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Donald Trump Is Wrong about Manufacturing and Economic Patriotism

Protectionism springs from ignorance of basic facts and economic principles.

Daily BeastDaily BeastHow misinformed—delusional, even—is Donald Trump's understanding of the economy? Totally. Here's a key passage from his inauguration speech (full transcript after the jump):

We've made other countries rich while the wealth, strength and confidence of our country has dissipated over the horizon.

One by one, the factories shuttered and left our shores with not even a thought about the millions and millions of American workers that were left behind.

The wealth of our middle class has been ripped from their homes and then redistributed all across the world.

Let's be clear: Manufacturing jobs (factory jobs) peaked as a percentage of the workforce in 1943 at around 40 percent, during the mobilization efforts for World War II. Since then, they have declined at a perfectly steady rate (red line below). In terms of raw numbers, manufacturing jobs peaked in 1979. The United States produces more stuff with fewer workers. Not only are these jobs never coming back, they disappeared from our shores decades ago. Only people who are wilfully naive or mendacious about basic economic reality and history can continue to assert that declines in manufacturing employment are recent or a major part of contemporary economic dislocation. FFS, I lived in Buffalo from 1990 to 1993 and even then people were saying the factories and the mills had just shut down, even though the big declines were already 20 and more years in the past.

FREDFREDOf course, Donald Trump is not alone in constantly talking about bring factory jobs back to America. Bernie Sanders never stops talking about and it was a regular line in Hillary Clinton's stump speech, too. In his early years in the White House, especially while selling the stimulus, Barack Obama also pushed that line, along with a very Trumpian "buy American" provision in the stimulus. To paraphrase Bob Dylan paraphrasing Samuel Johnson, economic patriotism is the last refuge to which a scoundrel clings. In today's global economy—a system that has not only lifted billions of horribly poor people out of extreme poverty but has delivered increasingly improved living standards for Americans—there simply is no such thing as "made in America." Or perhaps a bit less categorically, nothing good will come of increasing the price of imports, whether we're talking about finished goods or raw materials (such as steel).

If Donald Trump thinks the "strength and confidence of our country has dissipated over the horizon" due to, say, NAFTA, which increased the amount of U.S. good sold in Mexico, just wait until you have to buy a car built with steel only sourced from western Pennsylvania or made more expensive due to tariffs.

One more point: The industrial Midwest (also known as the Rust Belt) was key to Donald Trump's victory. The region remains mired in a decades-long slump; states such as Ohio and Michigan have for years been at or near the top when it comes to job loss and population declines in percentage terms. They don't need less trade with foreign countries, they need more; they also need more in-migration from other states. Whether U.S.-born or foreign-born, an influx of people is a sign of a thriving economy. These states need to create better, cheaper business climates by reducing taxes and regulation if they want to have any chance of competing with parts of the country that have better weather and lower start-up costs. When Reason TV and Drew Carey looked at ways to save Cleveland and other once-great American cities, the comparisons between the Mistake on the Lake and Houston were incredibly telling. Cleveland had dozens of different types of business zones, for instance, while Houston had essentially zero. The paperwork to start a business in Houston took an afternoon, while in Cleveland it stretched on for weeks. These are the fixes that should be discussed and implemented, not cynical and utterly unrealistic appeals to xenophobia and trade wars.

Here's a 2009 Reason TV video that is freshly relevant in the wake of Trump's inaugural address. I post it partly because it explains why free-er trade is good and because it explains that economic nationalism hurts poor people most of all. But I also post it to show that just eight years ago, we were hearing exactly the same rhetoric and arguments about how protectionism can fix what ails America. It wasn't true then and it's not true now.

Read a full transcript of Trump's speech after the jump.

Transcript of Trump's first speech as president:

Chief Justice Roberts, President Carter, President Clinton, President Bush, President Obama, fellow Americans and people of the world, thank you.

We, the citizens of America, are now joined in a great national effort to rebuild our country and restore its promise for all of our people.

Together, we will determine the course of America and the world for many, many years to come. We will face challenges. We will confront hardships. But we will get the job done.

Every four years we gather on these steps to carry out the orderly and peaceful transfer of power.

And we are grateful to President Obama and first lady Michelle Obama for their gracious aid throughout this transition.

They have been magnificent.

Thank you.

Today's ceremony, however, has a very special meaning because today we are not merely transferring power from one administration to another or from one party to another, but we are transferring power from Washington, D.C., and giving it back to you, the people.

For too long, a small group in our nation's capital has reaped the rewards of government while the people have bore the cost. Washington flourished, but the people did not share in its wealth. Politicians prospered but the jobs left and the factories closed.

The establishment protected itself, but not the citizens of our country. Their victories have not been your victories. Their triumphs have not been your triumphs. And while they celebrated in our nation's capital, there was little to celebrate for struggling families all across our land.

That all changes starting right here and right now, because this moment is your moment.

It belongs to you.

It belongs to everyone gathered here today and everyone watching all across America.

This is your day.

This is your celebration.

And this, the United States of America, is your country.

What truly matters is not which party controls our government, but whether our government is controlled by the people.

January 20th, 2017, will be remembered as the day the people became the rulers of this nation again.

The forgotten men and women of our country will be forgotten no longer. Everyone is listening to you now. You came by the tens of millions to become part of a historic movement, the likes of which the world has never seen before.

At the center of this movement is a crucial conviction that a nation exists to serve its citizens. Americans want great schools for their children, safe neighborhoods for their families and good jobs for themselves.

These are just and reasonable demands of righteous people and a righteous public.

But for too many of our citizens, a different reality exists.

Mothers and children trapped in poverty in our inner cities, rusted out factories scattered like tombstones across the landscape of our nation.

An education system flush with cash but which leaves our young and beautiful students deprived of all knowledge.

And the crime and the gangs and the drugs that have stolen too many lives and robbed our country of so much unrealized potential. This American carnage stops right here and stops right now.

We are one nation, and their pain is our pain.

Their dreams are our dreams, and their success will be our success. We share one heart, one home and one glorious destiny.

The oath of office I take today is an oath of allegiance to all Americans.

For many decades we've enriched foreign industry at the expense of American industry, subsidized the armies of other countries while allowing for the very sad depletion of our military.

We've defended other nations' borders while refusing to defend our own. And we've spent trillions and trillions of dollars overseas while America's infrastructure has fallen into disrepair and decay.

We've made other countries rich while the wealth, strength and confidence of our country has dissipated over the horizon.

One by one, the factories shuttered and left our shores with not even a thought about the millions and millions of American workers that were left behind.

The wealth of our middle class has been ripped from their homes and then redistributed all across the world. But that is the past, and now we are looking only to the future.

END

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  • Brochetta(MEDIOCRE_NEGRO)ward||

    Reason stole my Bane reference with its video, and didn't even give me a hat tip.

  • Krabappel||

    There will never be as many manufacturing jobs in the US as there once were, but there are still lots of great mfg jobs in the United States.

    To the extent that labor is becoming less important, the United States can be as competitive as many other countries, except in one major way -- our unbelievably high corporate income tax that US-based manufacturers have to pay.

    If we want to slow down the exodus of manufacturing jobs, eliminating the corporate income tax would be a good way to do it.

  • timbo||

    And to embrace automation and be rid of unions once and for all.

  • ||

    Yes, yes. These power-looms robots will be the end of semi-skilled labor.

  • Jerryskids||

    Abolish the minimum wage and overtime laws, the child labor laws, the clean air and water laws, all the OSHA rules about worker safety..........

    What, you thought our clean air and water and our nice clean safe jobs at good wages came at no cost? They did have a price - the price is a lot of factories moving to Third World countries where they can't afford the luxury of worrying about a few lost fish or a few lost fingers because they're too busy worrying about whether or not they're going to eat this week.

    Now, is our cleaner, safer, 40-hour-a-week work environment worth the price? That's a different argument, but you gotta consider the costs and benefits and that starts with figuring out what all the costs and benefits are. "If it saves just one life...." is bullshit. How many lives have been saved or vastly improved by better rules and regulations regarding industry? How many trillions of dollars in economic growth has it cost? And how many lives has that lowered economic growth cost? What's a life worth? If you say life is priceless, I'm gonna want to see the invoice from your insurance agent because I'm betting you ain't got a billion dollar life insurance policy. For most people, life is worth about $26.50 an hour, because that's what they trade it for.

  • ant1sthenes||

    Now, is our cleaner, safer, 40-hour-a-week work environment worth the price? It certainly is to the people who can just dodge the cost by purchasing imports. Not like they're losing their jobs.

  • Fist of Etiquette||

    An education system flush with cash but which leaves our young and beautiful students deprived of all knowledge.

    That needs to be a tweet.

  • Ship of Theseus||

    I'm sure he'll help "educate" the more beautiful students... He'll likely have private tutoring sessions with 'em.

  • cavalier973||

    ...a system that has not lifted billions of horribly poor people out of extreme poverty...

    It hasn't?

  • Ship of Theseus||

    Should be "can't"

  • timbo||

    When I ride by the projects every day, I see quite a few European sedans. That don't look that poor to me.

  • cavalier973||

    It looks like he corrected the sentence.

  • Half-Virtue, Half-Vice||

    It's like an AK spray of Trump articles.

  • The Fusionist||

    On this of all days!

  • Citizen X||

    It's almost like he became the president a couple hours ago, or something.

  • Half-Virtue, Half-Vice||

    Yeah, but, some of us are mostly avoiding political stuff -- and I know that makes no sense of a political website but, idk, give me free-range kids or weed article to rail on.

  • Not a True MJG||

    OK, some of these euphemisms go too far.

  • Citizen X||

    Also, dude, Kalashnikov references are problematic. "AR-15 spray," please.

  • UnCivilServant||

    AR-15s don't spray, they're only semiautomatic.

  • Half-Virtue, Half-Vice||

    This guy knows what's up.

  • MikeT1986||

    If Bump-rig/really twitchy finger AND poor discipline Then
    Spray
    End If

  • Chipper Morning Wood||

    AR-15 Body Spray. Find your magic.

  • Chipper Morning Wood||

    Yeah, when is socialist Reason going to have an article criticizing Hitlery?

  • ||

    I tend to white-knight Reason and it's authors, mostly because I can't stand it when people come here to bitch about why the website doesn't reflect their personal level of conservatism, but damn man, even I'm getting a little tired of the Trump Train today.

    If only there was some mechanism by which I didn't have to compulsively read every post. Alas, I live in the world we have, not the world I want.

  • Pro Libertate||

    Trust no one, Jim.

  • SugarFree||

    They haven't written even one word today about Hillary.

  • UnCivilServant||

    Who?

  • SugarFree||

    The traitors at Reason. Trump articles all day, but not one article going after Hillary. Not one.

  • ||

    SHE WOULD HAVE BEEN WORSE, SUGARFREE!!!

  • tarran||

    Why should they, when you've already written all that needs to be written about her for today?

  • AlexInCT||

    ^^^^THIS^^^^

  • Fuck You - Cut Spending||

    They're dog-whistling for disaffected proggies. Too bad the proggies hate free minds and free markets even more than they hate Trump.

  • Chipper Morning Wood||

    Your username is gonna come in real handy in the next 4 years.

  • MikeT1986||

    Only true libertarian position is to kill the drug users because of rule of law, invest trillions in a super fence, and prevent trade once the national borders are crossed.

    Anything else is progshit.

    RE the volume of Trump Posts:
    Yeah, it's a lot, on the other hand, you know, big news day. It's also Friday, go home and get drunk like a real American.

  • ||

    Some of us aren't welfare queens and have to get up early to put in a full day at the office tomorrow, MIKE. Sheesh.

  • MikeT1986||

    Are you implying you don't go to work hungover?

    Cosmo.

  • ||

    Touche'

  • Chipper Morning Wood||

    Cosmos leave work hungover.

  • Citizen X||

    No true cosmo would ever work for an employer that doesn't turn a blind eye to a lil' liquid lunch.

  • The Fusionist||

    Yeah, we can't all observe (((holidays))).

  • Not a True MJG||

    Best go out on this high note, GK.

  • Ship of Theseus||

    Today's ceremony, however, has a very special meaning because today we are not merely transferring power from one administration to another or from one party to another, but we are transferring power from Washington, D.C., and giving it back to you, the people.

    This is a lovely sentiment that I don't believe one word of.

  • timbo||

    I like the very subtle, yet oft repeated "transfer of power." Think about that in a supposedly free country.

    How about transfer of duty or office? At least then I am a little less afraid of the army of military guys all looking at the citizens with suspicion.

  • Pro Libertate||

    Transfer of cower. We change what person we cower before.

  • timbo||

    By his words alone, he is not a free market capitalist. His actions in business are also that of a cronyist.

    He sounds as frightening as any other power drunk politician.

    To his credit, the other side of his rhetoric does mention eliminating massive amounts of waste and government agencies and at least appointing businessmen to wasteful cabinet posts rather than fascist bureaucrats.

    He does say that government's role is to serve the citizenry. You can bet that Brak never uttered those words nor would he even contemplate them.

    At best, squirrel head might slow down the train a bit. Until a guy gets elected by being honest about drastically eliminating major portions of the government, stop most and reform the rest of entitlements, no more foreign adventures, reign in and eliminate the FED, and stop the debt/spending, we can only ever hope the next scumbag president at least tries to slow down the train,.

  • Heroic Mulatto||

    Holy shit. Katherine Mangu-Ward came into my office to bring me a plate of chicken nuggets and I literally screamed at her and hit the plate of chicken nuggets out of her hand. She started yelling and swearing at me and I slammed the door on her. I'm so distressed right now I don't know what to do. I didn't mean to do that to our new Editrix-in-Cheif, but I'm literally in shock from the reality of today's events. I feel like I'm going to explode. Why the fucking fuck did Gary Johnson lose? This can't be happening. I'm having a fucking breakdown. I don't want to believe the world is so corrupt. I want a future to believe in. I wanted Gary Johnson to be president and fix this broken country. I cannot fucking deal with this right now. It wasn't supposed to be like this, I thought he was polling well in New Hampshire???? This is so fucked.

    -- Nicholas J. Gillespie

  • Not a True MJG||

    What's the J stand for?

  • Heroic Mulatto||

  • ||

    Where's that originally from?

  • SugarFree||

    Your mom.

  • ||

    My mom could teach Winston's mom a thing or two about being a trashy whore.

    But this is a development over the last 20 years or so, so unlike Winston, I know who my father is.

  • SugarFree||

    Winston is the bastard son of a hundred maniacs.

  • AlexInCT||

    Winston.... Krueger?

  • Chipper Morning Wood||

    He had me going there for a moment.

  • Heroic Mulatto||

    From the heart, Gojira.

    From the heart.

  • Calidissident||

    It was originally a copypasta on Reddit about Bernie losing a primary. It's been adapted several times since.

  • Heroic Mulatto||

    Why do you enact their labor for them?

  • Not a True MJG||

    just wait until you have to buy a car built with steel only sourced from western Pennsylvania

    So, no more pencils, is what you're saying.

  • Chipper Morning Wood||

    I understood that reference.

  • Not a True MJG||

    *wipes tear from eye*

  • timbo||

    If we have to buy steel that is made here, then the guys working at the mill have to wear boots that were made here, shirts that were made here, use smart phones that were made here, eat food that was made here, use plastic hard hats that were made here, use battery components that were made here, their waitresses at restaurants have to do all the same things, the workers have to watch football on televisions that were made here, they have to view websites that were created here with only American content, and on, and on.......

    The whole proposition is such horseshit if one American were capable of taking a moment

  • Chipper Morning Wood||

    No more dates for Crusty.

  • John Titor||

    American prostitutes are still willing to do fetish stuff, you just need to pay them more.

  • ||

    Also FYI, a coworker stated that her activist buddies are streaming footage of a full-scale riot in DC.

  • Half-Virtue, Half-Vice||

    I hope the little tykes tucker themselves out soon.

  • Citizen X||

    "Footage of a full-scale riot" = "some progs knocking over trash cans and yelling"

  • ||

    I pretty much implied that when I responded to her.

    She's a full-blown Marxist (I have heard her tell someone else that some person she didn't like in her activist circle was a, "known capitalist"), and won't shut...the...fuck...up about how Donald Trump is going to kill everyone any second now.

  • Pay up, Palin's Buttplug!||

    Smashing car windows.

  • Pro Libertate||

    If my Google is correct, that happened this morning.

  • ||

    Well, good. DC Metro can beat up some white people for once.

  • Pro Libertate||

    You know, why didn't they just Occupy™ DC since the election?

  • ||

    I assume they were afraid that Trump was going to have the military disperse them a la Hoover and the Bonus Army. Not that any of them know enough history to get the reference.

  • Pro Libertate||

    They don't even know that Hoover was a president.

  • ||

    The guy who ran the country into the ground before the brave and noble Roosevelt come and save us all?

  • Pro Libertate||

    Yeah. That guy. The left really has rewritten a little too much history, hasn't it?

  • Pay up, Palin's Buttplug!||

    Nah, they do… they move the bad stuff that happened during the FDR Administration to the Hoover Administration and the good stuff that happened during the Hoover Administration to the FDR Administration.

  • Bruce Hall||

    Nick,

    Your data are correct, but perhaps Jack Ma has "the rest of the story".

    "DAVOS, Switzerland — Alibaba founder Jack Ma thinks America went wrong over the past 30 years by focusing too much on war and Wall Street. Speaking at the World Economic Forum on Wednesday, Ma was asked about globalisation and the reaction to it represented by the election of Donald Trump as US president.

    He responded that back when Thomas Friedman published "The World Is Flat" in 2005, globalisation looked like "a perfect strategy" for the US: "We just want the technology, and the IP, and the brand, and w̲e̲'̲l̲l̲ ̲l̲e̲a̲v̲e̲ ̲t̲h̲e̲ ̲o̲t̲h̲e̲r̲ ̲j̲o̲b̲s̲" to other countries like Mexico and China, he said.

    "American international companies made millions and millions of dollars from globalisation," Ma said.

    "IBM, Microsoft," he added, "the profit they made was larger than the top four banks in China put together ... But where did the money go?"

    Ma said that 30 years ago the American companies that people in China heard about were Ford and Boeing. Today the companies that people in China talk about are in Silicon Valley and on Wall Street.

    "T̲h̲e̲ ̲o̲t̲h̲e̲r̲ ̲c̲o̲u̲n̲t̲r̲i̲e̲s̲ ̲s̲t̲e̲a̲l̲ ̲j̲o̲b̲s̲ ̲f̲r̲o̲m̲ ̲y̲o̲u̲ ̲g̲u̲y̲s̲ ̲—̲ ̲t̲h̲a̲t̲ ̲i̲s̲ ̲y̲o̲u̲r̲ ̲s̲t̲r̲a̲t̲e̲g̲y̲.̲ You did not distribute the money in the proper way."

  • Fuck You - Cut Spending||

    Ma sounds even more incoherent than a Politburo official.

  • creech||

    Where, in his speech, did he say the jobs have left America recently? Perhaps he knows, as does Nick and the commentariat, that it has been since the New Deal times? Every retired person today saw this happening continually during their long career. I'd prefer a zero corp. tax rate and let the dividends be taxed (if realistically the U.S. needs to tax) when distributed to the owners. If the profits are re-invested, instead of being dividended out, then the cash is helping to further grow the company and the economy.

  • OldMexican Blankety Blank||

    Where, in his speech, did he say the jobs have left America recently?


    If not today, his recent speeches suggested it.

  • Azathoth!!||

    If not today, his recent speeches suggested it. He didn't.

    FTFY

  • Uncle Jay||

    RE: Donald Trump Is Wrong about Manufacturing and Economic Patriotism
    Protectionism springs from ignorance of basic facts and economic principles.

    If Trump the Grump really wants to get some of those manufacturing jobs back to the USA, he will have to drastically lower the corporate tax which I do not see him doing.
    He'll prove to be just another RINO.

  • OldMexican Blankety Blank||

    "One by one, the factories shuttered and left our shores with not even a thought about the millions and millions of American workers that were left behind."


    Even if one accepted the lie that "millions and millions of American workers" were left on the street, ostensibly because of all these factories leaving the country, the implication that factories exist to provide jobs to these workers is just pure Marxism. Who the heck said that a job belongs to a worker? All jobs belong to the employers. It's THEIR money.

    Why should a thought be given to these "American Workers(TM)"? Did they think of the company when they became unionized slugs? Were they ever thinking of the stock holders when they extorted better pensions from management? Yet the rhetoric seems to follow the same track that socialists and Marxists created: the notion that factory owners, employers and capitalists "owe" workers. You can almost hear Marx whispering his fraudulent Exploitation Theory of Profit in the background. Yet we have libertarians defending this economic ignoramus presumably because of his anti-market stance... And not because he claimed that more than half of Mexican immigrants are rapists and drug dealers.

  • Pay up, Palin's Buttplug!||

    The paperwork to start a business in Houston took an afternoon, while in Cleveland it stretched on for weeks.

    If you really want to screw up a city, adopt the requirements to start a business Greece has

    Antonopoulos and his partners spent hours collecting papers from tax offices, the Athens Chamber of Commerce and Industry, the municipal service where the company is based, the health inspector's office, the fire department and banks. At the health department, they were told that all the shareholders of the company would have to provide chest X-rays, and, in the most surreal demand of all, stool samples.
  • ant1sthenes||

    It's a fucking amazing tale where the FDA looks like the model of helpful, efficient bureaucracy.

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