A few short years ago, it appeared as though the rust belt was doomed to live up to its name: Cities and towns, once booming with factories making quality products in America, now desolated, desecrated, and decrepit. Communities gone overnight with the closure of yet another plant -neighborhoods, shops, and malls abandoned, rundown, and falling apart; the doors to the once busy factories locked shut forever, leaving the vacant buildings they guard to rot and rust. The jobs were gone, and so was the good pay and benefits they provided millions of working class Americans.
Or so that’s what Obama had everyone believe. With no former business experience and a “shoot blindly in the dark” approach to policy, the former President was once famously quoted as saying that manufacturing jobs weren’t coming back unless someone found a “magic wand.” Well, funny thing – Trump says he’s found that magic wand – his business acumen – and the numbers support him. It turns out that the executive branch and its policies greatly influence all aspects of the American economy. Who could have realized that earlier (everyone)?
The more regulations you force upon job creators, like those that require several hundred pages of paperwork to build an extension on your factory, the higher costs will be for companies and they will simply choose to go to countries where they can sell to the US with much less bureaucratic overhead. Having such a high cost to doing business in the US also makes market entry for new companies difficult and expensive, reducing competition and consumer benefits. Trump noticed this problem and acted immediately; in dozens of meetings, he threatened the CEOs of companies using cheap third world labor with tariffs on their goods, closing a loophole many companies used to cheat American workers and incentivising them to make their brands in the USA. Apple, infamous for using third world labor in China where workers are paid pennies a day, has promised to repatriate and invest tens of billions of dollars in the US and build American factories that will be staffed by American workers.
But that wasn’t enough for Trump. He also eliminated many of those excessive, unnecessary statutory regulations. This move helped to bring US manufacturers back to American soil and has lowered the cost of competing in the USA. In addition, US manufacturers are enjoying Trump’s lower corporate taxes. It was critically important for the Trump administration to simplify and lower the corporate tax rate. The previous system’s was tiered and the highest tier had an unbelievably high tax rate of 35%. Don’t fool yourself – few if any multi-billion dollar companies were paying it. They use any and every loophole to avoid paying as much taxes as possible. Lower taxes give them less reason to work so hard to move money out of the country.
The new system has one flat corporate tax rate of 21%, making the US more competitive than many countries, including Canada (26.5%). It’s science: The more you tax someone, the less money you get from them. By placing the tax rate in the low 20%, a “goldilocks” zone, taxes aren’t so high as to eat profit but are high enough to generate trillions in tax revenue. How does that work? The more money a company has, the more it spends, the more people it hires, and the more money makes it back into the economy. It’s a cycle that amplifies itself and it’s good for everyone, including US manufacturers.
Success is in the numbers: Forbes states Trump’s administration has overseen 10 times more manufacturing growth than the Obama administration. US manufacturers created 284,000 jobs in 2018, the highest annual increase in manufacturing jobs since 1997. These jobs are high-paying with good benefits. Running the country like a business yields clear, positive results and Trump is the man responsible for this period of growth and prosperity. A strong economy certainly helps his 2020 reelection.