available there are the result of a vicious circle. "I want cheap goods", so I will turn a blind eye to the knowledge that Mexicans or Chinese are making slave wages just so long as I get mine. Unfortunately, it doesn't work that way.
Clinton had many chances such as in the debates, to explain to farm/rural voters how much value, in actual billions per state, Trump’s protectionist stuff was going to cost them. From what I could tell she failed that and in many other cases
3
Since the trade war began in Feb, 2018, the dollar has risen 9% against a basket of currencies, and 12% against the Chinese yuan. Of course that stimulates consumption with cheap imports, and that in turn can stimulate mfg for domestic consumption, but it is terrible for exports - ag of course, and also export manufacturing.
1
One note that is interesting is the Fed has been remarkably compliant to Trump's whims - they keep lowering interest rates despite the low unemployment. Easy money is often a big complaint among right wingers - I don't hear it now. It's as if the Fed we're on his re-election team.
I don't think that's the case; I think there is a rational for lower rates. But not in any right wing universe.
The point is, Trump has been remarkably lucky - he inherited steady growth from Obama and has done his best, his incompetent best, to wreck the economy. Fortunately, short of starting a war (hey, there's still time), there's only so much a incompetent criminal president can do to harm the economy.
12
I enjoy such insights that clearly are based on careful study of numbers. I would not have guessed that the mini-recession in manufacturing was more specifically a downturn in oil industry investment.
However, trade actions against China have two domestic policy drivers, and this only mentions one. Clearly a shift of manufacturing chains from China to Vietnam does nothing for domestic manufacturing.
It does however serve the hawks' cause of decoupling from the Chinese economy to permit a Cold War with them. Vietnam was briefly invaded by China and those tensions are still very real. Vietnam is on the not-China side of decoupling.
The fight with China is so big that it has many things going on at the same time.
Personally I don't want us to decouple, because I don't want the conflict that is meant to clear the way for. I'd rather the conflict be impractical.
I prefer that even though I think the globalization of supply chains went too far, and has many hidden costs of transportation, labor abuses, environmental damages, and distance of factory floor from design floor and business management.
I'd like the US to stay in for what remains globalized, but to bring more home instead of so much globalization. The "extra costs" are recognition of hidden costs, and so constructive in the economic sense of putting a real price on real things.
5
Born MN now retired IL it is not that great here
Lots of poverty, disease and anger
I get by but sure not high on the hog
Interesting TV as Missouri, Kentucky with Illinois politics 24/7
Big casino coming and legal pot
I pity my Draft age grandchildren
So it goes
14
@Lost In America I guess Marx said that religion is the "opiate of the masses".
Now we have real opiates, plus pot and the economic development promise of casinos- which is all a scam.
The magic trick of voodoo ecpnomics is making the middle class disappear.
34
I don’t think i’ve ever seen a quote in a Krugman column. Can you champion the poor and minorities if you never talk to a one of them
Wrong mr krugman does
3
Please don't assume that D. J. Trump meant to keep any of his promises any more that P. T. Barnum would have. There is a sucker born every day so never give one an even break. Just saying.
15
I wish Paul would stop pretending like he cares about “the commoners” or has any solutions for America’s swirl down the drain. It is the same column over and over again.
says much about how gullible and uninformed his base is.
7
Krugman: white men are the root of evil, the destroyer of nations, the pangs of infinity. If Paul Krugman weren't a white man I'd be inclined to believe him.
3
He’s not saying that. He just means they’re a convenient constituency to pander to.
If he had a paper route he wouldn't have been the lousy business man he is, and wouldn't have needed to become POTUS in order to make his ends meet, taking the rest of us down with him.
8
This year almost 40 percent of farm income will come from trade assistance, disaster assistance, the farm bill and insurance indemnities.
——————
If only more of our farmers were minorities....then we could call it welfare. Alas....
48
You can't have a rich egomaniacal leader focused on himself who's specialty is Real Estate trying to bring back manufacturing after he signed the rich people's Congressional Tax Cuts bill that still made foreign profits taxes lower than national. There is a real disconnect from national priorities by a man whose life is International. The Republicans made it attractive to leave the nation and failed to curtail the loss of national wealth, instead plundered it.
We need penalties on exporting wealth, business, and manufacturing. Trump knows it but he answers to his Wall Street roots. Manufacturing may never fully return, but punishing our consumers with Tariffs taxes on imports instead of punishing the manufacturers who left is so stupid my jaw drops.
The exodus must be made unattractive by means such as higher foreign holdings taxes and targeted taxes on those companies that abandoned us. Additionally, restrictions must be placed on foreign companies locating here and taking our jobs just as importantly as stopping the loss of jobs to foreign lands.
6
We all need to put up the following sign - "Farmers = welfare queens driving Cadillac tractors"
48
American farmers are the new welfare queens thanks to Trump.
34
You say it might matter politically that Trump has "utterly failed" to bring back blue collar jobs. It won't. Never mind that your use of "utterly" is probably hyperbole given your anti-Trump bias. Remember the stock market was never going to recover, until it did a few hours later--before you so "heroically" admitted you were wrong. No the real reason it won't matter politically is because whether Trump fails or not, he does not treat those suffering from the loss of industrial jobs with contempt and condescension, as you do in this very column, and it comes so naturally to you, you probably don't even realize it. Never mind that you can't resist suggesting that the real reason blue collar workers are supporting Trump is that they are racists. Even when you grudgingly admit that economic motives might be afoot here, you cannot resist a snarky, sarcastic jab at these very workers as "manly men" working "manly jobs." It is like it is some kind of inside joke between you and your fellow liberal intellectuals that all those blue collar yokels won't even get. Trust me, they get it, and that is why they will vote for Trump. So remember when Trump gets re-elected, just like the first time, it will be people like you who paved the way. And you will be once again wringing your hands over how these people must be racists, since the economic data shows that Trump does not care about them.
1
But will the die hard MAGA voters care, even if their pocketbooks are picked again by Trump? It seems not. Hate and fear require no affluence to spread. Trump will claim others (Blacks, Hispanics, Muslims....pick any group) did the stealing.
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I think a lot more people will do what they have been and just effectively “drop out” of our community life
3
Mr, Krugman is essentially asking why farmers are the stupidest people in America, why they would stab themselves in the back by electing a guy who promised to destroy their biggest markets. But, no, it is because farmers are true patriots that they voted to destroy their own livelihoods in order to make the rest of America great again. The fact that they may done so unwittingly does not detract from their noble sacrifice.
3
Except for one small problem. What Trump is doing has about as much chance of making America great again as Paris Hilton does to win the Nobel for physics.
And did the country actually benefit from their noble sacrifice?
"Great" is the lingua franca of sales: Great product, great price, great deal. Great is what hucksters say about what they're selling because otherwise what they're selling is no different from what everyone else is selling. Legacy advertising calls it USP or Unique Selling Proposition or brand differentiation.
Great is meaningless except as code for "you won't be sorry you bought something you don't need or duped to believe you can't live without it.
Trump looks at America as a boob he can sell anything to. That's why he thinks he's so great. He doesn't care what he sells, just that suckers buy it.
The symmetry of America's collapse is Salesman and Sucker.
What makes the Salesman great is the Sucker who likes being sold (and marvels at the seller). Truth has no role in any of it; in fact, truth is an impediment to selling.
Face it, about half of America wants to be sold, to be duped, to trade their hard won democracy for a mess of Trump pottage.
They knew what Trump was selling. They've been "sold" by the Republicans for decades.
Markets don't work without informed consumers. America won't work without informed citizens.
And "informed" isn't "enlightened self-interest" if that means "I voted for Stupid just to raise an index finger at Americans who aren't."
Impeachment is how we really make America great again.
38
Not a surprise from a President who knows almost nothing and lies about the rest.
17
@The Dog .
"I am just a poor boy though my story's seldom told
"I have squandered my resistance for a pocketful of mumbles, such are promises
"All lies and jest, still a man hears what he wants to hear
"And disregards the rest, hmmmm
"When I left my home and my family, I was no more than a boy
"In the company of strangers
"In the quiet of the railway station, runnin' scared, laying low
"Seeking out the poorer quarters, where the ragged people go
"Looking for the places only they would know
"Lie la lie, lie la lie la lie la lie
"Lie la lie, lie la lie la lie la lie, la la lie la lie"
4
It sure doesn’t help when CEOs make blatantly stupid decisions like Boeing with the obviously poor design of the Max and GM deciding to follow trumps lead and build vehicles that cannot be sold in the biggest markets in the USA.
Buy a GM product, ha! I won’t even accept one as a rental.
6
Ha, ha....but don't you know, it's all because of the do-nothing House wasting its time with impeachment. and frustrating the plans of our stable genius President. I can hear it now.
3
Trump needs those midwestern states to win the election. So, he made false promises and won the election. Every politician must say what people want to hear to get elected. It is union leaders job to educate the rank and file about the false claims. They didn’t do it or didn’t do a good job. The question is what the previous presidents did for the people that got Trump elected. Trump is only a symptom of what went wrong in America. Over the past half a century, the economic policies under both Democratic and Republican presidents, shifted wealth from middle class to few wealthy, shrinking middle class and widening the gap between rich and poor. Poor can’t go to college and suffering silently without health insurance and without living wages.
10
@Kodali What's a Union?
1
Believing in Trump is like believing that if you wish hard enough Peter pan's tinker bell will come back to life It makes no sense much like trickle down economics, but facts really do not matter in the mind of a Trump supporter.
23
@just Robert And that's the scariest part. How do you reason with someone who will flat out deny facts and evidence that is contrary to their 'faith'? "Fake News" is the ultimate conservative end of all debate. They only want to hear what they like, same as a 4 year old.
1
Mr Krugman,
Your column is the main reason why I subscribe to the New York Times, while the rest of the paper ain’t too bad either!
May God help us to survive Trump’s presidency.
-JLM (a reader for 59 years)
17
Krugman writes the same column over and over again. The economy stinks/ its Trump’s fault/hip hip hooray. The man celebrates what’s particularly bad for poor and minorities because he hopes it will undermine Trump. He blames Trump for lack of compassion for the poor and minorities. Pot calling the kettle black.
3
@michjas
The repetition you detect might have something to do with this administration's frequent and persistent economic errors (and its repeated false claims about their supposed success), all now in their third year, tho' I admit itt does seem much longer.
Except for the stock market, eighty percent of which benefits only ten percent of the people, the economic numbers since the tax cut sugar high aren't really very good.
And behind it all, there's that ballooning deficit, which (funny thing) Repbulicans no longer care about.
And that's just part of the economic story that bears repetition. Again. And again.
19
Hey.....you don't bankrupt several casinos, buy into a failing airline, run a fraud under the guise of it being a university, etc. without proving you have a "special talent" to bring, in guiding our country to economic success in a complex, global marketplace.
46
When all is said and done, in the midst of his deep incompetence and galling arrogance, Trump shall remain an astute self-serving demagogue who, by instilling fear and bribery, bought the loyalty of the Republican Party...and a misinformed 'base' that remains faithful to his nonsense...based on lies and insults. Manufacturing, as well as farming, has become dependent on Trump's 'largesse'...with our taxes.
17
Great piece.
5
Dr. Krugman, if all or most of the money flows to the top 1% ( we are in a Gilded Age II are we not?) or even being generous the top 10%, is it enough to keep the economy flourishing?
Common sense, says no. Even Henry Ford knew that if his workers were not paid a fair wage they would not buy his cars. Maybe there are enough 10%ers around the world to keep the U.S. economy flourishing but I suspect the answer is no.
I am no economist but maybe you can comment on this?
9
"For others, however, it meant restoring the kind of economy we had a generation or two ago, which offered lots of manly jobs for manly men: farmers, coal miners, manufacturing workers."
Agree, but I think that its more than that. They want to return to a time before the Great recession, the Iraq war, Whitewater, Iran-Contra, Watergate, Vietnam, the race riots of the 60s or the Kennedy assassination. They want to go back to the 50s socially and emotionally - basically go back to their rose colored childhood where there weren't all of the problems.
15
@yeti00 Do they really? Because in the 1950's, the highest marginal tax rate was 90%. If we returned to that, we could reduce the deficit and debt and spend money (like Eisenhower building the interstate highway system) that would help the economy.
And there were plenty of poor people in the 1950's (and 60's). Remember Bobby Kennedy visiting poor white people in Appalachia when he ran for President in 1968?
4
@Martin Brooks
I mentioned "rose colored" because they are looking for Matt Dillion, Perry Mason and Andy Taylor. They aren't thinking of Korea, polio, Iran, Guatemala or busing boycotts.
The *last* thing they are considering are taxes. Rush Limbaugh told them so.
This is getting out of hand. Dr. Krugman is referring to rural Americans as though they are social parasites (and is on the wrong side of history here.) This is irresponsible and he should apologize for it, imo. Dr. Krugman uses the USDA fact that nearly 40% of projected farm and ranch income this year is "related to" (though he states "comes from") various economic assistance/disaster relief programs (that have still not been paid out) as grounds to claim that RURAL PEOPLE are wards of the state! He neglects to mention (from the very same article he sites) that farm debt is projected to be a record high this year at 416 billion and Chapter 18 farm bankruptcies are up 24% over the past year. These figures reflect the mixed bag and high stakes from a year of catastrophic weather that affected our commodity farmers and other large-scale farmers, ranchers and agribusinessmen. And these industrial agriculturalists are NOT the common farmer, who have under 100 acres and benefit little, if at all, from farm subsidies! And these industrial acriculturists are NOT the average RURAL American! What percentage of rural Americans are recipients farm bill subsidies? Probably less than 1%. An apology is in order. (Of course, nearly ALL taxpaying Americans are both indirect beneficiaries and taxpaying benefators of this Iowa caucus-driven, pork barrel bonanza.)
6
@carl bumba Ah yes, only minorities who live in the city are on welfare - not the good rural Americans. How dare Krugman imply otherwise! :0)
13
Nobody ever apologized to the people in urban areas who have been demonized for years. Seems like they are owed an apology first.
@strangerq
This base caricature of a "bad" person's argument isn't mine.
I pray that American voters wake up to the fact that traditional manufacturing has been on life support for decades and that the new economic mantra of the modern world has shifted to green energy, food, and goods manufacturing with an eye on the future not the past. Other countries are far ahead of the US in this. I live in one of them and have seen first hand that it creates better jobs and better living standards. But the GOP, Fox News and all the greedy old men who own the means of production have the US voters lobotomized and cowed. Meanwhile the Trump media circus burns bright while America sinks. Wake up, please!
181
All of Trumps malfeasance, lies, and irrationality are all part of the grand "con" he has put over on the folks who voted for him before and will vote for him again. There's something scary about listening to those who have been hurt by this administration ...farmers, working guys, women...all defend him even though he has conned them with phony promises and vulture capitalistic policies.
70
The key slogan for the Democrats, both this year and in 2020, is “Promises broken...and don’t foist the blame on others.”
25
"And [Trump] has utterly failed in his politically crucial promise to make manufacturing in key swing states great again."
He hasn't delivered on any other of his campaign promises either, yet, with all that has come to light re the Ukraine Affair, Trump still enjoys a solid approval rating with Republican voters. Congressional Republicans are terrified of him, or more accurately, his fact-free, make-up-your-own-truth base. That base is a constuancy is not going away when Trump leaves the Oval Office.
The nightmare will not be over with the defeat/retirement of Trump.
Look for Baron Trump, who seems very much to enjoy standing in for his father at rallies and fund-raisers, to carry the flag after his father retires to Mar-A-Lago.
4
@Ralph Averill , are you sure you mean Barron, who is in high school and is very protected by his mother? Don Junior is the one I see craving the spotlight, having been pushed out of it by his sister all these years.
5
@Margaret McLaughlin
Thank you for the correction. Either way, one of Trump's brats is likely to follow Trump Sr. into politics. He/she can boast having more experience in government than Daddy did.
"Could Trump have been more successful at boosting manufacturing?"
Well Elizabeth Warren seems to have feelings about off-shoring labor. Here's a quote from her while walking the picket line at the GM Poletown plant:
“G.M. is demonstrating that it has no loyalty to the workers of America or the people of America,” ... “Their only loyalty is to their own bottom line. And if they can save a nickel by moving a job to Mexico or to Asia or to anywhere else on this planet, they will do it.”
So there you go Krugman, from Warren's lips to your ear. It's all the fault of the money grubbing corporations as well as a dig at manufacturing in Mexico, which Krugman seems to be enamored with. Can't wait to see her proposals to stop this.
A dose of alienation, hopelessness, xenophobia and racism? Maybe but the Democrats play to the mob as well as anyone.
3
Hi Paul Krugman....not surprising news but I'm wondering, if you, as a brillant man, can come up with solutions too since that can start a wonderful manufacturing engine for the future. Planting seeds of ideas can grow....
Hope you can surprise us readers!
6
Heavy on politics. Light on explanations or solutions. There's way more to the "why" question than this Paul. Trump's only the latest guy on the scene. You can do better... can't you?
5
I've read a lot of commentary on this subject, yours and others, explaining why the easy fixes were not going to deliver, and also, why a business tax cut in particular was going to lead to stock buy backs rather than new investments in manufacturing jobs.
So would it be inappropriate at this point to just say: "suckers"?
15
Wow.
“This year almost 40% of farm income will come from trade assistance, disaster assistance, the farm bill and insurance indemnities”!
Close to half?!
U.S. farmers are the new welfare queens. (Well, maybe not so new...)
How long can we let these rural welfare queens hold our metropolitan citizens electotrially hostage?
It is time to take back our Country back, cityfolk.
138
@SRP That number floored me too! And it comes from the Farm Bureau, which seems to have been one of the biggest Trump boosters. And as usual, I doubt if much of the subsidies is going to small-scale ag...
28
@SRP Right! Farm subsidy receipients have always baffled me. If they are rural folk, they hate the very people that pay those subsidies, and they don't want to see any change to their "white", 1950's communities. No minorities (except to harvest their crops for a month or two), no liberal politics, prayer in school, no taxes. Yet, they live off the government. If farms are run by corporations, farm bills are simply another hand-out to the already wealthy...and they are and always will be Trump/Republican voters.
9
It appear not to matter with most Trump supporters. Most of them are not really manufacturing workers, so they won’t notice. For that are, he will just scapegoat someone else who will have foiled his great genius.
Many Trump supporters are angered by much more than trade issues. They are a collection of single issue voters who don’t like homosexuals, don’t like abortion, don’t like immigration, don’t like ObamaCare, don’t like health insurance, don’t like trade unless other countries buy more than they sell us.
40
@Jazz Paw
You’d be right about those voters. They don’t like those things, unless their daughter gets pregnant or they get sick or they need chores done inexpensively. Those voters have what I call ‘situational ethics’.
1
I have sincerely been trying to curb my scorn and distain for Trump Fans. But occasionally, I must open the steam relief valve.
If you are still a Trump supporter, I must ask: what happened in your life, to cause you to fall for a lifelong Conman? Was it the faux Billionaire styling and posing ? The tornado siren Racist screeds ? The satisfaction of seeing uppity Women put in their place, and worse ? The pleasure of watching “ Spite TV “ whenever He appears ?
One question : How has He improved the actual lives of your Family ? Unless you got the latest and greatest Tax Cut for the already Rich, I’m guessing not so much. Do Better.
264
@Phyliss Dalmatian
Thank you for your steam. I appreciate your effort to reach out to the other side in multiple debates, but am forced to conclude that it is a fruitless endeavor. That is disheartening to have to say.
11
@Phyliss Dalmatian
Trump gives the wicked pleasure, for all to see at his rallies, of saying the words our elites won't print, even here. See Eastwood's Gran Torino before saying "deplorable".
The hidden reality is Republican resistance to punishing manufacturers who go overseas, resistance to higher minimum wages and short-term on-the-job training, resistance to the fight against age discrimination, resistance to efforts to make jobs more secure, even in work schedules and hours available, resistance to public sector jobs repairing roads and installing solar panels. Obama would have done so much more with a Democratic legislature. Warren will.
7
@Phyliss Dalmatian Well said and my thoughts exactly. However, the chances of your words reaching Trumpists is slim.
One thing I can predict, if you ever hear what you just said on Fox News you know it will be over for him.
4
Donald Trump threw a mess against the wall. He knew that it would not—could not—stick. He ran because he was shilling his name brand; he had no expectations of winning. He was playing with house money—racism against Mexicans, immigrants and other non-whites.
On the 2015-16 campaign trail, he said the first thing that came to his mind—and then promptly forgot about it. He preached the great white way—a return to eminence for the proletariat—who, tethered to his goofiness, thought their ship had just come in. He was, they knowingly smirked, “one of us.”
So now America’s farmers are on welfare. One wonders if they’re ashamed. Manufacturing jobs remain a mirage. The air that we breathe and the water that we drink are worse than the conditions under which (Republican) President Richard Nixon brought into being the EPA, one of the disgraced president’s signature accomplishments.
The Congress that bailed out the white and the rich in 2017 won’t say much against the lie that they knew Trump and themselves knew they were telling.
They knew that Xi Jinping—in office until he dies (or is overthrown)—could afford to outlast the buffoonish president. Foresight has never been a Republican staple.
They can’t win elections without resorting to racism’s train: voter suppression; gerrymandering; blaming social programs for a deficit that they blew up by helping themselves to the public dime. Their sleight-of-hand is so thin that a mere child sees through it.
Why is it successful? Guess.
121
So manufacturing ain't great? Could it be that new manufacturing job pay about as much as a fast food restaurant shift manager makes. The NYTs had an article on this a few years ago but I don't have the link.
4
But none of this is enough to sink him in the election, unfortunately
3
"When Donald Trump promised to Make America Great Again, his slogan meant different things to different people."
The same could be said for Obama's slogan, "Hope and Change", Paul.
"Somewhat ironically, Trumponomics has effectively turned rural Americans, who are far more conservative than the nation at large, into wards of the state: This year almost 40 percent of farm income will come from trade assistance, disaster assistance, the farm bill and insurance indemnities."
The federal government has turned many Americans into wards of the state through various and sundry entitlement programs, Paul, but you never mention that.
"The Trump administration repeatedly promised that the 2017 tax cut would produce a huge boom, with long-term growth above 3 percent; nothing like that is happening."
What did Obama repeatedly promise?
https://www.politifact.com/truth-o-meter/article/2013/dec/12/lie-year-if-you-like-your-health-care-plan-keep-it/
Did anything like what he promised happen?
"And he has utterly failed in his politically crucial promise to make manufacturing in key swing states great again."
What is your solution, Paul, besides more government control? How about less regulation, a simpler tax code and elimination of subsidies? What if we follow the Constitution? Will you ever advocate for a smaller federal government? Quite frankly, Paul, the president is not the economic center of the country regardless of party affiliation.
Submitted 10/31/19 @ 7:56 p.m.
@hm1342
Didn't Trump promise and indeed fulfill everything you advocate? smaller government (better yet shut it down); less regulation (except when it comes to voting rights and a woman's right to choose); dismantling "subsidies" by challenging the ACA (but giving them to farmers hurt by his trade wars and tax breaks to the most wealthy); and above all following the Constitution, excluding Article I and the First Amendment freedom of the press.
6
@Alan J. Shaw
and the Emoluments Clause.
4
@Alan J. Shaw: " Didn't Trump promise and indeed fulfill everything you advocate?"
Uh, no. Tell me any cabinet department that has been eliminated. Show me that the bureaucratic state is no longer making unnecessary regulations on a daily basis. The individual mandate may be gone but subsidies remain. Businesses still get subsidies, exemptions, carve-outs, etc. Trump doesn't know anything about the Constitution except what his lawyers tell him. Article I has to do with Congress - you may be trying to reference the First Amendment.
There are probably very few people in all three branches of government who know enough about the Constitution to actually attempt to turn things around. Sadly, none of them are in leadership positions.
The sun rises in the east, sets in the west, and the economy performs better under Democratic presidents. They’re just the facts. Oh, and people think Republicans are better economic stewards and Trump meant what he said. So you’ve got to take the logical with the moronic, I suppose.
28
"be careful what you ask for; you might get it"
1
Anyone who believed for a second that trump was going to be good for them (excepting the uber-wealthy of course) deserve exactly what they are getting, or will soon get. As a liberal sick and tired of being marginalized, pummeled by endless lies and subject to constant "both sides do it", I've no sympathy to give to trump, republican politicians or any trump supporters or voters. You are reaping what you sowed.
86
The problem is that most Trumpists care more about non-economic issues like abortion, gun control, illegal immigration, religion, than they do about economic issues. There's a giant disconnect between what they say they care about, and what they REALLY care about.
Sure, they want good jobs and wages, but when guns, abortion, immigration and religion are threatened (even if only in their minds based on fear-mongering from the right wing media), jobs and wages take a back seat. And in truth, since the war on jobs and wages has been ongoing for forty years, most of these voters have had to figure out some way to get by, and have adjusted to that as "normal". They're used to hearing about jobs and wages improving, and then they don't, so they don't put much stock in any promises on that score. It's almost like they expect to be lied to, so it's not really something they hold against a politician. But let a politician be linked with messing with one of the "untouchable" beliefs, that politician will never get their vote, even if they offered a realistic plan for improving their economic circumstances.
Fortunately there is a segment of Trump voters that did base their support on his returning economic fairness to the middle and working class. Many of these actually voted for Sanders before they were then left with the choice between Radical Change and Status Quo. These are the people the Dems need to win back, and if they follow a Sanders/Warren platform they will.
11
Mr. Krugman, we can tell the truth as many times as we'd like, but the public needs that delivered in a method that discredits the lies. So far, it doesn't seem much of the public has a drive to know the truth. Perhaps you should create a method of delivering financial truth in one simple, easy to understand paragraph? When you describe economic details in depth it is easy for those of us with graduate degrees in finance to comprehend, but most are just working day in and day out at trying to survive - not learn complex Treasury cash flow and how it correlates with GDP and jobs, business investment, consumer demand, infrastructure, on and on...I task you with simplifying the message and remembering who it is we need to convince.
4
Essentially, none of our Abandoner-in-Chief’s economic promises have come true - and he never brings them up any more.
This makes sense - the only thing he has ever known how to do is destroy things and walk away.
30
Utter failure is the meal being served up. Will farmers turn against Donnie Dumpster? Well in Scott County, KS, where my dad grew up it went about 80% for Prez Donnie. Think that rolls over? Doubtful, nor will it in the surrounding counties. Western Kansas is a right off. How about Southern OK, where my mom came from? Nope 80% for the Dumpster. Write them off too. So it really comes down to rural WS, PA and OH. Win 2 of 3 and the Demo can carry the day. If Donnie and his crew of cognitive dissonant cultists hold serve 2 of 3 we are doomed. So you make the call. As for manufacturing, we got sold down the river on that decades ago. Time to sell insurance or burgers.
13
@Paul Trump voters are not going to abandon Republicans (whether it's Trump or someone else) and that doesn't really matter. Hillary didn't need a single Trump voter to vote for her.
Hillary lost the election to liberals/Democrats who didn't bother to vote because they "couldn't get as excited about Hillary as they did about Obama" and those who voted third party. If 14% of third-party voters in WI, MI and PA had voted for Hillary, she'd be in the White House and we wouldn't be living this nightmare.
And it could well happen again if Democrats and liberals act like spoiled brats again. If Biden gets the nomination and leftists decide not to vote or vote third party of if Warren or Bernie gets the nomination and centrists decide not to vote or vote third party they'll put Trump right back in the White House.
Any red state Republican who would vote Democratic isn't voting on issues. They're voting on personality. Democrats (of any ilk) and Republicans are so far apart on the issues that anyone who is familiar with the issues and politicians positions on those issues would never switch parties.
IMO, Trump supporters aren't actually voting on issues either. They love Trump because they love his racism, nationalism, sexism, anti-Semitism, immigrant hatred and phony "macho" personality.
7
If Tulsi Gabbard runs as an independent, we could have a re-run of the 2016 election and another 4 years (or more?) of Trump. I'd like to know who is financing her campaign.
King Donald I has always not lived up to the hype. His problem is that he preys on the fears of individuals and channels it not the our worst sides.
King Donald has forgotten one very crucial lesson from history. Mobs can turn against the monarch. Just ask the Bourbons or the Romanoffs. All they have to feel is betrayed.
12
He'll say it all over again and they'll believe it all over again. Like Kevin Bacon in Animal House, "thank you sir, may I have another."
6
Yes, lots more clothing seemed to have tags for Vietnam, Thailand or Bangladesh these days. I would like to buy USA made clothing but who can afford it, even if you can find it?
4
As has happened twice before and now currently the rich are laughing all the way to the bank - as the rubes will have to pay for their unfunded tax cuts and there is no trickle down. Fool them once twice three times - it seems endless.
32
Electrolux just closed a fridge plant in St. Cloud, Mn. Over 700 people lost their jobs. Another sign of tRump's stewardship of the economy and his concern for American workers.
18
@woodlawner
More than half the workers losing their jobs are over age fifty, and have worked for the company for many years. It is going to be very difficult for them to find comparable work.
Here is one story about the plant closing:
https://www.mprnews.org/story/2019/10/30/in-st-cloud-longtime-electrolux-plant-to-go-quiet
5
Don't forget that Dubya cut taxes during war, a phony war at that. This has never before been done in the nation's history. So much for shared sacrifice.
I began my adulthood, first year of college, shortly before Reagan. His military buildup during peacetime is the greatest crime committed by any US president, the stoking of war for war's sake. Clinton later refused to collect the peace dividend from the collapse of the USSR. And we continue to build things the Army doesn't want, like Ospreys. Even decades after iniitial release, it was still killing Marines.
Fiscal insanity and military bloat, the twin nails in the coffin of shared prosperity. Neither of these things bother conservative voters in the least. You know what does bother them, if you peek at right-wing media like Glenn Beck's Blaze TV? George Soros. George is wealthy and Jewish and nominally liberal, so he must be the anti-Christ. It's all they talk about.
13
What all this says to me is that those of us on the middle-Liberal-side need to push for the Democratic Party of Truman. We need a Demand side experiment in economics, raise taxes on the super rich and spend on infrastructure, raise teacher salaries and build better schools. Teaching jobs will never be replaced by machines. Invest in education as the long term capital gain. I have enjoyed the benefits of the supply side years though I now want a Real Democrat, Bernie?, Joe?, Bess?, I am moving leftward at age 74 disgusted by this greedy grabby 'supply side' farce. I want the Democrats to feel proud of what they did today and trust in themselves. I am a gay man who feels deeply grateful for the NewYork Times and its editorial staff.
11
What really contributed to Trump's victory was Bernie Sanders and his oversized ego.
3
@Steve
Wrong. Bernie beat Trump whenever they were in the same poll. He was also cheered in a Fox TownHall this year. Why? Because he appeals to angry people like Trump, but in a positive and specific way. Trump wanted to get rid of Obamacare, Sanders wants Medicare for All. Trump thought huge tax breaks for big Corporations would make then invest and hire - it didn't happen. Sanders wants more progressive taxation so we can spend money on infrastructure which will definitely require hiring. Trump goes by gut instinct, Sanders gets his ideas from FDR's New Deal which gave us 70 years of prosperity. As to ego size Trump's ego is huger than Sander's ego by a factor of thousands.
12
@Steve If you really want to blame someone, blame his supporters who pouted when they didn't get their way (the outcome) they wanted and so they took their "votes" and went home instead of taking part in the general election - don't blame Sanders.
6
@Dennis One of the influencers of those Bernie fans going over to the 3rd party candidate instead of supporting Hillary was Susan Sarandon.
This goes to prove that the law of unintended consequences applies twice as strongly where a president is deeply ignorant regarding The relevant subjects, including trade policy and economics.
7
"This year almost 40 percent of farm income will come from trade assistance, disaster assistance, the farm bill and insurance indemnities."
But aren't trade wars easy to win?????
Someone is being duped.
20
“Let the Democrats really make America Great Again” should be their campaign motto.
4
I watched game 7 last night on a Fox feed on my local cable network. Normally I do not watch tv so I have never seen a Trump ad before. At any rate, his first claim was that he created 500,000 manufacturing jobs since taking office. Apparently Mr Trump does not agree with you Paul.
2
@rsvp
That's right, Trump's economic views and political ads have as much truth and authority as Krugman's articles. It's just a matter of opinion.
1
@rsvp ….Narcissists are known to be pathological liars. It comes just before delusions of grandeur.
5
Who believes anything Trump says anymore? He has zero credibility.
Interesting dichotomy between the thrust of this column and the recent cabinet meeting (Oct 21) at which Trump, Kudlow and others extolled the successes of the tax cuts and deregulation promotion of increased median family income vis-a-vis both the Bush and Obama administrations.
Although GDP and investment estimates are no where near those predicted by Hasset and others at the time of the tax cut debate, it is interesting there is no pushback on the Trump assertions of success. It is of interest that Zande predicts a Trump win in 2020 if the economy stays where it is, the content of this column notwithstanding.
The short-term sugar high is fading, and the long-term hangover has just begun.
7
The resemblance is uncanny. Crony capitalism and attack on the institutions of democracy is part of the playbook for all new populist leaders from the UK to Turkey to Brazil. Relying mostly on disenfranchised conservative older white men, and some other transitionary disgruntled system 'haters', populist politicians promised the moon in their blatant ignorance and disrespect for the political process and voters, only to fall back on polarizing nationalist messages and economic handouts once they are called out, to keep the 30-35% 'core' together.
7
A major infrastructure investment would have made perfect sense during the Obama years. The country’s infrastructure was and is crumbling from age and underinvestment, labor was plentiful and financing cheap. So of course Republicans in Congress prevented it, because their goal wasn’t to help the country - it was to hurt Obama.
Now we have a Republican President, albeit a corrupt and incompetent one, and guess what, he turned out to be more interested in massive tax cuts for the wealthy than public investment. What a shock.
The GOP is hollowing out America at frightening speed - not just public infrastructure but every public asset, including our lands, environment, educational system, health care system and oh yeah, our Constitutional government.
Better get these folks out soon, or there won’t be a country left.
112
@David Getting congress to pass an infrastructure bill would have required a lot of hard work and strategic thinking- not the Donny bone spurs strengths.
3
Does this column run in papers in farm country, the midwest and south, hometown papers in farm communities? I'll venture that most NY Times readers are familiar with Dr. Krugman and can see this argument. I'll venture that it would do more good if it ran in the heartland.
6
@Ken L : A better question is does rural American still have newspapers or much broadband internet access? Nearly 20% of local newspapers have closed in the last few years.
4
Trump killed the goose that laid the golden egg. His trade war is dragging down China which is dragging the entire world, including the US. His policies are hitting US manufacturing especially hard.
China is a major global supplier of many of the parts, components and materials used by American manufacturing. They dominate the globe in many of these areas. China is basically the one stop shopping center for industrial materials.
Nobody else can make that stuff as cheaply as China. Don't be fooled into thinking it all comes from backward shops using massive labor pools. China has many very modern, highly efficient manufacturing facilities. The Chinese government put up a lot of money for them. We don't do that here.
Bottomline is that we cannot produce these materials in the US at anywhere near the Chinese price. In fact, no one else can either. Those jobs will never come back to America.
So Trump has succeeded in slowing down the global economy, created a recession in US manufacturing, and put the farmers on welfare. All the while there has been no reduction of inequality, the left behind are still waiting for that ride to prosperity, and the shuttered plants are still rusting away. But we have the greatest economy the world has ever seen. Just ask him.
64
And we just heard that his big plan is for ... more tax cuts. Unbelievable!
6
Let’s see if it makes any difference in next year’s election. And about that manufacturing mini-recession: the Red State voters will blame the Democrats, the Bicoastal Elites, Nancy Pelosi, the Baby Boomers, Hillary Clinton, and the Loch Ness Monster, before they will attach any blame to Donald Trump.
16
What’s the matter with Trumpland? The most dangerous problem is that the Trump base either can’t recognize their own economic interests or they are so consumed by their incandescent resentment against coastal elites that they are will torch their own livelihoods to bask in the Trump filthy hatred. Either way it does not bode well for the future of democracy in this country.
15
Trump's a gambler... a three-card-monte street gambler that likes to keep talking nonstop while entertaining you, taking your money and moving on to his next mugging victim.
The Rust Belt and the neo-Confederacy fell for his cheap act and his Worldwide Wresting Federation Presidency which is predicated mostly on verbally hitting everyone over the head with folding chairs.
Some of these Trumpers will figure out they've been duped by election day, but many will just double down on his three-card-monte act until everything is gone out of blind loyalty to their cult leader.
And the tariff war has done nothing but raise prices on consumer goods while frightening the business community and creating a bigger American farmer welfare queen state.
A real President would try to lift up these angry white males by massively investing in infrastructure, healthcare, green energy, technical training and education that is required to compete in a modern 21st century economy.
Instead, Trump and his Grand Oligarch Party invested in more 0.1% Reverse Robin Hood infrastructure with his Billionaire Welfare Queen Tax Cut Act and Grand Old Pollution deregulation to soil the water, earth and air while stacking the courts with Corporate Shariah judges to ensure that no company, CEO or Robber Baron is every held accountable for trashing America.
Let's hope a few workers in the heartland and the Bible Belt have learned not to gamble away their votes and their futures with a seedy casino operator.
176
I spent last year in central Michigan on a work assignment for my company (a manufacturer of high-tech products). For the most part, my colleagues, many of whom are machinists who have been working in their jobs for many years, are stalwart Trump supports. Most of the people there seem to be satiated by owning large trucks and paying low gas prices. There's nothing that's going to change their minds. They don't care what he says or does, so long as he's sticking it to the "liberal elites."
12
We exist. But our votes don’t count as long as we are outnumbered by the MAGA crowd.
1
@Socrates
Inside your comments you identify, what I believe to be, a substantial part of a viable economy for the USA for the next decade or more. I want to emphasize by pointing to it. Your list includes: infrastructure (which would include new construction, replacement and continuing maintenance), healthcare (needed expansion of facilities, personnel and strategies for life quality improvement as well as more effective and efficient delivery), green energy (removal and cleanup of some facilities, development, installation and expansion of a new generation of systems including transportation, domestic and industrial), training (which I broaden to research and development of new and follow on systems and methods in fields including infrastructure, health, energy, transportation, appliance etc,), and education (a task that renews itself with each new generation and expands with new technical and biological discovery).
There’s plenty to do in America if we will simply focus on the future rather than the past.
3
When we needed a Teddy Roosevelt and we got Trump. When we needed a Franklin Roosevelt we got Barrack Obama. When we needed a real presidential candidate we got Hillary. When we needed journalist to stand up for American jobs we got Krugman.
3
@JoeG
I'm sorry to see you invoke by way of invidious comparison Franklin Roosevelt, whom I think would have been proud of Obama, Hillary Clinton, Pelosi, and Schiff.
5
While Trump and the GOP keep repeating the refrain of how great the economy is and how low unemployment is, Democrats should answer with "Well, that might be, but it's as good as it's going to get with Trump. Are you happy with what you got?"
4
Mr. Krugman, I am from the rust belt, a battleground state which went to Trump, and I have family members in manufacturing. Regrettably, you simply don’t understand their plight and this misunderstanding and/or lack of empathy towards working class whites pervades your columns.
It’s not just about the health of manufacturing, it’s about having a President that at least rhetorically will convey our dismay; who will stand tall against China (in a recent column you acknowledged the toll the Chinese have taken against American jobs); it’s about accountability and not asking for handouts; it’s about respect for law enforcement, when groups like Black Lives Matter promulgate a fake narrative of murdering police; it’s about fighting terrorism and eschewing political correctness with a Muslim Ban and a tough stance against immigration.
You are part of the detached liberal elite, which condescends to the working class.
4
@Mark So therefore the detached conservative elite is preferable?
10
Did you really put accountability and not asking for handouts in the same sentence? Didn’t you read the article?
Don’t you understand the payouts the farmers are getting? The farmers vote him in and are requiring payouts to stay afloat. Where is the accountability?
11
@Mark - I'm pretty sure Krugman isn't listening to pleas for respect for dirty fingernails. His tears for the bygone era of manly jobs for guys is the best understanding you can expect. He enjoys his elite status.
3
The problem with republicans is they hate government. They needed to socialize the profits of globalization to provide a parachute for all of us. But the wealthy bought the votes through legalized briber, aka corruption, and figured they didn't have to share the profits or the GDP growth.
And that is why we are where we are. We could have been investing in massive amounts of infrastructure, diplomacy, space technology, medical cures, science but instead we threw it away on profits for the few and the rest of us have seen no benefit.
7
For MAGA folks, Trump HAS increased manufacturing jobs in the rust belt, particularly, in the key swing states.
They know this because Trump told them so. And so it is.
The 'fake news' (this column included) is just part of lie. And if there is any lack of manufacturing jobs, it's the fault of Obama and the Dems.
Trump said it; it is so.
5
Talk about hitting the nail on the head, Mr. Krugman. Trumponomics has indeed resulted in the need to bail out our nations farmers. It has indeed resulted in little or no change in our balance of payments. It has been a boon to the Vietnamese rather than Americans with manufacturing jobs. And infrastructure? What "beautiful" highways, bridges, airports have we seen built. Zilch. We have interminable pipe dreams and lies and a political reality that makes it acceptable for the republicans to support a pathological narcissist. Heartbreaking.
16
No business, no person, can make plans if they have no confidence in their ability to predict the future. trump is instability and chaos personified.
12
Trump has combined neoliberalism with an economic nationalism that is primarily racist without state sponsored production. Trump's ego needs of being seen as the great deal maker have no depth of understanding. The corporations see no real benefit in moving manufacturing to the US. The Republican tax breaks are rewarding share prices without increasing a consumer base. I do appreciate Krugman's Keynesian analysis.
Hopefully, the media will focus more on the potential for meaningful economic policies that don't primarily serve the rich.
And hopefully, the Democrats will move beyond the neoliberalism of its last three administrations. Otherwise, American workers have little economic choice in today's political partisanship.
1
Trump has combined neoliberalism with an economic nationalism that is primarily racist without state sponsored production. Trump's ego needs of being seen as the great deal maker have no depth of understanding. The corporations see no real benefit in moving manufacturing to the US. The Republican tax breaks are rewarding share prices without increasing a consumer base. I do appreciate Krugman's Keynesian analysis.
Hopefully, the media will focus more on the potential for meaningful economic policies that don't primarily serve the rich.
And hopefully, the Democrats will move beyond the neoliberalism of its last three administrations. Otherwise, American workers have little economic choice in today's political partisanship.
1
The Republicans are absolute masters at psychological projection - I mean, world class masters. Many Republican voters, egged on by the grotesqueries of the Fox broadcasting style, accuse "coastal" Democrats of being anti-American socialists. Yet it is the Republican voter who depends on ag subsidies, military contracts, and direct government transfer payments (social security, medicare) to stay solvent. The truth -- the objective, measurable, data-supported truth -- is that the coastal states are the economic engine that drives US prosperity. From tech in the west, to finance in the east, to higher education on both coasts, the successful US industries are clustered in non-Republican states. Projection in the economic realm has now been duplicated in the political realm; "enemies of the Constitution" and "engineers of a coup" are constant Republican talking points. Yet they accurately describe the Trump era. The lesson: when Republicans accuse others of something, you have a good indication that they themselves are ashamed and guilty about the very subject of their accusation.
22
Even within the red states, it’s the blue urban areas which contribute most of the economic output and therefore tax revenue
2
There is nothing about Trump that is not nonsense. The real question is why did 63 million people vote for him.
6
Ironically, if we’d gone all-in for green energy and power grid updating we’d have a blazing economy. And we’d be preparing for the coming decades. But that requires “the vision thing,” something Republicans have been signally lacking for many years now.
21
You'd think this would influence the affected people's votes and support for Trump, but never underestimate their capacity for cognitive dissonance and the kind of weird Stockholm Syndrome support that the right-wing enjoys from many of the very people they victimize the most.
14
There are other Americans struggling besides the manufacturing segment - a corporate / government collusion giving away well paid hi-tech jobs to H1B Visa workers from overseas. They’re on our shores and winning while Americans are losing. There is not a shortage of American talent.
6
True. I went back to school, worked hard, got a CS degree. Was told that’s a great field and I’ll do fine. They neglected to mention tech doesn’t like you if you are near 40 and thanks to the bankers crashing the economy while I was still in school there was no job for me when I graduated. All I got out of it was debt. And people wonder why I’m mad.
1
I added a couple of midwestern states to the Fed graph and went back to 2010 when we really came out of the Great Recession. The data show clear 3-year business cycles in manufacturing employment. The troughs are in 2013, 2016, and 2019 like clockwork. That seems to be the thing to explain.
1
In my opinion Trump's economic policy resembles his foreign policy. In both areas there was a status quo, and the possibility (not a guarantee, but a distinct possibility) that radical change could (at least in some ways) improve things. Trump has in both areas created radical change. But he just charged in and broke things. Today and for many years to come, he has made things worse. Does he care? No. But he's had fun.
11
@Marvant Duhon
And he's richer.
3
If you think manufacturing ain't great now, just wait until next year. It'll be even worse then. Workers will be hurting but Trump and his fellow Republicans politicians will do just fine because they make money even if hardworking Americans don't.
11
Dr. Krugman is repeating himself here. On manufacturing tell us more: What is the spending on R&D by manufacturers now compared to 30 years ago? In what industries have American manufacturers been able to keep their competitive advantage? How do American owned companies in the U.S. compare with Japanese/EU companies in the U.S. vis a vis implementing new technologies, i.e. the results of R&D?
On common goods imported from China or Vietnam, such as appliances, give us a breakdown of the manufacturing costs here and there. Be specific for selected products. Also clothes. Include overhead such as work. comp, health insurance, pensions, and taxes. Then ad in shipping across the Pacific Ocean for an overall comparison. The story here is in the details. Then tell us what industries have moved overseas where the cost difference is marginal and why.
The reason industry has moved overseas en-masse is boneheaded policy here. Notice that our big union companies have almost all declared bankruptcy to get out of union contracts that greatly overpaid workers in these industries compared to other workers--the same greed that affects their corporate monopoly mgmt. culture.
With this give a rundown on public service union pay compared to other workers. You see a double charged subway tunnel in NYC and another tunnel not built to NJ., plus no high speed rail. In SF, anything connected with public transportation, the price just goes up and up.
What new policy would you suggest?
3
@loveman0
Manufacture moved overseas because of cheap labor. A great deal of corporate profit came from cheap labor overseas and importing cheap labor via the H-1B visas and trashing unions. It's that simple. In agriculture the cheap labor was/is immigrants, many of them undocumented, from Mexico and Central America. They are paid less than American workers. Employers are not punished for hiring them. If Trump's wall works watch the price of food go up. Not to worry, the wall will not stop the immigrants, it will suck money from the Pentagon that would have been used for schools for soldier''s children and housing and such.
4
Not sure how this column could be written w/o any discussion of the Fed and interest rates. The Fed erroneously lifted rates last year — and here we are. The recent reductions should boost investment over the next 6-12 months. The Fed also is boosting the money supply now, back to a 7%-8% annual rate. There is so much debt outstanding these days, it only takes a small change in rates to create financial pain — or a windfall. Politics is a sideshow.
1
To compete with foreign manufacturing wages and profits will have to be brought down to a competitive level. Or, even higher tariffs will have to be imposed on products that compete with American made ones.
That profit from the low taxes, it went to the stockholders as dividends, and in case you do not know, those on the board of directors are some of the largest stockholders. They vote themselves more stock each year.
As for manufacturing, must of the machinery it uses today is also make in other countries. The GOP tax cut was the real scam, the tariffs were for those who think government help is Socialism, but will take any public money they can.
It used to be other countries that tried to keep up with the U.S., well they learned how, and are doing a good job of it.
6
Despite the etymology of the word "manufacture", manufactured products are no longer dependent on manufacturing jobs. The USA could substitute its own production of goods for those imported from China with negligible effect on manufacturing employment. In fact, this has been happening for the last 75 years.
Products manufactured in US are targeting economies all over the world. With many countries still reeling with shock of 2008 recession and its repercussions, it's no wonder that companies are scaling back.
Euro zone, Russia, China, Middle East and Asia are all grappling with political and economic uncertainties.
US is managing the scenario much better as the dollar resilience shows relative to other currencies.
However, federal deficit is a bigger concern.
Turns out there really is a Confidence Fairy.
Not the Confidence Fairy of myth that "traditional" Republicans playing the role of Serious Policy Wonk used to justify cutting government spending for people they don't like (Americans not in the donor class) in order to magically increase economic growth. Mr. Krugman busted that myth (along with Paul Ryan's reputation as a Serious Policy Wonk).
Well run businesses don't need a lot of guidance from government to justify (or cut) investment. It's what they do.
But it seems that they do need SOME level of confidence that the President of the world's largest economy is not a dimwitted petulant child making economic decisions based on how they make him feel in the moment.
Maximizing ego gratification for the Narcissist-in-Chief is no way to run an economy. But it seems to be very effective in scaring the Confidence Fairy right out of the boardrooms of manufacturing companies.
7
Actually, not even infrastructure could have occurred without imports of the many materials needed..and his trade "deals" have disabled that. The bottom line Mr. K, are the low wages of countries such as China,Vietnam, Mexico, etc.which enables both parts and finished goods to be produced.Trump's denial, as well as ignorance ,of modern globalism is your answer.to Why?
Many Trumpsters like that a businessman is running the country, but how many of them would work for him? That's what I don't get about all of this.
Not one of his supporters would last a day working for the man.
They'd either quit or be fired.
3
Nobody wants to work for him. Work for Trump and you won’t get paid. Just ask the contractors he hires.
3
Nobody wants to work for him. Work for Trump and you won’t get paid. Just ask the contractors he hires.
3
Why are the Democrats not pounding this drum? What are they not highlighting the Trillion dollar deficit?
I am all in favor of impeachment at this point, but I think the Dems should not be putting all their eggs in one basket and instead diversify the avenues of attack.
6
I don’t think the impeachment is about removing him from office. Nancy Pelosi has been accused of many things, but stupidity is not one of them. She knows they won’t get the votes in the Senate. It’s about getting the facts out publicly, before the election. That really could hurt Trump in 2020.
5
When campaigning in 2016, Trump hit the right notes with his target base. He realised that a vast hinterland had been reeling from the outsourcing of manufacturing jobs over successive administrations and leveraged the anger of entire displaced communities to ensure a political victory.
While I have always despised the man's xenophobia and bigotry, I did hope that his emphasis on manufacturing would at least give way to a rejuvenation of the ailing manufacturing sector. Between 2002 and 2011, this sector experienced constant negative growth even as the US expended trillions on prolonged wars - a legacy of the Bush era.
Yet, Trump has floundered too. His lack of coherent policies, if anything, means that manufacturing will never come back here. The US would do well to look at others.
Germany and Japan - both advanced economies - retain robust manufacturing sectors. In both countries, there is a high degree of government-industry coordination. In Germany, the government facilitates a nationwide vocational training programme to ensure workers are equipped with the skills demanded by companies. I would think the success of this policy is reflected in Germany's consistently low unemployment rate over time. Japanese companies are also known to retain workers even during the downturn of a business cycle.
I believe ample solutions can be gleaned from these countries' models to alleviate the structural unemployment in the Midwest caused by the outsourcing of manufacturing.
7
Had the Congress and the Administration passed an Infrastructure Bill there would have been further demand for workers in the construction trades and lot and lots of demand for steel. Surely the demand for steel (e.g. for Miss/Mo River Locks and Dams, Amtrak Tunnels and Bridges, and Interstate Highway rehabs) would have juiced demand for steel bigtime.
But no. So US Steel temporarily shuts mills in Gary and Detroit. Stock prices of US-listed steel companies are down and steel industry is going nowhere. All in an era of 3.5% unemployment.
1
We begin with the premise that natural resources and manufacturing are strategically vital. We need the fuel to drive the economy and the means to manufacture for ourselves with the goal of being capable of sustaining our nation entirely on our own.
Our manufacturing giant was built during WWII and continued until perhaps the 80's after which time manufacturing began migrating to save costs, first to the sun belt, then to foreign lands. A culture of patriotic pride and self sufficiency has faded since then with the holdouts of car manufacturing telling us to eat our foreign cars.
After NAFTA, exporting businesses was attractive to the penny counters who saw a way to make things cheaper and to import those products tax free. That is as it is.,
And equally important is fossil fuels from oil to natural gas. They are strategic resources necessary to sustain us and after Trump arrived, Congress repealed the prohibition on exporting crude oil. They allowed our children's needs to go for profits and undercut our security. This may become trouble in times of political or military isolation.
So the worst has happened as you indicate tariffs have harmed imports of supplies for manufacturing. The supply chains are harmed, but more important is manufacturing pride which was punished.
We need limits on exports of fuels, business, and wealth used to build foreign plants. It is a real matter of national security. Trump is real estate, not manufacturing. It's a loser.
3
A particular area of neglect by this administration is urban manufacturing. Large old industrial buildings that were once home to a single big manufacturer need to be renovated for multi-tenanted, smaller scale, more design-oriented, high value production. Community colleges and apprenticeship programs need to be funded and form partnerships with businesses to provide the training for state-of-the-art technologies. We need to repair highways and expand mass-transit to help move goods and people. And the government needs to provide health care as in every other industrialized country so that US manufacturers are not burdened with those costs.
3
The challenge of manufacturing for a profit in a global economy is that everyone from Virginia to Vietnam has access to the same equipment. Let's say a piece of machinery cost $100. It can produce 100 widgets before it has to be replaced. Everyone in the world produces widgets with the same sunk cost of $1 per widget. The market price will be determined by the cost of labor and shipping. If the Vietnam company can bring its product to market in America at a competitive price because shipping costs are more than offset by lower wages paid to Vietnamese workers, then the Virginia company is out of luck. Unless tariffs are imposed.
It's hard to see how American manufacturing can make a comeback until we reach an equilibrium between low foreign wages and higher international shipping costs that will make domestic products competitive. Can American capitalism solve this problem? Probably not.
1
@WDG There is one other variable in trade and that is currency exchange rates. The dollar has been strong against other major currencies for some time now, even though we run huge trade deficits. The dollar's strength is mostly due to interest rates in the USA which are higher than interest rates in most other places. This is a financial matter but it does give a cost advantage to producers in countries with weaker countries in competition with US producers.
1
One could argue that the “Trumponomics” are barely disguised attempts to shift massive wealth to the “owner’s class” without any limitations like mandatory investment in modernizing production here in the USA in exchange for the tax cuts and the protective tariffs. Take the steel mills as example. They were the first to benefit from Trump’s tariffs and what did they do? They “adjusted” the pricing for their products to the level of imports after tariffs and that was about it. The extra win margin after the corporate tax cut was another welcomed windfall - without any consequences for the competitiveness of US made products on a global scale. The reason for that is fundamental misunderstanding of Mr.Trump and his supporters: the US market alone is simply too small for many of the most successful companies to survive. They must compete on a global scale or they will fail. Mr.Trump’s ideas are tainted by nostalgia and are not suitable for times of breathtaking progress in automation and robotics. A substantial infrastructure program could have secured longterm success and I think the failure to come up with one will cost the next generations dearly.
6
If there are to be manufacturers, they will most likely be small businesses; they can hire locally and support their communities. But Professor Krugman is right—there is too much economic uncertainty now due to Trump’s ill-advised trade wars; more economic uncertainty than I’ve felt since 2008.
I have a business plan for a unique niche product that could make a good profit and employ at least 20 area residents. I won’t take it on at this time due to economic uncertainty.
3
Please address automation. It seems self evident that automation will destroy more US jobs than outsourcing.
Other western countries invested in healthcare, education and infrastructure while we kicked the can down the road. Our Lobbyocracy seems ill-equipped to cope with these new challenges. According to Bloomberg we're 54th for healthcare efficiency. If we can't even fix healthcare, what chance do we have of fixing the big challenges?
30
Eventually we are going to have most people unemployed, a few middle class who maintain the robots, and the owners of those robots who are insanely wealthy.
4
@F Walker Automation is always destroying jobs — remember, it doesn't have to look like C3PO to be job-replacing technology. That's what happened to the coal miners: instead of employing men digging, we blow the tops of mountains or use giant scoops to strip-mine. Longshoremen were replaced with containers and giant cranes. There's nothing in the data suggesting that this kind of displacement is happening faster than it has in the past.
79
@Paul Krugman
Thanks for reply! I really admire your articles. I don't want to be a Luddite but this time feels different and much more widespread. It's not just the driver-less car and truck jobs but the sharing economy will mean less manufacturing and we won't need gas stations, much servicing or parking garages. You can't turn many truck drivers into IT programmers. Can you please point me to the data or lack of it?
Our US system of government seems less capable of addressing these challenges than a good Parliamentary system. We were so proud that we helped create the middle class but now we seem to be letting it slowly disintegrate. Europeans remember the feudal system much more vividly. Thanks!
5
I feel somewhat bad about rooting against my fellow Americans, and as a lifelong New Yorker I knew what a low-life Trump is. But I have to say it: anyone who voted for Trump and supported him deserves anything bad that happens to them as a result of Trump’s actions.
Hopefully, it will be something that the Democrats can eventually fix, again. But decisions have consequences, and selling your soul has a cost.
140
Too bad the rest of us have to suffer along with them.
11
I think the most salient point in this article touched on the absence of infrastructure improvement policy.
I hope Mr. Krugman is will take up this issue again in subsequent columns as to why these programs seem perennially sidelined. Is it just partisan gridlock or funding issues or just incompetence?
The rest of the article is good but just really sad .
46
@Matt
Only one party ever actively pushes for infrastructure funding. One party actively blocks such efforts.
Hint: the last time a major new funding bill was passed into law, the Democratic Party controlled both houses of Congress. That was in 2009.
We can change that in 2020.
20
@Beyond Concerned
Yup. Right there with you. I think it’s better if a professor says it though.
6
@Matt Infrastructure really isn't a problem of partisan gridlock: if Trump had proposed a straightforward plan, Democrats would have supported it — grudgingly, because it would have helped him politically, but they wouldn't have been able to say no. The reason we don't have a plan is that Republicans in Congress don't want any kind of successful public program, because that might legitimize other government actions. And Trump basically isn't interested in policy that doesn't directly reward his business supporters.
148
M\r Trump's business history was primarily either paying way too much for investments, or making promises of prosperity to desperate people. Trump University and Trump's Atlantic City ventures are examples of the latter. These ventures always ended up losing tons of money, and saddling the folks who trusted Trump with big losses. Toward the end, Trump loudly blames others for his own errors.
Trump's Presidency is running the same course: He gave away far too much money in his tax cuts for the rich (tilted heavily to Trump's personal businesses), and his policies have left the non-millionaire folks who voted for him poorer - not richer. (Had Trump run up the same level of debt on government-funded infrastructure projects, the economy would be booming - but Trump wouldn't have pocketed a tax cut.)
Today, we're in the typical glide path of a Trump enterprise: mounting debt, growing realization that jobs are not coming back, and Trump is screaming ever more loudly about whichever scapegoat he's chosen that day to blame for Trump's criminal acts.
The sd thing is that so many people are surprised.
P.S.: Trump's policies are standard Republican fare - it's just that Trump doesn't hide his policies with dog-whistles.
8
Good grief--socialism in the heartland! Now what?
How does a self-respecting "Trump Lover" explain that at the upcoming Thanksgiving dinner table?
Maybe it's time to sit down and rethink things--or, better yet, begin thinking about change away from the "old days" that were supposedly going to miraculously reappear when America was made great again.
5
A few things: I wonder if the folks in the rural states who are taking in lots of government handouts will be self aware and recognize it as socialism, or will they blindly accept it while railing about socialism and the lazy bums who don't deserve government handouts?
I wonder how much the last 40 years of stagnant wages and trickle down economics has killed American manufacturing. If regular people don't have money to spend, they're forced to look for the cheapest price, which forces manufacturing overseas.
Isn't the simplest rule of economics that economies are driven by demand? Put money in the hands of the general public and they'll want to buy things. Then businesses sprout up to meet that demand.
82
I’d love to buy more American made stuff but when you make less than $11/hr, that’s a nonstarter. Thus the cycle continues.
17
@Smilodon7 It's the Walmart Conundrum.
9
@David Biesecker My sense, unfortunately, is that rural voters are awesomely lacking in self-awareness. Rich blue states massively subsidize poor red states, and those states keep railing against the bums on welfare.
164
We never get around to infrastructure. Even in the depths of the Great Recession, the best we could do was ERRTA, well intentioned but too small. We have actually divested some of our infrastructure. Indiana sold its toll road to private investors. Chicago sold its parking meters. Fluor Corp built the new Bay Bridge main span in China and floated it across the Pacific on a custom-built barge. Saved a hundred million in labor costs, they say.
Trump's infrastructure promises, forgotten soon after he was sworn in, were all bait-and-switch privatization schemes.
So, is this the way it has to be? Infrastructure happens when and where it has to be, to make money for big players? Yeah, sounds about right.
3
That sounds about right. I could even get behind tariffs or a trade war with China if it were not Trump at the helm. He governs by whim, not any kind of plan or orthodoxy. Businesses don't thrive in a climate of uncertainty. They need to know the end game. So many decisions are long term in their nature and consequences, but you never know what Trump will do from one minute to the next. He'll watch Fox News and suddenly have a change of heart.
1
To compete with foreign manufacturing wages and profits will have to be brought down to a competitive level. Or, even higher tariffs will have to be imposed on products that compete with American made ones.
That profit from the low taxes, it went to the stockholders as dividends, and in case you do not know, those on the board of directors are some of the largest stockholders. They vote themselves more stock each year.
As for manufacturing, must of the machinery it uses today is also make in other countries. The GOP tax cut was the real scam, the tariffs were for those who think government help is Socialism, but will take any public money they can.
It used to be other countries that tried to keep up with the U.S., well they learned how, and are doing a good job of it.
3
No shock. Although rich folks got richer, and debt soared.
The support of many of these manufacturing workers was part of what enabled President Trump‘s razor-thin victory in 2016. They didn’t even necessarily like him, but they took a chance on his promises that he would somehow improve their lot—e.g., “I’ll rebuild the steel mills in Pittsburgh!”
Everyone can now see how empty those promises were. But even so, to win over this group the Democrats must make a better—and honest—appeal. For starters, we need to quit talking about socialism. Then, we must present an exciting vision of how we can use the powers of capitalism that made our country great to once again provide our workers with family-sustaining jobs.
One way to do this is to forcefully take on the challenge of climate change. And, as a central part of this, take the world lead in inventing and manufacturing cool new technology for power generation and transportation.
Besides saving the planet, this will also provide the millions of great jobs our people so desperately need. And maybe we’ll even make a few bucks in the process, and what would be so wrong with that?
3
The interesting question for me is, why can’t we, or Congress, get a major infrastructure package passed? Everybody agrees we need major investment here. Why the hold up?
39
Because that will cost big bucks and none of them want to be seen spending that much. Especially on something that benefits average people.
11
@Zave Smith
The two reasons Gary Cohn and Steve Mnuchin, the Goldman Sachs twins, enlisted on the Titanic were to get a tax cut for themselves and their cronies and shepherd through a "public/private" infrastructure scam that would have had Goldman skimming billions in "management fees" right toff the top. Well, they got their tax cuts, and Cohn soon jumped ship, finally realizing that any public money at all for infrastructure was anathema to the GOP. I still don't know what's keeping Mnuchin around, but it definitely warrants investigating, the man's a crook.
18
I do think most Americans would like to see more manufacturing return to the U.S. with better paying jobs. Unfortunately Trump took the shortcut to accomplish it, a trade war, without America’s buy-in. Had Trump explained to the nation that those products targeted to be manufactured here in the U.S. again would bring growth, but with a higher price for each of us, at least initially. But he didn’t, and as you say Paul, first build out an infrastructure to support that manufacturing, and do not have tax cuts.
Trump has done nothing to improve manufacturing and though the monthly labor report seems fine and dandy with low unemployment. The weakest category is manufacturing, it’s at the anemic level and getting worse. Trump likely has hurt the manufacturing sector more than helped it.
1
The unemployment numbers don’t tell the whole story. Sure there’s lots of jobs, but are they quality jobs that someone can actually live on? I suspect most of them are not.
3
White House "economists" Larry Kudlow and Peter Navarro claimed that the tax cut would "pay for itself." Republicans have been claiming that for 40 years and it has never happened yet. But like Charlie Brown running to kick the football hope springs eternal. Trump's tax cut benefited mainly large corporations and the top 10% of income earners - really mainly the top 1%. After a couple of quarters of above trend GDP growth the "sugar high" petered out and the latest quarter was under 2%. Large corporations only invest when they see increased demand for existing products and need to expand production or when they are introducing new products and need a plant to build them. The Trump tax cuts didn't deliver. Corporations took their tax cuts and used them to buy back their own stock, to give executives big bonuses, or to increase dividends. Very few manufacturing jobs were created. Most of those that were are in Mexico! And our annual budget deficit is up to nearly $1 trillion per year! No wonder Paul Ryan resigned!
3
When it comes to absolute truth all politicians don't embrace it or they see the truth as their own way to be re-elected and follow the party they attained.
They mostly forget about the people that pay taxes to our system of gov't.
They watch how the minority or majority will help them be re-elected.
They do not harbor any loyalty to the people from both sides, they harbor loyalty to their re-election.
It is not the distant future that as we become less informed as citizens that we lose our democracy.
It's the populace has been outwitted be these law holders who have no qualms to further their own ambitions.
Wake up America. 2020 is important for you and me. Good Luck.
1
So manufacturing is not coming back? And no one is offering to retrain them or send them to college? But, how will they live? And, what will I tell them?
4
It’ll move out of China, but it will go to some other low cost country. We sure aren’t getting it back.
@rebecca1048
Um, did you listen to or read Clinton's projected policies about retraining programs for groups like coal miners? There have been a number of similar programs by other Democrats. And college programs. Yet someone people in Iowa and other Red states keep electing people who main goal seems to enrich the rich and keep everybody poor and stupid.
4
Retraining is realistic for the younger ones, but for those that are middle age it likely won’t help them. Employers don’t hire people over 50 for good jobs. And education does not protect you from this. At best you will find a McJob somewhere.
I think we all are very lucky that Trump didn’t make big investments in infrastructure. It would mostly financially benefit his cronies. Even more important are potential
physical dangers of large scale projects in present regulatory environment. Just look at Federal agencies, from FAA to Department of Education. If we don’t wont to deal with large scale catastrophe like Chernobyl, US Government should be fixed first.
5
How about there is worldwide overcapacity for just about anything manufactured. The need for supply is driven by demand. The demand just isn't creating any shortages.
3
Life is a series of new beginnings. Domestic manufacturing with the use of human hands will wind down as A.I. will be instructing robots for those tasks.
That Caterpillar engine with hands on by Ms. Cardenas will be a history book photo in 15-20 years, if not sooner.
Farmers will have a bigger issue with climate change than soybean exports to China and no amount of farm subsidies will be enough.
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It doesn't matter, Prof. K. You can try and explain all this with reasons and facts till you are blue in the face, those farmers who are wards of the state as you put it (with few exceptions -- why is it always necessary to add this caveat to defend against the nitpickers?) will still vote for Trump.
Why?
A) as you have said so many times yourself, they only object to gubmint aid when it goes to "those people," and
B) because their grandpappy told them that Democrats were bad for business and nothing you say will make them abandon that belief, just as nothing will make them abandon position A). Very few people are able to make this kind of leap, liberals included.
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Politically, this seems like more of a problem for the GOP in Congress than for Trump. Sure, the trade war and cronyism are his babies, but the attempted death of healthcare, tax cuts, and trickle down came from Congress.
If any Congressmen or Senators buck him in Congress, he can attack them for disloyalty by saying they failed to deliver on his promises. Elect a real Trumper instead. Only then can we really MAGA. He’s got them where it counts.
Sure, his promises were absurd and grandiose: revive coal, restore manufacturing, big beautiful wall, even better healthcare, Muslim Ban, end war. He was like a Miss America contestant, but he can attack Congress. “It’s on them, I just work here.” So how can a non-retiring member vote to impeach/remove him?
He can also agree that infrastructure is important and blame Dems and Never Trumpers in Congress for that. He wanted infrastructure. He also wanted a wall. He can say it was Pelosi, Schumer, and their disloyal operatives in Congress that failed to deliver. “Not my fault, blame them.”
And there is probably just enough truth in there for it to stick. Sure, he poisoned the well with his government shutdown over a wall and DACA. But that’s adding complexity in a shouting match. He’s hurt by impeachment, a little, because it’s not hard to understand and the evidence is overwhelming.
He’s still got the base and even Dems are having trouble disavowing his trade war. Can Dems cave to China? End cronyism? There’s a trust problem.
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Yep, pretty much what I thought. Businesses are allergic to instability. Trump = Instability. Any questions? Meanwhile, the good old consumers in this nation drag the GDP along, one tv purchase at a time.
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How long can that last when we aren’t getting raises?
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It is Paul Ryan’s ‘belief that cutting taxes on rich people and corporations would have a magical effect on the economy’. Trump doesn’t know any of that. He is a dupe. Tariffs is Trump’s game, albeit, he knows little how to play that game. Yes, he strongly believes in white supremacy and so doesn’t like Obama. Obama won one Nobel prize and Trump wants to win two. That would be his quid pro quo phone calls in his second term, if he wins. For elections, he will get couple companies announce publicly about hiring thousands of manufacturing jobs in a quid pro quo deal. Trump needs to win the second term to make real money. At the minimum, he will have 100’s of millions of dollars of contributions, whether he win or loose.
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A sure reason for losses in domestic manufacturing is the widespread use of forced labor in China?
At its core macroeconomics is about controlling labor.
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The GOP doesn’t believe that cutting taxes will improve the economy, they believe they can sell the electorate on that while they make money for their rich backers.
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The core idea that protectionism has some value is not an absurd one. We take for granted that manufacturing jobs are "not coming back" because paying American workers to make a t-shirt or an iPhone would radically increase the price of those items compared with production in countries without labor or environmental protections. But it is far from clear that the benefits of these cheap consumer goods outweigh the harm of the domestic jobs lost, the intricate international supply chains that leave access to medicines and other vital products vulnerable to disruptions across the globe, or the insane environmental costs of using planes and container ships to send berries from Chile to Maine.
Mr. Krugman is of course right that the mixture of Trump's unique incompetence and typical Republican "voodoo" has not yielded a positive result. But the lesson we should take from that is not that more trade is always good. Staving off the worst of climate change, and remedying both domestic and international economic inequality, will require a pronounced return to localism - even if that means giving up some conveniences and rethinking some entrenched systems.
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"big investments in infrastructure, which would have created a lot of sales for U.S. manufacturing." ( exactly )
He walked away from it completely at the last moment. Those projects would have employed millions in both the mfg. plants of CAT and other machine mfgs. along with the boost of high wage construction jobs.
We would have started on our long climb back to ' modern ' highway/rail/water treatment/elec. gen. etc.
He threw it all away.
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That’s what he does. He threw away our allies and the progress they made in Syria too. And for what? To impress his dictator buddies?
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"And he has utterly failed in his politically crucial promise to make manufacturing in key swing states great again."
And yet, the voters in those key swing states keep supporting Trump. Let's hope they connect the dots before 2020.
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And also, manufacturing didn’t come back because the factories are increasingly automated. Like the tool booth collector vs EZPass, automation continues to march on.
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Robots don’t have human needs, they can run 24 hours a day, don’t need bathroom breaks, sick time or health care, and they don’t ask for raises. Of course this makes them very attractive to manufacturers.
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Dr. K, even if a lot of the manufacturing that shifted overseas from the 70s onwards does come back, the jobs and wage income that represents is not coming back. Factory automation has sealed that door. What can grow locally is a "tech" service sector (not just IT but product tech) - and that wont happen unless "tech" education (at community colleges, vocational/trade schools) is invested in.... What can also come back is the infra / construction sectors - only if Trump can find a way to work with Pelosi to make actual investment in those sectors - public as well as private
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I think a great example of how much work, and passion, is needed to bring certain types of manufacturing back to the USA is described in an article published in the NYTimes: https://www.nytimes.com/2018/11/28/style/made-in-america-flannel-shirt.html
American General was able to make a made-in-America flannel shirt, but it took a lot of cooperation among small companies (and owners) with a desire to make it work. It'd never happen with big companies and CEOs who only cared about the bottom line.
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@Rick in Texas I messed up. The company name is American Giant. And I wore one of their fully made-in-America flannel shirts today since it was chilly in Austin.
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@Rick in Texas Actually, some kinds of apparel are making a comeback — being close to the consumer has advantages. On other stuff, there are real reasons to outsource many things. The real sin of big corporations isn't so much globalization as tax avoidance: they've moved their reported profits to low-tax countries even when they haven't moved jobs or production.
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@Rick in Texas
I read that story, and I am on their mailing list--but, make no mistake, their shirts are never going to be cheap, and cheap is what America wants because, increasingly, that's all Americans can afford.
What I'm hoping for is a move away from "fast fashion"-- where apparel is worn seven times then needs to be thrown out because it's in tatters or because too many people have seen it on Instagram.
H&M, the super-giant retailer, is complaining that "consumers just can't stop buying clothing--it will hurt the economy." So, now, they're supposedly accepting clothing for recycling--I guess in an effort to get us to buy more junky clothes that don't last, but with clean consciences. I have yet to find a store of theirs in the U.S. that will take clothing--their web site is atrocious in that regard. It's like they don't really mean it.
Consumerism is a giant part of our GDP. If people stop buying stuff, our economy stops growing. My objection to this, besides environmental aspects, is that we pay the people who box up the "fast fashion" pitifully because God forbid we pay a decent wage in this country.
If you're willing to wear a good hybrid flannel shirt--try Vermont Flannel. The fabric is imported; the sewing is done in the U. S. You'll pay more for their shirts--but you don't have to throw them out in five minutes.
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Question is: will Trump be able to convince the workers of these states that the manufacturing jobs haven't come back due to (a) the Democratic party (b) the liberal elites (c) immigrants. So far, he has been very effective at getting these folks to vote against their own interests. And who likes to admit being wrong?
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I'm still waiting for that massive infrastructure plan. And I'll probably have to wait until he's gone.
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@Christy
Me too, I've waited to see one for decades. Now we're all about 'regions'............ east , south, west etc...... Which candidate speaks of (National) projects ? ..............we need to become united again as in "United States"
I remember Trump bragging about how his tax cuts were going to Make America Great Again by stimulating the economy up to 6% quarterly. He was criticizing Obama's quarterly GDP figures which hovered at around 3% as being minuscule. How odd then that after increasing the deficit to record numbers by giving Corporation & billionaires tax cuts that the GDP average for 2018 was 2.2% in 2017 & 2.9% in 2018 with 2019 at 1.9%. As pointed out by Dr. Krugman, business investment declined for two straight quarters, dragging down economic growth while the federal deficit exceeds $1 trillion.
The only thing keeping the American economy humming is consumer spending which has risen 3% even though manufacturing, construction, mining & trade exports have shrunk. The growth is in the service sector (hospitals, restaurants, education, software & consulting) which have grown five times faster than those from the traditional union paying economy. Private &/or public investment in fixed capital like real estate has declined tremendously leading to severe housing shortages for millennials. Plus white women are losing faith in Trump as they note that his promises have not come to fruition. He will have an uphill climb in the working class swing states absolutely & will have to double down on his culture wars to keep his hardcore base who are loyal regardless of his economic policy weaknesses.
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Pew Research published an article a few days ago. In it, the reader learns that most major cities have begun to feel the effects of a recession, in spite of the fact that the data they rely on, tax receipts, is usually only published once a year.
Be that as it may, at least one third of this nation never recovered from the Great Recession. The only change is that people now work multiple jobs in order to hang on and the elderly can’t afford to retire. While the new jobs under Trump pay a little more, the American paycheck is nowhere near what it was pre-recession. That is as true for experienced workers, if they were ever able to get back into their profession (most jobs call for 3-5 years of experience to cut out older workers), as it is of new graduates. Their starting pay is nowhere near as good.
This is what greed and limitless profits have wrought. The only difference, under Trump, is the massive injection of steroids into Milton Friedman’s doctrine.
Is it any wonder voters are looking at two senators rather than the centrist former VP?
We have a long way to get back to a better, more ethical, normal, barring a Trump depression. Add to that what we need to do to save our planet. 2020 can’t come fast enough!
In the meantime, let’s hope the Fed’s recent actions delay a depression. I don’t see Trump or McConnell bailing out millions of new homeless Americans.
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@Rima Regas , Glad to see you are back!
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Rima !!!
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@Rima Regas thank you. Your comment is absolutely correct.
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And yet, many people in those same swing states will vote for Trump (and their GOP representatives and senators) again. They don't see the connections. And they are deathly afraid that Democrats would --- what exactly? Help them?
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No, they are afraid Democrat’s would help those other people. Y’know, the ones that don’t look like them.
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@Richard. No. They're (the white guys) afraid the Dems will open the floodgates for immigrants who will take their jobs, depress their wages and seduce their women.
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@Richard
When you feel bad, it is easier to kick down on someone else than to accept help. It is easier to blame someone else than to acknowledge your own mistakes.
I think thats the core reason for the success of right wing misanthrope politicians. Be it in the US, Germany or Great Britain.
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Running the economy into the ground is a tactic Trump employed in running his business. By the way, is it 6 bankruptcies? But with Larry Kudlow at the helm, what could possibly go wrong?
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I really can’t find any sympathy for them their vote is the reason we are in this mess , just like the farmers vote . They wanted this now they got it.
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@jh : Unfortunately, they're taking a lot of us who *didn't* want it -- and who voted wisely -- down with them.
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@jh The farmers have become the new welfare queens that the Republicans always talk about taking taxpayer hand-outs to survive with markets gone and climate change nipping at their heels.
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Absolutely! I did not vote for this.
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In 1994 Charlie Rose interviewed Sir James Goldsmith about GATT (General agreement on Taxes and Tariffs). Goldsmith warned that the western industrial nations were committing economic suicide, that they were destroying their jobs base. Without an economically viable middle class, democracies become oligarchies run by the wealthy..
The past 50 years have seen an endless pursuit of the cheapest possible labor costs. Shipyards in the US, Britain and Germany have closed. The two biggest shipbuilding countries in the world are now South Korea and China. The textile industry in the US is dead. We no longer spin thread, weave cloth or make clothes.
Steel making in the US is now limited to small units melting scrap.
Most manufacturing plants have been shipped overseas. The furniture makers of Virginia and North Carolina are gone. Auto manufacturing has shrunk dramatically.
If another nation had done this to us we would have called it an act of war.
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Agree. In this brave new economy many people either work in professional services (management, consulting, finance, law, creative, education or medicine- Yes, I include the latter two in America) or services services (hospitality, gig, or informal labor). This leads to a largely hallowed out middle-class.
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@cynicalskeptic
Do you really think spinning thread and weaving cloth are a good use of our time and resources? Such low-productivity industries are not the route to prosperity.
Also, the view that all our manufacturing has gone to Asia is not remotely accurate. While some low-value industries like clothing have done so, overall, the US has three times as much manufacturing per capita as China: https://tcdata360.worldbank.org/indicators/mva.per.cap?country=USA&indicator=3798&countries=CHN&viz=line_chart&years=1990,2014.
We are able to have these higher-value industries precisely because our workers and resources aren’t tied up in making clothes. Even China is trying to outsource its lower-value manufacturing to poorer countries now so that it can build its higher-value ones.
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@cynicalskeptic
Agree. Was a grad student at LSE at the time. All of the academics pushed this .... in Europe it was almost all directed towards the EU and the EURO. There was a huge fight in the UK .. this is why they never adopted the Euro.
He was correct ... Brexit is the result. It was predicted.
Unfortunately, most trade policy is all about geo-politics. It not rational policy with proper direction .. the elites throw the workers away ... What made Japan, Taiwan and Korea global manufacturing powerhouses ??? The USA did .... we gave them our market .. with the US worker getting the shaft.
Goldsmith understood that doing the same thing was going to get the same results.
I'm talking from a family with 125 years of experience in manufacturing .. now much of it overseas. Not because we want to ... because we have to. Tariffs/Quota ... unilateral action against dumping ... all needed.
Technology has always effected manufacturing -- it's disruptive. BUT ,,,, we still make stuff ... and it can be in the USA. Technology makes it cheaper as we need fewer workers ... BUT .. have them in the USA. Someone has to make the machines and robots .. that cuts the workforce down the line.
Ah, but his tax cuts for the rich will result in a huge influx of money into Republican campaign coffers which will go out to massive advertising and misinformation campaigns which will convince the deplorables to vote his way or at least stay at home once more.
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@Hair Bear Yes, it is creating jobs in disinformation, influence peddling, extra security for his cabinet members, and ICE agents. Not much of an economic base for a major industrialized country.
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As usual, Paul, you hit the nail on the head. I love reading your opinions because they are clear and to the point. I was just a music major in college but all your economic (and social) insights are easy to understand. Trump simply has no plans; it's all seat-of-the-pants. Hence, he's constantly a moving target. If a normal business operated that way, they'd be out of business in a month.
We all knew the Republican tax cuts were never going to lead to 3% gdp growth; pie in the sky. The U.S. occasionally has a 3 or 4% quarter but that's an anomoly. Whatever tax policy we have in place it seems like we'll be in the 1.7% growth rate and that's pretty optimistic.
Anyway, I can ramble on but you're the pro and thanks again for your insight and amazing reporting.
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