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Power Sheet: Why Trump, Clinton Can’t Revive Manufacturing

It’s painful to hear Hillary Clinton and Donald Trump promising voters that they’ll bring back the past. An event scheduled for this week that you’ll probably hear nothing about is a reminder of why such promises are wrong and cruel.

Both nominees are explaining how they’ll bring back manufacturing jobs. “We are builders, and we need to get back to building things!” Clinton told an audience in Michigan last week, explaining how she’d bring hundreds of thousands of jobs to Michigan. Trump told a crowd in Columbus that he’ll make Ohio “a manufacturing behemoth…. We’re gonna bring your jobs back, we’re gonna bring companies back.”

Of course we know why they say this. Michigan, Ohio, and Pennsylvania are among the most important swing states in this election, and they’ve lost millions of high-paying manufacturing jobs. Many voters – especially old ones, who are most likely to vote – are susceptible to a fantasy of bringing back the good old days. Clinton told her Michigan audience, “You should be able to learn a skill, practice a trade, and make a good living doing it.” Just like in the 1960s. If Trump renegotiates Nafta, said a retired rally attendee in Pennsylvania, “we can start bringing back industries and make televisions, we can make refrigerators. I saw them leave. Why won’t they come back?”

They won’t come back because the world has changed. Manufacturing jobs were about 40% of U.S. employment in 1940; today they’re less than 10%, but we manufacture far more now. It’s the same worldwide – in the U.K., Germany, Australia, Brazil, India, China, and many other countries, the manufacturing share of employment is falling. Everybody’s making more stuff with fewer people, and the trend isn’t going to reverse. Suggesting that it will is inexcusable.

The obscure event that brings the lesson home is on Friday, when the results of the U.S. ProFarmer Crop Tour will be announced. Never heard of it? That’s not surprising. Since fewer than 2% of U.S. workers are in agriculture, hardly anyone pays attention to estimates of Midwest crop yields. Yet those 2% produce so much food so efficiently that obesity has become a U.S. health crisis.

Back in 1820, when the industrial revolution was getting underway in the U.S., 60% of workers were in agriculture, and conventional wisdom held that manufacturing could never be the basis of an economy. That view was mistaken, of course. As the economy was transformed, that 60% dwindled to 2%.

Now the economy is being transformed again, and it’s irresponsible to deny that reality. Would America be better off if we went back to the good old days when 60% of us worked on farms? Obviously not. The larger point for all leaders is that the world never stops changing, and the leader’s job is to embrace the new reality, explaining how it can bring a better future, not a worse one.


Please check out the latest Fortune Unfiltered podcast with Aaron Task. His guest is Richard Parsons, former CEO of Time Warner and former chairman of Citigroup’s board — holding both posts in times of crisis for those companies. Dick shares a lot of wisdom — well worth listening to.

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What We’re Reading Today

Pfizer will acquire Medivation 
Ian Read‘s Pfizer will reportedly pay $14 billion for the cancer drug company. David Hung‘s Medivation has been the target of buyout discussions since the spring, when Olivier Brandicourt‘s Sanofi pushed for a deal. After initially hesitating, Medivation agreed to share confidential information with suitors. Pfizer beat Merck, Sanofi, Gilead Sciences, and Celgene, all of which had expressed interest. Fortune

Sean Hannity, Trump adviser
The Fox News host has provided advice on strategy and message to Donald Trump‘s advisers and family members for months, says the New York Times. Hannity acknowledges he provides advice and says there’s nothing wrong with it since he’s not a journalist; it’s unusual, though, for a news host to provide continuing advice to a candidate. Trump advisers say Hannity may want a role in a Trump administration, which he denies. NYT

Lyft’s attempted sale
Reports surfaced late last week of CEO Logan Green‘s attempt to sell the company for as much as $9 billion. Larry Page‘s Alphabet, Jeff Bezos‘s Amazon, Satya Nadella‘s Microsoft, and Tim Cook‘s Apple all declined. The most interested party is Mary Barra‘s GM, which invested $500 million in Lyft in January and reportedly approached Lyft about a sale, though any proposed price remains unknown. Green declined the offer and instead will raise a new funding round. Lyft’s last fundraising round valued the company at $5.5 billion. Re/Code

Building a Better Leader

When mediating a conflict…
…being aggressive and a little hostile to both sides can help. You become an outlet for their disagreement and help them reach a resolution. Harvard Business Review

Dick Parsons says that the key to managing in a crisis…
…is having a calm, confident demeanor. You become “the person everyone wants to see succeed,” which helps the situation. Fortune

Confessions of a former benevolent dictator
Giving step-by-step instructions for staff members may seem like strong leadership, but it diminishes employees’ ability to grow the company.  SmartBrief

Updating Action Plans

Obama plans one last push to secure TPP
Though Donald Trump and Hillary Clinton oppose the Trans-Pacific Partnership, President Obama will make one last push for it in September. Congress won’t vote on it until after the election, since Obama doesn’t want to ruffle Democrats supporting Clinton, while Republicans in Congress up for reelection fear attacks from Trump. NYT

Jack Ma argues for free trade
Ahead of the G20 summit in China, the Alibaba founder appears in a promotional video to state his support of tax-free online global trading. He’s speaking of online trading only, in line with his plan to expand Alibaba’s footprint globally. The Chinese media are publicizing Ma’s comments, indicating Communist Party support. Fortune

Kimberly-Clark tries to manage out “dead wood”
A job at Kimberly-Clark often meant lifetime security, with high salaries and few layoffs — enabling some underperforming employees to hang on for years. Now CEO Tom Falk is reforming the system. Changes include software that measures employee performance, exposing laggards; turnover is double what it was 10 years ago. WSJ

Up or Out

Valeant Pharmaceuticals has named Paul Herendeen as its new CFO.  CNBC

Fortune Reads and Videos

Google will stop support for Chrome apps…
…on other platforms, including Windows, Mac, and Linux. It will continue to grow apps on its Chrome OS notebooks. Fortune

Hillary Clinton’s campaign raised $63 million in July
While Donald Trump‘s campaign lagged far behind, raising $36.7 million, the month was his strongest to date. Fortune

Barbra Streisand called Tim Cook over Siri
The virtual assistant wasn’t pronouncing her name correctly, and she wanted it fixed. Fortune

Tyra Banks to teach a course at Stanford Business School…
…on how to create and maintain a personal brand.  Fortune

Quote of the Day

“I’m attracted to that – it keeps your attention…It concentrates the mind as Pat Moynihan used to say. If you’ve got serious issues, you need to be alert [and] alive in the moment. I’m not the world’s best steady-state manager…not a particularly good one because my mind wanders.” — Former Citigroup and Time Warner Chair Dick Parsons, discussing why he enjoys working in a crisis.  Fortune

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Produced by Ryan Derousseau