Moneybeat: rebate checks and manufacturing reports

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MYRNA BROWN, HOST: Next up on The World and Everything in It, the Monday Moneybeat.

MARY REICHARD, HOST: Time now to talk business, markets, and the economy with financial analyst and adviser David Bahnsen. David heads up the wealth management firm The Bahnsen Group. He is here now. Good morning to you, David.

DAVID BAHNSEN: Good morning, Mary, Good to be with you.

REICHARD: President Trump said on Friday he’s considering rebate checks for Americans—funded by the billions of dollars in tariff revenue he says is coming in. The idea plays into his bigger political message: that tariffs protect American jobs and rebuild U.S. manufacturing.

But that’s where things get complicated. Because David you’ve pointed out that U.S. manufacturing output is actually strong—even 50 percent higher than it was thirty years ago. The number of manufacturing jobs has dropped significantly, and that seems to hit at the concerns the president is tapping. Why is there so much confusion between output and employment in this space? (Where do you think is the disconnect?)

BAHNSEN: I think the heart of the matter is that we're able to make more with less, and the reason for that is technology. The reason for that is enhanced productivity. It's a more efficient system and world that we live in, and the output now is able to grow without more people involved.

And along those lines, there's a significantly declined appetite for manufacturing, jobs, services. Jobs have been much more attractive, and in a lot of ways, as I've studied this historically, Mary, what's happened in manufacturing is very similar to what manufacturing itself did to agriculture, is it surpassed it as a contributor to economic growth and surpassed it in terms of the attractiveness of job opportunities. We actually have 500,000 open jobs in factories, but not a lot of people that want to fill those.

The issue on the rebate check rhetoric. There is no rebate check to offer anyone from tariff revenue because we are running $2 trillion annual deficits that are about to go higher. Baked into the new big, beautiful bill in the CBO projections is a significant amount of tariff revenue. And so the idea that we would be giving money back to taxpayers is simply a cash advance on the credit card.

Ultimately, the various rationales that have been offered for tariffs that they are a revenue generator, or that they will protect us jobs, which, of course, if they were doing that, it would mean they weren't a revenue generator, because we wouldn't be importing from overseas, or that they have to do a national security or other issues. There's a lot of different rationales, and each one can be kind of gone through one by one, but they can't all be the rationale at once. Some of them are quite contradictory, and so certainly the revenue issue and the idea of giving money back to taxpayers, it fits into some of the populist ideas that are in vogue right now. But it is not going to happen, and it most certainly shouldn't happen.

REICHARD: You pointed out we have a lot of open jobs in manufacturing—but they’re not being filled. So you argue that the real problem isn’t a lack of jobs, but a mismatch between what people want and what’s available. What would you say is the future of work in America?

BAHNSEN: You're very right that there is a mismatch of jobs available and what people are looking for. There's also, though further complicating it, a mismatch of skills that I'm sure we could find 500,000 people that would take a job in a factory, but not 500,000 whose skills and training qualifies them for that job.

And one of the things that I just think has become so abundantly obvious, I can't believe it is not a bipartisan, piping-hot priority for public policy, is to stop with these college degree requirements for some of these jobs and certifications and trainings, and really advocate much more for a vocational training situation where there are various jobs and certifications and and training requirements that could get filled outside of the university system.

And why, if we're going to be giving taxpayer dollars in student debt for people to go take sociology classes at a state university, I don't understand why that same program wouldn't be applied to not only the welders and electricians and other things that frankly, there is a lot of job demand for, but why it wouldn't apply to these unique factory and high tech manufacturing jobs. that's That's where America shines. Those are higher paying jobs, though there is demand there, but we need to fill that gap, and I am at a loss as to why this is not a bigger priority for the American public.

REICHARD: David, you’ve said that top-down government planning will not solve our labor challenges like these—but rather market forces. And, this is what has my attention, even deeper than that, spiritual health. That’s not something we usually hear in economic conversations, although we do hear it a lot from you. Say more about that.

BAHNSEN: Well, the reason you hear a lot about it from me is not just merely me sprinkling my personal faith convictions into the arenas that I work in and care about, like finance or economics, or policy, but because I don't believe that we can address these issues apart from a worldview that has a coherence to it. And I don't understand economics apart from some of these spiritual truths that guide economics and that teach us and inform us what we need to know about them.

So to the extent that I believe work is a byproduct of the way that God created mankind, that we possess certain attributes as a result of being an image bearer of God—made with dignity and his image and likeness—therefore, that informs my view of mankind as a producer, as a productive creature. And I think that economics is best understood when we know these things about the human person.

The convictions I have about work are ethical, they are theological, but they are creational. And all of those things together formulate the economic understanding of man, and therefore the economic understanding of work.

So I believe a very secular and unChristian idea is that mankind needs to work to provide and then would work as little as possible. That the work is there just to meet the basic needs and and once those needs are met, that this idea of what they call Homo economicus man, that we're then going to really search for the thing that would enable us to then go find the most pleasure in recreation and leisure. I believe it's theologically flawed. It fails to understand the fulfillment mankind gets, the flourishing made possible by work, by productivity.

REICHARD: All right, David Bahnsen is founder, managing partner, and chief investment officer at The Bahnsen Group. He writes regularly for WORLD Opinions, and at dividend-cafe.com. David, thank you so much. We’ll see you next week.

BAHNSEN: Thanks so much, Mary.

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