Trump Promised To Bring Jobs Back To America. It’s Not Happening.
As a candidate, Donald Trump promised to bring jobs back to the United States, especially manufacturing jobs. It hasn't worked out that way.
Throughout his campaign for President, Donald Trump promised to bring jobs in manufacturing and other areas that had been transferred overseas back to the United States. As Jim Tankersley notes in The New York Times, it hasn’t exactly worked out that way:
WASHINGTON — From tax cuts to relaxed regulations to tariffs, each of President Trump’s economic initiatives is based on a promise: to set off a wave of investment and bring back jobs that the president says the United States has lost to foreign countries.
“We have the greatest companies anywhere in the world,” Mr. Trump said at the White House recently. “They’re all coming back now. They’re coming back to the United States.”
Mr. Trump’s tax cuts unquestionably stimulated the American economy in 2018, helping to push economic growth to 2.5 percent for the year and fueling an increase in manufacturing jobs. But statistics from the government and other sources do not support Mr. Trump’s claim about his policies’ effectiveness in drawing investment and jobs from abroad.
Foreign investment in the United States grew at a slower annual pace in the first two years of Mr. Trump’s tenure than during Barack Obama’s presidency, according to Commerce Department data released in July. Growth in business investment from all sources, foreign and domestic, accelerated briefly after Mr. Trump signed a $1.5 trillion tax-cut package in late 2017 but then slowed. Investment growth turned negative this spring, providing a drag on economic output.
In Mr. Trump’s first two years in office, companies announced plans to relocate just under 145,000 factory jobs to the United States, according to data and modeling by the Reshoring Initiative, a nonprofit group. That is a record high in the group’s data, which dates back to the late 1980s, but it adds up to less than one month of average job gains in the United States in its decade-long expansion. More than half of those jobs — about 82,000 — were announced in 2017, before Mr. Trump’s tax cuts took effect.
Moreover, the Reshoring Initiative data show fewer than 30,000 jobs that companies say they will relocate to the United States because of Mr. Trump’s tariffs on imported steel, aluminum, solar panels, washing machines and a variety of Chinese goods. Researchers at A. T. Kearney said last month that Mr. Trump’s trade policies, including tariffs, had pushed factory activity not to the United States but to low-cost Asian countries other than China, like Vietnam.
On Tuesday in Pennsylvania, Mr. Trump declared that his tariffs had turned things around for the domestic steel industry and that “now your business is thriving.” But manufacturers of primary metals, which include steel and aluminum, have added fewer than 15,000 jobs since Mr. Trump took office, with more than half of those gains coming before he imposed tariffs on foreign-made metals last year.
Now manufacturing is struggling amid a global slowdown and fallout from the trade war, which Mr. Trump has escalated by imposing additional tariffs on Chinese goods and by labeling China a “currency manipulator.”
(…)
On another front, administration officials point to companies like Mylan and Allergan — which had moved their corporate addresses overseas in a process known as inversion but recently said they would return to the United States — as a sign of success for the tax law. Larry Kudlow, the director of the National Economic Council, said last week that “you’re seeing American firms move back.”
When a CNBC interviewer said the Mylan and Allergan moves would not bring back manufacturing jobs, Mr. Kudlow agreed. But he said, “You’re also going to have factories moving back in from other places around the world, including China.”
Brad Setser, a senior fellow at the Council on Foreign Relations who tracks international investment flows, said it was notable that relatively few pharmaceutical companies were moving plants and activity back to the United States from countries like Ireland or Switzerland. Pharmaceutical imports from those countries actually rose in 2018, he noted.
And a May report by researchers at the International Monetary Fund concluded that the investment impact of the tax bill “has been smaller than would have been predicted based on the effects of previous U.S. tax-cut episodes” and that the strongest effects on investment were likely to have shown up in the first year after the law was enacted. Morgan Stanley’s Business Conditions Index shows that companies’ plans for new investment plummeted this summer.
On some level, the fact that Trump’s largely short-term policies have not led to the kind of long-term repatriation of American jobs in manufacturing and other fields that he promised is not surprising. For one thing, the factors that led to the trend of companies moving facilities and jobs overseasons are far more complex than just tax policy, and most of them are beyond the ability of a President or Congress to address. These factors include not just differences in wages that make it less expensive to conduct some business operations overseas but also changes in demand that causes American companies to move overseas for efficiency reasons.
For example, when a car manufacturer finds that it would be less expensive to build automobiles overseas due to the fact that it decreases the expenses such as shipping involved in manufacturing product in the United States and shipping it overseas, they’re obviously going to look seriously at the idea of moving production overseas. We’ve seen this happen in reverse in the form of Japanese, South Korean, and European car manufacturers who have invested billions of dollars in factories in the American south. American manufacturers in a wide variety of industries have reached the same conclusion and there’s very little that the Trump Administration can do about that.
It’s also worth noting that the changes in employment in manufacturing are not simply due to jobs that have moved overseas, there are other factors that have played a role that has nothing to do with jobs being shipped overseas. One of these, of course, is the role that technology has played in transforming manufacturing over the past several decades, a trend that is inevitably going to continue no matter who the President is. Even if a manufacturer builds a new plant here in the United States, it’s going to need far fewer workers than it did in previous decades. Similarly, changes in worker productivity, which in part are due to the increased use of technology in industry across the board, means that employers need fewer workers to get the same amount of work, or more, done and that it becomes far less expensive to invest in new technology that increases productivity than they are to hire new workers.
All of this means that it was never realistic to believe the President when he promised as a candidate to bring jobs back to the United States. In most cases, those jobs are gone and unlikely to come back. Of course, the President will never admit this and his supporters are going to continue to believe his lies about the rebirth American manufacturing.
This mess can’t be blamed on Trump alone, these are the persistent mythologies of conservative economics.
Trickle down? Nope. Laffer curve? Nope. Raising minimum wages kill jobs? Nope. Tax cuts for the rich spur business investment? Nope. ‘Standing up to China’ means better balance of trade? Nope. Fewer regulations mean more bidness?* Nope.
They are never, ever right.
I think there are two underlying reasons for this. First, economics is a bullshit science, utterly useless as a tool for predicting future outcomes. The ‘science’ of economics is about where medicine was in the 15th century: doctors could tell what killed you, unfortunately they had no idea how to use that insight to cure or prevent. And indeed their cures often hastened death.
Second, because economics is largely b.s. it is easily exploited as a tool for the greedy and dishonest. You know, Republicans. Economics is like the Bible – a motivated reader can find absolutely anything he wants to find. And Republicans always find the same things, and those things always mean funneling more money to billionaires and screwing working people.
*Ask Boeing how that whole we hate regulations and oversight thing is working out for them. Do they still make airplanes? You know who really has to deal with a lot of government regulation? Airbus. The company whose planes don’t suddenly nose dive.
This has little to do with liberal v. conservative economics, it has to do with the globalization of the economy and impact of technology and increased productivity.
So Trump lies and lies and lies and his entourage lies and lies and lies and none of the Trumpenproletariat cares. It’s more important for a sizeable percentage of Americans that they get told what they want to hear than dealing with reality and what is actually going on.
I suspect we’re going to have to have a splendid economic crash and a nasty case of pointing fingers, civil revolution, and a lot of dead bodies before our culture realises that indulging trolls and other narcissists is an awful idea.
Nothing trump tries to do gets the results he wishes, because he has 1) no real idea of the problem, and 2) no real idea of any solution.
@michael reynolds:
Boeing made a massive mistake with the 737, all the way back to the 90s NG (Next Generation) versions.
The original 737 was a turbojet regional jet meant to operate even in airports with minimal infrastructure. It sits low to the ground to make unloading cargo and bags possible without a mobile conveyor. But raising the frame isn’t as simple as putting in a taller landing gear.
They managed to put in turbofan engines, which are larger, and make it a mainline plane. Instead of moving on to a clean slate design, though, they went for further modifications, finally raising the landing gear, which also involved making the plane unstable due to the placement of the even larger engines.
Unstable isn’t necessarily a bad thing. Lots of fighter jets are inherently unstable and require constant adjustment, usually done by the flight management system automatically. but then they went and effed up the means to handle the nose-up problem.
The whole thing is ridiculous. the plane has gone from small regional jet to transatlantic mainline plane. Imagine changing the VW Beetle so it goes from subcompact to pickup truck, still low to the ground, with a V-6 engine in the back.
We had a joke, half true, during the Reagan recession that seems apt now. Jobs were moving to third world countries. Trump’s plan, like Reagan’s, is to turn the US into a third world country and meet the jobs coming around the backside.
@Doug Mataconis:
We don’t know what the problem is. That’s the point. Saying ‘globalization’ is just hand-waving if we don’t know what it is, how it works, or why, or where it’s going or what to do about it. It is absolutely about left vs. right because for decades we’ve floated along on this conservative greed is good, magic of the market, low tax, low regulation doctrine and it is just bullshit. The ‘doctor’ keeps telling us he’s got the cure and then we keep getting sicker. Maybe we should start ignoring the doctor. One thing for sure, we aren’t going to discover bacteria so long as doctors keep insisting it’s just evil humours in the blood.
Step one: understand that economics is backward-looking and just about useless for deciding on future courses of action. And here’s more: it will go on being useless at prediction and prescription because economics is all about humans and humans will never be able to successfully predict the behavior of humans.
Right now, can economics predict the results of a UBI, for example? No. It can’t. So why do we insist on turning to these people for guidance? What good are they? Particularly given that this so-called science is endlessly malleable in the hands of politicians and business people? We are one of the richest countries on earth – on paper – yet we have people living on the streets a block away from billionaires for whom money is of no value except as a score to be kept. That’s where economists, particularly conservative economists co-opted by the endlessly greedy, have left us. Our problem is not globalization, we don’t somehow lack money, we have fuktons of money, it’s just that it’s all in the hands of a very few. Globalization is an excuse. Americans are not living in pup tents while other Americans live in 40 room mansions because of globalization.
@Doug Mataconis:
Which is true…although globalization is such a catch-all term as to be almost meaningless…but it’s another case of an empty promise not kept. And another case of 40% of this nation believing in a fake tan and a comb-over.
@michael reynolds: I also suspect some causation in terms of marginal tax rates. When it was cheaper to reinvest in your business, businesses got reinvested in; now it’s cheaper to buy a 13th yacht. I understand some issues are the product of a post industrial society but – for instance – when and why did we outsource our steel production to China? I sound like Tyrell, here, but I’m old enough to remember when government construction projects required US steel. I recall reading that one of the major bridge projects in the Bay area couldn’t even get a bid from a US steel company because they didn’t have the ability to produce the quantity needed any longer (and this was probably a decade ago).
” it has to do with the globalization of the economy and impact of technology and increased productivity.”
Actually Doug, it has to do with a well known equation.
Trump promised to X. X is not happening. Just replace the X in the equation with nearly anything he talks about.
Steve
@grumpy realist:
I think Trump believes what he says about the economy(*). And about immigration. And about healthcare. Off the top of my head, those are the only areas where he takes “positive” action, and doesn’t simply let the system go to hell. Now, admittedly, healthcare is just crazy complex (who could have known?), so he lost interest. But for the rest, he’s taking steps to make his vision a reality. As deeply satisfying as the spectacle of watching kids in cages might be, I’m sure he also believes that immigrants seeing this will be scared away. And as powerful as he must feel seeing the stock market twitch at his every tweet, I’m sure he also believes that the Chinese will roll over, and that manufacturing will return to these shores. These are not lies (simply delusions).
(*) I’m excluding tax cuts.
@Kit:
Trump has no beliefs. His brain, such as it is, is incapable of having a belief that cannot instantly be sold out for the right price. He is 100% transactional and in effect believes what he is paid to believe. Give the fkwad a billion dollars and he’ll open the borders. Another billion and he’ll push gun control. Or buy him enough votes and he’ll sell the country out to a Russian thug.
He has no core. There is no there, there. His brain is just a stew of insecurity, resentment, greed and cruelty. People with actual beliefs don’t put their beliefs up for sale. Some people actually die for their beliefs. But Trump? Hah. Wave a dollar under his snout.
Ah, our liberal New York Times…
A whole lot of people question this.
@michael reynolds: Real economics is well past the blood-letting and humors stage — but there are also a lot of people who call themselves economists who are selling crystal therapy or snake oil, and the layperson cannot tell the difference.
The idea behind the Laffer Curve is, technically, accurate if pointlessly trivial. The assumption that we are on the right hand side of the Laffer Curve is just bullshit. The entire shape of the Laffer Curve is bullshit.
The right wing has found the anti-vaxxers and global warming deniers of economics, and promoted them to the mainstream.
@Gustopher: Butbutbutbut, it went from 2.4% all the way up to 2.5%.
@michael reynolds:
I think we are using the word belief in two different ways. Yeah, he believes he can win a trade war, and that in doing so jobs will come back. He believes that he has the necessary knowledge. That doesn’t mean that he feels any moral imperative to do so.
@OzarkHillbilly: Oooopps, my bad, 2.3%. Meanwhile, the deficit grew….
@Doug Mataconis:
That depends on what ‘this’ refers to in your sentence. The interpretation of cause and effect, and the prediction of what effects specific policy changes will have, absolutely has to do with conservative vs. fact-based macroeconomics*.
*Microeconomics and econometrics are much more fact-based and self-correcting than macroeconomics, in my experience.
@Kathy: “Unstable isn’t necessarily a bad thing. Lots of fighter jets are inherently unstable and require constant adjustment, usually done by the flight management system automatically. but then they went and effed up the means to handle the nose-up problem.”
For a non-fighter jet, unstable *is* a bad thing.
@Barry: It’s the exact same reason why if my one-engine flying machine has the engine give out, I’d much rather be in a Cessna or an Eclipse than a Sikorski.
@Barry:
But you cannot possibly do a low-visibility, stealth Boeing 7007 passenger jet that’s not negatively stable. 🙂
This implies that the trash in the White House can’t do anything to make good on his promise…is there really nothing that Congress and the president can do to bring jobs back to America…
@Kathy:
That isn’t what happened with the 737 prior to the most recent max stuff. A proper analogy would be extending the car a bit limo style while adding a v6 to it. None of the modifications of the original 737 airframe was nearly as wild as you tried to claim. Boeing did fck up with the bigger engines though as that unlike prior changes threw the balance of the plane off. All the other stuff was minor in comparison..
There’s nothing wrong with the prior modifications as similar has happened to basically every airliner in service. Throwing everything away and starting from scratch has proven to be a mistake MANY MANY times in history (also extremely costly). Generally it’s preferred to improve on a proven platform for a reason. Not just because of the costs associated with certifying new parts and all the details associated with that.
I could list dozens of modern airplanes that are just incremental improvements on the originals like the 737 line. This hold true in the military too.
EDIT :
Not really considering what allowed that was the massive increases in engine efficiency over the last 52 years…
You might as well complain about how ridiculous it is that most modern widebody jets only have two engines instead of the four they had 30+ years ago..
@michael reynolds:
Human behaviour on a small scale can be surprisingly easy to predict once you have the necessary means of processing the massive amount of data points. The problem is that scaling that up to a global scale requires vastly more capability in processing and data storage to get any meaningful results. We’re getting there but it’s taking time as technology is developed that can handle it. Deep learning braw.
@Matt: You know I kind of got that wrong when I said
It’s more like upgrading the stock engine with forged internals while porting and polishing before putting a turbo on it. As at the heart of a modern turbofan engine is a turbojet engine with some modifications to drive a fan.
Kathy where does this obsessive dislike of Boeing stem from?
@Matt:
Within reason. I do not think a 50+ year basic design intended to be a regional jet falls within reason when it becomes the 737 NG line.
Airbus is heading down the same road. The A320 is mid-80s vintage, and the neo line will go on well into the 2040s, barring some revolutionary new development.
I do complain that modern jets all seem to be made with the same cookie-cutter 🙂
Seriously, from the A220 to the A350 on one hand, and the E-170 to the B-777X on the other, all have the same twin engine silhouette. It’s boring.
@Matt:
The MAX, the battery fires on the 787, the continuing issues on the 787, and the general sucking up of Trump. Remember that lawsuit to get tariffs on a plane they don’t compete against? As though the MAX 7, or the 737-700 NG can even come close to the C-Series 100.
@Matt:
Only so long as the people are not aware they’re being observed. Free will means we can deliberately mis-program the observing computer/AI/researcher. VPN’s, different names, avoidance of online ads. Or, becoming aware of observation we may tailor our behavior to it, rendering data points solipsistic.
I can tell you this: Netflix has been watching my viewing habits for a decade now, ditto I-Tunes, and for a shorter period, Amazon. None of them have ever come anywhere close to predicting what I want to watch. I’d be happy if they could just keep track of what episode I’m on.
So, if I’ve been feeding data willy-nilly to Netflix, I-Tunes, Amazon, Google, Safari, Twitter, Uber and Lyft, Visa, Amex, FedEx, Instacart, Door Dash, Caviar and Nugg for years and years how come I still never get a good show recc from Netflix, or a ‘hey, try this’ from the various food apps that are even remotely on-point? I mean, there’s zero correlation. Wells Fargo has my last decade’s worth of financial data and yet they can’t figure out that yes, that probably is me buying gas in LA, and no that probably is not me buying a fking package tour to Spain? From the UK. While I’m in LA buying gas.
You know the one thing any of these people ever get even slightly right? Amazon which keeps suggesting books to me. Which books? My books. Because I check on sales numbers. I mean I almost feel sorry for them. They’re just so dumb. Points for trying, kinda.
There are a bunch of people who think they have all kinds of amazing data worth trillions, and I have a strong suspicion they’re investing in tulips. No system can understand itself. I can’t predict what I’ll have for dinner. You know who else won’t be able to predict it? Door Dash et al. Because they’ve only had about five hundred orders to analyze, so despite having consumed zero vegetables that were not tomato sauce, who knows? Maybe I’ve become a vegan.
@Doug Mataconis: I down voted you this morning, and now that I have a little more time I wanted to explain why. I don’t have any problem with blaming globalization and productivity. That’s probably at least half right.
But your comment was very close to the standard conservative response to … well everything, “Well that’s just the way things are, nothing can be done.”
Trump inherited the Obama economy, told us it sucked, since then he has told us every day how much better he’s done.
Anyone who has bothered to look up the job creation numbers knows that as many jobs were created in Obama’s last 24 months as were created in Trump’s first 24 months.
@al Ameda:
Yes, but Obama is black and Trump is orange.
False analogy. It’s unreasonable to expect that mass media products such as television programming can be customized to individual tastes. (At least so far.) Additionally, it’s possible that they DO know what you want to watch, but you’re so much of an outlier to make programming to your taste unprofitable.
@al Ameda:
I think we are up to 30 months now…and still the same.
@Just nutha ignint cracker:
But that’s exactly what Netflix claims it does. It’s not my allegation, it’s their boast.
What is unreasonable is the notion that a system can predict free will. Like I said: I have given ‘them’ all kinds of data. And to date they have accomplished precisely nothing with me. If these systems can’t cope with outliers, that contradicts @Matt’s assertion that they’re pretty good at predicting small scale behavior. The individual is the smallest scale we have, so what’s the hold-up? So far algorithms and big data and AI’s have been at best irrelevant and at worse irritants.
The problem is philosophical in a way. If we have free will, all this Big Data is worth much less than investors imagine. And I think we have free will. I’ve been shopping for a car for my wife for months now. I just bought a house. These are big data points, so how come Big Data isn’t suggesting the perfect car? Or a house painter? Don’t tell anyone, but it’s because the data is fkin useless.
@michael reynolds: Then Netflix is full of sh!t. For all of the reasons I outlined above.
BTW, I just bought a new computer a few days ago–an HP AIO. Wanna guess what Amazon is emailing me mark-down ads about today? (And they’re still not less than what I paid, either! 😛 )
@michael reynolds:
You can try but the other 10,000 people won’t bother.
That is completely irrelevant. You’re confusing technologies with various limitations with an omnipotent system that doesn’t exist yet. The technology and techniques will eventually trickle down to those systems you’re complaining about.
The problem is that you think “small scale” is you when it’s not. Small scale would be a parking lot or a neighborhood in a large city. For example predictive policing has gotten to the point where they can predict crimes on a neighborhood level. It’s getting kind of creepy how accurate it can be. The parking lot example would be automated cameras that call the police because they noticed someone who exhibited signs of looking to break into a car. Fellow got arrested and stolen goods and tools to break into a car were present. The camera was watching how the fellow was walking and looking. It didn’t just report him because he was black 😛
EDIT : The black comment is in reference to how some facial recognition software would fail massively on minorities due to the developers not providing enough varied reference material in the learning stages. Some systems even had issues with women because all those on the team were male and they just didn’t think about it.
@Kathy:
Why not there are airplane designs that are +80 years old being heavily used across the world. The MOST produced airplane in history is the Cessna 172 which was designed almost 70 years ago. Civil aviation is chocked full of old air plane designs. Hell the US Air force’s KC-135 was designed over 70 years ago and is still actively being used. It’s quite common in the aviation industry for designs to be used for decades and expanded on into other more capable or specialized models. Old platforms means the various design kinks and maintenance issues have been worked out. That way you can focus on the newer stuff and fixing the unexpected crap they cause. Also the fewer parts you have to certify the cheaper and faster the newer product can be brought to market. Boeing got lazy with the latest max when they just slapped bigger engines on it and a poorly designed hardware/software setup to compensate for the center of gravity changes. The little cherry on top was Boeing’s failure to provide real training on the new stuff. It was almost like they were afraid to let people know it was there and that cost lives.
Yes it’s boring but it’s also the optimal configuration for the needs of the modern airline and air freight market. I always hated riding in the DC series with the engines on the fuselage..
@Kathy: The Max 10 version is the only one that had issues because as stated above because of Boeing’s “solution” to installing bigger engines… All other Max planes are fine.
Yeah the battery fire on the 787 was pretty dumb. GS Yuasa really dropped the ball with that design. Still Boeing should of tested for worst case scenarios involving defective batteries burning down.