Monday, April 10, 2017


Paul Krugman's column today is titled "Publicity Stunts Aren't Policy." He's referring to the strike on Syria, of course, but as he points out, this applies to Donald Trump's moves on the economy as well:
Does anyone still remember the Carrier deal? Back in December President-elect Donald Trump announced, triumphantly, that he had reached a deal with the air-conditioner manufacturer to keep 1,100 jobs in America rather than moving them to Mexico. And the media spent days celebrating the achievement.

Actually, the number of jobs involved was more like 700, but who’s counting? Around 75,000 U.S. workers are laid off or fired every working day, so a few hundred here or there hardly matter for the overall picture.

Whatever Mr. Trump did or didn’t achieve with Carrier, the real question was whether he would take steps to make a lasting difference.

So far, he hasn’t; there isn’t even the vague outline of a real Trumpist jobs policy. And corporations and investors seem to have decided that the Carrier deal was all show, no substance, that for all his protectionist rhetoric Mr. Trump is a paper tiger in practice. After pausing briefly, the ongoing move of manufacturing to Mexico has resumed....
Take a look at the last link in that excerpt if you think Trump has scared corporations into reversing plans to outsource jobs. The story is from Bloomberg:
After Donald Trump’s election, the flow of manufacturers setting up shop south of the border dwindled to a trickle. Ford Motor Co. and Carrier Corp., caught in Trump’s Twitter crosshairs, scrapped plans to move jobs to Mexico in two very public examples of the slowdown.

But now the pace is picking back up. Illinois Tool Works Inc. will close an auto-parts plant in Mazon, Illinois, this month and head to Ciudad Juarez. Triumph Group Inc. is reducing the Spokane, Washington, workforce that makes fiber-composite parts for Boeing Co. aircraft and moving production to Zacatecas and Baja California. TE Connectivity Ltd. is shuttering a pressure-sensor plant in Pennsauken, New Jersey, in favor of a facility in Hermosillo.

... Mexican manufacturing jobs rose 3.2 percent in January from a year ago as they dropped 0.3 percent in the U.S.
So who believes that anecdotal evidence of job repatriation is more important than actual statistics showing the opposite? Well, apparently the president does. In a Politico story today about administration efforts to frame the first hundred days, we're told this:
Trump’s communications team is now plotting to divide their first 100 days into three categories of accomplishments, according to people familiar with plans: “prosperity” (such as new manufacturing jobs, reduced regulations and pulling out of the Trans-Pacific Partnership trade deal), “accountability” (following through on swamp-draining campaign promises such as lobbying restrictions) and “safety/security” (including the dramatic reduction in border crossing and the strike in Syria).
(Emphasis added.)

And we know that Trump keeps citing anecdotal evidence of success in this area, often boasting about saving jobs he didn't actually save. Here was Trump in a February White House meeting with CEOs:
Bringing manufacturing back to America, creating high-wage jobs was one of our campaign promises and themes, and it resonated with everybody.... And I'm delivering on everything that we've said. In fact, people are saying they've never seen so much happen in 30 days of a presidency.
And Here was Trump last week in an interview with the Financial Times:
We have done a lot ... We’re doing great. The jobs: Ford just announced they are doing three major plants, three major expansions, thousands of jobs; General Motors, Fiat, [a] couple of them off the record because ‘Why do I need this for?’ But a couple of them were going to build in Mexico, now they are building in Michigan. Now they are building in Ohio. We got it going. 
In fact, the Ford, GM, and Fiat expansions were all in the works long before Trump was elected. But Trump actually seems to believe these dubious anecdotes. And so do his voters, as we learned from The New York Times yesterday:
Since Donald J. Trump’s victory in November, consumer sentiment has diverged in an unprecedented way, with Republicans convinced that a boom is at hand, and Democrats foreseeing an imminent recession.

“We’ve never recorded this before,” said Richard Curtin, who directs the University of Michigan’s monthly survey of consumer sentiment. Although the outlook has occasionally varied by political party since the survey began in 1946, “the partisan divide has never had as large an impact on consumers’ economic expectations,” he said.
We certainly see that in the most recent Quinnipiac poll. Although Trump gets generally poor marks in the poll, Republicans are still loyal: while only 41% of overall respondents approve of the way Trump is handling the economy (48% disapprove), among Republicans the approval number is 84%. And 60% of Republicans think the economy is getting better (the overall number is only 32%).

So who needs policy when you have publicity stunts? Not Trump voters -- and not Trump himself.

No comments: