During the campaign, Donald Trump promised to become the greatest jobs president God ever gave to America. He railed against unfair trade deals that, in his view, prompted a mass exodus of jobs to countries like Mexico and China and condemned governmental regulations that ruined industries such as coal. While his xenophobic populist speeches crossed rhetorical boundaries adhered to by major party candidates, they highlighted a theme familiar to Republican voters. Ever since Reagan, conservative politicians have characterized government as the sworn enemy of prosperity: its policies undermined economic growth and squeezed middle and working class incomes. Trump vowed to reverse this pernicious trend.
If the president elect negotiates tougher bilateral trade deals and cuts corporate taxes, will shuttered coal plants and steel mills flicker back to life, allowing him to restore these declining industries? The historical record suggests otherwise. The coal industry was decimated by cheaper and cleaner natural gas, while steel mills closed because their plant and equipment was old and inefficient and labor costs were high. As steel from China became cheaper to make, increased demand for its products resulted in greater market share. Accordingly, more favorable trade deals and/or lower taxes will not return lost jobs to American coal and steel workers.
Every player in the free enterprise economy engages in cutthroat competition that distributes winners and losers across the globe. Many refer to globalization as if it were a recent development. In fact it’s very old news. The capitalist economy has always been a worldwide phenomenon. An early 19th century example of globalization involved the destruction of the Indian textile industry by Britain’s East India Trade Company. Cheaper British textiles slashed demand for Indian products, just as Chinese producers succeeded at the expense of American manufacturers. How will private companies and government respond to the continuous evolution of the global marketplace? Will we seek to revive dying industries, as Trump promised, or identify emerging ones, like the manufacture of solar panels and wind turbines, as Bill McKibben proposed, to employ American workers at good wages, revitalize hard hit areas of the country and renew macroeconomic growth?
One recent Oxford study found that nearly half of all American jobs could disappear over the coming decades due to automation. Better trade deals and lower taxes will not reverse this trend. Democrats must address this burgeoning economic problem by ensuring that workers who lose their jobs due to technological change and/or the migration of companies elsewhere, receive every opportunity to get retrained. Moreover, public education should provide curriculums for young people to find good jobs in rising, not declining, industries. Government must assist workers as they adapt to technological innovation and ruthless competition in the global marketplace. And this effort must be highlighted as an important example of how government is a friend to working and middle class families, not their enemy as Republicans contend. Levying tariffs and taxes to protect jobs, industries and markets against foreign competition, as Trump threatened, characterizes nations that cannot successfully compete globally. Protecting jobs from automation or more efficient production elsewhere, is surely a losing strategy for American workers.
A key part of the effort to strengthen America’s place in the global marketplace involves modernizing America’s rail lines, ports, bridges, tunnels and roads. Given Trump’s promise to rebuild the nation’s decaying infrastructure, Democrats should hold his feet to the fire and insist that he honor his campaign pledge. Perhaps the Keynesian prescription of putting more money in the hands of more people, as opposed to cutting taxes for the wealthy, as the key to generate renewed economic growth, will provide an opportunity for Trump and congressional Democrats to work together.
But what happens if Trump proposes massive infrastructure spending and runs into conservative opposition in Congress? How will he square his promise to rebuild with the Republican effort to reduce the federal debt and balance the budget? Will Republicans seek to cut money for other social programs to compensate for increased infrastructure spending? There is a potential for serious conflict between Trump and congressional Republicans. One can even imagine a scenario where Trump seeks Democratic support for increased outlays over the opposition of the Republican leadership. Much stranger things have happened recently.
Trump’s compelling promise to put America back to work and enhance levels of macroeconomic growth, underscores a critical failure of the first Obama administration. Obama’s stimulus package to revive the economy was far too small. While the economy rebounded, sluggish growth coupled with the loss of jobs over a long period of time, provided an opening for Trump’s angry populist appeal. He assailed Obama’s economic program as a failure, even as the economy crawled back from the edge of an abyss. But the sad fact is that Obama’s policies did not allow more working families to improve their economic condition. And this proved fatal to the Clinton campaign.
But what if Trump fails to deliver on his promise to be a “jobs” president? What will happen to Rust Belt voters who ultimately swung the election in his favor or to all those who harbored misgivings about his qualifications and temperament but voted for him anyway because he promised jobs? How will they react when the stock market rallies and his economic policies produce an even greater concentration of wealth at the top while factories in their communities remain closed? Will white working class voters become more cynical and apathetic? Or will their smoldering anger create a potential opening for more sinister demagogues to emerge?
Neal Aponte, Ph.D.
Editor of Delano