Bernanke: Trump's pledge to revive U.S. manufacturing is "not realistic"
Former Federal Reserve Chairman Ben Bernanke is challenging President Donald Trump's claim that manufacturing jobs in industries such as coal mining can make a comeback in the U.S.
"We're not going to have people on assembly lines putting cars together anymore, because we have robots," Bernanke said in an interview with CBSN where he discussed his new book, "The Courage to Act: A Memoir of the Financial Crisis and Its Aftermath. "We don't need as many coal miners because we have other forms of energy and cleaner forms of energy."
Instead, Bernanke suggested, "What we need to do is bring people into the growing sectors and have them find good, well-paying jobs in those growing sectors."
On the campaign trail, Mr. Trump repeatedly touted the return of manufacturing jobs and vowed to boost annual annual economic growth to at least 3 percent. More recently, U.S. Treasury Secretary Steven Mnuchin has expressed confidence that the U.S. can sustain growth at that level.
According to the Bureau of Economic Analysis, the last time the nation's gross domestic product – the total value of goods and services – reached at least 3 percent was 2005.
Bernanke said that target will be hard to hit for a number of reasons, including an aging population, a slowdown in worker productivity, and the rising gap between rich and poor. Those issues will require a basket of policies to remedy.
"No single policy is really going to change the ballgame," said Bernanke, citing government investment in education, worker training and R&D as policies needed to boost Americans' economic mobility.
Bernanke also pushed back against claims by Trump administration officials that a plan to slash taxes for businesses and individuals will be fully offset by stronger growth. Many economists say the proposal would reduce federal revenue by more than $2 trillion over 10 years.
"I don't think any serious nonpartisan analyst of tax cuts would suggest it's going to pay for itself," Bernanke said.
Still, the former Fed chief, who led the central bank from 2006 to 2014, said there are other ways to boost growth, including increases in infrastructure spending. "Better bridges, roads, schools, all the things on the infrastructure side" that would boost productivity and long-term growth.
Mr. Trump repeatedly promised to revitalize America's infrastructure during his presidential campaign, and he's repeated it often since he took office.