A chink has appeared in the armor of Trump economic plans. Business Insider looks at Trump’s plans and says that the economy that Trump sees is fantasy!
Last week, House Speaker Paul Ryan and President Donald Trump had a seemingly small disagreement over a feature of (what they hope will become) our country’s tax code.
And through that disagreement, they showed that they have two dramatically different ways of looking at our economy. One is based on the reality of the economy we have, and the other is a fantasy.
The writer says that Trump has his eye on the ball in a completely different game than America is playing. How is that? What Trump wants to do will not bring back manufacturing and it will kill the goose that lays the golden egg, the American service economy. The USA has not had an export-led economy for generations. The service industry in the USA make up 78% of private sector GDP employs 82% of private sector workers. China is trying to mimic the success of the USA in this regard as their overbuilt industrial sector is sagging and taking their economy down with it. Trump’s policies would reduce consumption which would help kill America’s successful service economy.
What Other Fantasies Does Trump Deal In?
The Financial Times writes about joyless fantasies in Trump’s inauguration speech.
Beware the delusions of an aggravated man. Of all the fantasies perpetrated in Donald Trump’s joyless rant of an inaugural speech, none was more preposterous than the self-casting of the man in the golden elevator as Defender of the People. The president’s crusade for Joe and Jane Sixpack will commence with an immense tax cut for the rich and, should Family Sixpack have any pre-existing health problems the insurance companies deem unviable, they will see their healthcare disappear.
With friends like that folks really don’t need enemies. And as for fantasy here is what the Times says.
The economy he represents as blighted by outsourcing is in full employment and the Dow Jones is touching record highs. In Barack Obama’s second term, manufacturing jobs have been coming back to America not the other way around. Those that will not return are largely the result of automation and robotics, and short of locking up chief executives until they consent to lower productivity, they will not be coming back.
The concern for stock traders and investors is that the sort of willful ignorance espoused by Trump will kill the economy that has brought back jobs. This is the era of automation and foreign competition. The jobs of the 1950’s don’t exist anymore in manufacturing. They have been replaced by robots and people to run robots people who design and program robots. The jobs that don’t go away are those of electricians, plumbers and construction workers as well as nurses, doctors, lawyers and more. But all of those jobs have been changed by technology. A century it took half the population working on farms to feed themselves and the other half of the country. Today less than 2% of the population works on farms. If Trump wants to bring back those days when America was great he will need to get rid of mechanization that makes food cheap and move half of America’s population back to the places they moved away from generations ago. This fantasy is really no different from the one about reviving manufacturing in an era of increasing automation.