How Everybody Can Win

Mark criticized Trump's debate claim that the United States isn't  making things anymore as false. However, not everything Trump says is an outright lie: sometimes there's a glimmer of truth to it.

Mark's observation that manufacturing in the US has doubled since 1979 may be true, but it ignores important facts. Pretty much all consumer products -- cell phones, clothing, shoes, TVs, computers -- are no longer made in the United States.

We were #1 in manufacturing until as recently as 2002. But by 2012 China had overtaken the United States, producing 22% of the world's manufacturing output, with the United States coming in second with 17%.

Clearly the United States still does a lot of manufacturing and export, but a lot of what we're manufacturing is high tech tools and machinery that are sent to foreign countries that are then used to manufacture consumer products that are then imported into the United States. We also build expensive things like airplanes and gigantic earth movers: things that cost a lot but employ a small number of Americans.

We're mostly out of mass-market consumer goods business -- that's why Trump's "Make America Great Again" hats and plastic Fourth of July American flags are made in China.

But developing countries like China and India are finally developing a middle class and the consumer market has grown drastically. That means manufacturing worldwide is way up, but the US share of worldwide manufacturing has declined markedly; more to the point, the number of people employed in manufacturing in the US is way down.

This is why Trump's claims on US manufacturing are false. To do make the US the largest manufacturer of consumer goods again we'd either have to pay Americans the same slave wages that Chinese factory workers are paid, or our factories would be totally automated.

In 1960 manufacturing had a 25% share of employment in the United States. In 2011 it was about 9%. Manufacturing as percentage of GDP has remained stable at about 12% the whole time.

This is the "gotcha" that Trump isn't mentioning. If we bring manufacturing back to the US according to Trump's plan, it'll mean a huge cut in pay for American workers, or it will mean more automation and fewer workers in manufacturing. We can't create more well-paying manufacturing jobs unless other conditions change.

We do lead the world in some export categories, notably agriculture and aircraft. If Trump starts a stupid trade war with the rest of the world by slapping tariffs on imports, we will lose all our export markets.

This is the key: in order for the people in developing economies to be able to afford to buy American goods, they need jobs that pay enough to afford to buy our stuff.

The current problem is that large parts of the world pay their workers a lot less than the American or European middle class wage: their labor markets are cheaper than ours. Those people want to make as much as Americans, and it's in America's best interests for people in those countries to make more: their countries will lose the advantage of lower labor costs.

It might seem contradictory, but for Americans to prosper, the rest of the world needs to prosper -- so they can afford to buy our stuff.

That should inform how we write the trade agreements. We shouldn't be shutting out products made in foreign countries with Trump's prohibitive tariffs, we should be making sure that companies in other countries pay their workers salaries commensurate with Americans. One way is to require that all trade agreements with the US have anti-corruption clauses and strong protections for trade unions -- something we should have in all states of the Union. The agreements should also eliminate tax havens, like Ireland.

This would have another benefit: if people in Mexico and China are paid salaries that approach American levels, they'll have no incentive to leave their countries and come to the United States.

History shows this to be true: in the late 1800s and early 1900s, Europeans flooded into the US by the millions. But after Europe stopped being a war-torn hellhole, they stopped emigrating here in huge numbers.

If we use trade as tool to improve the lot of people of in other countries, they will want to stay home and they'll be able to buy American stuff.

Everybody wins.

Trump does not think this way. For him, and an awful lot of Republicans, life is a zero-sum game and there can only be one winner.

This, in a nutshell, is why someone like Hillary Clinton will make a far better president than an egotistical narcissist like Donald Trump.