Just recently, Bloomberg ran a fascinating article discussing a new study from the McKinsey Institute.

“American manufacturing could be poised to rebound as technological disruption shakes up global production chains, but that will offer little relief to displaced factory workers, according to new research by the McKinsey Global Institute.

Now, McKinsey sees conditions changing in a way that could favor U.S. producers: automation is weakening the case for labor arbitrage as wages rise in emerging market economies and developing market residents are coalescing into a new consumer class, among other factors.

While the U.S. could seize on those manufacturing growth opportunities, especially if the government and companies invest to make production more competitive, there are catches. Importantly, production might bounce back without bringing a lot of jobs in tow.

‘Even if we rebuild factories here and you build plants here, they’re just not going to employ thousands of people — that just doesn’t happen,’ said report co-author and McKinsey Global Institute Director James Manyika. ‘Find a factory anywhere in the world built in the last 5 years — not many people work there.’”

McKinsey is absolutely correct. While the President recently started a discussion on “Buy American,” most of the root belief in the efficacy of tax cuts, tax reform, and nationalism is rooted in the history of “Reagan-omics.”

The thing most overlooked by the majority of economists, politicians, and commentators, is the stark difference in the underlying economic and monetary fundamentals which provided the massive tailwind Reagan’s policies that simply don’t exist currently. As my partner, Michael Lebowitz, illustrated previously:

“Many investors are suddenly comparing Trump’s economic policy proposals to those of Ronald Reagan. For those that deem that bullish, we remind you that the economic environment and potential growth of 1982 was vastly different than it is today.  Consider the following table:’”