President Donald Trump has turned foreign trade into one big loser for the American economy.
But economists tell us that trade generally helps the economy while there is no doubt that certain segments have been hard hit, such as those in the industrial Midwest and people with just high school educations.
A survey by the Economist shows that if international trade ended, the poorest tenth of consumers would lost 63 percent of their purchasing power.
And as many experts have pointed out, automation has cost a lot more jobs than trade.
From 1990 to 2014, U.S. auto production increased by 19 percent but with 240,000 fewer workers.
America is still making things — but it’s doing so by using more robots and fewer people.
Adidas is going to bring a shoe factory to the Atlanta area next year with mostly robots and a few technicians and software engineers to run them.
The U.S. generally exports high-tech goods and services and imports products that use lots of labor. So if you’re a highly skilled worker in the U.S., you have benefited from trade while low-skilled workers have been hurt.
Solutions? MIT economist David Autor told The Washington Post that the U.S. needs to change its tax code in order to favor investment in the U.S. so that companies stop moving profits overseas.
As Thomas Donohue, CEO of the U.S. Chamber of Commerce said, “Currently when a company based in America earns money overseas that money gets taxed twice. First in the country where it’s earned and then again by the U.S. government.”
And as Autor said, “There is no substitute for economic growth.” Everyone benefits when the size of the pie grows larger.
And the nation needs to give a hand up to those who have been hurt by the change away from low-skilled work.
“The shock of China’s entry into global manufacturing was unprecedented in the disruption it created for U.S. communities, Autor said. “It created much more hardship than anyone anticipated.”
WHERE WE DO WELL
But the U.S. does better in foreign trade than it appears.
For instance, America has a favorable trade balance with Australia, Belgium, the Netherlands, Hong Kong and the United Arab Emirates.
Dig a little deeper and our trade with Canada looks pretty good.
Last year, the U.S. sold about $210 billion of manufactured goods to Canada and imported only $167 billion, reported The Washington Post.
Our overall trade with Canada showed a deficit because we bought things like wheat and oil from our Northern neighbor.
But trade often doesn’t include services.
So last year the U.S. ran a $250 billion trade surplus in services while racking up a $650 billion trade deficit in goods.
By factoring in services, the U.S. has a trade surplus with Canada.
So much of the trade controversy has focused on Mexico that we tend to forget Canada, the other nation in NAFTA.
FILIBUSTER needs to go
You won’t find any references to the filibuster in the U.S. Constitution.
So while the Senate, with its six-year terms, was designed to be a more deliberative body than the House, the filibuster has created real roadblocks to progress.
It has created a 60-vote threshold for getting substantial bills through the Senate.
Democrats under President Barack Obama wiped out some of the filibuster rules, and now it’s the Republicans’ turn to turn 51 votes into the true majority for nearly every decision.
We can see keeping the 60-vote requirement to end a filibuster for lifetime appointments like the Supreme Court or for major treaties.
But for most of the Senate’s business, it’s time to bring back the 51-vote majority.
American historians agree that the three best presidents have been Abraham Lincoln, George Washington and Franklin Roosevelt.
All three managed to succeed during life-and-death challenges for this democratic republic.
There also is broad agreement that the two worst presidents bracketed Lincoln — James Buchanan and Andrew Johnson.
The survey of 91 historians also showed a general increase in approval for the peace and prosperity of Dwight Eisenhower (No. 5).
Among recent presidents, Ronald Reagan is at No. 9 and Barack Obama is at No. 12. Both of them faced terrible economies — Reagan the stagflation and Obama the Great Recession.
What’s surprising is that the historians have not really penalized presidents for failed wars.
Vietnam didn’t seem to hurt Lyndon Johnson (No. 10). Korea didn’t seem to hurt Harry Truman (No. 6). Both Truman and Johnson resigned during unpopular wars rather than seek another term.
Winning the Mexican-American War and adding large amounts of land seems to have worked for a one-term President James Polk (No. 14).
Other presidents of note:
• Eight years of peace and prosperity seems to have worked well for Eisenhower and Bill Clinton, who comes in at No. 15 on the list.
• Gerald Ford (25) and the man who replaced him, Jimmy Carter (26) are next to each other.
• The first Bush, George H.W. (20), does much better than his son, George W. (33).