Trump Voters And The Magical Belief In Government Action

After violent protests forced the cancelation of a Trump rally in Chicago on Friday night, I listened for about half an hour to Trump being interviewed on the subject by Sean Hannity.  Much of the discussion was about the illiberality of the "liberal" left, but some considerable percentage of the time was also devoted, after a fashion, to issues of economic policy.  I say "after a fashion" because, as usual with Trump, there were no specifics.  Instead, given the opportunity, with all the time in the world, to lay out anything he wanted about economic policy, what Trump did was repeat, over and over, the same line:  "We're going to bring the jobs home."  By my count, he uttered that line at least half a dozen times in the half hour, and that was the beginning and the end of what he had to say about economic policy.

Well, what does that even mean?  What is the thing that supposedly Trump is going to do that will "bring the jobs home"?  Certainly, he did not mention anything in this interview.  In previous interviews, I have heard him go as far as to say that we are "losing" in international trade to countries including China and Mexico, and that he can fix that by doing better "deals" than our current incumbents.  But the better "deal" consists of what, exactly?  

Unfortunately, I think that many or most Trump voters actually believe that we are somehow "losing" in the arena of international trade, and that there is something a President can do to change that.  On a similar note, the Obama voters believed that their man could "stop the rise of the oceans" and "heal the planet."  Is there really much difference?

How would you measure whether we are "losing" to another country in international trade?  Me, I would start with per capita GDP.  That statistic would basically tell you which country's workers have the higher-value jobs, and by how much.  So how does the U.S. stack up against China and Mexico in per capita GDP?  Here is a chart compiled by Wikipedia that includes per capita GDP numbers for all the countries of the world from three sources -- the IMF, the World Bank, and the UN.  All three are pretty close for these purposes, so I'll use the IMF numbers (which come from 2015; the others are for 2014).  And the answer is:  US per capita GDP for 2015 is $55,904; Mexico is $9,592; and China is $8,280.  Whoa!  That's saying that people in the U.S., on average, are close to six times as productive as Mexicans, and almost seven times as productive as Chinese.  I would submit that any rational person would conclude that we are killing them in the international economic competition.  Indeed, it's not remotely close.  (And by the way, did you know that even after the tremendous economic growth in China in the last two decades, Mexico is still the wealthier country by a considerable margin?  It pays to look at the statistics.)

Are these jobs that are one-sixth or one-seventh as productive as our jobs the ones that Trump plans to "bring home"?  Another way of looking at that is that Mexican and Chinese jobs are not productive enough to support a wage as high as the U.S. minimum wage for any but a tiny percentage of their workers.  How could it possibly be a good thing to bring those jobs here?

When he has been asked to specify the jobs that he thinks should be done in the U.S., Trump has sometimes referred to automobile assembly line jobs that have gone to Mexico, or computer assembly that is now done largely in China.  These of course are about the lowest-value jobs in the automobile and technology sectors today.  Think about what goes into a car or a computer today, and you immediately realize that there are zillions of much higher value jobs that the rational country would greatly prefer to have.  Which is a better job, designing the new sensors that will keep cars from crashing into each other, or snapping the same two pieces together on an assembly line two hundred times a day every day of the year?  Creating a new computer chip to maximize gas mileage, or screwing on door handles all day long?  I say, good luck to the Mexicans and Chinese with those rote assembly jobs.  Within our lifetimes, they will mostly be done by robots. 

I have a fundamentally different diagnosis from Trump as to the basic economic problem of the U.S.  The problem is not that good jobs are moving abroad as we "lose" to other countries.  The problem is that our own job-creation machine is not working at the pace that it should.  And that, in turn, has little to nothing to do with international trade policy, and everything to do with what I have called the "war against the economy" being waged by our government domestically.  In that article in August 2015 I listed a few of the intentional efforts of our government to suppress economic activity:

[M]assive wasteful spending and debt accumulation; artificially suppressing cheap and reliable energy in favor of subsidizing expensive and unreliable energy; overregulation and endless phony prosecutions directed against anyone who dares to make too much money in a financial business; forcing people to overpay for wasteful health insurance (Obamacare); big tax increases; and more.

What could actually help our economy take off?  How about stopping the suppression of cheap energy?  How about recognizing our financial sector as the crown jewel of our economy and ending the demonization of it?  In a simple summary, how about basic encouragement of productive economic activity instead of intentional demonization and suppression?  But instead we have Trump proposing better "trade deals" with China and Mexico.  Meaning what?  Tariffs?  Quotas?  How are things like that going to help?