I was born in Pittsburgh, Pennsylvania, where my extended family had lived for three or four generations. My family moved to Southern California in 1966. We visited family (in Pittsburgh) the year I graduated high school in 1979, where I had the opportunity to witness the “rust belt” firsthand.

I recall driving through Allentown at the time and thought how depressing an existence. Shuttered steel mills, auto parts fabricators, and textile companies, people seemingly living without purpose. A picture out of a John Steinbeck novel.

The decline in manufacturing jobs only accelerated since, with an increasing number of good paying middle-class jobs shifting to lesser-paid, lower-class service jobs. This is a 40+ year story of American decline.

There are many components of this decline — the shift to a global market, foreign competitors subsidizing industry, currency manipulation, Union demands for above-market wages, over-consumption.

I was somewhat confused by the president’s love for tariffs (and the word) and the fullness of their rationale, until I watched Tucker Carlson’s interview with Bob Lighthizer, adviser to President Trump.

Bob Lighthizer speaks of growing up in a small Ohio town (Ashtabula, OH), which struck me as being very similar to the experience that I had when visiting Allentown. He recalled living in a town where children were proud of their parents who felt a sense of dignity in their work, and where parents envisioned a future for their kids where they could earn a decent wage and become productive members of society. He spoke of seeing plants shutter and jobs disappear, and the quality of life in his small town decline. He and Tucker agreed that this wasn’t just an Ashtabula issue, but had occurred across the country.

Bob Lighthizer makes the case for tariffs:

Carlson: Thank you for coming on to explain. I believe in what the White House is doing (i.e., Tariffs). I don’t think enough Americans understand it.

Lighthizer: Has the system (globalization) failed, and the answer to that for me is an empathic yes.

To Donald Trump’s credit, he’s thought about this, talked about since he was 35. He’s said it often and what I think is the essence of Donald Trump, that he thinks we’re being ripped off, it’s not that they’re lazy or stupid, it’s that we have a bad system, and it’s destabilizing the country.

Once you realize that, you realize that you have to do something.

After National Security the purpose of the economy is to distribute resources and wealth so that the most Americans can live the best lives possible. We have lost that. We’ve just plain lost it.

We’ve seen a real deterioration in the quality of life of our working-class people. Two-thirds of American workers have a high school education, only. We’ve seen these people lose their jobs. We’ve seen their wages stagnant for 25 years. You’ve seen them have shorter lives. They are poorer. We’ve seen despair increase. All of this is the result of this failed attempt at globalization.

There’s a concept of the financialization of America. What they (Wall Street) cared about was price optimization and how much people consume. They didn’t care about (as a first principle) the benefit or detriment of the American people.

The end of George Herbert Walker Bush’s term and into Bill Clinton we (America) pursued the trifecta of stupid. We do NAFTA, we do the WTO, and then the dumbest of them all in giving most favored nation treatment to China. We had 5 million manufacturing jobs lost. Real wages have not gone up since.

When you lose manufacturing, you lose innovation. According to a study, America is behind China in 57 of 64 critical technology development criteria. We’ve fallen behind technologically.

I have complete confidence that the President will do what he said was going was going to do (re: tariffs & trade re-balancing). He ran on big ideas. You have to put tariffs in place to offset this unfairness. When you do that, I do not think that you’ll have inflation in a systemic, fundamental way, but will have people in the supply chain that will have to make adjustments.

Over a reasonably short period of time, I think you’ll see a manufacturing renaissance, these new jobs, wages will go up. I’m praying for wage inflation. It will naturally (market) transfer wealth from the finance-class to the middle-class, wage earner.

Tariffs in order to get us to balance, or reciprocity, is targeted to resolving the issue of unfairness.

The president (and Lighthizer) are sold on the idea that tariffs will create a golden-age for America. There are countless “experts” who are denouncing tariffs as being a tax on imported products. President Trump, Lighthizer don’t think so. Domestic and foreign companies have committed $4.4 trillion since the president’s inauguration.

The interview is worth the time.

Image: TCN video screen grab.