Tags

, , , , , , , , , , , , , ,

Boy, those working class Americans who voted for Donald Trump for president. How ignorant! At least that’s the clear message sent by Ronald Brownstein’s recent article for The Atlantic reporting on new findings about the America’s trade performance and prospects and their likely impact on one of Mr. Trump’s main constituencies.

In Brownstein’s words, “If Trump’s moves ultimately reduce trade flows and squeeze exports, the biggest U.S. losers will include not only big metropolitan areas that almost entirely supported Hillary Clinton in November, but also the smaller places that provided the core of Trump’s support.” His evidence? A new Brookings Institution study purporting to show that (Brownstein’s words) “Although the big metropolitan areas generate the most exports, selling to the world is often proportionally more important to smaller places.”

More specifically, writes the author:

The metropolitan areas where exports account for the largest total share of local economic output are smaller and midsized communities that are almost all hubs for either manufacturing or energy production. These places read like a recap of Trump’s campaign-travel itinerary: Columbus, Elkhart, Kokomo, and Lafayette in Indiana; Racine, Fond du Lac, and Sheboygan in Wisconsin; Lake Charles and Baton Rouge in Louisiana; Waterloo, Iowa; Hickory and Rocky Mount in North Carolina,; and Midland and Battle Creek in Michigan. The list of metropolitan areas where exports provide the greatest share of total gross domestic product doesn’t reach a big city until Seattle—which ranks about 40th.”

So what could be more obvious – and pathetic – than the conclusion that many of Mr. Trump’s supporters essentially opted to shoot themselves in both feet, at best?

Brownstein and the Brookings specialists do offer one explanation – though it plainly reinforces the impression created of Trump voters as know-nothings:

Many of those smaller places…would initially welcome a more protectionist trade policy, on the belief that it will force manufacturers now relocating or building new facilities abroad to reinvest in the United States. The downside for them is less visible, but potentially more consequential: the cost to their local economies if retaliation from other nations, or simply a diminished effort to open other markets, leads to fewer sales from American firms to the world.”

Distorting these shortsighted Trump supporter views even more? “[I]t’s difficult for local officials to keep that broader perspective in mind when trade’s losers are so much more visible than its beneficiaries.”

Here’s a pretty big rub, though. Although most of the Mainstream Media for decades have swallowed claims from think tanks like Brookings about recent and current trade policies supercharging exports and benefiting the U.S. economy and its workers on net, the data tell the opposite story. Here are two leading (but by no means unusual) examples that have directly and powerfully affected the kinds of Trump strongholds listed in Brownstein’s article.

The first concerns U.S. trade in industrial machinery – a broad category of products that includes machine tools and construction equipment and farm machinery and engines and turbines and industrial heating and cooling equipment (think Carrier). Let’s see what’s happened on the trade front since 1997. That’s when the U.S. government adopted its current predominant system for classifying sectors of the economy, which has therefore generated nearly two decades of apples-to-apple statistics. It’s also when the first big effects began to be felt of major trade liberalization decisions made starting in the early part of the decade with places like Mexico and Canada — which were advertised overwhelmingly as “Big Emerging Markets” for American-made goods and services.

In 1997, this big segment of domestic manufacturing ran a $17.39 billion trade surplus. By 2015, this surplus had become a $14.33 billion deficit. And in the 2016 presidential election year, that shortfall was up nearly 60 percent through November (the latest figures available). Some net export bonanza.

The second example concerns the automotive sector – which has also been kind of important to the Rust Belt economy. In 1997, vehicles and parts combined racked up a trade deficit of $63.07 billion. In 2015, this figure was just under $178 billion – much bigger than the machinery gap. And through November of last year, it too had risen – though by a more modest 2.25 percent. Still, no export bonanza here, either.

And it’s the Trump voters who are ignorant?

Advertisements