Trump's Economy

[DOR]

Trump fails his own test on trade

and, the evidence is here: https://fred.stlouisfed.org/series/BOPGTB, and for purists, here:https://fred.stlouisfed.org/series/BOPGSTB. Note that it has nothing whatsoever to do with China, since no one with a passing interest in international macro gives a hoot about bilateral balances.

[TopHatter]

US voters turn against Donald Trump’s economic policies

Donald Trump’s handling of the US economy is no longer benefiting his candidacy just weeks before election day, with a Financial Times poll finding more Americans believe the president’s policies are hurting rather than helping the recovery. The final monthly survey of likely voters before November 3 for the FT and the Peter G Peterson Foundation found 46 per cent of Americans believe Mr Trump’s policies had hurt the economy, compared to 44 per cent who said the policies had helped. It was the first time this year that a larger share of respondents said the president’s economic policies had hurt rather than helped, and was a significant drop-off since the start of the pandemic. In March, before Covid-19 forced nationwide lockdowns, Americans believed Mr Trump’s policies were helping the US economy by an 11-point margin.

In addition, only 32 per cent of Americans now believe they are better off financially now than they were when Mr Trump took office four years ago — equal to the lowest total since the FT-Peterson survey began 12 months ago. The FT-Peterson results add to an increasingly dire re-election picture for Mr Trump, who trails Democratic challenger Joe Biden by 9.1 points nationally, according to a Financial Times analysis of recent polls from RealClearPolitics.

Mr Trump has staked his re-election bid on his handling of the economy, but weekly unemployment claims have started rising again nationwide amid a sharp rise of coronavirus cases in the Midwest. With infections rising to a third peak in the US, the FT-Peterson survey showed increasing pessimism about the prospects of a near-term economic rebound. Just 31 per cent of respondents said they expected the US economy to “fully recover from the impact of the coronavirus outbreak” within a year — the lowest level since the FT first began asking the question in April. The remaining 69 per cent of respondents said an economic recovery would take a year or more.
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Let's see if this translates into an EC loss or not...

[TopHatter]

Trump’s Farm Bailout Pumped $21 Billion Into GOP Counties

More than 90% of the money disbursed by a program that compensates American farmers hurt by retaliatory tariffs during President Trump’s trade war with China was sent to counties that voted Republican in the 2016 presidential election, according to a report Tuesday evening in The Washington Post.

The Agriculture Department’s Market Facilitation Program, which distributed more than $23 billion in 2018 and 2019, sent about $21 billion to Trump counties, and just $2.1 billion to counties won by Hillary Clinton.

“That this disparity falls so heavily along political lines is a function of the likelihood of rural voters to support Trump, certainly,” the Post’s Philip Bump says. “But that doesn’t detract from the point that this was nonetheless a massive redistribution of money to places that supported Trump.”

Bump points out that farm subsidies were funded by tariffs on Chinese imports – a cost that is borne by all Americans and not, as Trump insists, the Chinese. “It’s as though a Democratic president decided to tax Americans broadly to send billions of dollars to the country’s largest cities,” Bump writes. “The recipients would overwhelmingly be members of his or her own party.”
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"Trade wars are good and easy to win!"

[tbm3fan]

The mirage of trump abetted by Foxxcon. Now you see them and now you don't. Jobs that is.

Hopes were high among the employees who joined Foxconn’s Wisconsin project in the summer of 2018. In June, President Donald Trump had broken ground on an LCD factory he called “the eighth wonder of the world.” The scale of the promise was indeed enormous: a $10 billion investment from the Taiwanese electronics giant, a 20 million-square-foot manufacturing complex, and, most importantly, 13,000 jobs.

Which is why new recruits arriving at the 1960s office building Foxconn had purchased in downtown Milwaukee were surprised to discover they had to provide their own office supplies. “One of the largest companies in the world, and you have to bring your own pencil,” an employee recalls wondering. Maybe Foxconn was just moving too fast to be bothered with such details, they thought, as they brought their laptops from home and scavenged pencils left behind by the building’s previous tenants. They listened to the cries of co-workers trapped in the elevators that often broke, noted the water that occasionally leaked from the ceiling, and wondered when the building would be transformed into the gleaming North American headquarters an executive had promised.

The renovations never arrived. Neither did the factory, the tech campus, nor the thousands of jobs. Interviews with 19 employees and dozens of others involved with the project, as well as thousands of pages of public documents, reveal a project that has defaulted on almost every promise. The building Foxconn calls an LCD factory — about 1/20th the size of the original plan — is little more than an empty shell. In September, Foxconn received a permit to change its intended use from manufacturing to storage.....


https://www.theverge.com/21507966/fo...=pocket-newtab

Seems there is a little bit of Trump in Gou as far a promises...

[TopHatter]

Seems there is a little bit of Trump in Gou as far a promises...

"a project that has defaulted on almost every promise."

More than just a little bit of Trump I'd say. It's like a mirror image of Trump.

[TopHatter]

Boarded up windows and broken promises haunt Monessen, the town Donald Trump pledged to rebuild

Shortly before the 2016 election, Donald Trump appeared like a messiah in the heart of Western Pennsylvania’s beleaguered steel country, bringing a message of hope to people who had none.

In the small, unemployment-ravaged city of Monessen the townsfolk went wild. Hundreds of lifelong Democrats joined the Trump train.

"We are going to put American-produced steel back into the backbone of our country,” the future president told them. "This will create massive numbers of jobs."

In the days that followed, Trump signs sprouted up in gardens, then spread to other blighted former steel towns across the Mon Valley, a Democratic bastion south of Pittsburgh.

It helped Mr Trump win this crucial state by just 0.72 per cent, and with it the White House.

Mr Trump had been invited to Monessen by the mayor, Lou Mavrakis, a Democrat former steel union official. He wrote to the Trump campaign after Hillary Clinton, and before that Barack Obama, ignored his letters.

The speech was "extraordinary," Mr Mavrakis told me fervently in 2016. "He gave people a shred of hope."

But four years later, Mr Trump is no longer seen as the saviour of Monessen. And Mr Mavrakis is no longer the mayor. He was turfed out by the electorate, partly because of his early enthusiasm for the president.

Now, even Mr Mavrakis has turned on Mr Trump. I found him sitting on his porch, on the outskirts of town with a "Biden-Harris" sign on his lawn. He did not mince words, calling the president a "son of a b---h".

"Trump came here and he made wild promises," Mr Mavrakis, 82, said. "He was lying about bringing steel back. He lies every day. He lies about the virus. He lies when he opens his mouth. The guy is a pathological liar...Jesus Christ, I thought I'd seen it all.

He added: “People have wised up around here. Pennsylvania's going to go for Biden."

The city was already dying when Mr Trump came to Monessen that summer's day four years ago. And it has died a little more since.

Nestled in a scenic bend in the Monongahela River, it was once a boom town of over 20,000. Nearly half of its people worked in the Wheeling-Pittsburgh Steel mill.
The mill closed in the late 1980s, and there are less than 7,500 souls left. Hollywood used the mill to film the movie Robocop before it was largely torn down.

Driving into town a week before the 2016 election, along potholed roads, I passed abandoned clapboard houses, barely visible through the weeds.

A large former sewing factory was empty, all its 20 windows smashed. Half the shops in the high street were derelict. Billy T's bar and the only hotel, the Okay Lodge, were boarded up too.

I remember there was one word that would elicit unprintable responses from people in Monessen then - "Nafta". They blamed the North Atlantic Free Trade Agreement, signed by Bill Clinton in 1993, for sending their jobs overseas.

Mr Trump railed against Nafta, calling it the worst trade deal in history, and vowed to terminate it, or renegotiate the substance with Mexico and Canada. It was a big part of his appeal in steel country.

Following his election things initially seemed to be on the up in Monessen.

One hundred days after Mr Trump’s inauguration I checked in with Mr Mavrakis, who was elated.

"I’ve done it, I've finally sold City Hall!” he told me, hopping out of his chair. “It’s the Trump effect. He put places like this on the map."

They had been trying to sell it for years to plug the debt.

That same day Mr Trump said he wanted to mark his 100 days in office by "terminating Nafta". However, following phone calls from the leaders of Mexico and Canada, he agreed to "renegotiate". That process would end up taking until well into 2020.

Meanwhile, Monessen crumbled some more.

In the derelict hardware store the former owner's spectacles still sit on the counter, covered by four more years of dust. Trees sprouting out the windows of the old pharmacy have grown some. The pizza place, Chinese restaurant, and pawn shop are still abandoned. A "Replacement Windows" business has its own windows boarded up. You still can't stay at the Okay Lodge, or have a drink at Billy T's.

When I walked down the high street in 2016 there were still two banks. Both have now closed. One had been there 90 years. "Everything's collapsing," one woman told me. "I have to drive seven miles to a bank now."

Around town there are 500 abandoned homes in various states of disintegration. Many have been empty since the 2008 financial crisis, when people left the keys and walked away.

Christine Panepinto, 55, a lollipop lady, voted for Mr Trump in 2016, but was now torn.

"The steel mill's still gone..." she told me. "I wasn't delusional last time. I know everybody promises jobs, it's the same thing every election. But things are worse here now. To be honest I feel disappointed with all of them, not just Trump. I just think we're lost here.

"I'm pro-life, so I don't know who to vote for. I've prayed about it, and I just don't know what to do."

Outside Foodland, the local supermarket, Rebecca Romantino, 53, an unemployed local resident, said: "I hate Trump. He promised to bring back steel. He didn't do s--t. People have a lot of anger for him here."

In Mr Trump's defence he never directly promised to bring the steel mill, or jobs of any kind, back to Monessen.

Re-reading his speech shows he spoke about trade policy, ending Nafta, withdrawing America from the Trans-Pacific Partnership, stopping the dumping of subsidised foreign steel on the US market, and currency manipulation by China.

He attacked politicians who "worship globalism over Americanism,” calling what had happened in Monessen and elsewhere a "politician-made disaster," while advocating for bilateral, instead of multilateral, trade deals.

American steel would again “send our skyscrapers soaring into the sky," he said, and it would be “American workers who are hired to do the job.”

Many in Monessen thought that meant them.

The lack of progress means Monessen, and places like it, looks set to return to the Democrat fold on Nov 3, 2020.

When Mr Trump spoke four years ago here a protest was held across the street by a 25-year-old, fourth generation Monessenite named Matt Shorraw.

This week I found that Mr Shorraw is now the Mayor of Monessen.

"There are people here that feel this is personal," Mr Shorraw told me. "He came and told them he was going to do something and he didn't do it. It opened old wounds about the mill closing and that’s not fair. I don’t blame people for believing him.“

Part of the steel mill still remains as a coke plant, and is the city's largest employer with around 200 jobs. However, it has been idling for months due to falling demand.

When Mr Trump took office there were about 11,300 jobs in iron and steel mills across Pennsylvania. The figure did go up slightly but didn't exceed 12,000. During the pandemic it fell to 10,000, according to statistics from the Federal Reserve Bank of St. Louis.

In 2018 the president put a 25 per cent tariff on foreign steel, with mixed results for the industry.

On July 1 this year the United States–Mexico–Canada Agreement (USMCA], the successor to Nafta, took effect.

Its provisions include that at least 70 per cent of steel used in automobile manufacturing be sourced in North America.

It has been welcomed by the steel industry, including the United Steelworkers union, which has 850,000 members. However, the union called it a "baseline, not a final destination.”

Mr Shorraw, said: “Four years from now if it does in fact help I'll give him (Mr Trump) credit. I don’t think we'll find out any time soon. I hope it helps, we need something.”

Mr Biden currently leads Mr Trump by seven percentage points in Pennsylvania, one of a handful of swing states projected to swing back to the Democrats on November 3.

There are clearly less Trump signs in Monessen this time round. But the president still has his supporters.

Dan Roberts, 54, has a giant Trump "No More Bulls--t" flag on the front of his house, and his garden is festooned with placards.

One was stolen recently so he has rigged the rest with fishing wire, and multiple mouse traps to snap the fingers of thieves.

Mr Roberts, a maintenance worker and keen hunter, said: "I'm like an eyesore around here now.

"But I believe in Trump. The steel industry is not like it used to be, no doubt, but the fracking's put big paying jobs in Pennsylvania. It's just not in this area.

“I see people in those parts with jacked up trucks, 80 or 90 thousand dollars, and you ain't getting that working at McDonald's."

He added: "I want Trump to win, but I've got a sad feeling they're going to take it away from him. The media hate him so bad they’d put a kangaroo in there."
______________

Yet another example of the true nature of Donald Trump.

[astralis]

it's sad because those people make for the easiest marks: they want to believe so bad.

in the end, the main driver isn't even NAFTA, it's technology.

it takes a heart of stone to look those people in the eye and promise them the unattainable.

Clinton was brutally honest about it -- those type of jobs are going to disappear -- and paid the price. of course, those people ended up paying a price too.

[DOR]

it's sad because those people make for the easiest marks: they want to believe so bad.

in the end, the main driver isn't even NAFTA, it's technology.

it takes a heart of stone to look those people in the eye and promise them the unattainable.

Clinton was brutally honest about it -- those type of jobs are going to disappear -- and paid the price. of course, those people ended up paying a price too.

Absolutely right.
The ATM put more people out of work than Dodd-Frank ever could.

[tantalus]

it's sad because those people make for the easiest marks: they want to believe so bad.

in the end, the main driver isn't even NAFTA, it's technology.

it takes a heart of stone to look those people in the eye and promise them the unattainable.

Clinton was brutally honest about it -- those type of jobs are going to disappear -- and paid the price. of course, those people ended up paying a price too.

A fair summary.

It "may" be fair to say that NAFTA was a net negative for the american people but a net good for people in general, its a very diffcult thing to pin down. Globalisation more broadly has been a great success for humanity but not for every region obviously. That's not to say slowing these disruptions down isnt an option but the market does and should win in the end.

I definitely agree technology is the key driver. It is very worrying that 2020s could be technological job disruption on steroids. This may evolve into one of the great challenges of our time across the globe and may be the making of a new generation of visionary politicans who can capitalise on it with a positive vision or just give us a plague of trumps.

There may also be an opportunity to bring back some manufacturing given the trade wars, pandemic and concern over of supply chains and the yet-to-deliver but coming disruption in manufacturing by A.I., robotics and 3d prinitng. This will allow for local, national level manufacturing to migrate back to the west from the east, it wont be labour job heavy but it can still generate economic activity and is an opportunity for policians and governements to direct (not drive) these new industries into the right geographical areas.

[DOR]

The greatest increase in standards of living — by whatever measure — for the largest number of people, in all of human history, is the direct result of globalization. Anyone who wants to slow, or (*shudder*) reverse that trend must — no possible exceptions — have a verifiable, iron-clad-guaranteed replacement already in place.

Otherwise, millions die needlessly.

Trying to “bring back” manufacturing to the US is like down-shifting on the freeway. Moving from agriculture to manufacturing is a major step up in adding value to an economy; the next step is from manufacturing to services.

[Albany Rifles]

The greatest increase in standards of living — by whatever measure — for the largest number of people, in all of human history, is the direct result of globalization. Anyone who wants to slow, or (*shudder*) reverse that trend must — no possible exceptions — have a verifiable, iron-clad-guaranteed replacement already in place.

Otherwise, millions die needlessly.

Trying to “bring back” manufacturing to the US is like down-shifting on the freeway. Moving from agriculture to manufacturing is a major step up in adding value to an economy; the next step is from manufacturing to services.

Spoken like an economist!

The area were traditional blue color jobs can still thrive in America are the trades. You can't offshore plumbers, electricians, roofers, etc.

And where many of those jobs can and need to expand is in expansion of the rebuild and/or upgrade of infrastructure. We need to fix our bridges, roads, dams, locks, harden our power infrastructure.

And another way to see production is in high tech production. Case in point: my nephew. PhD in BioChem from Harvard...worked for a lab at Harvard Labs post grad 10+ years. Now VP at a start up lab where they will something I cannot pronounce or describe but it goes to support bio tech...artificial skin used in treating burn victims, regeneration of organs, etc.

But Monessen, where my former MIL was born and raised, has seen the last of heavy industry. Pittsburgh is a financial and high tech center these days. US Steel isn't even the #1 steel producer in the US anymore. The entire business model of that area has shifted.

[DOR]

Spoken like an economist!

The area were traditional blue color jobs can still thrive in America are the trades. You can't offshore plumbers, electricians, roofers, etc.

And where many of those jobs can and need to expand is in expansion of the rebuild and/or upgrade of infrastructure. We need to fix our bridges, roads, dams, locks, harden our power infrastructure.

And another way to see production is in high tech production. Case in point: my nephew. PhD in BioChem from Harvard...worked for a lab at Harvard Labs post grad 10+ years. Now VP at a start up lab where they will something I cannot pronounce or describe but it goes to support bio tech...artificial skin used in treating burn victims, regeneration of organs, etc.

But Monessen, where my former MIL was born and raised, has seen the last of heavy industry. Pittsburgh is a financial and high tech center these days. US Steel isn't even the #1 steel producer in the US anymore. The entire business model of that area has shifted.

There is an old saw in macro that tradables are things that can be made one place and consumed another. The ultimate non-tradeable was a haircut.

Until Hong Kong and Shenzhen became deeply integrated. HKers crossed the border every day to visit a spa, beauty salon, barber, tailor, nail salon, whatever. All deeply in violation of what every single economist knew to be impossible: trading the nontradable.

Now, plumbers from China are on call to drive across the border to unclog your sink. Decorators and carpenters, glaziers, tilers, gardeners, you name it.


It's enough to bring tears to these dismal eyes…

[astralis]

DOR,

The greatest increase in standards of living — by whatever measure — for the largest number of people, in all of human history, is the direct result of globalization. Anyone who wants to slow, or (*shudder*) reverse that trend must — no possible exceptions — have a verifiable, iron-clad-guaranteed replacement already in place.

of course, the main failure of both parties -- under the New Democrats as well as pre-Trump Republicans -- was that there were no "verifiable, iron-clad-guarantees" of a replacement system of employment within the US for the socio-economic disruptions of either technology or globalization.

both our trade and tax policies were meant to increase economic efficiency -- and they did. unfortunately, they also developed a system where the wealthiest among us concentrated the gains of productivity and economic efficiency, assisted with a vastly expanded labor pool across the globe.

the GOP placed a complete faith in the ability of the free market, seeing people as no more than economic units with complete labor mobility.

the New Democrats placed a near-equal faith on higher education and job retraining, so that people could better integrate into the realities of the free market: similar to the GOP view of people as economic units.

Until Hong Kong and Shenzhen became deeply integrated. HKers crossed the border every day to visit a spa, beauty salon, barber, tailor, nail salon, whatever. All deeply in violation of what every single economist knew to be impossible: trading the nontradable.

herein lies the poison pill of unheeding globalization. Hong Kong as part of the PRC Greater Bay Area. just another PRC city, now.

[TopHatter]

US Did Not Benefit From Trade War With China: WSJ
President Donald Trump's trade war with China did not achieve the objective of boosting manufacturing in the U.S., the Wall Street Journal reports.

What Happened: Manufacturing activity in the U.S. has not reversed despite billions of dollars in tariffs to discourage importing Chinese manufactured goods.

The trade deficit with China reduced in 2019. Still, the overall trade balance has soared to a record $84 billion in August as U.S. importers shifted to imports from Vietnam, Mexico, and other countries. Since the pandemic, China's trade deficit is back to where it was at the start of the Trump administration.

The goal of reshoring factory production to the U.S. is unfulfilled as job growth in manufacturing slowed since July 2018, while the manufacturing activity peaked in December 2018.

Why It Matters: Trump's trade advisers say that the tariffs of $370 billion on Chinese goods have succeeded in forcing China to agree to phase one trade deal in January and will end China's unfair practices over time.

Industry analysis by the Federal Reserve shows that tariffs helped boost employment by 0.3% by protecting domestic industries exposed to cheaper Chinese imports.

Those gains were more than offset by higher costs of Chinese imports due to tariffs, cutting manufacturing employment by 1.1% in the U.S. The retaliatory tariffs by China on the U.S. exports reduced domestic factory jobs by 0.7%.

According to Peterson Institute for International Economics trade expert Chad Bown, President Trump is not the first to use tariffs to protect industries, but this is the biggest use of tariffs since the Great Depression.
__________

In other words, idiot child that thinks that trade wars are "good and easy to win" was completely wrong.

Shocking, isn't it.

Y'know, I'm starting to think 'orange man bad'!

[DOR]

astralis,


“both our trade and tax policies were meant to increase economic efficiency -- and they did. unfortunately, they also developed a system where the wealthiest among us concentrated the gains of productivity and economic efficiency, assisted with a vastly expanded labor pool across the globe.”


That only works on a national scale. Worldwide, there is nothing wrong with globalization. Just ask the billions that rose out of abject poverty in our lifetimes.

No substitute.