MANUFACTURING mfg
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primary 2 26 ez
merri ok
no notes 11/18?
ironically neglected?
see globalization outsourcing
SEE TARIFF TRADE WAR BS CHIPS ACT?
see LAYOFF UNEMPLOY JOBS
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an 10 26 steel plant ohio? bs?
Trump’s massive $150 billion manufacturing boom just hit a major snag: WSJ
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an 10 26
mfg bs
The News Observer reports President Donald Trump and U.S. Secretary of Commerce Howard Lutnick were quick to announce a new manufacturing plant in North Carolina that would provide raw materials for semiconductors — perhaps too quick.
The Observer reports Sibelco, the mineral company that Lutnick said was behind the new plant, hasn’t confirmed any details of the federal officials’ announcement.
Trump is eager to sell his policies to South Carolina voters because Republicans are fighting for their political lives in a state the party was expecting to dominate without effort. But, aside from ‘closing the border,’ there are relatively few Trump policies that are resonating with Americans.
With his talking points running thin, Trump and Lutnick were quick to announce the groundbreaking of a factory to bolster a global hub for mining in Western North Carolina, which the Observer said produces 70 percent to 90 percent of the world’s high purity quartz — a key raw material in semiconductor and solar panel manufacturing.
However, a Sibelco spokesperson told The News & Observer that the company is only “aware of recent public comments regarding a potential project involving the company in North Carolina.”
“At this time, we are awaiting the official communication from the U.S. Government and are therefore not in a position to comment or provide information beyond what has been publicly announced through official channels,” the spokesperson said. “Should further information be announced, Sibelco will share relevant details through its communications channels.”
The setback comes as the president’s standing continues to plummet among working Americans. Trump promised when he ran for reelection in 2024 that he would revitalize American jobs, particularly in traditionally masculine industries like manufacturing. Yet according to a report by a business journalist, that's just not what's happening.
"The White House promised a manufacturing renaissance,” wrote Fortune business editor Nick Lichtenberg. “Instead, the factory floor keeps shrinking."
The journalist added that "the blue-collar job market has been slowing for more than a year, with jobs in manufacturing and construction racking up roughly 150,000 net losses on an annual basis as of March… During Trump's first year back in the White House, the manufacturing sector alone shed 108,000 jobs — even as the administration touted an incoming 'manufacturing boom.'"
While campaigning in 2024, Trump also pledged to eliminate the entire national debt in just one term. He also claimed he’d do it without cutting “one penny” from Social Security or Medicare. Instead, he suggested that he would eliminate the debt through growth, crypto, and tariffs.But according to Atlantic columnist David Frum, not only were Trump’s “absurd” plans little more than “fantasies,” but the bill has come due with potentially disastrous consequences.
Instead, Frum said Trump’s tax cuts reduced government revenues by $4.5 trillion over the next decade, and his cuts to food stamps and Medicaid reduced spending by just $1.1 trillion. Meanwhile, Trump’s budget plans generated $3.4 trillion in direct costs over the decade ahead — and this grows to $4.1 trillion because of the rising costs of debt service in the Trump era.
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8 26
A Connecticut manufacturing company that has operated for more than a century is finally closing its doors after being sent over the edge by President Donald Trump’s economic policies.
Its longtime owner cites “soaring business expenses and tariffs as key reasons for the decision,” reports NBC Connecticut.
“Leed-Himmel Industries, a custom aluminum manufacturing company based in Hamden, has been winding down operations after decades of serving customers,” NBC CT reports. “The closure did not come as a surprise to owner Howard Goldfarb.”
When NBC Connecticut visited the plant in 2024, Goldfarb was already warning reporters that rising expenses were biting an expanding hunk out of his business and putting pressure on it.
"It could get to the point where I just say, 'It's not worth doing anymore. All we're doing is working to pay the electrical bill,'" he told NBC Connecticut at the time.
Two years later, that prediction became reality, with Goldfarb declaring that costs had climbed too high as he walked through a largely empty factory floor.
"If our costs were where they were, say, eight years ago, I wouldn't have shut it down," Goldfarb told reporters.
Goldfarb’s factory was not only a stable source of jobs but also a considerable spring of revenue. The business paid about $160,000 annually in local property taxes. But Goldfarb said health insurance for workers kept rising, as did insurance for buildings, vehicles, and workers' compensation. The company's power bill topped $500,000 despite reduced operations.
But Goldfarb said the final blow came from the White House.
"Tariffs was the final nail in the coffin, if you will," he said, adding that tariffs increased the cost of aluminum and other materials while forcing him to tie up more cash in inventory purchases before customers paid their invoices.
The Supreme Court has already rejected Trump’s tariffs, calling them illegal because they lacked congressional authorization. But the president has continued to levy them despite not receiving legislative approval.
“President Trump’s repeated attempts to impose tariffs have become an encapsulation of his second term,” wrote the Times Editorial Board. “They have hurt the American economy and his own popularity. They also range from legally dubious to blatantly illegal.”
Goldfarb had almost managed to salvage some jobs by selling the company to a European buyer, but he said the buyer backed out after Trump unilaterally declared war on Iran. He said he is still trying to find a buyer for the Hamden facility and hopes it will remain a manufacturing site rather than being converted to storage space.
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bessnt says we do not need jobs bc deport?
Trump torn apart for passing the buck on manufacturing losses
an 8 26
rollins blames dem gnd for beef $
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an 7 26
Trump's promises of an "economic revival" and a return of manufacturing have once again fallen flat, with a new Washington Post piece documenting the closure of a factory in "Trump country" owned by a prominent Trump donor.
Per the Saturday morning piece, the Conn Selmer plant in Eastlake, Ohio, just east of Cleveland, shut its doors for the last time at the end of June. Located within a 61-year-old building, the plant was a subsidiary of the Steinway Musical Instruments company until its acquisition in 2013
"At a time when the president of the United States said the country was in the midst of a manufacturing renaissance, the 150 people who still worked at the plant were losing their jobs, and seeing many of them offshored to China," the report detailed.
The plant was one of the many holdings in the portfolio of John Paulsen, a billionaire hedge-fund owner whose firm acquired Steinway over a decade ago, and who emerged as a vocal backer of Trump during his 2024 campaign. He was also notably supportive of Trump's tariff plans, claiming that they could "protect American jobs and protect American manufacturing.
"What you see is a hollowed-out American manufacturing base. And we need to protect American jobs and protect American manufacturing,” Paulson said during a CNBC appearance in September 2024. “We can’t have Americans — American producers closing American factories and offshoring.”
This manufacturing "renaissance" under Trump has, so far, failed to materialize, with recent data showing that the sector has, in fact, lost around 75,000 jobs during his second term. Tariffs have borne the brunt of the blame for this, as their haphazard and disastrous implementation has done far more to harm the economy than to bring jobs back from overseas.
As the Post's report highlighted, Trump has long claimed to be able to prevent the closure of factories in the U.S., with little in the way of results to prove it.
“All of those bad things that you had to suffer with, you’re not suffering anymore, because now people and companies have an incentive to stay,” Trump told workers at an appliance factory back in 2020. “They’re not going to be leaving so fast. I want to make sure these companies aren’t leaving.”
“Together we will reclaim our nation’s destiny as the number one manufacturing superpower in the world," Trump said during his reelection campaign in August 2024. “We will do it, and China won’t even be close. Nobody will be.”
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Trump’s manufacturing promise backfires: Data shows 75,000 lost jobs
AN
7 26 BOAST BUY 250 ESCALADES
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AN 5 26 NOTE INTENT IS OPPOSITE?
Trump’s 'Golden Age' killed another American company's factory in a red state - Alternet.org
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booed at ufc fight?
an 4 26
President Donald Trump likes to boast about his supposedly unanimous support within his own base, but a recent editorial from a prominent financial publication suggested his movement is not just slipping away from him. It’s eviscerating itself.
"The 'Make America Great Again' (MAGA) 'manosphere' is showing signs of internal fractures, as disagreements over U.S. President Donald Trump's handling of the Epstein files and the war in Iran spill into the open,” wrote the Money Control World Desk in an editorial published on Wednesday. As they pointed out, the so-called “manosphere” that fueled the MAGA movement
Trump launched with his 2016 presidential campaign is fracturing over the war in Iran and his longtime friendship with late convicted child sex trafficker Jeffrey Epstein.
"Prominent figures linked to the space include Andrew Tate, Ben Shapiro and Nick Fuentes, many of whom are now at odds over issues such as U.S.-Israel ties and the Epstein files,” Money Control World Desk wrote.
Even President Trump has been drawn into the fierce feud, which threatens to even further dampen enthusiasm that the Republican leader desperately needs as his party approaches the treacherous 2026 midterm elections.
"The tensions escalated after Trump lashed out at both commentators,” Money Control World Desk reported. “'They have one thing in common, low IQs,' he said. 'They're stupid people, they know it, their families know it, and everyone else knows it, too.'"
As war blooms, others in the movement are taking sides. Podcaster Joe Rogan described Trump’s ICE agents as engaged in “Gestapo tactics,” said he was disappointed in Trump’s evasive response to releasing Epstein’s files and opposes his war in Iran. Far-right commentator Alex Jones went from being one of Trump’s staunchest supporters to claiming he has betrayed his base with the Iran war and even questioning his mental fitness. Nick Fuentes, a far right commentator, proclaimed that “MAGA is dead,” and told the president: “Trump, you don’t have any young fans anymore.” Because of Trump’s recent comparison of himself with Jesus Christ and feuding with Pope Leo XIV, many Christian conservatives are even questioning whether Trump is the Antichrist.
Trump is equally controversialamong his base on economic issues. "The White House promised a manufacturing renaissance,” wrote Fortune business editor Nick Lichtenberg on Tuesday. “Instead, the factory floor keeps shrinking."
In particular, Lichtnenberg pointed out that "the blue-collar job market has been slowing for more than a year, with jobs in manufacturing and construction racking up roughly 150,000 net losses on an annual basis as of March… During Trump's first year back in the White House, the manufacturing sector alone shed 108,000 jobs — even as the administration touted a coming 'manufacturing boom.'"
He concluded with irony that "the same working-class men the MAGA economy promised to rescue are sitting out a hiring boom in the fastest-growing sectors of the U.S. economy because those jobs are considered women's work. Meanwhile, the factories they're waiting to return to keep shedding workers."
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BILL MCKIBB 2 25? 26
CHINA WILL OWN AUTO SECTOR WITH ev; 3 CITIES MAKE MORE CARS THAN FORD? BETTER ONES?
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AN 3 26
Whirlpool made manufacturing promises to Trump — then cut 481 jobs
an 2 26
President Donald Trump repeatedly claims that manufacturing jobs have boomed during his second term, but a recent report reveals the construction spike is not doing what most people want — creating large numbers of jobs.
“Industry data show that much of the recent surge in construction jobs is tied to data centers and the power infrastructure that supports them, not a wave of new factories backed by fresh investment pledges Trump has secured,” wrote Politico’s Megan Messerly and Sam Sutton. “That matters because factories tend to employ far more people than data centers, one of the main reasons communities have been more receptive to the former setting up shop in their towns.”
By contrast, Trump claimed during his State of the Union message that “as thousands of new businesses are forming and factories, plants and laboratories are being built, we have added 70,000 new construction jobs in just a very short period of time. It’s getting bigger and bigger and stronger. Nobody can believe what they’re watching.”
Even though Trump says rising construction activity means Trump’s tariff policy is cultivating domestic manufacturing, Politico reports that many of these investments are in such early planning stages that “the factory jobs that could reshape communities are likely years away” — and that is assuming the factories in question produce lots of jobs, which often is not the case with data centers.
“Not one in the last year has started under this administration where we’ve procured the first man hour of work,” Sean McGarvey, president of the North America’s Building Trades Unions, told Politico. Although there have been announcements of projects, “they haven’t started yet… As far as actual shovels in the ground, that hasn’t happened.”
In terms of the 33,000 job gains in January, “economists believe those jobs were just a blip in the data, driven largely by unseasonably warm weather during the period when government statisticians were collecting data. That disconnect could complicate Republicans’ argument to working-class voters looking for signs of a Trump-fueled factory comeback.”
Quoting Scott Paul, president of the Alliance for American Manufacturing, Politico reported that “whether it’s warehouses, data centers, manufacturing or a Buc-ee’s or whatever, what is ultimately going to bring stable, high-paying jobs into the community? From that perspective, manufacturing is the winner. At a data center, there are fewer jobs. There will be a few high-skilled jobs, but not a lot of them.”
He concluded, “I think that’s a very fair question of, what’s going to get you more bang for the buck, employment wise?”
Mark Zandi, the chief economist at Moody’s Analytics, confirmed the type of construction cultivated by the Trump administration will not be particularly fruitful in terms of creating thousands of long-term jobs.
“You’re going to get some construction jobs because of data centers and build out of power capacity and maybe chip plants — that kind of thing,” Zandi said. “But that’s going to be offset by job loss in the housing sector. Multifamily, single family completions are weak and are going to continue to fall. And they’re much more worker intensive than the data centers.”
In fact, not only has Trump failed to stimulate manufacturing job creation. According to the liberal-leaning think tank Center for American Progress, he is actually making things worse.
“Far from the manufacturing sector ‘roaring back’ as Trump promised, the United States has lost more than 100,000 manufacturing jobs over the past year,” Allison McManus and Dawn Le from the liberal-leaning think tank Center for American Progress recently wrote. “These actions have pushed the country’s closest trading partners to seek deals elsewhere, including with China: Canada, India, Japan, South Korea, and the European Union have all recently sought new agreements without the United States.”
Similarly, when Trump claimed during the State of the Union message that tariffs would one day replace the income tax, experts scoffed.
“I believe that tariffs paid for by foreign countries will, like in the past, substantially replace the modern day system of income tax,” Trump claimed, prompting American Bridge 21st Century to tweet that “American families and businesses paid at least 90% of Trump’s tariffs last year. His agenda taxes Americans anyway you slice it.”
A moderate commentator echoed this critique.
“After a fairly sober opening, Trump is now veering into fantasy, falsely claiming that he ended taxes on Social Security and suggesting that tariffs paid by foreigners will mostly replace the income tax,” Nicholas Kristof of The New York Times posted on X. “All false.”
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an 1 26
Trump’s policies have cost the auto industry a staggering $25 billion so far
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jdv rome not built day 12 16 25
//
an 12 25
Trump’s 'willy-nilly' economic policy freezing out manufacturing jobs: WSJ
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an 12 25
Washington Monthly writer Anne Kim reports the president and former star of “The Apprentice” vowed to “reach and surpass 1 million new active apprentices,” before surrendering his commitment to funding cuts, grant cancellations, and layoffs.
Trump directed the Department of Labor to deliver his commitment to surpass 1 million new active apprentices within 120 days in an April executive order, but Kim reports that deadline has passed, “with no evidence of progress or even a plan to reach the one-million apprenticeship milestone.”
“Instead, drastic layoffs, funding cuts, and a purge of ‘DEI’-related initiatives have sabotaged the emerging apprenticeship movement. Growth in apprenticeships is at its slowest in years, far more sluggish than during Joe Biden’s administration or even [Trump’s] first term,” said Kim.
“I don’t see them getting to 1 million apprentices till 2032,” Former Department of Labor senior staffer Nick Beadle told Kim.
The number of new apprentices has grown by only about 3 percent so far, according to Zach Boren, Senior Vice President of Apprenticeships for America and the former chief of registered apprenticeship and policy for the Department of Labor.
“We’ve got a White House that has really good talking points on apprenticeship, but no road map,” Boren said.
“One major problem: the gutting of the DOL’s Office of Apprenticeships, first by Elon Musk’s DOGE initiative, and then by the exodus of key staff,” said Kim. “There’s literally no one available to write a plan, let alone implement it.”
The office lost its national director and several division chiefs, and staffing levels are down by as much as 30 percent, according to Boren. The website for the national office lists just three people, all of them designated as working in an “acting” capacity.
“The Department of Labor, and especially the Office of Apprenticeship, are running on fumes,” said Boren.
The Trump administration has also paused or canceled grants for apprenticeship programs and apprenticeship research, which means fewer resources for recruiting and preparing candidates, helping employers and community colleges launch programs, or evaluating their effectiveness.
In fact, at least $30 million in funding appropriated by Congress last year was never spent and has expired, said Beadle.
Meanwhile, Trump’s executive order “Ending Radical and Wasteful DEI Programs,” has purged websites, data, and programs perceived to promote diversity. And the administration canceled dozens of grants under the Women in Apprenticeship and Nontraditional Occupations (WANTO) program established in 1992 by President George H.W. Bush.
“Much as he did on his show, Trump seems to favor a particular kind of apprentice,” said Kim, pointing to a recent Department of Labor social media campaign featuring what’s “presumably Trump’s ideal: a blond, broad-shouldered, AI-generated Aryan avatar ripped straight from the manosphere, with a chiseled jaw and a cleft chin.”
Historians say the style of the DOL posts evoke “historical government propaganda, including posters from New Deal-era America and fascist Europe,” but Kim said propaganda is probably the most Trump’s commitment to apprenticeships will amount to.
“Like so many of his promises to his working-class base, ‘one million apprenticeships’ will likely prove hollow,” Kim said.
Read the Washington Monthly report at this link
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an 12 25
*Newsweek*reportsthat blue collar jobs are collapsing under President Donald Trump as the labor market in 2025 "takes a decidedly white-collar tone" driven by artificial intelligence.
"AI has already been cited in many of the mass reductions announced by Amazon and other corporations in recent weeks," writes Hugh Cameron.
"But for all the hand-wringing over the potentially ill-fated employees of Silicon Valley and Wall Street, a quieter crisis appears to be unfolding for the U.S.'s blue-collar employees, despite the pledges and efforts of the current administration to foster a renaissance in marquee industries such as construction and manufacturing," he adds.
The delayed September jobs report corroborates this, showing "an encouraging uptick in overall hiring but no pause in blue-collar employment's long-term decline," Cameron writes.
Of the five areas of employment considered blue collar — manufacturing, mining and logging, transportation and warehousing, utilities, and construction — only construction saw an increase in employment, he notes.
That said, construction's 19,000-job gain was also "insufficient to offset the monthly loss of 25,300 jobs in transportation or manufacturing shedding a further 6,000," he writes.
"Year-over-year changes show that annual payroll declines have accelerated since January — albeit continuing a long-term trend—and have pushed blue-collar job growth into negative territory for the first time since the pandemic," Cameron explains.
Heidi Shierholz, chief economist for the Department of Labor during President Barack Obama's tenure, tells Newsweek there is "undeniably a deterioration in employment conditions for the U.S.'s blue-collar workers."
"Between April and September, goods-producing industries (manufacturing, construction, logging, mining), lost 72,000 jobs, with most of those losses (58,000) in manufacturing," she says.
Shierholz also says that "the services sector — which falls partially under the blue-collar umbrella — is 'limping along' thanks solely to gains in health care."
David Dorn, a labor market expert at the University of Zurich, says construction is particularly vulnerable to negative growth despite that slight uptick in employment.
"This sector is highly sensitive to broader economic deceleration, and increasingly restrictive immigration policies under the current U.S. administration are likely constraining labor supply," he says.
And while Dorn says it's hard to "isolate" the direct effects of Trump's tariffs on employment, he says he doubts "whether these had 'generated any sustained gains' in jobs."
Dean Baker, a co-founder of the Center for Economic and Policy Research, goes further and says "tariffs have been largely to blame for the uncertainty and 'overall weakness in demand' that has driven cautious hiring across blue-collar sectors," Newsweek reports.
"Companies are reluctant to invest in a context where they have no idea whattariffs will be in placesix months from now, much less three to five years from now," he says.
Baker also says that while manufacturing's gradual decline as a share of total employment has "been the case for more than 50 years," as labor demand shifted toward health care, education and other roles within the more service-focused economy, the president isn't trying to fix it either.
"Trump is doing nothing to address these issues," Baker says.
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AN 5 25
The Wall Street Journal reportsmany Americans may not care to adopt the kind of factory work President Donald Trump’s is pledging to bring back to the U.S.
“The jobs are tiring, feature hazards not found at desk jobs and are tough to fill. Once workers are recruited, it can be difficult to get them to stay,” reports WSJ. “… The work represents the type of gritty, physically demanding labor … Trump envisions will recast the U.S. as the manufacturing powerhouse it once was.”
READ MORE: A dangerous new lie is being peddled by Trump’s toadies
The Wall Street Journal reports the U.S. already has nearly half a million unfilled manufacturing jobs, according to the U.S. Labor Department. A 2025 National Association of Manufacturers survey also shows nearly half of manufacturing companies say their biggest challenge is recruitment and retention in jobs with rigid hours, hard work, and risk of significant physical injury. Additionally, the pay is 7.8% lower on average than the private sector, according to the Bureau of Labor Statistics, following a decline in union representation.
“A lot of people say they wouldn’t work in a place like this because of how hard it is,” said Quaker City Castings employee Zachary Puchajda, who is a metal caster.
Carolyn Lee, president of the Manufacturing Institute, a nonprofit focused on workforce development for the sector, told WSJ that the significant labor shortage makes scaling up production a challenge.
Quaker City Castings President Dave Lordi told reporters his company saw a brief 25% surge in orders after Trump announced tariffs, but he would need to add a second work shift. This, say analysts, would not be easy without manufacturers adding better pay and schedule flexibility, among other things that Americans have come to expect from work. Plus, many of the incentives it would require to coax Americans into factories could drive up purchase prices for U.S. factory-made goods. American-made Viking stoves already cost more than $5,000 for a low end model, and those are made in Greenwood, Mississippi, which is known for its record low cost of living.
Lee says the U.S. manufacturing industry is nowhere near the level of evolution it needs to be to engage growth.
READ MORE:'Betrayed': Alarm sounded as GOP 'plotted behind closed doors to hurt even more families'
“You can’t just plop a factory down and hope people will miraculously appear,” Lee said.
Read the full Wall Street Journal report here.
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AN 12 24
During the 2024 presidential race, Donald Trump relentlessly attacked President Joe Biden and Vice President Kamala Harris on the economy — blaming both of them for post-pandemic inflation in the United States. And the message resonated with enough voters for Trump to pull off a narrow victory over Harris.
According to the Cook Political Report, Trump defeated Harris by roughly 1.5 or 1.6 percent in the popular vote and picked up 312 electoral votes compared to 226 for the vice president.
A victory of 1.5 or 1.6 percent is hardly a "landslide," as Trump's allies have been claiming. But it's a victory nonetheless, and Trump will be sworn in for a nonconsecutive second term on January 20, 2025.
READ MORE:**Trump’s tariffs on Mexico could devastate border region: TX economists**
Some of Biden's supporters have argued that history will be kind to the outgoing president — not unlike the kind words for the late President George H.W. Bush after he lost the 1992 election to President Bill Clinton. And history, they argue, will remember Biden's job-creation record and the low unemployment of his presidency.
In October, according to the U.S. Bureau of Labor Statistics (BLS), U.S. unemployment was 4.1 percent.
In a December 2 post on X, formerly Twitter, Alex Armlovich — a senior housing analyst for the Niskanen Center — praised Biden's record on creating manufacturing jobs. And he made his point by tweeting a chart from Joey Politano, who publishes a financial newsletter.
Armlovich tweeted, "This rise in US manufacturing construction spend via @JosephPolitano is absolutely mindblowing. So many CHIPS & IRA-fueled factories are about to start opening in January you're not gonna believe it."
READ MORE:[Bombshell report details 'dangerous' new allegations against Trump Cabinet nominee
In a separate tweet, Armlovich laments that Trump, in 2025, will get the credit for Biden's economic achievements.
Armlovich predicts, "Trump's name will be on every IIJA, CHIPS, & IRA ribbon cut b/c key Dem factions thought NEPA red tape was more important than permitting reform to finish projects in <4 yrs FDR didn't respond to the 1930s by saying 'Mussolini is too fast we need NEPA.' He just started building."
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https://www.alternet.org/2020/11/us-economy/
an 1120
The rich are getting richer and everyone else is getting poorer. That is exactly the plaN
the reason everybody is so angst-ridden about the economy is because we all have the wrong idea about what it is supposed to do and how it's supposed to work.
Most of us have a quaint, 19th century idea about free markets and all that up-by-the-bootstraps Horatio Alger stuff. You know, work hard, play by the rules, keep your nose clean, and you'll do well. That is certainly the cultural myth our society bathes us in. but that's not how things actually work. It's the dissonance between how we imagine things work and how they really work that causes our perplexity and angst, and rage. It is also that dissonance that has been so deftly manipulated by Donald Trump and given rise to Trumpism.
Forty years ago, around 1980, the uber-wealthy decided they wanted to get their money out of the economy. There was too much political turmoil (Vietnam, Watergate), too much economic turbulence (Arab oil embargos, stagflation), and too high of a cost of production (high wages, environmental and labor protections).
They wanted to take their money somewhere where they could pay people 1/20th what they paid here (less than $1 an hour), where there were no environmental or labor laws, where the workforce was plentiful, hungry, and docile, and where politicians could be bought cheap.
so, they engineered a controlled demolition of the U.S. economy. The plan had two elements.
In the first part, they began systematically de-industrializing what had been the mightiest economy in the history of the world—the same economy that had almost single-handedly won World War II, the greatest industrial enterprise ever undertaken. They dismantled tens of thousands of factories, creating what became known as the "Rust Belt." They literally sent factory designs to east Asia, rebuilt them, and when they were ready to go, flipped the switch, shut down here, and opened up there. The consequences were devastating.
Tens of millions of white, working-class factory workers were put out of work, losing their high-paying jobs. Forever. With nothing to replace them. Major cities became hollowed out hulks of a once-glorious industrial past, bywords for decline. Think Detroit, Pittsburgh, Cleveland, Cincinnati, Milwaukee, Buffalo, Toledo, and more. The data tell the story.
In 1980, manufacturing accounted for about 22% of the U.S. economy. By 2012, just 30 years later, it contributed only 12%, an astonishingly rapid decline in historical terms, effectively a controlled demolition. The U.S. trade deficit, where we buy more from other countries than we sell, went from $19 billion in 1980—pretty close to a rounding error—to what looks to be almost $1 trillion this year. That is money that is sent directly out of the country to buy other countries' goods. $1 trillion.
The second element of the controlled demolition of the economy was that the U.S. embarked on a plan to shift massive shares of U.S. income and wealth from the working and middle classes to the already wealthy. This is what was called "supply side economics." It was Ronald Reagan's signature economic policy when he ran for president in 1980.
The mythical story was that if we all gave more of our money to the already wealthy, they would invest it for us and the resulting economic boom would more than pay back the transfer, even after taxes and inflation. It sounded too good to be true. It was.
Taxes on the highest income brackets were lowered from 71% to 38%, essentially cut in half. Importantly, there was no requirement that the beneficiaries actually invest their new-found gains in the U.S. So, they didn't. They invested them in the those east-Asian countries that were the beneficiaries of the deindustrialization discussed above.
What happened?
In the first full year under Reagan's plan, the economy shrunk by 2.1%, the greatest shrinkage since the Great Depression. Factory workers were out of work, so they weren't paying taxes. And, because the wealthy were paying so much fewer taxes, the government didn't have enough income to cover its expenses. It had to make up the difference by borrowing. That is what is called a "budget deficit."
Jimmy Carter's last budget deficit was $78 billion. Reagan's first full-year budget deficit, after his supply side tax cuts were put in place, was $128 billion, a 64% increase. The next year, 1983, the deficit exploded again, to $208 billion, another 63% increase. By 1992, when Reagan's vice president, George H.W. Bush finished office, the deficits were running $300 billion a year.
Of course, annual deficits accumulate into the national debt. When Reagan took office in 1981, the national debt (the accumulation of all the annual deficits since the country began) was $1 trillion. In 1993, just 12 years later, when George H.W. Bush left office, it was $4 trillion. Think about that.
Over 204 years, paying off the costs of the American Revolution, the War of 1812, the Civil War, building out the entire continent, fighting World War I, surviving the Great Depression, fighting and winning World War II, and winning the better part of the Cold War, the country only had to borrow $1 trillion. Then, in the next 12 years, years of peace and prosperity, that debt quadrupled, to $4 trillion.
These deficits and this debt benefit the very wealthy, because it is they who fund them, who loan the money to the government, at interest, that it has to borrow because it can't pay its bills from the taxes it's no longer bringing in. As with the deindustrializing of the economy, this was exactly the plan: to benefit the wealthiest people in the world.
Today, average working-class wages, adjusted for taxes and inflation, are the same as they were in the 1970s. For a stark comparison, average incomes in China are up more than 10 FOLD over the same period. This is why the U.S. has massive civil tension among its people and record distrust of the government while the people of China are ferociously loyal to their government.
The annual trade deficit—that money we ship out of the country to buy things we don't make anymore—is on track to exceed $1 trillion this year. That's $1 trillion taken straight off the top of what would otherwise be available national income, and shipped abroad. The national debt has exploded beyond belief, to over $27 trillion. This year's increment, the annual budget deficit, will exceed $4 trillion. That's four times as much as was incurred in the first 204 years of the country, combined. This is not a picture of economic vibrancy.
For the past forty years, the government has had to run average budget deficits of $675 billion a year just to keep the holes in the economy plugged. Otherwise, it would have fallen into recession, or depression. And the borrowing is going vertical.
This is a tremendous boon to the very wealthy because, as mentioned above, it is they who loan the government all that money. And importantly, they do so at higher interest rates because when anything is in higher demand, in this case, borrowed money, its price goes up. The price of borrowed money is the interest rate. But wait, it gets better—or worse—depending on whether you are a borrower or a lender.
Higher interest rates in one part of the economy mean higher rates in all of the economy, because the pool of loanable funds is essentially the same pool for all. That means that when budget deficits rise, the interest rates on mortgages, credit cards, automobiles, student loans—anything bought on borrowed money—goes up, too. This is a stealth way for the government to transfer still more money to the already wealthy, but with the appearance that it's an arms-length private transaction, between borrowers and lenders, involving interest rates.
What does all of this add up to?
For the four decades between 1940 and 1980, the share of national income that went to the top 10% of income earners was remarkably stable, around 34%. This included those decades that are generally regarded as "the golden age of capitalism"
But in the four decades since 1980, the share of the same top 10% has skyrocketed to 47%, a breathtaking upward shift in national income to those who are already the richest. The upward distribution of wealth over the same period is actually even greater.
It's a cliché, but like so many cliches, it is grounded in reality. The rich are getting richer and everyone else is getting poorer. That is exactly the plan, and the plan is working exactly as intended. In fact, it is accelerating, as every new crisis becomes a new pretext for ladling more and more and more of the nation's wealth into the coffers of the already wealthy.
Inequality is reaching feudal proportions, where very few own almost everything, and everyone else is crushed under the wheel of engineered destitution. This directly degrades democracy, because since it costs so much to run for office, office seekers pay attention to those who can write big checks. Have you written a $50,000 check to an office seeker lately? No? Again, that is exactly the plan. They don't want to hear from you because you can't help fund their expensive campaigns. But write a big check and you'd be amazed at how fast the doors fly open.
Two last, quick words on the politics of this all. Donald Trump has been stunningly successful for the very wealthy which is part of the reason they have backed him. He passed massive tax cuts that accelerated the upward transfer of wealth. But that is actually the lesser part of what makes him so valuable to the wealthy.
The far greater part is that he has re-directed the rage of the dispossessed, downwardly-mobile working class from the economic system that has caused their distress—those intentional policies mentioned above—to the altogether bogus factor of race. This has shielded the wealthy from being held accountable for having engineered and built an economy that has intentionally shafted the vast majority of its own citizens.
The mainstream media has been altogether complicit in this deception, focusing, laser-like, on the racist dimensions of Trump's issuances, but almost never on the much more legitimate economic origins of his base's rage. This is perfectly understandable because the mainstream media is owned by the very wealthy. They use it to condition cultural awareness of vital issues in ways that benefit them, like when they laundered the idiocy of supply side economics as some kind of divination come down from the mountain on stone tablets that would save the country.
The second political point is that we would be worse than naïve, even worse than stupid if we imagine that Joe Biden is going to do anything at all about this. We would be deceitful. Biden is one of the doyens, the stewards, the consiglieres of the neo-liberal order described here. He has spent almost five decades servicing the interests of the very wealthy who put him in power and kept him there and recalled him to service when it became apparent that Trump's utility had been exhausted. They didn't use to call him "The Senator from MasterCard" for nothing.
Biden is already discovering that there's not enough in the coffer to afford the kind of stimulus needed to simply feed people, to keep them housed, to help small businesses stay alive, to help schools reopen. But watch, he'll find plenty of money for weapons makers, for the Federal Reserve to buy the garbage debt of over-leveraged corporations, money for hospital chains and pharmaceutical companies, and for banks, and for all the members of the neo-feudal aristocracy that he helped build and who are our new masters.
The economy is working exactly as it is intended to work, the way it has been designed to work, to benefit the wealthy and to crush everybody else. The problem for the mass of the rest of us is that we didn't get the memo.
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truly a Fox tump con?
https://www.alternet.org/2020/10/foxconn-wisconsin/
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https://www.alternet.org/2020/07/heres-the-truth-about-the-supposed-return-of-manufacturing-under-trump/
headline from the Commerce Department’s new report on the economy is that new shipments and new orders of durable goods by U.S .manufacturers increased at healthy rates in June – by 15 percent and 7 percent respectively. Larry Kudlow almost certainly will herald the numbers as proof that American manufacturing is back, and good times are just around the corner.
Don’t believe it. Only one industry, motor vehicles and parts, was responsible for almost all of the gains. June shipments of motor vehicles and parts jumped 80 percent from their abysmal levels in May, and new orders increased 87 percent. Set aside that industry, however, and U.S. durable goods manufacturers treaded water or worse in June. Their shipments were up less than 4 percent, and their new orders fell more than 6 percent.
The story is the same for the capital goods that businesses order and buy to maintain or expand operations: In June, shipments by capital goods manufacturers increased 3.5 percent and their new orders fell 16.5 percent.
As everyone in the industrial Midwest knows, all parts of durable goods manufacturing continue to operate at depressed levels. American manufacturers of all durable goods shipped 8.5 percent less in June than in February, before the pandemic and the Trump administration’s mishandling of it. Their new orders were 16 percent lower in June compared to February.
Despite the bounce back in June by manufacturers of motor vehicles and their parts, these companies still shipped 12 percent less in June than in February, and their new orders were 11 percent lower. Finally, manufacturers of capital goods shipped 7.5 percent less in June than February, and their new orders were 28 percent lower in June than February.
The question for Americans during the campaign is one Ronald Reagan asked the electorate forty years ago: Are you better off now than you were both four years ago? Actually, it’s: Are you better off now than you were four monthsago? The answer is clear.[graf]
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https://www.alternet.org/2020/07/theres-a-hidden-economic-trendline-that-is-shattering-the-global-trade-system/
Former U.S. Treasury Secretary Lawrence Summers has recently conceded: “In general, economic thinking has privileged efficiency over resilience, and it has been insufficiently concerned with the big downsides of efficiency.” Policy across the globe is therefore moving in a more overtly nationalistic direction to rectify this shortcoming.
COVID-19 has accelerated a process that was well underway before it, spreading beyond U.S.-China-EU trade negotiations and into the world’s 50 largest economies. As much as many defenders of the old order lament this trend, it is as significant a shift as the dawn of the World Trade Organization (WTO) global trade era.
Economists, politicians, and leading pundits are often tempted to see new economic patterns through the prisms of the past; we are therefore likely to hear that we’re back in an era of 19th-century mercantilism, or 1970s-style stagflation. But that misses the moment—the motives are different, and so are the outcomes.
What we are experiencing is the realization by state planners of developed countries that new technologies enable a rapid ability to expand or initiate new and profitable production capacity closer to or inside their own markets. The cost savings in transport, packaging and security and benefits to regional neighbors and these countries’ domestic workforces will increasingly compete with the price of goods produced through the current internationalized trade system. U.S. national politicians from President Trump to Senator Elizabeth Warren will be joined by a growing chorus who see the long-term domestic political benefit of supporting this transition..
the combination of high-speed communication, advances in automated manufacturing and computing combined with widespread access to the blueprints and information necessary to kick-start new production capacity increasingly makes the current international network of supply chains resemble a Rube Goldberg contraption, and it lightens the currency outflow challenge that many economies have had to deal with for the past seven decades.
Growing political will to restore manufacturing capacity in the national interest will have a shattering effect on countries that built up their economies through a labor price advantage over the past 40 years. No amount of currency depreciation or product dumping can overcome the reality of a country’s foreign customer base suddenly opting to produce and buy their own goods at competitive prices.
Taken in sum, the transformation underway isn’t just Donald Trump demanding less dependency on China’s production capacity—it’s a global process. It’s also India signaling it’s going to try to strike its own technological path away from China.
New Patterns of Production
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https://www.alternet.org/2020/05/top-us-companies-lay-off-thousands-of-workers-while-rewarding-shareholders/
Some of the largest companies in the U.S. have rewarded their shareholders amid the coronavirus pandemic after firing thousands of employees.
Companies like heavy machinery manufacturer Caterpillar, denim-maker Levi Strauss, toolmaker Stanley Black & Decker, furniture manufacturer Steelcase and World Wrestling Entertainment have doled out more than $700 million to shareholders in cash dividends while slashing jobs and shuttering facilities, The Washington Post reported. Many other companies have likewise rewarded shareholders while laying off workers.
Caterpillar, for example, announced a $500 million distribution to shareholders in early April, according to the report, about two weeks after it announced that it was “temporarily suspending operations at certain facilities.” The company did not say how many workers would be impacted.
“We are taking a variety of actions globally, but we aren’t going to discuss the number of impacted people,” a spokesperson told the outlet. “We are taking a variety of actions at our global facilities to reduce production due to weaker customer demand, potential supply constraints and the spread of the COVID-19 pandemic and related government actions. These actions include temporary facility shutdowns, indefinite or temporary layoffs."
Levi Strauss announced that it would distribute $32 million to shareholders on April 7, the same day that the company said it would furlough retail workers. About 4,000 workers have been affected, according to The Post.
“As this human and economic tragedy unfolds globally over the coming months, we are taking swift and decisive action that will ensure we remain a winner in our industry,” Levi CEO Chip Bergh said at the time, after reporting big earnings in Q1.
Stanley Black & Decker announced in early April that it would furlough and lay off “non-essential” workers. It distributed $106 million in dividends to shareholders just two weeks later, The Post reported.
“Throughout our company’s 177-year history, Stanley Black & Decker has weathered a series of exogenous shocks and thrived,” CEO James Loree said in the statement last month. “We are in a strong position as we face today’s challenges and are taking the necessary actions now to protect our employees and the business while positioning the company to thrive into the future.”
Steelcase announced in March that it would cut operations in four states, issuing a statement saying it took “these actions in an effort to avoid permanent headcount reductions so the company and its employees can come through this crisis together.”
It announced the same day that it would issue a dividend of roughly $8 million to shareholders. Earlier that month, the company bought back $38 million in stock from shareholders.
The WWE, a company whose longtime former CEO Linda McMahon served in Trump’s Cabinet and now works on his re-election campaign, cut 10% of its workers and fired about 20 wrestlers a day before it announced $9 million in dividends for shareholders.
These five companies are far from the only corporations rewarding shareholders while cutting workers, but many other companies took steps to end dividends and buybacks in response to the economic crisis caused by the coronavirus.
The Gap, American Eagle and Darden Restaurants — which owns Olive Garden and LongHorn Steakhouse — announced that they would pause dividends and stop buybacks, according to The Post. Williams Sonoma said it would continue to pay full-time employees after shuttering its stores.
Chris Lu, who served as the Deputy Secretary of Labor under President Obama, called out the Trump administration for pushing to protect companies from being sued by workers who contract COVID-19 while ignoring businesses that reward shareholders at the expense of workers.
“In Trump’s economy, these companies won’t get punished,” he said. “Instead, he wants to give them liability protection.”
“In a downturn like this the first thing a company should do is give up any distributions to shareholders,” William Lazonick, an economist at the University of Massachusetts Lowell, told The Post. “But in a crisis, companies will differ. Some will care . . . and some will rob the workers, who should expect that their continued employment will be the company’s first concern.”
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aha: fail b/c simplistic linear short term transaction model applied to a complex system
https://www.alternet.org/2019/12/how-trumps-trade-war-hurt-the-very-individuals-it-was-supposed-to-help/
no lnx
How Trump’s trade war hurt the very individuals it was supposed to help
Written by Sarah Toce / Salon December 30, 2019
President Donald Trump’s trade war raised prices for consumers and hurt the manufacturing industry, according to a report from economists on the Federal Reserve Board.
“The first comprehensive estimates” of the trade war’s effect on American manufacturers show that the tariffs have hurt the industry more than they helped, wrote Aaron Flaaen and Justin Pierce, two senior economists at the Federal Reserve’s Industrial Output Section.
“We find that U.S. manufacturing industries more exposed to tariff increases experience relative reductions in employment as a positive effect from import protection is offset by larger negative effects from rising input costs and retaliatory tariffs,” the report said.
In short, the economists concluded that the tariffs gave a “small boost” to manufacturers, which was “offset by larger drags from the effects” of rising costs and retaliatory tariffs.
Mother Jones summarized the main findings in a handy chart:
The report looked at a wide range of effects on the impacted sectors. In some cases, the tariffs were simply contradictory. While import tariffs may have helped protect some manufacturers from foreign competitors, tariffs on imported materials have increased costs for those same companies. Retaliatory tariffs imposed by China and other countries in response to the U.S. tariffs further “put U.S. firms at a disadvantage in those markets,” Flaaen and Pierce wrote.
As a result, manufacturing employment fell, and consumer prices increased. The economists acknowledged that their analysis only examined short-term trends, while long-term trends could show different effects. Trump has argued that the tariffs provide leverage for ongoing trade negotiations, but extensive data thus far shows that his trade war has devastated manufacturers, farmers and other industries.
The economists cited extensive existing research showing that “the majority of U.S. tariff increases are absorbed by U.S. retailers” and are almost entirely passed on to consumers in price increases. Some studies have found that American companies which engaged in trade with China saw “lower stock returns and higher default risk.” The report also acknowledged the political implications of the trade war, citing a study which concluded that it could “explain a shift in voting away from Republican House candidates in the 2018 election.”
The report follows months of extensive reporting on the ongoing manufacturing recession. It confirms what thousands of manufacturing firms have been saying for months: Tariffs are having the opposite effect of what the president claimed.
“There’s been a lot of anecdotal evidence about how tariffs are behind the manufacturing slump. Now the Federal Reserve proves it, finding that the trade war is hurting the sector it was ostensibly supposed to help,” ProPublica reporter Lydia DePillis tweeted. “The [White House] would say that it takes a while for supply chains to adjust, and manufacturers will recover as they find alternative input sources. Also theoretically, mounting pressure will eventually force the Chinese to knuckle under in a way that will rebalance global trade. Given that we haven’t yet seen the text of the Phase One trade deal with China that’s supposed to be signed imminently, that promise remains … theoretical.”
But the economists did not only find that the trade war is failing to help manufacturers. Their research suggests that tariffs simply do not work in any economy that relies on global supply chains.
“Our results suggest that the traditional use of trade policy as a tool for the protection and promotion of domestic manufacturing is complicated by the presence of globally interconnnected supply chains,” Flaaen and Pierce wrote. “While the potential for both tit-for-tat retaliation on import protection and input-output effects on the domestic economy have long been recognized by trade economists, empirical evidence documenting these channels in the context of an advanced economy has been limited.”
Igor Derysh is a New York-based political writer whose work has appeared in the Los Angeles Times, Chicago Tribune, Boston Herald and Baltimore Sun.
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https://www.alternet.org/2020/04/how-the-pandemic-pulled-back-the-curtain-on-the-flawed-global-economic-system/
no lnx
How the pandemic pulled back the curtain on the flawed global economic system
Written by Marshall Auerback, Jan Ritch-Frel April 2, 2020
When the wealthiest country in the world is unable to produce basic medical gear to cope with a rampaging pandemic, it is dealing with a strategic vulnerability by depending on multinational supply chains to produce manufactured goods. Absent sufficient redundancies and physical reserves of resources, “just-in-time” lean supply systems can’t cope with sudden disruptions. The global pandemic of 2020 is a case in point.
This pandemic continues to unfold, but it will serve as the D-Day equivalent of a new predominating economic model for the world, and which in many ways was beginning to take shape before COVID-19. At its core, developed and mixed market economies will factor in the health risk and growing military cost of sustaining international supply chains against investing in high-tech production closer to their markets, and increasingly export their goods to the rest of the world.
Dozens of economies that developed in the past 50 years by enmeshing themselves in the international supply chain on the basis of their labor price advantage will find themselves increasingly cut out of the new process. The contest for global power will increasingly pivot to the extraction and refinement of minerals and component materials that are critical to sustaining the high-tech economy model, away from carbon energy resources. We will be hearing much more about “national stockpiling” and “strategic reserves” beyond oil in the months and years ahead.
Not only has COVID-19 exposed potential health risks and costs involved (as globalized trade routes become vectors of contagion), but the champions of the offshoring phenomenon increasingly resort to myths and misconceptions that are irrelevant to a 21st-century economy. They are as obsolete as spending trillions annually on managing the supply and price of Middle East oil, which American foreign policy figures, including Martin Indyk, are beginning to openly say “isn’t worth it.”
Before we get into the details on thefuture economy, let’s quickly review how the U.S. saw a massive decline in its industrial capacity. Bad ideas and pernicious orthodoxies grew like barnacles over the decades on what was once the world’s leading manufacturer. First was the idea that offshoring is essential to preserving profitability. Often this assertion has been more apparent than real. As far as profitability goes, many companies have made choices to move manufacturing offshore despite continuing domestic profits on home shores. For example,the five North American plants that General Motors (GM) shut down in 2019 were still profitable, but the company, which had received a government bailout in 2009, chose to refocus on the higher-margin operations in China.
Of course, capitalism controlled by bankers and speculators gives free rein to companies to make profits on how they see fit.The consequences are that for decades, Detroit’s “Big Three” automakers have consistently underperformed their German and Japanese counterparts because of their decision to embrace a Wall Street-driven culture that has prioritized short-term quarterly earnings, massive dividend payouts and unprecedented spending on stock repurchases over productive investment in innovation. And as GM’s 2019 experience illustrates, the resultant profits did not go to spur domestic reinvestment, which in turn creates domestic employment, but abroad to expand China’s manufacturing base. GM is but one example of the hundreds of major corporate actors that have denuded the country’s industrial ecosystem, creating gaps in the U.S. workforce and shortages of vital skilled labor.
There are also multiple examples of companies acquiring smaller innovative companies “solely to discontinue the target’s innovation projects and preempt future competition,” according to researchers Colleen Cunningham, from London Business School, and Florian Ederer and Song Ma, both from Yale. A particularly poignant example of these “killer acquisitions,” given today’s ongoing ventilator shortage, is Covidien’s attempted 2012 purchase of California-based Newport Medical Instruments, a smaller competing medical device company that had secured a contract from the federal government in 2010 to produce up to40,000 mobile ventilators.But as David Dayen of The American Prospect observed, the purported rationale for the acquisition was bogus: It had nothing to do with expanding Covidien’s product base and everything to do with destroying a competitor whose product “could cut into its existing profits.”
For years, the political economist Seymour Melman argued that companies that embraced the soft option of downsizing/offshoring labor would ultimately create grave production weaknesses in the U.S. economy and stifle innovation. Higher domestic wages, by contrast, would induce competent managers to compensate by using and investing in more and better machinery, which in turn would lead to a virtuous cycle of production: higher profits, which can lead to higher wages, leading to better machinery and organization of work.
While American companies may think they are improving their individual competitiveness in the short term by shifting operations to low-cost labor economies, the current pandemic illustrates that they collectively undermined America’s (and their own) competitiveness over the long haul.
Intuitively, Melman’s forecasts make sense. A modern manufacturing “ecosystem” makes it much easier to redeploy and pivot to new priorities when there are shortages in vital areas. China, for example, has a sufficiently deep and robust industrial infrastructure to adjust production lines quickly, even as the U.S. continues to struggle with ventilator shortages. And in Germany, a flagship company likeSiemens, for example, announced that it is “making its Additive Manufacturing (AM) Network along with its 3D printers, available to the global medical community to speed design and production of medical components … to enable faster and less complicated production of spare parts for machines like ventilators.”
The Next Economy
A combination of existing technologies and capacities that are already in business application and on the rise will enable the new era of production and global economic overhaul and develop in motion with Melman’s thinking. These include artificial intelligence computing, automated manufacturing and increasingly universal and portable manufacturing equipment, innovations in energy production and storage, high-speed data transfer, and nanotechnology. Some of these technologies are mature, profitable and business-ready. Others are still in an early phase but will be seen as more economically viable or worthy of state investment and subsidy in light of a growing awareness among policy planners that the consequences of running global supply chains are potentially more expensive.
All of these technologies are revolutionary. Their concomitant rise will create a new economic era dominated by the countries that fully integrate them into their economies:
AI computing has the capacity to introduce game-changing efficiencies in the production process, quality control in terms of production and blueprints for new models of production and consumption. It can handle huge volumes of administration and management of automated systems. This industry is estimated to be growing at an annual rate of over 45 percent.
Automated manufacturing can be expensive and requires skilled labor to maintain, but it can produce goods at precision levels beyond what people can make, as well as at increasing volumes. 3D manufacturing is a universalizing process: one machine capable of producing a dizzying number of products that already competes with some products from global supply chains. Many companies are locating back in deindustrialized New York and other U.S. cities on the back of 3D manufacturing.
Recent major advances in energy production—from solar and wind to geothermal and energy storage—are the holy grail of non-carbon energy sources, permitting solar and wind industries to compete on a 24-hour basis with carbon-based fuels, giving more weight for policy planners to minimize fuel imports and revisit dormant energy alternatives.
High-speed data transfer—enabled through satellites and huge server farms—is necessary for the multi-location management and logistical coordination of the segments of the new supply chain: the means of information transfer and the capacity of one hand to know what the other is doing.
The rise of nanotechnology—the capacity to engage in precision design and manufacture at a molecular scale—presents humanity with a new frontier of materials and products that have capabilities beyond what we currently know in terms of materials, products, medicines and much more. Products ranging from glass to suntan lotion are already vastly enhanced by nanotechnology production. Qualities of human-made materials such as those designed for fireproofing, bulletproofing, insulation and space travel are in the midst of being revolutionized. Medicines can be deployed through nanotechnology at the molecular level, vastly improving their effectiveness.
The collective strength of these technologies will diminish the appeal of finding cheaper labor outside a country’s borders or common market—and the costs they entail. Countries that are advanced along these lines and have access to the minerals required to engage in this form of production will prosper, plugging into their existing consumer market and building up a head of steam that will eventually lead to a new chain of international exports and imports. These trend lines will accelerate the decline of brick-and-mortar retail and service industries.
Export-led economies that grew on the back of a labor price advantage will find themselves in a role reversal of having the option of importing better goods from the markets they once exported to or paying intellectual property (IP) licensing fees to produce them domestically. The geopolitical advantages that went with offering a developing country a labor role in a global supply chain will be replaced with discounts on IP licenses or imports.
The past phases of industrialization saw an ongoing contest among wealthy countries for control of petroleum, minerals and shipping lanes, using all their available powers to obtain them. The historical pattern is that residents of the resource-rich and undeveloped countries suffer far more than prosper in the mineral extraction and export process to wealthy markets. Barring a major shift in attitudes to wealth distribution or successful political resistance to exploitation, the pattern will likely continue, with the wealthy countries’ preoccupations pivoting increasingly from carbon energy resources to the components of the new economy: cobalt, lithium and rare metals. Resources that sustain the present and future economies, like iron, copper and gold, will continue to retain their strategic value.
Much of Europe and Asian countries like China, South Korea and Japan are poised for the transition. Based on their traditions of rigid state-driven capitalism, these nations instinctively grasp how state capacity and direction can help drive further industrial development. It remains to be seen if the U.S. is fully capable of it. That is unlikely, if the prevailing neoliberal ideology persists, limiting the role of the U.S. government to be, at best, a neutral umpire that sustains efficient, rent-free markets able to supervise the delivery of an increasingly narrow set of public goods (as opposed to an active participant in industrial policy).
The U.S., with thousands of advanced research institutions, is certainly capable of the next stage of economic development. It has a developed market and a partial manufacturing base. But it also has a long history of wage-avoidance for its workforces and an utterly dysfunctional political process. You need nation-state competence and highly skilled labor in this new world, as well as a willingness to expand ownership and dividend models to workers and the governments that funded the research for this advanced economy.
The coronavirus pandemic will force the U.S. and other countries to stop making distinctions between low-tech business (supposedly fine to offshore) versus high value-added industry. Not only can production lines be altered to cope with shortages (as China is doing), but there is often a continuum in the industrial ecosystem.
Consider the case of surgical masks. Even though their production is ostensibly a low-tech commodified business, the critical inner filtration layer of a mask, which allows the wearer to breathe while reducing the inflow of possible infectious particles, is a high-end business: Costing “upward of [$4.23 million] apiece, the machine that creates this fabric melts down plastic material and blows it out in strands, like cotton candy, into flat sheets of melt-blown fabric for face masks and other filtration products. A similar line of machines can create a related kind of fabric, called spun-bond fabric, also used in face masks and in medical protection suits worn by health-care workers,” according to a report carried by National Public Radio.
The point is that there is a continuum. One creates the demand for the other. Eliminate one industry and another potentially dies, much like a biological ecosystem. We now know that when forests are cut down, at some point if the surviving forest is too small, the whole ecosystem collapses. The ecosystem has to be large enough to encompass all of the niches that make it work.
If the machine tool industry is allocated in one country, the textile industry in another, the steel industry in another, the whole thing becomes much more delicate and inefficient, depending on a greater range of variables to succeed. Crucially, the speed with which innovations can ricochet around the system decreases significantly. When Japanese auto manufacturers have access to Japanese machine tool makers, they can get at the machine tool advances before GM and Ford. Proximity becomes a competitive advantage.
All of which helps to explain why the distinction between offshoring hardware while retaining software is not only fatuous but damaging to long-term economic welfare.
Offshoring left the U.S. unprepared for COVID-19. It has also occasioned a widespread reassessment of globalization: What was once seen as the heretical refuge of economic nationalists has now become respectable again. Even without this pandemic, the foundations of America’s economic model were failing and becoming rapidly obsolete.
The question is: As the world moves to a post-carbon future, can the U.S. economy take away the primacy of rent-extracting sectors like finance, insurance and real estate; Hollywood films, smartphone apps, or increasingly irrelevant sectors like oil and natural gas exports, and join the leaders of the pack? Or is coronavirus merely the pandemic that presages a more terminal disease?
Marshall Auerback is a market analyst and commentator. Jan Ritch-Frel is the executive director of the Independent Media Institute.
This article was produced by Economy for All, a project of the Independent Media Institute.
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https://www.alternet.org/2020/03/trump-promised-to-bring-back-manufacturing-in-pennsylvania-he-didnt-but-will-it-cost-him/
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https://www.alternet.org/2020/01/inequality-in-the-trump-economy-just-keeps-getting-worse/
CEOs make more in first week of January than an average salary. Here’s the solution
Tobore Okah-Avae, The Conversation
Nobody else, apart from CEOs, has enjoyed a similar rise in their fortunes since the 1980s.
no lnx
Inequality in the Trump economy just keeps getting worse
Written by Sher Watts Spooner / Daily Kos January 5, 2020
Every month when the Bureau of Labor Statistics releases its monthly jobs report, Donald Trump and Republicans crow about the economy and the low unemployment rate. And every month, too many Americans wonder when they’re going to start feeling the effects of that “great economy.”
A recent study on poverty and a new way of measuring the quality of jobs show the shallowness of GOP claims about the U.S. economy. Poverty went up in at least one county in every state, concentrated in rural areas and the South. And a new system of measurement called the Job Quality Index shows that, although there are jobs available, for the most part, they aren’t jobs that pay well and aren’t career jobs for the long term. Often, they don’t even employ workers for a full 40 hours a week.
Combine that with the disastrous effects of the Trump tariffs and the trade war with China, especially how that trade war hurt U.S. manufacturing; the surge in bankruptcies of small farmers; the fact that American consumers now have a record $14 trillion in debt; and the 2017 GOP tax reform scam that turned into a windfall for big companies instead of helping everyday Americans, and most of us don’t feel that we’re better off than before Trump became president—a benchmark used by challengers in nearly every election.
Don’t forget that, after the GOP House and Senate passed and Trump signed the tax overhaul in late 2017, Trump’s message to his rich cronies at Mar-a-Lago gathered for the Christmas holidays was, “You all just got a lot richer.”
That was not a message that trickled down to average Americans. The supposed tax savings didn’t do much trickling down for them, either. Since the country started coming out of the Great Recession in 2009, the overall U.S. poverty rate has decreased. But between 2016 and 2018, the poverty rate grew in 30% of counties across America, according to data from the U.S. Census Bureau.
As a story from HuffPost put it:
The counties with the biggest jumps in poverty ranged across the political and demographic spectrum: from 97% white and solidly Republican-voting Carter County in Kentucky to black-majority, Democratic Bullock County in Alabama.
Most of the biggest increases were in areas both rural and Southern. Those areas generally had residents who lacked job training and skills and industries that suffered downturns.
Those industries included the coal industry in many of those poverty-stricken areas. Coal output has decreased by 27% in the last five years, and 50 coal power plants have closed across the country since Trump became president. That’s good news for the environment, but bad news for those counting on coal mining for a paycheck. It’s also a betrayal of one of Trump’s main promises in coal country.
But the unemployment rate is only 3.5%. That’s got to be great, right? Actually, considering the kinds of jobs available—and the fact that wage growth is fairly stagnant—not so much. And this isn’t a recent phenomenon.
The U.S. Private Sector Job Quality Index, or JQI, is a new economic indicator developed by academic economists that measures desirable higher-wage/higher-hour jobs versus lower-wage/lower-hour jobs. Job quality is defined as the weekly dollar-income a job generates for an employee. A paper defining the system and explaining why the detailed indicator is a more accurate reading of the economy is available at this link.
The paper’s conclusion reiterates the fact that U.S. manufacturing jobs have “declined dramatically in the last three decades,” and replacement jobs are poorer-paying, service-sector jobs with no guarantee of job stability or even a full work week. There also has been a “massive loss of market share, revenue, and jobs to foreign manufacturers.”
An important question surrounding the decline of manufacturing is whether those leaving manufacturing are transitioning into better or worse jobs. …
With other countries targeting what they see as high-value industries, the US is not just in danger of, but actually has been, forced into greater reliance on low-value, low-growth industries, offering lower-wage, lower-hours jobs. The success of superstar companies like Google or Apple or Pfizer should not blind us to the fact that today Leisure & Hospitality is our largest sector with 14.7 million non-management employees. It’s a sector that pays such workers $16.58 an hour and the average worker works just 25.8 hours a week — resulting in average weekly income of $428. …
When all that a country has left is the domestic manufacture of processed foodstuffs, you end up with a lot of unhealthy and unwealthy workers who are in dire shortage of security, much less dignity. A republic that offers no better than this cannot long endure.
“When U.S. unemployment is at a 50-year low, why do so many people have trouble finding work with decent pay and adequate predictable hours?” asks a story from Forbes on the JQI. Answer: Few non-specialized good jobs are available.
Tens of millions of working-aged Americans are still not formally employed and have no apparent interest in sending out a resume. If the job market is so hot, why are so many people sitting on the sidelines? One frequently cited explanation is the growing proportion of older generation workers. Now we have another more important element. Workers don’t re-enter the workforce because many of the jobs themselves are rotten. …
Many looked to the category of jobs known as Professional and Technical Services as a path for the economy to “move to higher ground.” Professional and Technical Services were supposed to offer high pay, growth in employee numbers, and an opportunity to increase productivity. In fact, the JQI does report that employment is up 41% in this sector and the average weekly pay for non-managerial workers of $1,575 exceeds the pay of many other industries. But that’s not enough to rescue what the economy lost in manufacturing.
To recap:
Many of the jobs available are poorer, with stagnant wages and little job stability or full employment guarantees.
The tax bills of many big companies ended up being even smaller than what was anticipated in the GOP tax scam law. This has caused a ballooning federal deficit that could reach $1 trillion in 2020.
Trump’s trade war with China led to a loss of U.S. manufacturing jobs and higher prices. No matter what he claims about a new agreement, it’s not a done deal, and it’s only “Phase One” of a partial deal with few specifics released.
After Trump’s tariffs against China, China retaliated with tariffs that were devastating to U.S. farmers. Despite $28 billion in farm subsidies in the last two years (many of which went to large agriculture suppliers, some foreign-owned), farm bankruptcies surged, especially in the Midwest.
The record $14 trillion in debt that Americans owe is spread across mortgages, auto loans, credit cards, student loans, and other forms of debt. By themselves, student loans make up $1.5 trillion of the debt total. And medical costs are still growing faster than income—medical costs have gone up 33% since 2009.
It doesn’t matter if the stock market had its best annual gain in six years. When only those at the top are benefiting from those stock market gains—not every worker has a 401(k) or fat IRA account—then there’s no trickle down from a bloated stock market. Although 20 states and 26 cities and counties are raising the minimum wage in 2020, the federal minimum wage of $7.25 an hour hasn’t gone up since 2009.
This is a message that all Democratic candidates should be repeating over and over, whether they’re running for president, the House, the Senate, or a state office: The Trump economy isn’t helping most Americans.
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When auto plants shutter, opioid deaths skyrocket1219 an
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https://www.alternet.org/2019/12/trump-turns-back-on-workers-as-companies-force-employees-to-train-their-cheaper-foreign-replacements-report/
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Trump turns back on workers as companies force employees to train their cheaper foreign replacements: report
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Written by Tom Boggioni / Raw Story December 29, 2019
President Donald Trump’s claims that he is bringing jobs back to America are being called nothing more than hot air in a report stating U.S. companies are instead forcing their employees to train their foreign replacements and they will be out of a job once the training is over.
According to a report at Axios, “Opponents of job outsourcing are making a holiday-season appeal to President Trump: Stop U.S. companies from forcing American workers to train the very same cheaper foreign laborers who will soon replace them.”
The reports states: “AT&T is poised to send thousands into the new year hunting for new jobs after assigning them to train their own foreign replacements, according to conversations with current and former workers and documents obtained by Axios,” adding, “Many have worked for the company for over a decade. They aren’t being offered severance or early retirement, and may not easily find a comparable job elsewhere with similar pay.”
According to Sara Blackwell, a lawyer who represents displaced Americans workers, “American workers are tired of waiting for President Trump to do something on this issue. They’ve gone from great hope in President Trump’s administration, to great discouragement.”
Focusing on AT&T, the report continues, “Despite receiving a $3 billion tax cut last year, AT&T announced new and expanded alliances with big outsourcing companies to replace workers with foreign or cheaper domestic talent. Like many major U.S. companies, AT&T has been shifting jobs for years now — but 2019 was especially noteworthy, as workers claimed that as many as 3,000 finance jobs were being outsourced to Accenture. AT&T denied the 3,000 figure, but declined to provide Axios with its own number.”
Speaking with numerous AT&T workers, many acknowledged they will soon be out of a job, stating they were told “they were needed for a ‘knowledge transfer” — then tapped to train people on work visas or overseas who would replace them.”
That, in turn, changed their plans for the immediate future.
“Folks aren’t going on vacation, they’re cutting back on their Christmas shopping,” one employee confided. “If you know that you’re going to be losing your job, you don’t want to spend the money.”
Axios reports they asked for a comment from the White House of the job transfers and were rebuffed.
You can read more here.
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https://www.alternet.org/2019/10/manufacturing-slump-undercuts-trump-claims-of-economic-strength/
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Manufacturing slump undercuts Trump claims of economic strength
Of all the ridiculous arguments Donald Trump makes for his reelection, perhaps none is repeated more often than his claim that the U.S. economy is “the greatest economy in the history of our country.”
The claim is gibberish, of course, which is why the claim (or some variation thereof) continually rates three out of four Pinocchios from The Washington Post’s Fact Checker. And one of the reasons the claim is wrong is that the nation’s manufacturing sector is in a downward spiral.
The Institute of Supply Management’s manufacturing index dropped to 47.8 in September, down from 49.1 the previous month, the lowest number in more than a decade. Any number above 50 indicates manufacturing expansion. A number below 50 indicates that manufacturing is in recession territory.
Companies are blaming the slowdown on Trump’s tariffs on Chinese goods, which have escalated into a full-blown trade war with China as that country retaliates with tariffs of its own. According to The Washington Post, “Manufacturing fell into a technical recession in the first half of the year, and the latest ISM data indicates the situation appears to be getting worse. Concerns are rising that the contraction in manufacturing could spill over into the rest of the U.S. economy.”
Even worse than a technical number from the index, numbers for manufacturing employment, new orders, backlogs, and production all fell in the Institute of Supply Management report. Because of Trump’s tariffs, parts cost more, so companies are ordering fewer of them, which also affects suppliers. In some cases, manufacturers worried about the future are laying off employees. Bureau of Labor Statistics data show that the manufacturing unemployment rate went up six-tenths of a percentage point just since June, and the manufacturing sector lost 2,000 jobs in September. The official September numbers from the Bureau of Labor Statistics showed that U.S. employers added only 136,000 jobs.
And guess where manufacturing job numbers are bad? In Michigan, Wisconsin, and Pennsylvania, three states Trump won narrowly in 2016. Republican losses in those three states could very well tip the election to a Democratic challenger in 2020.
A Bloomberg opinion piece points out that Trump’s trade policies are hurting both the farming and the manufacturing sectors. A 2016 manufacturing recession may have contributed to Trump’s slim win in those three states that Democrats were counting on as a “blue wall.”
Manufacturing is still a major source of employment in those states—think steel and automobiles—and there have been layoffs as manufacturing has weakened. Even though Trump ran in 2016 promising to revive the country’s manufacturing sector, that promise sounds more hollow as time goes on.
Manufacturing employment growth in Wisconsin and Michigan has already fallen below the 2015 rate. Pennsylvania is dangerously close. At best, this makes it difficult for Trump to claim that his policies have led to a revival. At worst, it suggests that his policies have backfired.
Trump could conceivably turn the situation around, but at this point it’s hard to see how. Even if he announced an official end to the trade war tomorrow, it would be months before farmers and businesses could be confident that he was serious. After that, there would be yet more delays before equipment orders rebounded, and still more before a rise in manufacturing employment.
The 2016 manufacturing recession likely convinced some Trump voters that he would be an economic savior and save their jobs. “Now Trump has to campaign against a similarly weak backdrop,” The Washington Post says.
Manufacturing accounts for about one-tenth of the U.S. economy, making it less of a barometer of what’s ahead of the U.S. economy than it once was. But most analysts agree that what’s happening to manufacturing is evidence Trump’s tariffs are doing real harm to the U.S. economy and is a warning sign for what could happen to other industries, especially as the tariffs expand by the end of the year onto nearly all Chinese products.
“We have now tariffed our way into a manufacturing recession in the U.S. and globally. What’s the strategy now? It better be more than the Chinese buying more soybeans,” said Peter Boockvar, chief investment officer at Bleakley Advisory Group, in an email.
Many factors affect a manufacturing recession, of course, including the global economy. In addition to concerns about trade wars with China, indicators in Europe also are pointing in the wrong direction. A joint forecast from several of Germany’s leading economic institutes sharply downgrades predictions for that country’s economy. Add to that the uncertainty about what will happen to the economies of European countries when the United Kingdom leaves the European Union—whether it’s a no-deal Brexit or not—and the economic future looks even bleaker.
But Trump’s tariffs have screwed U.S. manufacturers more than anything else. While the tariffs initially helped the steel industry, that bump was short-lived, and now some steel plants are closing.
A story from Markets Insider explains how this slowdown is Trump’s doing:
While US manufacturing has faced separate challenges, including a broader slowdown abroad, economists said a drop in demand for new orders showed how the sector has been directly affected by trade policy.
“The continued decline in new export orders suggests that the trade war is an important source of the ongoing slowdown in the manufacturing sector,” said Torsten Slok, the chief economist at Deutsche Bank Securities.
By effectively taxing American importers, tariffs on Chinese products have disrupted global supply chains and threatened to upend trading relationships that have been built over a span of decades. Domestic jobs have been put increasingly at risk as heightened costs and uncertainty weigh on the outlook.
Trump continues to spout nonsense on how the manufacturing slump should somehow be blamed on the Federal Reserve, because … I don’t know, something to do with interest rates?
Three out of four economists surveyed by the National Association of Business Economics are predicting a recession by 2021, if not sooner, perhaps even before the 2020 election. When you add the record number of bankruptcies filed by Midwest farmers, the higher prices U.S. consumers will pay for goods because of Trump’s new round of tariffs, and a prediction from Agriculture Secretary Sonny Perdue that small dairy farms might not survive, remember to take Trump’s words on how great the economy is doing with mountains of salt.
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https://www.alternet.org/2019/09/new-report-details-trumps-broken-promise-to-revive-manufacturing-as-us-factory-employment-hits-record-low/
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New report details Trump’s broken promise to revive manufacturing as US factory employment hits record low
Written by Alex Henderson September 6, 2019
During President Donald Trump’s 2016 campaign, a key part of his “Make America Great Again” pitch was bringing manufacturing jobs back to the United States in a big way. But business reporter Andrew Van Dam, in a new Washington Post article, stresses that the U.S. has been seeing a manufacturing slowdown in recent months and offers some reasons why.
Trump, Van Dam notes, inherited an increase in manufacturing jobs when he was sworn in as president in January 2017.
“In the first quarter of 2017, as Trump’s term began, manufacturing posted its best quarter since 2014,” Van Dam recalls. “The turnaround appears to have started under President Barack Obama and accelerated under Trump.”
One of the things Trump railed against in 2016 was American companies outsourcing and manufacturing their products in other countries. That didn’t end after he became president, although Van Dam explains that the U.S. did experience a manufacturing increase at the end of the Obama era and during the Trump era in 2017 and 2018.
“When Trump was born in 1946,” Van Dam observes, “factories employed more than a third of the American workforce. In July, they tied a record low of 8.5%.” Van Dam cites a number of factors for sluggish manufacturing in the U.S., from “trade war turbulence” to “an uncertain world.”
“It’s difficult to discern where the fallout from the trade war ends and where the global slowdown begins, especially because one helped beget the other,” Van Dam writes. And the uncertainty in the world, according to Van Dam, ranges from Brexit to “escalating disputes with Iran” to “chaos in Venezuela.”
According to one widely watched index, global policy uncertainty is hovering near its highest levels on record.
“Trump has promised that a range of elusive trade deals, particularly with China, will revive U.S. manufacturing,” Van Dam reports. “But there is no sign of a breakthrough. And in the interim, many U.S. companies are waiting to see what happens.”
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Trump’s promise of a manufacturing boom has yet to materialize — putting these key battleground states up for grabs in 2020
by Alex Henderson June 24, 2019
President Donald Trump’s promise to bring back manufacturing jobs in a huge way played a major role in the success he enjoyed in the Rust Belt in 2016. Trump carried…
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https://www.alternet.org/rise-robots-how-trump-and-republicans-betrayed-their-base-voters
Trump’s formula for his unfortunate electoral victory in 2016 relied almost exclusively on persuading rural American voters in the so-called “heartland” that their economic decline was due not to any fault of corporate, late-stage capitalism but to fact that their jobs were being “stolen” by people with darker skin than themselves. By scapegoating Latinos and Hispanics in particular, and by employing familiar Republican stereotypes against African-Americans, Trump succeeded in eking out the election against a polarizing female Democratic candidate by mobilizing rural “working class’” Americans, mostly white and male, to vote for him out of a sense of race-based grievance.
In an articlefor the New York Times, Thomas Edsall shows how Trump and the Republicans almost immediately betrayed that rural voting base with their massive tax giveaway to corporations in 2016, creating a tax incentive bonanza that encouraged and accelerated the pace of automation and the implementation of robots, now displacing thousands of relatively low-skilled workers in largely Trump-voting areas of the country. Another articleby Eduardo Porter (also written this week for the Times) highlights the root causes behind the seemingly intractable problem of rural poverty in this country, and offers some clues on how we as Democrats might reclaim many of those rural voters without compromising Democratic values on issues of racial inclusion and equality.
If for nothing else, last month’s elections were remarkable for the fact that virtually no Republicans highlighted their singular achievement, a massive tax giveaway to corporate America. One obvious reason for that is that few Americans making less than mid-six figure incomes saw any benefit to themselves from this tax cut. But the other reason was even more damning, if less noticeable: buried in this gargantuan payoff to reward the CEO donors in boardrooms who supported their campaigns, Republicans deliberately provided a huge incentive for corporations to eliminate the very jobs that their rural voters needed to survive.
Donald Trump’s $1.5 trillion tax cut has increased incentives to replace workers with robots, contradicting his campaign promise to restore well-paying manufacturing jobs in the nation’s heartland.
The Trump tax bill permits “U.S. corporations to expense their capital investment, through 2022. So, if a U.S. corporation buys a robot for $100 thousand, it can deduct the $100 thousand immediately to calculate its U.S. taxable income, rather than recover the $100 thousand over the life of the robot, as under prior law,” Steven M. Rosenthal, a senior fellow at the Urban Institute and a specialist in tax policy, wrote me by email.
The sheer appeal to corporations of taking advantage of an immediate tax deduction by investing in automation cannot be understated. The biggest liability corporations face is the high cost of paying their workers. Robots do not need health benefits and “sick time”—they need only to be programmed and oiled on occasion. They do not require wage “increases” because they do not require any wages to begin with. So a tax incentive to automate was immediately hailed by corporate America as a win-win. And the impact has for the most part fallen in those industries that typically employ the same type of non-college educated—usually male--workers (semi-skilled assemblers, machinists, material handlers, welders) who voted in droves for Donald Trump.
Edsall quotes Jeffrey Sachs, a professor of Economics at Columbia:
The demographic group most hindered by the rise of automation, Sachs wrote, “has been the proverbial white male with less than a college degree and living in rural and semirural areas.”
Sachs believes that
[T]he next wave of job losses will be in basic business services (wholesale and retail trade, warehousing and transport) which will mean another hit for workers with relatively lower educational attainment.
Edsall also cites and quotes extensively from a recent study out of MIT that shows the Trump-voting swaths of the South and Midwest have a far higher concentration of robot-dependent industries than other areas of the country.
But the Trump tax cut did more than just encourage automated replacement of workers in Trump country—it encouraged industries to move out of the country altogether:
The 2017 Trump tax cut not only boosted incentives for corporations to replace workers with robots, it has also created incentives for American companies to move production overseas, even as it directed resources toward “opportunity zones” in what the Trump administration defines as “neglected and underserved communities” — incidentally providing a bounty of lucrative grants, guarantees and breaks for real estate developers.
Many in the Democratic Party frankly feel like these voters in Trump country are getting exactly what they deserve for supporting Trump and his cast on enabling charlatans in the GOP. And there is undoubtedly some appeal in schadenfreude,that sense of pleasure that people derive from others’ misfortune, particularly if it is viewed as deserved. But the racism that drove Trump voters to the polls didn’t arise in a vacuum. It was packaged, stoked and fed to them as an easy opportunity to assign blame to what they felt as a real problem, the plain fact that American business industries are not offering livable jobs in rural areas any more.
I was in Fayette County, Pennsylvania this week. This is a county about an hour south of Pittsburgh that borders West Virginia. The collapse of the steel industry turned the region into an economic basket case several decades ago. Today the people who live and work there are largely employed in low-paying service or retail industries like Applebees or Walmart, or desperately trying to land a few jobs with a number of fracking companies that are sucking every drop of natural gas out of the land. Everyone seems to know someone who has overdose and died from opioids. There is no economic recovery going on in Fayette County right now. It is white, sem-rural, and unabashedly Trump-supporting, just like a thousand other forgotten places in this country.
Which brings us to Eduardo Porter’s piece., which takes a hard, cold look at the prospect of reclaiming a decent standard of living for the 60 million or so Americans who live in backwaters like Fayette County, Pennsylvania. For the last 25 years these areas have seen nothing but economic and demographic decline.
Rural America is getting old. The median age is 43, seven years older than city dwellers. Its productivity, defined as output per worker, is lower than urban America’s. Its families have lower incomes. And its share of the population is shrinking: the United States has grown by 75 million people since 1990, but this has mostly occurred in cities and suburbs. Rural areas have lost some 3 million people. Since the 1990s, problems such as crime and opioid abuse, once associated with urban areas, are increasingly rural phenomena.
While there have been many solutionsto try to rejuvenate these areas, none of them seem to have taken hold. That is primarily because of a now wholly globalized, Hobbesian economy and remarkable if unsettling leaps in worker-replacement technology and Artificial Intelligence.
Robots and workers in China put together most of the manufactured goods that Americans buy, and the high-tech industries powering the economy today don’t have much need for the cheap labor that rural communities contributed to America’s industrial past. They mostly need highly educated workers. They find those most easily in big cities, not in small towns.
Even the people recommending a revolution in rural investment suggest targeting areas that lie near major cities (“big tech hubs”), because those are the areas with the existing infrastructure to support such efforts, and more importantly, those are the areas where highly skilled workers are likely to be found. There’s a reason, for example, that Amazon just decided to build a new campus in Austin, Texas rather than even a medium sized city in the state.
This is the inescapable reality of agglomeration, one of the most powerful forces shaping the American economy over the last three decades. Innovative companies choose to locate where other successful, innovative companies are. That’s where they can find lots of highly skilled workers. The more densely packed these pools of talent are, the more workers can learn from each other and the more productive they become. This dynamic feeds on itself, drawing more high-tech firms and highly skilled workers to where they already are.
And if medium sized cities can’t compete for such job-creating industries, what chance is there for rural areas? The brutal conclusion for Porter is: not a lot.
So what to do? Rather than do nothing and let the people in these regions whither away (because most people living there can’t afford to leave), Porter suggests that we undertake some efforts geared to encourage relocation of people to where the jobs are. That would necessitate lowering the cost of living in some of the places that are thriving, most significantly, for housing. Revision of zoning rules to permit more affordable housing in around places like New York and San Francisco is one of his suggestions. Implementing a national strategy to revitalize rural communities would seem to be another. And assisting people in obtaining an education is an obvious one.
Making a combination of all these approaches a national priority is a natural fit for Democratic policy-making. In particular, a strategy of bringing people to the areas where these jobs are would appear to benefit the long term fortunes of Democrats in the same way cities promote inclusion and diversity. People are just less inclined to hate and fear something or someone they work with every day.
There is no easy solution to the problems faced by rural America. But the failure of Trump and the Republicans to do anything but enrich themselves and their donor base with perversely counterproductive tax cuts provides Democrats with an enormous and inviting opportunity to make inroads with these potential voters without compromising our values. Because everyone wants a good place to work.
Robots building cars in a Toyota plant.
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https://www.alternet.org/general-motors-laying-thousands-workers-and-closing-two-us-plants-michigan-and-ohio
General Motors has made an announcement that is going to bring considerable pain in the Rust Belt. The automotive giant will be slashing 14,700 jobs, many of them in Michigan and Ohio—and a plant closing is expected in Ontario, Canada as well.
This is the biggest restructuring at GM in a decade, with 15% of its workforce being eliminated in North America. According to GM CEO Mary Barra, these job cuts reflect changing tastes in the automotive market and will bring a greater emphasis on electric and autonomous vehicles. Models expected to be discontinued include the Cadillac CT6, the Chevrolet Cruze and the Buick LaCrosse.
According to GM, tariffs on imported steel—which were imposed by the Trump Administration earlier this year—have cost the company $1 billion. And in late October, GM offered buyouts to 50,000 salaried workers in North America.
The decline of traditional passenger cars in favor of larger SUVs and pickup trucks has been a major factor in GM’s evolution. In 2012, traditional passenger cars comprised over 50% of vehicle sales in the U.S., but during the first nine months of 2018, that number decreased to 31%. This year, SUV and pickup truck sales have increased by about 31%.
GM announced that it will also be closing two plants outside of North America by the end of 2019.
Ohio politicians, including Rep. Tim Ryan and Sen. Sherrod Brown ripped the company's decision.
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mike davis on 2016 election
But perceived anthropological condescension is precisely what drives people in Dubuque, Anderson, and Massena to pick up their pitchforks against “elite liberals” as well as “establishment conservatives.” “Deplorables” indeed. The counties in Table 4all have industrial unionism in their DNA; they were the cradles of the CIO in the great labor wars of the New Deal. With few exceptions (1972 and 1984) they remained loyally Democratic in rain, sleet, and snow; voting strongly for Obama in 2008. So why, in the face of positive economic indicators and the lowest national unemployment rate in a decade, did these older industrial counties suddenly desert the Democrats and embrace Trump’s reindustrialization cargo cult?
Fumbling with the odd pieces of the Trump puzzle, t*he Economist decided* that “the pitch of economic anxiety motivating Mr. Trump’s supporters has been exaggerated.” But when analysis goes micro plentiful reasons for such anxiety emerge. Table 5 itemizes plant closures that occurred during the campaign season — striking evidence of a new wave of job flight and deindustrialization. In almost all of these flipped counties, a high-profile plant closure or impending move had been on the front page of the local newspaper: embittering reminders that the “Obama boom” was passing them by.
Some Ohio examples: Just before Christmas, West Rock Paper Company, the major employer in Coshocton County, closed its doors. In May, GE’s century-old locomotive plant in Erie announced that it was transferring hundreds more jobs to its new facility in Fort Worth. The day after the Republican Convention ended in Cleveland, FirstEnergy Solutions announced the closure of its huge generating plant outside of Toledo, “the 238th such plant to close in the United States since 2010.”
At the same time in Lorain, Republic Steel formally reneged on its promise to reopen and modernize the enormous three-mile-long US Steel plant that had once been the area’s largest employer. In August, meanwhile, GE warned of the closing of its light bulb plants in Canton and East Cleveland. Simultaneously, pink slips were being handed out to workers at Commercial Vehicle Group’s big stamping plant in Martin’s Ferry on the Ohio River (Belmont County).
“I think 172 job losses in the community and even the county in an area like ours is devastating,” said the local superintendent of schools. “This is another kick in the gut to the valley, with the coal mines closing, the power plant and now this. It’s just one pieceof bad news after another.
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