The latest concept liberals don't get
There's a standard playbook for commentators. Find a situation that can be construed as a problem. Spin it into a crisis, then blame President Trump. Conservatives need to respond or these ginned up crisis will reverberate in the media echo chamber. David Brooks of the N.Y. Times and Public Television gives us a perfect example.
It is a fact that in the initial reporting, foreign direct investment (FDI) in America in 2017 was 32% lower than 2016. That is a single data point, which is part of a bigger pattern. We'll look at the pattern shortly, but first, here's how Mr. Brooks spun that one fact on the Newshour.
"You notice two things when people – from talking with people, especially in the business community, from around the world." "The first is, the U.S. is now becoming like this black hole, that they just don't want to get involved. And there are plenty of ways to invest in China. There's plenty of ways to invest in Africa or Europe or Asia. So why get involved in the U.S.? And, as a result, foreign direct investment is plummeting here."
"They just don't want to be involved with Trump. They just don't want to be." "And they get the sense that America is no longer the central nation. It's the [inaudible] the U.S. is imploding. And so you – we should be seeing surges of people who want to invest here. Our economy is doing pretty good. But we're not seeing that."
Twenty-fourteen was a typical year for FDI. It totaled $212 billion. In 2017, FDI was originally $260 billion but has been revised upward to $292 billion. Growth of $80 billion over three years is neither a plummet nor an implosion. In fact, 2017 was the fourth strongest year in the last decade. The number demonstrates that people, whom Brooks apparently doesn't talk to, are investing here at a normal rate.
Here's what happened between those two years. There was an 82% explosion in 2015, taking the number to a mammoth $477 billion. Twenty-sixteen brought a slight leveling to $468 billion. According to the Organization for Economic Cooperation and Development, this spike was due to corporate restructuring brought about by unique circumstances. Stock market behavior should teach everyone – even David – that large swings in investments are usually followed by a correction...like, you know, this one.
Brooks isn't buying. People have convinced him that FDI fell in America because investment grew all around the world in places where there is no Trump. That's where the smart money goes. It's hard to dismiss the feeling that Brooks is being hustled into exotic offshore investments.
See if you get the same feeling when you realize that the FDI drop-off in 2017 was a worldwide phenomenon. When restructuring slowed, so did FDI. No other nation benefited by the drop in U.S. FDI. Brooks's black hole didn't just nibble on America. It swallowed the planet.
Investment capital, like all economic resources, is scarce. It's likely that capital is being replenished after so much of it was lavished on America. As more capital is created, more of it will be invested in America. If you have doubts, consider this: in 2018, "[t]he United States tops the Foreign Direct Investment (FDI) Confidence Index for the sixth year in a row" (bold in the original). In the first quarter of 2018, FDI in America grew by a healthy 10%. That should silence the echo chamber.