Those Stubborn Facts: Park Avenue Joe

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I really view this campaign as a campaign between Scranton and Park Avenue. And I really mean it, Because, you know, when you’re raised up here in this area, an awful lot of hard-working people bust the neck — all they ask for is a shot, just a shot. All that Trump can see from Park Avenue is Wall Street. All he thinks about is the stock market.”

Democratic presidential nominee Joe Biden, September 19, 2020

Campaign contributions to Biden from donors with Park Avenue addresses:  $1 million-plus

Campaign contributions to President Trump from donors with Park Avenue addresses: $127,000

Campaign contributions to Biden from donors in Scranton: $355,706

Campaign contributions to President Trump from donors in Scranton: $336,657

(Source: “Park Ave Residents Gave Joe Biden 8 Times What They Gave to President Trump,” by John Carney, Breitbart.com, September 18, 2020, https://www.breitbart.com/2020-election/2020/09/18/park-ave-residents-gave-joe-biden-8-times-what-they-gave-donald-trump/)

Making News: Featured in The Los Angeles Times & Industry Today

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I’m pleased to report that my views have been presented three times in important news outlets in recent weeks.

Yesterday, Los Angeles Times business columnist Michael Hiltzik cited some of my research findings and perspectives in this essay on the economic policy differences between President Trump and his Democratic challenger, former Vice President Joe Biden.

Hiltzik’s piece, incidentally, reveals a great deal about how many journalists – including opinion journalists – work, at least in my experience.  He’s a clear Never Trumper, and so would need a lot of convincing to reach the conclusion that the President has done a commendable job of keeping his campaign promises to his working class supporters. (For the record, there’s nothing wrong with that, since everyone has his or her particular slant on life, everyone has every right to them, and Hiltzik is in the opinion business.)

Hiltzik did take the time to consult with someone like me, who does give Mr. Trump solid marks in this respect.  And during our conversation, he was genuinely interested in what I discovered when I looked at recent income trends in “Trump flip counties” – those that voted for Barack Obama in both 2008 and 2012, and then backed the President in 2016.  (I know the interest was genuine because he questioned me at length on the subject.)

All the same, if you read the entire column, you’ll see that he pooh-poohed Trump achievements like outdoing the Obama administration record on manufacturing job creation, and placed lots of weight on the findings of folks at the Brookings Institution, a mainstream establishment (and therefore pretty Never Trump-y) think tank, even when the opinions they expressed to him were flat wrong.  (In particular, there is no set of official data showing that U.S. after-inflation manufacturing output was “higher than it has ever been” right after the 2016 election.)

On balance, though, since my perspectives, however on target or not, are definitely minority perspectives, Hiltzik deserves praise for paying some attention to them.

The second and third instances were IndustryToday.com‘s re-publication of RealityChek posts on the latest government data on the (still-robust) recovery of U.S. manufacturing production, and on evidence that the President’s tariff-centric trade policies have performed effectively during the CCP Virus period in shielding domestic American manufacturing from predatory Chinese trade practices.

And keep checking in with RealityChek for news of upcoming media appearances and other developments.

 

Im-Politic: A Chinese Link to Black Lives Matters?

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Our times are so racially fraught that even I (someone who rarely feels defensive about my views) feel the need to start out this post by specifying that I am not a systemic or structural racist or even an unwitting example of white fragility. Indeed, I’m so woke on the issue of continuing racial discrimination in America that I’ve come out for reparations to remedy what I see as one recent example of open-and-shut racial injustice whose victims would be relatively easy to identify and compensate. And I’ve called attention to the still yawning racial wealth gap

I don’t even have significant problems with the phrase “Black Lives Matter” (BLM) – although I like “Black Lives Matter, Too” because it avoids the possibility of either-or interpretations while making clear that there’s a still a racial gap that must be eliminated.

But the various organizations and coalitions invoking this phrase that have sprung up lately? I’m not so sure about many of them, especially since their proclaimed agendas often go far beyond securing racial justice. (See, e.g., here.) And just yesterday I found out about another potential problem with these groups that seems to support a point I made in a recent article about the massive and under-reported scale of Chinese interference in American public life – signs of close connections between a key BLM organization the Chinese government.

As reported in The Federalist, a conservative publication, based on research by the equally conservative Heritage Foundation, an outfit called Black Futures Lab (BFL) is funded mainly by an organization called the Chinese Progressive Association (CPA). The Lab’s own website, moreover, confirms this finding.

It’s true that BFL is only one group in the BLM constellation. But it’s no ordinary group. Its “Principal” is Alicia Garza, who describes herself, and is credited in news reports, as a founder of the BLM movement.

It’s also true that the CPA isn’t officially affiliated with the Chinese government. But Beijing is certainly a fan of what’s been described as its Boston chapter, as this article (cited in the Heritage Foundation report) from its official mouthpiece demonstrates. One charge I could not independently corroborate – the claim that the Chinese flag-raising event the article mentions was “hosted by the Consulate General of China in New York.”

Consulate officials clearly attended the other event – a flag-raiser – and spoke. But unike the aforementioned Boston passport-focused event, I was unable to find evidence that they played any organizing role.

So maybe the cooperation doesn’t go any further than attending (and sometimes organizing) the kinds of celebrations that might simply be ethnic solidarity events. But according to this study (an undergraduate thesis, but one from Stanford University by a student with clearly progressive sympathies), the admiration between CPA and the Chinese government is decidedly mutual:

The CPA began as a Leftist, pro-People’s Republic of China [PRC] organization, promoting awareness of mainland China’s revolutionary thought and workers rights, and dedicated to self-determination, community control, and ‘serving the people’.

Further, although “Its activities were independent of the Communist Party of China or the US,” it “worked with other pro-PRC groups within the US and San Francisco Bay Area.”

Again, the prospect can’t be ruled out that Beijing is content simply to admire CPA’s efforts to improve social services for Chinese Americans or even help organize Chinese American events with the group. But given the influence I thoroughly documented in the aforementioned magazine article that China has gained over major American institutions; and given the unusual interest displayed by a group like CPA, which is exclusively focused on Chinese Americans (as it makes clear) in an organization that says it’s exclusively focused on African Americans (especially since serious problem of poverty and discrimination still clearly dog Chinese Americans, according to CPA), grounds for further investigation don’t exactly seem to be lacking.

Indeed, as known by anyone with legal or law enforcement experience, or most fans of detective stories, showing that defendants have had “motive, opportunity and means” is a venerable framework for investigating and determining wrongdoing. When it comes to fomenting racial tensions in the United States, the Chinese government surely has all three. So let’s hope that the federal government (both the Exective and Congress), as well as the supposed watchdogs of our democracy, the news media, look into China’s involvement with the Black Lives Matter movement as aggressively as it’s looked into other charges of improper foreign interference in America’s politics.

(What’s Left of) Our Economy: A Spot-On, if Belated, Warning About Experts

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If you’re a normal person – meaning someone who doesn’t follow the U.S. economy especially closely – you have no reason to care much about the news that long-time economics columnist Robert J. Samuelson announced his retirement this week. In fact, even though I follow the economy really closely, I don’t much care either about his departure as such, either.

Nonetheless, one point Samuelson made in his farewell piece in the Washington Post does deserve everyone’s attention, and that was the (reluctant) swipe he took at the character of economists. And this indictment presumably includes many of the discipline’s leading lights, because the observation was made in the context of his claim that they’ve taught him a lot, and because his position gave him regular access to so many of them.

But first, some full disclosure. I’ve dealt with Samuelson on a steady basis literally for decades, mainly because pundits like him have a powerful megaphone, and therefore convincing him that some finding made by me or one of my various colleagues was worth covering boosted the odds that policy makers would pay attention.

He’s been refreshingly respectful and reasonably open-minded, and occasionally took the bait. So I was grateful for that. Otherwise, he’s been a decidedly faithful transmitter of the national, and especially academic and think tank version of, economic policy conventional wisdom, including on trade policy. In that respect, I found him less impressive. The only exception that come to mind – he’s repeatedly, and quite emphatically, challenged the notion that the more immigrants the United States admits, legally or otherwise, the more prosperous the nation as a whole will be. (See, e.g.. here.)

As a result, although in his swan song Samuelson presented some major lessons he says he’s learned about the economy and life in general, they’re hardly gold mines of insight. But what he said about economists was a true shocker, and something to which everyone should pay attention – his fellow journalists first and foremost.

As implied above, Samuelson didn’t exactly relish being critical. For he began by insisting that “With some exceptions, most [of the economists in his Rolodex] are intelligent, informed, engaged and decent. In my experience, this truth spans the political spectrum.”

But in the very next sentences, he maintained that

But it’s not the only truth. Another is this:  Economists consistently overstate how much they know about the economy and how easily they can influence it.  [Samuelson’s emphasis.] They maintain their political and corporate relevance by postulating pleasant policies.”

And a few column inches down, he added that “the quest for economic status and power pushes economists and their political sponsors toward exaggerated promises that lead to widespread public disappointment.”

In other words, according to Samuelson, the economists with whom he’s continually consulted (and who are mainstays for pretty much every other leading economic journalist and pundit you can think of) are generally nice people personally, but “consistently” they succumb to temptations to cast aside intellectual honesty. And the references to “political and corporate relevance” and “political sponsors” aren’t far from charges of outright corruption.

The 75-year old Samuelson closed this final column with an observation that hit particularly close to home for this 66-year old: “I am a man of the 20th century, but we are now facing the problems of the 21st century, which demand new policies and norms.”

I’m trying to keep up – how well I’m succeeding of course ultimately is up to you. But when it comes to identifying the need for new policies and norms, one area in which I think I’ve done a pretty good job has been pointing out that the economics and business press should do a much better job revealing the actual and potential conflicts of interests of the experts it repeatedly treats as dispassionate truth-seekers. (See, e.g., here.)

So it was gratifying to see someone as established as Samuelson reinforcing this case, however implicitly – even if he waited till he was walking out the door.

(What’s Left of) Our Economy: New Fed Figures Show the U.S. Manufacturing Recovery is Proceeding Nicely

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It’s not apparent from the overall numbers, but the most important takeaway from this morning’s monthly Federal Reserve report on U.S. manufacturing production is that American industry has continued a steady comeback from the ravages of the CCP Virus and the government-induced shutdown of much of the U.S. economy. And the continuing healthy pace of this comeback is all the more impressive given the stop-and-start nature of so many of the economic restrictions imposed by Washington, D.C. and by the states and localities, and given the recent uncertainty about a new virus-relief bill.

The overall Fed numbers, as indicated above, do show a manufacturing bounceback that’s losing noteworthy steam. In August (the latest available data month), inflation-adjusted manufacturing output grew by 0.96 percent sequentially. That’s definitely a weaker pace than July’s growth (now pegged at 3.97 percent on month), much weaker than June’s 7.64 percent monthly burst, and well short of May’s 3.91 monthly percent production rise.

Grounds for encouragement, though, are justified even by these aggregate figures, as revisions for recent months generally were positive, and July’s was really positive – that month’s previously estimated manufacturing real growth was 3.41 percent.

But the best and most important news comes from the numbers on manufacturing production outside the automotive sector. As known by RealityChek regulars, the wild sequential swings in output from vehicle and parts makers have dominated the Fed manufacturing production reports for nearly the entire CCP virus period. (See., e.g., last month’s post on this subject.) So important though automotive is – both because of its size per se and because it affects the rest of its industry due to its big domestic supply chain – the non-auto results arguably provide a more accurate picture of U.S. manufacturing’s fundamentals. And this picture looks remarkably good, and still displays significant momentum.

Ex-auto, as the cognoscenti put it, constant dollar manufacturing production increased by 1.40 percent on month in August. So since that’s much faster than overall manufacturing’s performance (up 0.96 percent) that means automotive output fell (by 2.13 percent, specifically).

The August sequential improvement for ex-auto manufacturing, moreover, isn’t dramatically lower than July’s (1.93 percent). And it compares pretty well with June’s (now estimated at 3.82 percent) and May’s (now judged to be 2.12 percent).

Even better, all the pre-July results have been revised up except for May’s.

When all is said and done, the August Fed report underscores just how resilient domestic manufacturing has been despite the formidable CCP Virus challenges (which also include major economic slowdowns in the foreign markets U.S. industry has always relied on for much of its sales). As of August, overall price-adjusted American manufacturing output was just 6.39 percent below its levels in February (the final month before virus effects began impacting the economy). Manufacturing ex-auto’s real production was just 7.04 percent less than in February. And automotive’s after-inflation production was a mere 1.98 percent below that February benchmark.

And another factor to consider: Since China’s has been the world’s first major economy to resume growth since the virus struck, and since its recent growth has been so markedly export-led, think of how much worse U.S. industry’s state would be had the steep Trump tariffs on hundreds of billions of Chinese goods normally sent to the United States not been imposed, or left almost completely in place by the Phase One trade deal.

Making News: National Interest Post Examines Biden’s Often Head-Scratching Manufacturing Plans

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I’m pleased to announce that my latest article for an outside publication is now on-line.  It’s an analysis of Democratic presidential nominee Joe Biden’s proposals to revive American domestic manufacturing, and it leads off this morning’s edition of The National Interest.  Here’s the link.

And keep checking in with RealityChek for news of upcoming media appearances and other developments.

Our So-Called Foreign Policy: Why America’s Stakes in East Asia’s Security are Looking Vital Again

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News flash! This past week I read a newspaper column by George F. Will that didn’t prompt me to say “What an ignoramus!’ In fact, not only did I learn something. I learned something so important that, in conjunction with some other recent developments, is causing me to rethink some long and deeply held ideas I’ve had about America’s grand security strategy in the East Asia-Pacific region.

Specifically, although Will’s own focus in the September 8 piece was who Joe Biden would pick as Secretary of Defense, the piece itself described some ominous changes in the U.S.-China military balance in Asia that call into question my main concerns about America’s approach to region, and especially what I’ve depicted as an increasingly dangerous reliance on nuclear weapons to deter Chinese aggression. Meanwhile, as I’ll detail in a forthcoming freelance article, two U.S. Asian allies – Taiwan and South Korea – whose value to the United States I’ve long insisted doesn’t remotely justify running such risks, are looking for now like critical assets.

To review, since the Cold War began, the United States has resolved to defend its East Asian allies in large part by using the threat of nuclear weapons use to persuade potential attackers to lay off. Presidents from both parties agreed that the conventional military forces needed to fight off China and North Korea (and early on, the Soviet Union) were far too expensive for America to field. Moreover, the Korean War convinced the nation that fighting land wars in Asia was folly.

Before China and North Korea developed nuclear weapons able to reach the U.S. homeland, or approached the verge (the case, it seems, with the latter), this globalist policy of extended deterrence made sense whatever the importance to America of Asian allies. For the United States could threaten to respond to any aggression by literally destroying the aggressors, and they couldn’t respond in kind.

As I noted, however, once China and North Korea became capable of striking the continental United States with nuclear warheads, or seemed close to that capability, this U.S. policy not only made no sense. It was utterly perverse. For nothing about the independence of South Korea and Taiwan, in particular, made them worth the incineration of a major American city – or two, or three. The security of much larger and wealthier Japan didn’t seem to warrant paying this fearsome price, either.

Greatly fueling my opposition to U.S. policy and my support for a switch to an America First-type policy of military disengagement from the region was the refusal of any of these countries to spend adequately on their own defense (which, in combination with U.S. conventional forces, could deter and indeed defeat adversaries without forcing Washington to invoke the nuclear threat), and their long records of carrying out protectionist trade policies that harmed the American economy.

As Will’s column indicated, though, the threat, much less the use, of nuclear weapons is becoming less central to American strategy. Excerpts he quotes from recent (separate) writings by a leading Republican and a leading Democratic defense authority both emphasize dealing with the Chinese threat to Taiwan in particular with conventional weapons. The nukes aren’t even mentioned. Especially interesting: The Democrat (Michele Flournoy) is his recommended choice to head a Biden Pentagon – and she’s amassed enough experience and is well regarded enough among military and national security types to be a front-runner. I also checked out the journal article of hers referenced by Will, and nuclear weapons don’t come up there, either.

Moreover, neither Flournoy nor her Republican counterpart (a former aide the late Senator John McCain) shies away from the obvious implication – accomplishing their aim will require a major U.S. buildup of conventional forces in East Asia (including the development of higher tech weapons). In fact, they enthusiastically support it.

Any direct conflict involving two major powers has the potential to escalate beyond the expectations of the belligerents. But certainly bigger and more capable American forces in East Asia would reduce the chances that war with China will go nuclear. So in theory, anyway, the nuclear dimensions of my concerns could be reduced.

Moreover, my willingness to run greater risks to safeguard Taiwan and South Korea in particular, and pay the needed economic price – even if they keep free-riding on defense spending – is growing, too. That’s because of the theme of that forthcoming article I mentioned: Intel, the only major U.S.-owned company left that both designs and manufactures the most advanced kinds of semiconductors, has run into major problems producing the last two generations of microchips. In fact, the problems have been so great that the company has lost the technological lead to South Korea’s Samsung and in particular to Taiwan’s TSMC, and their most advanced facilities are in South Korea and Taiwan, right on China’s rim.

Given the importance of cutting edge semiconductors to developing cutting edge tech products in general, and ultimately cutting-edge weapons (including advanced non-weapons electronic gear and cyber warfare capabilities), acquiring the knowhow to produce these microchips by whatever means – outright conquest, or various forms of pressure – would make China an even more formidable, and even unbeatable challenge for the U.S. military, at least over time.

So until Intel, whose most advanced factories remain in the United States, figures out how to regain its manufacturing chops, or some other U.S.-owned entrant rides to the rescue, there will be a strong argument on behalf of protecting South Korea and Taiwan against Chinese designs at very high risk and cost. And as noted above, Americans may even have to tolerate some more military free-riding along with, in the case of South Korea, fence-sitting in the overall U.S.-China competition for influence in East Asia.

At the same time, because of the military (including nuclear) risks still involved, seizing back control of the semiconductor manufacturing heights ultimately is the best way out of this bind for Americans. So shame on generations of U.S. leaders for helping this vulnerability develop by swallowing the kool-aid about even advanced manufacturing’s obsolescence and replacement by services. But this grave mistake can’t be wished away, or overcome instantly, either – though efforts to regain this lost tech superiority need to be stepped up dramatically. So shame on current leaders, their advisers, and wannabe advisers – whatever their favored foreign policy strategy – if they fail to acknowledge that dangerous new circumstances may be upon the nation, and the sharp imperatives they logically create. And that includes yours truly.

Those Stubborn Facts: A Strange Definition of a Broken Trump Promise

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Shortages of meltblown textiles, key to N95 mask-making, illustrate ‘the failure of this administration to take necessary steps to fulfill’ its promise of restoring critical manufacturing capacity lost to China.”

Associated Press, September 10, 2020

“Pre-pandemic, five U.S. producers were making about 42 million N95 masks a month. By October, that is projected to have increased to 11 U.S. producers making 168 million a month, which could amount to 2 billion a year….”

–Associated Press, September 10, 2020

“Also pre-pandemic, 24 U.S. companies were making meltblown, with 79 machine lines in operation….But only a fraction of that was going into medical respirators….By the end of 2021… there will be 28 new lines in the U.S., representing a 35% increase, with almost all of the newly produced textile going into medical supplies.”

–Associated Press, September 10, 2020

(Source: “Scarcity of key material squeezes medical mask manufacturing, by Martha Mendoza, Juliet Linderman, Thomas Peipert, and Irena Hwang,” Associated Press, September 10, 2020, https://apnews.com/02a0542e8a05176bd5d79757134bc277)

(What’s Left of) Our Economy: A Backfiring Attack on Trump’s Trade & Manufacturing Policies

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For the record, the Economic Policy Institute (EPI) has done terrific work over decades on the domestic economic impact of U.S. trade policy decision and trade flow, and it’s been great to stand shoulder-to-shoulder with its economists and ther staff during many major trade policy battles starting with the North American Free Trade Agreement (NAFTA).

Which is why I have been absolutely baffled by a recent EPI report that shows signs of furnishing some major trade policy talking points for Democratic nominee Joe Biden’s presidential campaign.

Most puzzling of all: a table in the August 10 study purporting to show that (a) “President Trump’s erratic, ego-driven, and inconsistent trade policies have not achieved any measurable progress” in reversing the offshoring of U.S. manufacturing jobs and the related ,”decline of American manufacturing”; and in fact (b) that “Offshoring and the loss of manufacturing plants have continued under Trump, notwithstanding U.S. Trade Representative Robert Lighthizer’s claim that the administration’s trade policy is helping U.S. workers.”

Here are the main table figures that cover the first two Trump years and the record of its predecessor, the Obama administration (whose Vice President of course was Biden). I started with 2010 because during 2009, the first year of the Obama presidency, the nation was mired in a Great Recession for which he deserves absolutely no blame. In addition, EPI stops the table at 2018 because factory numbers afterwards aren’t yet available. (The gross output figures have been added by me to make further comparisons possible.)

             Change in factory #s            Change in mfg jobs        mfg real gross output

2010:            -11,283                               -755,000                        +5.37 percent

2011:              -5,155                              +222,000                        +2.89 percent

2012:             -2,938                               +223,000                        +1.93 percent

2013:             -4,220                               +101,000                        +2.86 percent

2014:             -4,056                               +121,000                        +0.79 percent

2015:             -2,129                               +192,000                        +0.54 percent

2016:                -999                                 +33,000                        +0.04 percent

2017:                -782                                 +50.000                        +0.99 percent

2018:             -1,005                               +216,000                        +2.31 percent

The first point that needs to be made is that, as must be obvious, these numbers show absolutely no consistent relationship between the annual change (and in this case, decline) in the number of the nation’s “manufacturing establishments” (what these official figures call factories) and the annual change in manufacturing payrolls.  

For example, in each of these years, lots of factories kept closing, yet manufacturing employment kept rising. It’s true that rates of annual change have varied for both categories during this period. But these variations don’t seem to hold any significance, either. If they did, why would the number of closures fall notably between 2011 and 2012, while those years’ manufacturing workers’ numbers rise by almost exactly the same amount? And why the big difference between the number of closures in 2011 and 2012 on the one hand, and in 2018, on the other, and the close resemblance of the employment gains for each of those years?

Further, although it’s true that factory closures continued during the first two Trump years, the annual rate of closures slowed dramatically. Indeed, from 2010 through 2016, the average annual closure rate was 4,397. For 2017-18, this rate was 893.5. That’s not progress? And let’s be fair and not count 2010, because the manufacturing job losses of the Great Recession continued through its early months. The 2011-16 annual average factory closure number was still much higher (3,249.5) than during the Trump years.

Not weird enough for you? According to these EPI figures, despite factories closing at a much faster rate during the Obama years than during the Trump years, manufacturing employment grew faster. From 2011 through 2016, manufactring jobs grew by an annual average of 148,670. The comparable number for the first two Trump years was only 133,000.

At the same, time, this seemingly paradoxical relationship between numbers of factories and numbes of workers isn’t so completely paradoxical after all.  For example, new kinds of machinery and other efficiencies have surely enabled many domestic manufacturers to consolidate their physical footprint, and actually boost production and hiring. Alternatively, manufacturing companies can increase their capacity by expanding existing plants rather than build new facilities.        

Speaking of production, if we’re going to talk about the decline of American manufacturing, we need to talk about output levels and their changes, too. After all, it’s tough to boost or even maintain manufacturing workers’ numbers if production isn’t rising. Yet the annual growth numbers I’ve added to the table (which represent inflation-adjusted gross output), don’t show much of a relationship with closure numbers or employment numbers, either – and that’s the case even leaving out the quasi-manufacturing recession year 2010.

Still, don’t the EPI figures make clear that manufacturing hiring during the first two Trump years was weaker than during the Obama years? They sure do. As mentioned above, from 2011 through 2016, manufacturing payrolls grew by an average of 148,670 each year versus the Trump annual average in 2017 and 2018 of 133,000.

But are the EPI numbers the right numbers? I decided to check since the 50,000 manufacturing jobs increase presented for 2017 seemed way off to me. And there’s strong evidence that my suspicions were justified. Here’s what I found on the Bureau of Labor Statistics website. They represent December-to-December changes, and they’re seasonally adjusted. But the unadjusted numbers aren’t terribly different:

2011:    +207K

2012:    +158K

2013:    +123K

2014:    +209K

2015:     +70K

2016:        -6K

2017:   +185K

2018:   +264K

According to these data, the average annual manufacturing employment increase during the Obama years was 126,830 (again, recession-y 2010 is left out) and the annual average for the first two Trump years was 224,500. So advantage Trump here. The current administration enjoys a big edge even adding in 2019, when industry’s payrolls rose by only 59,000. That performance brings the Trump annual average down to 169,330 – still considerably higher better than the Obama years’ performance.

The EPI report correctly notes that 2020 has been much worse so far for manufacturing employment, and reasonably argues that even though the CCP Virus pandemic has been mainly responsible, “If President Trump wants to take credit for the job growth at the tail end of a decade of recovery from the Great Recession, then he must also own this collapse, thanks to his administration’s mismanagement of the pandemic.”

But if we’re going to start blaming non-trade policy-related factors for changes in manufacturing performance measures, let’s at least be consistent. For manufacturing hiring and growth (1.30 percent) undoubtedly were held down in 2019 by the safety woes experienced by aerospace giant Boeing – and therefore by its vast domestic supply chain – and by the six-week strike at General Motors.

Combine those developments with the inevitability of manufacturing inefficiencies as companies and entire industries adjust to a dramatically different trade policy environment, and the Trump record looks remarkably good. Unless EPI (and other Trump critics) believe that a painless way to transform U.S trade and manufacturing policies (which the institute strongly supports) has ever been possible?

President Trump was clearly (though anything but disastrously) mistaken when he claimed in early 2018 that trade wars are “easy to win.” Let’s hope that the EPI report isn’t a sign that a Biden administration and other critics would peddle the same pipe dreams.

(What’s Left of) Our Economy: China’s Trade is Killing Global – but not U.S. – Growth

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Let’s say you don’t care about America’s still-huge and longstanding trade deficit with China. You should still be up in arms about the trade figures that just came out from the People’s Republic. For they make clear that China this year has been growing at the expense of the rest of the world just as the pandemic it spawned has destroyed massive amounts of income, jobs, and growth around the world.

At the same time, these data should cheer anyone who’s more America First-inclined, since they also provide compelling evidence that President Trump’s tariff-heavy trade policy toward China has delivered considerable benefits to the United States during this crisis.    

It’s a maxim of conventional economics that changes in a country’s trade balance determine its role in adding to or subtracting from global growth. More specifically, national economies whose trade balances are worsening (either because surpluses are shrinking, surpluses have become deficits, or deficits have increased) are adding to output worldwide. That’s because such countries are consuming more of other economies’ output, and therefore expanding the demand for these goods and services, more than their own goods and services are taking share of other countries’ markets.

Improving trade balances (either because deficits are shrinking, deficits have become surpluses, or surpluses are increasing) subtract from global growth because the opposite effects are created.

The China trade data I’m talking about only cover its goods (or merchandise) trade. But since China’s two-way global goods trade (totaling $2.1431 trillion for the first half of this year) is nearly seven times greater than its two-way global services trade ($316.27 billion), it’s clearly worth focusing on.

And here’s what the numbers show: From January through August of this year, China’s goods trade surplus with the entire world added up to $327.92 billion. For the same eight-month period of last year, the number was $262.29 billion. That’s an increase of just over 25 percent, and a growth drag this year’s global econmy can ill afford. (Here’s the source.)

In this vein, it’s more than a little interesting that between January and July, 2019 and January and July, 2020, China’s goods trade surplus with the United States fell by 18.14 percent. (The U.S. figures for August won’t be released until early October.) In other words, merchandise trade with China has added to America’s growth.

Of special importance, year-to-date, U.S. goods imports from China are off by 14.71 percent. Globally, according to this source, imports from China worldwide are down only 4.11 percent. (These last numbers vary, but only in a minor range.) Which seems to be a ringing endorsement of President Trump’s stiff and sweeping tariffs on imports from the People’s Republic. Why else would the pattern of China’s trade with the United States this year differ so dramatically from the pattern of China’s global trade?

Meanwhile, on a net basis, it’s not like other countries are making out like bandits in the wake of China’s weak performance. The total American non-oil goods deficit (which RealityChek likes to call the Made in Washington deficit, because it’s the portion of U.S. trade flows most heavily influenced by trade policy, and which comprise the best proxy for U.S.-China trade flows) is up year-to-date, but only by about a half a percent. And U.S. non-oil goods imports are off by 9.79 percent globally – considerably less than the decrease in imports from China.

It’s true that the pace of U.S. imports from China has picked up lately. Indeed, on a monthly basis, they’ve doubled between March and July – nearly twice the 28.34 percent advance in global imports from China during this period. But given the relatively rapid U.S. economic recovery, it’s legitimate to ask where these trade figures would be with no tariffs. Moreover, it’s way too soon to know into which what kind of post-virus-normal and post-Phase-One-trade deal normal U.S.-China, and China’s global trade flows will settle.

So far, however, the numbers tell a reasonably clear story. During the pandemic, China’s trade has strongly subtracted from global growth with countries that have not launched a trade war, and actually added to growth with the country that has.