May 31, 2018—The Accidental President's ill-considered flailings have put trade much in the news of late, with on-again, off-again metals tariffs (now back on); the threatened shuttering of a Chinese telecom giant rescinded after His Accidentalness fretted via tweet about "too many Chinese jobs lost" (we thought the whole program was about getting "our" jobs back from China); incensed allies and confusion throughout the U.S. and global business and farming communities. While informed observers across the political spectrum seem to agree that China has, since its admission to the World Trade Organization in 2001, made a fine art of gaming the world trading system, commentators are nearly as universally agreed that the measures the Trump administration is adopting—fixating on the trade deficit, lashing out at friend and foe alike—are unlikely to help the average American and will likely do considerable damage to the place of the U.S. in the world. Others perceptive observers point out that the best response to globalized manufacturing would be to roll up our sleeves and invest in human capital the way Germany has done for decades: train our young adults to participate competitively in the high tech industries in which the U.S. enjoys a comparative advantage.
March 8—The Accidental President has announced tariffs on imported steel and aluminum of 25 and 10 percent, respectively. The tariffs, essentially a tax on imports, will protect steel and aluminum producers from cheaper foreign products, while adding to the costs of manufacturers who use steel and aluminum in the products they make. These costs will be passed on to consumers in the form of higher prices for everything from canned goods to automobiles and appliances. Most economists consider such tariffs to be counterproductive, moreso when applied to our friend and allies, though some on the left favor protectionism for American manufacturers. The effect of the measure is rapidly being diluted, however, as the Acciental President announces one exemption after another: Canada and Mexico top exporters of metals to the U.S., have already been exempted, and other friendly nations are lined up for the same treatment. China, the bete noir of Trump's unfair trade narrative, accounts for only 3 percent of imported U.S. steel. The measure is looking more and more like standard Trump fare: an ill thought out gesture, capturing media attention, the chief purpose of which is to present the illusion (and what an illusion it is!) that the Accidental President is doing something purposeful.
In the wake of the Democratic Party's positive showing November elections, Jared Bernstein, former economic advisor to Vice President Joseph Biden, offers his prescription for a strong Democratic program going forward. In this WashingtonPost column, Bernstein suggests that direct job creation should form a key part of the Party's platform. If the government can bail out wealthy financial institutions when the economy goes south, Bernstein asks, why should it not come to the aid of the average citizen when globalization, digitalization and other forces beyond their control disrupt employment?
August 11, 2017—To those who celebrate increasingly human-like machines, columnist Alissa Quart, writing in The Guardian, say "slow down." Noting the loss of "human infrastructure," Quart questions the value of a future without the need for human effort and suggests needed measures to protect human workers.
In this Guardian opinion piece, Harvard economist Kenneth Rogoff writes that when it comes to trade protectionism, "the main beneficiaries are the rich and politically connected, whle the losers are consumers who pay higher prices."
This Forbes article, with accompanying video, challenges the notion that the U.S. has been hurt by global trade. Since its peak in 1979, the article states, U.S. manufacturing has lost 7 million jobs. Meanwhile, however, the economy has added 53 million jobs in the service sector, the majority of which pay better than jobs in manufacturing. If this data is correct, perhaps a better focus of our energies would be in raising the wages of those service jobs—in retail, the hospitality industry, and other low-skill sectors—which do not allow a comfortable standard of living, and in making sure there is a decent-paying job available for every citizen who wants one.
U Cal Berkely economist Brad DeLong takes issue with the 2016 presidential campaign’s consensus on the undesirability of the TPP and other trade deals. In this thorough-going analysis, DeLong argues that trade deals have had virtually no negative impact on U.S. manufacturing, and have greatly helped the overall economy.
Trump promised in his campaign to take down America’s trade competitors; his meek actions so far, according to columnist Binyamin Appelbaum, amount to “talking loudly and brandishing a small stick.”
The Accidental President claims he will get a better deal for America through foregoing multilateral for bilateral trade deals. According to McGill University political scientist Krzysztof Pelc, history tells us otherwise.
It is not only global trade that threatens U.S. jobs. Sears has not made a profit since 2011 and has shed a large number of stores. What fate for its decommissioned employees, and those of other brick and mortar chains?
National Academy of Sciences researchers take issue with Accidental Treasury Secretary Mnuchin’s complacency about the impact of technology on employment. (March, 27)