The Obama Economy
This is Jim Tankersley at Wonkblog. The president has watched some of his biggest economic initiatives falter since winning reelection.
- He promised 1 million new manufacturing jobs by the end of 2016. But factory employment has fallen for the last four months, and on net is only 13,000 jobs toward that goal.
- Obama’s plan to double U.S. exports by 2014 has also run into trouble (due in large part to persistently weak global demand, which was certainly foreseeable when Obama made that promise).
- Perhaps most discouragingly for everyday Americans…Labor Department statistics show median earnings have fallen 4 percent since the recession ended, after adjusting for inflation.
- Growth appears to once again be slipping below economists’ projections. And the bulk of net job creation this year has been part-time, not full-time, work.
“on net is only 13,000 jobs toward that goal.”
That’s pretty depressing
But why are manufacturing jobs better than any other type of job? I’ve always wondered that.
I would say the government is putting more emphasis on manufacturing jobs, because the U.S. is trying to close up the trade deficit and become more independent as a country in the global marketplace.
But why is closing the trade deficit and being self sufficient a good thing?
Look at this on the trade deficit: http://blog.heritage.org/2013/07/02/trade-deficit-new-data-confirm-americans-gain-big-from-foreign-trade-and-investment/
and this on trade independence:
http://cafehayek.com/2013/02/quotation-of-the-day-540.html
If I were to venture a guess, the Administration is using “manufacturing jobs” as a code word for the 1960s-era union jobs with artificially-high wages and great benefits that just about any illiterate high school dropout could perform — assuming he had the right connections to people already in the union. Of course, the only way those types of jobs would still exist is if trade restrictions protected domestic companies from competition; and labor law protected unions from outsourcing.
This arrangement no longer exists because most economists began to understand that to maintain protectionism would ultimately erode Americans standard of living — like occurred in Argentina.
The focus on manufacturing comes from what politicians observe. They don’t see people thinking very well, and they don’t trust what they themselves think (hence the many advisors).
So, they think people will do better overall working with their hands.
“If a politician found he had cannibals among his constituents, he would promise them missionaries for dinner.” – H.L. Mencken
It’s sad how true this is…
“Perhaps most discouragingly for everyday Americans…Labor Department statistics show median earnings have fallen 4 percent since the recession ended, after adjusting for inflation.”
Key Words after adjusting for inflation.
“Growth appears to once again be slipping below economists’ projections.”
Exactly, because we a worthless regulatory environment that discriminates against innovation and business creation.
If you want to encourage manufacturing jobs, you need to lower taxes on capital, lower capital gains taxes, shorten depreciation schedules and reduce taxes on labor. I don’t see the Administration championing any of those ideas.
I’m not an educational analyst, but I also wonder about the generous student loans for four-year colleges but few initiatives in vocational training. How come Germany (which is a country with high labor costs) has an extensive vocational training program and has a manufacturing economy. A portion of high school in Germany is used for vocational training.
“Obama’s plan to double U.S. exports by 2014 has also run into trouble (due in large part to persistently weak global demand, which was certainly foreseeable when Obama made that promise).”
Obama could get close to achieving this if we were able to export more natural gas.
What specific economic initiatives are we talking about here?
ObamaCare? Cash for Clunkers? Dodd-Frank? The Keystone Pipeline? Stiffing the bondholders in the auto company takeovers? Loans to companies like Solyndra? The student loan takeover? The tax increases?
These are all economic initiatives, but even strict Keynesians would have a hard time arguing that they do anything to help otherwise productive people.