Tuesday, September 27, 2016

Trumped!: clueless about the US economy

Does Trump know anything about the US economy? Matt Yglesias examines the evidence:
Trump explained that he talks about how rich he is “not in a braggadocious way” but because “it's time that this country has somebody running the country who has an idea about money.”
And yet from his very first statement in the debate, Trump revealed a frankly bizarre level of ignorance about economic policy.
  • Literally the first thing Trump said after thanking the moderator was that “our jobs are fleeing the country” when, in fact, employment has been steadily increasing for years.
  • Three sentences later, he said the Chinese “are devaluing their currency and there's nobody in our government to fight them,” when, in fact, the Chinese are trying to prop up the value of their currency in the face of a massive investor exodus from Chinese real estate.
  • He also said the Chinese “are using our country as a piggy bank to rebuild China,” which isn’t even how piggy banks work, much less the US-Chinese economic relationship.
  • He said that Mexico is feasting on American manufacturing and “building the bigger plants in the world” when, in fact, Tesla is currently building the biggest factory in the world right in California. The existing biggest factory in the world is also in the United States, and is where Boeing jumbo jets are built. No. 3 is a Mitsubishi plant located in Illinois.
One could continue with the factual specifics here, but the overarching theme is pretty clear: The Republicans nominated someone who doesn’t know anything about his signature issue. Trump lambasted Clinton for her involvement in NAFTA, which he said had devastated American manufacturing, but US manufacturing output has risen about 50 percent since NAFTA passed. And while it’s not true that the world’s biggest factories are opening in Mexico, it is absolutely true that both the Boeing factory and the Mitsubishi factory depend critically on international trade for their viability.
What’s particularly odd about this is that while Trump doesn’t know anything about trade policy and isn’t in possession of any relevant facts about American manufacturing, he seems to see trade policy as the only economic issue worth discussing. You would never know from Trump’s discourse that the vast majority of Americans work in jobs related to domestic service provision — they work in hospitals and restaurants and schools and stores working with nearby customers, not internationally traded manufacturing.
A particularly vexing aspect of this is that the GOP nominee’s core business expertise is in real estate development. Under the circumstances, you might think he would have something useful and insightful to say about house building or some other adjacent sector of the economy. But he no more talked about construction than he talked about health care.
He did briefly mention that “our energy policies are a disaster,” but energy prices have been falling for years. The brief digression into being wrong about energy was immediately followed by a repetition of the idea that the country is suffering a disastrous outflow of jobs to foreign countries. “All you have to do is look at Michigan and look at Ohio,” he said, “and look at all of these places where so many of their jobs and their companies are just leaving.”
Ohio has a 4.7 percent unemployment rate, and in Michigan it’s 4.5 percent. These states have problems, no doubt, but they are strange examples of the economic devastation wrought by trade.
So the answer is: no. Trump is clueless about, as he puts it, "money".

Next question: Is Trump more clueless than Sarah Palin? Discuss.

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