Backing America into a ditch
Donald Trump is, with his 1980s view of the world, trying to return the country to a 20th century that no longer exists in the 21st. His economic policies are stripping the U.S. of its innovation and competitiveness, argues Robinson Meyer in The New York Times. Manufacturing is shrinking, home starts are slowing, and only health care is seeing increased employment. His simple-mindedness is making our economy increasingly simple (gift link):
Perhaps this slowdown will soon reverse. But nearly seven months into his presidency, it’s now clear that Mr. Trump and his officials’ tax and trade policy — and their hatred for next-generation energy technologies — is distorting and, increasingly, robbing the economy of its complexity. And if he keeps at it, Mr. Trump will demote America into a deindustrialized power that relies on technology developed elsewhere and doesn’t know how to sell much more than crypto, soybeans and petroleum products.
Trump is putting the kibosh on further electric enegy development at a time when consumser clearly have shown a growing preference for electric and hybrid vehicles. He’s trending toward a Soviet-style economy that produces products no one wants to buy, while depriving the manufacturers of data for knowing what to produce.
Trump’s tariffs add to the confusion:
But the clearest example of the atrophy is in the bill’s demolition of electric vehicle tax credits. E.V.s are to the 21st century what gasoline-burning cars were to the 20th century: an important “apex” industry that builds on and incorporates the work of other sectors, like steel, mining and chemicals.
In their tax law, congressional Republicans kept some subsidies in place for companies that produce E.V.s, which will manage to keep American factories just barely cost-competitive on a per-unit basis. But they stripped out incentives to help consumers buy or lease electric vehicles. Mr. Trump’s lobotomizing of the Environmental Protection Agency means that soon there will be essentially no mechanism for the government to encourage Americans to buy E.V.s, which will leave the infant industry without a reliable source of new demand. Companies are responding as you might expect: Since Mr. Trump took office, more than two dozen E.V. or clean energy manufacturing projects across the country — totaling more than $27 billion in investment — have been paused, canceled or closed.
Smothering the E.V. industry might have been merely a regrettable mistake for a Republican to make 10 years ago. Today, it is economic idiocy. Over the past decade, China has built a new kind of industrial economy that combines a specific stack of technologies — batteries, motors, semiconductors, sensors and software — into high-end manufactured goods like cars and drones. It is better at producing these high-end goods than just about anyone else in the world. Its electric cars, in particular, are “far superior” to what’s available in the West, according to Jim Farley, Ford’s chief executive.
Put a man with dictatorial tendencies and retrograde ideas in office and watch him slam the country into reverse and right into a ditch.
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