Rusty lever won’t lift U.S. econ­omy

Trump is ob­sess­ing over min­ing and man­u­fac­tur­ing in­stead of health­care, tech­nol­ogy and ed­u­ca­tion.

Los Angeles Times - - OPINION - RON­ALD BROWNSTEIN Ron­ald Brownstein is a se­nior ed­i­tor at the At­lantic.

Don­ald Trump in­vari­ably presents his agenda as pri­or­i­tiz­ing the Amer­i­can econ­omy over ab­stract ideals like global co­op­er­a­tion.

But that’s not ac­cu­rate. Trump’s agenda just pri­or­i­tizes some seg­ments of Amer­ica’s econ­omy over oth­ers. He’s at­tempt­ing to re­store the pri­macy of in­dus­tries that pow­ered the Amer­i­can econ­omy in the mid-20th cen­tury: par­tic­u­larly man­u­fac­tur­ing, fos­sil fuel ex­trac­tion, and con­struc­tion. In the process, he is sub­li­mat­ing — if not op­pos­ing — the needs of the sec­tors driv­ing growth to­day: in­for­ma­tion tech­nol­ogy, pro­fes­sional ser­vices, clean en­ergy, en­ter­tain­ment, ed­u­ca­tion, tourism and health­care.

With de­ci­sions such as last week’s blus­tery with­drawal from the Paris cli­mate ac­cord, Trump is bet­ting on in­dus­tries whose great­est con­tri­bu­tion to Amer­i­can pros­per­ity is be­hind them. If Democrats can re­sist the temp­ta­tion of re­flex­ive anti-busi­ness pop­ulism, Trump is of­fer­ing them a huge op­por­tu­nity — sym­bol­ized by the con­dem­na­tion of his Paris ac­cord with­drawal from lead­ers of cut­ting-edge com­pa­nies in­clud­ing Ap­ple, Google, Ama­zon, Mi­crosoft, Tesla and GE.

When Trump talks about the econ­omy, man­u­fac­tur­ing and fos­sil fuel pro­duc­tion usu­ally take first billing, fol­lowed by con­struc­tion — the tar­get of this week’s in­fra­struc­ture pro­pos­als. He typ­i­cally cites these in­dus­tries to jus­tify im­pos­ing trade bar­ri­ers, aban­don­ing trade deals, re­strict­ing im­mi­gra­tion and rolling back en­vi­ron­men­tal reg­u­la­tions.

It’s far from cer­tain Trump’s agenda will ben­e­fit these in­dus­tries as uni­formly as he claims. The fed­eral In­ter­na­tional Trade Assn. has cal­cu­lated that about one-fourth of man­u­fac­tur­ing jobs are tied to exports, even more for key sec­tors in­clud­ing aero­space, com­put­ers and chem­i­cals. If Trump’s con­fronta­tional ap­proach to trade pro­vokes re­tal­i­a­tion from other na­tions, those exports — and the jobs they sup­port — could be lost. Like­wise, Trump’s push to un­ravel for­mer Pres­i­dent Obama’s agenda for con­fronting cli­mate change may boost coal and oil pro­duc­tion at the price of sup­press­ing lower-car­bon al­ter­na­tives such as so­lar, wind, nat­u­ral gas and nu­clear power that al­ready cu­mu­la­tively em­ploy far more peo­ple.

But even if you count Trump’s ap­proach as an un­qual­i­fied ben­e­fit for his fa­vored in­dus­tries, he’s still bank­ing on sec­tors that have been shrink­ing for decades. The num­ber of Amer­i­cans work­ing in man­u­fac­tur­ing peaked in 1979, ac­cord­ing to the Bu­reau of La­bor Sta­tis­tics. Min­ing em­ploy­ment (mostly ex­tract­ing oil, gas and coal) peaked in 1982. Con­struc­tion jobs haven’t fallen as sharply, but they peaked amid the hous­ing bub­ble in 2006.

Mea­sured as a share of to­tal U.S. em­ploy­ment, Trump’s three fa­vored in­dus­tries have plum­meted pre­cip­i­tously. In 1965, man­u­fac­tur­ing, min­ing and con­struc­tion pro­vided about one in ev­ery three non-agri­cul­tural jobs. To­day it’s fewer than one-in­seven jobs.

Trump is try­ing to move the econ­omy with a lever a frac­tion of its size 50 years ago.

Job growth is now driven by post-in­dus­trial oc­cu­pa­tions, which have much to lose from Trump’s agenda. Health­care and ed­u­ca­tion, and gov­ern­ment at all lev­els, would face an em­ploy­ment squeeze from his de­sired bud­get cuts. Busi­ness and pro­fes­sional ser­vices would have ben­e­fited from in­tel­lec­tual-prop­erty pro­tec­tions and greater mar­ket ac­cess in the Trans-Pa­cific Part­ner­ship trade deal Trump jet­ti­soned and the Euro­pean deal tread­ing wa­ter. In­for­ma­tion tech­nol­ogy and en­ter­tain­ment com­pa­nies share those con­cerns. Travel and tourism firms fear his con­fronta­tional im­mi­gra­tion agenda (par­tic­u­larly his ju­di­cially blocked tem­po­rary ban on en­try by cit­i­zens of six Mus­lim­ma­jor­ity na­tions) will de­press for­eign vis­its to the U.S.

To­gether these sec­tors ac­count for over four times as many jobs as man­u­fac­tur­ing, min­ing and con­struc­tion.

By align­ing so un­re­servedly with a “coali­tion of restora­tion,” Trump has opened the door for Democrats to as­sem­ble a “coali­tion of trans­for­ma­tion” that wel­comes not just de­mo­graphic but also eco­nomic change. The nearly 100 com­pa­nies that legally in­ter­vened against Trump’s Mus­lim-na­tion travel ban were a who’s who of Amer­i­can in­no­va­tion; many of the same firms con­demned his with­drawal from the Paris ac­cord. All of them be­lieve that pros­per­ity comes from en­hanc­ing the free flow of prod­ucts, peo­ple and ideas, not walling them out.

Nei­ther party can af­ford to write off any re­gion or any seg­ment of the econ­omy. But Trump’s nar­row fo­cus on a few tra­di­tional blue-col­lar in­dus­tries leaves Democrats gap­ing open­ings. Trump’s agenda of­fers lit­tle to the grow­ing ranks of low-paid ser­vice work­ers. Con­versely, he is invit­ing Democrats to court work­ers in the white-col­lar, ur­ban­ized and in­creas­ingly glob­al­ized en­gines of to­day’s growth. Even the most man­u­fac­tur­ingde­pen­dent states would ben­e­fit more from a for­ward-look­ing eco­nomic di­ver­si­fi­ca­tion strat­egy than an at­tempt to re­verse tech­no­log­i­cal ad­vances.

Trump’s eco­nomic agenda is so fo­cused on the past it might as well come with tail fins. In eco­nomics, as much as cul­ture and de­mog­ra­phy, the pres­i­dent is ced­ing to Democrats the fu­ture — if they are smart enough to claim it.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.