Peddle competing messages

Trump, Pence peddle competing economic messages

Pence has spent years touting Indiana's economic progress, a message clashes with Trump's picture of a crippled nation.

By Matthew Nussbaum and Ben White

Donald Trump looks at the economy and sees a “crippled” America, a nation ravaged by incompetent leaders who’ve betrayed the working class — specially in the rust belt, ground zero for the loss of manufacturing jobs.

But one of those rust belt governors, Indiana’s Mike Pence, has spent years touting his state’s economy, noting a drop in unemployment, an increase in factory jobs and a growing workforce.

They can’t both be right, and now that they’re sharing a presidential ticket and looking to communicate a coherent economic message, Trump and Pence are going to have to reconcile the contradiction. It’s a difficult needle to thread, because if Trump wants to claim that Indiana is a Pence-inspired bright spot in an Obama-blighted nation, he’ll have to explain Indiana’s economic climate is strikingly similar to the rest of the U.S.

Indeed, much of what Pence — and more recently Trump — tout about Indiana’s economic strength is supported by economic data, but those same sources point to similar positive trends nationwide. And Trump was not always so high on the Hoosier State’s prospects, particularly when he was campaigning there during the GOP primary.

“Few states in America have seen income declines more than Indiana. Now, one of the reasons, is because our jobs are being gone. Indiana has lost one in five manufacturing jobs since China joined the World Trade Organization,” Trump said during an April 20 rally in Indianapolis ahead of the state’s nominating contest in early may.

“The businesses are being sucked out of our country,” Trump declared a week later in Evansville, Indiana. “And if you look at New York, you look at Indiana, you look at Pennsylvania, you look at all of them … they all have one thing in common. No matter where you go, it’s like 40 percent, it’s like 50 percent, 60 percent, jobs are gone.”

But by July, as Trump introduced Pence as his running mate in New York, he said that the “primary” reason he picked the governor was Indiana’s economic performance.

“One of the primary reasons I chose Mike was I looked at Indiana,” Trump said. “Indiana, their unemployment rate has fallen.”

“I’ve gone around to all these states…and every time I have statisticians,” Trump said. “I say give me the stats on a state. And it’s always bad. Down, down, down. Down 40 percent, 50 percent, 60 percent in some cases. Here’s somebody where it’s gone up. Private sector job growth is up by more than 147,000 jobs since 2013, that’s, like, very unusual.”

Trump is wrong — it is not, in fact, unusual at all.

Through May 2016, Indiana had enjoyed a 9.1 percent increase in private sector jobs since January, 2009 – a solid gain, but less than the 9.3 percent gained nationally, according to data from the Congressional Joint Economic Committee. On that front, Indiana did outperform most of its Rust Belt neighbors, with the exception of Michigan, which has seen a 12.7 percent increase in private sector jobs. But lengthening the timeline to December 2007, before the Great Recession, tells a slightly different story. Over that period Indiana has seen just a 3.2 percent increase in private sector employment – well below the 5 percent increase nationally.

The Trump-Pence ticket message reconciliation depends primarily on a point of near universal agreement among Republicans: the bulk of the blame rests with President Barack Obama.

Trump and Pence argue that Indiana’s strides have been made despite the Obama administration’s policies, and it is an argument Indiana Republicans are quick to echo.

“I think we’re doing very, very well in Indiana. I think we’re a model for states across the country,” Patricia Miller, a long-time state senator, said from the convention floor in Cleveland. But, she added, “it would be doing much, much better” if not for Obama’s policies.

“What we’ve accomplished was done in spite of the policies of the last 8 years. Just think what we can do when state and federal policies are aligned,” said Eric Koch, a state representative from south central Indiana. He called the state’s economy “the envy of the nation.”

The state’s budgetary health and AAA bond rating are certainly major accomplishments, and Pence is quick to point to them. He also touts the state’s expanded labor force.

“Indiana is a state that works because conservative principles work every time you put them into practice,” Pence said during his convention address after ticking through those and other accomplishments.

But the story in Indiana is similar across much of the country, complicating the Republican ticket’s message that the economy is a mess and getting worse. Joblessness is half what it was at the height of recession and wages, after languishing for much of the recovery,are starting to rise more quickly. Wages grew at a 2.6 percent pace in June, the fastest rate in six years as the economy approaches full employment.

Over the past year, the total U.S. labor force has grown 1.2 percent, while Indiana’s has increased by 3.4 percent, one of the biggest increases in the country, according to data from the Indiana Business Research Center. Still, it would be hard to argue that Indiana somehow stands alone. Oregon’s labor force has grown by 4.6 percent over the same period and Delaware’s by 3.4 percent – and neither of those states are being bandied about as a model for conservative policy-making.

In June, Indiana’s unemployment rate was 4.8 percent, just a hair below the national rate of 4.9 percent. Twenty-six states – including such liberal bastions as Vermont, Minnesota and New York – registered lower unemployment rates than Indiana’s. Rust Belt peers like Iowa, Wisconsin and Michigan also had lower unemployment rates.

For Trump and Pence, the potential economic messaging woes don’t end there. A signature issue for Trump is trade, and he has railed against the North American Free Trade Agreement with vigor, blasting those behind it as incompetent. Opposition to the proposed Trans-Pacific Partnership is, along with the border wall, among his most specific policy proposals.

Pence expressed support for TPP has recently as 2014, and was a vocal cheerleader for NAFTA’s success.

Taking to the House floor in late 2001, Pence praised the good NAFTA had done for Indiana while advocating the approval of trade promotion powers for President George W. Bush.

“Indiana benefited directly under the North American Free Trade Agreement,” Pence said. “You can see that our existing trade agreements have truly benefited Indiana and the United States.”

In 2015, the leading recipients of Indiana exports were Canada, Mexico and Japan, according to the Department of Commerce. Exports from the state totaled $33.7 billion that year, and exports support nearly 200,000 jobs in the state.

Pence, of course, is not the only elected official to claim some responsibility for Indiana’s success. When Obama decided to give an address on the nation’s economic progress a few months ago, he chose Elkhart, Indiana as the venue. He had visited the town early in his first term, when it was gripped by the recession and saw its unemployment rate near 20 percent. It has since recovered and has an unemployment rate below the national average.

The recovery, he argued, owes much to his administration’s efforts.

“And we can see the results not just here in Elkhart, but across the nation,” he said that day. “By almost every economic measure, America is better off than when I came here at the beginning of my presidency. That’s the truth.”

Still, a better economy does not mean everyone is better off — and it’s still a climb from a deep hole, which may explain why Trump’s economic message resonated so strongly with voters in the primary.

“The U.S. economy is performing well and has made it all the way back from the depths of the recession,” said Mark Zandi, chief economist at Moody’s Analytics. “But because we’ve been in a hole so long, people have begun to believe they will never get out. But we are right on the edge of doing exactly that and people will probably feel a lot better a year from now.”

And Trump and Pence still have an opportunity to capitalize on bad feelings about the economy created by the recession. And while indicators in many key swing states are on the rise, there are still pockets of significant manufacturing weakness across the Rust Belt including in Ohio, Pennsylvania and Illinois, giving the Clinton campaign reason for concern.

“Those areas of weakness are going to be very difficult for the rising economic tide to lift because those economies are thin and there is not a whole lot going on,” Zandi said. “These people truly have been left behind and the economy is not working for them.”