Which of the passages below is from which party’s official platform?
-No. 1. We “will use all our trade enforcement tools to hold China and other trading partners accountable because no country should be able to manipulate their currencies to gain a competitive advantage…. Trade agreements should crack down on the unfair and illegal subsidies other countries grant their businesses at the expense of ours.”
-No. 2. “We cannot allow China to continue its currency manipulation, exclusion of U.S. products from government purchases, and subsidization of Chinese companies to thwart American imports…. [Our nominee] will insist on parity in trade and stand ready to implement countervailing duties if other countries refuse to cooperate.”
The similarities of the parties’ stands on trade are even greater than these passages suggest. (No. 1 is from the Democrats’ platform, No. 2 from the GOP’s.) Donald Trump and Hillary Clinton have each gone far beyond the platform language in denouncing the Trans-Pacific Partnership and Nafta. The clear message they’re sending is hostility toward free trade. Over the past 70 years the world has achieved hard-won progress toward freer trade, and both candidates explicitly threaten to stop it dead in its tracks.
That’s an important problem. To say out loud what isn’t said often enough: Free trade is undeniably good for the economy, though the benefits are not distributed evenly. Trump and Clinton are hostile toward it because they’re trying to win the votes of Americans who blame trade agreements for taking away their jobs or the jobs of others, or for crushing their wages or benefits, or for hollowing out their towns.
Heaven knows all those things have happened, but trade isn’t the main reason. Whenever Trump, Clinton, or anyone else talks about bringing back manufacturing jobs by restricting trade, remember these facts:
The high water mark for U.S. manufacturing jobs was June 1979: There were 19,553,000 manufacturing workers that month, says the Bureau of Labor Statistics. Last month the number was 12,296,000. Yet today the U.S. produces manufactured goods worth 78% more in constant dollars than we produced in 1979. That is, we produce 78% more stuff with 37% fewer workers.
This is a global phenomenon. Everywhere on earth, every day, business people figure out how to make more stuff with fewer workers. That trend isn’t going to reverse.
Wise policy makers don’t bemoan this reality or try to bring back the past; instead they embrace economic change. Rusted-out old manufacturing towns can revive spectacularly – just look at Pittsburgh. But never again will America employ 19,553,000 manufacturing workers or any number remotely close. Trade deals didn’t eliminate most of the lost manufacturing jobs, and killing trade deals won’t bring them back. For Trump, Clinton, or anyone else to suggest otherwise is misleading and cruel.
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What We’re Reading Today
Hillary Clinton becomes first woman nominated…
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China is no longer Apple’s second largest market
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Marissa Mayer’s major payout
Yahoo CEO Mayer will receive far more than the previously reported $55 million as a result of selling the company’s internet business to Lowell McAdam‘s Verizon. The real number is over $122 million because Yahoo’s stock has risen 16% in recent months, increasing the value of her restricted stock and option; in addition, earlier calculations excluded some of her stock grants. Fortune
Hedge fund’s culture questioned
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Building a Better Leader
General Electric gets rid of employee ratings
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Reverse mentoring catches on
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Does it make more sense for your company to offer health insurance…
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VW settlement passes major mark
U.S. District Judge Charles Breyer in San Francisco gave preliminary approval of a $10-billion settlement by Volkswagen in which Matthias Müller‘s company will buy back 475,000 vehicles with 2.0-liter engines. VW can soon begin telling car owners how much they’re set to receive. A final approval hearing is set for October. VW is still working on a settlement for owners of 3.0-liter vehicles. Fortune
Aviation experts to car makers: Move slowly on autonomous driving
The aviation industry began moving to autonomous technology long ago, and many companies have needed years to ensure safety as pilots adjusted. For companies like Elon Musk‘s Tesla, which reported the first death of a driver using autonomous technology, experts say drivers need more time and training to understand the capabilities of self-driving tools. WSJ
Twitter reports another disappointing quarter
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Up or Out
Fox News has fired Michael Clemente, who was executive vice president of news until April, when he was demoted. Fortune
Dr. Neil Clark Warren, CEO and founder of eHarmony, will step down and will continue as chairman. Grant Langston succeeds him as CEO. CNNMoney
Fortune Reads and Videos
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Tumblr bloggers will soon be able to host ads
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Google Maps gets an update
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