Thomas W. Pauken II speaks at the Tsinghua School of Journalism and Communication (GBJ photos by Rick Dunham)
By CHEN HONGXIN
Global Business Journalism reporter
The American economy has been hollowed out by Wall Street wolves who have made trillions of dollars in profits while middle class workers and Main Street merchants have lost out to foreign competitors in a corrupt bargain that has benefited multinational corporations and globalist elites, a Donald Trump ally told Global Business Journalism students at Tsinghua University on March 11.
Thomas W. Pauken II, an economic policy analyst and senior fellow at the America First Asia Institute, said the high-tariff, sharp-retaliation trade policies of the Trump administration are designed to bring jobs back to American soil and strengthen the middle class, which has been battered by decades of stagnant wages and lost manufacturing jobs.
“‘America First’ is about making America strong for America,” Pauken told the students.
Pauken predicted an eventual revival in domestic manufacturing under Trump’s America First approach, although he acknowledged that a recession was highly likely in the short term in response to the global trade wars. Pauken, who has long supported Trump’s economic approach, said strengthening domestic manufacturing would eventually create an economic boom that would bring sustainable prosperity to the American masses.
“We believe that when you boost the U.S. manufacturing, improve the U.S. economy and move in the direction of the real economy, a Main Street economy, not a Wall Street economy, this is going to create more opportunities for a stronger middle class,” he said.
Trump’s policies during his first two months in office have included imposing tariffs on major trading partners such as China, Mexico, and Canada, offering tax incentives to domestic manufacturers, and reducing government regulation and environmental oversight. He has promised to increase infrastructure investment to support industrial growth, but it may be difficult amid major cuts to domestic discretionary spending.
One of the pressing challenges in “reshoring” jobs and reviving the U.S. manufacturing sector lies in workforce preparedness, he said. Pauken stressed that education and vocational training would be key to ensuring that American workers are prepared for the next wave of industrial development.
“You have to provide education programs so that workers can learn how to build better robots and handle automation,” Pauken explained, citing China’s technical training programs in Africa as a model for equipping workers with the skills needed for modern manufacturing.
He emphasized that while China places a strong emphasis on academic achievement, American workers would benefit more from vocational and hands-on training.
“My granddad could fix a home,” Pauken recalled. “He was amazing with plumbing. It was his hands that did everything. There’s a culture of blue-collar work in America that’s stronger than what we’d even see in Asia.”
Pauken stressed that the key to revitalizing the American economy lies in shifting focus from Wall Street to Main Street and reducing the power of the military-industrial complex and profits-over-people Wall Street elites.
“The core problem of America was the corruption,” Pauken said. “Finance was also part of the corruption, part of the problem.”
He added that Trump’s push to reinvigorate manufacturing would shift economic power away from financial elites and back toward the working class.
However, a wide range of economists, from liberals to some conservative Republicans, call Trump’s approach a radical gamble with America’s future. They compare it to the disastrous protectionist policies of the early 1930s that created international economic chaos and plunged the United States deeper into the Great Depression.
Former Trump economic advisor Stephen Moore recently criticized the president’s policies, calling them “misguided” and warning that they could destabilize the American economy.
“The economy is wobbly,” Moore said on Fox News’ program “Sunday Night.”
Trump’s “America First” mantra, including bringing manufacturing jobs back to the U.S., has stirred up concerns about a possible “Trumpcession.” His aggressive tariffs on major trading partners already have raised production costs for manufacturers and created uncertainty in global supply chains. This uncertainty has spilled over into the financial sector, with market volatility increasing as investors worry about slowing economic growth. Major U.S. financial markets last week entered “correction” territory, meaning that their values had declined by more than 10% from their most recent peak.
Some analysts fear that the combination of higher costs for businesses and unstable trade relations could push the U.S. into a recession. If manufacturing weakens under the pressure of tariffs, financial markets could see sharp downturns, leading to reduced investor confidence and tightened credit conditions.
Trump pointedly declined to rule out the possibility of a recession in a recent interview with Fox News Channel’s "Sunday Morning Futures” program. But he predicted that any pain would be followed by economic greatness.
“There is a period of transition because what we’re doing is very big,” Trump declared. “We’re bringing wealth back to America.…it takes a little time, but I think it should be great for us.”
In his appearance at Tsinghua, Pauken remained confident that with the right mix of policy support, technical training, and strategic planning, the U.S. can reclaim its position as a global manufacturing leader. Pauken defended Trump’s approach, noting the importance of focusing more on everyday workers, middle class and small businesses.
“Trump’s a leader I support because I believe that the corruption in America has gotten so bad,” Pauken said.
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