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John Waelti: No easy solutions - even for Donald Trump
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It wasn't supposed to happen. He broke every rule in the book, any one of which would have sunk a normal candidate.

But Trump was not a normal candidate. Perhaps it's more accurate that these are not normal times. We have to go back to the Great Depression of the 1930s for a time when so many people lost faith in the system, even questioning the viability of democratic capitalism.

Surely, the nation is now in better shape than during the Great Depression. But even as Wall Street banks have been bailed out, many people have yet to recover from the Bush Recession. Wages and incomes have stagnated for a majority of people for decades, even as the wealthiest few have reaped soaring incomes.

I have in previous columns admitted to an economist's view, and still insist that if the vast majority of American voters had seen steady improvement in incomes, and felt optimistic regarding futures for themselves and their children, issues including immigration, gay rights, and all the rest of it would still be there, but would be of diminished importance regarding this election.

Politicians and opinion leaders assumed that the Democrats would hold Pennsylvania in this election. Few believed that Wisconsin and Michigan would play a pivotal role. Ohio and Florida always were questionable. But blue collar workers, including union members, in Pennsylvania, Ohio, Wisconsin, and Michigan who once voted Democratic turned out for Trump. Rural counties in these states that went for Obama in 2008 and 2012 turned to Trump in 2016.

Rural counties were the difference for Donald Trump even in Florida, replacing Ohio as the crucial "must win" state.

Trump was smart enough, or lucky enough - take your pick - to seize upon national discontent and ride it to victory. Sure, he played the race card with some success. But those former Obama voters surely did not switch to Trump on the basis of race.

As Bill Clinton's strategist James Carville famously advised his team in 1992, "It's the economy, stupid." It still is, which brings us back to President-elect Trump.

The basic problem in addressing the anger of disaffected voters in manufacturing regions is that there are no easy, costless solutions. That would have been a serious problem for Hillary Clinton as well. But Donald Trump and the Republicans now have the presidency and the Congress. Since they won the election on promises to make things better, they now own, and voters have entrusted them with responsibility, for solution.

Thus far, they have come up with a blank slate. Getting rid of Obamacare will do nothing to aid the working poor and unemployed; it would be counterproductive.

Trump ran against Wall Street but wants to eliminate the Dodd-Frank bill that places modest regulations on those banks. That will do nothing to employ manufacturing workers or coal miners.

Building a wall will do nothing to bring manufacturing jobs back. Immigrants were an effective whipping boy during the campaign, but not the primary concern of unemployed coal miners.

Huge tax cuts for the wealthiest Americans is more of the same failed trickle down economic snake oil that has contributed to the growing income disparity on which both Sanders and Trump campaigned.

So, what legislation and economic policy will produce economic prosperity in Rural America, the Rust Belt, and Appalachian coal country? There are no easy answers, especially in the short run.

Let's start by recognizing reality: the reduced demand for coal has nothing to do with regulations. The major factor is economic - reduced prices of natural gas. Anybody in favor of raising natural gas prices as solution for unemployed coal miners?

How do we bring manufacturing jobs back to the Rust Belt? Granted, some of those jobs never should have been lost. Trump, and Sanders for that matter, is correct that workers are justified in being outraged when a plant moves south of the border to take advantage of lower labor costs.

Democrats agree on this. But Trump capitalized on this anger and seized the issue as his own. Trump promises to solve this by making "smarter deals." But there is nothing in his rhetoric that suggests that he will include representatives of labor in crafting these "smarter deals."

Furthermore, while some jobs have been lost through plants moving abroad, many jobs, perhaps most, have been lost through technology and automation requiring fewer workers. "Smarter deals" don't address this.

Finally, it would be a mistake to adopt overly protectionist policies. Much American income, including from agricultural exports, relies on sales abroad. Trump's "smart deals" need to include protections for American workers, while not unduly reducing American exports or inducing an international trade war. That is no small challenge, even for the self-professed master deal maker.

Education and training is often cited as solution to changing labor force needs. Education and training are more essential than ever, but let's not be Pollyanna-ish about it. It's hard to think of alternative employment with equivalent incomes that large numbers of middle-aged coal miners and shop floor guys can be quickly trained for.

While education and training might benefit some displaced older workers, it is absolutely essential for those of high school age. It is thus a longer run solution. Even then, younger people will need to migrate out of declining economic regions, just as younger people have always moved to where jobs exist. This, even as politicians are not inclined to see out-migration from their districts as solution to a changing economy.

With ingenuity, some jobs may be brought to a few declining regions. Protection for labor must be given greater priority in future international trade deals. But it is not realistic under any scenario to see coal mining regions once again thrive from coal, or manufacturing towns return to previous levels of employment, even with enhanced protection of labor.

Next week: Related issues of the Trump agenda.



- John Waelti of Monroe, a retired professor of economics, can be reached at jjwaelti1@tds.net. His column appears Fridays in The Monroe Times.