An economy more about doing than making Politicians of

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Jan 13, 2017 at 5:18 PM 143

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An economy more about doing than making

Politicians of both parties love to talk about manufacturing. Obama pushed manufacturing initiatives throughout his presidency, and Trump built much of his economic message during the campaign around singing the praises of America's manufacturers.

But when it comes to employment, the goods-producing share of the economy has continued to fall. Throughout the past few decades, the share of Americans who make things — people in manufacturing, mining, logging and construction — has fallen off, and that trend continued during the recent recession, finally flattening out toward the end.

We present this chart over a longer time frame, which makes it a little bit of a cheat — this isn't exactly a measure of Obama's "record on jobs." Nor is it necessarily a measure of economic weakness; in fact, manufacturing has, thanks to technological advances, maintained strong output while shedding workers.

http://www.npr.org/2017/01/07/508600239/what-...n-8-charts

It's a reminder that all the usual macroeconomic indicators (unemployment, wages, labor force participation, GDP) can quantify a lot of things in the economy, but you have to dig in to learn about the quality of that economy — what exactly is going on behind those numbers. This decline in goods-producing jobs doesn't signal that the economy is getting worse or better — it's just changing, in this case to become more focused on providing services, instead of goods.

All of this is to say that Trump inherits a job market that is humming along comfortably, given how poor of shape it was in only recently.

But it's also an economy that has sharply moved away from manufacturing and other goods-producing industries — the very ones he pushed the most in the election. That change has hurt plenty of Americans, despite the job market's improvement.

Trump has tried to claim credit for several hundred goods-producing jobs here and there (credit that he doesn't always deserve, as the Washington Post's Philip Bump has reported), but bringing manufacturing employment back in a sizable way seems like a tall order for any president.

Furthermore, alternative work — like driving an Uber or Lyft — continues to grow quickly as a share of the economy. That change could eventually require policy attention, as more workers take jobs that don't come with benefits.

But there's another big caveat here. Presidents get lots of credit and blame for the economy's performance, despite the fact that they don't really have firm control over that performance. (If they did, why would recessions ever happen?)

Yes, a president can push an economic agenda and in some cases push particular policies that end up having a sizable impact on the economy (see: the 2009 stimulus package, which undeniably had a positive impact).

But they also need Congress to enact those policies. Not only that, but the Federal Reserve has its own set of controls — a set to which the president does not have access, despite some conspiracies of politically motivated Fed scale-tipping.

So, like Obama, whatever happens to the economy under Trump, he may not deserve whatever credit he may claim (and the same goes for whatever blame is thrown his way).

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