Trump, Mexico, and Jobs

President Trump’s commitment to fight for American workers is a big reason he’s president. To deliver on that commitment, he should consider a lesson from the Gemini space program.

Back in the 1960s, NASA engineers were learning how spaceships could rendezvous and dock. It looks easy in the movies, but reality is much more complex. For example, if one of the spacecraft is far behind the other, how does it catch up? The obvious answer would be to step on the gas. But that answer would be wrong.

Why?

When a spaceship speeds up, the laws of gravity push it into a higher orbit. That’s a big problem because ships in a higher orbit move more slowly. So, crazy as it seems, the only way to catch up is to slow down. Hitting the brakes drops the ship into a lower orbit and a lower orbit means higher speed.

The laws of economics are not nearly so firm or as well understood as the laws of gravity. But the obvious answers often create more problems than they solve.

That’s certainly the case for calls to impose a tariff on any car made in Mexico. Raising the cost of cars made south of the border sounds like a simple way to keep jobs in the US. The reality, though, is even more confusing than orbital physics.

It’s true that the number of cars made in Mexico has tripled since the North American Free Trade Agreement (NAFTA) was signed. And, during that time, the number of US-made cars has held steady. The numbers haven’t decreased, but there’s been little growth. Some conclude, therefore, that the Mexican growth came at the expense of American workers.

However, when a car is built in Mexico, nearly half of the component parts are made in the USA. That applies to cars assembled in Mexico and sold in the US, but also to those sold to other countries. As a result, Detroit alone exports more than $10 billion worth of goods annually to Mexico. Since NAFTA was signed, US exports of auto parts to Mexico have tripled.

The last thing the millions of American workers dependent on the auto parts industry want is a trade war with Mexico. The same is true for millions of other Americans whose jobs depend on exports. Just as speeding up a spaceship causes it to slow down, punitive tariffs are an obvious answer that produce the opposite of what is instinctively expected. They’ve been tried before and failed. The 1930 Smoot-Hawley tariff converted a bad recession into the Great Depression.

President Trump’s commitment to American workers earned him the votes and trust of working class Americans. To honor that commitment and trust, rhetoric and symbolic actions aren’t enough. He needs to deliver jobs. Imposing a punitive tariff might make his supporters feel good in the short-term, but the good feelings will fade quickly as jobs disappear and the economy sinks.

A more productive approach would build upon the president’s call for reducing the regulatory burden and reforming the tax code. These steps would create jobs by getting rid of political obstacles that encourage companies to invest elsewhere.

What America needs today is not a trade war, but an end to the federal government’s war on job-creation.

Posted in Scott's Columns

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Martin Luther King, Jr: A Great American

Abraham Lincoln is generally regarded today as one of America’s greatest presidents. But, that wasn’t always the case. It took more than half-a-century after his death before the memorial erected in his honor could be built. The bitterness of the Civil War he waged to preserve the Union lingered long after an assassin’s bullet ended Lincoln’s life.

It took time to bring the perspective needed for Lincoln’s greatness to shine. We are now experiencing the same process in the legacy of Martin Luther King, Jr.

The legacies of Lincoln and King were publicly intertwined when King delivered his “I Have a Dream” speech from the Lincoln Memorial. That speech ranks alongside Lincoln’s Gettysburg Address as among the best expressions of America’s highest ideals.

In 1963, however, both the speech and the speaker were as controversial as Lincoln had been in his time. Throughout the 1960s, King was routinely found to be one of the most unpopular men in public life, hounded by the FBI, and repeatedly arrested for demanding that America live up to its highest ideals The bitter response to the Civil Rights movement he led lingered long after an assassin’s bullet ended his life.

This past Monday, we officially celebrated King’s life and he is now viewed favorably by most Americans. But King still does not get the respect he deserves. As a Baptist preacher, King grieved over the fact that the most segregated hour in America was Sunday morning at church. It is painfully ironic that the holiday honoring King’s life has become one of the most segregated days in America.

Appreciation of King is limited partly because he is viewed primarily as a great black leader rather than as a great American leader. It’s also limited because many Americans know little about the great man beyond his soaring rhetoric.

King was a smart, tough, and courageous leader who tirelessly promoted non-violent protests to counter the violence inflicted upon black Americans. It was a brilliant strategy designed to appeal to the hearts and minds of white Americans by presenting a clear choice between right and wrong.

But it was tough to sell the idea to many black Americans who were sick and tired of being abused. Recognizing this, King did more than just give nice speeches and hope for the best. He constantly led mass meetings to remind everyone that non-violence was the only practical path forward. He and his team also prepared protesters for what they would face by clearly expressing the dangers and providing ongoing training exercises.

Ongoing daily leadership was needed. Following the Montgomery Bus Boycott, King recognized the potential for violence when black riders prepared to ride integrated busses for the first time. So, he wrote a 17-point memo advising the riders on appropriate behavior. One of those points remains both heartbreaking and powerful: “Be loving enough to absorb evil and understanding enough to turn an enemy into a friend.”

Leadership like that made Martin Luther King, Jr. one of America’s greatest leaders. Like Lincoln, he understood that challenging the nation to live up to its highest ideals put his own life at risk. But King sacrificed himself to make our nation a better place. He created a better world not just for black Americans, but for all Americans.

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The Regulatory State vs. The American Dream

In the midst of the Great Depression, James Truslow Adams coined the phrase “The American Dream.” He described it as “a dream of a social order in which each man and each woman shall be able to attain to the fullest stature of which they are innately capable.” Everyone should “be recognized by others for what they are, regardless of the fortuitous circumstances of birth or position.”

Adams believed that this concept is the “greatest contribution we have made to the thought and welfare of the world.”

It’s a dream of a profoundly moral and just society. The land of opportunity is a place where all who are able accept the responsibility to provide for themselves and their family. And, because everyone can get ahead by working hard and making good decisions, it’s a land where poverty does not exist. Even those with temporarily low incomes have a viable path to a better life.

The dream has always been about more than money. One revealing survey found that just 27% of Americans admire those who are rich. However, 88% admire those who work hard and get rich. It’s not the money that matters. It’s the hard work that draws rave reviews.

The vision of a land where people can work hard and earn their success remains extraordinarily powerful in the 21st century. But many Americans fear it’s a vision that describes our nation’s past more than its future.

Some worry that today’s children simply won’t have the opportunities than their parents had. Others are concerned that the desire for an opportunity to succeed has been replaced by an entitlement mindset. And, most recognize that there are some parts of the country where credible opportunities don’t exist. No matter how hard the residents are willing to work, the jobs simply aren’t there.

The declining sense of opportunity in 21st century America is directly related to growth of the Regulatory State. That’s because opportunity thrives only in an environment of freedom, equality, and self-governance.

• The land of opportunity is a land where the people are in charge. Everyone is empowered to pursue their own success.
• The Regulatory State is a land where unelected and unaccountable panels of government experts are in charge. Everyone else must ask permission first.

The conflict between the Regulatory State and a land of opportunity is at the heart of twenty-first century concerns about America’s future. It’s a conflict about the American Creed, the deeply held belief that we are free to do whatever we want with our own lives so long as we don’t interfere with the rights of others to do the same. Throughout our nation’s history, Americans have used that freedom to work together in community and create a better world.

The danger we face today is that as the bureaucracy increases, opportunity decreases.

The reverse is also true. By decreasing the power of the bureaucracy, we will unleash the American Dream. That is the greatest legacy we can pass on to future generations.

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Trump’s Transition from Rhetoric to Policy

Eight years ago, as Barack Obama prepared to move into the White House, he continued to offer the rhetoric of hope and change. Though many Republicans mocked it, that message was exactly what the American people wanted to hear.

Candidate Obama promised to change the way Washington worked and talked of bi-partisan cooperation. But, within weeks of taking office, President Obama rammed a so-called “economic stimulus” package through Congress that was so partisan it failed to win a single vote from House Republicans. He took the same polarizing approach to pass Obamacare.

The disconnect between the promises of candidate Obama and the policies of President Obama decimated the Democratic Party. Republicans have more state and federal political power today than at any point since the 1920s.

Now, it’s President-elect Donald Trump who must transition from rhetoric to policy. His challenge is different than Obama’s. It’s not about making Washington work better. It’s a promise to make the economy work better for middle class and working class Americans.

Like Obama, Trump has spent the transition showing that he remembers what got him elected. Acting as dealmaker in chief, he offered incentives to the Carrier air-conditioning company to keep a few hundred jobs in Indiana. He has claimed similar success with Sprint and Ford to bring jobs back to America and keep them here.

Symbolically, this is the right message. Working class Americans have long believed—with justification– that Washington politicians don’t care about them. It’s true of politicians from both parties. These are the sort of voters who put Trump over the top in heartland states like Ohio, Pennsylvania, Michigan, and Wisconsin. These voters are thrilled to have an incoming president who is so visibly committed to fighting for them.

Now comes the hard part.

In a nation with 152 million workers and 7 million unemployed, the few thousand jobs Trump claims responsibility for are a drop in the bucket. They’re a powerful symbol, but nothing more. The new president cannot create the needed opportunities by playing dealmaker in chief and adding jobs a few thousand at a time.

Over the next few months, we will see if President-elect Trump can do a better job than President Obama in delivering policies that will match his rhetoric. If he does, and if the economy improves, Republicans will benefit. If not, the GOP under Trump could suffer the same fate as Democrats under Obama.

For any president, it ultimately comes down to a question of priorities. President Obama may have promised hope and change, but he decided implementing Democratic policies and an unpopular health care law were more important.

For President Trump, the tension will be between his deal-making instincts and his commitment to reducing the burden of excessive regulatory power. Reducing the power of distant and unaccountable bureaucrats will produce lasting economic benefits. When businesses can worry more about pleasing their customers rather than sucking up to politicians, America wins.

But, reducing the regulatory burden also limits the tools that a president can use to bully companies into submission. Sooner or later, the new president will have to decide whether he is more interested in playing dealmaker-in-chief or creating a healthy economy.

If he chooses wisely, the new president might actually deliver the hope and change promised eight years ago.

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