Talking Points: Noah Smith: Trump's Industrial Rebirth Is a Dead End: "President Donald Trump's economic adviser, Peter Navarro, has vowed to restore U.S. manufacturing supremacy...
...But there's no going back.... Everyone should read "The New Geography of Jobs," by University of California-Berkeley economist Enrico Moretti. It's probably the most important popular economics book of the decade.... Two Americas -- one... healthy, rich and growing, and a second... left behind... divided... by the kinds of industries they support. Those cities and towns that are home to... information technology, pharmaceuticals, advanced manufacturing... are wealthier, healthier and safer, while the places without these industries are steadily declining. "The New Geography of Jobs" catalogs these changes relentlessly.... Local multipliers are the key to providing Americans with good jobs.... The kind of industries the U.S. used to specialize in--textiles, steel and cars--provide much smaller multipliers than the innovative industries that the country has now shifted into. The U.S. didn't lose out to China -- it simply shifted into more productive industries. If the country were to return to the kind of low-multiplier manufacturing that it left behind in the 1980s, it would be a lot poorer as a result....
Writing angry tweets at companies that open factories in Mexico won't create good jobs for American workers. But expanding universities and allowing greater urban density just might do the trick. If Trump and his people can't do this, the Democrats should make it a pillar of their own economic strategy. There is no way back for the U.S. economy--only forward, further into the innovation age.
Talking Points derived from Noah Smith:
- Everyone should read "The New Geography of Jobs," by University of California-Berkeley economist Enrico Moretti.
- Two Americas:
- Healthy, rich and growing: cities and towns that are home to innovative industries--information technology, pharmaceuticals, advanced manufacturing and the like.
- Left behind: Visalia, California, and Bridgeton, New Jersey, that have failed to catch the train of the innovation economy.
- Why? Local multipliers.
- Today: local multipliers of six or so for innovation-economy industries
- Today: smaller local multipliers of three or four for old-line manufacturing—textiles, steel and cars.
- Returning to low-multiplier manufacturing would make America much poorer.
- Help more people move to the innovation hubs.
- Eliminate NIMBYism in Austin, Texas; San Francisco; San Diego; and Boston.
- Expanding universities—in and outside of innovation hubs.
- Recruit more high-paying foreign students.
- Writing angry tweets at companies that open factories in Mexico won't create good jobs for American workers.