"The recent trumpist trumpeting about the plans of Chinese manufacturer Foxconn to open a manufacturing facility in Wisconsin omitted a few key details -- like the fact that Foxconn is being given a sweetheart tax-break that's topped up with 15 years' worth of guarantees of up to $200m/year in cash subsidies at taxpayer expense -- a record-setting taxpayer subsidy that exceeds the previous Wisconsin record-holder by a factor of fifty."
"The total bill for this incentive package that Wisconsin is giving the super-profitable Chinese manufacturer? Three billion dollars."
"But there's more! Wisconsin cities will also have to provide incentives, including hundreds of millions more in infrastructure, and exemptions on environmental rules that will allow Foxconn to pollute watersheds, drain water habitats, and reengineer Wisconsin's freshwater sources, up to and including Lake Michigan."
"To understand the import of these statements, a bit of background might help. Like most mainstream economists, Yellen believes that there is a causal relationship between the jobless rate and the rate of inflation. When unemployment falls below a certain level, the scarcity of workers enables them to negotiate higher wages, and inflation picks up. Economists call this threshold the Non-Accelerating Inflation Rate of Unemployment, or “nairu,” for short.
"If you are running the Federal Reserve, a clear understanding of the nairu is obviously a very useful thing to have. For the sake of argument, let’s say that you think the nairu is five per cent. If the monthly unemployment rate then dips below that—to 4.8 per cent, say—you would expect inflation to pick up in the coming months. And that might well prompt you to start raising interest rates to prevent an inflationary spiral from developing."
"As it happens, the Fed did once think that the nairu was somewhere close to five per cent. Today, though, the harsh truth is the Fed doesn’t know what the figure is, or whether it even exists in a usable form. "
"The "Buy American" portion of the executive order calls for stricter enforcement of laws requiring the federal government to buy American-made products when possible. Administration officials complain that those laws have been watered down over the years and often are sidestepped with government waivers."
"The "Hire American" part of the order aims to crack down on what the administration calls "abuses" of government guest-worker programs. The biggest target is the H-1B visa program, which is designed to help technology firms fill jobs requiring special skills but which critics say often is used to replace American workers with lower-paid foreign competitors."
"Hiring in March was expected to drop after the monthly gains of more than 200,000 in the two previous months, but this was the weakest showing for the economy in nearly a year. Although it represents just one month’s data, it will raise questions about whether improving business sentiment is actually translating into any meaningful action by employers."
"On the other hand, at 4.5 percent in March, the unemployment rate is at its lowest point since May 2007, marking a milestone in the long road back from the Great Recession."
"In many small towns across the country, there aren’t very many good jobs these days. Once there were factories that employed millions and paid decent wages. Today, young men are scraping by working at local bars or in lower-paid temp jobs. Many of these men are single, and new research suggests that those two things—their poor economic status and their singleness—are not unrelated."
"It’s no wonder, then, that the changes wrought by the disappearance of manufacturing jobs helped elevate the platform of Donald Trump, who won 67 percent of white workers without a college degree. Their malcontent comes not just from their economic struggles, but from the dramatic changes to their personal lives that the decline of manufacturing have created."