The US economy has evolved since the 1990s. Trump is concerned about the harm that NAFTA has done to the US jobs market, and economists agree that hundreds of thousands of US jobs were lost because of NAFTA. But the truth is that NAFTA also created jobs, perhaps for different people, but if you undo NAFTA now you will destroy the NAFTA-created jobs without bringing back the jobs that were lost.
The same holds true for the coal industry. The alternative energy sector now employs more people than the coal industry and if you sacrifice government support for future energy initiatives you will destroy jobs without bringing back coal jobs. These jobs were mostly replaced by automation, which improves worker safety and reduces the health consequences for counties that depend on the coal industry.
What President Trump should be doing is finding ways to encourage businesses to invest in counties where jobs have been lost due to automation or trade. By retraining workers, even older workers, he'll practice a more realistic economic policy that stabilizes our growth rather than threatens it.
The government can pass incentives that make it reasonable for companies to hire and retrain older American workers who are being squeezed out of the job market by younger, highly educated workers and automation. I don't believe we need more traditional factory jobs but what would help is a program that stimulates investment in production that cannot yet be automated. An unemployed coal miner can learn to build houses, pull product from shelves in a warehouse, and drive a delivery vehicle.
The US retail market is now facing a grave crisis as consumers spend less than half the time browsing grocery stores than they did 10 years ago. While retail sales are still dominated by brick and mortar stores economists point to Walmart as the number 1 factor that consumers are staying away from the smaller high value brand stores that are closing. Everyone is blaming Amazon for outcompeting the local shopping mall but consumers are buying more inexpensive clothing than ever before. That is not the Amazon Effect but the Walmart Effect.
And these reductions in consumer spending are a direct result of the bad economic policies of the Obama administration. President Obama hailed his job creation initiatives but his administration oversaw the creation of lower paying jobs, many with too few hours and few to no benefits. Worse, he supported the H1-B visa program, which takes jobs away from American workers and hands them to lower paid foreign workers who immigrate to this country.
With less money to spend consumers have no choice but to tighten their belts. They have to look for more clearance sales, use more coupons, and shop at more discount stores. They also take advantage of online deals that offer the best prices and sometimes even free shipping.
If Donald Trump would only look at news headlines that are not about him and his administration he might see what is going on. Instead he is pursuing a Republican fantasy of "reducing big government". The big government myth is one of the mainstays of Republican Party politispeak but the US government has been steadily shrinking its non-military payrolls for years, even decades, according to some analysts.
If US government payrolls have been shrinking then why do agencies need to eliminate more jobs? Cutting government services hurts the economy. Private industry rarely if ever steps in to replace these vital services because they cannot make a profit from doing so. By eliminating jobs President Trump is just putting more people out of work. That won't help the economy. By eliminating government services, President Trump will remove consumer protections and deprive truly needy people of the care they cannot afford in the private marketplace.
As the quality of government services declines at the federal level states may take up some of the slack, but the reality of depending on states to private basic government services needed across the country is that some regions will benefit more than others. Progressive states are more likely to find ways to compensate for the loss of federal services. Republican-controlled states are more likely to make matters worse unless they cross party lines and work with Democrats to devise new solutions.
This is the reality of America today. We'll have to live with it for at least another two years. In the worst case scenario not only will Republicans strengthen their hold on Congress, Donald Trump will be re-elected to office in 2020. Why would voters do that? One reason is that the Republicans have spent years gerrymandering voting districts so that they can retail control of the House of Representatives through minority wins. Yes, in some states, Democratic voters outnumber Republican voters but the Republicans still win elections because they have carved out minority districts where their loyalists are the dominant voting block.
These minority wins ensure that our government fails to learn vital lessons from its economic experiments because Republicans are intransigent in their unscientific beliefs. Not all Republicans are like this, mind you. Some are very broad-minded people who align well with the general population in their ideas. But these moderates have little to no effective power inside Republican Party politics, which are dominated by ultra-conservative radicals who have no idea of how to run a government or an economy.
