Donald Trump’s trade-centric economic message is clouded in myth. (More)
“Our jobs are fleeing the country”
So declared Donald Trump Monday night, when asked to explain how he would improve working Americans’ incomes:
Our jobs are fleeing the country. They’re going to Mexico. They’re going to many other countries. You look at what China is doing to our country in terms of making our product. They’re devaluing their currency, and there’s nobody in our government to fight them. And we have a very good fight. And we have a winning fight. Because they’re using our country as a piggy bank to rebuild China, and many other countries are doing the same thing.
So we’re losing our good jobs, so many of them. When you look at what’s happening in Mexico, a friend of mine who builds plants said it’s the eighth wonder of the world. They’re building some of the biggest plants anywhere in the world, some of the most sophisticated, some of the best plants. With the United States, as he said, not so much.
So Ford is leaving. You see that, their small car division leaving. Thousands of jobs leaving Michigan, leaving Ohio. They’re all leaving. And we can’t allow it to happen anymore.
Only one sentence of that is even partly true: Ford is opening a small-car plant in Mexico, but their existing plants will shift to producing larger vehicles:
Ford, like many other automakers, is expanding production in Mexico. These companies have many reasons for doing so. The cost of labor is indeed greater in the United States, which makes producing labor-intensive small cars in Mexico more profitable. The United States also has advantages, though – inexpensive electricity, experienced technicians and access to sophisticated materials and equipment – often means building larger and more expensive cars is cheaper in this country.
One irony of the politics of the auto industry today is that for some companies, building cars in Mexico can be cheaper because Mexico has more free trade agreements with countries overseas. These free trade agreements allow manufacturers who build in Mexico to avoid tariffs when they sell cars in places such as Europe and Brazil.
Ford confirmed that Monday night in a series of tweets:
Ford has more hourly employees and produces more vehicles in the U.S. than any other automaker. pic.twitter.com/k15cqknsvX
— Ford Motor Company (@Ford) September 27, 2016
@eschulze9 There is no impact on US jobs. Ford’s American workers will build 2 new vehicles at the US plant where small cars are made today.
— Ford Motor Company (@Ford) September 27, 2016
Literally the first thing Trump said after thanking the moderator was that “our jobs are fleeing the country” when, in fact, employment has been steadily increasing for years.
Three sentences later, he said the Chinese “are devaluing their currency and there’s nobody in our government to fight them,” when, in fact, the Chinese are trying to prop up the value of their currency in the face of a massive investor exodus from Chinese real estate.
He also said the Chinese “are using our country as a piggy bank to rebuild China,” which isn’t even how piggy banks work, much less the US-Chinese economic relationship.
He said that Mexico is feasting on American manufacturing and “building the bigger plants in the world” when, in fact, Tesla is currently building the biggest factory in the world right in California. The existing biggest factory in the world is also in the United States, and is where Boeing jumbo jets are built. No. 3 is a Mitsubishi plant located in Illinois.
And contrary to popular imagination, U.S. manufacturing output has increased – by about half – since NAFTA was signed into law in 1994. Yes, there are fewer factory jobs, but that’s not because we’re making less stuff. It’s because automation lets fewer factory workers make more stuff.
What’s particularly odd about this is that while Trump doesn’t know anything about trade policy and isn’t in possession of any relevant facts about American manufacturing, he seems to see trade policy as the only economic issue worth discussing. You would never know from Trump’s discourse that the vast majority of Americans work in jobs related to domestic service provision – they work in hospitals and restaurants and schools and stores working with nearby customers, not internationally traded manufacturing.
His colleague Ezra Klein agrees:
If you believe the American economy is broken, you’re simply not going to fix it with trade deals. Trump’s promise to bring the jobs “back” is all the more hollow because he doesn’t seem to know where they are.
But might Yglesias and Klein be, in Salena Zito’s phrase, “taking Trump literally but not seriously”?
“And that is less clear”
Klein offered that comment in a criticism of pundits’ response to the debate:
Here is the conventional wisdom about last night’s presidential debate, as I understand it. Hillary Clinton won in a rout, but that’s largely because Donald Trump flagged after an excellent first 30 minutes in which he hammered away at his strongest issue: trade.
“Donald Trump won the first 25 minutes of the first presidential debate,” writes Ross Douthat at the New York Times, in a representative piece. “He was too bullying and shout-y, too prone to interrupt, but he seized on an issue, trade, where Hillary Clinton was awkward and defensive, and he hammered away at his strongest campaign theme: linking his opponent to every establishment failure and disappointment, and trying to make her experience a liability rather than a strength.”
His colleague, Maggie Haberman, made much the same point. “Trump has a strong case to make on trade, when he makes it,” she tweeted. “He made it once and then chased shiny objects for most of the debate.”
This is how it felt to me, too. Stylistically, this section was Trump’s best portion of the debate. He kept slamming Clinton on NAFTA – “the worst trade deal maybe ever signed anywhere” – and spoke with the confidence of a man who knew what he was talking about.
But he didn’t know what he was talking about.
Klein chided journalists for trying to reflect “what they think voters think,” rather than informing voters why Trump’s trade-centric economic view is wrong.
But even Yglesias concedes that manufacturing jobs have shrunk by 14% – one in seven – since NAFTA was signed. And that left a lot of men out of work, as NPR’s Uri Berliner explored two years ago:
There’s a long, unfolding story about work in America that often gets overlooked. It’s the story of men opting out of work altogether. These are men who have vanished from the labor force – men who don’t have a job and aren’t looking for one.
To describe this historic development with the context it deserves, we start with the American economy after World War II. It was firing on all cylinders, dominant globally, confident and dynamic. It was a great time to be an American man in the workplace. Hiring was strong for white-collar jobs and factory work. Industries like autos, aviation and steel were booming.
David Autor, an economist at the Massachusetts Institute of Technology, says women have responded to an increasingly demanding job market by getting more education, but men haven’t followed suit.
“You might say, ‘Why haven’t men responded more effectively, why haven’t they educated better, more, why haven’t they moved into higher-wage occupations?’” Autor says. “And that is less clear.”
As might be expected, economists don’t agree on why so many men have left the workforce. Some possible factors they cite: There’s less of a stigma today if a man doesn’t work. Union clout has declined. More men are in early retirement receiving disability benefits. New technology has eliminated manufacturing jobs. And competition from abroad moved others overseas.
Autor says many service-sector jobs that remain – in restaurants and retail, for example – don’t pay as well as the factory jobs that disappeared.
Like so many who tell this story, Berliner sets his baseline right after World War II. And yes, back then any white man in the U.S., regardless of education, could find a job that paid enough to support a wife and children. But three qualifiers – “white,” “man,” and “in the U.S.” – are the key to that baseline.
That baseline predates the Civil Rights Act, so American employers could openly discriminate. Consider these employment ads in a South Carolina newspaper, specifying “white” or “colored,” in 1958. Or these sex-specific employment ads in a North Carolina newspaper, in 1968. Moreover, in 1950 the U.S. accounted for 27% of the world’s GDP. Much of the industrialized world was still devastated by the war, and vast swaths of the world were still pre-industrial. But other industrialized nations rebuilt and still more nations were building modern economies. By 1993 – before NAFTA – the U.S. slice of the world’s production had shrunk by a third, to 20.6%.
I think the key to understanding Trump’s trade-only economic view – and why so many voters and pundits ‘feel’ it as truth despite its fact-free basis – lies in his first two words: “Our jobs.”
In TrumpWorld, the phrase “American worker” evokes a misty image like the one at the top of the page: a white guy in a factory.
Our Grafix Department blurred that image because it’s part of an equally misty Good Old Days. The other “workers” in that factory were also white guys. Maybe a black guy mopped the floors and cleaned the toilets. Maybe a couple of women served lunch in the cafeteria. But the “workers” were white guys. The foreman and the factory owner were absolutely white guys. The mayor, the city council, local judges, the police chief, and the cops were all white guys. The local and national TV news anchors were white guys. The local congressman and both senators were white guys. The Supreme Court was nine white guys. And of course the President of the United States was, and had always been, a white guy.
That white-guy-ness is a big part of what Trump means when he starts his answer with “Our jobs.” Note the first-person pronoun. Later in the debate, when questions focused on women or people of color, Trump switched to the third-person, with phrases like “their jobs” and “their neighborhoods.”
Seen through that misty lens of white-guy-ness, it’s true that “Ford is leaving the country.” Instead of opening a small-car plant in Mexico and adapting the U.S. factories to build bigger cars, Ford should build them all here. Those are “Our jobs.” White guy jobs.
Sure, American factories produce 50% more stuff than they did in 1994. But there’s stuff being made in Japan, Taiwan, China, India, Mexico, and South America … and that stuff should be made here instead. Those are “Our jobs.” White guy jobs.
You never hear Trump complain about cars, appliances, clothes, and other stuff being imported from Europe. Those imports are chic … built by white guys, at least in the minds of Trump and his supporters.
“Any group that’s been dominant – well, it’s not that easy for them not to be dominant anymore”
But a lot of Europeans see it differently. Authoritarian racist parties are gaining ground there too … as white-guy-ness wanes as the cultural norm:
As recently as the early 2000s, scholars didn’t have a good answer to the question of why ethnic violence tore through one city without hitting the other.
Roger Petersen, a political scientist at MIT, decided to try to find one. A year after arriving at MIT he published a book, 2002’s Understanding Ethnic Violence, that contained the first truly solid framework for understanding the difference between Kaunas and Vilnius – and, as it turns out, the right-wing backlash we’re seeing across the world today.
Prior to Petersen, scholars often thought of ethnic violence in terms of threat (one group turns to violence when it feels threatened by another) or in terms of “ancient hatreds” (long-simmering resentments that have left the groups wanting to kill each other). Petersen argued that while these explanations were correct in some cases, they were incomplete. Clearly, neither theory can explain the difference between Kaunas and Vilnius. Nor did they fit several other case studies in Petersen’s book.
In order to fully understand why ethnic violence happens, he argued, we need to appreciate the role of resentment: the feeling of injustice on the part of a privileged portion of society when it sees power slipping into the hands of a group that hadn’t previously held it. Drawing on social psychology, he theorized that one of the underappreciated causes of ethnic violence was a change in the legal and political status of majority and minority ethnic groups.
According to Petersen, that change in status comes from a sense of injustice. Members of dominant groups simply believe they deserve to be the dominant force in their societies, and resent those challenging their positions at the top of the pyramid.
“Any group that’s been dominant – well, it’s not that easy for them not to be dominant anymore,” Petersen tells me.
Later in the article, Vox’s Zack Beauchamp cites research on the Brexit vote, on the rise of far-right parties elsewhere in Europe, and on Trump’s voters. In every study, the statistically significant links were not economic loss or even expectations of future economic changes. Instead:
The graph indicates that neither income nor economic pessimism has a statistically significant impact on evaluations of Clinton versus Trump. On the other hand, those who think the economy is worse now than a year ago and those opposed to free trade agreements are more likely to support Trump, and these results are statistically significant.
The graph also indicates that several of the racial and religious views have a significant impact on evaluations of the candidates. Those who express more resentment toward African Americans, those who think the word “violent” describes Muslims well, and those who believe President Obama is a Muslim have much more positive views of Trump compared with Clinton.
More interestingly, with this variable included, attitudes toward free trade and evaluations of the economy are no longer statistically significant. This suggests that Trump supporters’ opinions about the direction of the economy are less an objective evaluation of actual conditions than a chance to register disapproval of a president they strongly dislike.
At the same time, resentment toward African Americans, the belief that Muslims are violent, and the perception that President Obama is a Muslim all remain significant even when controlling for attitudes toward Obama’s job approval.
Tesler’s own research confirms this. He looks at data from the same people, interviewed in 2007 and again in 2012, and examined the relationship between racial resentment and their evaluations of the economy. There was no relationship in 2007; in 2012, there was suddenly a strong correlation.
If the Great Recession didn’t cause this, there’s only one obvious explanation: America’s election of a black president. That means we need to turn the “economic anxiety causes racism” theory on its head: It’s racism that causes a certain group of Americans to say the economy is doing badly. Concern about the economy has become, for some, an outlet for anxieties about the country being led by a black man.
Trump’s fact-free “Our jobs” riff isn’t really about trade. When he howls “We’re losing!” he doesn’t mean that U.S. GDP is down (it has grown in all but three fiscal quarters since President Obama took office), that unemployment is up (it’s less than half now than when President Obama took office), or that wages are slipping (the median income has been rising for the past five years).
When Trump says “you have 4,000 people killed in Chicago by guns, from the beginning of the presidency of Barack Obama, his hometown, you have to have stop-and-frisk,” he’s not talking about crime rate statistics (the homicide rate in Chicago is lower now than in 2002 and shows only typical year-to-year variations since 2008) or analyses of effective police tactics (data show no correlation between crime rates and arbitrary stop-and-frisk tactics).
When Trump says those things, he’s invoking a misty Good Old Days when “the American worker,” the foreman, plant owner, the mayor, city council, local judges, police chief and all the cops, the local and national TV news anchors, the local congressman and both senators, the Supreme Court … and especially the President of the United States … were all white guys.
And you can’t fact-check that.
Photo Credit: Three Lions (Getty Images); Modified by: Crissie Brown (BPI Campus)
Good day and good nuts