Grasping Reality on TypePad, by Brad DeLong

We now have a manufacturing recession. Paul Krugman correctly explains why: Paul Krugman: Manufacturing Ain’t Great Again. Why? https://www.nytimes.com/2019/10/31/opinion/manufacturing-trump.html?emc=rss&partner=rss: 'Many of Trump’s economic promises were obvious nonsense. The hollowing out of coal country reflected new technologies, like mountaintop removal, which require few workers, plus competition from other energy sources, especially natural gas but increasingly wind and solar power. Coal jobs aren’t coming back, no matter how dirty Trump lets the air get. And farmers, who export a large fraction of what they grow, should have realized that Trump’s protectionism and the inevitable retaliation from other countries would have a devastating effect on their incomes.... Trumponomics has effectively turned rural Americans, who are far more conservative than the nation at large, into wards of the state: This year almost 40 percent of farm income will come from trade assistance, disaster assistance, the farm bill and insurance indemnities.... Over the past year, manufacturing employment has fallen significantly in Wisconsin, Michigan and Pennsylvania.... Trump’s... domestic economic agenda has been pure, orthodox Republican voodoo.... But business investment, which the tax cut was supposed to promote—and which is a key source of demand for U.S. manufacturers—is actually falling.... Analysts blame Trump’s trade war. His tariffs have the direct effect of disrupting global supply chains.... Destructive uncertainty... [from] crony capitalism across the board.... Things might look very different if he had actually followed through on his campaign promises to make big investments in infrastructure, which would have created a lot of sales for U.S. manufacturing.... Trump is presiding over an economy that, despite low unemployment, doesn’t feel like a boom to most Americans. And he has utterly failed in his politically crucial promise to make manufacturing in key swing states great again...