Glenn tears into economist Paul Krugman’s recent Substack article, “Making Sweatshops Great Again,” which laments Donald Trump’s plan to bring manufacturing back to the United States. Of course, we should manufacture things like computer chips in the US, as Krugman insists. But what’s wrong with bringing sneaker and textile manufacturing back? Would Krugman rather child slaves in China continue making them?

Transcript

Below is a rush transcript that may contain errors

GLENN: Paul Krugman writes, on Manhattan's Seventh Avenue near the corner of 39th Street, there's a larger than life statue of a garment worker, a man wearing a skull cap, hunched over a sewing machine. The statue is a tribute to the locale's history.

It stands in the middle of what's still called the Garment District! After all, in 1950, New York's apparel industry employed 340,000 workers, but that industry is gone now. Not just from midtown Manhattan, but from the United States as a whole!

Having moved to low wage countries, like China, and increasingly Bangladesh. No serious person mourns the off-shoring of the apparel employment.

I do! As someone who would like to wear American clothing, who has tried to help save the Cohen denim company, which made the best denim in the world. They're out. You know why? Can't afford to make it here. You know why? Because we offshored everything. You know why? Because we're stupid, that's why. So I actually do mourn that, but I don't really count in Paul's world, but I digress. For a poor nation like Bangladesh, apparel jobs are a big step up from the alternatives. Even in our heyday, mostly, it only employed immigrants, who despite being represented by powerful unions were paid low wages.

And often faced harsh working conditions. Oh. Wait a minute.

So wait a minute. Let me see if I can get this right. What about your insistence of keeping people here, because they will work for low-paying jobs. You remember jobs Americans won't do. So are you now saying, we will want to get rid of all those low-paying jobs that all Americans won't do? I mean, I'm not with you, Paul.

I'm just trying to understand your reasoning here. I mean, have you changed your mind on that? Is there no one in America that would gladly take a sewing job over scrubbing toilets in a hotel?

Nobody. As I said, no serious person wants the apparel industry to come back. Again, but Donald Trump's economic team aren't serious people.

This come from the biggest clown of my lifetime. Last week, Howard Lutnick, the Commerce Secretary went on CNBC to explain that Trump's tariffs will bring back US production of T-shirts and sneakers and towels.

The host just started laughing at him, because we know when we all know better than he does. And there's no reason to believe that he -- he or his boss think this was a joke. And their nostalgia for industries in the past, seems to be matched by surprising hostility towards the industries of the future.

Oh, okay. All right. Now, we're starting to get good. Again, our hard-working dishwashers. Fruit pickers. Lawn maintenance. Or service style jobs. For people just like you, Paul, that will hire people at a lower wage because they're illegal, and you can get away with anything that you want.

Oops. I mean, you can help them achieve the American dream. Are these jobs nostalgic?

Because with the onset of AI in the next few years, I think they are! But wait. I'm hostile towards AI?

I'm confused, but Krugman goes on.

Now the Trumpiest view of international trade pretty much begins and ends with a view that whenever Americans buy something made abroad, no matter how much cheaper it is, it may be to import a good, rather than try to produce it domestically. And that's a win for foreigners and a loss for America.

No. Paul!

God, you're stupid.

Products that are more inexpensive. Or that are inexpensive, are always a win for Americans. Always. Unless it completely guts our ability as a country to stand on our own.

Also, why should we give so much money to the biggest slave owner country the world has ever known?

Message to you progressives, America is not so bad. Compared to what China is doing currently!

Now, instead of standing up to them, you know, we -- we just want to be independent, so we can!

And I would like to live without the slave labor of some of these countries.

You know, if we're making sneakers here in the US, at least it wouldn't be a line full of children, spraying, you know, led paint on Nike shoes, like it's most likely happening away from our shores. But I digress. Again, by shipping our jobs to China, Paul. Buying our i Phone and socks from China. Are you not doing the same things the elites like you did before and during and even after the Civil War? Well, it will hurt the economy!

We've got -- jobs here in America on our American assembly lines actually allow people to afford college for the next generation or even themselves, to better their stations. Even though you have done everything you can to destroy our universities through your horrible progressive ideas.

And, you know, through government subsidies that you have raised the cost of college.

You know, since we got into the business of getting loans for colleges, guaranteeing those loans. In 1963, tuition was an adjusted -- inflation adjusted $2,487. Now it's almost $10,000. That's an increase of 292 percent. Four times the cost, in real dollars, that was in 1963!

What happened? What changed?

What changed?

He continues. I mean, Trump has slapped high tariffs on Canadian aluminum, which is cheap, because smelting uses a lot of electricity. And Canada has a lot of abundant hydropower, and aluminum is important for US manufacturing. Yet, Trump somehow thinks Canada is exploiting us, by offering us a key industrial import at a good price.

But back to T-shirts and sneakers. We definitely shouldn't be making those for ourselves.

But what should we be making instead?

Well, here's what we are going to be making, Paul. Nothing. We're not going to make anything.

Unless, we have a hard-working, well-educated, motivated workforce, with cheap energy, and the cutting of crazy regulation. In which companies can afford to grow and build.

And want to come here. Because we have the best conditions. And the best labor. And the cheapest energy.

That's what made America, America.

But what you have done, you have killed the well-educated with your support of the teachers unions. And everybody else controlling EDU. You want an example. Just check what you were saying, while our children were out of school, during COVID. Because of your support.

You know, next thing that you cut was the motivated by advocating for higher taxes. More red tape. Plus, out of control labor unions.

You know, where the lazy and the corrupt, they think can't be fired. Can't be fired. You killed motivation.

Well-educated. You killed that one. The motivated, you killed that one. You killed that one. Because not only the red tape. But with DEI and ESG, and CRT programs. You also teach everybody, you'll never make it without us. Why try?

You've killed everything. And do I need to even remind you of your anti-cheap energy lectures? And you love the growth. Energy regulation. Because, oh, my gosh, we have to get rid of our -- we have to get rid of our hydroelectric power here. And take those dams down. Because that's so colonial.

Oh, my gosh.

I can't take this guy. What free trade purist would answer, whatever the market decides, let private firms decide what's profitable in America. And even if you're not a free trade purist. You have to admit the government doesn't have a great record of picking winners.

Oh, my gosh, have you just admitted this out loud, without even knowing this? Your support for the Green New Deal!

Your support for things like, I don't know, Solyndra. Did I miss an op-ed, where you're like, boy, that was a mistake?

Yet I, like many economists, have come around to The View. Listen to this one. This is his big announcement. That maybe we should engage in a limited amount of industrial policy, using subsidies.

Oh, wow!

Paul, the heavens have opened up for you.

You have finally come around to the idea of government subsidies. How refreshing from you.

What a shock. What an unbelievable turnaround for you. You mean to tell me, you've gone from a supporter of the public private partnerships. The green nigh deal that just funds entire sectors.

Big government programs.

To now somebody who can -- who can finally embrace the idea of government bailing out failures.

Wow!

Making partners with private corporations. With our government using the little guy's tax dollars, to give to the billion dollar companies.

Money from the average person. The average working man and woman. Right to the billionaire. Wow, you have come so far, Paul!

You really have!

Good for you. You know, there are two big reasons. Limited industrial policies, back in vogue.

That word isn't even in vogue.

One is that it's become increasingly clear that there are important positive spillovers, between technology firms, Silicon Valley is now more than the sum of the individual companies, located in south of San Francisco.

It's kind of an industrial ecosystem of shared services. A pool of skilled workers. And an exchange of knowledge!

Oh! Paul, you mean like every other industry, somehow?

But this one is different?

I mean, other than Silicon Valley being originally funded by the DOD, CIA, and the federal government, how is this different?

You know, again, other than it was the greatest concentration of wealth, perhaps ever in the history of man.

Think of that. Silicon Valley, probably the greatest collection of wealth in the history of all mankind, we've got to get the government in there to help those poor, starving billionaires.

The -- aren't these the titans. The billionaires. Are they somehow different than the titan and billionaires that have to pay their fair share.

And who are unelected fascists like Elon Musk.

I mean, I'm so confused, Paul.

Are you now admitting that Elon Musk alone is capable of creating, quote, an industrial ecosystem of shared services? A pool of skilled workers. And with his willingness and action, not to patent technology. But to release it. To help the planet.

Is he an important force, that for an exchange of knowledge, it -- wouldn't he be one of those?

If we want America to be competitive and high-tech, we need government policies to encourage the formation of these industrial ecosystems. In other grimmer reasons, we need industrial policy because of geopolitics.

Circa 2010. Listen to this. Circa 2010. No, not many people worried about how much of the world's production of advanced semiconductors, which are now crucial to almost everything, was concentrated in Taiwan. No, Paul!

You weren't! In 2010, you couldn't see over the horizon. You know that quote from Paul Krugman, that you gave me earlier? About the internet.

I mean, you were the one that wasn't concerned about semiconductors and high-powered chips.

STU: 1998. The growth of the internet will slow drastically, as the flaw in Metcalf's law, which states that the number of potential connections in a network is proportional to the squared number of participants becomes apparent.

Most people have nothing to say to each other. By 2005 or so, it will become clear that the internet's impact on the economy has been no greater than the fax machines. That's so good.

GLENN: Well, forget about that.

Now we know the age of large-scale warfare isn't over! And it's dangerous to rely on crucial products and industrial clusters easily threatened by potential adversaries. That -- just that paragraph.

Just that paragraph -- just that, Paul, proves everything else you've said in your stupid op-ed, to be absolutely the opposite.


Or may I just say, duh!

And duh! These realizations lay behind one of the Biden administrations two major pieces of industrial policy legislation. The Chips and Science Act, designed to encourage production, unlike the Inflation Reduction Act, which sought to use industrial policy to fight climate change! Climate change.

The Chips Act has had a substantial bipartisan support. Yeah, it did. It did. As did slavery in the 1800s. As did the rounding of the Japanese under another progressive president.

In fact, wow. So did men can actually be women? Just a couple of years ago. It doesn't make it true, Paul. Even though in an era of intense partisanship, a significant number of Republicans were willing to back the effort, but during his speech to Congress last week, Trump veered off into a demand that Congress would repeal that act.

It's not clear what he has against the Chips Act. Although, according to the New York Times, many semi conductor companies attribute his hostility simply to personal animus to former President Biden.

Yeah. You can't think of another thing, that might make him against the Chip Act.

It's weird, Paul.

I went to an expert, I trust more than you. Grok!

And asked it, besides personal animus, why might the president be against the Chips Act? I'll share that answer with you, Paul.

I can't figure out, other than his personal animus against former President Biden, why he would be against the Chips Act. Uh-huh.

Thank you, Paul Krugman. So I just went to Grok, and I said, is there another reason besides personal animus, that President Trump might be against the Chips Act?

Here's what Grok told me today. Cost, and perceived wastefulness.

Trump has described that the Chips Act is a horrible, horrible thing, that involves giving hundreds of billions of dollars to companies without sufficient return.

From this perspective, he might view the $52.7 billion in subsidies, plus additional lending authority. As an inefficient use of taxpayer money.

If his goal is to save America, he could argue these funds might be better directed elsewhere.

Two, preference over tariffs for subsidies. Trump has constantly advocated for tariffs as a tool to incentive domestic manufacturing, claiming they could achieve the same outcome as the Chips Act, bringing the semiconductor to the United States without the government spending any tax dollars.

Let me point to Taiwan's semiconductor manufacturing company. Increasing its US investment. As evidence that these tariffs, or the threat of them are working.

From his viewpoint, this approach avoids handing out money to wealthy corporations. Aligning with a belief that market pressure is a more sustainable way to bolster American industry.

Three, skepticism of corporate giveaways. I don't know.

Paul, that sounds like something that you would say, as you're shipping your country -- right there, on the porch in your rocking chair. Thinking, I'm so smart!