Not a magic wand, but good policy, has brought back those manufacturing jobs Obama said were gone

I almost didn’t post this because focusing only on the “magic wand” remark is borderline unfair to Obama. He actually makes some fair points in the run-up to that.

Obama doesn’t actually say no manufacturing jobs will come back. He focuses on the now-antiquated tasks that have been replaced by automation. And he’s right that it takes more than a willingness to work hard to get and keep a good job.

The jobs that are not coming back are the ones that require virtually no skill whatsoever. Also, the “magic wand” comment was actually in reference to negotiating better trade deals, not making the jobs come back, although the purpose of the one is obviously to do the other.

So it seemed like a bit of a bad rap to post this and then gloat about the huge growth we’ve seen in manufacturing jobs, but then I remembered that everything Obama says here – while it has some validity to it – misses the most important point: Better policy could have counteracted all the forces he mentions, and the lack of a better policy was 100 percent on him:

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As the Forbes piece linked above points out, manufacturing job growth was tanking when Obama made this comment in June 2016. It had fallen by 31,000 compared with January 2016, and Obama had no answer apart from his usual mantra about the federal government pouring money into “job training” (as if the government is best equipped to perform that function) and propping up “green energy” companies and others in fields Obama favored.

When Trump took office, he went in a completely different direction on policy. He cut the corporate tax rate from 35 percent to 21 percent. He deregulated. He opened up domestic energy production. He stopped the legal and regulatory harassment of businesses that had been one of the staples of the Obama presidency. He stopped the use of the federal government as a thumb on the scales in favor of labor unions.

In Trump’s first 26 weeks, manufacturers added 479,000 new jobs. Compare that to the period that had Obama lamenting how the jobs would never come back.

Whether you apply the “magic wand” comment to trade deals or to job growth, what Obama didn’t understand is that his own policies were making it harder for manufacturers to add people. He was causing the cost of labor to be inflated. He was adding regulatory costs. He was maintaining the highest corporate tax rate in the world. And he was maintaining high individual tax rates that were making it harder for people to buy the goods manufacturers needed to sell.

Trump changed all this and the result has been a phenomenal turnaround for the manufacturing employment picture.

It is still true that low-skill manufacturing jobs, now replaced by automation, are not coming back. But the rise of automation also creates new jobs, and companies in those industries also need to be in a pro-growth economic environment so they can thrive and hire people. Obama never understood this. He thought the answer to everything had to focus on public institutions, such as community colleges he wanted to somehow make free for the first two years, or government-run job training.

Companies can train their own workers if they are able to operate profitably enough. Obama always seemed to think that corporate profits were evil, and always had a reason those profits needed to be handed over to the government. Trump has reversed those policies and now manufacturing is thriving.

This is not a magic wand. It’s good policy, which is something Barack Obama never tried.