(What’s Left of) Our Economy: Manufacturing’s Real Wage Recession Keeps Lengthening


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Whether it’s because of unskilled, unproductive newbies or continuing jobs offshoring or (as likely) some combination of these and other trends, today’s real wages figures from the Bureau of Labor Statistics can’t be read as good news for American manufacturing workers. For it means that the lengthy technical real wage depression they’ve been suffering on average just got longer.

Because of a 0.37 percent monthly drop in October – the biggest such falloff since August, 2017 (0.64 percent) – inflation-adjusted hourly pay in manufacturing is now down on net since December, 2015 (by 0.19 percent). That’s one month longer than this slump had lasted as of the previous data in this series, and a decline that’s lasted far longer than the definition of a technical recession: a cumulative decline over at least two consecutive quarters.

Another measure of manufacturing’s pay doldrums: After-inflation hourly wages are now back to exactly their level in June, 2009 ($10.72), when the current recovery began. That is, they’ve made absolutely no progress over a more than nine-year period.

Moreover, the October figures indicate that current-dollar manufacturing wages will weaken further before they start strengthening. In particular, the 1.11 percent annual decrease was the biggest such deterioration on a relative basis since October, 2012’s 2.09 percent nosedive. By contrast, between October, 2016 and October, 2017, real manufacturing wages dipped by only 0.28 percent.

The real wage news for all private sector workers was better – but not by much. On month in October they were down 0.09 percent (their first such drop since February). On an annual basis, though, they rose by 0.65 percent. And meager as that is, it was the best yearly performance since January (0.66 percent), as well as a substantial improvement over the previous October’s 0.19 percent.

As a result, though, inflation-adjusted private sector wages still have advanced by only 4.75 percent since the current economic recovery began in mid-2009. And whether justified by inadequate skills levels or not, for an economy that remains strongly dependent on consumption for its growth, that doesn’t sound like a formula for lasting prosperity.


(What’s Left of) Our Economy: Early Signs of Manufacturing Trade Progress Under Trump


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Since President Trump has focused so much of his trade policy on reducing America’s enormous and chronic deficits, it’s not surprising that the press has noted that, under his presidency so far, the trade gap has widened.

And oddly, in one respect, they just got some data showing that in the one area where the President had been able to claim progress (but hasn’t to my knowledge) – slowing growth in the deficit despite accelerating growth in the economy as a whole. As of the last monthly U.S. trade figures, the trend has once again gone south, though the economy’s still strong growth plus a stronger dollar – which makes American-origin goods and services more expensive than their foreign counterparts – are no doubt overwhelmingly responsible.

But a closer examination of the statistics reveals an important new front on which Mr. Trump’s efforts appear to be succeeding – manufacturing trade, which still dominates overall U.S. trade flows. Specifically, signs have emerged that, under his administration, domestic manufacturing is regaining the ability to boost output without relying more and more on inputs from foreign factories (which of course boost the trade shortfall) In fact, during the Trump administration’s first full data year, American manufacturing’s production has grown faster than its trade deficit – indicating that domestic goods have been replacing imports. And this progress has been made despite a speed-up in manufacturing production growth, and that stronger dollar.

Continuation of this trend would be great news for the nation’s economy. Further, it would represent a major departure from the record of the previous administration, during which the growth of the manufacturing trade deficit vastly exceeded industry’s own growth.

Actually, manufacturing trade deficit has been greatly outgrowing the sector’s output for nearly twenty years. In 2000, the trade gap represented 25.54 percent of total domestic manufacturing production (according to an output measure called value added). As of the second quarter of this year (the latest available data), that figure stood at 42.02 percent. In absolute terms, the trade gap increased by a factor of 2 and a half, while manufacturing production grew by a little over 50 percent. (All figures are stated in pre-inflation dollars.)

But this manufacturing trade deficit’s “out-performance” really took off during the Obama years. Let’s give the former President’s trade record a break by throwing out the data for the first year of the economic recovery (and his first year in office). After all, the global trade contraction during the last recession was so dramatic that the trade “snapback” effect once the recovery began was unusually strong, and couldn’t last.

From 2010 through 2016, however, while American manufacturing output advanced by 16.04 percent, the manufacturing trade deficit jumped by 52.47 percent. That’s more than three times faster. In fact, between 2015 and 2016, the manufacturing trade deficit increased by 3.23 percent even though manufacturing output actually fell by 1.78 percent.

Between 2016 and 2017 (the Trump administration’s first year), the manufacturing trade deficit rose less than twice as fast (7.31 percent) as industry’s output (4.53 percent). And I don’t think it’s coincidence that this manufacturing growth rate represented the best annual performance since that first recovery year of 2009-2010 (5.58 percent), which was surely strengthened by the aforementioned snapback effect.

We only have partial 2018 figures, of course, but they show even more improvement along these lines. Between the second quarter of last year and the second quarter of this year, manufacturing output was up a sizzling 8.08 percent. But the manufacturing trade deficit grew more slowly – by 7.83 percent. That combination hasn’t been seen since 2012-2013, when industry’s output improved by 3.36 percent while the trade gap widened by only 0.77 percent.

The following year, though, manufacturing’s trade shortfall soared more than four times faster than its production. For all I know, this coming year could be a repeat of that depressing precedent. For now, however, it’s definitely evidence that the Trump trade and manufacturing policies are winning.

(What’s Left of) Our Economy: Manufacturing Jobs Update – & the Wage Mystery Solved?


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All the commotion surrounding last week’s midterms elections – and their continuing aftermath in places like Florida – make it all too easy to overlook the details of the latest U.S. government report on the country’s employment situation. These most recent results are worth examining because the dominant trends of the last few months – encouraging job creation and discouraging wage numbers – have remain so persistent that it may be time to consider a new explanation that I, anyway, have been skeptical of for months.

First, the data.

Domestic manufacturers created 32,000 net new jobs in on month in October – the biggest sequential increase since last December (39,000). Indeed, employment gains have been so healthy lately year that manufacturing’s share of total non-farm employment (the U.S. government’s jobs universe) hit its highest level (8.537 percent) since August, 2016 (8.533 percent).

Year-on-year, as of October, manufacturing payrolls grew by 296,000 – a pace nearly double that achieved between the previous Octobers (152,000). Further, that yearly increase was the second best since February, 1998 (311,000). And the very best annual performance since February, 1998 came in July (300,000).

As a result, American industry has now regained 1.332 million of the 2.293 million jobs it lost from the late-2007 beginning of the last recession through its latest employment bottom (in February and March, 2010). That is, 58.09 percent of those lost jobs are back.

Not that manufacturing employment doesn’t have a long way to go, especially compared with the rest of the private sector. It’s still 6.99 percent below those recession onset levels – whereas overall private sector payrolls are 9.75 percent greater. And since its own last employment bottom (February, 2010), the private sector has regained 20.103 million of the 8.785 million it had lost during the worst of the downturn – an increase that’s nearly four times as great as manufacturing’s. But it’s tough to deny that industry’s hiring performance is on the way up.

But manufacturing’s wage picture keeps looking completely different. October pre-inflation wages growth…wasn’t. Hourly pay was the same as in September. The private sector’s October monthly wage gain wasn’t terrific either. In fact, at 0.18 percent, it was the lowest since February’s 0.11 percent. But it still left manufacturing in the dust.

The annual increases make manufacturing’s wage laggard status even more obvious. At 1.46 percent, it was below that between the previous Octobers (1.67 percent), and the worst such figure since July’s 1.31 percent.

By contrast, private sector current-dollar annual wage growth in October was 3.14 percent. That was not only considerably faster than the October, 2016-October, 2017 increase (2.28 percent). It was the best such performance since April, 2009 (3.37 percent), in the midst of the recession.

Further, the widening of the private sector-manufacturing pay gap continues. From the mid-2009 beginning of the current recovery (in economic growth, if not employment, terms) through last October, pre-inflation private sector wages had increased 21.71 percent faster than their manufacturing counterparts. As of this October, the difference was 30.05 percent.

In absolute terms, since the recovery began, private sector wages are up 23.31 percent, versus only 17.77 percent for manufacturing.

Actually, it’s not just sluggish manufacturing wage growth amid strong job creation during this economic expansion that’s puzzled economists. It’s been a mystery for the entire private sector. But one explanation for manufacturing’s poor performance is starting to win me over, at least in part, and a clue comes from that robust year-on-year rise in manufacturing pay during deeply recessionary April, 2009.

At that time, of course, manufacturers were shedding jobs like mad. So why was pay going up? According to many manufacturing executives I spoke with at the time explained, they were letting go of their least experienced (and worst paid) workers – therefore, wages per worker seemed to be rising even though those workers’ paychecks themselves weren’t actually growing. Better paid workers had simply become a greater share of manufacturing’s total.

As explained to me by John Carney, the economics and finance editor over at Breitbart.com, something like the inverse may be taking place now: manufacturing companies have had to reach so deeply into the potential labor pool to fill positions that they’ve needed to hire many employees with subpar levels of skills and education, and who therefore aren’t very productive. As a result, they’re not performing productively enough to justify rising pay.

I’m still not convinced that poor worker quality is the only answer for relatively poor and stagnating manufacturing pay. For one, the threat of job offshoring has by no means vanished, as demonstrated vividly by the Carrier export of jobs to Mexico that then President-elect Trump promised to deal with in 2016. And manufacturers still hire lots of illegal aliens, especially in sectors like meat packing and processing, which undoubtedly dampen wage growth as well. Nor is it clear to me that manufacturers have started spending enough time and money training new workers, as opposed to expecting someone or something else (mainly, the schools) to do the job for them.

But I’ve also heard directly – and consistently – from manufacturers how difficult it remains to find even minimally qualified applicants to fill positions, and I can’t reasonably dismiss all or even most of these claims. So the one conclusion I can confidently reach is that following the manufacturing jobs and wages figures has become more important than ever for serious students of the U.S. economy.

Im-Politic: The Real Veterans Day Hypocrites


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Mentioning U.S. military cemeteries in France and my town of Riverdale Park, Maryland in the same sentence, or even the same piece of writing – that’s got to be a first. But due to the overlap of Veterans Day today with the hundredth anniversary of the armistice that ended World War I hostilities, both shed some light on the confused, often downright incoherent, and just as often hypocritical nature of America’s heated, intertwined political and philosophical battles over identity, nationalism, and related issues.

The military cemetery angle is clear enough, due to President Trump’s controversial decision to forego attending yesterday’s Armistice Day ceremony at the Aisne-Marne American Cemetery and Memorial outside of Paris. Mr. Trump’s administration attributed the decision to bad weather and the logistical complications it created. I’m no expert on these matters (chances are, neither are you) and for all I know, rain and the herculean task of moving American presidents in foreign countries may have genuinely rendered his initially announced schedule unrealistic. I also suspect that a major role was played by the simple exhaustion of a 72-year old man following a whirlwind last few weeks of criss-crossing America for speeches at campaign rallies aimed at electing Republican candidates in this month’s midterm elections.

Nonetheless, even though this event wasn’t the only, or even the main event on the Trump schedule, or even the only scheduled cemetery visit, I believe that the President should have sucked it up and attended. (Just FYI, he did wind up going to a second such ceremony today.) As a result, I have some sympathy for the critics’ charges that Mr. Trump’s decision undercut his high profile claims of championing patriotic values.

But I don’t have total sympathy, and here’s why: because these presidential opponents generally have a pretty dodgy, and thus often double-standard-infused, record on patriotic values themselves. Why else, for example, would they be so apoplectic about the President’s self-description as a “nationalist.” Many have not only equated this viewpoint with something they call “white nationalism” (a concept whose fatal internal contradictions are, revealingly, ignored only by them and by the fringe neo-Nazi types who have adopted it). They’ve also attacked it for clashing with the idea of diversity, as opposed to “inclusion,” and for asserting (in the words of France’s President, Emmanuel Macron), “our interests first, who cares about the others?”

At best, however, that’s a bizarre critique for at least two reasons. First, the United States exists in a world of other political units that are known as “nation-states,” and inevitably, their “national interests” (another term that’s not the least bit controversial) won’t always coincide. These interests aren’t always in conflict, either, and when they’re not, inclusion – in the form of fostering international cooperation in order to advance shared goals or repel share challenges – is a fine idea. But when these interests don’t coincide, and can’t be reconciled via diplomacy, inclusion can easily become a formula for delusion, and for harming U.S. interests. And Macron to the contrary, at that point, any national leader deserving his country’s trust would put their “interests first” and not care terribly “about the others.”

Second, Mr. Trump’s actual use of the word had nothing to do with jingoism or chauvinism, much less racism. Indeed, it had everything to do with promoting an entirely reasonable U.S. foreign policy goal. Here’s his description of the term: “All I want for our country is to be treated well, to be treated with respect. For many years other countries that are allies of ours, so-called allies, they have not treated our country fairly, so in that sense I am absolutely a nationalist and I’m proud of it.”

And here’s where Riverdale Park, Maryland comes in. This morning, the town held its annual Veterans Day observance. It took place at a pretty little patch created near the town center, complete with a memorial and a big American flag. Ever since I moved to the town in 2003, I’ve attended this ceremony nearly every year, along with the Memorial Day ceremony (when I was in town, which has usually been the case), and was proud to do so. This year, that streak came to an end.

I’m boycotting, and will continue to boycott, because earlier this year, as I’ve described, the town decided to permit illegal aliens to vote in local elections (along with 16-year olds). It’s a free country, and the decision is Constitutional, but it mainly rankled because, as I also wrote, during the debate, supporters of the idea made plain as day that they not only had no regard for the idea of citizenship, and of the community of values it has represented throughout our country’s history. They stated repeatedly their convictions that that community, along with the Constitution that organized its government and enshrined into law the liberties Americans enjoy, are nothing more than racist and sexist constructs concocted by a claque of dead white males determined to perpetuate their dominance and that of their descendants. Moreover, the town’s endorsement of non-citizen voting unquestionably represented endorsement of that perspective.

And these are folks – and the municipality – claiming to honor those currently serving in the military, and those who have lost their lives defending this political system? Sorry, but I found that proposition stomach-turning, along with the idea of taking part in this sham.

Further, these convictions are hardly confined to Riverdale Park. Polls – not a perfect measure of opinion, I know, but the best we have – show consistently that patriotic feelings are declining sharply among the American public as a whole, and among Democrats, liberals, and the young in particular – the last three categories are coming to dominate Riverdale Park’s population. (See, e.g., here and here. And according to the Gallup survey, the latter two trends predated Mr. Trump’s election as president.)

I have no evidence that most or even many of those with low patriotism levels have chortled at the President’s decision to skip the military cemetery ceremonies. But I’ll bet the number is more than a few. Ditto for a high correlation between the Trump cemetery critics and staunch opponents of his immigration policies – due to the President’s insistence that the United States as a sovereign nation, and even more important, one precious enough to be worth defending, has an absolute right to control its borders and decide who and how many are granted admission.  

There’s no obligation for any American to feel patriotic, and there’s certainly no obligation to like President Trump. Is it too much to ask, however, that Veterans Day, and associated professions of love of country, be made exempt from political football-dom?

Making News: Economic Hits During a Political Week


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I’m pleased to announce two recent economics-focused media hits that were especially gratifying given the (understandable) dominance of political news last week.

The first came in the Cleveland Plain Dealer, which quoted me in a terrific investigative piece on the stunningly different stories of manufacturing strength and overall prosperity in two different counties in Ohio.  The article has also been syndicated in smaller papers all across the state.

The second came on Breitbart.com.  Its economics editor, John Carney, cited my post on the midterm elections and results in the trade-dependent U.S. farm belt in a same-day (November 7) article on the same subject.  OK, so this piece was kind of political.

And keep checking in with RealityChek for news of upcoming media appearances and other developments.

(What’s Left of) Our Economy: Tariff-Led U.S. Inflation Remains Mythical


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Talk about bad timing! Yesterday, the Washington Post ran a piece by Emily Rauhala, who covers Canada and other foreign news for the paper, on how soaring tariff-juiced aluminum prices are already “bruising” the American beer industry. According to her report, “In a vivid example of how Trump’s trade tactics abroad can hurt business at home, the U.S. beer industry, which needs aluminum to make cans, is seeing costs rise.”

But this morning, the U.S. Labor Department came out with data showing that, although prices for aluminum (along with steel, another tariff-ed metal) have jumped from last October to this past October, they’re now actually starting to fall. And special bonus! The same trend seems to be holding for household laundry equipment.  Product-specific tariffs boosted prices for a time, and generated big headlines, but now the price are falling back to earth.

The new Producer Price Index (which measures price changes at the wholesale level) reports that “aluminum mill shapes” last month cost buyers 8.2 percent more than they did in October, 2017. But since July, they’ve dropped on a monthly basis by 2.1 percent, 0.3 percent, and 0.4 percent.

Further, it’s important to remember that, as with steel and the laundry machines, last year’s prices were artificially depressed by foreign dumping. In other words, these prices were set by foreign governments determined to grab market share for their producers at the expense of their American-based rivals. They had nothing whatever to do with market forces.

The statistics for “steel mill products”? Between October, 2017 and October, 2018, prices did indeed surge by 18.2 percent. But the monthly numbers since July reveal price changes of +2.6 percent, zero percent, and -0.8 percent.

Also significant: In lots of metals-using industries, there are no major year-on-year price increases at all. These include hardware, plumbing fixtures, turned products (like bolts and nuts and screws), metal valves, ball bearings, auto parts, aircraft parts, and aircraft engines and parts (which are tracked separately).

The price data for household appliances are found in a another of today’s Labor Department tables, and don’t separate out laundry equipment from other appliances where no special tariffs were applied. But they strongly indicate that any producers thinking they’d gain major pricing power from these levies were utterly delusional.

From October, 2017 through last month, prices in this category were up only 3.3 percent. And the last three months’ worth of sequential changes? Down 0.1 percent, up 1.3 percent, and down 0.7 percent. Think we’ll see this development  generate any headlines?

As with investing, past performance doesn’t always predict future results. But it’s not bupkis, either. At some point, President Trump’s tariffs may indeed supercharge U.S. inflation. To date, however, trade-related inflation reports at best deserve the warning, “Let the buyer beware.”

Im-Politic: Will Trump Let Trump be Trump on Issues?


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Ever since Donald Trump made clear his staying power in presidential politics, his more populist supporters have tried to beat back efforts of more establishment-oriented backers to “normalize” him by insisting that they “Let Trump be Trump.” The results of Tuesday’s midterm elections tell me that the populists’ arguments on substance (as opposed to the President’s penchant for inflammatory and/or vulgar rhetoric) are stronger than ever, but that the obstacles that they’ve faced remain formidable.

The “Let Trump” argument contends that the President’s best hope to attract the most voters has always been his willingness to reject positions that for decades have been conservative and Republican hallmarks, but that have become increasingly unpopular outside the realms of most national GOP office-holders, other Washington, D.C.-based professional Republicans and conservatives, and the donors so largely responsible for their power, influence, and affluence. These maverick Trump positions have included not only trade and immigration; but the role of government and the related issues of entitlements, healthcare, and infrastructure spending; and Wall Street reform.

But since his election, as I’ve argued, Mr. Trump’s willingness to embrace the full maverick agenda has been blunted by his vulnerability on the scandals front. Specifically, he’s seemed so worried about impeachment threats from Democrats that he’s been forced to shore up his support with the conventional Republicans that dominate the party’s ranks in Congress. Why else, I’ve written, would his first two years in office have so prominently featured strong support for right-of-center standbys like major tax and federal discretionary spending cuts; curbs on regulation; repeal of Obamacare; and bigger military budgets, rather than, say a massive push to repair and retool America’s aging or simply outdated transportation, communications, energy, and other networks?

It’s true that Trump remained firmly in (bipartisan) populist mode on trade (notably, withdrawing from the Trans-Pacific Partnership agreement and slapping tariffs on metals imports and many Chinese-made products), and just as firmly in (conservative) populist mode with various administrative measures and proposals to limit and/or transform the makeup of legal immigration – though many of his most ardent backers accuse him of punting on his campaign promise to build a Border Wall.

Yet this Trump populism strongly reflected the views of the Republican base – a development now not lost on conventional conservatives when it comes to immigration, even though they’ve been slow to recognize the big shift among Republican voters against standard free trade policies. By contrast, the President has apparently feared that Congressional Republicans would draw the line on the rest of their traditional agenda – or at least that he could curry favor with them by pushing it.

The midterm results, however, might have brought these political calculations to a turning point. On the one hand, there’s no doubt that most House and Senate Republicans, along with the donors and most of the party’s D.C.-based establishment, are still all-in on their tax, spending, regulatory, and Obamacare positions.

On the other hand, according to the exit polls and other surveys, the tax cuts didn’t even greatly impress Republican voters (let alone independents). And most Americans aren’t willing to risk losing Obamacare benefits they already enjoy (especially coverage for pre-existing medical conditions) by supporting Republican replacement ideas that may be less generous.

The message being sent by all of the above trends and situations is that President Trump may have even more latitude than he’s recognized to cut deals with Democrats. At the same time, the Democrats’ capture of the House of Representatives on Tuesday and signs that they’ll ramp up the scandal investigations could keep preventing him from “being Trump” on such issues and possibly antagonize most Republican lawmakers.

Of course, my political neck isn’t on the line here. But I’d advise Mr. Trump to follow his more unconventional instincts. The Congressional Republicans still uncomfortable with him ideologically must be aware that his personal popularity with GOP supporters has grown significantly since mid-2017, and that this surge owes almost nothing to their own priorities. So if they don’t help staunchly resist any intensified Democratic probes, their political futures could look pretty dicey, too.

One big sign that ever more establishment Republicans are getting “woke” on the obsolescence of much establishment conservatism: the efforts by long-time mainstream conservative/Republican favorites like Senator Marco Rubio of Florida to develop a Trump-ian agenda that can survive Mr. Trump’s presidency. Further, resistance in Washington to their efforts is likely to continue weakening, since so many of the President’s ideological opponents on the Republican side are leaving the House and Senate. (And of course, their spiritual leader, veteran Arizona Senator and 2008 Republican presidential nominee John McCain recently passed away.)

To be sure, Mr. Trump yesterday (rhetorically, anyway) erected his own obstacle to deal-cutting – his declaration that he won’t be receptive if investigations persist and broaden. House Democratic leader (and still favorite to become Speaker again) Nancy Pelosi has pretty clearly, however, signaled that she herself is not impeachment-obsessed, even if those exit polls say most of the Democratic base is.

As a result, I can’t entirely blame the President for still feeling spooked by the Democrats – at least this week. But what an irony if the most important opponent “letting Trump be Trump-ism” – whose broad popularity could well combine with the advantages of incumbency to outflank the Democrats, win the President a second term, and pave the way for a truly earth-shaking, lasting realignment of American politics – turned out to be President Trump himself.

Im-Politic: So Farmers (Especially Soybeans Growers) Were Going to Punish Trump on Trade?


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Since I’ve long followed U.S. trade policy, since it’s long been one of President Trump’s signature issues, and since for months the President’s tariffs had been widely described as a major danger to the coalition that carried him and other Republicans to victory in 2016, I thought one of the most useful post-midterms exercises I could conduct would be to see if these analyses held up. The verdict: Anything but.

At the heart of this narrative were America’s farmers, and especially its soybean growers. In brief, the Trump China tariffs sparked retaliatory Chinese levies on a wide range of U.S. exports, including soybeans. Soybeans had become the nation’s leading agricultural export to China, and China exports represented a large share of total American soybean production. And since those soybean exports to the People’s Republic were endangered (and have in fact plummeted), the soybean farmers (along with the rest of U.S. agriculture, since its exports were threatened by various foreign retaliatory tariffs, too) were likely to take their anger out on Republican candidates for the House and Senate this year, and reward Democrats with significant wins.  (See here, here, and here for some examples.)

Last night’s midterm results, however, make clear that nothing of the kind happened. To see how off-base the “Republican Soy-Mageddon” (“Soy-Pocalypse”?) predictions were, let’s first look at the returns from the Top Twenty districts in the House of Representatives in terms of total agricultural output. Republicans held sixteen and Democrats four when the evening began.

When it ended, the number of those seats flipped by the Democrats (i.e., where one of their candidates beat a Republican incumbent) totaled one: the First District of Iowa. The other three Democratic victories were scored by Democratic incumbents.

Republicans flipped none of these 20 seats. But they held on to 15. Moreover, three of these seats were open seats – that is, a Republican incumbent had retired. So all else equal, the Democratic candidate’s chances of winning were increased.

The race for the twentieth seat on this list – Minnesota’s First District – was too close to call at the time of this writing. It’s an open seat also, but the previous incumbent was a Democrat. So no sign of any blue wave, or any notable Democratic strength in this group of Districts, whatever.

But what about the soybeans-dominated Districts? The results from this Top Twenty show nothing like a Republican Soy-Mageddon, either.

During the previous Congressional session, Republicans held 16 of these seats as well, and the Democrats four. The Democrats flipped two of these Districts – that First in Iowa, along with that state’s Third. The Democrats’ four other victories in this group were by incumbents.

The Republicans, again, didn’t flip any Democratic soybeans seats. But they held onto 15 of their original 16 seats. In addition, three of those seats were open, so again, the GOP candidates’ advantage was smaller than it would have been had the incumbent run. The election in the twentieth District in this soybeans group – Minnesota’s First – is that still-undecided race.

Again no Soy-Mageddon for Republicans.

These developments won’t come as a major surprise to careful news buffs. Several reports (see, e.g., here, here, and here) have been published in recent weeks containing evidence that, however worried they were about their own individual prospects, many American farmers continued to support Mr. Trump – and in principle even his efforts to use pressure to extract more equitable terms of trade from China and other foreign economies. But you had to be quite the careful news buff.

At the same time, last night’s results by no means give Mr. Trump a free pass on trade policy from American agriculture. Before too long, unless his efforts start delivering results for U.S. farmers, or removing the trade threats they still face, or unless other administration policies open up new opportunities (at home or abroad), their patience could well run out. For now, however, ag is hanging tough with an America First trade approach at the grassroots level.  It’s high time that its whiny Inside the Beltway spokespeople start paying attention. 

(What’s Left of) Our Economy: “Tariff Victim” US Industries Remain Full of Job Openings


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If today’s government data on U.S. jobs openings don’t prompt loud mea culpas and apologies from the tariff-alarmists in the Mainstream Media and elsewhere in America’s globalization cheerleading establishment, I don’t know what will.

Recall that Americans have been swamped in recent months with reports that President Trump’s trade curbs have already been decimating American manufacturing.  And since they have been in place the longest, his metals tariffs (on most steel and aluminum imports) have been treated as prime examples, with metals-using industries being the prime victims.

But the new figures on job openings in major sectors of the economy (contained in the latest monthly release of the “JOLTS” numbers – the “job openings and labor turnover series”) are simply the latest statistics thoroughly debunking these claims.

Here are the results for job openings from April (because the metals tariffs began to be imposed in late March) through September (the most recent month covered by the JOLTS reports):

private sector:     +2.30 percent

manufacturing:   +7.08 percent

durable goods:   +7.47 percent

As has been the case with so much other data, the durable goods super-sector of manufacturing – the portion of industry containing the biggest metals-using industries – outperformed the rest of manufacturing and the entire economy in the number of employment opportunities it claimed were available.

And although the number of job openings in durable goods dipped from August to September (whose figures are still preliminary), they fell much less than in the rest of the economy.

private sector:     -2.85 percent

manufacturing     -4.72 percent

durable goods     -0.66 percent

Moreover, the 302,000 durable goods jobs openings reported preliminarily in September were the second largest number on record (going back to late 2000). The all-time high? August’s 304,000.

Some critics maintain that employers have incentives to exaggerate their claims of job vacancies. The motives cited include reinforcing contentions of “skills gaps” and other forms of labor shortages; rationalizing the persistence of high unemployment rates or sluggish wage growth; and pushing government or schools to take on worker training responsibilities (and expenses) that employers are loathe to assume. It’s also easy to see how exaggerated job openings claims can be used to bolster arguments for more immigration – which of course is also a tempting strategy for keeping wages down by increasing labor supply relative to demand.

But even if such exaggeration is rife, why would it be so much more important in durable goods manufacturing than in the rest of the economy? Further, why would employers have any reason to overstate the number of vacancies they’re trying to fill if they believed that their businesses were being swamped by steep, tariffs-led costs increases, or were about to? Wouldn’t they be trying to shed payroll instead? As a result, it’s hard to escape the conclusion that the JOLTS openings numbers simply add to the evidence that, despite the claims of actual or impending tariffs-mageddon, metals-using industries continue to be faring just fine.

Interestingly, workers in durable goods sectors don’t appear to share this optimism fully, according to the JOLTS data. For the figures also measure the numbers of employees voluntarily leaving their jobs – a clear sign of confidence that lots of new opportunities are available. Here are are the April-through-September results:

private sector:     +8.53 percent

manufacturing:    -2.94 percent

durable goods:     -9.48 percent

Clearly, durable goods workers have been displaying less confidence about reemployment opportunities than their counterparts in the rest of manufacturing, and much less than private sector workers overall. And these results are mirrored in the August-to-September numbers:

private sector:     -1.26 percent

manufacturing:    -6.60 percent

durable goods:   -11.76 percent

Nonetheless, in absolute terms, all these quits levels – even for durable goods – remain pretty high by recent standards. And for durables, they’re somewhat volatile, possibly because the absolute numbers have always been on the small side. Indeed, durable goods quits increased by 6.19 percent month-to-month as recently as July. And the August-to-September drop-off was the biggest sequential decline in percentage terms since the 15.70 percent monthly nosedive in August, 2017 – after which the numbers of quits steadily recovered.

As always, these trends could change (or, with the quits rate) intensify. It’s also possible that the President’s more sweeping tariffs on imports from China will be game-changers. (The first round dates only from early July, and the second, much larger round, went into effect in mid-September.) For now, however, the only real news about the economic effect of these levies is that they’ve showed no signs of slowing the recovery’s current momentum. Accept no substitutes.

Im-Politic: Caravans and Open Borders Grandstanding


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By now it’s become an article of faith among President Trump’s critics that his stated determination to prevent the caravans of Central American migrants from entering the United States represents a shameful, and possibly racist, break with America’s longstanding tradition of providing haven for victims of poverty, persecution, and numerous other hardships and outrages that remain all too common abroad.

In other words, in striking contrast to the Statue of Liberty’s message of welcome for the world’s “tired…poor…[and] huddled masses yearning to breathe free,” Mr. Trump and his supporters are cruelly telling the Central Americans to return to their destitute and violence-wracked countries.

So what do the critics believe should be done instead? Specifics are often lacking, but let’s do a thought experiment and try to figure out how a policy that literally doesn’t “turn its back” on downtrodden foreign populations would like. That is, let’s try to imagine the gist of what a President Hillary Clinton would say about the caravans if she took seriously claims that the Trump approach to the problem is unforgivably callous and wrongheaded – claims that she’s made clear she agrees with via her strong condemnation of Trump administration policies that have resulted in frequent separation of migrant children from their parents:

My fellow Americans:

As you have seen in many news reports, several so-called caravans of Central Americans are heading north, through Mexico, filled with men, women, and children hoping to make new lives in the United States.

Many politicians and news organizations in conservative and Republican ranks, along with out-and-out right-wing extremists, have portrayed this caravans as an impending ‘invasion’ of our country. They’ve urged my administration to deal with this ‘national security emergency’ by taking all necessary steps to turn the migrants back – including stationing the American military at the border.

I come before you tonight to make clear that I will strongly reject such measures. They would represent a violation of our solemn international treaty obligations. They would amount to a betrayal of America’s long, proud history of welcoming immiserated populations from all corners of the world. And they would ignore simple human decency. In fact, some who urge a hard line toward the migrants are clearly playing on longstanding dark, but completely unjustifiable, fears about foreigners and even about racial and ethnic minorities.

So I will not send regular military or even national guards units to the border. I will not beef up Border Patrol deployments. And I certainly will not begin building a Wall – as my chief opponent in the last election so foolishly and crudely recommended.

Nor will I outsource my migrants policy to Mexico, or to the migrants’ home country governments. For none of these countries can guarantee the migrants the safety from crime and violence and the escape from poverty that they, like all members of the human family, deserve.

In fact, I’m issuing an Executive Order that explicitly establishes gang and domestic violence as valid reasons for granting asylum. For aren’t these dangers just as appalling and inexcusable as the religious, political, and other forms of persecution to which grants of asylum have historically been restricted? Further, this new directive will abolish the artificial distinction between refugees from these horrors and refugees from joblessness, threadbare wages, hunger, homelessness, and other forms of economic privation. For if you’re being victimized for your political leanings or religion or nationality, you’re almost surely trapped in grinding, dehumanizing poverty as well.

Of course, I’ll be directing that much more of the Justice Department’s budget be allotted to end the shortage of immigration judges that has produced immense backlogs in our immigration courts. Yet until the shortage ends, I will also mandate the construction of high quality accommodations for asylum applicants awaiting a hearing, including first-rate schooling for their children. And needless to say, applicants will enjoy the full come-and-go freedom to and from these facilities. Otherwise, we’d be putting them in cages, however gilded.

Moreover, I will immediately put into effect my campaign promise to increase five-fold America’s admissions of refugees from Syria’s horrendous civil war. In fact, I apologize to these refugees for waiting so long to address their plight.

And finally, because too many recent arrivals – from Central America and elsewhere – continue living precariously in the shadows, I will restrict the enforcement of domestic immigration law to finding and deporting dangerous criminals. For far too long taxpayers – including these many of these Aspiring Americans – have paid far too much money for the hounding of individuals and families whose only illegal behavior has been seeking better lives.

We Americans need to remember: Except for our native American and native-born African-American populations, practically all of our ancestors came to this country for the exact same reasons motivating the Central Americans and so many others today. The Pilgrims were seeking freedom of religion. The Jamestown settlers were economic migrants. How can we deny caravan members and others like them the same opportunities that our nation has extended to our own forebears?

The answer, it must be clear, is that we mustn’t and we can’t – if we want to be law-abiding global citizens, if we want to be true to our country’s best traditions, and if we want to be able to look ourselves squarely in the mirror.”

Pretty inspiring, isn’t it? But before you pick up the phone to call your Member of Congress (or the White House) to demand implementation of this agenda right now, ask yourself about the impact of an announcement like this. According to Gallup, as of last year, nearly 150 million people around the world would like to move to the United States. That includes 37 million Latin Americans.

Yet since the situation in Central American has clearly worsened over the last year, along with the crisis in Venezuela, that figure now is surely conservative. Additionally, the Trump administration’s current attitude towards migrants could well be depressing the number who consider migrating to the United States an option worth thinking about even idly. The kind of welcoming position Trump critics seem to want – i.e., one that further and greatly strengthens already powerful magnets that have attracting enormous foreign populations to this country – could well supercharge their ranks.

The lessons of this exercise couldn’t be clearer. If you believe that the United States could easily absorb anything close to this inflow in the near future, go right on lambasting the Trump administration and supporters of its immigration policies as modern day [INSERT YOUR FAVORITE ARCH-VILLAIN FROM HISTORY OR LITERATURE HERE]’s. But if you’re genuinely interested in devising an immigration and migrants and refugee policy that acceptably reflects your version of America’s values but recognizes the inevitable limits on such good intentions, you’ll start grandstanding less and thinking about the who, what, how, why, when, and where more.