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Opinion | When the fantasy collides with reality

let us accept it: the “Let's make America great again” was a political slogan brilliant. Why? Because it could mean different things to different people. For m

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Opinion | When the fantasy collides with reality

let us accept it: the “Let's make America great again” was a political slogan brilliant. Why? Because it could mean different things to different people. For many followers of Donald Trump, was basically the promise of a return to the good times of the racism and the sexism, pure and hard. And Trump is living up to that promise.

But at least for some voters Trump, was a promise to restore the kind of economy that we had 40 or 50 years, an economy that still offered many jobs manly in manufacturing and mining. Unfortunately for those who trusted in the gift Art of the Agreement, Trump never had no idea of how to fulfill that promise. And even if I had known something about how to make policy, could not have changed the long-term trajectory of our economy, which is away without truce of the physical manufacturing of things and progresses towards the provision of services.

As a result, Trump, who above all is concerned about the image it captures now holders that put in ridiculous your postureo in the campaign, headlines about the closure of car factories and loss of employment. Now, the cars are a special case; the employment in manufacturing continues to increase in general, although not especially fast. But in regard to its great promises, what is happening is a shameful fiasco.

why was it absurd the idea of the recovery of the industry? Of course, talk about what that Trump doesn't know is a huge task, as your ignorance is profound. But it seems not to have understood well the three things, in particular manufacturing. In the first place, believed that trade deficits are the reason why we abandon the manufacture. But they are not. To be fair, those deficits have played a role in the reduction of employment in the industry. If we could eliminate the current trade imbalance, we would have around 20% more workers in the sector now. But that would only reverse a small part of the decline of manufacturing, which has gone from representing more than 25% of the workforce in 1970 to less than 10% today.

In fact, even in countries that recorded trade surpluses, huge as Germany, there has been a significant decline of industry in total employment. And the trade is not the whole story. What is happening is that, as it grows the overall spending, an increasing part is spent on services, not goods. The consumption of manufactured products continues to grow, but technological progress allows us to produce those products with ever-fewer workers, so the economy moves towards services.

By the way, if you want to know what it means to “services”: of the four occupational sectors in which the Labor Department is expected that will create more employment over the next decade, three are of some type of assistance (the fourth is the food sector). And if you can't even imagine to what extent we can build a prosperous economy based on services, take into Efsanebahis account that healthcare is an important source of middle-class jobs and could create even more with the right policies. And yet, although the trade deficits are a cause clearly secondary to the decrease of the manufacture, can't Trump help a little by getting tough with foreigners? That brings us to the second fallacy: no, the trade practices foreign unfair do not cause deficits.

The fact is that, although the tariffs may affect the trade in specific sectors, the trade balance generally reflects on all the types of change, which, in turn, derived mainly from capital flows: the dollar is strong because foreigners want to buy u.s. assets. And the policies of Trump —tax cuts for multinationals, large deficits that drive up interest rates— are making the dollar even more strong. Finally, the furious reaction from Trump to the closures of car factories reminds us of her third great mistake policy: believes that it can manage the economy screaming to the people.

why is it wrong? It is not only companies to have learned not to take account of their threats. The most important thing is that the economy is too big to make policy by pointing at individual companies and despotricando. Up to what point is it big? Each month is put on the street for about 1.7 million workers. So that not even a president to spend less time playing golf could threaten to enough employers to have a significant impact on the labour market. Or, to put it another way, to direct the U.S. is not like running a family business. It has to be done by laying down general policies and adhering to them, and not as intimidating to some people when a owner negative. That's why the promise of Trump to regain the manufacturing was doomed to failure.

why the did in the beginning? For if it serves of something, I suspect that in this case Trump really wasn't trying to deceive voters. I believe that you sincerely believed I could make the industrial manufacturing, coal mining and others are recovering spectacularly, and others failed only because there were enough hard. You may ask where she got that confidence, considering how little you know about economics. The answer, probably, is the effect of Dunning-Kruger: people incompetent they often rely upon their ability, because they are too incompetent to know how badly they are doing. But the real question is not whether Trump will be there any time that you do not know how to “make US big again”. Is if their followers will notice and when. I guess we will know the answer in the next few months.

Paul Krugman is a Nobel prize winner in Economics. © The New York Times, 2018. Translation News Clips

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